The Future of Exclusive Remedy: Does the Doctrine Still Protect Employers?

The Future of Exclusive Remedy: Does the Doctrine Still Protect Employers?

 At the 21st Annual National Workers’ Compensation and Disability Conference®, Nov. 7-9, 2012, Thomas A. Robinson, author and primary upkeep writer for Larson’s Workers’ Compensation Law, will speak and moderate on The Future of Exclusive Remedy.

21st Annual National Workers’ Compensation and Disability Conference

Exclusivity: The Heart of the “Bargain”

At the heart of the 100-year-old workers’ compensation “bargain” is the exclusive remedy doctrine: that the employee and his or her dependents, in exchange for somewhat modest but relatively assured disability and medical benefits, give up their common-law right to sue the employer for damages for any injury covered by the relevant Workers’ Compensation Act. From the perspective of some, this important core doctrine has been remarkably resilient during the past hundred years. Others contend that exclusivity is under attack. Robinson, joined by Albert Betts, Esq. (Thompson Coe Cousins & Irons, LLP, Austin, Texas), Kevin L. Connors, Esq. (ConnorsLaw LLP, Exton, Pa.), Lex K. Larson (President, Employment Law Research Inc., Durham, N.C.), and Lawrence J. Pascal, Esq. (Ashcraft & Gerel, LLP, Alexandria, Va.), will offer opinions and commentary on the extent to which the exclusivity doctrine has been eroded and where the doctrine seems to be headed.

Title VII, Federal Tort Claims, Etc.

Based on the Supremacy Clause, Federal antidiscrimination laws, such as Title VII, trump workers’ compensation statutes, as do most state antidiscrimination laws. But civil suits under the Federal Tort Claims Act, various Scaffold Acts and Boiler Explosion Acts are almost always barred. So are suits filed under state Unfair Trade Practices Acts, Dram Shop Acts and Defective Machinery Acts. With the exception of a few successful actions filed under the dual capacity doctrine, products liability actions filed against employers who manufacture or modify machinery and equipment used in the workplace have been unsuccessful as against the exclusiveness defense.

Injuries to the Unborn

Since the exclusiveness defense is a part of the quid pro quo by which the sacrifices and gains of employees and employers are to some extent put in balance, some inroads against the exclusivity doctrine have been made where a party successfully argues that he or she received nothing from the “bargain.” For example, several tort actions against the employer have been successfully maintained on behalf of children who claimed en votre sa mere injuries from hazardous conditions in the mother’s workplace. Nondependent relatives who, in a number of states, do not qualify for workers’ compensation death benefits and who, therefore, have a strong argument that their common law rights have been taken away without anything in return have nevertheless gone without remedy in the vast majority of cases. The dominant issue in these sorts of cases is whether the child or other relative can show an independent breach of duty owed by the employer.

Intentional and “Substantially Certain” Claims

Since most state acts cover “injury by accident” (sometimes the similarly-worded “accidental” injury), an intentional assault by the employer against the employee will ground a common law action for damages that is not barred by exclusivity. In the majority of jurisdictions, “intent” means intent. That is to say common law liability cannot be stretched to include accidental injuries caused by gross, wanton, reckless, or otherwise “culpable” negligence. About a dozen states, however, have moved away from the “pure intent” standard. Most utilize some variation of the “substantially certain” test that has been borrowed from the Restatement on the Law 2d, Torts (1965). Ohio, West Virginia, North Carolina, Louisiana, and Connecticut are among this group. As has been the case with a number of other legal theories and doctrines borrowed from the tort world, the substantially certain test has generally produced as much confusion as it has clarity.

Non-Physical Claims

Just as some plaintiffs have tried to skirt workers’ compensation exclusivity by claiming the injury was intentional and not accidental, others have chipped at the exclusiveness doctrine from a different direction. Since the coverage formula historically has spoken of “physical” (and in recent decades “mental”) injury, some “injured” employees have contended the primary harm suffered is not “physical” and, therefore, not within the scope of the compensation bargain. Depending upon the circumstances of the case, claims of false imprisonment, deceit, defamation, malicious prosecution, and retaliatory discharge have sometimes proved successful. The record is mixed with regard to claims for intentional and/or negligent infliction of emotional distress. Claims alleging negligent hiring or retention have usually been unsuccessful, however.

RICO Claims

Claimants sometimes argue that in addition to the harm produced by the initial physical injury, there is subsequent harm produced by the claims process. A number of plaintiffs, utilizing the Federal RICO statute, have claimed employers, carriers, and even physicians have colluded to deny or minimize their workers’ compensation recovery. Arguing the Supremacy Clause bars the utilization of the exclusiveness defense, several cases have worked their way up and down within the Federal courts. The November 7 session on The Future of Exclusive Remedy will set aside important time to discuss this hot topic.

Dual Persona Claims

Since actions against third party tortfeasors are not subject to any exclusive remedy defense, some plaintiffs have attempted to sue employers by creating somewhat of a fiction–that at the time of the injury the employer occupied a separate status, “capacity,” or “persona” that appropriately subjected it to suit. While many of these efforts have been unsuccessful, those related to unrelated transactions—e.g., a hospital treating an injured employee—have often survived against the exclusivity defense.

Statutory-Employer and “Contractor-Under” issues

Many modern work projects, particularly those related to the construction industry, are processed and completed through a host of specialized sub-contractors. Sometimes the general contractor requires all subordinate firms to maintain workers’ compensation coverage, sometimes not. Either way, an issue often arises as to how far down (or up) the contract chain tort liability for injury may be extended. These issues will be discussed at the session as well.

Discussed as well will be the current, and expanding, trend among companies to use independent contractors and specialized employee teams to perform work that is closely related to the company’s core enterprise. Security, housekeeping and cleaning, landscaping and lawn maintenance, and other so-called “peripheral” matters are often out-sourced to firms that provide specialized and skilled personnel. What sort of exclusive remedy issue arises when those workers are injured?

Contribution/Indemnity Issues Related to Exclusive Remedy

The exclusive remedy defense is not limited to suits filed against the employer by the employee. Under many circumstances, the defense can be raised against third-party defendants who have been sued by the injured worker, where the defendant has interposed the defense of employer negligence or other fault. That the third-party defendant is a stranger to the employment contract and cannot accordingly be said to have been part of the original workers’ compensation “bargain” does not ordinarily mean the employer is susceptible to the defendant’s claim. The panel will discuss the Contribution and indemnity claims—unless based upon a written agreement—are generally unsuccessful against the employer of the injured worker.

The Future of Exclusive Remedy

While appropriate levels of time will be devoted to fleshing out the current status of these and other issues related to the exclusive remedy doctrine, each of the presenters will offer advice and commentary on the direction in which this important doctrine is heading. Other time will be reserved for questions and discussions from those attending.


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