“Exclusive Remedy” – Bends but does not Break

April 20th, 2005 by

“Exclusive remedy” lies at the heart of workers compensation. In exchange for the protection of workers compensation benefits, employees give up their right to any other remedy for workplace injury. This generally works out pretty well for both parties, but as with so many issues, the action at the margins is intense.
There are two areas where challenges to exclusive remedy tend to emerge: where injuries are deemed to be intentional – especially where the employer ignored explicit warnings or even crossed over into criminal negligence; and where workers compensation appears to be an inadequate remedy. In an article posted by NCCI and authored by attorney Charles Tenser (Acrobat Reader required), the exclusive remedy concept is shown to have bent, but it has not broken.
“Intentional Injuries” and Substantial Certainty
Tenser points out that many states allow employees to sue employers when the injuries are determined to be intentional. Of course, it’s usually pretty difficult to prove intention. No matter how egregious or careless an employer might be, it’s not easy to reach a standard that looks for proof of intention. As a result, attorneys are looking at the concept of “substantial certainty.” In other words, while the employer might not have intended to cause the injury, under the specific circumstances there was a substantial certainty that an injury would occur.
Tenser cites a Louisiana case, Reeves v. Structural Preservation Systems, in which an employee was asked to move, by hand, an extremely heavy sandblasting pot. This despite the fact that the pot bore an OSHA sticker that it should not be moved by hand. The court concluded that “believing someone may, or even probably will, eventually get hurt if a workplace practice is continued does not rise to the level of an intentional act, but instead falls within the range of negligent acts that are covered by workers compensation.”
In New Jersey, in at least one instance the courts have gone the other way. In Laidlow v. Hariton Machinery, the employer removed a safety guard from a machine, knowing that it was likely to result in injuries. In addition, the employer deliberately and systematically deceived safety inspectors into believing that the guard was in place. The subsequent injury to an employee was the result of an “intentional wrong” which superceded the “exclusive remedy” provision of the workers compensation statute. (Indeed, based on this brief summary of the facts, the employer should be subject to tort liability.)
It’s interesting to note that the door in New Jersey does not appear to be wide open to exclusive remedy exceptions. In Fisher v. Sears Roebuck, the court dismissed a suit brought on behalf of a security guard who was killed during a robbery in a parking lot while transporting cash receipts. The court held that the dangers faced by security guards did not amount to a “substantial certainty” that injury would occur. The dangers, in other words, are simply inherent in the job.
Adequate Remedy
While courts have generally resisted the temptation to undermine “exclusive remedy,” they are at times receptive to the idea that if workplace injuries do not fall under workers compensation, some other remedy must be available. Tenser cites a case in Oregon, where the court held that the exclusive remedy provision of the workers comp law violated the state’s constitutional guarantee of a remedy where it required a claimant to show that his employment was a “major contributing cause” of his occupational disease rather than simply a “contributing cause.” In other words, in falling short of the standard for comp, the employee had no recourse of any kind, which the courts found in violation of the state’s constitution. The Oregon legislature subsequently established procedures for allowing a negligence action against employers after potential comp remedies have been exhausted.
Balancing Act
When employers act egregiously and without regard for the safety of their workers, it is indeed tempting to open the doors to tort liability. In the New Jersey case discussed above, the door opened, just as it should have. But for the most part, the exclusive remedy provisions of comp statutes have proven their worth over time. In the great trade off at the heart of comp, employees give up their right to sue employers, in exchange for the relative certainty of indemnity and medical benefits. It is by no means a perfect system. There are employees who take advantage of it, just as there are too many employers who ignore safety standards, putting their employees at risk. For the most part the system accomplishes what it is supposed to do: helping injured workers provide for their families as they recover from work-related injuries. We should think long and hard before changing the rules to encourage a fault-driven system governing disability in the workplace.