Workers' Compensation as the Exclusive Remedy for Injuries

Workers’ compensation law that has now existed for over 100 years has a history that is both interesting and varied. Prior to the development and mandatory adoption of the concept of the workers’ compensation system, a worker who had suffered an injury on the job would have to rely on the consideration and benignity of the employer. The employer may or may not choose to pay for medical care and other injury-related expenses. Moreover, as one can expect, the financial generosity of the employers was an exception. The only remedy an injured worker was left with was to sue the employer and prove that the injury had occurred solely as a result of the employer’s negligence. The cost of lawsuits was high, and the time taken to reach a decision was generally out of the injured workers’ control. While filing a lawsuit did not offer an assurance of getting the right compensation, it is noteworthy that all this while the injured person had to meet all the medical expenses while being possibly out of work. The employer would utilize all sorts of defenses available, resulting in a few judgments going in favor of the injured worker or his surviving dependents.

Strict employers’ liability statutes were adopted by several states as the physical, mental and financial hardships faced by workers post injury became more evident. These laws limited the utilization of the common law defenses previously available to the employer, which ultimately paved the way for the enactment of the modern day workers’ compensation laws.

Under the California workers’ compensation laws, all employers are required to provide an injured worker and his or her surviving dependents with entitled compensation benefits if the injury occurred during the course and scope of employment. For any work-related injury that is qualified as a compensable injury, the “responsible” employer would be required to make suitable payments for medical and other incidental expenses, in addition to the income lost during the recovery period. In the case of death, the worker’s surviving dependents are eligible for the same benefits.

The workers’ compensation system was based on a ‘no-fault’ principle. The rationale behind a no-fault system was that if the injury or accident occurred in the workplace or in the course of work, then the worker was entitled to all the workers’ compensation benefits. The benefits were to be provided by the employer to the injured worker without putting an issue whether the injury occurred due to the worker’s own negligence, or the negligence of the employer or co-workers. No matter who was at fault, the benefit coverage was regardless.

However, the type of work-related injury caused must be eligible to be categorized under compensable injuries under the workers’ compensation regulations. In addition to injuries that were caused by mental and physical strains, pre-existing conditions that worsened at the workplace are also covered. Illness caused due to exposure to hazardous toxins while doing work-related activities also come under workers’ compensation benefits coverage.

In legal terms, the workers’ compensation system is designed to work as the “exclusive remedy” for compensable work-related injury or illness. That is, workers’ compensation is the exclusive remedy offered to workers who are injured on the job and seeking recovery for damages or other rewards from their employers. As per California laws, workers’ compensation is the sole remedy against a work-related injury. California Labor Code section 3600 details the fundamental circumstances that must exist for applicability of the exclusive remedy rule.

However, the principle of workers’ compensation as the exclusive remedy is built upon a fundamental compromise between employers and workers. This statutory scheme results from a compromise wherein both workers and employers give up certain advantages in return of others. It works to help the injured workers get immediate compensation benefits as much as it protects the employer from being sued. In exchange for a comprehensive and efficient process of obtaining compensation, the injured worker loses the right to sue their employer for money damages related to the injury.

Although the employer has to assume liability, regardless of the fault, the exclusive remedy doctrine saves an employer from the more substantial damage verdicts. In such cases, even if the injured worker does not apply for workers’ compensation, they will be barred from holding the employer liable in tort. So, whenever the injury falls within the workers’ compensation act, this exclusiveness provision bars the employer from statutory tort liability under the state and federal laws. It is notable that even in the case of gross negligence on the part of the employer, this provision of exclusive remedy is mostly applicable. Except in narrow situations, regardless of how egregious the employer’s conduct is, the worker’s only remedy against the employer will be through regulations of the workers’ compensation. Likewise, actions against co-workers who caused the worker’s injury are barred under workers’ compensation laws.

The good part of the “exclusive remedy doctrine” is that the injured worker does not have to prove that the employer’s negligence caused the injury in order to be eligible for medical and/or wage benefits. The injured worker is only required to fulfill the necessary obligations on his or her part in order to receive benefits lost medical care, lost wages, and rehabilitation. A guarantee of compensation is usually higher in workers’ compensation than when the injured person has the opportunity to file a personal injury claim.

While the exclusive remedy provision provides shielding to the insured employer from liabilities under the tort law and prohibits the personal injury suit, in certain conditions, the injured worker may be able to bring a personal injury action along with workers’ compensation claim.

• When a worker is exposed to an injury while on the premises of another business

• When a worker is injured due to the action or fault of a person who is neither an employer nor a co-worker

• When the employer fails to provide the mandatory worker’s compensation insurance; this leads to loss of employer’s protection under the exclusive remedy rule

Although the exclusive remedy rule was intended to remove all disputes between the employer and the injured employee from the tort system, according to several state cases, some workers felt giving up their right to sue their employers in exchange for receiving a no-fault compensation system was too high a price to pay.

Under the exclusivity rule, most workers are automatically eligible for benefits entitled under no-fault workers’ compensation system when they sustain a work-related injury. It requires no proof of the party at fault to claim the entitled benefits. However it is not just the worker who is protected by the exclusive remedy doctrine of the workers’ compensation system. This exclusive remedy rule also protects the employer from being sued and avoids the possibility of extremely high damage awards. However, in some cases, the injured worker may follow the pursuit of filing a civil lawsuit against the employer or a third-party. For this, the injured employer needs to prove negligence at trial in the state court to achieve compensation for the damages. If the injured worker has successfully shown the employer's negligence by a preponderance of the evidence, he or she may recover items of damages outside the workers' compensation system. Under the civil lawsuits, the injured worker can claim past and future loss of earnings and earning capacity, and loss of household services in addition to the medical expenses.

Any employer who is incapable of or refuses to comply with the mandate of worker’s compensation insurance for injuries sustained by a worker is subject to the full measure of damages under tort law. This would eliminate the limits on the amount and scope of the employer’s liability under the workers’ compensation law.

Typically, worker’s compensation is the exclusive remedy against the employer, but sometimes an injured worker may file a third-party lawsuit. These situations arise when the injury or illness involved the negligence or harmful acts of a third-party. A third-party is a person or entity that is neither the worker’s employer, not a co-worker. A lawsuit like this may offer additional compensation benefits, like property damage or pain and suffering, which are not provided under the workers’ compensation system.

For instance, a worker sustains an accident injury caused due to the negligence of a driver of another vehicle, when going to the work-related activity. In such a case, the negligent driver becomes the third-party against which the injured worker can file a lawsuit.

Another instance could be of an injury or accident caused on the premises of a work area that was intentionally or negligently left exposed to dangerous conditions. Here, the owner of that work activity area happens to be the third-party against which the injured employee can file a third-party claim.

In most cases, the employers are not liable when it comes to the third-party claims as they are not directly involved. Such claims are undertaken under civil lawsuits, outside the line of the workers’ compensation system. In spite of this, an employer is capable of recovering its workers’ compensation payments and obligations from the amount the injured worker acquires as recovery from a lawsuit against a third party.

It could be a tricky affair to filing a civil claim or lawsuit against a third party as the rules defining the “employment” status in certain states have complicated rules. It is best to take professional advice from attorney well-versed with the ins and outs of the workers’ compensation rules.

Despite the exclusive remedy regulation, in some cases, the workers’ compensation system works to the advantage of the injured worker. This is because several state courts have created exceptions to the exclusive remedy rule, thereby allowing workers to claim more from employers than just the prescribed benefits mandated by the statutes. Under some circumstances, the exclusive remedy bar is not applicable, and an injured worker may assert a civil lawsuit against the employer for an injury that occurred during the course and scope of employment. Here are some exceptions to the workers’ compensation no-fault system where an injured worker has the right to sue the employer and seek more benefits in addition to those offered under workers’ compensation law. The exceptions may vary from state to state, and by occupation.

Possibly one of the most debated exceptions to the exclusivity rule is the dual capacity doctrine. Dual capacity or dual persona exception acknowledges that an employer may have several duties towards their workers, whether based on common law or statute. Under this exception, a worker can sue its employer if he or she is injured during the course of employment using a defective piece of equipment which was manufactured by the employer. In such a case, the injury is said to have arisen out of something other than the employment and the employer is considered a third party, which is outside the realm of the workers’ compensation statute.

For instance, a worker at a factory falls from a height and fractures his hand after a tool manufactured at the factory fails to perform its intended job. Here, the defect in the tool or machinery is determined to be the proximate cause of the injury. The injured worker is then capable of making a claim for medical expenses, income lost during the recovery period, and other damages under workers’ compensation regulations. Also, he may file a lawsuit for injury caused by the defective piece of equipment against the employer.

But not all states recognize the dual capacity or dual persona liability. As per the American Law Firm Association (ALFA International), this exception is recognized by California, Kentucky, Illinois, Michigan, Ohio, Kansas, Minnesota.

California law mandates all employers to secure a workers’ compensation insurance policy or be self-insured in order to pay for the compensation benefits of the injured workers. However, when the employer fails to provide workers’ compensation insurance or provide self-insurance, it can be treated as an exception to the exclusivity rule. In such a case, the employer loses the right to bargain, and the injured worker is under no limitation to follow the exclusive remedy rule that is a part of the workers’ compensation laws. The injured worker can take the path of a lawsuit and free to file a lawsuit in the state court against the uninsured employer. In some states, an uninsured employer is provided with a presumption of negligence and an inability to abide by workplace safety codes and standards. Also, in some states, like Texas, not all employers mandate workers’ compensation coverage.

An employer is not required to take the liability for an injury or death caused by a physical assault by one worker against another worker. Most workers’ compensation statutes provide for an exception to the exclusive remedy rule is where the employer intentionally inflicts the injury to the employee. Those states that do not provide an exception for injuries due to intentional misconduct of the employer, usually consider additional compensation when the injury occurs due to an employer’s willful and deliberate act. If an employer assaults an employee, which results in an injury, the employee is allowed to file a claim with the state court for personal injury. Even if the employer approves of an assault and encourages a co-worker to cause harm to the worker, the injured employee can still file a personal injury claim. It is premised on the theory that the injury caused cannot be considered accidental.

Since most workers’ compensation laws only provide coverage for accidental on-the-job injuries, intentional torts do not come under the exclusivity rule.

Another exception to the exclusivity rule is the fraudulent concealment when an employer deceptively conceals a worker’s injury, which further leads to worsening of the injuries. This exception is premised on the theory that the employer is aware of the hazardous effects of the chemical exposure and the suffering it may cause, in fact, hides the existence of the injury, allowing the injury to aggravate, even after reporting the injury or illness symptoms. In such a case of fraudulent concealment on the part of an employer, the injured worker can sue the employer in the state court outside of the workers’ compensation. In a fraudulent concealment claim, the claimant needs to prove that the employer concealed the injury and the connection between the injury and employment and that the deliberate concealment by the employer resulted in injury exacerbation.

Such an exception is common in a factory or construction situations that involve exposure to hazardous asbestos, mold, or a toxic chemical. As per the California state laws, this exception allows the injured worker to claim workers’ compensation benefits as well as file a civil lawsuit for extra compensation based on damages that resulted from the fraudulent concealment of the employer.

This unique statutory exception applies to a power press—a material-forming machine, typically used in the manufacturing industry. Some employers who operate a power press machine may modify the machine’s design by removing a guard or other safety features that make the machine less safe to work on but increases production. Aimed at enhancing the efficiency and productivity of the workers, such an action on the part of the employer may cost the worker’s safety. Operating on a machine without a necessary guard may have serious consequences for the machine operator’s hand and arm.

In situations when the employer is aware of the fact that the manufacturer has missed out a required operation guard, the employer becomes responsible when an injury occurs to a worker. This exception to the exclusivity rule allows the injured worker to sue the employer outside the workers’ compensation system.

Possibly the latest recognized exception to the exclusivity rule is bad faith or unfair claims handling practices on the part of the employer. An insured employer, whether carrying an insurance policy or self-insurance, may be held liable for acting in bad faith. In situations when an employer showcases intentional delays or acts negligently in making payments, processing, investigation or settlement of a compensable injury. Actually, this exception can be seen as an extension to the more commonly accepted intentional tort exception. The laws for this exception may vary from state to state.

However, in California, bad faith claim handling does not allow lawsuits for tort claims but imposes fines and penalties against the offending employer.

Several courts have shown approval for making exceptions to the exclusivity rule, which suggests the fact that current workers’ compensation laws are still not considered absolute or equitable by many jurisdictions.

The workers’ compensation system is treated as the exclusive remedy for injured workers. However, things can still get rather complicated, especially when the injuries are severe. If you have a workers’ compensation issue and looking to attain the fullest possible benefits by bringing a civil lawsuit against your employer, we have highly qualified and experienced attorneys that understand the finer details and can successfully argue to get you maximum compensation benefits. Don’t hesitate to contact us for a free, no-obligation consultation to get all your questions answered. Call our Los Angeles work injury lawyer at 310-956-4277 to speak to one of our well-established legal experts regarding your workers’ compensation case. We are ready to stand with you in your battle for your rights!