Many clients, sometimes after years of litigating a workers’ compensation claim, get to the frustration point where they decide: “I guess I’m going to have to sue my employer.” It is at this point that the harsh reality must be revealed (or reiterated). In most cases, if you have a workers’ compensation claim, you cannot sue your employer, even if it was negligent, for the same injury. This article will try to explain the logic behind the exclusion commonly known as “the exclusive remedy provision”.
Before workers compensation statutes came into existence, the same rules applied to work related accidents as any other civil claim. If one was injured at work and the employer was negligent, a civil suit could be brought against the employer for damages. However, in many cases, the injured worker would be out of work and unable to feed his family or obtain medical treatment. If the case was complicated, attorney fees, court costs and expert witness fees could not be paid. The employer had a distinct advantage. Even if a favorable verdict was obtained, it took months and the losing side was entitled to appeal.
To even the playing field, beginning in the 1910s, lawmakers began creating the “workmen’s compensation” laws on which the current law are based. The concept was fairly simple: create a system where an injured employee received compensation and medical treatment where he or she was injured in an incident which arose out of and in the course of employment. Benefits were paid quickly and regardless of fault. If the case was disputed, it was handled administratively, generally without suit being filed and without a jury trial.
On the surface, these laws seem to favor employees. However, as time would tell, the benefit to employers was significant. Contingency fees and non-economic damages, such as pain and suffering, were in their infancy in the 1920s. In the heyday of the pre tort reform era, a person could recover much more in a personal injury case than they could in a workers’ compensation claim, sometimes ten times as much or more. Therefore, in a case where an individual was killed on the job as a result of his employer’s negligence, benefits to his dependents under workers compensation are generally limited. If he or she had no dependents, in many states the employer would only have to pay for medical treatment before death. The same circumstances in a lawsuit would likely result in a six or seven figure settlement or verdict with the potential for punitive damages.
Also, as an incentive to industry, workers’ benefits under the act would be limited. Generally, an injured worker is entitled to two-thirds of his or her “average weekly wage” with a cap in place in many jurisdictions. In Georgia, for example, as of June 30, 1990, the maximum benefit an injured worker was entitled to was $175.00 per week, regardless of his or her injury or pre-injury wages. Even in 2006, after significant increases in the last fifteen years, the maximum rate in Georgia is less than $24,000 per year. (O.C.G.A 34-9-261) The median household income during the same period of time was $48,388.
In some jurisdictions, there are exceptions to the exclusive remedy provision. If the employer is guilty of gross negligence or willful misconduct, an injured worker may be able to obtain benefits over and above those provided by workers’ compensation. For example, in Massachusetts, an employee’s compensation is doubled in these types of cases with the employer paying the additional benefits. At lease one jurisdiction allows a choice of remedies where the employer is guilty of gross or willful negligence.
There are other exceptions but they are rare. In certain contract cases, an employer may be brought in as a result of an indemnification agreement with a third party. Also, if the employer is acting in a different capacity than employer, the exclusive remedy bar may not apply. Another example is in a loaned servant situation such as an employee working for a temp service. However, most states treat the both the direct employer and the company that pays the leasing company as “employer” for workers’ compensation purposes.
The level of frustration is tremendous for both employees and attorneys in the area of exclusive remedy. It does not seem right that an employer can be negligent and be immune from suit. It is more unfair that an employer can cause injury due to gross or willful misconduct with no consequences in most jurisdictions. The frustration intensifies when you learn you cannot sue a company who is not your employer – the “statutory employer” concept but that discussion is for another article.
When your lawyer, family or a friend tells you “You cannot sue your employer”, it may not seem just or fair. Sadly, however, it is probably correct.