Many clients, sometimes after years of litigating a workers’ compensation claim, reach the point of frustration 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 they were negligent, for the same injury. This article will attempt to explain the logic behind the exclusion commonly known as “the exclusive remedy provision.”
Before workers’ compensation statutes existed, the same rules applied to work-related accidents as to any other civil claim. If one was injured on the job and the employer was negligent, a civil lawsuit 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 or her family or obtain medical treatment. If the case was complicated, attorneys’ fees, court costs, and expert witnesses’ fees could not be paid. The employer had a clear advantage. Even if a favorable verdict was obtained, it took months and the losing party had the right to appeal.
To level the playing field, beginning in the 1910s, lawmakers began creating the “workers’ compensation” laws on which the current law is based. The concept was quite simple: create a system where an injured employee would receive compensation and medical treatment in the event that he or she was injured in an incident that arose during the course of employment. Benefits were paid quickly and regardless of fault. If the case was contested, it was handled administratively, usually without a lawsuit being filed and without a jury trial.
On the surface, these laws appear 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. At the height of the pre-tort reform era, a person could recover much more in a case than personal injury than in a workers’ compensation claim, sometimes ten times more or more. Therefore, in the event that a person has been killed on the job as a result of their employer’s negligence, benefits for their 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 for the industry, the benefits of workers under the law would be limited. Generally, an injured worker is entitled to two-thirds of his or her “average weekly wage” with a cap set 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. (OCGA 34-9-261) The median household income during the same time period was $48,388.
([http://www.census.gov/hhes/www/income/income06/statemhi2.html]).
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 in addition to those provided by workers’ compensation. For example, in Massachusetts, an employee’s compensation is doubled in these types of cases, and the employer pays the additional benefits. At least one jurisdiction allows a choice of remedies when the employer is guilty of gross or willful negligence.
There are other exceptions, but they are rare. In certain contractual cases, an employer may be intervened as a result of an indemnity agreement with a third party. Also, if the employer is acting in a different capacity than the employer, the exclusive remedy prohibition may not apply. Another example is a loaned servant situation, such as an employee working for a temporary service. However, most states treat both the direct employer and the company that pays the leasing company as the “employer” for workers’ compensation purposes.
The level of frustration is tremendous for both the employees and the attorneys in the area of exclusive recourse. It doesn’t seem right that an employer can be negligent and immune from prosecution. It is more unfair that an employer can cause injury due to serious or intentional misconduct without consequence in most jurisdictions. The frustration is heightened when you learn that you can’t sue a company that isn’t your employer: the concept of “statutory employer,” but that discussion is for another article.
When your attorney, family member, or friend tells you “You can’t sue your employer,” it may not seem fair or equitable. Unfortunately though, it’s probably correct.