Workers’ Compensation as Exclusive Remedy Is Being Challenged

A system for providing medical care and lost earnings to workers injured in job-related accidents that has existed more than 100 years in the U.S. could be in for some radical changes in 2016 and beyond. Workers’ compensation was designed to make it easier for individuals to receive benefits by eliminating lawsuits against employers in favor of an insurance-based system. Some recent court cases have claimed that making workers’ compensation the exclusive remedy for injured workers forces them to accept benefits that are inferior to what they could receive if they had retained the right to sue their employer in a tort action.

Although it has come under fire in court cases in several states, workers’ compensation as the exclusive remedy of injured workers appears to just keep on going, but recent events could bring changes. For example, the United States Supreme Court has been asked to hear an appeal on the constitutionality of the Florida law that makes workers’ compensation the exclusive remedy of injured employees.

What is it that has made the exclusive remedy provisions of workers’ compensation laws the target of injured workers and their attorneys? More importantly, what does it mean for you if you are injured at work?

Pre-workers’ compensation: Tough times for workers

A better understanding of workers’ compensation as an employee’s exclusive remedy requires a look at the history behind workers’ compensation laws in the United States. Although every state now has a system in place to provide benefits for people unable to work as a result of work-related injuries or illnesses, this was not always the case.

Before the development of the workers’ compensation system, a person injured on the job would have to depend upon the benevolence of their employer to pay for medical care. As you can probably imagine, employer generosity was the exception rather than the rule. The only recourse an injured worker had was to sue their employer, but a worker had to prove that the employer’s negligence was the cause of the accident.

Lawsuits, even in the nineteenth century, took time, were costly, and did not offer any assurance of a victory for a worker. Keep in mind that while a lawsuit was making its way through the court system, the injured worker was probably out of work and unable to afford medical care.

Workers’ compensation: A boon for injured workers or a deal made with the devil?

Workers’ compensation laws came about for the first time in the early part of the twentieth century. The laws allowed injured workers to receive medical treatment and the income they lost from injuries related to their jobs. Families of workers killed in job-related accidents were entitled to receive benefits under the new laws.

You might think that the new laws were welcomed with open arms by workers, but they were not. Compensation laws required workers to give up their right to sue their employers in exchange for making benefits under the new program the exclusive remedy. Some people felt this was too great a price to pay.

Early challenges to workers’ compensation laws focused on constitutional principles of equal protection and due process. Court challenges in 2016 are reminiscent of the earlier objections to making compensation benefits the exclusive remedy for workers injured on the job.

Where the states stand on the exclusive remedy issue

Most states have retained at least part of the common law right of a worker to sue an employer, but not to the extent that existed before workers’ compensation laws. For example, some states, such as California, Massachusetts, Oregon, and Washington, permit lawsuits by injured workers who can prove that employers engaged in deliberate and intentional acts that caused the injuries to happen.

Texas allows an employer to opt out of providing coverage for employees. This creates two separate classes of injured workers in the state: those for whom workers’ compensation insurance is the exclusive remedy and those who retain the right to sue their employers. Employers who purchase workers’ compensation insurance receive immunity from civil lawsuit by injured workers except in situations in which the injury is caused by the intentional conduct of the employer.

Lawsuits against third parties filed by injured workers generally remain unaffected by the fact that workers’ compensation coverage applies. For example, a driver whose company vehicle is hit by another motorist who was texting on a cellphone retains the right to sue the negligent driver for damages, regardless of the fact that the exclusive remedy rule under workers’ compensation laws prevents a lawsuit against the employer.

Constitutionality of workers’ compensation laws under attack

The states have been the battleground for constitutional challenges to various provisions of workers’ compensation. An injured Florida worker claimed the legal fees paid to attorneys representing individuals filing compensation claims did not adequately take into consideration the amount of work a lawyer performed in representing a claimant. The worker’s lawyer proved that it took more than 100 hours to achieve a successful result for the client. The compensation judge agreed, but the fees allowed by law resulted in an hourly fee to the attorney of about $1.50.

The worker’s attorney argued to a state appeals court that the inadequate amount of the legal fees the law allowed made it difficult or impossible for injured workers to obtain legal representation. The appellate court agreed and held that the law violated both due process clauses of both the state and federal constitutions.

The same state appellate court that declared the legal fees provision of the law unconstitutional was not prepared to go in the same direction when a hospital nurse sued to win the right to forego his benefits and sue his employer. The nurse was entitled to receive workers’ compensation benefits, but he was forced to pay a copayment for each visit he made to his doctor once it was determined that additional medical treatment would not improve his condition. The law also did not allow him to receive benefits for a partial disability.

The attorney for the nurse argued that the benefits under the law were inadequate, and rather than benefiting the injured worker, they were causing financial harm. As with most cases challenging the exclusive nature of workers’ compensation benefits, this worker argued that a better remedy would be a lawsuit against the employer.

The state appeals court refused to rule on the issues raised by the worker. The claimant’s lawyer filed a request to the Supreme Court to have the appeal heard, but no decision has been made by the Court.

It remains to be seen what will happen before 2016 ends

The legislative changes and court challenges to workers’ compensation going on around the country might not affect you immediately unless you live in one of those states, but state officials throughout the country are taking notice, so you could see changes to the laws in your state. If the Supreme Court takes up the issue of a worker’s right to sue an employer, we could see a dramatic change in a system that has existed for more than 100 years.