Is the Workers' Compensation Frontier Changing?
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Will workers’ compensation laws continue to provide an exclusive remedy? Will the election of President Trump influence any states’ decisions on these laws moving forward? While the pendulum swings both ways, there are several jurisdictional considerations which challenge the exclusive remedy provisions in workers’ compensation statutes.
In 2016, I began following what transpired in Florida, thinking about the varying nuisances by state and how cumulatively there are considerable exceptions. There were two Supreme Court rulings impacting the statute:
- Castellanos vs. Next Door Company involved a contested case in which the attorney disputed the fees allowed under the Florida WC Statute. Prior to this ruling, the attorney fees allowed were a percentage of the award which was based on section 440.34 of the Florida Statute enacted in 2009. This provision of the statute was deemed to violate due process, deemed unconstitutional and reverted to the fee provisions allowed prior to 2009.
- Westphal vs. City of St. Petersburg involved an injured employee who had not reached Maximum Medical Improvement (or end of healing) when the 104-week cap on Temporary Total Disability Benefits occurred. The Supreme Court essentially ruled that this cap resulted in a statutory gap in benefits, which was a violation of an employee’s constitutional rights.
Some states already have acknowledged exceptions that begin to remove the protections afforded by exclusive remedy. For example:
- In California, fraudulent concealment which results in an aggravation of an injury can bar exclusive remedy protections.
- In Illinois, the contractual waiver of an employer’s Kotecki protections, while not a direct removal of exclusive remedy, does essentially expose a client to a tort case (in excess of the WC benefits statutorily owed).
- In Iowa, an employee can sue a co-employee if they’re able to demonstrate that co-employee acted “grossly negligent” amounting to wanton neglect for the safety of another.
- In Wisconsin, there are exceptions for auto accidents resulting from the use of an automobile not owned or leased by the employer.
Several states also recognize failure to procure WC insurance has a bar of exclusive remedy as well.
Another area of potential waiver of exclusive remedy is the Dual Capacity Doctrine. Some states have recognized situations where the employee acted in a secondary role outside of their role as an employer. In what capacity a state recognizes the Dual Capacity Doctrine will vary, however, some of the considerations include Products Liability, Medical Mal-Practice and Premise Liability.
More importantly, why does this matter and why should you care? As part of your risk program, evaluating the exposures in your jurisdictions and engaging in best practices to avoid these areas of liability are essential to managing your overall cost of risk.
For more information on workers’ compensation laws, chat with a member of the ‘A’ Team!
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