Thursday, March 25, 2010

The not-so-exclusive remedy

A recent Ohio Supreme Court decision prompted some thoughts about workers’ compensation as the ‘exclusive remedy’ for work-related injury, illness, disease and death.

In Canada and most of the US, we think of workers’ compensation as being the exclusive remedy, that is, compensation for work-related injury or disease is limited to the wage loss, permanent disability and medical compensation defined by the workers’ compensation law and policy in force in a particular jurisdiction. Injured workers (or their survivors in fatality cases) are not permitted to seek other remedies for the work-related losses; for example, a worker is prohibited by law (statute barred) from suing the accident employer or another worker. (Of course, if a third party is at fault, there may be a right of action that may be taken as an alternative to compensation or pursued by the workers’ compensation authority as a subrogated right). The Ohio case reminded me that some states allow for exceptions to the exclusive remedy rule.

In the Ohio case, legal precedent in that state and a change in the Ohio tort law five years ago defined an exception to the exclusivity of workers’ compensation. It allowed a worker to both collect workers’ compensation and pursue an action against an employer if, and only if, the worker could prove the employer acted with “deliberate intent” to harm. The statute reads (in part) as follows:

R.C. 2745.01, effective April 7, 2005,
(A) In an action brought against an employer by an employee, or by the dependent survivors of a deceased employee, for damages resulting from an intentional tort committed by the employer during the course of employment, the employer shall not be liable unless the plaintiff proves that the employer committed the tortious act with the intent to injure another or with the belief that the injury was substantially certain to occur.

(B) As used in this section, ‘substantially certain’ means that an employer acts with deliberate intent to cause an employee to suffer an injury, a disease, a condition, or death.

(C) Deliberate removal by an employer of an equipment safety guard or deliberate misrepresentation of a toxic or hazardous substance creates a rebuttable resumption that the removal or misrepresentation was committed with intent to injure another if an injury or an occupational disease or condition occurs as a direct result.

The section clearly puts a high test on what would be an intentional act intended to or substantially certain to injure a worker. The examples in paragraph C anchor the intent of the provision to very plausible but likely very rare situations. And the Ohio Supreme Court certainly confirms a very narrow access to the exception.

Similar exceptions to the exclusive remedy exist in some other states for cases of reckless or wanton disregard for the safety of the worker. According to Larson’s, Ohio, Louisiana, North Carolina, Connecticut, Oklahoma, New Jersey, South Dakota, and Texas—now employ a “substantially certain” standard.

In Australia, access to common law remedies still exists in most states (but not in SA or NT and limited access in Victoria and ComCare). In Queensland there is an unrestricted worker right to seek common law damages against an employer for breach of duty or negligence. One report says common law claims represent just four percent of all claims, but 40 percent of claim costs. That state has a discussion paper proposing a narrowing of access to common law by adopting a 10%-15% threshold in whole body impairment.

Social justice reasons are sometimes given for allowing exceptions to the exclusive remedy rule. Some see access to common law remedies for serious harm resulting from intentionally or substantially certain harm as a mechanism to deter such behaviors and improve worker safety. On the other hand, many view exceptions to the exclusive remedy as an erosion of the Historic Compromise.

In isolation, each of these arguments may have merit, however, I am of the view that you cannot look at any single feature of a system—including exceptions to the exclusive remedy rule-- in isolation. This is less a form of cultural relativism and more a position that accepts more than one arrangement of public policy features can achieve similar if not exactly equivalent outcomes.

I am certain others will have strong views for or against exceptions to the exclusive remedy rule so feel free to post them.

No comments: