Worker's Compensation is Not Necessarily a Bad Thing

Worker's Compensation is Not Necessarily a Bad Thing

The worker’s compensation system has come under attack in recent years. Despite the criticism, worker’s compensation can present a defense to litigation, but it can also impose significant obstacles to defending a claim.

I. The Effect

The California Legislature requires all employers to comply with the worker’s compensation statutes. Worker’s Compensation is effectively no fault insurance for personal injuries. It does not matter who was at fault or whether the employee was negligent in causing his injury. The only issue for worker’s compensation is whether the employee was acting “within the course and scope of his employment” at the time of the injury.

The “course and scope of employment” answer comes down to one question: Did the employer have some control over the employee at the time of the injury? If so, worker’s compensation will apply.

Obviously, if an employee is injured while performing job duties, he/she is within the course and scope of their employment. However, if the employee comes into the work site on a day off and trips over something, it is possible they are also within the course and scope of employment.

If the injury is compensable, i.e., arises out of the course and scope of employment, then worker’s compensation serves as a basis to provide money for medical care, missing work, and retraining, if necessary. Worker’s compensation uses a series of formulas to determine how much money an injured employee will receive.

The nature of the worker’s compensation setting is its own arena and is separate from civil litigation. Because of the separate nature of worker’s compensation, courts consistently hold worker’s compensation is the exclusive remedy for an employee’s injuries on the job.

The exclusive remedy of worker’s compensation even extends to an employee’s emotional distress. For example, worker’s compensation prevents an  employee from recovering for high blood pressure caused by job related stress. The emotional distress from discipline or termination (provided it is not illegal) is also subject to worker’s compensation.

Often employees try to bring various claims in civil court to exempt them from worker’s compensation. If the employee’s injuries arise out of the “course and scope of employment,” then the employee’s civil lawsuit must be dismissed.

The largest exemptions in the employment setting to worker’s compensation are the wrongful termination and harassment claims. Courts have held these claims arise outside of the course and scope of employment, even though a component of these claims is emotional distress. Thus, worker’s compensation does not preclude these lawsuits against an employer.

II. The Consequences in Civil Litigation

An employer who opts not to comply with the worker’s compensation statutes does so at their peril. If an employee is injured within the course and scope, the employee may sue the employer in a civil lawsuit as if worker’s compensation does not apply. This means all of the formulas for damages are not considered and the jury has the ability to award any amount.

The employer also needs to be aware they are going into this litigation with a severe handicap. First, the employee’s injury is presumed to be the direct result of the negligence of the employer. In other words, the employer is considered liable and caused the injury.

The employer is required to present evidence to show someone else was liable for the employee’s injuries. However, the employer is not permitted to argue the employee was negligent for his injuries or assumed the risk. The employee may not blame the cause of the injury on another employee.

From a defense standpoint, this is an extremely high burden to overcome. The employer is often forced to attribute the employee’s injury to another party, such as a manufacturer or a landlord. If so, the employer must prove this case with evidence. The employee can effectively sit back and watch the employer and any other entity blame each other as to who caused the injuries.

In addition to any damages which will be awarded, the employee is entitled to recover his/her attorney’s fees from the employer. However, the worker’s compensation statutes limit the award of attorney’s fees to only the plaintiff. This means if an employer prevails, they bear the sole responsibility to pay for their attorney’s fees.

In conclusion, worker’s compensation is not perfect, but it is a cost of business the employer cannot avoid. The potential liability of a lawsuit brought by one injured employee could easily cost as much if not more than the insurance premiums. Worker’s compensation insurance can provide the employer with one less headache in its operations.

This article appeared in the December 18, 2006 issue of the San Diego Business Journal.

For more information on employment related matters please contact Hugh McCabe.  Mr. McCabe is a shareholder at Neil Dymott. He concentrates his practice on employment law, business litigation and trucking and transportation matters.  Mr. McCabe can be reached

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