Workers’ compensation is known as an exclusive remedy. It is an exclusive remedy because it is the only way workers can receive compensation for injuries they suffer while working. However, there are exceptions to workers’ compensation as the exclusive remedy.
Workers’ Compensation Explained
Workers’ compensation is a no-fault insurance scheme that provides benefits and trade-offs for businesses and individuals. Individuals benefit under workers’ compensation because they get compensation for their injuries, lost wages, and related (i.e., incidental) damages within days or weeks. In contrast, under traditional civil litigation, it takes months or years.
Businesses benefit because they get certainty. The business can see exactly what the worker is losing and provide compensation to precisely compensate their workers. The worker cannot seek damages for pain and suffering or similar claims.
Under workers’ comp law, if a worker is injured while on the job, they must file a claim as soon as possible. By filing the claim, the company is notified and can begin processing the claim and sending it to the insurer. The insurance company processes the claim and dispenses funds once the claim is accepted. The entire process can be resolved in a few weeks.
Exceptions to Exclusive Remedy Rule
There are a few exceptions to the exclusive remedy rule: (1) dual capacity, (2) fraud, (3) assault, (4) power press, and (5) uninsured employer.
Dual Capacity
Dual capacity refers to a situation in which the employer owes duties to its employee outside the scope of employment. For example, a woman who works for a hospital is injured related to her job and is on temporary leave and receiving workers’ compensation for that first injury. The woman returns to the hospital for medical treatment and slips on a puddle, getting injured for a second time. The woman sues the hospital for slip and fall injuries (outside workers’ compensation). She is successful because the hospital was not acting as her employer when the second injury occurred but as a medical care provider. The woman was not injured within the scope of her damage but while seeking medical care.
Fraud
Fraud occurs when the employer tries to conceal the worker’s injury and its relation to the employer. An injured employee must file a claim. Suppose the employer improperly denies that the injuries were related to employment or concealed facts. In that case, the employee is further injured because of that denial (for example, being unable to receive medical care exacerbates the damage). The employer is liable outside workers’ compensation for the additional harm.
Assault
In general, employers are not liable for worker injuries caused by assault (i.e., intentional attacks). However, if an employer intentionally assaults one of its employees, the exclusive remedy rule is inapplicable. For example, if an employer instructs an employee to attack another employee, or if an employer ratifies (i.e., approves) an earlier assault by an employee against another employee.
Power Press / Removal of Safety Guards
Some employers remove safety guards from dangerous equipment — usually to increase productivity. However, when these safety devices have been removed, the risk of worker injury significantly increases — especially with hazardous equipment like presses.
When an employer knows that a device is attached to a piece of dangerous equipment and intentionally removes it, the employer loses the protection of workers’ compensation. The worker is allowed to sue them in civil court. However, the plaintiff must show that the employer knew that the safety device was removed. Therefore, the court cannot impute knowledge to the employer even if it is obvious from the facts.
Uninsured Employer
Finally, employers are required to obtain adequate workers’ compensation insurance. If the employer is uninsured or underinsured and injured, the employer cannot rely on insurance coverage to avoid liability. In addition to potential criminal penalties, employees may sue the employer directly.
