Dual capacity

Intentional torts

Third-party over

Other possible doctrines

Dual Capacity

 Dual capacity holds that an employer normally shielded by the exclusive remedy rule may still be answerable for additional damages as one who has committed a wrongful act that is not related to the role of employer. This occurs, for example, when the employer is judged to occupy a second capacity where the exposure giving rise to the injury is common to the public in general. A classic illustration of a potential dual capacity situation is that of a soda bottler's delivery man injured by an exploding bottle during the stocking of a merchant's shelves. The soda bottler-employer is responsible for workers compensation for its employee, the delivery man, and could be held responsible in another capacity as the product manufacturer of the bottle should the injured delivery man, as a member of the general public, decide to pursue an action based on product liability against the manufacturer. The decisive test of this doctrine, then, is not concerned with how separate or different the second capacity of the employer is from the first, but with whether the second capacity generates obligations unrelated to those flowing from the first, that of an employer.

 Currently, a majority of states expressly and generally reject the dual capacity doctrine as a theory by which employees may avoid the immunity from tort actions granted to employers under workers compensation laws so as to bring actions in negligence against their employers for unintentional injuries. For example, in State v. Purdy, 601 P.2d 258 (Alaska 1979), the Alaskan high court stated that “whatever frail vitality the dual capacity doctrine has in other jurisdictions, the court does not think it warrants adoption in Alaska”. The New York high court echoed that sentiment in Billy v. Consolidated Machine Tool Corporation, 412 N.E.2d 934 (N.Y. 1980) in which the court stated that “the dual capacity doctrine…is fundamentally unsound”. (In fact, the California legislature largely abrogated the dual capacity doctrine after the Duprey decision by amending the state labor code.)

Furthermore, in order to combat the effect of dual capacity lawsuits, both the workers compensation form and the general liability form were revised. The current workers compensation form (WC 00 00 00 C), in the employers liability insurance part, specifically includes as damages that will be paid, those that are claimed against the insured in a capacity other than as an employer; the current commercial general liability form specifically excludes bodily injury to an employee whether the insured is liable as an employer or in any other capacity. Thus, these two forms make it as clear as possible that an injury to an employee is to be handled under workers compensation and not wrapped in a dual capacity cloak so as to seek relief under the general liability policy. For more information on this aspect of the workers compensation form, see Workers Compensation and Employers Liability Policy. For a discussion of the workers compensation exclusion in the CGL coverage forms, see CGL Coverage Form—Coverage A.

 Intentional Torts

 The reasoning behind the “intentional tort” doctrine eroding the exclusive remedy rule is that, in many jurisdictions, injuries caused by an employer's intentional actions have been ruled not to arise out of the course of employment; furthermore, public policy considerations do not permit an employer immunity from civil actions where the employer's intention is to injure or otherwise harm an employee. And, whether the employer's acts are intended or whether the results of his acts are intended, many courts decide that workers compensation is simply not the only remedy for an injured employee even if that individual happens to be a member of the employer-employee relationship. Some examples of this rational are as follows.

 The Louisiana Supreme Court in Fricke v. Owens-Corning Fiberglass Corp., 571 So. 2d 130 (La. 1990) indicated that it is not necessary for the employer to intend to inflict actual damage on the employee or that actions be malicious; it is enough if the employer intended to inflict either a harmful or offensive contact without the employee's consent.

 In Pursell v. Pizza Inn, Inc., 786 P.2d 716 (Okl. App. 1990), an Oklahoma appellate court was confronted with a case in which employees sued their employer alleging that the supervisors deliberately sexually battered and harassed them at work. The court decided that such allegations of willful, intentional, or even violent conduct on the part of the employer took the case out of the exclusive domain of workers compensation.

 In Gulden v. Crown Zellerbach Corp., 890 F.2d 195 (C.A. 9 1989), employees who had been ordered to clean up a PCB spill without protective clothing sued their employer, claiming the employer intended injury to them by his actions. The court decided that a jury could conclude that the intention to injure was deliberate where the employer had an opportunity to weigh the consequences and to make a choice among possible courses of action. Therefore, allegations of such intent to injure could not be dismissed by summary judgment based on the state's workers compensation law and the employees could file suit based on tort liability. Similarly, in Richie v. Rogers Cartage Company, 626 N.E.2d 1012 (Ohio App. 1994), an Ohio appeals court decided that a lawsuit by an employee against an employer could not be summarily dismissed if the question of company intent existed; the court said that there had to be a trial to determine whether the employer committed an intentional wrong.

 The intentional tort exception to the exclusive remedy of workers compensation is not universally accepted around the country and it is reasonable to believe that the problem of intentional tort erosion of the exclusive remedy theory will not be settled soon. Court decisions will vary from one jurisdiction to another and an insured employer should be aware of such decisions not only in the area where he is domiciled but also in those areas where he carries on his business activities.

 And, some state legislatures are getting into the act. Some states have passed laws reversing or limiting those court decisions that have allowed intentional tort actions to replace workers compensation recovery. On the other hand, many states' workers compensation laws provide the right to bring tort action against an employer with respect to injuries resulting from the employer's willful, deliberate conduct; or, like in Ohio, where the employer can be held liable if the plaintiff proves the employer committed a tortuous act with the belief that the injury was substantially certain to occur. This is also something that a responsible employer should know.

 Third-Party-Over

 The “third-party-over” doctrine is used to breach the exclusive remedy concept and involves the injured employee bringing suit against a third party who for one reason or another is able to bring an action against the employer. For example, the employer may have assumed the obligations and liabilities of the third party and thus can not take advantage of the exclusivity provisions of the workers compensation law; this was the thinking of a New York court, appellate division, in Oliver v. N.L. Industries, Inc., 566 N.Y.S.2d 128 (NY App 1991). This leaves the employer, then, with the prospect of paying workers compensation to his injured employee plus paying for the same injury based on a third party suit.

 Some courts that have allowed third-party-over actions have done so because the third party action included a demand for contribution rather than indemnification (at a time when the employee exclusion on the general liability policy applied only to indemnification). Earlier workers compensation forms did not address this distinction. However, both the current workers compensation form and the current CGL forms are worded so as to eliminate such a basis for third-party-over problems.

 The workers compensation form under the employers liability insurance section specifically pays for damages for which the insured is liable to a third party by reason of a claim or suit by that third party. The commercial general liability forms specifically apply the workers compensation exclusion to any obligation to share damages with or repay someone else who must pay damages. It needs to be pointed out, however, that this exclusion does not apply to liability assumed by the insured under an insured contract. So when there is an assumption of liability under an insured contract, the roles of the WC policy and the CGL coverage form are reversed. Namely, if employer A agrees to assume the tort liability of company B and a worker for A is injured due to the negligence of B and promptly sues B, the third-party-over situation that arises will see B handing the suit by the employee over to A; A's general liability form will defend and pay if necessary due to the exception to the exclusion; A's employers liability insurance (part two on the workers compensation policy) will not apply since liability assumed under a contract is not covered.

 Other Possible Doctrines

 It is safe to say that the exclusive remedy rule of workers compensation will continue to be the subject of repeated assaults aimed at diluting or destroying its impact. Several ideas have been proposed with varying results throughout the legal system in this country. The following discussion is certainly not the final word on this issue of the erosion of exclusive remedy, but it does show some examples that will keep the issue in a state of instability for some time.

 In Kerans v. Porter Paint Company, 575 N.E.2d 428 (Ohio 1991), the claimant alleged that she was sexually molested on five separate occasions by a co-worker and that Porter Paint did nothing to discipline or reprimand the co-worker. Kerans sued based on sexual harassment and Porter Paint made a motion for judgment without trial based on the exclusive remedy of workers compensation. The Ohio trial court granted the company's motion, but on appeal, the court stated that the workers compensation statute did not provide the exclusive remedy for claims based on sexual harassment. The court decided that workers compensation provides coverage for economic losses resulting from accidents and that sexual harassment did not usually result in economic loss, but rather, in loss of dignity and self-esteem. Therefore, workers compensation was not the remedy for the damages suffered by the claimant in this instance.

 Workers compensation coverage applies to bodily injury. What this case points out is that ”bodily injury” is subject to court interpretation and if certain alleged damages are deemed to either not include bodily injury or extend beyond the scope of that term, workers compensation can be said by a court not to be the sole path of recovery for a claimant.

 In Horn v. Bradco International, 283 Cal.Rptr. 721 (Cal. App. 1991), the claimant was fired, sued for and was awarded damages based on, among other things, the infliction of emotional distress. Upon appeal, the employer claimed that the award for emotional distress was improper since workers compensation was the exclusive remedy for any distress the claimant suffered as a result of his termination. Horn argued that workers compensation does not apply to purely emotional distress claims, but only if physical disability or injury accompanies the mental distress. In this instance, the California appeals court stated that nonconsensual termination of employment is included within the scope of workers compensation and any distress experienced is thus subject to the workers compensation law.

 Mental stress claims are a growing problem for the workers compensation system. As with sexual harassment claims, the question here is whether alleged damages are included within the meaning of “bodily injury”, and thus, subject to the exclusive remedy of workers compensation. This matter is discussed in more detail in the article on the workers compensation policy itself; see Workers Compensation and Employers Liability Policy.

 Another course chosen to avoid the exclusive remedy of workers compensation is for the claimant to deny that the injury occurred “in the course of employment”. If the claimant was injured outside the course of employment, the thinking goes, there is no causal connection between the injury and employment; therefore, a tort claim based on negligence against the employer is applicable. Some examples of this course are Middlekauff v. Allstate Insurance Company, 439 S.E.2d 394 (Va. 1994); Williams v. Martin Marietta Energy Systems, Inc., 99 Ohio App.3d 520 (1994); and Copeland v. Boots Pharmaceuticals, 916 P.2d 277 (Oklahoma 1996). This course of action is based on the individual facts of each case, of course, and the outcome will be decided on a case by case basis.

Finally, another avenue of attack on the exclusive remedy doctrine involves the preempting of state workers compensation laws by federal laws. The idea here is that the employer, through its actions or inaction, has violated a federal law and the injured employee has a right to sue for any damages suffered based on that federal law. For example, migrant farm workers, injured while riding in their employer's van, received workers compensation benefits under Florida law and then sued in federal court, arguing that their injuries were caused in part by the employer's violation of motor vehicle safety provisions of the Migrant and Seasonal Agricultural Worker Protection Act. The employer claimed workers compensation as the exclusive remedy for the workers' damages and the case went all the way to the United States Supreme Court; in Adams Fruit Company, Inc. v. Barrett, 494 U.S. 638 (1990), the Supreme Court affirmed that the federal migrant protection act does preempt state law and so, the workers compensation coverage is not the sole remedy by which the employees can be compensated for injuries. (Note that this court decision was superseded by statute in an attempt to allow state law to once again be the primary factor in workers compensation issues.)

 Other potential examples of preemptive federal laws would be the Employment Retirement Income Security Act (ERISA), the Americans With Disabilities Act (ADA), and the Family and Medical Leave Act (FMLA). These and other such federal laws do not, of course, have as their express purpose the demise of the exclusive remedy concept, but they can be used to accomplish that goal.