Wednesday, October 1, 2014

The Workers Compensation Act as a Shield for Employers

Workers compensation laws are designed to remove fault from employee injury claims in exchange for a monetary cap on an employer’s liability. Recently, the Illinois Appellate Court Fifth District (Dale v. South Central Illinois Mass Transit District, 2014 Ill.App.5th 130361) considered whether the Workers Compensation Act cap on liability applied in a retaliatory discharge action. The court held that an employee retaliatory discharge claim for lost wages may be limited by the Workers Compensation Act.

The employee plaintiff, Richard William Dale, worked as a bus driver for the defendant, South Central Illinois Mass Transit District. Dale injured his shoulder in a work-related accident. He subsequently filed a claim under the Illinois Workers Compensation Act. South Central granted Dale twelve weeks of leave under the Family Medical Leave Act. When his twelve week leave period expired, South Central terminated Dale because he was medically unable to return to work. Dale filed a claim against South Central alleging retaliatory discharge for exercising his rights under the Illinois Workers Compensation Act.

Subsequent to his retaliatory discharge claim, Dale settled his workers compensation claim for $54,348.00 including temporary total disability benefits for 143 weeks and future medical damages. South Central then moved for partial summary judgment in the retaliatory discharge case, arguing that Dale’s claim for lost wages was solely attributable to his work related injury and not caused by the alleged wrongful discharge. The trial court agreed because “Plaintiff cannot establish any causal connection between his retaliatory discharge and lost wages.”

The appellate court granted an interlocutory appeal to decide if the Workers Compensation Act bars an employee from recovering lost wages in a retaliatory discharge lawsuit when the employee is injured in a work-related accident and is unable to work as a result of the compensation carrier’s delay in approving medical treatment.

The appellate court held that the Workers Compensation Act provides the exclusive remedy for injuries arising out of the course of employment, unless the injured employee can show one of the following: (1) the injury was not accidental (the employer intended to injure the employee); (2) the injury did not arise from employment; (3) injury did not happen during the course of employment; or (4) the injury is not compensable under the Workers Compensation Act.

Dale did not prove any of the exceptions allowing a lost wage claim exceeding the limits established by the Act. The court said to allow a civil action for lost wages for an injury covered under the Workers Compensation Act would improperly frustrate the purpose of the Act’s statutory scheme. The exclusive remedy provision is part of the quid pro quo, in which the employer assumes new liability without fault, but is relieved from the prospect of a large damage verdict.

Lost wages attributable solely to one’s infirmity (the work related injury) do not naturally flow from the commission of retaliatory discharge.

As the Dale case illustrates, the interplay between the damage limits established under the Workers Compensation Act and damages available under a retaliatory discharge claim is not always clear. Occasionally, the Workers Compensation Act can be used as a shield to protect employers from large damage claims. Employers should consult with their attorneys to determine whether or not damages under a retaliatory discharge claim can be limited based on factual situations similar to the Dale case.