The grand bargain of workers’ compensation has long been premised on the rights and responsibilities of the employer and employee. Under this statutory framework, the employee has a right to a guaranteed benefit system following a work injury that removes barriers presented by the traditional tort system. Employers gained the benefit of certainty by not being subjected to lawsuits and agreeing to pay post-injury benefits to the employee.

Recent legal developments have put the underlying tenants of workers’ compensation law and the grand bargain under assault. Time will tell if the basic premise of the “exclusive remedy” will remain moving forward into the post-modern world.

What is the Exclusive Remedy?

All workers’ compensation acts contain “exclusive remedy” provisions that limit the ability of an injured employee to file a lawsuit against an employer following a work injury. This legal concept in workers’ compensation insurance policies prevents employees from suing their employer for an injury they sustained while on the job. This is known as the “Exclusivity Doctrine.” The exclusive remedy limits the compensation available to an injured party to only those benefits defined in the insurance policy.

While employees are not completely limited in their ability to bring a tort action against an employer, the high standard of “willful negligence” generally precludes all but a few limited instances. Some courts are reexamining this doctrine, which could be a monumental moment for workers’ compensation programs nationwide.

Attacks on Exclusive Remedy in Work Comp

The concept of “exclusive remedy” has been maintained in the American tradition since Wisconsin passed the first workers’ compensation law in 1911. Recent trends suggest that ongoing attacks on the exclusive remedy provision will grow given the ongoing transition of the US economy from manufacturing to being more service-based.

• COVID-19: Several attacks on this provision have arisen from the recent worldwide pandemic. These were challenges faced by family members who were exposed to this virus at work and who transmitted it to household members.

• School and workplace violence: Challenges have been made related to violence within the workplace. In some instances, courts allow tort actions to proceed, notwithstanding workers’ compensation acts limiting the ability of employees to file civil lawsuits.

• Traveling employees: Exclusive remedy provisions are under attack when business trips go bad. There have also been other challenges in the context of wrongful death actions that arise in the context of workers’ compensation claims.

It is unlikely that courts will eliminate the “exclusive remedy” provisions contained within workers’ compensation acts. However, steps that chip away at this precision’s role within the system are problematic.

Why Does it Matter?

To steal a phrase from 1980s automobile marketing, “This Ain’t Your Grandpa’s Oldsmobile!” The US economy is changing, and so is the nature of the workforce. Courts that used to enforce the exclusive remedy provisions of workers’ compensation acts strictly are now more open to challenges. While such provisions are unlikely to be found unconstitutional, courts are more likely to allow other challenges that chip away at the edges of exclusive remedy.

Now is the time for stakeholders interested in reducing workers’ compensation program costs to be proactive within their workplace to reduce the frequency and severity of work injuries. It is also crucial to take other proactive measures to defend against claims:

• Ensure a best in class injury response: This can include training all employees in first aid and ensuring everyone has access to basic first aid supplies. Incorporate safety messaging into all team meetings. Make safety training effective. Consider using telephonic nurse triage services to best direct non-emergency medical care.

• Promote timely reporting of work injuries: This is one of the best defenses against workers’ compensation claims.

Now is the time to take a proactive approach to your workers’ compensation programs to reduce program costs.

Conclusions

The exclusive remedy provisions are the cornerstone of the workers’ compensation grand bargain. While this concept is slowly eroding, there are many steps that interested stakeholders can take to reduce program costs and best position one’s program to face the challenges they may face following a work injury. When reducing workers’ compensation costs, now is the time to stay on offense.

Michael Stack, CEO of Amaxx LLC, is an expert in workers’ compensation cost containment systems and provides education, training, and consulting to help employers reduce their workers’ compensation costs by 20{c9b670b3c77d807bdd7060c9fc0a99121cc6b184676c9335f3481a95c383dd4c} to 50{c9b670b3c77d807bdd7060c9fc0a99121cc6b184676c9335f3481a95c383dd4c}. He is co-author of the #1 selling comprehensive training guide “Your Ultimate Guide to Mastering Workers’ Comp Costs: Reduce Costs 20{c9b670b3c77d807bdd7060c9fc0a99121cc6b184676c9335f3481a95c383dd4c} to 50{c9b670b3c77d807bdd7060c9fc0a99121cc6b184676c9335f3481a95c383dd4c}.” Stack is the creator of Injury Management Results (IMR) software and founder of Amaxx Workers’ Comp Training Center. WC Mastery Training teaching injury management best practices such as return to work, communication, claims best practices, medical management, and working with vendors. IMR software simplifies the implementation of these best practices for employers and ties results to a Critical Metrics Dashboard.

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

Injury Management Results (IMR) Software: https://imrsoftware.com/

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.