Unintended Consequences of the August 28, 2005 Missouri Workers Compensation Amendments- Your Company Co-Workers Can Now Sue Each Other For Negligent Acts Committed Against Each Other During the Scope of Their Employment
For many years, all employers have had their own issues with workers compensation claims. Prior to the early part of the twentieth century before state legislatures passed workers compensation statutes, individuals who were involved in accidents while at work could file a lawsuit in Circuit Court. These individuals could obtain any and all damages such as payment of medical bills, reimbursement for lost gross wages, disability, pain and suffering, loss of consortium, etc. For example, an employee who sustained third degree burns all over their body was capable of obtaining a large jury verdict in Circuit Court.
As a result of these lawsuits, there were numerous small and medium-sized businesses who sustained what were considered to be large verdicts for that time period. In many instances, these types of verdicts caused the destruction of many businesses. In an effort to prevent further loss of business, state legislatures developed workers compensation statutes in an attempt to arrive at an equitable outcome for individuals who were hurt in work accidents while also protecting businesses from large jury verdicts. Once these workers compensation statutes were developed, it was determined that the employee’s damages would be capped and the employer would be immune from being sued in Circuit Court.
For about the last 28 years in Missouri co-workers could be sued by injured employees if they were involved in a work-related accident that was “something more” than a breach of the employer’s duty to provide a safe workplace. In Missouri, the something more test required proof that a co-worker engaged in an affirmative negligent act that purposefully and dangerously caused or increased the risk of injury.
On August 28, 2005, the Missouri Workers Compensation Act was amended. As part of the amendments, the Legislature deemed that the Act was to be construed strictly by all Administrative Law Judges and all reviewing courts. Recently, the Missouri Court of Appeals for the Western District issued a decision in the case Richard Robinson v. Cheryl Hooker which involved strict construction of the Missouri Workers Compensation Act. The court determined that under strict construction, the Act did not allow for co-workers to have immunity from being sued in Circuit Court by co-workers even for simple negligence since the definition of “employer” in the Act does not include co-workers. Therefore, the Act does not specifically release co-workers from liability in exchange for their employers/insurers providing workers compensation benefits, i.e. the something more test is gone. Now an injured employee has the right to sue a co-worker for simple negligence in Circuit Court and demand pain and suffering, loss of consortium for the injured worker’s wife, etc. It is undetermined at this point as to whether the Missouri Supreme Court is going to take up this case.
What does all of this mean? This case could have significant ramifications with respect to companies trying to conduct business. If it is easier for injured employees to sue co-workers, one has to wonder what, if any, issues will arise within the company, particularly with regard to small and medium-sized businesses. What would happen to company morale if you have co-workers who are suing one another? Most companies try to create an environment which encourages teamwork and support for their fellow co-worker in order to optimize production and increase quality. What would happen to teamwork, productivity and quality in a business if co-workers were suing one another?
Most likely, the defendant’s homeowners insurance will not cover the loss. Thus, the co-worker would have to pay to hire their own attorney. Further, they would be faced with the possibility of a six or more figure judgment which could result in a lien against their house and the ability for the injured employee to execute on the judgment, i.e. garnish bank accounts and wages, take vehicles, etc. This could destroy the co-worker’s credit and force them into personal bankruptcy. Further, it is possible that the lawsuit between the co-workers reaches back to clients, customers, vendors, prospective clients, etc. which could significantly impact income streams, cash flows, operations and the reputation of the entity. Moreover, this type of lawsuit could allow a company’s competitors to gain a competitive advantage which could hurt the company’s ability to keep existing clients, gain new business and remain competitive via their cost structures.
What should you do? You should contact your Missouri legislator and request that they amend the Missouri Workers Compensation Act to immunize co-workers from being sued in Circuit Court by injured employees over simple negligence.
Danna McKitrick, P.C.