Diligent worker’s compensation managers, adjusters and defense attorneys justifiably strive to identify compensability issues and weed out cases that arguably do not create compensable claims. Such efforts appropriately manage worker’s compensation costs by eliminating claims that fall outside the protections of the compensation laws. Should employers always resist accepting claims as compensable when the facts present arguments against compensability? A recently decided Indiana premises liability case highlights the importance of recognizing that an employer may prefer a finding of compensability in situations that present issues as to whether the injury arose out of and in the course of employment.
The Indiana Court of Appeals recently decided just such a case in Curry v. D.A.L.L. Annointed, Inc. (Ind. Ct. App. 2012). The plaintiff, Gladys Curry, worked at a fast food restaurant operated by D.A.L.L. On her day off, Curry came to the restaurant to attend an employee meeting. The meeting started at 5:00 p.m., but Curry arrived at 3:45 p.m. to eat a meal before the meeting. The evidence did not establish whether D.A.L.L. required Curry to attend the meeting or whether she received pay for attending the meeting, but Curry clearly was not on the clock while eating her meal. Curry took her food outside to eat with other employees who came to attend the meeting. Curry suffered injuries when she tripped and fell while taking her trash to a trash can. All of this occurred before the meeting began.
The employer, through its worker’s compensation carrier, directed her medical treatment and paid wage benefits to Curry while she recovered from the injury. Curry did not request that she receive worker’s compensation benefits for the injury, but rather, the employer opted to treat the case as a compensable injury from the outset.
Curry and her husband sued the employer for negligence in a premises liability tort suit. They sought tort damages for the injuries and for the husband’s loss of consortium. The employer moved to dismiss the suit on the grounds that the Indiana Worker’s Compensation Act provided the exclusive remedy for Curry to seek compensation for her injury. The trial court agreed with the employer and dismissed the suit. On appeal, the Court of Appeals affirmed the dismissal. The Currys argued that because Gladys’s injury did not occur during work time, the injury did not arise out of and in the course her employment. They also argued that the case did not fall under the Act because Gladys did not affirmatively seek worker’s compensation benefits. The Court rejected their position, agreeing with the employer that the injury fell within the Act and the Act provided the sole remedy, stating, “The connection between [the employer’s] interest in improving the business by holding employee meetings and Gladys’s presence on the premises as an employee waiting for the meeting to begin, places jurisdiction of her claim for compensation for injuries sustained while on those premises squarely within the Act.”
Although the facts of this case presented a situation in which the employer could have made a good faith argument about compensability of the claim, the Court of Appeals decision finding compensability underscores that employers may prefer to find themselves in the workers compensation arena rather than the tort arena. A tort suit would involve not only claims for medical treatment and lost wages, but also claims for pain and suffering, loss of consortium, and under extreme circumstances, punitive damages. Premises liability trip and fall cases can result in substantial judgments if juries believe that property owners ignored the safety of those on their premises. In the worker’s compensation framework, the employer could direct the medical care (and presumably control costs) and avoid exposure to damages that could greatly exceed those available in a worker’s compensation case.
The Curry decision illustrates the point that worker’s compensation claims provide not only a means for employees to obtain treatment and benefits, but also a way for employers to avoid exposure to potentially more costly tort claims and remedies. A worker’s compensation claim may seem like a sword for employees, but it also creates a shield for employers. In close cases, even if an employer may have a good faith argument against compensability, the employer may derive some benefit if it treats the case as compensable and the case is ultimately determined to be compensable. Before denying the compensability of a workplace injury, in a close case employers and carriers should engage in a thoughtful analysis of the facts and exposure of the case. The employer may well prefer the devil it knows in the comp universe to the less predictable one lurking in the tort universe.
If you have any questions, please contact an Ice Miller Workers’ Compensation attorney.