Employees Can Sue Employers in Civil Court for Occupational Disease Claims: Missouri Appeals Court

Missouri’s Western District Court of Appeals recently decided that an employee can sue his employer in civil court for an “occupational disease” claim. The case, KCP & L Greater Missouri Operations Co. v. Cook, involved Monroe Gunter’s claim for damages stemming from a work-related injury. He claimed that he contracted mesothelioma as a result of having been exposed to asbestos during his employment with KCP&L. The court ruled that Gunter was allowed to file suit in civil court because, under Missouri law, the workers’ compensation forum is not the exclusive forum for a claim premised on an “occupational disease,” such as mesothelioma. (Note the distinction between an “occupational disease,” which develops over a period of time, versus an injury that happens instantaneously or acutely as a result of a single accident.)

This is a major change from prior law. Historically, the exclusive remedy for an employee with any employment-related injury – whether acute or gradual in onset – was to pursue a claim in the workers’ compensation forum. This is a system that clearly benefits employers (as well as third-party workers’ compensation insurers).

There are two types of employers in the workers’ compensation context: those who carry insurance policies issued by third-party insurance companies, and those who self-insure – that is, who create and pay into their own private workers’ compensation insurance policies. In every work-injury case, there are three benefits to which an injured employee is presumptively entitled: medical costs, lost wages, and permanent disability.

Two Scenarios

Consider the difference between the likely cost of a workers’ compensation claim versus the possible cost of a civil lawsuit with regard to: (1) a Missouri business with a workers’ compensation insurance policy issued by a third-party insurance carrier; and (2) a Missouri business that self-insures.

1.      Missouri business with a third-party policy.

Workers’ Compensation Claim

The only substantial cost the employer incurs as a result of a work injury is the increase in monthly premium that results from the “exposure” of the injury. The insurance carrier pays all claim-related costs for medical treatment, lost wages, and permanent disability. The insurance carrier also pays all attorneys’ fees associated with defending the claim, if necessary.

Civil Lawsuit

It is possible, depending on the terms and language contained in the employer’s workers’ compensation insurance policy, that the workers’ compensation insurance will not cover the company’s liability because the injury is not a “workers’ compensation” injury. If this is the case, the employer will be liable for all injury-related costs, including medical treatment, lost wages, permanent disability, and attorneys’ fees.

The good news for employers is that, in the civil realm, the employee will have to prove that the injury was caused by the employer’s negligence. Contrast this with the workers’ compensation system, in which the employer and its insurance company are strictly liable (i.e. liable without evidence of fault) for all injuries as long as the employee proves that the injury was caused by his work activities. Clearly, the evidentiary standard is harder on the employee in a civil lawsuit than in the workers’ compensation forum.

Still, if the employee is able to prove employer negligence, the employer will face costs dramatically higher than the increased insurance premium it would face in the workers’ compensation system. Plus, regardless of whether the employer wins or loses a civil case, it will be responsible for attorneys’ fees with the workers’ compensation insurer out of the picture.

2.     Employer that self-insures.

Workers’ Compensation Claim

The maximum cost to the employer is still relatively low. The maximum number of weeks a claimant can possibly obtain in permanent disability is 400, and the maximum rate per week is currently $811.73 (for permanent total disability). That caps the possible cost to the employer for permanent disability at $324,692. And note that in order to be entitled 400 weeks of disability, the employee essentially has to have died as a result of the injury.

With regard to medical costs, the self-insured employer has the right to direct and control medical treatment. With that right comes substantially depressed medical costs due to state-regulated re-pricing of medical billing.

Civil Lawsuit

Again, the injured employee has to prove employer negligence. This is not a simple task, but assume that the employer accomplishes it. $342,692 may seem like a high cost. However, consider the possible liability in a civil jury trial where, depending on the circumstances, an employer could face a punitive damages award that could reach $500,000.

In addition, in a civil case, the employer no longer is afforded the right to direct medical treatment, as it would in a workers compensation case. The employee can treat wherever he wants. And without directing treatment, the employer loses the benefit of re-priced (i.e. lowered) medical costs and selecting treatment providers with whom it has established client relationships. Under Missouri law, it is possible for injured claimants in a civil trial to obtain more money for medical costs than their insurance provider actually paid for their medical care. As a result, the workers’ compensation forum is unquestionably preferable for the self-insured employer.

What This Means for Missouri Employers

Most “occupational disease” claims involve “repetitive use” injuries, such as carpal tunnel syndrome (wrists/hands) and epicondylitis (elbows). It is yet to be seen whether or not Missouri courts will allow pursuit of these sorts of claims in the civil forum as well. However, it seems clear that KCP & L would permit an injured employee to pursue a repetitive use claim in civil court.

Still, this does not mean that most – or even many – employees will do so. Repetitive use injuries like carpal tunnel syndrome are caused by repetitive use. Plain and simple. It is hard to believe an employee would be able to prove that his employer’s negligence caused this sort of injury. To prove negligence, an employee must prove that the employer knew or should have known that a harmful condition existed and that its employees were at risk as a result. If the employee cannot prove negligence, it would be foolish for his attorney to file a civil lawsuit rather than a workers’ compensation claim.

“Injuries” such as mesothelioma, which results from years of exposure to asbestos, are do not commonly result from employment. However, Missouri employers need to ensure that they are not subjecting their employees to hazards – like asbestos – that can cause disease. Employers should also ensure that there is no way an employee can show that the employer’s negligence caused him to develop a repetitive use injury. How can employers do this? Ensure that:

• Machines work as they should. This includes making sure that machines are routinely maintained.
• Employees are educated and trained in the proper manner of using machines, tools, and other devices used in the course and scope of their job activities.
• Employees use safe/proper techniques in performing their job activities, and employees who do not are reprimanded.
• Employees are instructed to immediately report any acute injury. (This will help prevent acute injuries from becoming, arguably, repetitive-use/occupational disease injuries.)
• At least one administrative employee has the job function of monitoring employee activities and machine performance.

The more employers use their imaginations with regard to how they could possibly be viewed as negligent with regard to employee safety, the better they will be insulated against civil claims for “occupational disease” claims.

Employers should act accordingly to reduce “occupational disease” risk to their employees and protect their business from civil claims beyond the scope of workers’ compensation.

Posted by Attorney Christopher D. Vanderbeek. Vanderbeek is involved in the evaluation and defense of workers’ compensation and other insurance claims, protecting the interests of employers and insurers.