Insurance not a legal shield
by Laurie Hager, Sussman Shank LLP
In a recent decision, the Oregon Court of Appeals rebuffed an
employer’s attempt to use workers’ compensation
insurance as a shield from liability for work-related
negligence and assault claims.
In Olsen v. Deschutes
County, decided earlier this year, three employee
plaintiffs sued Deschutes County for damages relating to unsafe
work conditions and retaliation for complaining about such
conditions. The three plaintiffs worked as mental health
professionals at a county care facility for the mentally ill.
Their supervisor allegedly maintained an unsafe work
environment, including failing to implement safety precautions
for dealing with HIV-infected or hepatitis-infected patients.
Their supervisor also failed to follow rules concerning
aggressive patients, leading to an assault on one of the
plaintiffs. Each plaintiff claimed to suffer from
sleeplessness, anxiety and emotional distress as a result of
these work conditions.
After complaining about the unsafe work conditions, each of
the plaintiffs was either actually or constructively
discharged. They sued the county under a number of theories
including wrongful termination, unlawful employment practices
and negligence. The assault-victim plaintiff also sued the
county for assault. The jury reached a verdict in favor of all
three plaintiffs on these claims. The county appealed on
several grounds.
Among other issues, the county argued that the workers’
compensation statutes provide an employee’s exclusive
remedies and precludes an action for negligence or assault. In
rejecting this argument, the court cited Smothers v. Gresham Transfer,
where the Oregon Supreme Court decided that under some
circumstances workers’ compensation cannot preclude
certain remedies for a claimant employee.
In Smothers, the
employee’s occupational disease was not compensable under
the workers’ compensation system, because his on-the-job
exposure was not a major contributing factor. Because the
Oregon Constitution requires an adequate remedy for claimants
and workers’ compensation failed to provide one, the
Smothers court
permitted the claimant’s negligence action against the
county.
In Olsen, the Court
of Appeals expanded the rule of Smothers. The court rejected the
county’s argument that Smothers only applies when the
claimant is denied workers’ compensation coverage because
the work-related injury is not a major contributing factor to
the harm. Under Olsen,
if a claim is protected by the Oregon Constitution, but cannot
be remedied through workers’ compensation, an employee
can bring a separate lawsuit against the county for that claim.
This rule applies to private, as well as public, employers.
Since the Olsen court
found workers compensation provided no remedy for
plaintiffs’ claims, it affirmed the jury verdict against
the county.
What does this mean for Oregon businesses? Employers should
not rely on payment of workers’ compensation insurance
premiums as the sole insurance against liability for
work-related injuries. In Olsen, the employer’s
failure to establish adequate safety rules ultimately led to
its liability. The employer was also liable for failing to
follow the county’s existing rules intended to keep its
employees safe. Establishing and following rules to maintain a
safe work environment is another necessary insurance
program.
— Laurie Hager,
Sussman Shank LLP
laurie@sussmanshank.com
