Missouri Closes Workers Compensation Loophole: Protecting Co-Workers from Lawsuits

[tweetmeme] The Missouri Senate passed legislation recently that would effectively close a major loophole in Missouri Workers Compensation laws.   The following the Missouri chamber of Commerce’s press release detailing the legislation.

Missouri Chamber pleased with passage of workers’ compensation reform that protects Missouri workers

Yesterday, the Missouri Senate passed legislation, House Bill 1540, on a unanimous vote and was adopted by the House with a vote of 122-29.  The bill was sponsored by Rep. Tim Jones specifies that an employee subject to workers’ compensation provisions must be released from all liability for personal injury or death to a co-employee due to an accident or occupational disease.

Following reforms to the workers’ compensation system in 2005, the courts began interpreting the law in such a way that co-workers were no longer protected as the exclusive remedy for workplace accidents.  Already, millions of dollars in lawsuits and settlements have been paid out as more and more trial attorneys find ways to leverage this loophole.

This comes at a crucial time as the Missouri Chamber has heard reports of trial attorneys using the loophole to go after the personal assets of co-workers of employees who were killed at a Joplin business during last year’s tornado.

“Every possession that these individuals own that wasn’t taken by the tornado is now at risk due to a flaw in the law that trial attorneys are using to get rich,” said Daniel P. Mehan, Missouri Chamber president and CEO.  “We are getting pleas from businesses that are being bankrupted by a rash of co-employee lawsuits, but reports of this flaw and the tornado being used to line the pockets of lawyers on the backs of innocent workers reaches an all-new low,” Mehan said.

“Workers’ compensation served as the exclusive remedy for co-employees for decades until the changes to the law in 2005,” Rich AuBuchon, general counsel for the Missouri Chamber of Commerce and Industry, said.  “This loophole puts Missouri workers in the crosshairs of trial attorneys seeking big payouts for a cause of action that was not intended to exist.  No employee should be forced to worry about losing their home to a lawsuit based on an unintentional workplace accident.  The passage of this legislation will protect employees and employers throughout Missouri.”

The passage of this legislation was extremely difficult.  Despite this success other critical issues impacting our workers’ compensation system remain including a loophole that allows employees to sue in court for compensation of occupational disease in addition to receiving workers compensation benefits.  Also, Missouri’s insolvent Second Injury Fund remains unresolved.  The Missouri Chamber of Commerce and Industry will continue to work on these issues but with only three days left in the 2012 Legislative Session the issues remaining may not be resolved this year.

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Missouri Court of Appeals: Workers Can Sue Employers for Occupational Diseases AND Collect Workers’ Compensation

[tweetmeme]The first line on the Missouri Department of Labor’s Workers’ Compensation webpage reads: “The Missouri Division of Workers’ Compensation administers the programs providing services to all stake holders including workers who have been injured on the job or been exposed to occupational disease arising out of and in the course of employment.” However in 2005 when Missouri last updated its worker’s compensation laws, it failed to include the term occupational disease in the exclusive remedy section of the workers’ compensation statute. Thus opening a big can of worms for Missouri employers.

In a recently published article written by Daniel Mehan, President and CEO of the Missouri Chamber of Commerce this “oversight” was highlighted as he noted that the Western District Court of Appeals ruled that workers’ compensation does NOT serve as the exclusive remedy for employees who may contract long-term, repeated exposure diseases. Transalation: Employees can sue their employers in civil court as an additional remedy to workers’ compensation. Both legal avenues are now seemingly concurrently open for employees in the state of Missouri.

The court case that prompted this ruling involved Monroe Gunter (Monroe Gunter v. KCP&L Greater Missouri Operations Co., et al., Case No. 10CA-CV01079) who worked for KCP&L for thirty-four years before he retired in 1988. He was diagnosed with mesothelioma in February 2010. The court held that Gunter‘s claims were not subject to the exclusivity provisions of workers’ compensation because they did not arise out of an―accident as that term is defined in the statute.

MISSOURI CHAMBER SAYS: UNCERTAINTY AHEAD

“For decades employees who filed a worker’s compensation claim were precluded from filing a civil lawsuit against the employer for the same injury leading to the worker’s compensation claim. It apears this long-standing rule of law is now gone for long-term, repeat-exposure occupational diseases.”

With Missouri’s Second injury fund already being frozen by Missouri Attorney General Chris Koster who stopped paying people who were granted permanent total disability awards by a judge, the opportunity for many of these cases to turn to civil courts for relief just opened up. Employers in Missouri should have alarm bells going off in their heads right now. If you, as an employer operate a facility that exposes or potentially exposes worker’s to chemicals or other agents that may cause long-term disease as a result of repeated exposures you may now be subject to civil litigation at the same time as being on the hook for worker’s compensation claims.

Since the Missouri Attorney General’s office stopped settling cases against the fund in 2009, more than 30,000 cases are now pending and about 700 cases are filed each month waiting to be adjudicated. Not counting those cases, the fund’s estimated liability for awards already approved by judges is $1 billion. With Social Security Disability being the sole source of income for virtually all of the injured workers not being paid by the fund one can only guess at the number of people who will strongly consider remedies through civil action against their employers.

LEGISLATIVE FIX NOT LIKELY ANYTIME SOON

It is up to the Missouri legislature to resolve this issue. As the Court ruled “The legislature is presumed to have intended what the statute says, and if the language used is clear, there is no room for construction beyond the plain meaning of the law.”  As noted in Mehan’s article, the Missouri Legislature failed to address this issue: a remedy was blocked according to Mehan “through work of trial attorneys wanting more litigation against Missouri employers to garner more legal fees on the issue.”   Thus placing Missouri employers in the unenviable position of being required to pay for workers’ compensation insurance knowing that workers can now seek civil action against them as well as filing for workers’ compensation benefits.

EMPLOYERS MUST PROVIDE A SAFE WORKING ENVIRONMENT

As a Missouri Employer it is now an imperative that you do everything to protect yourself from this risk. Including reviewing and updating your industrial hygiene safety programs, ensuring that all of your workers are protected at all times from dangerous or potentially disease causing agents in the workplace. Performing job hazard analyses (JHAs) for each specific job function, especially those relating to chemical storage, use and disposal. Consulting with experienced professionals in industrial hygiene and safety is a must for those employers without in house expertise. Training your supervisors and front line managers to recognize potential hazards and to effectively communicate the risk associated with those hazards to your workers, so they will take the necessary precautions to protect themselves is critical to protecting your organization against potential claims in the future.