Pennsylvania Effectively Eliminates Workers’ Compensation Act as Source of Protection for Employers from Suits Arising Out of Latent Occupational Disease Lawsuits

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On January 29, 2014, the Pennsylvania Supreme Court denied defendants’ Petition for Reargument of the Court’s November 22, 2013, ruling in Tooey v. AK Steel Corp. et al. The ruling held that the Pennsylvania Workers’ Compensation Act (the Act) did not provide a bar to the lawsuits brought by the estates of two former employees of the defendants. The estates alleged in their complaints that the employees had been exposed to asbestos while employed with the defendants, but did not develop mesothelioma until more than ten years after their employment with the defendants had ended. Prior to the Pennsylvania Supreme Court’s ruling in Tooey – a major departure from existing Pennsylvania case law – common law claims for a latent occupational disease that first manifested itself outside of 300 weeks after the last day the employee was employed by his/her employer were barred by the exclusivity sections of the Act.

Background
The Workers’ Compensation Act works to insulate Pennsylvania employers from lawsuits arising out of workplace injuries occurring to employees while in the scope of their employment with the employer. In exchange for insulation from civil liability, the employers insure against those risks of loss to employees through the purchase of state-mandated workers’ compensation insurance coverage. Under the Act, an employee is compensated from the Pennsylvania Workers’ Compensation Fund for such injuries through fixed weekly payments until such time as the employee recovers from the workplace injuries.

Section 303(a) of the Act, which had been interpreted by prior Pennsylvania courts as providing insulation from liability to employers for injuries sustained during the course of employment with the employer (the “Workers’ Comp Bar”), states the following:

“The liability of an employer under this Act shall be exclusive and in place of any and all other liability to such employees, his legal representative, husband or wife, parents, dependents, next of kin or anyone otherwise entitled to damages in any action at law or otherwise entitled to damages in any action at law or otherwise on account of any injury or death as defined in Section 301(c) (1) and (2) or occupational disease defined in Section 108.” 

Section 301(c)(2) of the Act states: “… whenever occupational disease is the basis for compensation, for disability or death under the Act, [the Act] shall only apply to disability or death resulting from diseases occurring within [300] weeks after the last date of employment.”

The Tooey Decision: A Game Changer
In Tooey, the Pennsylvania Supreme Court summarily rejected the long-established precedent, which held that if a former employee had a latent disease that only manifested itself 300 weeks after the employee’s last date of employment, the employee would not be entitled to (1) workers’ compensation benefits or (2) the right to institute tort claims against the former employer. The only remedy remaining in such circumstances would be a direct lawsuit against, for example, the manufacturer of the asbestos-containing product or a distributor of that product.

In Tooey, the employees charged that due to exposure to asbestos dust while employed with the defendants, each had developed mesothelioma. The individual plaintiffs died and their estates filed suits against not only the product manufacturers and distributors but also their former employer(s). Summary judgment motions were filed in the trial court by the employers invoking the “Workers’ Comp Bar” discussed above. The motions were denied by the trial court. On appeal to the Superior Court, the trial court was reversed and the Superior Court – relying on existing precedent – concluded that the claims by the plaintiffs were barred. The Superior Court found that the claims were barred even if their mesothelioma manifested itself more than 300 weeks after their last date of employment.

In reversing the Superior Court, the Pennsylvania Supreme Court analyzed the “plain” language of section 301(c)(2) and found that contrary to the Superior Court’s interpretation of the section, section 301(c)(2) should be read to provide a bar to a tort claim against a former employer only in those cases where the occupational disease occurs within 300 weeks after the last day of employment. The Pennsylvania Supreme Court further noted that its grammatical construct simply made more sense and was more consistent with the Act’s legislative history and purpose. If the Superior Court’s interpretation were to continue to be upheld, the Pennsylvania Supreme Court reasoned that the employee would never be able to obtain any relief against an employer.

Ramifications
The most significant ramification from the Pennsylvania Supreme Court’s ruling in Tooey is that employers now face liability for common law claims arising out of occupational diseases with latency periods greater than 300 weeks. The Court was very careful in what it did not say in the Tooey decision – it did not say that the opinion was limited to only mesothelioma cases. To the contrary, it is evident that this decision will provide compelling authority that the “Workers’ Comp Bar” does not apply to any personal injury claims arising from an alleged occupational disease that does not manifest itself “within” 300 weeks from the last date of employment.

Further, from a practical standpoint, the Tooey decision now enables counsel for the plaintiff alleging injury from an occupational disease that has not manifested itself within the first 300 weeks after the last day of employment to sue the employer directly and wait for the employer to join the asbestos manufacturers and distributors.

Finally, the Tooey decision has already prompted a wave of amendments to complaints already on file seeking to join the employer in the ongoing litigation. It is unlikely that any trial court would prevent such timely amendments in light of the recent denial by the Pennsylvania Supreme Court of the defendants’ Petition for Reargument.

This decision by the Pennsylvania Supreme Court expands the liability of employers in latent occupational disease cases. Employers that know they have exposed employees to asbestos-containing products would be well advised to contact their insurance brokers to begin analyzing what insurance coverage they had in place during such time periods and the terms, conditions and limits of those policies (both primary and excess). In addition, the employers should consider whether or not they are able to purchase “retroactive” coverage for potential liabilities. Such employers should begin to investigate which of its employees and/or their estates have commenced litigation as a result of exposure to not only asbestos-containing products but also any other industrial toxins that may be the source of occupational diseases with latency periods of greater than 300 weeks.

Topics:  Asbestos, Asbestos Litigation, Employer Liability Issues, Latent Occupational Diseases, Tooey v. AK Steel Corp., Workers' Compensation Defense, Workplace Injury

Published In: Civil Procedure Updates, Labor & Employment Updates, Personal Injury Updates, Products Liability Updates, Worker’s Compensation Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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