Weekly Law Resume - September 20, 2012: Torts – Exclusive Remedy of Workers’ Compensation - Exception

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[author: David Blinn]


LeFiell Manufacturing Co. v. The Superior Court of Los Angeles County
California Supreme Court (August 20, 2012)

Under Labor Code Section 3602, an employee’s right to recover workers’ compensation benefits pursuant to Labor Code Section 3600 is the “sole and exclusive remedy” against his or her employer, with limited exceptions. This case considered whether a civil claim for loss of consortium would be allowed against an employer on behalf of the spouse of a worker injured in the course and scope of his employment.

O’Neil Watrous filed a civil action against his employer, LeFiell Manufacturing Company, for injuries suffered while Mr. Watrous was operating a power press in the course and scope of his employment. Mr. Watrous sued his employer under a cause of action for violation of Labor Code Section 4558. This is one of the four exceptions to the exclusive remedy rule. This section allows an injured worker to bring a civil action for tort damages against his or her employer where the injuries were “proximately caused by the employer’s knowing removal of, or knowing failure to install, a point of operation guard on a power press,” where the “manufacturer [had] designed, installed, required or otherwise provided by specification for the attachment of the guards and conveyed knowledge of the same to the employer.” Mr. Watrous’ wife, Nidia Watrous, joined as a plaintiff, seeking recovery for loss of consortium under the same theory. Both also brought causes of action for negligence and products liability.

LeFiell demurred to the Watrous’ complaint, arguing that the employee’s causes of action for negligence and products liability were barred by the exclusivity rule of the workers’ compensation laws. The employer also contended that the spouse’s claims were barred by the exclusivity rule, and did not fall within any recognized exception to that rule. The trial court sustained the demurrer only as to Mrs. Watrous’ tort claims for negligence and products liability. LeFiell appealed. The Court of Appeal issued a writ of mandate directing the trial court to sustain the employer’s demurrer to the causes of action for negligence and strict liability, but upheld the denial of the demurrer as to the Labor Code Section 4558 claims of both Mr. Watrous and his wife. The employer appealed the ruling as to the wife’s claim only.

The Supreme Court reversed the Court of Appeal, holding that the spouse could not state a claim for loss of consortium against the employer, based on the exclusive remedy rule of Labor Code Section 3602.

The Supreme Court noted that California courts have held that workers’ compensation proceedings are also the exclusive remedy for certain third party claims deemed to be derivative or collateral to the employee’s injury. The Court held that a spouse’s claim for loss of consortium is unquestionably derivative of, and dependent on, the employee’s industrial injuries.

Next, the Supreme Court pointed out that under the express language of Section 4558, standing to sue was limited to the employee “or his or her dependents in the event of the employee’s death.” Since Mr. Watrous did not die, by its terms, the statute only provided him with standing to sue for an injury related to use of a power press machine without appropriate guards.

Interestingly, the Court of Appeal had also recognized that (1) the spouse’s claim was derivative of Mr. Watrous’ industrial injury, and (2) Mrs. Watrous’ loss of consortium claim fell outside the express language of Section 4558 and was thus unauthorized by that section. However, the Court of Appeal had allowed her claim to go forward, concluding that “Since [employee’s] injury is outside the workers’ compensation bargain, his spouse’s dependent claim also falls outside the compensation bargain of Section 3600. According to the Supreme Court, this was where the Court of Appeal erred.

The flaw in the Court of Appeal’s logic was determining that Mr. Watrous’ injury was “outside the workers’ compensation bargain” of Labor Code Section 3600. To the contrary, the Supreme Court pointed out that the language of Labor Code Section 3600 establishes that the remedy of tort damages in an action at law pursuant to the power press exception in Section 4558 (as well as the other statutory exceptions) is intended to augment, and not replace, workers’ compensation benefits. The injured worker still receives their workers’ compensation benefits, but also has the right to sue if the injury falls under one of the exceptions. Therefore, the exceptions, under strict and limited situations, allow an injured worker to receive their benefits as well as to file suit against their employer. Since the language of Section 4558 was narrowly written, a lawsuit was only allowed when those strict requirements were met. Plaintiff could not “bootstrap” her civil action for damages for loss of consortium under the statute where the statute did not expressly allow her to do so.

The Supreme Court reversed the Court of Appeal’s decision denying the petition for writ of mandate to overturn the trial court order overruling the demurrer to the loss of consortium claim; thus ruling in favor of the employer by not allowing the spouse’s loss of consortium claim.

COMMENT

For a copy of the complete decision see:

http://www.courts.ca.gov/opinions/documents/S192759.PDF