Workers’ Compensation Outline
Fall 2010, Prof. Evans
Introduction to Course
· Worker’s Comp is a remedial legislation designed to assist the employee. The purpose of the doctrine is to adjudicate.
· The doctrine evolved out of the industrial revolution, and the callous indifference employers had to employees and their families, in particular to miners, who were killed in mining accidents.
· Worker’s Comp is designed to provide the injured employee with a dignified form of relief and the cost of the system is passed on the consumer of the product.
· Author says that it is a no-fault remedy, but in MI we have section 305 of the Act, which takes away the no-fault portion.
· In Michigan, Worker’s comp claims are not taxed and they receive 80% of the after tax value of the average weekly wage.
· Three benefits are payable:
o 1) Wage-loss (weekly indemnity)
o 2) Reasonable and necessary medical
o 3) Vocational Rehabilitation
· Even though Act says that negligence is immaterial, by the end of the day it is important and the real motivation for the outcome is the fault of the employee
· Coverage is limited to an employee as distinguished from an independent contractor.
· Consequences of the Act- the employee and his dependents give up their common law rights to sue the employer for damages resulting from the Act. There are, however, exceptions to the rule.
· The employer is required to secure its liability through private insurance, state-fund insurance in some states, or “self-insurance”.
· Statutory Provisions
v The British Compensation Act formula states that the “injury has to arise out of and in the course of employment.”
· Section 131 Exclusive remedy: the right to recovery of benefits as provided in this act shall be the employee’s exclusive remedy against the employer for personal injury or occupational disease. The only exception to this exclusive remedy is an intentional tort.
· Section 141: basically eliminates 3 defenses: 1) assumption of risk; 2) contributory negligence; and 3) the injury was caused by the negligence of a fellow employee. the only exception is intentional tort.
v The statute eliminates negligence unless it appers to be willful
· Statutory employer:aka contracted under statute, in which it imposes liability on the general employer
· The five lines of interpretation of “Arising”
v Introduction: of the two components of the almost-universal coverage formula—“arising out of and in the course of employment-the “arising out of” test is primarily concerned with causal connection. Most courts in the past have interpreted “arising out of employment” to require a showing that the injury was caused by an increased risk to which claimant, as distinct from the general public was subjected by the employment.
v 1) Peculiar-Risk Doctrine: the claimant had to show that the source of the harm was in the nature peculiar to his occupation. Accordingly, even if the work subject the claimant to a tremendously increased quantative risk of injury by heat, cold, or lightning, that claimant might be turned away with the comment that “everyone is subject to the same weather”. For example, if a laborer froze his foot while in the public square all night in very cold weather. The court said: there is nothing to show that the employee was exposed to any greater risk of freezing his foot than the ordinary person engaged in outdoor work in cold weather. But, of course, the ordinary person is not engaged in outdoor work in cold weather; and so to limit the comparison was to rob the claimant’s employment of the only distinctive feature it had for present purposes.
v 2) Increased Risk Doctrine: the risk the employee is exposed to is much greater than the risk of the average person. For instance, a lawyer in a lightning case will begin by trying to prove that the employment increased the risk of exposure to lightning by placing the claimant on a height, or near metal, or in contact with an element that conducts electricity.
v 3) Actual Risk Doctrine: this says that we don’t care whether this risk was also common to the public, if in fact it was a risk of his employment. One effect is to permit recoveries in most street-risk cases and in a much greater proportion of act-of-god cases.
v 4) Positional-Risk Doctrine: This is a but-for test. The doctrine says that an injury arises out of the employment if it would not have occurred but for the fact that the conditions and obligations of the employment placed claimant in the position where he or she was injured. This case supports compensation in cases of stray bullets, roving lunatics, and other obligations placed the employee in the particular place at the particular time injury occurred by some natural force.
· Five categories of risks:
v All risks causing injury to a claimant can be brought within three categories: 1) risks distinctly associated with the employment, 2) risks personal to the claimant, and 3) neutral risks-i.e. risks having no particular employment or personal character.
v 1) Risks Associated with Employment: this group comprises all the obvious kinds of injury that one thinks of as an industrial injury. For instance, things that can go wrong around a modern factory like machines breaking, object falling, explosives exploding, tractors tripping, etc. All of these risks fall readily within the increased risk test and are considered work connected in all jurisdictions.
v 2) Risk Personal to the Claimant: these could include when its time for the employee to die of natural death, or if the employee has a mortal personal enemy who has sworn to seek the employee out wherever he or she may be and if this enemy happens to murder the employee while the latter is at work, then he employment cannot be said to have had any casual relation to the death.
v 3) Neutral Risks: these are the risks of neither distinctly employment nor distinctly personal character. For instance an employee may be found to have died on the job from unexplained causes, or may suffer a slip or fall for no reason that anyone including himself can explain.
v 4) Mixed Risks: a personal cause and an employment cause combine to produce the harm. The most common example is of a person with a weak heart who dies because of strain occasioned by the employment. The law does not weigh the relative importance of the two causes, nor does it look for primary and secondary causes; it merely inquires whether the employment was a contributing factor.
Miscellany of Risks
· 1) Act of God and Exposure
v All courts agree that injury due to lighting, windstorms, earthquake, freezing, etc, arises out of the employment if the employment increases the risk of this kind of harm.
v It may be possible to recover under the following theories: 1) increased risk; 2) actual risk; or 3) positional risk. The “proximate cause” or “peculiar risk’ approaches would disallow compensation.
v Whetro v. Awkerman: tornado came through town and destroyed hotels where 2 plaintiffs were staying. Defendant argued: 1) act of God and therefore, it did not arise out of the course of employment. Held: Court rejected Defendant’s argument, noting that Michigan no longer requires the establishment of proximate cause between employment and the injury. Further, they noted that they no longer regard an act of god as a defense to a work-related injury. The court reasoned that the function of WC is to place the financial burden on the industry and ultimately spread the costs to the consumer.
v Exposure to heat or cold is also usually compensable. In Hanson v Reichelt, Defendant argued that the injury occurred on a hot day and everyone was subject to the same risk. Held: heddddddddHddddfdffffffHthe court noted that the work that the decedent was doing for his employer exposed him to a greater hazard from heatstroke than the general public was exposed to for the simple reason that the general public were not pushing wheelbarrow loads of sand in a the hot sun on that day. They used the actual risk doctrine reasoning that if the nature of the employment exposes the employee to the risk of such injury the employee suffer an accidental injury arising out of and during the course of employment. It made no difference that the risk was common to the general public on the day of the injury.
· 2) Street-Risk Doctrine
v Frequently employees find themselves on the streets and highways in the course of their employment.
v An employee who is subjected to a greater exposure to the risks of the street, despite the fact that such risks are common to the public may be covered. This also serves as an extension of the master-servant doctrine: When master sends the servant out, he has increased the risk.
v The injury has to occur on the street in order to recover. If you were on the side-walk you weren’t entitled to damages, you had to be on the streets.
v Coverage in these cases can be provided on the basis of
te the rejection of the aggressor defense, a substantial minority of jurisdictions by statute exclude from coverage those who have been harmed as a result of their “willful intent to injure” others. Generally these statutes require a greater degree of fault and wrongdoing than is required for the aggressor defense.
o Stewart v. Chrysler: Stewart was provoked by McCoy and slapped McCoy. McCoy then Murdered Stewart. Held: McCoy caused the controversy and was the aggressor. The fight arose because McCoy willfully interfered with a method and means of ingress and egress incidental to the employment provided, prescribed and approved by the employer. Court further explained that while the decedent struck the first blow, this is not the controlling test as to whether the injury arose out of the employment. It didn’t make the decedent the aggressor. The disagreement arose out of the employer’s work.
o In Michigan, there is an aggressor rule of sorts. The unique thing is that it must follow a cooling off period. Whoever precipitates the fight after the cooling off period is not entitled to compensation. If you are plaintiff’s attorney, you want to qualify your client as the non-aggressor and if you are defense you want to point the fingers at the person as the aggressor.
· Assaults by Strangers:
o White v Atlantic City Press: plaintiff while driving his automobile to work picked up 2 hitchhikers who then assaulted him and tried to rob him. A fight ensured and petitioner was hospitalized with lacerations and stab wound. The court held that he was entitled to compensation because but for the performance of his duties to drive to the pickup point of the newspaper that he delivers, he would never have encountered his assailants. The court further reasoned that the employer placed the petitioner on the highway and he was thereby subjected to the hazard, therefore there was a work-connection sufficient to render the ensuring injuries such as those that arose out of employment
o Jordan v Farmers State Bank: James Byler was the president of a bank. Shortly after he arrived for work, he received a phone call from a man ho identified himself as Jay and he had taken Byler’s wife hostage. Byler told Jordan (an employee of the bank0 that he needed the money so she gave it to him but also accompanied him because he had a heart condition. They got the money and were told to lay down. They were then both shot. So now they seek benefits under WC for injuries suffered from the shooting. Held: the court said yes to both arising and out of their employment. The court offered 2 different arising out of standard:
§ Court said that it arises out of employment if 1) the injury results from a natural and reasonable incident of employment, a rational consequence of some hazard connected therewith or a risk reasonably inherent in the particular conditions of the employment; and 2) if the injury is the result of a risk peculiar to the employment or enhanced thereby.
§ Cases where an injury arises in the course of employment if it occurs within a period of employment at a place where the employee engages in an activity that furthers the employer’s business or if he is injured in doing an act reasonably incidental to the performance of his duties of which his employer might reasonably have knowledge or reasonably anticipated.
§ In this case, the court said that the injuries arose out of Jordan’s and Byler’s employment, in that it is a natural and reasonable that an employee could be shot and that shooting would be a rational consequence of the hazard of such employment.