When Workers Compensation Isn't the Exclusive Remedy

Stethoscope and gavel
Image courtesy of [Andrew Unangst] / Getty Images.

All state workers compensation laws in the United States incorporate a legal principle called the exclusive remedy rule. This principle is based on a mutual compact between employers and employees. Employers provide benefits to workers injured on the job regardless of fault. In return, workers give up the right to sue their employer for those injuries. Workers compensation benefits are intended to serve as workers' sole source of restitution for employment-related injuries.

While the exclusive remedy rule is firmly entrenched in most states, it is not ironclad. The rule has some exceptions. This means that injured workers may sue their employers (or other parties) in some situations. The specific exceptions to the exclusive remedy rule vary from state to state. Some common exceptions are outlined below.

Dual Capacity Suits

In a dual capacity suit an injured worker sues the employer in a capacity other than as the worker's employer. Many dual capacity suits are based on product liability.

For example, suppose that Jim is employed by Tires Inc., a tire manufacturer. One day Jim is driving a company truck when a tire blows out, causing an accident. The blown tire was made by Tires Inc. Jim is injured in the accident and sues Tires Inc. for bodily injury. Jim sues Tires Inc. in its capacity as a manufacturer of a product, not as Jim's employer. 

Dual capacity suits can arise out of injuries that are not caused by a product.

For instance, suppose that Jane is employed as a waitress at the Delectable Diner. One evening when Jane is not on duty she brings her family to the restaurant for dinner. Jane is walking to a table when she trips and falls on some loose carpet. Jane suffers a broken arm in the fall. She sues the Delectable Diner for bodily injury.

Jane has sued the diner in its capacity as a business, not as her employer.

No Workers Compensation Coverage

An injured worker may sue his or her employer if the latter failed to provide the workers compensation benefits required by law. The worker may have the option to sue either for compensatory damages or for the workers compensation benefits he or she should have received.

Intentional Harm

Workers may sue an employer for an injury the employer has inflicted on the worker intentionally. For example, Fred is Bill's employer. Fred gets into an argument with Bill and shoots Bill in the foot with a gun. Bill files a lawsuit against Fred alleging that Fred injured Bill intentionally.

Suits against employers based on allegations of intentional harm can be difficult to prove. In some states a worker seeking damages against an employer for intentional harm must show that the employer knew that his or her action was substantially certain (extremely likely) to cause injury to the worker.

Injured workers are generally barred under workers compensation laws from suing co-workers for injuries sustained on the job. However, a worker may be permitted to sue a co-employee for an injury the co-worker caused intentionally.

Concealment

A worker may be permitted to sue an employer that has intentionally concealed a connection between the employee's injury and the worker's employment. For instance, a worker develops silicosis. The worker's employer conceals the fact that the worker was exposed to silicon in the workplace.

Third-party Liability

Employees are typically permitted to sue a third party (other than the employer) whose negligence caused an accident that led to the worker's injury. For example, suppose that a restaurant employee is using a slicing machine when the machine malfunctions, injuring the worker. The worker receives workers compensation benefits from his employer (or its insurer). The worker then sues the manufacturer for bodily injury. The worker collects damages from the manufacturer in addition to the workers compensation benefits.

Depending on the state, the worker might be obligated to reimburse the workers compensation insurer if the damages he or she receives exceed the amount of benefits paid by the insurer.