I’ve written before about the dangers of denying an accident took place in the course and scope of employment.  Such a denial allows removes the exclusive remedy defense to an Employer and allows an injured worker to proceed with a tort action. 

While researching for a client, I found a case decided this past March that is based on the same principle.  But, in this case, the Employer never reported the accident to its Carrier after the injured workers reported their injuries.  This is a big no-no in and of itself, but considering the wider consequences an Employer is crazy to even think to take this position.

More after the jump. . .

In Ocean Reef Club v. Wilczewski, two employees at a salon notified their supervisor of potential exposure to chemical fumes “inherent in the operation of a beauty salon” which caused headaches and asthma-like symptoms.   However, the Employer never informed its Carrier of the alleged exposure and a Notice of Injury nor Denial was filed at the time.

Cut to some time later and the employees filed a tort suit against the Employer in circuit court for negligence.   Finally, upon reciept of the suit, did the Employer notify its Carrier.  The Carrier denied the claims contending that the illnesses did not arise of out of the course and scope of employment and the statute of limitations passed.

On a Motion for Summary Judgment, the Employer sought the Judge to dismiss the civil suit based on Workers’ Compensation immunity (s. 440.11).  The judge denied the Motion and the Employer appealed.

On appeal, the Third DCA was not very sympathetic to the Employer.  First, both parties agreed that the Employer was put on notice of a W/C claim when the employees notified their supervisor of the potential exposure.  Further, the Employer conceded that the it had knowledge of these claims but did not report the alleged accidents to its Carrier.

These facts alone sunk the Employer.  First, an Employer cannot simply take notice of a potential W/C claim, not notify its Carrier, then claim immunity on the civil action.  To prevent prejudice to the employee such as the running of the Statute of Limitations, an Employer hast the responsibility of noticing its Carrier of a potential claim so if a denial is issued the employee can pursue her claim in the correct court.  In this case, the Employer cannot hide the ball from its own Carrier and the employee and then tell the employee she has no recourse for her accident.

Second, the Carrier denied the claim in that the alleged accidents did not occur in the course and scope of employment.  I’ve mentioned this before, but when an E/C denies an accident even took place it disintigrates the W/C exclusive remedy protection for the Employer opens the door for a Claimant to file a tort suit in circuit court.  In this case, the Employer would have been better off reporting the claim to its Carrier and denying on the grounds of Statute of Limitations only or simply denying the claim under the Major Contributing Cause defense.  This would keep the claims in W/C court.

The advantage of W/C jurisdiction is the standard of proof for chemical exposure claims is very, very difficult.  A Claimant must prove her case by clear and convincing evidence.  In other words a Claimant must convince the Judge that its about 80-90% possible the specfic chemical and the amount of such chemical caused her injuries.  In circuit court, a Plaintiff merely needs to prove her case by the preponderance of the evidence.   In contrast, she only needs to prove to a jury the accident is more than 50% responsible for her current illness.  

The difference in these standard is almost 40%.  Claimant attorneys pray every night for a claim like this so they can get out of W/C court and into circuit court for an easier standard of proof in front of a sympathetic jury. 

In all, the Wilczewski Court did not find the Employers actions redeemable.  By not reporting the initial accidents to its Carrier, the Court found the Employer basically telling the employees that they have no coverage.  But, when the employees brought the suit, the Employer asserted the defense that it did have coverage.   The courts do not like Employers (or any party) that talks out both sides of its mouth.

The bottomline is that all employers must report all accidents to their carriers.   If you want the advantage of the W/C exclusive remedy and immunity from civil suits, report everything. . . especially when it involves an exposure claim.