Missouri employers scored a major victory when the state overhauled its workers compensation law in 2005. Concerned about an avalanche of claims and soaring business insurance rates, the state's Republican-dominated legislature decided to narrow the types of injuries compensable under the workers compensation scheme. The controversial new law mandated that only those injuries in which work was the "prevailing factor" qualify for workers compensation. Under the old law, any injury in which work was a "substantial factor" was compensable under workers comp.
The amendments had their intended effect almost immediately. Citing anticipated positive effects of the new law, Missouri Employers Mutual, the state's largest workers compensation carrier, announced a 5 percent, across-the-board rate cut at the beginning of 2006. And workers compensation claims in the state also decreased in 2006 for the first time in several years.
The Supreme Court agreed, ruling that workers whose injuries weren't covered under the statue could sue their employers under common law tort theories of liability, such as negligence. Under a negligence theory, the employee could recover if he proved his job caused or contributed to the injury.
"Companies need to watch what they wish for," says Alan Mandel, who represented the Missouri Alliance for Retired Americans and other labor organizations in the suit. "This could open up a floodgate of litigation."