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Labor: 3 strategies for handling workers’ compensation retaliation claims

Employers often are unclear regarding their obligations to return an employee to work while claims are pending

Most employers are familiar with the increase in retaliation claims filed either as independent actions or in conjunction with Equal Employment Opportunity Commission and related employment claims. The increase in retaliation claims is attributable, in part, to the 2006 Supreme Court ruling in Burlington Northern & Santa Fe Railway Co. v. White. In that case, the Supreme Court abrogated decisions from multiple districts and broadened the definition of “adverse employment action” as a necessary element to sustain a retaliation claim. The other elements include engaging in an activity protected by Title VII, the employer’s knowledge of the employee’s exercising of the right, and a causal connection between the protected activity and the adverse employment action or harassment.

Workers’ compensation retaliation claims, however, arise purely out of state claims. The concept is that employers should not retaliate or discriminate against employees for filing or receiving statutory workers’ compensation benefits for compensable work-related injuries. It is not only the termination of an employee that triggers a claim. It could be any employment action that allegedly results from the employee’s claim, including reduction in benefits and reassignment to a different position or location. The actual payment or denial of the underlying workers’ compensation claim is not a pre-requisite. The threshold is whether the employee has claimed a work-related injury.

State statutes and codes vary greatly in the areas of jurisdiction, remedy, obligation and attorneys’ fees. For example, in California, Labor Code Sec. 132(a) is incorporated into the Labor Code and jurisdiction falls to the workers’ compensation judge for enforcement. In Florida, the statutory prohibition is located in the workers’ compensation statute, but jurisdiction lies exclusively with the circuit court.

Compounding the issue for employers is plaintiffs’ use of workers’ compensation retaliation claims to maintain jurisdiction in state court. Often, a workers’ compensation retaliation claim is filed as count I of a complaint, with a Fair Labor Standards Act (FLSA) claim filed as count II. The employer’s counsel can certainly remove the FLSA claim to federal court; however, the workers’ compensation count generally remains in state court, forcing the employer to either fight the claims on two fronts or concede jurisdiction for both claims in the state court.

During the pendency of these claims, employers often are unclear regarding their obligations to return an employee to work. In general, workers’ compensation claims do not have accommodation provisions as in the Americans with Disability Act (ADA). Once an employee reaches maximum medical improvement from her work injuries, a permanent classification of indemnity benefits is awardable. The employer is encouraged, but not statutorily required in most states, to return an injured worker to employment.

The best options for employers include:

1. Attempting to settle the retaliation cause as part of the underlying workers’ compensation claim. This generally requires the assistance of an attorney not affiliated with defense of the workers’ compensation, as most workers’ compensation coverage does not include the retaliation claim.

2. Putting the employee in question back to work. No employer relishes returning an employee to work if he has a pending lawsuit against the company. However, unless there is a basis to separate the employee distinct from the claim, an employer choosing to terminate will greatly increase damage exposure.

3.  Evaluating these employees using the same ADA analysis that would be used for employees with non-industrial injuries and illnesses. If, after the analysis, it is clear that the position cannot be accommodated—even if the condition were non-industrial—the employer can reduce some of its potential exposure.

Contributing Author

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Cheryl Wilke

Cheryl Wilke is a partner in the Ft. Lauderdale office of Hinshaw & Culbertson and focuses her practice in the representation of employers in...

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