At least in Florida, an employer that fails to notify its workers' compensation insurance company of a potential claim will regret the decision later down the road when a civil case gets served.
In Ocean Reef Club v. Wilczewski et al., Nos. 3D09-2779, 3D09-2791, 03/21/2012, Cherrye Wilczewski and Laura Leon worked at a beauty salon owned by the Ocean Reef Club and claimed to have been exposed to chemical fumes which caused them to experience asthma-like symptoms, headaches and respiratory problems over a period of time for which they had to receive medical treatment and hospitalization.
Both said they notified their supervisor of their health issues, but, while they were employed, neither they nor Ocean Reef notified Ocean Reef's workers' compensation insurance carrier. Ocean Reef did not notify its carrier until after the two women filed a civil suit against the company for damages.
It is unclear from the case how long the employees worked in these conditions, whether others complained of similar symptoms or health issues, how much treatment they received etc.
The employer admits it was aware of the complainant's health issues but was hesitant to report them to the workers' compensation carrier. The facts in the case do not offer an explanation, and there could be any of a number of reasons why these potential claims were not reported.
I'm sure there is some underlying employer/employee tension underlying the basic facts - that intangible human relations factor that allows emotions to get in the way of good decision making. No doubt, the employer is getting an abject lesson in decision making.
Ocean Reef moved for summary judgment in the civil action, arguing that Wilczewski's and Leon's injuries were work-related and that, based on workers' compensation immunity, it was immune from suit as a matter of law.
The trial judge denied the motion and ruled that there was no workers' compensation immunity, as a matter of law.
The 3rd District Court of Appeal noted that the employer's delay in notifying its workers' compensation insurance carrier until after suit was filed only resulted in a denial of coverage by the carrier on the grounds that the injuries sustained by Wilczewski and Leon were not within the scope of their employment and were time barred. The carrier's denial of coverage on those grounds is imputed to the employer said the court.
"Where the employer's assertion of workers' compensation immunity is 'clearly irreconcilable' with the reason for its denial, an employer is estopped from asserting the defense of tort immunity," said the court, citing a litany of case law.
"It would be inequitable for the employer, through its insurance carrier, to take the position that there were no work-related injuries and hence no workers' compensation coverage, and then later, when the employee brings a tort action against the employer, to assert as a defense at law that there was workers' compensation coverage entitling the employer to immunity from suit," the court said, concluding that such an employer "is estopped from taking the totally inconsistent position that the injuries did not occur during the course and scope of employment and claim worker's compensation immunity when sued in tort."
If my Google'ing is correct, Ocean Reef is a not a small employer and should be relatively sophisticated when it comes to insurance matters, and in particular workers' compensation insurance matters.
Even relatively sophisticated employers are vulnerable to the legal complexities surrounding work injury claims though. As I mentioned, there likely was some personal tension between the employer-owner and employee-claimants that contributed to the failure to report the claims.
And there is no mention in the case about the ancillary employment facts - e.g. how long the two employees worked and allegedly were exposed to the fumes, how and when they received medical treatment, what their claims of disability were, whether they quit, were fired, or are still employed, etc.
All we get is the bottom line: "Where, as here, the employer fails to satisfy that duty to provide notice to the carrier of the possibility of a claim for workers' compensation benefits, the employer is estopped from asserting tort immunity as a defense in the resulting civil lawsuit for damages," the court said.
Likely the general liability carrier denied coverage too because the claims arise out of a work related issue.