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What is California’s Workers’ Compensation Exclusive Remedy Rule?

an injured worker holding his back

In California, workers’ compensation provides benefits to victims who suffer injuries in the course of performing job-related duties regardless of who is at fault, and even if the worker’s negligence caused or contributed to their injuries.

Workers’ compensation does come with a significant caveat: In exchange for no-fault benefits, the law requires workers to relinquish their right to pursue civil claims against an employer. This means workers’ comp is intended to be the exclusive remedy for injured workers to seek a financial recovery.

As with many matters of the law, however, there are exceptions to the exclusive remedy rule.

Some situations outlined by statute, accidents involving third parties who are not a worker’s employer or co-employees, and cases where the conduct of employers contravenes public policy may allow workers to step outside of workers’ comp to obtain additional compensation.

Why Does the Exclusive Remedy Rule Exist?

California was among the first states in the country to adopt a comprehensive statutory scheme for workplace injuries.

Since their inception over a century ago, state workers’ compensation laws have provided a solution to the need for compromise between workers who face risks of physical harm in their employment and employers who face risks of financial loss arising from civil liability.

The result is an arrangement where employers assume liability regardless of fault in exchange for workers relinquishing their right to sue their employer in court.

This arrangement was established in the amended Workers’ Compensation Industrial Safety Act of 1917, which was later codified in California Labor Code §§ 3600 and 3602, making workers’ compensation the “exclusive remedy” for work-related injuries.

Since that time, there have been a number of rulings and legislative revisions that define when the exclusive remedy applies, and when it may not.

Conditions on Workers’ Compensation Liability

California Labor Code § 3600 outlines the essential conditions of compensation liability that must exist for the exclusive remedy to apply.

Though there are many, the first two conditions are the most important for a threshold analysis:

  1. At the time of injury, employer and employee are subject to workers’ compensation. Essentially, there must be an employment relationship, and not an independent contractor relationship.
  2. At the time of injury, the employee was performing duties out of and incidental to employment, and acting within the course of employment.

Exceptions to the Workers’ Comp Exclusive Remedy Rule

1, Claims Against Third Parties

Attorneys who represent injured victims do not always handle workers’ compensation cases, but many do handle third-party claims arising from workplace accidents. These third-party claims may be filed against parties other than a worker’s employer or, under very limited circumstances, against employers.

One of the most notable exceptions to the exclusive remedy rule are claims against third parties other than a worker’s employer. Examples include:

  • Premises liability claims against negligent property owners
  • Products liability claims against manufacturers, distributors, or retailers
  • Claims against a third-party motorist responsible for a worksite auto accident
  • Claims against contractors or subcontractors on multiemployer worksites
  • Any situation where a third party negligently caused the conduct in which the worker was injured.

2. Claims Against Employers

While claims against parties other than a worker’s employer certainly represent a viable path to compensation, plaintiffs’ attorneys may do themselves a disservice by taking a tunnel-vision approach that solely targets third-party defendants and assumes an employer is immune from liability – especially when workers have already filed for or received workers’ compensation.

There are several situations where workers can pursue and collect both workers’ compensation benefits and civil damages from an employer for the same incident, but any monies collected from the third-party are credited against what the employer owes under workers’ compensation. These include:

  1. Dual Capacity: The dual capacity exception applies when employers owe multiple duties to workers. One example includes product liability, specifically when workers are injured by a product made by their employer, provided they obtained the product as a consumer rather than from their employer (Labor Code § 3602(b)(3)). Dual capacity may also apply when an employer serves a separate legal role or assumes a duty outside of the employer-employee relationship. In Miller v. King (1993), for example, a plaintiff injured in a slip and fall accident at a restaurant where she worked brought a premises liability claim against the individuals who owned the restaurant property. Though the defense moved for summary judgment on exclusive remedy, the appellate court ruled that because the employer was a corporation, it existed separately from the individuals who the plaintiff sued.
  2. Power Press: California Labor Code § 4558 creates an exception that applies to power presses for which machine guards are removed. California Courts have ruled on what does and does not constitute a “power press” under the exception, and generally define them as any material-forming machine used that uses a die.
  3. Fraudulent Concealment: If an employer’s fraudulent concealment of a worker’s injury or illness results in a worsening of injuries, the employer may be subject to civil liability under California Labor Code § 3601(b)(2). Workers must prove (1) their employer knew of the injury and its work-related connection; (2) the employer concealed that knowledge from the worker; and (3) the worker’s injury was aggravated by the fraudulent concealment.
  4. Employer Assault or Ratification: Workers may bring claims against an employer if they are injured as a result of an employer’s willful physical assault (California Labor Code § 3602(b)). Courts have held an employer must have used force or violence, or a physical movement coupled with a threat of violence (brandishing a weapon and threatening to shoot), and acted with specific intent to cause injury. Claims may also be brought under this exception when an employer “ratifies” an assault committed by one worker against another.
  5. Uninsured Employer: If an employer required under Workers’ Compensation law fails to obtain and maintain workers’ compensation insurance, exclusive remedy does not apply, and employers can be held civilly liable (California Labor Code § 3706). Indeed where the employer is uninsured, there is a rebuttable presumption that the employer’s negligence caused the workers’ injuries.

In addition to statutory exceptions, there may exist other situations that preclude employer immunity in work accident cases. Such situations generally involve employers whose conduct violates public policy and is beyond “the scope of the compensation bargain” (Fermino v. Fedco, 7 Cal.4th 70).

Examples may include false imprisonment, sexual harassment, disability discrimination, defamation, and wrongful termination in violation of public policy.

Searching Outside of Exclusive Remedy to Maximize Compensation

Plaintiffs’ attorneys who welcome injured workers to their practice must be equipped with requisite insight into California Labor Code and workplace accident litigation, and will need to conduct thorough investigations to determine a client’s options for seeking supplemental compensation outside of workers’ comp. This includes both civil claims against third parties and civil claims against employers should the elements of an exclusive remedy exception be satisfied.

At Biren Law Group, our Father-Son legal team has excelled in matters of workplace accidents and third-party cases. Our firm is available to discuss potential claims from workers, families, and fellow attorneys across Los Angeles and Southern California. Contact us to speak with a lawyer.