NCCI — Court Case Update, Oregon, California and Idaho

Oregon—Exclusive Remedy

On July 7, 2023, the Supreme Court of Oregon, in Bundy v. NuStar GP, LLC, clarified that Oregon statute 656.019 does not create an exception to workers compensation (WC) exclusive remedy.

Oregon statute 656.019 states that only after a final order that a claim is not compensable, may an injured worker pursue a civil negligence action for an injury that was determined to be noncompensable on the basis that the work-related incident was not the major contributing cause.

In this case, a claimant asserted that the statute codifies an exception to exclusive remedy that was judicially created in the case of Smothers v. Gresham Transfer, Inc (2001). The court noted that in Smothers, it had ruled that claimants were constitutionally entitled to bring civil negligence actions for injuries determined to be noncompensable in WC where the work incident was not the major contributing cause. After reviewing the statutory language and legislative history, the court disagreed with the claimant’s assertion in this case and concluded that the statute did not create a substantive exception to exclusive remedy. The court clarified that the statute only establishes procedural requirements for employees to pursue civil actions after being denied WC benefits.

With this decision, the court upheld the dismissal of the claimant’s civil lawsuit against the employer because his claims did not fall within an exception to WC exclusive remedy.

California—Employer Liability for COVID-19 Related Injuries Suffered an Employee’s Spouse

On July 6, 2023, the Supreme Court of California, in Kuciemba v. Victory Woodworks, Inc., ruled that WC exclusive remedy did not bar a negligence lawsuit brought against an employer for injuries suffered by an employee’s spouse after the employee allegedly contracted COVID-19 at work and spread it to the spouse at home. However, the court also found that the employer owed no duty of care—a necessary element in a negligence case—to prevent the spread of the illness to the spouse.

In its analysis, the court considered the application of the derivative injury rule, which provides that third-party injuries that are “collateral or derivative of” an employee’s injuries are barred by WC exclusive remedy. In this case the court found that, although the employee’s infection was a necessary factual step that led to the spouse’s illness, the spouse’s claim was not legally dependent on the injuries suffered by the employee because it was not necessary for the spouse to allege or prove the existence of an injury to the employee in order to succeed on her claim.

Nonetheless, the court also ruled that the employer did not owe the spouse a duty of care because even though it was foreseeable that an employer’s negligence in permitting the spread of COVID-19 will cause members of the employee’s household to contract the disease, recognizing a duty of care to non-employees in this context would impose an intolerable burden on employers and society in contravention of public policy.

Idaho—Authority to Suspend Payment for Benefits

On June 23, 2023, the Supreme Court of Idaho, in Arreola v. Scentsy, Inc., held that a WC insurer cannot suspend benefits because a claimant refuses a medical examination without first obtaining an order from the Idaho Industrial Commission.

In this case, a WC insurer relied on Idaho statute 72-434 to unilaterally suspend a claimant’s compensation payments after the claimant failed to appear at an independent medical examination. The statute provides that no compensation will be paid during the period of time in which an injured employee unreasonably fails to submit to a medical examination. The court concluded that only the Commission has the authority to adjudicate medical exam disputes and to enforce that adjudication by ordering the suspension of an injured employee’s compensation payments.

With this decision, the court overruled a prior case, Brewer v. La Crosse Health & Rehab, which held that an employer or WC insurer could unilaterally execute the statute and suspend payments to an injured employee without first obtaining an order from the Commission.

For more information on these and other cases monitored by NCCI’s Legal Division, visit Court Case Insights under the Legal section of ncci.com.

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