The Lesson Behind the Florida Ruling on 'Exclusive Remedy'

In an episode of the hit television show "The Big Bang Theory," leading character Dr. Sheldon Cooper, in admonishing his friends over his correct assumptions as to when they should depart for a movie and thus avoid a long line, decided not to say "I told you so." Instead, he opted for the much more refined, "I warned you thusly." I plan to emulate Dr. Cooper and make liberal use of that phrase today. While pundits and legal experts have been carefully watching major RICO cases and other test cases around the country that threaten the sanctity of "exclusive remedy" within workers' compensation, out of the legal swamps of Florida an unexpected ruling from a previously undiscussed case has surged forth to consume the topic in its entirety. A Miami judge on Wednesday declared Florida workers' compensation, as an exclusive remedy, unconstitutional based on the continued erosion of benefits from when the system was established. While the final act on this play has yet to take the stage, it is a potential wake up call for the industry. After all, most of us didn't see this coming. Most of us, that is. I, however, warned you thusly. More than two years ago I wrote about a case in Tennessee that denied an electrical lineman workers' comp benefits because he had "willfully" defied established safety rules and was severely shocked as a result. He had removed protective safety gloves to attach a small nut that was very difficult to handle when the gloves were in use. The court essentially assigned blame to him in the case and found he was not entitled to benefits for his injuries, because he had violated established safety protocols that otherwise would have prevented the accident. While insurance professionals and employers around the country were taking a victory lap over this decision, I assumed a position that put me at direct odds with many. I warned that the continued erosion of the no-fault doctrine of comp was a two-edged sword and that eventually employers would get cut by the same instrument they were championing at the time. Specifically, I wrote: "While this decision might be a short-term victory for employers and perhaps a strong reinforcement of safety protocol, I am concerned that it fundamentally undermines the notion of workers' comp at its core, and ultimately threatens the benefits offered those same employers; namely the concept of exclusive remedy. Employers cannot have their cake and eat it, too. The employee made a mistake. That is quite often how these accidents happen. While there are exceptions for horseplay, drug use and extreme negligence in some jurisdictions, largely comp pays these claims because, quite frankly, that was the deal. This company has other avenues with which to deal with this if it so chooses. It can document, demote, even terminate the employee for failing to follow required procedures. But by refusing to pay his claim, and successfully getting the courts to agree, the door is open for any accident, any "willful" mistake to be used in the denial of all claims. That might be logical on the surface, but it is entirely contradictory to the no-fault precept that workers' comp is based on. It threatens the future of comp as it was envisioned and followed. Once the "blame game" begins, employers may not have to wait long to find that it is a two-edged sword." I warned you thusly. I so warned you thusly. While the case in Florida is not related to our Tennessee lineman, the corrosive principles that led to the decision share a lineage; a line that leads to reduced benefits and coverage in exchange for cost reductions. They are both cases dealing with erosion of the "Great Compromise" that created workers' comp to begin with. The case in Florida hinges largely on 2003 reforms that eliminated benefits for permanent partial disability. The court found that eliminating those benefits violated injured workers' rights and determined that workers are therefore free to pursue tort claims for work-related injuries. Two other challenges to the Florida comp statutes and 2003 reforms are already scheduled for review by the Florida Supreme Court, so the entire cost-reducing effort is currently at peril. Employers that celebrated the specific reduction in benefits and cost are now likely panicked at the prospect of a new and looming liability. You cannot say I did not warn you thusly. At a bloggers panel at the National Workers' Compensation Conference in Las Vegas last year, we touched on this topic and were discussing cases that threatened exclusive remedy. One employer in the audience stated out loud, in response to the concept of denying benefits based on culpability, "but it is their fault." I responded by reminding them of the "no-fault" concept of workers' comp and the Great Compromise that brought it about in the first place. I then asked the audience which of them would like to be held personally liable, evenly criminally liable, when their company is found "at fault" for a worker's injuries. Would employers willingly accept tort claims when it is shown they were negligent or at fault for an accident? Not a single person in the crowd of 300 responded in the affirmative. Boy, were you warned thusly. We are rapidly approaching a point where societal changes and entitlement expectations will require major overhauls in the thought processes within our industry. We need an attitude shift within workers' comp. We can no longer manage claim cost and severity rating by legislative fiat. We, both the industry and the employers it serves, need to embrace a new philosophy for dealing with these challenging issues. A return to more personal claims management within a system geared for workers' recovery is the only path that will accommodate the needs of all parties, while preserving the intent and scope of the original Great Compromise. In the interim, we will continue to struggle with balance and reforms. I do not necessarily agree with the Florida court decision, but I understand what led us to this point. The legislature, depending on appeal activity, will no doubt address the issue if needed and restore certain benefits to preserve the exclusive remedy portion of its law, but I fear this will leave a lesson not yet learned. We must understand our history, or we will be bound to repeat it at some point in the not-too-distant future. You cannot say you were not warned thusly.