Accommodating Tort Law: Alternative Remedies for Workplace Injuries

Abstract

In this paper, I explore the often-contested territory that tort occupies within the more expansive domain of worker’s compensation. This exploration reveals that, far from being substitutes, tort and worker’s compensation are, in fact, deeply and inextricably joined: A complementarity that underscores the trade-offs intrinsic to each system. Whatever the source and scale of harm, the incentives to pursue a third-party tort suit—in light of the bar on a direct claim against the employer—are straightforward. Worker’s compensation no-fault benefits feature stringent caps on economic loss beyond medical expenses, and bar non-economic recovery altogether. By contrast, tort provides the prospect of recovery for total wage loss, as well as pain and suffering, which is considerably more remunerative than worker’s compensation benefits—particularly in the case of more serious injuries or workplace-related fatalities.

These tort claims, in turn, can raise a related question that again demonstrates the inextricable tie between worker’s compensation and tort: Whether the third-party product manufacturer, if responsible in tort, can recover a portion of the tort award through a contribution claim against the employer, despite the ban on a direct employee tort claim against the employer. Correlatively, there is the prospect of the employer seeking to recapture worker’s compensation benefits paid to the employee through a subrogation claim against the third-party tort defendant.

These intersecting claims most frequently involve accidental harm in the workplace, rather than intentional misconduct or reckless disregard for the safety of workers. But in the latter cases of egregious employer misconduct, most states recognize an exception from the bar on tort recoveries. As a consequence, these are situations where tort recovery may be a substitute for worker’s compensation rather than standing side-by-side with tort, as in accidental harm cases. Similarly, Title VII claims for sexual harassment in the workplace stand as a distinct tort-type source of recovery entirely apart from the worker’s compensation system.

Keywords: accommodating, tort, law, often-contested territory, worker’s compensation complementarity, trade-offs, source of harm, scale of harm, incentives, third-party tort suit, direct claim against the employer, worker’s compensation no-fault benefits, stringent caps, economic loss, medical expenses

JEL Classification: K13