In November, 2013, the Pennsylvania Supreme Court issued a significant decision for all employers whose workers can claim exposure to toxic substances in the workplace. The matter, Tooey v. AK Steel, (Pa. Nov. 22, 2013), represents a big change in the way the Pennsylvania's Workers' Compensation Act is interpreted. Although it is a few months old, the decision has not been discussed by many outside the legal industry, and its implications may not be widely understood or appreciated. My colleague in Fox Rothschild's Exton office, J. Benjamin Nevius, Esquire, explains how the decision will have significant consequences for folks in manufacturing, industrial chemical, and construction industries, in particular:
As many businesses know, a claim for compensation under the Workers' Compensation Act (the "WCA") is an employee's exclusive remedy against his or her employer for injuries – including diseases – sustained in the course and scope of employment. The WCA extends to any injuries discovered within 300 weeks of the date of last employment. The employer's liability is limited, and compensation is calculated using a schedule set forth in the WCA. Employers that want to avail themselves of this statutory protection and further avoid civil and criminal proceedings purchase insurance coverage to compensate employees for workplace injuries.
In Tooey, the Supreme Court was asked to consider whether the manifestation of an occupational disease outside of the 300-week period prescribed by Section 301 of the WCA removes the claim from the purview of the WCA, such that exclusivity does not apply. The plaintiff argued that, because his claim manifested after the 300-week period, the WCA did not apply, and that the plaintiff (or his estate) could sue his employer in a common law civil action. The employer, however, argued that the exclusivity provision was designed to apply to all work-related injuries, and that, because the disease manifested itself outside the 300-week period, it was not a compensable injury. This, in fact, was the prevailing law at the time of the decision.
The Court found the employer's interpretation unreasonable, stating:
"[T]he consequences of [e]mployer's proposed interpretation of the [WCA] to prohibit an employee from filing an action at common law, despite the fact that employee has no opportunity to seek redress under the Act, leaves the employee with no remedy against his or her employer, a consequence that clearly contravenes the Act's intended purpose of benefitting the injured worker. It is inconceivable that the legislature, in enacting a statute specifically designed to benefit employees, intended to leave a certain class of employees who have suffered the most serious of work-related injuries without any redress under the [WCA] or at common law."
The Court ultimately held that "an occupational disease which manifests outside of the 300-week period prescribed by the WCA does not fall within the purview of the [WCA], and, therefore, that the exclusivity provision of Section 303(a) does not apply to preclude an employee from filing a common law claim against an employer."
Put simply, an employee can now sue his or her employer for latent diseases that manifest more than 5 ½ years after the date of last employment. Where employers previously could rely on the exclusivity of the WCA to either limit compensation or bar recovery, they are now exposed to direct liability for what are, generally, very serious conditions occurring long after an employee retires or leaves employment (mesothelioma, cancer, heart problems, neurological problems, fertility issues, etc.). This is a significant decision for employers that deal in a trade that may expose workers to hazardous materials. Justice Saylor acknowledged as much in his dissenting opinion, stating:
"[The decision] would expose employers to potentially unlimited liability for occupational diseases, an exposure that could undermine the compromise of interests between the employers and employees manifest in the Act."
The consequences of this decision may take a while to materialize, but it will likely result in a wave of new toxic and mass tort litigation. With this new direct right of action against employers comes many questions about the adequacy of insurance coverage. If your workplace is one that may give rise to such claims, it may be appropriate to review your insurance policies with your broker.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
