Explore the pros and cons of workers’ comp and suing your employer. Make informed decisions about compensation after a work injury.
Your options for pursuing compensation might be limited after a work-related injury. Most state employment laws require employers to provide workers’ compensation insurance to eligible employees.
The same laws prevent injured employees from suing their employer, except in extreme circumstances.
Injured workers do have the right to sue their employer for injuries caused by the employer’s outrageous or egregious actions. Injury claims outside of (or in addition to) workers’ compensation insurance may be paid through the employer’s liability or business insurance policies, or from corporate assets.
Can you continue to work if you sue your employer?
Technically, you can continue to work for your employer while a lawsuit is pending. You can’t be fired in retaliation for filing an injury claim, lawsuit, or for being a “whistleblower” and reporting safety or employment violations.
There are some types of “injuries” that don’t necessarily involve physical harm. Victims of sexual harassment or civil rights violations may have grounds to sue an employer for damages. If you were wrongfully terminated, that’s another legal claim you should discuss with a specialized employment law attorney.
Do what’s best for you by making informed decisions.
Here’s where we unpack the pros and cons of filing a lawsuit against your employer, workers’ compensation insurance, and where the money comes from to pay for your claim.
The Pros and Cons of Suing Your Employer
Employer liability claims are more complex than workers’ compensation claims.
An injured worker can’t just submit a claim to their employer’s liability insurance company and expect to be paid. The insurance company will fight to avoid paying a large settlement and may deny your claim entirely unless you file a lawsuit.
Most personal injury attorneys offer a free consultation to potential clients, so it costs nothing to start out with good legal advice.
Good Reasons for Suing Your Employer
Unlike a workers’ comp claim, a personal injury liability claim has no limits to the type or amount of compensation an injured worker can seek from their employer.
In a liability claim, you can pursue compensation for all your injury damages, including medical and therapeutic services, medications, transportation to and from treatment, full wage replacement, and a monetary award for pain and suffering.
Depending on the at-fault company and the severity of the worker’s injuries, some cases can settle for hundreds of thousands, even into millions of dollars.
You may be able to file a personal injury claim or lawsuit against your employer if you are denied workers’ compensation.
Workers’ compensation would not apply to damages sought in a discrimination lawsuit or other harmful company practices, so litigation may be your only option.
Drawbacks to Suing Your Employer
Employee liability lawsuits can result in large payoffs, but juries are unpredictable, and it will take time and an experienced, dedicated attorney to give you the best chance at winning your case.
Lawsuits can take months or even years to resolve. Even if your case goes to trial and you win, your employer’s team can appeal the verdict. Taking your case to an appeals court is time-consuming and intense, and you might lose on appeal.
Unlike workers’ comp claims where negligence isn’t an issue, employer liability claims require proof of the employer’s negligence. That means you’ll have to provide hard evidence that your injury or illness was caused by something your employer did wrong, or because your employer failed to act appropriately.
Workers’ Compensation Pros and Cons
Workers’ compensation is a form of no-fault insurance. So long as the injury or illness happens on the job, eligible employees can file a claim for workers’ compensation benefits, even if the employee or a co-worker made a mistake that caused the accident.
For most employees, a workers’ compensation insurance claim is their best first choice.
Pros of Workers’ Comp Insurance
- The worker doesn’t have to prove their employer’s fault for causing their injuries.
- The worker can get worker’s comp benefits even if a third-party caused their on-the-job injury, like a delivery person in a car accident caused by the other driver.
- The injured worker can file a claim or lawsuit against the at-fault third-party while receiving workers’ compensation benefits.
- Workers’ compensation benefits for medical treatment are effective immediately after the worker is injured. Wage replacement benefits typically kick in after a brief waiting period, then may be paid retroactive to the date of injury.
- Wage replacement benefits are usually two-thirds of an injured worker’s base pay, up to a certain limit. Since workers’ comp wage benefits are not subject to federal taxes, some workers will see wage benefits close to their normal take-home pay.
Cons of Workers’ Compensation
- Unfortunately, because of state-mandated limits on workers’ comp replacement wages, employees who are higher wage earners may face a significant cut in pay after a personal injury at work.
- Permanently injured employees, especially those at higher pre-injury wages, may not get a worker’s comp settlement that adequately replaces the future income the worker would have earned if not for the work injury.
- Workers’ compensation won’t pay anything for pain and suffering, or for consortium claims made by the dead or disabled worker’s spouse.
- Under most state workers’ compensation laws, employees who file a workers’ comp claim usually can’t take legal action against their employer in connection with same the injury or illness.
- You’re stuck with worker’s comp in most workplace injury scenarios. You don’t get to choose to file a personal injury claim or lawsuit against your employer instead of workers’ comp.
Proving Your Employer Liability Claim
To succeed in a personal injury liability claim against an employer, a worker must prove the injury would not have happened if their employer wasn’t negligent in some way.
Proof of negligence requires these four elements:
- The employer had a legal duty to protect the employee from undue harm or injury
- The employer’s actions or omissions breached that duty
- The employee was injured as a direct result of the employer’s breach of duty
- The employee sustained damages resulting from the injury (medical bills, lost wages, etc.)
Example: Lack of Ear Protection
David is twenty-five years old. For several years he’s worked as a landscaper. His primary duties included using a blower to move leaves and other debris. The leaf blower he used creates noise at about 80 decibels. The medically proven maximum safe range for humans is about 60 decibels before hearing loss occurs.
Although David regularly asked his employer to provide ear protection, his employer failed to do so. Eventually, David permanently lost 50 percent of his hearing in both ears and needed hearing aids.
David filed a workers’ compensation claim for his injuries. Workers’ comp paid all David’s medical bills and a partial permanent disability award of $100,000.
David also filed a separate claim under his employer’s liability insurance, claiming his employer was negligent in failing to provide him with hearing protection. Following a lawsuit, a jury awarded David $100,000 for actual damages and $300,000 for pain and suffering.
Evidence to Prove Your Case
As in any injury claim, evidence is the key to success. Without evidence, your liability claim will quickly be denied by the insurance company. With evidence, your employer will have a tough time trying to dispute your claim.
Photographs and video of the accident scene can be crucial. There’s a good chance your employer will very quickly change the accident scene to remove evidence of negligence. The sooner you photograph and video the scene, the better.
Witness statements are another strong form of evidence. They don’t have to be formal or notarized. Ask the witnesses to write down what they saw and have them sign and date their statements. Be sure you have their contact information.
Example: Employment Lawsuit for Asbestos Exposure
Tamara is forty-eight years old and worked as an electrician for 20 years. Her primary duties included rewiring old buildings that were being refurbished for sale. After being ill for about a month, she had tests that revealed she was suffering from lung disease caused by inhaling asbestos. Her condition was untreatable.
Tamara filed a workers’ compensation claim and received medical benefits and a permanent total disability award of $300,000.
Through her attorney, Tamara also sued her employer for negligence for failing to warn her of the presence of asbestos and for not providing protective gear. Her doctor’s testimony linking her incurable lung disease directly to asbestos exposure was critical evidence in the case.
A jury awarded Tamara full medical benefits and $300,000 in lost wages. The jury also awarded Tamara $1 million for pain and suffering.
Who Pays if I Sue My Employer?
Large corporations have extensive company assets that may come into play, for example after an industrial accident, however most businesses of any size carry some form of liability insurance.
While workers’ comp insurance covers medical treatment and partial wage benefits for injured employees, employer liability insurance protects employers from claims or lawsuits brought by injured employees and, in some cases, their spouses.
Most states allow employers to buy workers’ compensation insurance privately. The exceptions are Ohio, North Dakota, Wyoming, Washington, the U.S. Virgin Islands, and Puerto Rico. In these monopolistic states and territories, employers are required to buy coverage from one of the state’s insurance pools.
Just like you might bundle your home and auto insurance with the same company to get a better rate, employers typically buy workers’ compensation insurance together with employer liability insurance.
In monopolistic states, the workers’ compensation plans don’t include liability insurance. Employers in those states usually purchase a general liability policy with an employer liability addendum.
Employer’s Practices Liability Insurance
Workers’ compensation and employer liability insurance provide coverage for bodily injuries and diseases that happen on the job. In many ways, worker’s comp and business liability insurance pay for the results of hazardous work environment.
Employer practices liability insurance has to do with company policy and employment practices – how the employer treats its workers.
Employer practices liability insurance provides coverage when a worker alleges the employer engaged in wrongful termination, sexual harassment, invasion of privacy, discrimination, breach of contract, false imprisonment, wage and hour law violations, or emotional distress.
A worker’s right to file an employer’s practices liability claim can be based on the following laws:
- Title VII of the Civil Rights Act of 1964
- Americans with Disabilities Act of 1990
- Civil Rights Act of 1991
- Age Discrimination in Employment Act of 1967
- Family and Medical Leave Act
Most practices liability claims are founded on civil rights violations such as:
- Workplace harassment, including sexual harassment
- Wrongful termination of employment
- Retaliation against workers for exercising their legal rights
- Invasion of privacy
- Defamation, including slander and libel
- Discrimination based on ethnicity, religion, sexual orientation, handicap, sex, or age
Example: Employee Sues for Sexual Harassment
While Lisa was working at a fast food franchise, a male employee repeatedly uttered sexual innuendos at her. Lisa needed her job, so she reported the innuendos to her supervisor. The supervisor’s response was, “Boys will be boys,” and no action was taken against the male employee.
The sexual innuendos continued, and eventually, the male employee’s comments became sexually explicit.
Again, Lisa complained to her supervisor. The supervisor spoke with the male employee, who denied the allegation. The supervisor cautioned him about his remarks, but no other action was taken.
One day the male employee fondled Lisa. Unable to tolerate the situation, she quit her job and retained an employment lawyer. Lisa’s attorney filed a claim for sexual harassment under the franchise’s employer’s practices liability insurance.
Her attorney invoked federal law, specifically Section 103 of the Elliott-Larsen Civil Rights Act 453, which states:
“Discrimination because of sex includes sexual harassment, which means unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct or communication of a sexual nature.”
A jury awarded Lisa $100,000 in actual damages and $300,000 for her emotional distress.
An employer isn’t going to admit to violating your civil rights. It could open the door to more claims against the company. Proving civil rights violations takes substantial legal experience and skills, so look for an employment attorney or law firm with expertise in this area.
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