• Beyond Workers’ Compensation and Into the Assets of Your Business
  • February 24, 2014
  • Law Firm: Spilman Thomas & Battle, PLLC - Winston-Salem Office
  • A recent November 2013 case from the North Carolina Court of Appeals provides the perfect opportunity to remember when your business or your supervisors can be held liable for workplace injuries.

    In North Carolina, an injured employee is generally limited to workers’ compensation benefits for an on-the-job injury, and cannot sue his or her employer in state or federal court. The “exclusive remedy” provision of the North Carolina Workers’ Compensation Act strictly limits an employee’s recovery, and jurisdiction is given to the North Carolina Industrial Commission, where the focus is not fault, but decisions based on benefits and damages. The policy behind this rule is that injured workers should be provided with efficient and certain benefits for work-related injuries; the employee gives up the common law right to sue the employer in exchange for limited but certain benefits.

    However, businesses need to be aware of a narrow exception to this general “exclusive remedy,” which a recent decision from the North Carolina Court of Appeals addressed. This exception arises where the employer “intentionally engages in misconduct knowing it is substantially certain to cause serious injury or death to employees and an employee is injured or killed by that misconduct.” These types of lawsuits are called “Woodson claims” after the namesake 1991 North Carolina Supreme Court case, Woodson v. Rowland, and are sometimes termed “deliberate intent” because they focus on the employer’s intentional conduct.

    Similarly, a worker may also bring suit against his or her co-employee when the co-employee injured the worker by willful, wanton and reckless negligence. This conduct is present when a co-employee intentionally fails to carry out some duty with manifest indifference to the consequences resulting from that failure. These types of lawsuits, with some irony, are called “Pleasant claims” after the namesake case, Pleasant v. Johnson.

    Construction industry participants need to be aware of these types of claims because they are more likely to arise in settings involving occupational hazards such as heavy equipment, working at heights and high voltage power lines. These types of hazards are rarely, if ever, posed in a sedentary office environment but are always present on construction job sites. For example, in Woodson, the employee was laying pipe in a trench that lacked a required trench box to prevent a cave-in. Other cases have involved an employer’s instruction for employees not to use fall protection when working at heights.

    The recent decision from the North Carolina Court of Appeals, Estate of Vaughn v. Pike Electric, &under;&under; N.C. App. &under;&under;, 751 S.E. 2d 227 (2013), involved an employee, Gary Vaughn, who was electrocuted in 2009 while working as a groundman for Pike Electric and died as a result of that injury. Several years later, his widow filed a civil lawsuit on behalf of Mr. Vaughn’s estate against Pike Electric and his supervisor in Rutherford County Superior Court.
    The estate’s complaint alleged that Mr. Vaughn was untrained and incapable of possessing the knowledge to perform the dangerous activities that Pike Electric and his supervisor requested that he perform. Mr. Vaughn’s position of a groundman involved assisting the foreman, lineman and other employees of Pike Electric who worked on overhead distribution lines. However, Mr. Vaughn was allegedly never trained or permitted to perform work on poles with energized lines due to the alleged risk of electrocution. The complaint further alleged that Pike Electric instructed Mr. Vaughn to perform very dangerous and specialized techniques to carry out duties for Pike Electric. Additionally, the complaint referenced prior instances where Pike Electric had been cited for violations of North Carolina and federal OSHA regulations.

    The complaint included specific facts regarding Mr. Vaughn’s supervisor directing him to perform the activities that ultimately caused his death. The supervisor allegedly instructed Mr. Vaughn to climb a utility pole and perform tasks associated with retrofitting a transformer. Specifically, the supervisor allegedly told Mr. Vaughn to use a “shotgun stick” to remove a clamp that would de-energize the active, high voltage power line. The complaint asserted that this process violated OSHA regulations and the Pike Electric safety manual, which required lines to be de-energized before working on them.

    The defendants moved to dismiss the complaint under Rule 12(b)(6) based on the exclusivity provision of the North Carolina Worker’s Compensation Act, but the trial court denied the motions based on Woodson and Pleasant, essentially stating that the complaint alleged enough deliberate conduct to allow the lawsuit to proceed in civil court.

    The North Carolina Court of Appeals disagreed, but only in part. The Court of Appeals held that the estate failed to allege that Pike Electric had knowledge that Mr. Vaughn’s supervisor had instructed him to climb the utility pole. There was no allegation that Pike Electric management accepted and encouraged the particular risk imposed on Mr. Vaughn by the supervisor or that it was even aware of the risk. Additionally, the Court of Appeals said that the prior conduct alleged by the estate did not serve as evidence of Pike Electric’s intent. Therefore, the Court of Appeals concluded that the claims against Pike Electric should have been dismissed because they were barred by the exclusive remedy provision of workers’ compensation.

    However, the Court of Appeals allowed the case to proceed against the supervisor. The Court of Appeals focused on the estate’s allegations that the supervisor asked, directed, instructed and requested that Mr. Vaughn utilize the “shotgun stick” to de-energize a transformer to be retrofitted, while knowing that Mr. Vaughn had not been trained to do so. The Court held that the supervisor’s alleged instruction to send Mr. Vaughn up the utility pole despite the severe lack of training and expertise was sufficient to create an inference that the supervisor was manifestly indifferent to the consequences of his actions. Accordingly, the lawsuit against the supervisor was allowed to proceed.

    Teaching Points

    The take-away from this case is that the “exclusive remedy” doctrine remains strong and exceptions remain few and far between. Nonetheless, important lessons can be learned from this case. First and foremost, occupational safety must be a priority to keep employees out of harm’s way. An individual died on the job, allegedly because he was a lower-level employee asked to perform specialized tasks, and this action had tragic consequences. The construction industry poses many hazards and situations that must be addressed in order to avoid employee injuries and fatalities.

    Additionally, providing training and directions to new employees on what they can do on a jobsite is crucial. Employers must send a clear message that using shortcuts will not be tolerated and that ignoring the rules for the sake of efficiency is never allowed. Courts will examine company policies and practices when assessing a Woodson claim, and businesses should maximize this defense by creating standard operating procedures and protocols emphasizing safety.

    In Woodson claims, courts will examine whether company management was aware of safety hazards that caused an employee’s injury or death. To the extent that problems or hazards are reported up the chain to headquarters, they must be addressed. Promoting a culture that encourages reporting problems, shortcuts and violations of policies will help to avoid these claims in the first place. Additionally, a reporting culture can help in the defense of Woodson claims by showing that management is always made aware of jobsite hazards and addresses them as soon as they arise.

    Finally, it is important to recognize that the Pleasant claim was allowed to go forward in the recent case because of the supervisor’s conduct. The trial court will have to assess whether the supervisor actually engaged in the conduct Plaintiff alleged, but this is an important reminder that jobsite supervisors can significantly impact the culture of safety and may bear significant liability when things go wrong. Inevitably, there will be temptations on jobsites not to rig up fall protection for a 10 second job on the roof, or to develop a shortcut to bypass lengthy safety protocols. Or, in this case, to have someone standing on the ground perform a task beyond his skill and training. Businesses must assess these behaviors and ensure that co-employees are not a source of liability.