State News : North Carolina

By: Bruce Hamilton and Elizabeth Ligon

The North Carolina Court of Appeals recently released two decisions that impact the state’s exclusive remedy doctrine. Under N.C. Gen. Stat. § 97-10.1, the North Carolina Workers’ Compensation Act provides an exclusive remedy for unintentional work-related injuries. This provision affords North Carolina employers “limited” liability and allows employers to more accurately calculate their exposures, unlike in the civil liability arena. Injured workers, on the other hand, have certain guaranteed benefits for compensable work injuries, and claims are handled much more efficiently through the North Carolina Industrial Commission.

Historically, there have been few exceptions to the exclusive remedy doctrine. The most notable exception was outlined inWoodson v. Rowland, 329 N.C. 330, 407 S.E.2d 222 (1991), which permitted employees to pursue civil actions in cases where the employer intentionally engaged in misconduct knowing it was substantially certain to cause serious injury or death to an employee, and an employee was injured or killed by that misconduct.

In Seguro-Suarez v. Key Risk Insurance Co., ___ N.C. App. ___, 819 S.E.2d 741 (2018), the plaintiff fell from a significant height and suffered a traumatic brain injury. The claim was accepted as compensable by Key Risk. However, after a period of hospitalization and recovery, Key Risk denied the treating physician’s request for additional medical treatment, a neurological evaluation, and an occupational home therapy evaluation. Key Risk also obtained surveillance of the plaintiff and provided heavily edited footage (from nine hours over several months to 45 minutes) to the plaintiff’s neuropsychologist, which caused him to change his opinion and opine that the plaintiff was exaggerating his symptoms and did not need further treatment.

After several adverse court decisions, Key Risk obtained an independent medical evaluation, which confirmed the validity of the plaintiff’s current condition and ongoing disability. Key Risk then obtained additional surveillance, and Key Risk’s investigator showed local authorities edited footage and convinced them to bring criminal charges against the plaintiff for obtaining workers’ compensation benefits under false pretenses. The plaintiff was arrested, jailed, and ultimately indicted on numerous fraud charges. These charges were ultimately dismissed, and the plaintiff filed a civil suit against Key Risk, its Senior Vice President, two Vice Presidents, the handling adjuster, and the investigator. The Court of Appeals upheld the trial court’s denial of the defendants’ motion to dismiss the plaintiff’s malicious prosecution, abuse of process, and unfair and deceptive trade practices claims, finding that these claims were only “tangentially” associated with his workers’ compensation claim. The Court noted concern that, in the extreme, an insurer could “hire an assassin to kill an insured employee” and try to hide under the protection of the exclusivity provision.

In the second case, Jackson v. The Timken Co., ___ N.C. App. ___, ___ S.E.2d ___ (2019), the plaintiff suffered a stroke at work and was seen by the staff nurse, a licensed RN. The staff nurse took the plaintiff’s blood pressure, asked him to complete a drug screen authorization form numerous times, obtained hair samples for a drug screen test, and sent him home with instructions to follow up with his primary care provider. Shortly thereafter, the plaintiff collapsed in the parking lot of his primary care provider’s office, and was rushed to the hospital. He suffered permanent injuries.

The plaintiff initially filed a workers’ compensation claim with the Industrial Commission.  He also filed a civil action in Superior Court while waiting for the Industrial Commission to issue a decision, alleging he was negligently diagnosed and treated by the staff nurse. The Superior Court asserted subject matter jurisdiction over the case, and denied the defendants’ motion to dismiss for lack of subject matter jurisdiction. The Deputy Commissioner at the Industrial Commission subsequently denied the plaintiff’s claims on the ground that the plaintiff did not suffer a compensable injury by accident. The plaintiff did not appeal the denial of his workers’ compensation claim.

The Court of Appeals upheld the Superior Court’s decision to assert subject matter jurisdiction, contradicting the North Carolina Supreme Court’s prior decision holding that the Act “provides the exclusive remedy when an employee is injured in the course of his employment by the ordinary negligence of co-employees.”  Abernathy v. Consolidated Freightways Corp. of Delaware, 321 N.C. 236, 362 S.E.2d 559 (1987). The Court attempted to distinguish Abernathy on the basis that, in this case, the plaintiff was alleging that his co-worker had breached a special duty for medical professionals when she rendered care, and the plaintiff did not suffer a compensable injury by accident.

Taken together, these two cases appear to carve out additional exceptions to the exclusive remedy doctrine, and could potentially expose employers to additional civil liability.Segura-Suarez allowed a civil action when certain tort claims were only “tangentially” associated with a workers’ compensation claims, although it remains to be seen whether the decision will be limited to the case’s particularly egregious facts. Jackson not only appears to have created an exception in cases involving potential medical malpractice committed by an employer’s on-site medical staff, but could also be read to suggest a plaintiff may be able to successfully pursue a civil action if his claim is deemed not compensable under the Workers’ Compensation Act.  The attorneys at Teague Campbell will continue to monitor the courts’ handling of the exclusive remedy doctrine. Please reach out to a member of ourworkers’ compensation team with any questions.