Fatima Hussein wrote a well-reported story for Bloomberg Law about UPS discouraging or under-reporting workers’ compensation claims.
This practice is sometimes known as claims suppression. Claims suppression is a common issue in workers’ compensation. Lawyers from coast to coast, Tara Reck in Washington state and Jeff Blackwell in Alabama, have recently written about the topic.
Washington state, to their credit, formally recognizes the concept of claims suppression in their law and identifies the practice. In Washington, employers guilty of claims suppression can be civilly fined. Employees can also apply to their workers’ compensation board to extend statute of limitations if claims suppression lead them not to file a claim.
Claims suppression in Nebraska
Though Nebraska doesn’t formally recognize the term claim suppression in our law, we have similar remedies to Washington state for the practice. Employers can be prosecuted for the misdemeanor of not filing a first report of injury with the Nebraska Workers’ Compensation Court. The failure of an employer to file a first report of injury also automatically extends the two-year statute of limitations to file a petition in the Nebraska Workers’ Compensation Court.
In my view the penalties for claims suppression in Nebraska are weak. I am unaware of any times where an employer was prosecuted for claims suppression in Nebraska.
Fighting claims suppression in the civil justice system
But I am a skeptic of criminalizing workers’ compensation — which at its core is a contractual issue between an employee and their employer. My view is that employees are more vulnerable to prosecution than employers. Since workers’ compensation is stigmatized, workers’ compensation fraud by employees is viewed as a variant of welfare fraud. Welfare fraud is prosecuted aggressively in many jurisdictions.
I believe that the civil justice system is a better forum for wrongs done in a commercial transaction. But many barriers exist to employees being able to bring civil claims for workers’ compensation claims suppression by their employers. The first barrier is the fact that workers’ compensation laws are the exclusive remedy for workplace injuries. For example, in Nebraska an employee can’t bring a bad faith action against their workers’ compensation insurer because their remedy for bad faith is the penalty and fee statute under Neb. Rev. Stat. 48-125.
The employment at-will doctrine and claims suppression
A related barrier to bringing civil claims for claims suppression, is the growing reluctance of courts to allow employees to sue their employers. I believe this is because of the overwhelming power to the doctrine of the employment at-will doctrine.
Claims suppression cases are often brought as retaliation cases. Earlier this year, a federal court in Pennsylvania narrowly interpreted Pennsylvania’s prohibition on workers’ compensation retaliation to rule against an employee. That case turned on the court finding the receipt of workers’ compensation benefits wasn’t actually claiming workers’ compensation benefits, so the employee wasn’t being retaliated against when they were fired after their work injury. The court’s narrow construction of Pennsylvania’s anti-workers’ compensation retaliation is based on the importance of the employment at-will doctrine.
Arguably in cases where an employee doesn’t file a claim because of claims suppression, then a court can find the employee isn’t being retaliated against because they never filed a claim in the first place. Recognizing a civil action for claims suppression requires more legal creativity than many courts are willing to give an injured employee.
But just because bringing a claim for claims suppression is difficult doesn’t mean that some lawyers aren’t trying. The Bloomberg article quotes Paul Taylor of the Truckers Justice Center, a nationally recognized expert on retaliation claims under the Surface Transportation Amendments Act (STAA) retaliation claims. Workers’ in industries covered under the STAA could bring suppression claims under the STAA. These claims have a more favorable burden of proof for workers’ than typical civil rights claims.
The Bloomberg story also mentions cases for workers’ compensation that have been brought under California state law. But, California state law is considered to be one of the most friendly for employees in the nation. I question what weight a Nebraska court would give to a ruling made under California law.
Ultimately claims suppression will probably have to be addressed by state legislatures as workers’ compensation laws are state laws. State legislatures can increase the penalties for claims suppression and create private causes of action for workers’ compensation claims suppression by statute. If federal minimum standards for workers’ compensation get momentum in Congress, stronger anti-claims suppression laws should be part of those standards.
