By Amanda Conley and Lauren Meadows
The morning starts out as a typical workday. Hundreds of tenants pass through the lobby eager to reach their desks and start work for the day. While rubbing the sleep from her eyes with a large coffee in hand, an employee inadvertently tips her coffee mug forward as she reaches out to select her floor on the elevator. Coffee spills onto the elevator floor, creating a hazard for other tenants who subsequently enter the elevator. Approximately an hour later, another employee enters the elevator. Her high-heeled shoe meets the coffee on the tile elevator floor, causing her foot to slip out from under her. The employee falls backward, landing awkwardly on the ground.
This single incident, a slip-and-fall while at the office, can simultaneously result in two very different types of claims with two very different legal standards and scopes of available damages. In addition to pursuing a workers’ compensation claim with her employer, the injured employee may also pursue a third-party liability claim against the building owner and/or property manager. Understanding the similarities and differences in these claims is critical to their defense.
The first step for the injured employee would be to file a workers’ compensation claim against her direct employer and their insurer. While workers’ compensation is a no-fault system, there are other defenses that could potentially come into play, with some variation by state. The employer is a tenant of the building and has no control over common areas, including elevators. This would be similar to the defense raised in Georgia when an employee is injured in a parking lot that is not maintained, controlled or operated by the employer. Since the issue here was not the elevator itself but a dangerous condition created in the elevator by another employee, that defense is unlikely to be successful.
The injured employee had not yet started work for the day at the time of the accident. Generally, injuries that occur while an employee is traveling to or from work are not compensable. However, there is frequently an exception for accidents that occur during a period of reasonable ingress and egress. This claim would likely fall under the ingress rule as the injured employee was already in the building and in the elevator when the accident occurred. We can also assume that the injured employee had to use the elevator to access her office. Those facts would likely make this claim compensable.
In a compensable workers’ compensation claim, an injured employee is entitled to indemnity and medical benefits. The amount and duration of those benefits varies by state. In Georgia, benefits are capped at 400 weeks (with some exceptions). If the employee is completely unable to work as a result of the injury, they are entitled to temporary total disability (TTD) benefits. Weekly TTD benefits are paid at a rate of two-thirds the claimant’s average weekly wage up to $800 per week. The average weekly wage is calculated using the claimant’s wages for the 13 weeks preceding the date of accident. The amount of weekly indemnity benefits varies widely by state.
The provision of medical treatment through the workers’ compensation system is a major benefit to any injured employee who is able to assert both a work injury and a third-party claim. They can work up the medical treatment, all paid for by the workers’ compensation insurer, in order to support their claim for damages in the third-party action. The injured employee is able to receive treatment at no cost without having to resort to liens. Even though most states utilize a medical fee schedule, providing meaningful savings on treatment to workers’ compensation insurers, the full amount of the medical bills will be presented by the plaintiff as part of the third-party claim for damages.
If there is a third-party claim, the employer and insurer in the workers’ compensation claim have a subrogation interest. They can attempt to recover amounts expended on the claim from the third party by intervening in the claim and filing a subrogation lien. The timing of the action and rights of the employer and insurer vary somewhat by state. In Georgia, the employer and insurer have the right to bring a third-party action on behalf of the injured employee if the employee has not done so within one year of the accident date. This is not a common occurrence.
We usually discuss subrogation issues in the context of settlement negotiations. The injured employee wants the employer and insurer to waive a subrogation lien as part of the workers’ compensation settlement in order to facilitate settlement of a third-party claim. The likelihood of a successful recovery on such a lien depends on the state law that governs as there are significant differences. In Georgia, subrogation liens are very difficult to recover due to the “made-whole doctrine.” Unless there have been substantial amounts spent on the workers’ compensation claim and there is a high level of coverage in the third-party claim, these liens are generally not worth pursuing. Other states allow employers and insurers a dollar-for-dollar recovery against third-party tortfeasors. Occasionally, the third-party claim is settled before the workers’ compensation insurer even has time to intervene. This tends to occur where policy limits for the third-party claim were low.
Once the medical treatment has been covered, the injured employee is in a favorable position to settle the workers’ compensation claim and move forward with litigation against the third-party. Issues can arise when we have different lawyers representing the injured employee in each action. We will often see the personal injury attorney try to dictate the terms of the workers’ compensation settlement. We also encounter resistance to the execution of a general release when there are other claims pending.
While fault is not at issue in a workers’ compensation claim, the threshold issue in any third-party liability claim is liability. If the third-party (here, the building owner and/or property manager) bears no fault for the incident, the claimant cannot recover – regardless of the extent of her injuries. Premises liability claims such as the spilled coffee at issue here turn on the building’s notice of the hazard and whether the building’s notice of the hazard is superior to that of the claimant. If the building does not have notice of the hazard or the building’s notice of the hazard is equal to that of the claimant, the claimant cannot recover.
While the exact legal standard may differ from state to state, generally there are two “types” of notice – actual notice and constructive notice. Actual notice is just that – the building actually knows that coffee is present on the elevator floor because someone reported it. Constructive notice is presumed or implied notice that often turns on how long a hazard has been present and whether the building, had it had a reasonable inspection program in place, should have identified the hazard. The longer a hazard exists, the more likely it is that the building will be deemed to have constructive notice of the hazard’s existence.
Once liability is established in a third-party claim, the issue then turns to the claimant’s injuries – specifically, whether the incident at issue caused the injuries alleged. This issue of causation presents the greatest area of overlap between workers’ compensation claims and third-party liability claims. If a medical expert testifies as to a lack of injury causation in a workers’ compensation claim, that same medical expert can similarly testify in defense of the third-party liability claim.
However, the scope of available damages greatly differs between workers’ compensation claims and third-party liability claims. For example, third-party liability claimants can recover pain and suffering for their injuries, dramatically increasing the scope of available damages. In contrast, workers’ compensation claimants are limited to employer-provided medical treatment and specific wage loss benefits.
Many states allow claimants to simultaneously pursue both a workers’ compensation claim and a third-party liability claim arising out of the same incident. Understanding these key differences between the two types of claims is critical to their defense.
Amanda Conley, a partner at law firm Swift Currie, litigates workers’ compensation claims on behalf of employers and insurers. Her clients include the largest insurance company in the Southeast and companies in industries ranging from hospitality to manufacturing to construction. She can be reached at amanda.conley@swiftcurrie.com.
Lauren Meadows, a partner at Swift Currie, represents insurance companies and their insureds on various aspects of insurance coverage and commercial litigation in federal and Georgia state courts. She can be reached at lauren.meadows@swiftcurrie.com.
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