Wisconsin Supreme Court docket Limits Employee’s Compensation Harm Tort Claims

By Last updated Jun 9, 2021

On May 20, 2021, the Wisconsin Supreme Court limited the tort claims an employee can bring based on alleged conduct among injuries covered by the State Employee Compensation Act. The expert opinion in Graef against Continental Indemnity Company can support the employer’s arguments to restrict labor law suits by employees, since the employee compensation offers an exclusive remedy for employees who have been injured in the context of the employment relationship.

background

On November 1, 2012, Francis Graef was impaled by a bull in a stockyard at his place of work. As a result of his physical injury, Graef developed depression. His employer and employer-employee compensation insurer Continental Indemnity Company did not deny that the bodily harm was covered by the Wisconsin Worker’s Compensation Act. However, on June 23, 2015, Continental refused a pharmacy’s request for payment when Graef requested a refill of its antidepressant prescription. Graef couldn’t pay for the antidepressant himself. On August 9, 2015, he attempted suicide and sustained a gunshot wound.

Graef then filed a tort law suit with the district court alleging that Continental negligently refused to approve payment for the refill of the antidepressants. Graef claimed that Continental’s legal obligation was based on its obligation to pay for the prescription under the State Workers Compensation Act. In response to the employee’s illegal act, the insurance company requested a summary judgment at the beginning of the proceedings.

Analysis of the court

The Wisconsin Supreme Court found that the Wisconsin Worker’s Compensation Act excluded Graef’s tort claims against Continental as he provided his exclusive remedy. The court stated that according to the law

[E]Employers and workers’ compensation insurers are obliged to pay for consequential damage that naturally arises from an insured accident at work, including any damage caused or aggravated by treatment or non-treatment of the original damage.

The court then stated that if those conditions were met, the Worker’s Compensation Act gave the worker “exclusive remedy”, as the law provides. When analyzing Graef’s allegations, the court found that he[ed] an uninterrupted chain of events “beginning with his injury on November 1, 2012 and ending with his attempted suicide on August 9, 2015. According to the court, the gunshot wounds he sustained as a result of that suicide attempt were” a direct result of the original accident at work “and is covered by the law.

The court rejected Graef’s argument that Continental broke the “causal chain” when it refused to pay for the prescription refill on June 23, 2015, as Continental’s obligation to Graef resulted from the fact that his depression was caused by his injuries on Workplace. The court also concluded that Continental did not have to admit that Graef would successfully enforce his employee’s claim for damages in order for the court to dismiss its tort action. Rather, Continental was entitled to sue at a suitable place of jurisdiction in which Graef had to prove his claims that Continental was obliged to pay for its antidepressant and that this led to injuries during his suicide attempt, for which Continental is therefore also responsible.

The central theses

The Graef case is a reminder to Wisconsin employers to contemplate having foreclosed a worker’s tort claims under the exclusive remedy of the Worker’s Compensation Act as an objection and must be brought to the worker’s compensation forum if the claims are based on conduct arguably resulting from an injury compensated by the employee’s compensation system. This decision may be of particular concern to employers faced with tortious allegations that an employee has contracted COVID-19 in the workplace. Employers should check whether such claims from tort should have been asserted under the Employee Compensation Act. As implied by the Wisconsin Supreme Court at Graef, an employer may view the greater likelihood but lower cost of recovery from an employee as a more attractive forum under the law.