May 11, 2001

Yesterday, on May 10, 2001, the Oregon Supreme Court limited the exclusive remedy protection of the Oregon Workers’ Compensation Law. Smothers v. Gresham Transfer, Inc.  Under Smothers, a worker may now bring a negligence action in certain circumstances against his employer if denied compensation because his work was not a "major contributing cause" of his injury or illness. The Oregon Supreme Court said that courts will have to decide on a case-by-case basis whether a negligence action will be permitted.

Under the Law’s exclusive remedy provision, the workers’ compensation system is the exclusive source for workers to obtain compensation for work-related injuries or diseases. The provision has generally barred an injured worker from suing his employer for negligence and obtaining compensation for pain and suffering and, possibly, punitive damages, unless the worker could show that the injury was intentional.

In Smothers, the injured worker had filed a claim for a lung condition under the Oregon Occupational Disease Law. The Workers’ Compensation Board upheld the denial of coverage on the ground that the worker had not proved that his work was the major contributing cause of his lung condition. After losing his occupational disease claim, the worker filed a negligence action against his former employer in court. Although the negligence case was dismissed by the trial court, it was reinstated by the Supreme Court. The Supreme Court reasoned that such application of the exclusive remedy provision violated the state constitution’s rule that all injuries have a remedy. 

Under Smothers, employees must first file a workers’ compensation claim. If the claim is denied because his work was not a major contributing cause of his injury or illness, the worker may bring a negligence action in court. If, however, the claim is denied because the worker is unable to prove that the work-related incident was a contributing cause of the alleged injury, the worker cannot sue.

Our recommendation:

First, Oregon employers should check with their insurance agents to make sure they have coverage for work-related injuries excluded from workers' compensation. 

Second, Oregon employers should weigh carefully the risks of challenging coverage on the grounds that their workplace was not a major contributing cause of the illness or injury. A successful challenge could mean you are faced with a negligence lawsuit. In appropriate cases, employers may want to keep the case within the workers’ compensation system and out of court by conceding causation. If coverage is challenged, employers should promptly give notice of the claim to their personal injury insurer if different than their worker compensation carrier.

Further, employers should carefully monitor the defense of claims provided by their comp carrier because of the inherent conflict of interest now present. The comp carrier may desire to contest liability because the injured worker cannot prove that work was a major cause of his injury or illness. Employers should insist in such a situation that the comp carrier choose the employer's interest over its own. 

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