Opinion ID: 2631213
Heading Depth: 3
Heading Rank: 2

Heading: Exclusive Remedy Provision of the Workers' Compensation Act

Text: ¶ 17 The Workers' Compensation Act (the Act) provides as follows: The right to recover compensation pursuant to this chapter ... shall be the exclusive remedy against the employer ... and the liabilities of the employer imposed by this chapter shall be in place of any and all other civil liability whatsoever ... on account of any accident or injury or death, in any way contracted, sustained, aggravated, or incurred by the employee in the course of or because of or arising out of the employee's employment. Utah Code Ann. § 34A-2-105(1) (1997). The trial court held that this provision bars Shattuck-Owen's breach of contract claim. ¶ 18 Snowbird argues on appeal that the trial court correctly barred Shattuck-Owen's claim because the therapy costs she incurred, and for which she now seeks recovery, were necessitated by an on-the-job sexual assault that is compensable under the Act. Snowbird asserts that Shattuck-Owen is merely attempting to plead around the workers' compensation exclusivity provision by characterizing her claim as one for breach of contract. We hold that Snowbird's argument on this issue is unavailing because Snowbird failed to establish that the exclusive remedy provision necessarily precluded Shattuck-Owen's contract claim. ¶ 19 The workers' compensation system constitutes a quid pro quo between employers and employees. See Hunsaker v. State, 870 P.2d 893, 899 (Utah 1993). Under the Act's balancing of rights, employees are able to recover for job-related injuries without showing fault ... and employers are protected from tort suits by employees, id., by virtue of the Act's exclusive remedy provision. Lest this careful balance of rights should tip too heavily in the employer's favor, the exclusive remedy provision must not be applied outside the coverage formula of the Act. It is well settled that the Act covers only mental and physical injuries sustained on the job. See Mounteer v. Utah Power & Light Co., 823 P.2d 1055, 1057 (Utah 1991); see also Retherford v. AT & T Communications, 844 P.2d 949, 965 (Utah 1992). Accordingly, we have held that the exclusive remedy provision bars common-law tort actions requiring proof of physical or mental injury. See Mounteer, 823 P.2d at 1056-58 (barring a claim for emotional distress while permitting a slander claim because slander does not require proof of mental or physical injury). ¶ 20 Furthermore, the exclusive remedy provision extends far enough to bar what are essentially tort claims masquerading as breach of contract claims. See 6 Arthur Larson & Lex K. Larson, Larson's Workers' Compensation Law § 100.03[9], at 100-19 to 21 (2000) (The all-inclusive character of the exclusiveness principle results in barring actions for covered injuries even though the plaintiff casts his or her action in the form of a breach of some kind of contract.); see also Hurd v. Monsanto Co., 908 F.Supp. 604, 611 (S.D.Ind.1995); Beauchamp v. Dow Chem. Co., 427 Mich. 1, 398 N.W.2d 882, 894 (1986), superseded in other respects by statute as stated in Shipman v. Fontaine Truck Equip. Co., 184 Mich.App. 706, 459 N.W.2d 30, 34 (1990); Hornsby v. Southland Corp., 487 A.2d 1069, 1071-72 (R.I.1985). Under such circumstances, the Mounteer analysis cited above still applies to prevent employees from evading the recovery restrictions of the Act. ¶ 21 However, a claim for contractual relief seeking benefits in addition to the workers' compensation system is not barred by the exclusivity provision. Indeed, while the Act expressly prohibits contracts that would limit an employee's right to workers' compensation, see Utah Code Ann. § 34A-2-108 (1997), nothing prohibits an employer from agreeing to provide benefits in addition to those provided in the Act. See Fredericks v. Liberty Mut. Ins. Co., 255 Ill.App.3d 1029, 194 Ill.Dec. 445, 627 N.E.2d 782, 786 (1994); Decatur County v. Public Employment Relations Bd., 564 N.W.2d 394, 398 (Iowa 1997); Segura v. Molycorp, Inc., 97 N.M. 13, 636 P.2d 284, 287-89 (1981); Hornsby, 487 A.2d at 1072. Under the subsection entitled Legal Status of Contractual Supplement to [Workers'] Compensation, Larson's workers' compensation treatise states as follows: It is possible to imagine a number of troublesome legal questions that might emerge from the type of contract in which the employer agrees to pay, say, $250 a week benefits instead of the $200 specified by statute. One cardinal principle, however, should ordinarily settle most such questions. That principle is the simple proposition that the contractual excess is not workers' compensation. It performs the same functions, and is payable under the same general conditions, but legally it is nothing more than the fruit of a private agreement to pay a sum of money on specified conditions. The provisions of a compensation act may be incorporated into the agreement by reference, but the operative force and the ultimate legal character of the arrangement remain that of private contract. 9 Larson & Larson, supra, § 157.05[3], at 157-46. ¶ 22 In short, employment agreements expressly promising benefits in addition to those already mandated by the Act should be enforced according to normal contract law principles. See, e.g., Stoecker v. Brush Wellman, Inc., 194 Ariz. 448, 984 P.2d 534, 538-39 (1999); Larke v. City of Fort Lauderdale, 568 So.2d 58, 59 (Fla.Dist.Ct.App.1990); Board of Educ. v. Chicago Teachers Union, 86 Ill.2d 469, 56 Ill.Dec. 653, 427 N.E.2d 1199, 1201 (1981). Thus, if Snowbird contracted to pay benefits in addition to those provided by the workers' compensation system, that contract potentially furnishes the basis for a legitimate claim. ¶ 23 This conclusion is supported by sound policy considerations. As already noted, workers' compensation is a quid pro quo, both granting and withdrawing specified employee and employer rights. See Hunsaker, 870 P.2d at 899. For its part of this bargain, an employer obtains valuable protection from tort suits. See id. The workers' compensation system, however, was not designed or intended to free an employer from performing its contractual promises to provide specific benefits to its employees. Stoecker, 984 P.2d at 538. Extending the Act's coverage to that extent would undermine the balance of rights embodied in the Act. [3] We therefore reverse the trial court's holding that the Workers' Compensation exclusive remedy provision necessarily bars Shattuck-Owen's contract claim and remand for application of the standard set forth in this opinion. [4]