Opinion ID: 2543127
Heading Depth: 3
Heading Rank: 1

Heading: Workers' Compensation Is a Clear and Substantial Public Policy

Text: ¶ 11 In order to conduct the balancing required by Hansen, we first determine whether the exercise of workers' compensation rights amounts to a public policy that is both clear and substantial. We make determinations of clear and substantial public policy under the at-will rule on a case-by-case basis. Indeed, we have stated that determining what employee conduct implicates or furthers a clear and substantial public policy is a still-developing inquiry. Although we have established certain conduct that will almost always implicate a clear and substantial public policy . . . there are other situations that we will have to address as they come before us. Ryan, 972 P.2d at 408. When making determinations of public policy for purposes of the exception to the at-will rule, we will construe public policies narrowly[,] . . . applying only those principles which are so substantial and fundamental that there can be virtually no question as to their importance for promotion of the public good. Berube v. Fashion Ctr., Ltd., 771 P.2d 1033, 1043 (Utah 1989). This is much narrower than what may typically be characterized as `public policy.' Ryan, 972 P.2d at 405 (defining public policy as `community common sense and common conscience' and `general and well-settled public opinion relating to [people's] plain, palpable duty to [others].' (alterations in original) (quoting Black's Law Dictionary, 1231 (6th ed.1990))). ¶ 12 We begin our discussion of the status of workers' compensation under the public policy exception by addressing whether the exercise of workers' compensation rights furthers a clear public policy. We conclude that it does. A public policy is `clear' only if plainly defined by legislative enactments, constitutional standards, or judicial decisions. Ryan, 972 P.2d at 405. In this case, the Utah Legislature has declared that [a]n employee . . . who is injured . . . by accident arising out of and in the course of the employee's employment is entitled to compensation pursuant to the provisions of the Act. Utah Code Ann. § 34A-2-401(1); see also id. § 34A-2-105(1). An employee's right to compensation for injuries sustained in the course of employment arises irrespective of negligence on the part of employers or employees. Sheppick v. Albertson's, Inc., 922 P.2d 769, 773 (Utah 1996). In accordance with the Act's requirement that an employee injured in the course of employment has the right to compensation, the Act requires an employer to secure the payment of workers' compensation benefits for its employees, Utah Code Ann. § 34A-2-201 (2005), and imposes criminal penalties on employers who fail to comply, id. § 34A-2-209 (2005). We think that by adopting the Act and imposing penalties on an employer for noncompliance, the legislature plainly established the public policy that an employee injured in the scope of employment has the right to receive compensation. ¶ 13 However, it is not enough that a public policy be clear; it must also be substantial. To determine whether a public policy is substantial, we conduct a two-step inquiry. First, we ask whether the policy in question is one of overarching importance to the public as opposed to the parties only. Retherford v. AT & T Commc'ns of the Mountain States, Inc., 844 P.2d 949, 966 (Utah 1992). A policy that affects a duty that inures solely to the benefit of the employer and employee is generally insufficient to give rise to a substantial and important public policy. Ryan, 972 P.2d at 405. Second, we ask whether the public interest is so strong and the policy so clear and weighty that we should place the policy beyond the reach of contract, thereby constituting a bar to discharge that parties cannot modify, even when freely willing and of equal bargaining power. Retherford, 844 P.2d at 966. ¶ 14 We conclude that workers' compensation is a policy of overarching importance to the public, as opposed to the parties only. Id. at 966. This court has previously discussed the policy underlying workers' compensation. The Workers' Compensation Act was enacted to provide economic protection for employees who sustain injuries arising out of their employment, therefore alleviating hardship upon workers and their families. Drake v. Indus. Comm'n, 939 P.2d 177, 182 (Utah 1997) (internal quotation marks omitted). Accordingly, we have stated that we will liberally construe the Act in favor of employee compensation. Olsen v. Samuel McIntyre Inv. Co., 956 P.2d 257, 260 (Utah 1998). While workers' compensation provides economic support for injured workers and their families, it was not enacted solely for their benefit. Rather, workers' compensation was designed to provide speedy compensation to injured workers, Sheppick, 922 P.2d at 773, thereby reliev[ing] society of the care and support of the unfortunate victims of industrial accidents. Reteuna v. Indus. Comm'n, 55 Utah 258, 185 P. 535, 537 (1919) (emphasis added). Indeed, this court has stated, `The theory of workmen's compensation is based largely upon the doctrine that society itself is vitally concerned in the prompt payment of compensation to injured and the dependents of killed employs [sic]. It is a matter relating to the promotion of the general welfare. ' Id. (emphasis added) (quoting Rosen Steel v. Niles Forge & Mfg. Co., 7 Neg. & Comp. Cases Ann. 798). ¶ 15 The text of the Act lends further support to the proposition that workers' compensation is not just a private benefit affecting only the interests of the employer and the employee. For example, the Act provides a means by which an injured employee can obtain compensation even where his or her employer fails to comply with the Act's requirements. Utah Code Ann. § 34A-2-208(1) (2005). To this end, the Act creates the Uninsured Employers' Fund to assist[ ] in the payments of workers' compensation benefits to any person entitled to the benefits, if: . . . that person's employer . . . does not have sufficient funds . . . to cover workers' compensation liabilities. Id. § 34A-2-704(1) (2005). Moreover, an employer who fails to provide sufficient workers' compensation insurance is guilty of a class B misdemeanor. Id. § 34A-2-209(1)(a)(I). Similarly, it is a criminal misdemeanor for an employer to deduct[ ] any portion of the [workers' compensation insurance] premium from the wages or salary of any employee entitled to the benefits of [the Act]. Id. § 34A-2-108(3) (2005). ¶ 16 Workers' compensation not only is a question . . . of . . . importance to the public, but also furthers a public interest [that] is so strong . . . that we should place the policy beyond the reach of contract. Retherford, 844 P.2d at 966. Evidence of this lies within the text of the Act itself. Section 34A-2-108(1) declares that an agreement by an employee to waive the employee's rights to compensation . . . is not valid. [1] Similarly, that section provides that an employee's agreement to pay any portion of the [insurance] premium paid by his employer is not valid. Id. § 34A-2-108(2). Thus, by statute, an employer cannot relieve itself of its obligation to provide workers' compensation by asking employees to contract away their rights. The legislature itself has placed workers' compensation beyond the reach of contract. It follows that an employer should not be able to free itself of its workers' compensation obligations by discharging employees entitled to workers' compensation benefits. Accordingly, we hold that workers' compensation constitutes public policy that is both clear and substantial.