The recent decision in Blow v. DSM Pharmaceuticals further confirms that North Carolina employers are immune from civil lawsuits brought by their employees in virtually all workplace injury cases. The North Carolina Workers’ Compensation Act allows employees who are injured on the job to recover defined benefits from their employer without having to prove the employer was negligent in causing the injury. Because employers are required to pay workers’ compensation benefits even for workplace accidents beyond their control, employees are precluded from suing their employer for potentially larger damages in civil lawsuits. This exclusive remedy protection limits employers’ liability exposure for workplace accidents, and eliminates the risks and expense associated with civil lawsuits. Previously, the North Carolina Supreme Court created an exception to this exclusive remedy principle by holding that an injured employee can receive workers’ compensation benefits and bring a simultaneous civil lawsuit against the employer where:

                1- The employer intentionally engages in misconduct;

                2- With the knowledge that the misconduct is substantially certain 
                     to cause serious injury or death to an employee; and 
                3- The employee is injured as a result of that conduct.

North Carolina courts applying this test, commonly referred to as the Woodson standard, have routinely rejected injured employees’ attempts to bring civil lawsuits against their employer for workplace injuries. Courts have held that employers can be stripped of their exclusive remedy protection only in the “most egregious cases of employer misconduct”, but have not identified the specific criteria required to meet the Woodson standard. As a result, there have been continued attempts to pursue civil lawsuits in many cases involving clear employer negligence, and this uncertainty presents an ongoing concern for North Carolina employers.

In Blow, the employee-plaintiff was exposed to a highly toxic and lethal chemical the employer used in its manufacturing operations. The injured employee alleged that the employer failed to adequately construct and maintain the equipment it used to contain that chemical, and failed to comply with various governmental safety standards. Significantly, the injured employee also alleged that an outside consultant who inspected the employer’s chemical storage equipment prior to the accident issued a report informing the employer of the “potential” for equipment failure which “[could] create catastrophic emission” of the lethal chemical. The employee further alleged that, because the employer failed to replace its chemical storage equipment after receiving this report, the employer knew or should have known there was “a substantial certainty that a catastrophic chemical spill would result in the serious bodily injury or death of its employees.” The North Carolina Court of Appeals held that the employee’s allegations, even if taken as true, failed to meet the Woodson standard.

In rejecting the employee’s civil claim, the Court concluded that, even though the employee alleged aggravated employer negligence, those allegations did not rise to the level of “intentional misconduct.” In observing the distinction between intentional misconduct and willful and reckless negligence, the Court made the significant observation that the employees’ allegations “involve defective equipment and human error that amount to an accident rather than intentional misconduct.” The Court also concluded that, although the consultant’s report provided the employer with actual knowledge of a potentially disastrous equipment failure, the report failed to inform the employer that a catastrophic chemical spill was “substantially certain to occur.” The Blow Court also followed many other North Carolina decisions in relying on the fact that the employer had no prior OSHA citations for the specific equipment defects which resulted in the chemical spill as a basis to reject the employee’s claim.

The Blow decision is significant in that it confirms the stringent Woodson standard represents a nearly insurmountable bar to civil lawsuits against employers arising from workplace injuries. The specific alleged facts in Blow demonstrate that workers’ compensation is the exclusive remedy for workplace accidents even in cases where extreme employer negligence is alleged. Furthermore, certain aspects of the Blow decision support an argument that virtually every workplace accident involving human error is subject to the exclusive remedy doctrine, and that the Woodson exception cannot be invoked unless the employer has willfully ignored prior safety citations for the exact condition which later injures the employee. Although Blow solidifies employers’ exclusive remedy protections, it does not put an end to the Woodson exception or preclude others from attempting to bring civil lawsuits against employers for workplace injuries in the future.

For more information regarding this legal alert please contact Doug Grimes or your Hedrick Gardner attorney.