California’s Workers’ Compensation Exclusive Remedy

Under California law, an employee who sustains personal injuries arising out of the course and scope of their employment has their sole and exclusive remedy against their employer by way of the workers’ compensation system. (Cal. Lab. Code § 3600 & 3602(a).) The purpose of the exclusive remedy is the result of a compensation bargain between employees and employers in that employees will be protected and receive timely treatment and compensation for industrial injuries and employers will be protected by setting limitations on compensation provided to an injured employee. As a result, an injured employee cannot sue their employer civilly for negligence. Below are some common questions that arise regarding the exclusive remedy:

1. Can a Third-Party Defendant file a Cross-Complaint for Implied Indemnity against the Employer of the Plaintiff?

No. Under Labor Code § 3864, an employer shall have no liability to reimburse or hold a third party harmless from any judgment or settlement against the Plaintiff absent a written agreement to do so executed before the injury. In other words, a third-party defendant can only assert a cause of action for expressed indemnity or breach of contract against the employer but not for implied indemnification.

This issue has been addressed in C.J.L Construction, Inc. v. Universal Plumbing (1993) 18 Cal. App. 4th 376. In C.J.L.¸ the court concluded that an employer may not be compelled to participate in the employee plaintiff’s lawsuit as a cross-defendant as a matter of law because the third-party defendant is entitled to raise as an affirmative defense a Witt v. Jackson offset to determine the employer’s degree of comparative fault to offset any judgment.

2. Can an employee bring a civil cause of action against their employer for infliction of emotional distress?

No. A cause of action for negligent infliction of emotional distress is not an independent cause of action but is merely a cause of action for negligence. (Marlene F. v. Affiliated Psychiatric Medical Clinic, Inc. (1989) 48 Cal.3d 583, 588.) Claims for intentional infliction of emotional distress are barred by the exclusive remedy provisions. In Cole v. Fair Oaks Fire Protection District (1987) 52 Cal. Comp. Cases 27, the California Supreme Court held when the employee’s emotional distress claim is based on conduct normally occurring in the workplace, it is the exclusive jurisdiction of the appeals board.

3. Are there any exceptions to the exclusive remedy?

Yes. The Labor Code sets out the following statutory exceptions:

• Where the employee’s injury is caused by a willful physical assault by the employer (Labor Code § 3602(b)(1).)
• Where the employee’s injury is aggravated by the employer’s fraudulent concealment of existence of the injury (Labor Code § 3602(b)(2).)
• Where the employee’s injury is proximately caused by a defective product manufactured by the employer and sold, leased, or otherwise transferred for valuable consideration to an independent third person, and the product is thereafter provided to the employee’s use by a third person. (Labor Code § 3602(b)(3).)
• Where the employee is injured using a power press machine (Labor Code § 4558.)

In practice, the workers’ compensation exclusivity exceptions are very limited and it is rare to see civil actions by an employee against their employer.

4. What happens if the Employer does not have workers’ compensation insurance?

If the employer does not secure workers’ compensation insurance and does not have the ability to pay or administer workers’ compensation benefits for the injured employee, then a state agency known as Uninsured Employers Benefit Trust Fund (“UEBTF”) will step in to pay the workers’ compensation benefits to the injured employee. UEBTF will then generally seek reimbursement from the employer.

Additionally, under Labor Code§ 3706, if the employer does not secure workers’ compensation insurance, the employee is permitted to bring a civil action against the employer for damages as if the division did not apply. An employee is not subject to the exclusive remedy and may pursue a personal injury action against its uninsured employer. (Valdez v. Himmelfarb (2006) 144 Cal. App. 4th 1261.)