King Decision and Exclusive Remedy Rule

By Nicole Rothford

When a person is injured arising out of and in the course of employment, they have a statutorily-created process to seek remedy for this industrial injury—the workers’ compensation system. The system is different from state to state, and in California, we have one of the more complex systems, rules and procedures to provide benefits to an employee that is industrially injured. Law has created the workers’ compensation system as the exclusive remedy when a person is injured at work, with few exceptions. However, what happens when a person is further injured after the original injury as a result of the workers’ compensation system, specifically, one of its statutorily created provisions? The answer is provided in the case of King v. CompPartners, Inc. 5 Cal. 5th 1039 (2018), recently heard by the Supreme Court overruling the Court of Appeal’s decision.

Kirk King was found to have an industrial injury and was receiving medication for the treatment of his industrial injury. The medication had been approved but was abruptly terminated based on a utilization review (UR) non-certification of the medication. King alleged as a result of the abrupt termination of the medication he suffered four seizures, which has resulted in ongoing difficulties. King filed a civil action against the UR company and the reviewing physician, Dr. Sharma, alleging negligence, professional negligence, loss of consortium and intentional and negligent infliction of emotional distress. 

Defendant filed demurrers at Trial citing exclusive remedy, as well as lack of duty of care on the part of the reviewing physician. Trial court sustained defendant’s demurrer and denied Kings’ request to amend the pleadings.

The matter went up to the Court of Appeal, which agreed the exclusive remedy protected the UR company and the reviewing doctor as it related to their conduct non-certifying the medication. However, the Court of Appeal held that the failure to provide warning as to the risks of abrupt termination of the medication as a separate act, not part of the UR process, thus allowing King to amend the compliant to establish a basis for the breach of the reviewing doctor’s duty of care, therefore allowing King to pursue his claim outside the workers’ compensation system.

Fortunately, the Supreme Court disagreed and cited Vacanti v. SCIF, that even collateral matters such as those the Court of Appeal pointed out, which are derivative of the workers’ compensation claim, fall under the exclusive remedy provisions of Labor Code section 3600.

The Exclusive Remedy Rule and Labor Code 3602 provide the Appeals Boards exclusive jurisdiction as the “sole and exclusive remedy” for injured workers and their dependents. The Workers’ Compensation Act (WCA) provides there is a compensation bargain that allows both the employer and the worker to benefit from the workers’ compensation system. The injured worker obtains benefits from the employer/insurer regardless of any fault of the employee, and the employer is protected from civil damages as it relates to the industrial injury. There are very limited situations that allow an employee who sustained an industrial injury to file a claim for relief and seek additional remedies outside the workers’ compensation system; we will not go into detail about those exceptions now.

King was attempting to collect civil damages for the seizures he claims resulted from the abrupt termination of his medication. The Supreme Court held that because King’s injuries were derivative of a compensable workplace injury, the civil cause of action filed by King falls within the scope of the workers’ compensation bargain and therefore compensable within the workers’ compensation system.

Further, the Supreme Court, in reversing the Court of Appeal, reasoned the ability of an injured worker to proceed outside the Workers’ Compensation Act is more restrictive when there is a direct relationship between the conduct alleged to be causative of the injury and the employment relationship. The court specifically held that King’s injuries occurred within the scope of the employment relationship, because King alleged his injuries resulted from errors in the utilization review process, which is governed by Labor Code section 4610. This is a statutorily created process for employers to discharge their own responsibilities to their employees for work related injury and medical treatment to be provided. The Supreme Court further stated that UR vendors, just like third party claims administrators, stand in the shoes of the employer and perform utilization review on behalf of the employer, which the statute allows. For this reason and the clear intent of the language in the statute, the Supreme Court determined the WCA, in conjunction with the statutory language, prohibits tort claims against UR vendors hired by employers/insurers to carry out their statutory claims processing functions.

In arriving at this conclusion, the Supreme Court cemented the Exclusive Remedy Rule for claims or subsequent injuries that are derivative or occur within the scope of the employment relationship, including administration of the workers’ compensation claim and affirming the workers’ compensation system as the exclusive remedy.