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Exceptions to the no-fault rule in workers’ compensation

BY STEVEN CORRIVEAU

The dual purpose of the North Carolina Workers’ Compensation Act, as stated by our Supreme Court, is to provide a “swift and certain remedy to an injured worker” and to “ensure a limited and determinate liability for employers.” In furtherance of the first goal, injured workers are not required to prove that their employer was at fault in order to recover compensation. Instead, whether an employee is entitled to workers’ compensation is governed by the circumstances of the employment and the accident or exposure which caused the injury or disease.

In exchange for a more certain recovery, employees are normally limited to workers’ compensation as the “exclusive remedy” against their employer. The damages provided by the Act are generally restricted to partial lost wages, certain medical benefits, compensation for permanent impairment, and death benefits. As a result, employers are shielded from the broader damages which civil lawsuits may provide for, including pain and suffering.

Since recovery under the Act is not premised on an employer’s negligence or fault, contributory negligence is not a valid defense to recovery. Our Supreme Court has “stated unequivocally that the Workers’ Compensation Act was intended to eliminate the fault of the workman as a basis for denying recovery.”

While employer fault is not a prerequisite to recovery, and contributory negligence is not a valid defense, certain exceptions exist to the general rule that workers’ compensation is a “no-fault” system.

Pursuant to N.C. Gen. Stat. § 97-12, intoxication or being under the influence of a controlled substance at the time of the injury may result in a complete bar to recovery. Our Court of Appeals has described that section as “an integral part” of the Act which “evidences the Legislature’s intention to relieve an employer of the obligation to pay compensation to an employee when the accident … is proximately caused by his intoxication.”

The party claiming application of § 97-12 has the burden of proof. Thus, an employer raising the defense has the burden of proving that the employee was either intoxicated or under the influence of a controlled substance. By statute, an employee is deemed “intoxicated” or “under the influence” only when he has “consumed a sufficient quantity of intoxicating beverage or controlled substance to cause the employee to lose the normal control of his or her bodily or mental faculties, or both, to such an extent that there was an appreciable impairment … at the time of the injury.” Accordingly, the issue is whether the employee was “appreciably impaired” when the injury occurred.

Our appellate courts have recognized that impairment is an affirmative defense which places the burden of proof on the employer. An exception applies where results from “a blood or other medical test” are consistent with intoxication or being under the influence. In that case, a “rebuttable presumption of impairment” is created. Whether the results of such a test qualify for the presumption and which party has the burden of proof are often disputed issues. Blood alcohol results over 80 mg/dL, or 0.08, have been held to trigger the presumption of impairment.

The type of test performed is critical to the impairment analysis. Notably, the presumption of impairment is limited to results from a “blood or other medical test conducted in a manner generally acceptable to the scientific community.” Urine drug screens for multiple substances are routinely conducted upon admission to a hospital. Those results are commonly understood to reflect historical samples, and not proof of impairment the time of the injury. Hospital test results performed solely for medical, as opposed to forensic, purposes have been held insufficient to create a presumption of impairment.

In addition to proving appreciable impairment, the employer must also prove that intoxication proximately caused the injury. As our Court of Appeals has recognized, “mere intoxication is insufficient to deny benefits; only if the injury was occasioned by the intoxication will benefits be denied.” Importantly, the statutory presumption described above only extends to the issue of impairment, not to cause. Therefore, even in cases where the presumption of impairment has been triggered by a “blood or other medical test,” the employer still must prove that impairment was a proximate cause of the injury.

Impairment is the most frequently-litigated exception to the no-fault rule we encounter in our practice. While a positive test result often leads to denial of a workers’ compensation claim, determination of those issues is far more complex than a positive hospital test and almost always requires legal and expert analysis to determine whether the facts truly support the denial of compensation.

Employer fault is relevant to workers’ compensation cases under certain conditions. An employer’s willful failure to comply with “statutory requirements” or a “lawful order of the Commission” results in an increased recovery to the employee when it proximately causes the injury. The Court of Appeals has held that OSHA safety standards are “statutory requirements,” and that an employer’s willful violation of those regulations brings the case within the purview of § 97-12. In those circumstances, compensation to the employee is increased by 10 percent.

In limited circumstances, an employee’s failure to follow safety rules can result in a decreased recovery. The employer must prove that the injury or death was caused by the employee’s failure to use a safety device, perform a “statutory duty,” or breach of an employer’s safety rules. The employee must have been informed of the safety rule prior to the injury, and the rule must have been approved by the Industrial Commission. Negligence on the part of the employee is insufficient for application of this section; the employer must prove that the alleged failure was “willful.” Additionally, an employee’s willful intent to injure himself or another person is a complete bar to recovery.

While workers’ compensation is generally a “no-fault” system, these provisions have serious implications in many cases. Determining whether § 97-12 may apply to increase, decrease, or bar recovery under the Workers’ Compensation Act is often a highly technical analysis. The investigation often begins with thorough discovery into the circumstances surrounding the incident and review by experts.

Steven Corriveau is an attorney at Martin & Jones in Raleigh, where he leads the workers’ compensation section. His practice focuses on representing plaintiffs in workers’ compensation and personal injury cases.

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