Avoiding Workers’ Compensation Discrimination Claims in Maine

 When an employee is injured at work, competing interests make it easy for an employer to improperly handle the injury on the front end.  An employer’s compliance mistakes and taking a “wait-and-see approach” to work injuries can give rise to expensive claims of workers’ compensation discrimination under the Maine Workers’ Compensation Act (the Act).  Despite the existence of other laws that address workplace discrimination, when an injured employee alleges to have been discriminated against because of a work injury at their current employer, the employee’s only remedy falls under Section 353 of the Act.  Employers are well advised to comply with all reporting requirements of the Act to avoid discrimination claims as they can be very expensive.

Why are workers’ compensation discrimination claims so expensive for employers?  Most workers’ compensation insurance policies exclude coverage for allegations of discrimination under the Act.  An employer accused of discrimination under the Act will have to pay for its own legal defense.  Furthermore, it will have to pay any award ordered by the Workers’ Compensation Board (the Board) out of its own pocket.  What is an employer’s exposure in these types of cases?  If an employee proves the claim, the Board may order that the employee be reinstated to the employee’s previous job, and/or that the employer pay back wages, reestablish employee benefits, and award reasonable attorneys’ fees to the employee.  The potential award of attorneys’ fees makes these types of claims very attractive to attorneys representing employees.

The statute provides that, “An employee may not be discriminated against by any employer in any way for testifying or asserting any claim under this Act.”  The Maine Judicial Supreme Court has interpreted this provision of the Act as prohibiting an employer from taking any adverse employment action against an employee for asserting any rights under the Act or for testifying in regard to any employee’s workers’ compensation claims.

Most typically, employers expose themselves to workers’ compensation discrimination claims when they terminate an injured worker.  The desire to terminate an injured employee is often intensified by the high cost of paying for employee benefits, especially health insurance, when the employee cannot work and contribute to “the bottom line.”  The closer in proximity the adverse employment action is to the date of injury the more likely it is that an employer will face a workers’ compensation discrimination claim.  The Maine Supreme Judicial Court has written that,

Neither the Act nor our decisions require an employer to keep an employee on the books indefinitely when the employee can no longer meet the requirements of a job […however,] the proximity in time between the assertion of a claim for workers’ compensation benefits and the adverse employment action may constitute circumstantial evidence of discriminatory intent.  

While timing is important, it isn’t everything.  The Court has also written that it is not discrimination to terminate an injured employee “based on legitimate employment considerations directly bearing on the employee’s physical ability to return to work.”  It should not simply establish an arbitrary time period for continuing an employee on its rolls, however.

Some employers avoid or delay reporting work injuries to their insurers or the Board for fear of increased insurance premiums, opting instead to continue paying the employee’s weekly wages, assuming that they will recover and return to work.  The problem gets worse when the injured employee does not recover and return as expected.  If the employer fails to report or controvert the injury in a timely manner, it may be assessed penalties and forced to pay the claim until a notice of controversy is filed.  The employer will eventually have to turn the claim over to their carrier, and they may have interfered with the insurer’s ability to effectively defend the claim.

Workers’ compensation discrimination claims are also asserted when the injured worker perceives the workplace to be a hostile environment in the wake of their injury.  Treating an injured worker with empathy and a positive attitude are simple steps an employer can take to minimize their exposure.  Compliance with the workers’ compensation reporting and filing laws will also go a long way in protecting an employer from discrimination claims under the Act.  In an important case, the Court wrote:  “Where the employer has complied with the Act and has paid benefits timely, we will not read into the Workers’ Compensation Act an additional requirement that employers maintain people who are completely unable to work on their employment rolls or face claims for discrimination under the Act.”

Cutting corners, delaying compliance, and failing to treat injured workers’ with respect are all common gateways to employers to finding themselves on the wrong end of a workers’ compensation discrimination claim.  The range of damages that an employee can recover in workers’ compensation discrimination claims, and their customary exemption from coverage in most insurance policies, means that employers should carefully follow the laws governing mandatory board filings.  The cost of non-compliance is often greater than the savings in insurance premiums.

This article is not legal advice but should be considered as general guidance in the area of employment and corporate law. James F. Pross, Bryan Dench, Amy Dieterich, Jordan Payne Hay, and Rebecca Webber are employment and labor law attorneys; others at the firm handle business and other matters. You can contact us at 207.784.3200. Skelton Taintor & Abbott is a full service law firm providing legal services to individuals, companies, and municipalities throughout Maine. It has been in operation since its founding in 1853.