Great Trade-Off in Workers Comp

In workers’ compensation insurance, the ‘great trade-off’ protects employers because the injured employee agrees to give up his/her right to sue the employer if they receive benefits for the work-related injury. An employer’s ‘exclusive liability’ to an employee who suffers an accidental injury or death arising out of work performed in the course and scope of employment is to secure the payment of WC benefits, as set forth in the law. By purchasing a WC insurance policy or otherwise securing the payment of benefits in a manner permitted by the law, an employer is immune from any other liability to an injured employee or his family. From the employee’s viewpoint, recovery of WC benefits is the ‘exclusive remedy’ for his injuries.

The immunity of employers is specified in 440.11(1) of the Florida Statutes, which states that the liability of an employer to secure the payment of WC “shall be exclusive and in place of all other liability to any third-party tortfeasor and to the employee, the legal representative thereof, husband or wife, parents, dependents, next of kin, or anyone else entitled to recover damages from such employer” due to the injury or death of an employee. Immunity applies even if an employer’s negligence causes an injury.

The Florida Supreme Court interpreted this section in Seaboard Coast Line Railroad Company v. Smith.

“An employer under this Act is not liable in tort to employees by virtue of the express language of the Act. Such immunity is the heart and soul of this legislation which has, over the years been of highly significant social and economic benefit to the working man, the employer and the State. And whether the injury to the employee is caused by ‘gross negligence,’ ‘wanton negligence,’ ’simple negligence’ passive or active, or no negligence at all of the employer is of no consequence. There is no semblance of suggestion in these statutes that the Legislature intended to make any distinction in degrees of negligence so far as the employer’s immunity is concerned and we see no reason or logic in any distinction.”

Note, however, that the ’great trade-off’ does not protect the employer from every situation. In Byerley and Byerley v. Citrus Publishing Co., Inc., the First DCA held that an employer can’t successfully deny WC benefits by saying the injured worker was outside the scope and course of employment and then, when sued in tort for negligence, contend that workers’ compensation is the exclusive remedy.