How Should Employers Handle ‘Comp Claim Waiting To Happen’?

Claims Management |
Written by Dell Dorn

by Stephanie Goldberg, Business Insurance | Aug. 27, 2015


A company can refuse to hire someone it considers “a workers’ comp claim waiting to happen,” but experts advise against it.

The Tennessee high court on Friday ruled that an employer can refuse to hire a job applicant who has filed or is likely to file a workers’ comp claim.

Kighwaunda M. Yardley, who worked as a housekeeping aide for University Medical Center in Lebanon, Tennessee, was injured in 2010, and began receiving workers comp benefits. She returned to light-duty work in July 2012 was released to full-duty work later that summer, court records show.

However, as of the start of 2012, the hospital contracted with Austin, Texas-based Hospital Housekeeping Systems L.L.C., which interviewed the medical center’s existing workers but retained the right not to rehire them.

In an email to Hospital Housekeeping Systems executives, Michael Cox, division vice president for Hospital Housekeeping Systems, advised against hiring Ms. Yardley, saying she had been out on workers’ comp, her shoulder was again hurting and hiring her would be “a workers comp claim waiting to happen,” according to the state high court’s ruling.

Ms. Yardley sued in the U.S. District Court in Nashville, Tennessee, arguing that workers would be less likely to file comp claims if employers can refuse to hire them, thereby depriving them of “their rightful remedies” under the state’s Workers’ Compensation Act.

Hospital Housekeeping Systems argued that, because Ms. Yardley was an applicant and not an employee, it had no obligation to her under the state’s workers’ comp law and the state’s at-will employment law.

In its unanimous ruling, the state court said employers do not violate comp law by taking such a stance.

The court also noted: “In Tennessee, there is no statutory or common law cause of action for retaliatory failure to hire.” States such as Florida, Louisiana, Maine and Massachusetts do have such laws, the Tennessee court noted in returning the case to the lower court, the ruling stated.

The court isn’t saying it’s fine to discriminate against the job applicant for filing a prior workers’ comp claim, said Steve Coonrod, a partner at McConnaughhay, Duffy, Coonrod, Pope, Weaver, Stern & Thomas P.A. in Tallahassee, Florida. Rather, it decided such an action does not violate the state’s comp law.

Such a stance could lead to a disability discrimination claim under the federal Americans with Disabilities Act, he said.

Albert B. Randall Jr., Baltimore-based principal at law firm Franklin & Prokopik P.C. and president of the National Workers’ Compensation Defense Network, said his advice to employers is ”be very cautious about using prior workers’ compensation claims as part of their decision-making process … Some courts, perhaps many courts, would” consider this a “violation of the ADA or the state equivalent under the ‘regarded as’ theory.”

“Be very cautious about using prior workers’ compensation claims as part of their decision-making process…”

The theory, which does extend to applicants, states that an employer can’t regard an individual as being disabled, Mr. Randall added.

And while Tennessee’s workers’ comp law does not bar employers from refusing to hire an applicant who has filed a comp claim, it is a violation of state law to fire an employee for filing one, the state high court noted in the ruling.


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About the Author

Dell Dorn

Dell Dorn is the founder of DORN Companies. He started DORN in 1998 to help employers save money on workers' compensation claims and reduce OSHA recordables. Today, DORN customers realize the immense cost of employee pain and the enormous impact our service has on employee morale and their bottom line.
Say Goodbye to employees' pain, high healthcare and workers' compensation claims and costs. Learn more


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