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Legislative Memo

BILL:

A.7493 (Weinstein)

Support

SUBJECT:

Permitting a plaintiff in a tort case to recover against a third party defendant when the third party plaintiff is insolvent

 

DATE:

May 12, 2003

 

There are two foundations on which workers' compensation law is based in New York. They are no-fault liability and exclusive remedy. Workers' compensation law provides that an employee is entitled to receive benefits for lost earnings and medical expenses, even if the injury is not related to any fault of the employer. The employers are absolutely liable for all benefits due to work related injuries and in exchange they are not able to be sued for such injuries. This bill would change the workers' compensation system in New York by allowing an injured employee to recover directly from the employer.

While an injured worker cannot sue their employer directly for work related injuries, the injured worker can sue a third party that may be responsible for that injury. An example would be an employee who loses their fingers in a piece of machinery and then sues the manufacturer of the machine. The Court of Appeals ruled, in Dole v. Dow Chemical Co., that the manufacturer may sue the employer, for damages that the manufacturer is responsible for paying to the injured employee. It must be noted that New York State is the only state that permits these types of third party lawsuits.

In 1996, the New York Employment Safety and Security Act, was passed. This law provided that claims for contribution and common law indemnity against employers for injuries to their employees were eliminated with the exception of specific grave injury cases. This legislation strengthened the exclusive remedy protections.

In the Klinger v. Dudley decision (1977), the Court of Appeals set the standard that in order for the employer to be liable, the defendant in the action must pay damages in excess of their equitable share. When the defendant is unable to pay their share of the damages, an action for indemnity or contributions cannot be brought against the employer by the employee.

This bill would change the exclusive remedy provisions by allowing the injured worker to recover damages directly from the employer, including pain and suffering, in excess of the workers' compensation benefits that the injured worker is already receiving.

This legislation would clearly undermine the exclusive remedy provision of the workers' compensation law. The Business Council, a broad-based, statewide membership organization of over 3,500 companies, chambers of commerce and trade associations has reviewed the aforementioned legislation and opposes its enactment.