Serious and Willful for Employers - Part 3

Saturday, June 7, 2003 | 0

This is the third of a three part series for employers on 'serious and willful' allegations. In the first article we defined what a serious and willful (S&W) issue was, and reviewed some basic case law as compared to statutory law on the issue. The second article went over some common fact patterns that will give rise to an allegation of a serious and willful condition that may give rise to liability. This article will review some practical considerations when a violation of Labor Code section 4553 is alleged.

Remember from the second article that intent is a requisite element of a finding of serious and willful misconduct. The intent is tantamount to criminal intent - knowledge of a condition that caused or might cause an injury, and despite that knowledge, failing to take corrective action, concealing the danger or concealing its relationship to an industrial injury. Intent must be the focus of any post injury S&W activity.

Obviously, one of the first steps to take when an allegation of section 4553 violation occurs is to initiate an investigation. Do not rely on your insurance company to do this, and do not rely on any attorney that has been hired by the insurance company to do this. An independent investigation paid for by you, the employer, will be necessary. You will need to develop your own facts and documentation. Remember that while the insurance company may pay for a defense against an S&W allegation, they are not obligated (indeed they are prohibited by law) to pay for the related damages (increase in compensation). It is in the employer's best interests to take care of itself - i.e. to conduct an investigation that is going to be most favorable to the employer.

The investigation should obviously include interviews of all witnesses, but in particular the supervisors and managers closest to the situation. They presumably would be the ones that would have formed the 'intent' necessary to commit an act that would be serious and willful. A good investigation will explore all facets of the accident, from equipment purchase and maintenance, to modification, through safety measures taken or ignored and the accident itself.

The investigation should be performed by, or at the behest of, an independent attorney hired by the employer. This is important in order to protect any attorney-client privilege that may be asserted or used in later proceedings - another reason not to rely on the attorney for the workers' compensation insurance company relative to this investigation. However, the attorney should be versed in workers' compensation laws. There are important differences that an attorney who does not focus on work comp is not going to understand -the jargon of workers' compensation is just one, albeit basic, example.

In addition, an independent investigation should still be performed even if an OSHA investigation is performed. The fact that OSHA did not issue a citation is not prima facie evidence of S&W innocence. There may still be a violation of section 4553. Likewise, an OSHA citation is not determinative of an S&W act. Either may be evidence in support of the proffered argument, but they are two separate levels of investigation by two independent administrative agencies that are not bound by one another's findings.

Accumulate any and all documentation regarding the focus or cause of the injury immediately and keep them stored in a safe, secure environment where they can be readily found. Key documents always seem to have a tendency to disappear after a period of time. Even if the documents are damaging to your case, preservation of such is critical. There may be an explanation for damaging statements in a document, or some other exculpatory events surrounding the generation of a damaging document, that could not otherwise be explained if it is missing.