Retaliation for Filing a Workers' Compensation Claim

1/1/2010 -

Wrongful Termination Suits Alleging Retaliation for Filing a
Workers’ Compensation Claim: the Law in Illinois and Missouri

      In the area of labor and employment law, most causes of action arise under federal statutes.  For example, Title VII of the Civil Rights Act of 1964 (“Title VII”) prohibits employment discrimination based on race, color, religion, sex, or national origin.  The Age Discrimination in Employment Act of 1967 (“ADEA”) protects individuals who are 40 years of age or older from termination due to age.  And, Title I and Title V of the Americans with Disabilities Act (“ADA”) prohibit employment discrimination against qualified individuals with disabilities in the private sector, as well as within state and local government.

      Because most suits alleging employment discrimination or retaliation arise under federal statutes, those actions are typically pursued in federal courts, applying federal law.  However, the federal patchwork of employment statutes does not generally address employees who are terminated after they have made a claim for workers’ compensation benefits.

      In 1973, Indiana’s supreme court handed down the landmark decision of Frampton v. Central Indiana Gas Co., 260 Ind. 249 (Ind. 1973).  In that case, Indiana’s highest court recognized a state-law cause of action for “retaliatory discharge” based upon the employee’s filing of a workers’ compensation claim.  The cause of action allowed the employee to recover civil penalties, if the employee could prove that he or she was terminated in retaliation for filing a workers' compensation claim.  Id.  That court noted that such a termination violated public policy, and was therefore actionable in a court of law.  Since that decision, many state courts and legislatures have followed suit and created similar state-law causes of action.  In particular, Illinois and Missouri have both followed this general trend.

     Illinois Retaliatory Discharge Claims

      The general rule in Illinois is that an “at-will employee” may be discharged by the employer at any time, and for any reason.  However, the Illinois supreme court has recognized a limited exception to this rule, where the employee can prove that he or she was terminated in retaliation for exercising his or her rights to workers’ compensation benefits.  Kelsay v. Motorola, Inc., 74 Ill.2d 172, 23 Ill.Dec. 559, 384 N.E.2d 353 (1978). In such a situation, Illinois law allows an employee to bring an action in state court against the former employer, alleging retaliatory discharge.

      In Illinois, the cause of action for retaliatory discharge arises from state statute.  The Illinois’ Workers’ Compensation Act provides that:

[i]t shall be unlawful for any employer, insurance company or service or adjustment company to interfere with, restrain or coerce an employee in any manner whatsoever in the exercise of the rights or remedies granted to him or her by [the Workers Compensation Act] or to discriminate, attempt to discriminate, or threaten to discriminate against an employee in any way because of his or her exercise of the rights or remedies granted to him or her by this Act.  … It shall be unlawful for any employer, individually or through any insurance company or service or adjustment company, to discharge or to threaten to discharge, or to refuse to rehire or recall to active service in a suitable capacity an employee because of the exercise of his or her rights or remedies granted to him or her by this Act.

820 ILCS 305/4(h).

      Citing the public policy behind this statute, the Illinois supreme court has recognized that Illinois law recognizes a tort of retaliatory discharge.  (See generally, Buckner v. Atlantic Plant Maintenance, Inc., 182 Ill.2d 12 (Ill. 1998)).  To recover damages for the tort of retaliatory discharge predicated upon the filing of a workers' compensation claim, an employee must prove: (1) that he or she was an employee before the injury; (2) that he or she exercised a right granted by the Workers' Compensation Act; and (3) that he or she was discharged and that the discharge was causally related to filing a claim under the Act.  Paz v. Commonwealth Edison, 314 Ill.App.3d 591 (2d Dist. 2000). 

     However, courts have held that this tort claim is very narrow in scope, and have generally resisted attempts to expand the tort outside the area of workers’ compensation.  In addition, an employer may discharge an employee claiming benefits for a valid and nonpretextual reason.  Therefore, an employer is not liable for retaliatory discharge solely because the employer fired an employee who has previously filed a workers' compensation claim.  The employee must affirmatively show that the discharge was undertaken in retaliation against the employee for exercising a protected right.  Excessive absenteeism, even caused by a compensable injury, may be a valid reason for dismissal, and an employer is under no obligation to retain an at-will employee who is medically unable to return to an assigned position.  Hartlein v. Illinois Power Co., 151 Ill.2d 142 (Ill. 1992).  However, an employer may not discharge an employee on the basis of a dispute about the extent or duration of a compensable injury.  Id.

      Plaintiffs who prove retaliatory discharge are entitled to seek and receive those damages supported by the evidence and the law.  In Illinois, this includes past and future wage loss (Clark v. Owens-Brockway Glass Container, Inc., 297 Ill.App.3d 694 (5th  Dist. 1998)); the value for loss of pension benefits (Midgett v. Sackett-Chicago, Inc., 105 Ill.2d 143 (Ill. 1984)); and emotional pain and suffering (Heldenbrand v. Roadmaster Corp., 277 Ill.App.3d 664 (5th Dist. 1996), Reinneck v. Taco Bell Corp., 297 Ill.App.3d 211 (5th 1998)).  Where the employee can prove actual malice, or willful and wanton conduct on the part of the employer, punitive damages may also be available.  Jackson v. Bunge Corp., 40 F.3d 239 (7th Cir. 1994).  Illinois law does not generally allow the employee to recover attorneys’ fees.  Bill v. Board of Educ. of Cicero School Dist. 99, 351 Ill.App.3d 47 (1st 2004).

     A wrongfully-discharged employee must attempt to mitigate damages by seeking similar employment.  However, Illinois courts will only require the discharged employee to make reasonable efforts to mitigate damages.  If failure to mitigate is raised as an affirmative defense, the burden falls upon the employer, not the discharged employee, to prove the amount of mitigation earnings in order to reduce the damage award.  The amount recoverable by a wrongfully-discharged employee is reduced by other wages earned by the employee.  However, that reduction is allowed only insofar as such income would have been incompatible with the performance of the employee's duties to the erring employer.  Thus, if the employee can prove that he or she would have been able to hold both jobs at the same time, then no setoff is allowed.

Missouri Employment Retaliation Claims.

      Missouri law, like Illinois law, provides a statutory prohibition against terminating an employee for exercising his or her rights to workers’ compensation benefits.  Missouri’s Workers’ Compensation Law provides:

No employer or agent shall discharge or in any way discriminate against any employee for exercising any of his rights under this chapter. Any employee who has been discharged or discriminated against shall have a civil action for damages against his employer.

R.S.Mo. 287.780

      The Missouri supreme court has noted that "[w]orkers' compensation law is entirely a creature of statute, and when interpreting the law the court must ascertain the intent of the legislature by considering the plain and ordinary meaning of the terms and give effect to that intent if possible." Greenlee v. Dukes Plastering Service, 75 S.W.3d 273, 276 (Mo. banc 2002). Under the plain language of section 287.780, no employer may discharge any employee for exercising any of his or her rights under the workers' compensation law.  Hayes v. Show Me Believers, Inc., 192 S.W.3d 706, 707 (Mo.banc 2006).

      A claim for wrongful discharge under Missouri law is a tort.  The elements of a cause of action brought under § 287.780 are: (1) plaintiff's status as an employee of defendant before the injury; (2) plaintiff's exercise of a right granted by the Act; (3) employer's discharge of or discrimination against the plaintiff; and (4) an exclusive causal relationship between plaintiff's actions and defendant's actions.  Wey v. Dyno Nobel, Inc., 81 S.W.3d 208 (Mo.App. S.D. 2002).

      This cause of action does not invalidate Missouri’s “at will” doctrine.  Under that doctrine, an employer may fire an employee without a durational contract for any reason or for no reason at all. Crabtree, 967 S.W.2d at 70.  The workers' compensation act did not abolish the at will doctrine but rather provided a limited exception which allows an action, only where there is an exclusive causal relationship between the discharge and the employee's exercise of rights as granted under Chapter 287.  Stephenson v. Raskas Dairy, Inc., 26 S.W.3d 209 (Mo.App. E.D. 2000).

      Because Missouri courts require an exclusive causal relationship between the discharge and the workers’ compensation claim, an employer may fire an employee for excessive absenteeism, even if the absenteeism is caused by a compensable injury.  In other words, even where the termination is the end result of a compensable injury, a cause of action for retaliatory discharge will not lie if the basis for discharge is valid and nonpretextual.  Rodriguez v. Civil Service Commission, 582 S.W.2d 354 (Mo.App. 1979).

      If a plaintiff is successful in proving a retaliatory discharge claim, Missouri law allows the plaintiff to recover various categories of damages, including the employee's loss of wages, and emotional distress.  Hopkins v. Tip Top Plumbing and Heating Co., 805 S.W.2d 280 (Mo.App. W.D.1991); Palermo v. Tension Envelope Corp., 959 S.W.2d 825 (Mo.App. E.D.1997). Where a plaintiff provides sufficient proof of an employer's knowledge and malicious intent, punitive damages may be awarded as well.  Self v. Lenertz Terminal, Inc., 854 S.W.2d 571 (Mo.App. E.D. 1993).

     Retaliatory Discharge: Summary and the Standard of Proof

      Federal statutes do not generally provide a cause of action for “retaliatory discharge,” where the plaintiff alleges wrongful termination for exercising his or her rights to workers’ compensation benefits.  However, the trend has been for individual states to create such causes of action under state law. Both Illinois and Missouri provide for such causes of action, which are narrow exceptions to the common-law doctrine that – where the employee does not have an employment contract – employers may terminate those employees for any reason, or no reason at all.  If such an “at will” employee is successful in proving that the discharge was in retaliation for making a workers’ compensation claim, then the plaintiff may recover lost wages, damages for emotional distress and, in some cases, punitive damages.

      Importantly, courts in both Illinois and Missouri apply a different standard of proof at trial, than the standard used by federal courts in Title VII claims.  Federal courts apply a “three-tier” standard of proof in Title VII employment discrimination cases.  Under that standard, once a plaintiff establishes a prima facie case against the defendant, the burden shifts to the defendant to rebut the prima facie case, with evidence of a legitimate, non-retaliatory reason for discharging the plaintiff.  If the defendant is successful in providing such rebuttal evidence, the burden shifts back to the plaintiff to then prove that the non-retaliatory reason asserted by the employer is pretextual in nature. (Civil Rights Act of 1964, § 701 et seq.; 42 U.S.C.A. § 2000e et seq.)  This standard relaxes the initial burden of proof upon a plaintiff, and simply requires proof of “circumstances which give rise to an inference of unlawful discrimination.”  Texas Dept. of Community Affairs v. Burdine, 450 U.S. 248 (1981).

      However, both Illinois and Missouri courts have rejected this three-tier allocation of proof standard in state-law retaliatory discharge claims.  Rather, those courts apply the traditional tort law analysis.  See, for example, Clemons v. Mechanical Devices Co., 184 Ill.2d 328 (Ill. 1998); Hopkins v. Tip Top Plumbing and Heating Co., 805 S.W.2d 280 (Mo.App. W.D. 1991).  Thus, in Illinois, the initial burden is upon the plaintiff to prove that he or she was discharged and that the discharge was causally related to his or her filing a claim under the Workers' Compensation Act.  In Missouri, the burden is upon the plaintiff to prove an exclusive causal relationship between the termination and the employees exercise of workers’ compensation rights.

     On its surface, the rejection of the Title VII burden of proof analysis appears to create a much higher hurdle for plaintiffs to clear in state-court retaliatory discharge claims.  However, this appearance can be deceptive.  State courts are often less inclined to grant summary judgment and dispose of frivolous claims than are federal courts.  In addition, because these retaliatory discharge claims are filed in state courts, the possibility of forum-shopping arises, where plaintiffs attempt to creatively select state circuit courts which have exhibited a pro-plaintiff bias.  Thus – viewed from a practical perspective – these types of claims are often more problematic for employers than may be expected.  Employers and their insurers should take care to begin preserving and cataloging the evidence of the non-retaliatory basis for the termination at the soonest opportunity after a new suit is filed, or when the employer becomes aware of a potential claim.

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