Tragic story about a woman seriously injured at MSU show what happens when insurance companies battle against each other and highlights a problem with the exclusive remedy provision contained in the WDCA.
WLNS-TV picked up the story of Elisabeth Ostendorf, a German born research scientist working at MSU, who was run over by an automobile and suffered a brain injury. MSU determined that she was not covered under workers’ compensation and refused to pay benefits as a self-insured employer. She filed a civil lawsuit against MSU for its negligence and received a multi-million-dollar verdict. MSU’s liability insurance carrier refuses to pay this award because they believe she is covered under workers’ compensation. This matter continues to be fought in the courts and justice has been delayed.
This tragic situation demonstrates what happens when insurance companies battle against each other. Michigan adopted its first workers’ compensation law in 1912. It was designed as a compromise between employee and employer interests. The Worker’s Disability Compensation Act of 1969 (WDCA) is now the exclusive remedy for an employee hurt on-the-job. This means wage loss, medical treatment, and vocational rehabilitation should be paid automatically if an employee is hurt at work. In exchange for these guaranteed benefits, employers receive immunity from civil lawsuits.
We have seen some employers refuse to pay workers’ compensation benefits and then use the exclusive remedy provision as a shield against a civil lawsuit. Insurance companies point fingers at each other while the disabled employee cannot put food on the table or get needed medical treatment.
The Michigan Legislature also reformed the workers’ compensation law in 2011 limiting the amount of wage loss benefits that must be paid. Insurance companies can now use “wage earning capacity” to reduce the amount of weekly checks. We had a client who saw his wage loss benefits slashed to just $19 per week based upon a job he could not even obtain.
It is time that Michigan scrap the exclusive remedy provision for employers who fail to pay. Employees should also be allowed to seek additional damages when workers’ compensation benefits are shown to be inadequate.
Michigan Workers Comp Lawyers never charges a fee to evaluate a potential case. Our law firm has represented injured and disabled workers exclusively for more than 35 years. Call (844) 201-9497 for a free consultation today.
Photo courtesy of Creative Commons, by John M. Quick.