Sexual harassment and assault have risen to the top of employment concerns for employers in the #MeToo era, but the question of whether such incidents constitute a compensable injury in the workers compensation context is unclear.

Employees who experience physical or mental trauma or both related to sexual harassment or assault can seek workers comp benefits in states such as North Carolina, Oregon and Delaware, while other states such as Alabama, South Dakota and Wyoming bar psychological-only trauma or significantly limit such recoveries.

While exclusive remedy provisions in workers comp statutes generally prohibit recoveries for workplace-related injuries outside of the workers compensation system, there may be exceptions related to sexual harassment or assault, experts say.

“#MeToo has actually kind of spilled over into workers comp,” said Robert Balkenbush, a partner in the Reno, Nevada, office of Thorndal Armstrong Delk Balkenbush & Eisinger P.C.

When it comes to sexual harassment, the general rule is if a charge is brought pursuant to state or federal antidiscrimination laws like Title VII of the Civil Rights Act, it generally doesn’t fall within the exclusivity provisions of state workers comp statutes, but that’s not a hard and fast rule, said Mr. Balkenbush. Although tort claims are the most common method for resolving sexual harassment and assault claims, there are occasions when employees choose the workers comp system to recover for their injuries.

“An employee who chooses to pursue this type of claim through workers comp may perhaps have a bit of an easier time proving their case,” said Courtney Britt, a partner in the Raleigh, North Carolina, office of Teague Campbell Dennis & Gorham LLP. “But there’s a little bit of risk. Clearly, if the employee has a good civil case, they have the potential for greater recovery, but they also run the risk that the case may not survive a motion to dismiss or a summary judgment motion.” 

But states have differing views of when sexual harassment may be considered compensable in the workers comp context. Psychological and stress injuries arising out of sexual harassment at the workplace may be considered compensable in Delaware, Hawaii, Indiana, Iowa, Louisiana, Missouri, New Jersey, New York, Oregon, South Carolina, Texas, Utah and Wisconsin, according to data from the National Workers Compensation Defense Network, an organization comprised of workers compensation defense firms in 47 states. But states have different evidentiary thresholds for such injuries.

However, workers comp is not considered a good remedy for sexual harassment charges in Alabama, Arkansas, Connecticut, Florida, Kansas, Kentucky, Oklahoma, South Dakota, Washington, West Virginia and Wyoming because they require a physical injury or a physical injury to cause the manifestation of a psychological injury, for the injury to be compensable, according to members of the defense network.

Most of the time sexual harassment will fall squarely under employment practice rather than workers comp, said Sandy Little, director of enterprise risk management at Bar-S Foods Co. in Phoenix. But when intentional infliction of emotional distress is claimed, such intentional acts are often not compensable in insurance policies, leading to more ambiguity.

In Phillips v. Exxon Mobil Corp., the U.S. District Court for the Northern District of Illinois held in July 2018 that a woman’s intentional infliction of emotional distress charge stemming from sexual harassment at work could proceed but denied her negligent infliction of emotional distress claim under the exclusivity provision of the state’s workers compensation statute.

In contrast, in the unpublished 2016 decision in Hall v. Rockingham County, the U.S. District Court for the Middle District of North Carolina held that a woman’s claim of negligent infliction of emotional distress was barred by the exclusivity provision of that state’s comp law.

When employers take the position that a state workers comp law doesn’t apply in a sexual assault or sexual harassment case, they expose themselves to tort liability, according to Mike Fish, a partner at Fish, Nelson & Holden LLC in Birmingham, Alabama, and current president of the defense network. “On the flip side, if they do take the position that the sexual harassment is work related, the exclusivity doctrine may still not prevent them from tort liability.”

Double recoveries do happen occasionally, and an employee may file separate claims for separate injuries and receive separate recoveries, experts say.

In June 2018, the California Court of Appeals in Camacho v. Target Corp. ruled in favor of an employee who claimed he suffered from digestive, psychological injuries and head and neck pain due to workplace discrimination and harassment based on his sexual orientation. The employee received $12,000 for his workers comp claim and signed a claims release, but the appeals court found that he did not release his nonworkers compensation claims and reversed a trial court’s decision to dismiss his California Fair Employment and Housing Act claims against Target.

In instances of sexual assault, the question of compensability often comes down to whether the injury or assault arose out of and in the course of employment, said Mr. Balkenbush, who also is chair of the USLAW Network Workers’ Compensation Practice Group.

In January, the District of Columbia Court of Appeals ruled that mental and emotional injuries experienced by a female firefighter who was allegedly sexually assaulted in her firehouse bunk by three fellow firefighters did not occur in the performance of her duties, leading to her involuntary retirement and disability benefits funded at a lower annuity rate.

Ms. Britt of Teague Campbell said she has not seen any uptick in sexual assault or harassment workers comp claims. But “it has the potential, as with any social issue, to lead to more folks pursuing these kinds of (comp) claims,” she said. “This area of workers comp is still developing.”