Issue
In Huffman v. Interstate Brands Companies, — Cal. Rptr. 3d —, 2004 WL 1798113, Cal.App. 2 Dist., Aug. 12, 2004, the California Court of Appeal addressed the issue of whether the exclusive remedy provision of California’s Workers’ Compensation Act (WCA) bars an employee’s recovery of civil damages for a work-related injury that occurred after the employee was unlawfully demoted.
Facts
The employer, Interstate Brands Companies (IBC) demoted Daniel Huffman, a 23-year employee, from district sales manager to division sales manager. Following the demotion, Huffman aggravated a pre-existing knee injury. He filed a workers’ compensation claim and ultimately underwent bilateral knee replacement surgery.
Huffman, age 51 when he was demoted, sued IBC for age discrimination in violation of California’s Fair Employment and Housing Act, and wrongful demotion in violation of public policy. During the trial, Huffman testified concerning the pain and suffering associated with his knee injury, and in closing argument, Huffman’s attorney focused on the “physical injury and emotional trauma” Huffman had suffered as a result of the surgery. The jury returned a verdict for Huffman that included $2 million in non-economic damages attributable to his emotional distress over the demotion and pain and suffering related to the knee injury.
IBC appealed, contending among other things that the trial court erred in admitting evidence concerning Huffman’s knee injury because his exclusive remedy for that injury was under the WCA.
The Court Of Appeal’s Decision
The Court of Appeal agreed with IBC. It rejected the trial court’s reasoning that allowed Huffman to recover civil damages related to his knee injury because Huffman would not have been in the division sales manager job “but for” IBC’s alleged unlawful conduct in demoting him. Generally, workers’ compensation is an employee’s exclusive remedy for injuries arising in the course of employment. However, certain employer misconduct – such as unlawful discrimination — is not included in the workers’ compensation scheme, and subjects an employer to liability for civil damages. Therefore, even though Huffman could recover damages for emotional distress associated with IBC’s unlawful conduct, Huffman could not recover for pain, suffering and emotional distress consequent to his subsequent injury unless he could also show that IBC’s unlawful conduct was a “substantial factor” in causing the subsequent injury.
The Court analyzed the evidence and found Huffman could not make such a showing. The knee injury occurred as a result of the physical requirements of the job, “not because [Huffman] was unlawfully replaced as a district manager by a younger man,” the Court said. There was no evidence that IBC assigned Huffman to the new responsibilities for an unlawful purpose, and IBC’s demotion of Huffman therefore was not a substantial factor in the subsequent injury. Because evidence related to the injury likely was a factor in the jury’s determination of damages, such evidence should have been excluded, and the trial court’s admission of it required a new trial. The Court of Appeal reversed the decision in favor of Huffman, and sent the case back to the trial court for a new trial.
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