Introduction To the Maryland Workers' Compensation Act

• Jurisdiction: Maryland

I. INTRODUCTION TO THE MARYLAND WORKERS' COMPENSATION ACT

A. Background and General Purpose of the Act

Through the enactment of Chapter 800 of the Acts of 1914,¹ Maryland joined most other states in creating a workers' compensation law. The basic purpose of this legislation was to provide relief to the increasing numbers of workers in the rapidly expanding industrial society who were being injured in hazardous employments. These workers, and in death cases their dependents, often had no remedy to recover damages under the existing law because of common law defenses such as the fellow servant rule, contributory negligence, and assumption of risk.²

The Legislature, in the preamble, declared its intent to benefit employees as follows: [T]hat all phases of extra-hazardous employments be, and they are hereby withdrawn from private controversy, and sure and certain relief for workers injured in extra-hazardous employments and their families and dependents are hereby provided for, regardless of questions of fault and to the exclusion of every other remedy, except as provided in this Act.

There was also an intent to benefit employers and taxpayers, as the Supreme Court of Maryland (formerly the Court of Appeals) observed in Waters v. Pleasant Manor Nursing Home:³

The Act secures employers from the unpredictable nature and expense of litigation, and the public from the overwhelming tax burden of "caring for the helpless human wreckage found [along] the trail of modern industry."⁴

? It is often advisable in workers' compensation appeals to inform the jury in the opening statement of the background and purpose of the statute.

B. Basic Statutory Scheme

1. Strict liability

The Act gives an injured worker and his or her dependents a no-fault remedy against the employer to receive certain compensation benefits for accidental injuries arising out of and in the course of employment.⁵

2. Tort immunity

In exchange for this strict liability, an employer is given certain protections, in that the Act provides that the employer's liability is limited to the payment of compensation and medical and funeral expenses set forth in schedules and, further, that the worker and his or her dependents may not maintain a tort action against the employer for damages since the workers' compensation remedy is exclusive.⁶

The employer is also immune from liability to a tortfeasor for contribution or indemnity.⁷

The employer's defense of immunity in a tort action does not have to be specially pleaded.⁸

The immunity from tort liability does not apply to causes of action such as false arrest or defamation, which are not compensable under the Workers' Compensation Act.⁹

3. Intentional actions of employer

If the injury or death resulted from the deliberate intention of the employer (defined as an intentional act with a desire to bring about the consequences of the act), then the worker and his or her dependents have the right either to take compensation benefits under the Act or to sue the employer in tort as if the Act had not been passed.¹⁰

The intentional act of the employer's agent is not automatically attributed to the employer so as to allow the worker to elect to sue the employer.¹¹

The employer's liability for the intentional tort of an agent depends upon the weighing of various factors, including:

a. the status of the agent in the hierarchy of the employer;
b. the extent to which their wrongful conduct could be expected to flow from their position;
c. the nature of the wrongdoing; and
d. any prior notice that the employer had of the agent's proclivity to do wrong.¹²

C. Insurance Requirements

The employer is required to secure the payment of compensation benefits by means of workers' compensation insurance with an authorized private insurance carrier or the Injured Workers' Insurance Fund, or by furnishing satisfactory prof to the Workers' Compensation Commission of financial ability to be self-insured.¹³

An employer who fails to secure the payment of compensation is not only subject to civil and criminal penalties,¹⁴ but also loses immunity from tort liability.¹⁵ In addition, the employer loses the right to plead as a defense to an employee's tort action the fellow servant rule, assumption of risk, and contributory negligence.¹⁶

1. Uninsured Employers' Fund

In 1967, the Legislature created an Uninsured Employers' Fund to pay benefits in cases where the employer has failed to secure the payment of compensation.¹⁷ A member of the Attorney General's staff represents the Fund in cases brought against uninsured employers.

? Cases involving uninsured employers are usually very protracted, and counsel should prepare the claimant to expect a long delay before any benefits will be paid.

D. Retaliation by Employer

An employer may not discharge an employee solely because he or she filed a claim for workers' compensation;¹⁸ an employer is not liable for wrongful discharge if the termination is based on inability to perform the work or excessive absenteeism resulting from the injury.¹⁹

? Employers should be cautioned that before they terminate an employee who was injured on the job, they should discuss the circumstances with their attorneys.

E. Wrongfully Obtaining or Affecting the Payment of Benefits

If the Commission finds that a person knowingly obtained workers' compensation benefits to which the person was not entitled, it shall order the person to reimburse the amount of benefits plus interest of 1.5% per month from the date the...