Natural disasters and Workers’ Compensation

Natural disasters, such as hurricanes, tornadoes, floods, and wildfires, are increasing the scrutiny businesses face over their disaster preparedness, response strategies, and liability for injuries and deaths of workers. While the laws vary by state as to whether natural disaster-related injuries are compensable under workers’ comp statutes, most states cover first responders and workplace injuries during disaster recovery.

In other situations, the neutral risk doctrine or positional risk doctrine may apply. To be compensable, an injury or death must arise out of and in the course of employment, but the risk of that job must be greater than that to which others of the public are exposed. Thus, injuries incurred during a natural disaster may not fit neatly into the framework of work comp and compensability will be based on the facts – did the disaster hit a widespread area? was there advanced warning? was an emergency plan executed? were the workers at greater risk than the general public?

Further, there is the question of whether injured workers and the families of those who are killed are barred from suing the company under the exclusive remedy of workers’ comp. In some states, such as Florida, North Carolina, and South Carolina, the only exception to exclusive remedy is intentional or deliberate misconduct by an employer. However, in several other states, negligence can be an exception to immunity and recent disasters have spurred negligence lawsuits.

Hurricane Helene caused deadly flooding in Erwin Tennessee, resulting in the death of several workers and injuries to others at Impact Plastics, which is now being investigated by Tennessee OSHA and other state agencies. The family of one of the deceased workers has filed a $25 million wrongful death lawsuit, alleging the company forced workers to stay at their posts despite known dangerous conditions and did not brief workers on flood evacuation.

This mirrors a 2022 lawsuit against a candle factory in Mayfield, Kentucky, where a deadly tornado leveled the building, resulting in six deaths and multiple injuries. The lawsuit alleges that the candle factory required employees to keep working, even with the threat of a dangerous tornado. In March 2023, a federal judge ruled the false-light and defamation claims could proceed, but the false imprisonment and intentional infliction of emotional distress could not. A separate “mass action” lawsuit filed by 18 employees in December 2022 alleges the company retaliated against employees by misleading and denying certain benefits to them. The company is also contesting OSHA fines for seven serious violations ­ – improper maintenance, lack of emergency action plans, inadequate safeguards and operational features for exit routes, and bloodborne pathogen. The case is still open, so more violations could be added or removed.

As climate risks intensify, regulatory agencies are taking the position that these severe weather events are occurring with such regularity that they’re no longer “acts of God or unpredictable,” but are becoming foreseeable. Therefore, a best practice for employers is to pay attention to OSHA’s requirement that companies have a plan in place for emergencies, train workers effectively, evacuate in a timely manner, and communication protocols.

Ignoring severe weather warnings and failing to take appropriate actions to protect employees can be considered negligence. To bypass exclusive remedy and succeed with a tort claim, there generally must be three elements present:

• Foreseeable danger: employer must have known or should have known about the potential risks posed by the disaster and taken steps to mitigate them.
• Negligence: the employer failed to take reasonable precautions to protect employees from foreseeable dangers during the disaster, including not providing proper safety training or equipment, failing to evacuate in a timely manner, and failing to have or implement an emergency response plan.
• Causation: Proof that the employer’s negligence directly led to the employee’s death or injury.

Steps employers can take to avoid lawsuits

Several strategies can be implemented to help protect your business:

1. Follow OSHA’s recommendations for disaster preparedness and response. As an OSHA requirement, employers with 10 or more employees are required to have an Emergency Action Plan (EAP), which outlines the steps to be taken before, during, and after a disaster to ensure the safety of employees and the protection of property. It should include evacuation routes, communication strategies, emergency contacts, assigned training and roles for employees during an emergency, and procedures for shutting down utilities and equipment.
2. Implement strong property loss prevention protocols to secure the physical infrastructure.
3. Conduct regular training and drills, which not only will help ensure that your employees know what to do during an emergency but also will convey a commitment to the safety of the workers.
4. Respond with empathy and communicate frequently with employees. Use multiple methods of communication, including social media outlets, as traditional methods may not be reliable. Don’t underestimate the importance of a supportive and helpful response.
5. Operational disruptions can also impact workers’ compensation claim processing, which leads to delays in claim submission or benefit receipt, a common cause of lawsuits. An EAP should incorporate policies for reporting injuries and filing workers’ comp claims.
6. Have a post-disaster recovery plan. Recognize that there are significant risks of injury during the clean-up phase and when restarting businesses. Employees who are assisting with recovery may be asked to perform tasks that are outside the scope of their job description or encounter unfamiliar hazards. Conduct a Job Hazard Analysis (JHA) to assess hazards and provide training and Personal Protective Equipment (PPE). Day laborers and other temporary workers need to be oriented and trained. Recognize the dangers of fatigue and heat stress.
7. Talk to your agent about your workers’ comp coverage including changes in projected payroll and job responsibilities. When employees are traveling out of state you want to be sure you have the correct states on the policy.