Workers Compensation Retaliation Exception to At-Will Employment

Employers in Nebraska cannot retaliate against an injured worker who has filed a workers’ compensation claim by demoting them or terminating them. I often see workers who have filed for workers' compensation benefits being harassed, demoted and even terminated on a regular basis. Additionally, if you believe that you have been terminated because your employer is not following safety rules and regulations or other laws that are in place to protect the public, you may have a claim for wrongful termination under Nebraska state law.

In Jackson v. Morris Communications Corp., 657 N.W.2d 634, 265 Neb. 423 (Neb. 2003), the Nebraska Supreme Court held that a public policy exception to the employment at will rule applies when an employer wrongfully discharges an employee in retaliation for filing a workers' compensation claim.

The Nebraska Supreme Court has extended the public policy exception to the employment-at-will doctrine by allowing employees to seek damages when they are demoted in retaliation for filing workers’ compensation claims.

In Trosper v. Bag `N Save, the Nebraska Supreme Court addressed whether an employee's demotion for seeking compensation rightfully owed him under the State's workers' compensation laws falls within the State's public policy exception to the at-will employment doctrine. Already having recognized a public policy exception when an employee is dischargedfor seeking compensation under the State's workers' compensation laws, the specific issue facing the Court was whether retaliatory demotion should be protected to the same extent as retaliatory discharge.

In Trosper v. Bag 'N Save, 734 N.W.2d 704, 273 Neb. 855 (Neb. 2007), the Plaintiff, Kimberlee Trosper, suffered a work-related injury that required medical treatment. When she told her employer about the injury, she was demoted to a deli “clerk” position, and her annual salary decreased by over $7,500.

Trosper sued Bag ’N Save, claiming that she was demoted because she filed a workers’ compensation claim. Noting that while the Nebraska Supreme Court had ruled that when an employer wrongfully discharged an employee in retaliation for filing a workers’ comp claim it created a public policy exception to at-will employment, a trial court dismissed Trosper’s claim because she had only been demoted, not discharged. Trosper appealed and the Nebraska Supreme Court agreed to hear her case.

Trosper argued that demotion, like termination, “frustrates the public policy behind the Nebraska Workers’ Compensation Act” while Bag ’N Save argued that the public policy exception should be limited to situations involving discharge. While the court had found retaliatory discharge to create a public policy exception to the doctrine of employment at will in 2003 ( Jackson v. Morris Communications Corp.), it had never considered the issue of demotion. 

The court examined a number of decisions from other states in which courts had wrestled with the same question.  The ruling they found most persuasive came from the Kansas Supreme Court, which recognized a cause of action for retaliatory demotion. That Kansas court reasoned that “the employer’s violation of public policy and the resulting coercive effect on the employee is the same in both termination and demotion. The loss or damage to the demoted employee differs in degree only.”

Just as Bag ’N Save argued that allowing employees to sue for retaliatory demotion would cause a “flood of litigation,” the employer in the Kansas case argued that a “torrent of litigation of insubstantial employment matters would follow” if the court allowed the lawsuit. Kansas Supreme Court judges disagreed that it would and, furthermore, wrote that “even if we did, it does not constitute a valid reason for denying recognition of an otherwise justified cause of action.”

A majority of Nebraska Supreme Court judges shared the same sentiments as the Kansas court. “An employee’s right to be free from retaliatory demotion for filing a workers’ compensation claim is married to the right to be free from discharge,” they concluded. “Demotion, like termination, coercively affects an employee’s exercise of his or her rights under the Nebraska Workers’ Compensation Act. If we fail to recognize a claim for retaliatory demotion, it would create an incentive for employers to merely demote, rather than discharge, employees who exercise their rights.” It reversed the trial court’s decision.

Trosper v. Bag ’N Save, Neb., No. S-05-889 (July, 6, 2007).

With this ruling, the court has made it an acceptable cause of action in Nebraska for an employee to sue an employer for retaliatory demotion for the filing of a comp claim.

If you have any questions about whether you have been subject to retaliation due a workers' compensation claim, contact Madathil Law Office for a free consultation.

Madathil Law Office, LLC

Nebraska Employment Attorney

1625 Farnam Street #830

Omaha, NE 68102

angela@madathil-law.com

http://www.madathil-law.com/

T: 402.577.0686

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