Employer’s Clinic May Not be Protected by Workers’ Comp Remedy, SC Court Says

The South Carolina Court of Appeals has signaled that employers who offer on-site health clinics may not be immune from tort claims from injured or sickened workers. It’s the latest twist to a question that has bounced around courts and workers’ compensation legal treatises for decades.

“The question in front of the court was whether the case belongs in workers’ comp or whether it’s a third-party suit for malpractice against the health clinic,” said Neil Alger, one of the attorneys representing the estate of deceased worker Samel Ragin, who died at a Pilgrim’s Pride chicken processing plant in 2017.

It’s all about what’s known as the “dual persona doctrine.” A company, in some circumstances, can be considered not only an employer, subject to the exclusive remedy of workers’ compensation law for worker injuries, but also a third party, taking on the liabilities that come with providing employee amenities, such as health care or food service.

The appeals court last week overturned a Sumter County judge’s ruling that had dismissed the Ragin estate’s lawsuit against Pilgrim’s Pride and two nurses at the plant’s clinic. The lower court, after a second hearing, found that South Carolina law does not recognize the dual capacity exception to the workers’ comp exclusivity.

But the appeals court said the matter is not so cut and dried, and remanded the case to the lower court for further consideration.

“Taking the facts and inferences in a light most favorable to the estate, there appears to be some possibility that the dual persona doctrine could apply here,” Appeals Court Judge Blake Hewitt wrote in the opinion.

The court said the duality doctrine has “proved difficult and complicated in several jurisdictions.” The opinion cited two South Carolina Supreme Court decisions in the last two decades as well as a Michigan Court of Appeals ruling. The appellate judges also pointed out that the famous legal guidebook, Larson’s Workers’ Compensation Law (which sells for several thousand dollars on LexisNexis), devotes at least two chapters to the question.

The tragedy and the conundrum began when Ragin, a pallet mover at the chicken plant, reportedly suffered chest pains and shortness of breath while at work in 2017. The case was complicated by a disagreement over whether the woman actually went to the plant clinic. The plaintiffs argue that she did and nurses told her to return to work. Pilgrim’s Pride said no records exist showing Ragin visited the clinic.

Later that day, she was found unconscious in the bathroom at the plant. The cause of death was listed as a heart attack.

A few weeks later, Ragin’s family member filed a workers’ comp claim. Sedgwick Claims Management denied the claim on behalf of Zurich American Insurance Co.

Alger argued that Pilgrim’s Pride should be held liable for not providing better health care to Ragin.

“If an employer takes on a legal duty outside of being an employer, then they can be subject to tort in that scenario,” Alger said.

The appeals court noted that nurses in South Carolina are statutorily held to the ethical practice standards adopted by the American Nurses Association in 2015. “These standards may be the sort of independent duties that the dual persona framework contemplates,” the judges wrote.

Alger acknowledged that some may see the dual persona claim in this case as questionable. After all, the employer was ostensibly helping workers by operating the clinic. On-site nurses have been shown to reduce the severity and duration of some injuries and claims, occupational health providers have said. Dr. David Fletcher, a well-known Illinois occupational health physician, has for years advocated for on-site nurses and other measures, especially at meat-processing facilities.

Tyson Foods, another meat company, in 2020 announced it planned to open medical clinics at several U.S. plants, reflecting a growing trend of on-site clinics at worksites.

That does not excuse poor decisions by in-house medical providers, Alger said. He compared the situation to a company that provides a lunch cafeteria at the jobsite. If a worker becomes gravely ill or dies from spoiled food, is the worker barred from suing?

The dual doctrine question more frequently arises at hospitals, Alger said. A janitor at a facility, for example, may take advantage of free health care at the hospital. But if a doctor misdiagnoses a disease, should the worker be prohibited from pursuing a tort action against the hospital?

“The doctors in that case were treating him as a patient, not as an employee,” Alger said.

U.S. law and employers decades ago moved away from “company towns,” in which industries provided company stores and company food and company banks and were allowed to escape tort liability by arguing that an injury from those services was covered by the exclusive remedy of workers’ compensation, Alger argued.

A lawyer for Pilgrim’s Pride in the case could not be reached for comment Monday. In his appellate brief, attorney Thomas Pritchard argued that the claimant’s estate had failed to pursue an appeal on the workers’ comp claim denial, leaving the exclusive remedy question unresolved. Also, he noted, the cited, 2013 state Supreme Court decision found that for the dual persona doctrine to apply, the duty to the victim must arise solely from the company’s non-employer persona.

It’s possible that the employer will now ask the state Supreme Court to consider the Ragin case, Alger said.

Lawmakers in a number of states have allowed a few occupations to avoid the vagaries of the dual persona question altogether. Firefighters in South Carolina, Florida and at least 17 other states, for example, have been granted a rebuttable presumption that heart conditions are considered work-related and are eligible for workers’ compensation benefits, the National Council on Compensation Insurance has reported. In 20 states, firefighters also are allowed a similar presumption for certain types of cancer.

Topics Commercial Lines Workers' Compensation Business Insurance South Carolina