Private Causes of Action under the Minnesota Workers’ Compensation Act

Workers' Compensation

The Minnesota Workers’ Compensation Act, Minnesota Statutes Chapter 176, requires employers to provide workers’ compensation insurance to its employees. Similarly, the Act provides for four separate and distinct causes of action where an employer attempts to evade its responsibilities under the Act. Section 176.82, subdiv. 1, provides a cause of action for:

  1. threatening to discharge an employee for seeking workers’ compensation benefit;
  2. intentionally obstructing an employee seeking benefits; or,
  3. discharging an employee for seeking workers’ compensation benefits.

Additionally, section 176.82, subdiv. 2, provides a cause of action for:

  1. an employers continued refusal to offer continued employment to an employee within his/her physical limitations.

Threatening to discharge employee for seeking workers’ compensation benefits:

A claim for threatening to discharge an employee for seeking workers’ compensation benefits in violation of section 176.82, subdiv. 1, requires the plaintiff to show:

  1. employer with knowledge that the plaintiff may have suffered a workplace injury;
  2. attempted to dissuade the plaintiff from seeking worker’s compensation benefits;
  3. through one or more communications that created a reasonable apprehension of discharge; and,
  4. caused the plaintiff to delay or cease seeking benefits. (See footnote 1.)

A “person” may be an individual, an insurance carrier, or an employer under section 176.82. (See footnote 2.) A “threat” is a communicated intent to take certain action if the threatened person does not conform his or her behavior to a desired standard.

Intentionally obstructing employee from seeking workers’ compensation benefits:

A claim for intentionally obstructing an employee seeking workers’ compensation benefits in violation of section 176.82, subdiv. 1, requires the plaintiff to show, by clear and convincing evidence, that:

  1. employer obstructed or hindered, whether by deliberate action or inaction;
  2. the receipt of benefits due to employee; and,
  3. did so in a manner that is egregiously cruel or extreme. (See footnote 3.)

Section 176.225, subdiv. 1, authorizes an additional award to a claimant of up to 30% of the total compensation award where the employer or insurer has opposed the claim on frivolous grounds, unreasonably delayed payment, intentionally underpaid compensation, or neglected or refused to pay compensation. (See footnote 4.)

Discharging employee for seeking workers’ compensation benefits:

A claim for discharging an employee for seeking workers’ compensation benefits in violation of section 176.82, subdiv. 1, requires the plaintiff to show:

  1. statutorily protected conduct by the employee;
  2. adverse employment action by the employer, and,
  3. a causal connection between the two. (See footnote 5.)

The burden of proof then shifts to the employer to articulate a legitimate, nondiscriminatory reason for its actions. (See footnote 6.) If the employer meets that burden of production, the burden shifts back to the employee to demonstrate that the employer’s stated reason for its action was more likely than not pretextual. (See footnote 7.)

Damages under Minn. Stat. § 176.82, subdiv. 1:

Any person who violates section 176.82, subdiv. 1, is liable in a civil action for damages incurred. Damages available include:

  1. diminution in workers’ compensation benefits caused by violation;
  2. costs;
  3. attorney’s fees; and,
  4. punitive damages not to exceed three the amount of any compensation benefit to which the employee is entitled.

Although the court has discretion to award punitive damages for a section 176.82 violation, a statutory violation does not result automatically in an award of punitive damages. A party can only recover punitive damages where he is able to prove actual damages. (See footnote 8.) Any damages awarded will not be offset by any workers’ compensation benefits.

Under basic agency principles, an employer is vicariously liable for the actions of a supervisor who threatens to discharge an employee for seeking workers’ compensation benefits in violation of section 176.82, subdiv. 1.

Refusal to offer continued employment:

A claim for refusal to offer continued employment in violation of section 176.82, subdiv. 2, requires the plaintiff to show:

  1. an employer;
  2. refuses to offer continued employment to its employee;
  3. without reasonable cause;
  4. when employment is available within the employee’s physical limitations.

In determining the availability of employment the court may consider whether the business is reasonably expected to continue its operations, the seniority of the particular employee, and any relevant provisions in a collective bargaining agreement. It should be noted that this subdivision does not apply to employer who employ fifteen (15) or fewer full-time equivalent employees.

Damages under Minn. Stat. § 176.82, subdiv. 2:

An employer who violates section 176.82, subdiv. 2, is liable in a civil action for one year’s wages. The wages are payable:

  1. from the date of the refusal to offer continued employment;
  2. at the same time and rate as the employee’s preinjury wage;
  3. up to $15,000.

[1] Schmitz v. United States Steel Corp., 2010 WL 4941668 (Minn. Ct. App. Oct. 7, 2010).

[2] Summers v. R&D Agency, Inc. 593 N.W.2d 241, 244 (Minn. Ct. App. 1999).

[3] Bergeson v. U.S. Fid. & Guar. Co., 414 N.W.2d 724, 727 (Minn. 1987).

[4] Id.

[5] Kunferman v. Ford Motor Co., 112 F.3d 962 (8th Cir. 1997).

[6] Benson v. Nw. Airlines, Inc. 561 N.W.2d 530, 539 (Minn. Ct. App. 1997) (citing McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-03 (1973).

[7] Id.

[8] McDaniel v. United Hardware Distrib. Co., 469 N.W.2d 84, 87-88 (Minn. 1991).