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In a recent decision, the Nebraska Supreme Court used the exclusive remedy provision of the Nebraska Workers’ Compensation Act (“NWCA”) to bar claims of discrimination under the Nebraska Fair Employment Practice Act (“NFEPA”). On September 9, 2022, in Dutcher v. Nebraska Department of Correctional Services, the Court held that employees filing claims or receiving benefits under the NWCA are precluded from filing claims under the NFEPA regarding injuries arising from, or in the course of, their employment. An issue of first impression for the court, the Dutcher decision raises important considerations for both employees injured in the workplace and employers responding to such injuries.

The NWCA is an employee’s exclusive remedy for any injury arising out of and in the course of employment, effectively providing employers with immunity from common-law suits in exchange for no-fault insurance benefits. In Dutcher, the dispute arose when an administrative supervisor for the Nebraska Department of Correctional Services (the “Department”), Suzette Dutcher, injured her knee during an employer-mandated self-defense training. After notifying the Department of her injury, Dutcher received treatment covered by Nebraska’s workers’ compensation insurance. A year after her injury occurred, the Department gave Dutcher a 90-day ultimatum to find a new position or face termination. This termination decision was based on her continuing work restrictions from which, as the Department successfully argued, there were no available accommodations that would allow Dutcher to meet the essential functions of her position.

Once terminated, Dutcher filed a complaint against the Department under the NFEPA and the Americans with Disabilities Act of 1990 (the “ADA”), alleging her termination was based on her disability. In response, the Department asserted that any reasonable accommodations to her physical job requirements directly threatened the health and safety of other employees, would impose an undue burden to accommodate, and thus her termination was a business necessity. In finding for the Department, the Court found that the Department’s proffered reason for terminating Dutcher was irrelevant because her NFEPA claim arose from an injury arising out of her employment, for which she already received workers’ compensation benefits.  Because both parties were covered under the NWCA, no other claim could arise from the same injury.

Dutcher was the first time the Nebraska Supreme Court applied the exclusive remedy provision of the NWCA to the NFEPA. However, the opinion makes clear that nothing in the NWCA limits an employee’s ability to file a charge of discrimination with the Equal Opportunity Commission. The NWCA’s exclusive remedy provision only precludes state claims regarding injuries arising out of and in the course of employment. If public policy favors allowing discrimination claims arising from workplace injuries, such changes must come from the Legislature rather than the Court. In addition, Nebraska continues to recognize a public policy exception to at-will employment, allowing employees to file suit against employers for wrongful termination in retaliation for filing a workers’ compensation claim.[1]

After Dutcher, covered employers can assume no other civil state claims may arise out of an employee’s workplace injury. The quid pro quo policy underlying the workers’ compensation scheme, as currently written, does not permit double recovery for an employee’s workplace injury. It is important to note that the Court’s holding does not absolve employers from the duty to accommodate disabled workers under both state and federal laws. It does, however, provide some clarity about the scope of liability in the event an employee who was injured at work threatens litigation.

Employers with questions about topics like workers compensation coverage, workplace safety, or workplace accommodations can contact any member of our Employment and Labor Law practice for assistance with drafting policies and answering related employment law questions.

[1] See, e.g., Trosper v. Bag ‘N Save, 734 N.W.2d 704, 707-08 (Neb. 2007); Jackson v. Morris Communications Corp., 657 N.W.2d 634, 635 (Neb. 2003).