Frampton v. Central Indiana Gas Co.

Decision Date01 May 1973
Docket NumberNo. 473S66,473S66
Citation63 A.L.R.3d 973,297 N.E.2d 425,260 Ind. 249
Parties, 115 L.R.R.M. (BNA) 4611, 63 A.L.R.3d 973 Dorothy FRAMPTON, Appellant, v. CENTRAL INDIANA GAS COMPANY, Appellee.
CourtIndiana Supreme Court

George K. Hughel, Anderson, for appellant.

Kiley, Osborn, Kiley & Harker, David L. Kiley, Albert C. Harker, Marion, for appellee.

HUNTER, Justice.

Plaintiff-employee brought an action against her former employer seeking actual and punitive damages for retaliatory discharge. The Henry Circuit Court dismissed the complaint pursuant to TR. 12(B)(6) IC 1971, 34--5--1--1 (failure to state a claim upon which relief can be granted). The plaintiff appealed. The First District Court of Appeals, in an opinion by Presiding Judge Robertson, affirmed the trial court's dismissal.

The complaint sets out the following facts:

Plaintiff, an employee of defendant, injured her arm while working. Defendant and their insurer paid her hospital and medical expenses, as well as her full salary, during the four months she was unable to work. However, they did not inform her of further benefits that might have been available. When she did return to the job she performed capably. Approximately 19 months after the injury, defendant and its insurer were notified of a 30 per cent loss in the use of her arm. Although hesitant to file a claim for fear of losing her job she did so, and received a settlement for her injury. About one month later she was discharged from her employment without reason being given.

Plaintiff prayed for $45,000 in actual damages, and:

'. . . punitive or exemplary damages in the amount of $135,000.00 which is triple the amount of her actual damages because of the Defendant's intentional acts in defiance of the legislative intent of the Workmen's Compensation Laws which if allowed to persist would effectively thwart the public policy of the State of Indiana.'

Workmen's compensation acts are designed to afford injured workers 'an expeditious remedy both adequate and certain, and independent of any negligence on their part or on the part of the employer' 1 Prior to workmen's compensation, workers were faced with the harshness of the common law. The employee's only remedy was an action in tort against the employer--actions which were rarely successful. 2 This lack of success is attributed to the common law defenses of assumption of risk, contributory negligence and the fellow servant rule which were accorded inordinate deference.

Workmen's compensation statutes are in derogation of the common law and provide, for those covered, an exclusive remedy for injuries sustained 'in the course of' and 'arising out of' one's employment. The basic policy behind such legislation is to shift the economic burden for employment connected injuries from the employee to the employer.

'One of the purposes of the Workmen's Compensation Act is to transfer from the worker to the industry in which he is employed and ultimately to the consuming public a greater portion of economic loss due to industrial accidents and injuries.' (authorities omitted)

Mann et al. v. Schnarr (1950), 228 Ind. 654, 667, 95 N.E.2d 138, 143. See also: Guevara v. Inland Steel Co. (1949), 120 Ind.App. 47, 88 N.E.2d 398; Aetna Casualty & Surety Co. v. Hightower (1939), 107 Ind.App. 46, 22 N.E.2d 875.

Workmen's compensation is for the benefit of the employee. Hoffman v. Brooks Const. Co. (1942), 220 Ind. 150, 41 N.E.2d 613. Accordingly, it is well-established that the Act 3 be liberally construed in favor of the employee so as to not negate the Act's humane purposes. Goldstone v. Kozma (1971), Ind.App., 274 N.E.2d 304; Prater v. Indiana Briquetting Corp. (1969), 253 Ind. 83, 251 N.E.2d 810.

The Act creates a duty in the employer to compensate employees for work-related injuries (through insurance) and a right in the employee to receive such compensation. But in order for the goals of the Act to be realized and for public policy to be effectuated, the employee must be able to exercise his right in an unfettered fashion without being subject to reprisal. If employers are permitted to penalize employees for filing workmen's compensation claims, a most important public policy will be undermined. The fear of being discharged would have a deleterious effect on the exercise of a statutory right. Employees will not file claims for justly deserved compensation--opting, instead, to continue their employment without incident. The end result, of course, is that the employer is effectively relieved of his obligation.

Since the Act embraces such a fundamental, well-defined and well-established policy, strict employer adherence is required. IC 1971, 22--3--2--15 (Ind.Ann.Stat. § 40--1215 (1965 Repl.)) states:

'No contract or agreement, written or implied, no rule, regulation or other device shall, in any manner, operate to relieve any employer in whole or in part of any obligation created by this act.' (our emphasis)

We believe the threat of discharge to be a 'device' within the framework of 22--3--2--15, and hence, in clear contravention of public policy. By denying transfer and allowing the trial court's dismissal to stand we would be arming unethical employers with common law authority. Once an employee knows he is remediless if retaliatorily discharged, he is unlikely to file a claim. What then is to prevent an employer from coercing an employee? Upholding retaliatory discharge opens the door to coercion and other duress-provoking acts.

Retaliatory discharge for filing a workmen's compensation claim is a wrongful, unconscionable act and should be actionable in a court of law. Although, we know of no other cases in this or in any other jurisdiction holding that such a discharge is actionable, there has been a parallel development in landlord and tenant law. Courts in several jurisdictions have held that 'retaliatory evictions' offend public policy. 4 'Retaliatory evictions' usually result from a tenant's reporting health or safety code violations to an appropriate administrative body. The tenant, quite often unable to motivate the landlord to make necessary repairs and improvements, reports the violations. The landlord, angered by the tenant's temerity, either gives the...

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