Karst v. F.C. Hayer Co., Inc.

Decision Date03 November 1989
Docket NumberNo. CX-88-1044,CX-88-1044
Parties55 Fair Empl.Prac.Cas. (BNA) 1751, 53 Empl. Prac. Dec. P 39,878, 58 USLW 2298, 1 A.D. Cases 1530 Daniel W. KARST, Respondent, v. F.C. HAYER CO., INC., Petitioner, Appellant.
CourtMinnesota Supreme Court

Syllabus by the Court

The exclusive remedy provision of the Minnesota Workers' Compensation Act precludes a separate action by an injured employee against his former employer for disability discrimination under the Minnesota Human Rights Act where the employer refused to rehire employee following a work-related injury.

Paul L. Landry, Fredrikson & Byron, Minneapolis, for appellant.

Gary T. LaFleur, Randall J. Fuller, Babcock, Locher, Neilson & Mannella, Anoka, for respondent.

Heard, considered and decided by the court en banc.


YETKA, Justice.

Appellant, F.C. Hayer Co., Inc. (hereinafter "Hayer"), has petitioned this court for review of a decision by the Minnesota Court of Appeals holding that the exclusive remedy provision of the Workers' Compensation Act does not bar the same employee awarded workers' compensation benefits from bringing a disability action under the Minnesota Human Rights Act on the grounds that his employer has refused to rehire him. 429 N.W.2d 318 (Minn.App.1988) We reverse the court of appeals and hold that the action under the Human Rights Act is barred by the exclusive remedy provision of the Workers' Compensation Act.

Respondent, Daniel W. Karst, initiated this action for damages at the trial court under the Minnesota Human Rights Act (MHRA), Minn.Stat. Sec. 363.01-.15 (1988), against F.C. Hayer Co., Inc. after Hayer refused to rehire Karst following treatment for a work-related injury. The Hennepin County District Court granted Hayer's motion for summary judgment on the grounds that the exclusive remedy provision of the Workers' Compensation Act (WCA), Minn.Stat. Sec. 176.001-85 (1988), bars such an action by an injured worker against his former employer. The trial court also concluded that Karst had failed to establish a prima facie case of disability discrimination.

Karst appealed to the Minnesota Court of Appeals, which reversed the trial court's conclusion that the exclusive remedy provision of the WCA operates to bar a discrimination action. In reversing the trial court, the court of appeals concluded that a discriminatory refusal to rehire causes an employee injuries separate from an earlier physical injury compensable under the WCA and, therefore, constitutes a separate "factual basis" for a discrimination action. Moreover, the court of appeals concluded that summary judgment was improper because genuine issues of material fact exist as to whether Karst established the elements of a prima facie case for disability discrimination under the MHRA.

Appellant Hayer petitioned for review of the court of appeals' decision that the exclusive remedy provision of the Workers' Compensation Act does not bar a disability discrimination action. 1

The only issue presented to this court is whether the exclusive remedy provision of the Workers' Compensation Act precludes an action by a disabled individual against his former employer for disability discrimination under the Minnesota Human Rights Act where the individual becomes disabled as a result of work-related injuries and the former employer refuses to rehire the individual because of the disability. The issue presented is a pure issue of law; therefore, this court is not bound by the decision of the lower court. See A.J. Chromy Constr. Co. v. Commercial Mechanical Serv., Inc., 260 N.W.2d 579, 582 (Minn.1977).

The following summary of the facts has been prepared from the affidavits, depositions, and exhibits presented by the parties to the trial court and from the appendices to the briefs submitted to the court of appeals and this court. Because the trial court granted Hayer's motion for summary judgment, there is no trial transcript. In addition, because the trial court's grant of summary judgment was reversed by the court of appeals on the grounds that genuine issues of material fact exist as to whether Karst established a prima facie case of disability discrimination, the trial court's findings of fact are not conclusive. Accordingly, some of these "facts" are, to a certain extent, still being contested by the parties.

Daniel W. Karst, presently age 55, was employed as a warehouseman by Hayer from February 9, 1953, until July of 1984. F.C. Hayer Co. is a wholesale distributer of household appliances. In December of 1978, Karst suffered a work-related injury to his left shoulder that rendered him unable to work. As a result of this injury, it was determined that, for purposes of workers' compensation, Karst had a 5% permanent partial disability. Karst returned to work in June of 1980. Despite his partial disability, Karst was able to perform his warehouseman duties satisfactorily from June 1980 to July 27, 1984. The parties have sharply differing views as to whether Hayer made any accommodations during this period in order to enable Karst to perform his duties or whether Hayer has ever accommodated other disabled workers. Karst alleges that, since 1980, when he had to remove the refrigerator boxes from the refrigerators by lifting the boxes over his head, his co-workers routinely assisted him. Karst contends that Hayer previously accommodated other injured workers. Moreover, Karst contends that because he is right-handed, he does not need the full use of his left arm in order to perform all the essential functions of his former job.

In July of 1984, Karst suffered a second work-related injury to his left shoulder that rendered him unable to work. Karst's treating physician, Dr. Haley, an orthopedic surgeon, diagnosed the second injury as a left rotator cuff tendonitis with adhesive capsulitis and impingement syndrome. This injury is characterized by chronic inflammation of the shoulder muscles, pain, and loss of range of motion. Soon thereafter, Karst applied for and began receiving workers' compensation benefits, including medical benefits, temporary total compensation, and the services of a qualified rehabilitation specialist. According to Hayer's counsel, Karst continues to receive temporary partial compensation benefits of Three Hundred Seventy-one and 23/100 Dollars ($371.23) per week and has received total benefits in excess of Two Hundred Twenty Thousand and No/100 Dollars ($220,000.00).

In April of 1985, Hayer's workers' compensation insurer referred Karst's case to Carol T. Mossey, who is a qualified rehabilitation consultant (QRC) and a registered nurse. In April and May of 1985, Mossey met with Karst, Dr. Haley, and managers from Hayer and also visited Hayer's warehouse. According to Mossey, both she and Dr. Haley felt that Karst could do any of the warehouseman's duties except tip refrigerators onto a "two-wheeler" (also commonly known as an "appliance dolly") and lift empty refrigerator boxes over his head. In May of 1985, Karst's treating physician released him to return to work subject to certain restrictions. These restrictions included weight-lifting limitations on his left shoulder from the ground up to shoulder level and a complete prohibition on lifting anything with the left arm above the shoulder level.

In July or August of 1985, Karst, at his own initiative, asked Hayer if he could return to his position as warehouseman or to a modified position. Hayer management employees told him that he could return only if his doctor removed all restrictions.

On September 7, 1985, Dr. Haley concluded that Karst had reached "maximum medical improvement." Dr. Haley determined that Karst had an additional 3% permanent partial disability as a result of his second shoulder injury. At this time, it was Dr. Haley's opinion that it would be in Karst's best interest to return to his old job, but only if he was allowed to work within his restrictions. This opinion was shared by Mossey and the insurance company's claims examiner.

Also, in September of 1985, Mossey contacted Hayer and requested a meeting in order to discuss whether accommodations could be made to the warehouseman position that would enable Karst to return to work. Hayer flatly refused to discuss any accommodations.

Between October and December of 1985, Hayer's workers' compensation insurer attempted to persuade Hayer to rehire Karst. On November 27, 1985, Karst's attorney filed a request for an administrative conference in an attempt to resolve the impasse regarding Hayer's refusal to discuss rehiring Karst. A conference was held on January 27, 1986. According to the Rehabilitation Decision and Order, Mr. Sherry, Hayer's operations manager, stated during the conference that it had always been their policy and will continue to be their policy not to return employees to work until they no longer had restrictions.

After Hayer's formal refusal to rehire him, Karst, with the assistance of his QRC, diligently sought other employment, including 54 employer contacts or visits during May 1987. Because Karst's prospects for employment were limited by his poor reading ability, Karst, in connection with his rehabilitation program, began attending tutoring sessions in order to improve his reading skills.

Since spring of 1986, Karst has worked part-time at his son's transmission shop disassembling automobile transmissions. Throughout the course of his treatment and rehabilitation, Karst has cooperated with his doctor, his QRC, and his tutor. Karst has repeatedly stated that he wants to work and believes he can do the job if given the opportunity.

On April 22, 1986, Karst sued Hayer for disability discrimination, seeking compensatory damages for wage loss, damages for mental anguish and suffering, punitive damages, and attorney fees. In connection with this lawsuit, Frank J. Lamp, Ph.D, also a QRC, conducted a vocational evaluation of Karst. Dr. Lamp testified that, as part of his vocational...

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