Whittaker v. McClure
| Decision Date | 19 January 1995 |
| Docket Number | No. 94-SC-340-WC,94-SC-340-WC |
| Citation | 891 S.W.2d 80 |
| Parties | Robert L. WHITTAKER, Acting Director of Special Fund, Successor to Special Fund, Appellant, v. Dorothy McCLURE, Gamco Products Company, and Workers' Compensation Board, Appellees. |
| Court | United States State Supreme Court — District of Kentucky |
This case concerns: 1.) whether the penalty which is assessed against the recovery of a worker whose injury results from the willful violation of a known safety rule is computed as 15% of the entire award or 15% of that portion of the award to be paid by the employer, and 2.) if the penalty applies to the entire award, whether the Special Fund is entitled to receive a proportional share of the penalty. KRS 342.165.
Claimant was awarded a 100% disability, with 4% being designated as prior, active, and noncompensable. Of the compensable portion, 72% was apportioned to the employer and 24% to the Special Fund. The Administrative Law Judge (ALJ) determined that claimant's injury was substantially caused by her willful violation of a safety rule and imposed a 15% penalty reduction in that portion of the award to be paid by the employer, pursuant to KRS 342.165. Because the ALJ determined that the penalty provision applied only to the employer's portion of the award, the Special Fund was required to pay the entire sum for which it was deemed liable.
The decision was affirmed, in part, by a two to one decision of the Workers' Compensation Board (Board). The ALJ's decision to allow a penalty reduction only to the employer was affirmed. However, because the Board noted that the method of calculating the penalty employed by the ALJ would result in the employer receiving an actual credit of only 11.25% of its share of the award, it reversed the ALJ's decision to the extent that it did not give full effect to KRS 342.165. The Board determined that the credit to the employer should be computed as 15% of the entire weekly award and deducted throughout the employer's payment period. This would result in a penalty equal to 15% of the employer's share of the award.
Board Member Turner dissented from that portion of the opinion which affirmed the ALJ's refusal to enforce the penalty during the Special Fund's period of payment as well as during the employer's. The dissent pointed out that claimant violated a safety rule but would avoid forfeiting one-fourth of the 15% penalty simply because one-fourth of the award was to be paid by the Special Fund rather than by the employer. The dissent also pointed out that, under the logic of the majority opinion, an employer who failed to enforce a safety rule would avoid paying part of the 15% penalty on any award in which the Special Fund also was liable.
The Board's decision was affirmed by a unanimous panel of the Court of Appeals.
The stated purpose in enacting the Kentucky Occupational Health and Safety Act (KOSHA) was "to promote the safety, health and general welfare of its people by preventing any detriment to the safety and health of all employees ... arising out of exposure to harmful conditions and practices at places of work...." KRS 338.011. It is apparent that the legislature recognized the joint responsibility for workplace safety which is shared by employers and workers and provided accordingly. Employers have an obligation to provide a place of employment that is free from recognized hazards to workers' health and safety 1; whereas, workers have the obligation to comply with health and safety provisions. KRS 338.031. As a result of KOSHA, workplace safety provisions have been established in order to protect workers from injury. However, such provisions are effective only if they are followed and enforced by workers and by employers. In imposing penalties on workers and employers whose violation of a known safety rule results in injury to the worker, the legislature provided incentives for following and enforcing safety rules which are consistent with its goals of providing a safer workplace and reducing the number of compensable injuries. See KRS 342.165. To be most effective, the amount of such a penalty should not be affected by whether the Special Fund is partially liable for the payment of income benefits. This is because Special Fund liability for a portion of income benefits does not in any way diminish the desirability of encouraging workers and their employers to practice workplace safety. It is noteworthy that KRS 342.165 does not refer in any way to the Special Fund.
Contrary to the view taken by the Court of Appeals, we find nothing in Barmet of Kentucky, Inc. v. Sallee, Ky.App., 605 S.W.2d 29 (1980), which supports a conclusion that KRS 342.165 is directed against employer misconduct but not against worker misconduct. Furthermore, such a conclusion would be contrary to the plain language of the statute. The opinion in Barmet reaffirmed that KRS 338.031 did not preclude the assessment of a penalty pursuant to KRS 342.165 in a workers' compensation case which involved a KOSHA violation. In that case it was questionable whether or not there was a safety rule prohibiting the worker's conduct. Furthermore, the court determined that, even if such a rule had existed, it was not enforced by the employer or followed as a general policy. Under such circumstances, it could not be said that the employer had proved a knowing violation of a safety rule by the worker. In other words, even where a safety rule exists, if the employer fails to enforce the rule, it cannot hope to penalize a worker for failing to follow the rule. The decision in Barmet was consistent with the legislature's purpose in setting forth corresponding employer and worker obligations in KRS 338.031 and with the purpose of the penalty provisions contained in KRS 342.165.
KRS 342.165, as it applies to this case, provided as follows:
If an accident is caused in any degree by the intentional failure of the employer to comply with any specific statute or lawful regulation made thereunder, communicated to such...
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