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Washington Supreme Court Further Clarifies “Deliberate Intention” Exception to Industrial Insurance Act

In early 2014, the Supreme Court of Washington issued a key decision, Walston v. Boeing Co., clarifying the protections extended to employers under the Washington Industrial Insurance Act (IIA).  The opinion’s holding is particularly significant for cases involving on-the-job injuries resulting from hazardous substance exposure.  Noting the importance of these issues to the construction industry, the Associated General Contractors of Washington, with permission from the Supreme Court, submitted amicus briefing in support of extending the court’s precedent to protect employers in such cases. 

In 1911, Washington adopted the IIA, which created the state’s workers’ compensation system.  The IIA, which provides an exclusive remedy for individuals injured in the course of employment, has been described by the Washington Supreme Court as a “grand compromise.”  Birklid v. Boeing Co., 127 Wn.2d 853, 859, 904 P.2d 278 (1995).  The act provides employers with immunity from civil suits brought by workers injured on the job, in return for giving workers a “swift, no-fault compensation system” for such injuries.  Id.  There is one limitation to the immunity granted to employers: An employer is not immune from suit when an employee’s injuries result from “the deliberate intention of his or her employer to produce such injury.”  RCW 51.24.020 (emphasis added). 

Until 1995, this exception, referred to as the “deliberate intention exception,” was generally applied only in cases where an employee was physically assaulted on the job.  Walston v. Boeing Co., 334 P.3d 519, 521 (2014) (citing Birklid 127 Wn.2d at 861-62).  In 1995, the Birklid court expanded the application of the exception to include situations where the “employer ha[s] actual knowledge that an injury [is] certain to occur and willfully disregard[s] that knowledge.”  Birklid, 127 Wn.2d at 865.  Notably, the Birklid court considered, and rejected, broader tests from other jurisdictions before adopting the more narrow “actual knowledge” standard.  Walston, 334 P.3d at 521. 

In Walston, the plaintiff alleged he was exposed to asbestos while working as a “hammer shop employee” in 1985 at the Boeing Co. He was diagnosed with mesothelioma 25 years after his alleged exposure and brought suit against Boeing claiming that his disease was caused by his exposure to asbestos while working for the company.  Boeing admitted that in 1985, it was aware asbestos was a hazardous material and that employees of the company, who worked in an area above the plaintiff and wore protective clothing and equipment, were involved in maintenance work that included flaking asbestos insulation. Boeing asserted, however, that it should be immune from suit by the plaintiff under the IIA because it did not have actual knowledge that the plaintiff, who worked in an area below the asbestos work, was certain to be injured.  Although the trial court rejected this argument, the Court of Appeals held that pursuant to the IIA and Birklid, Boeing was immune from liability because the plaintiff did not raise a material question of fact as to whether Boeing had actual knowledge that injury was certain to occur. 

In Walston, the Washington Supreme Court, by a 5-4 majority, agreed with the Court of Appeals and held that the “actual knowledge” standard is a high standard that is not even met by an act that has substantial certainty of producing injury (emphasis added).  Similarly “negligence — even gross negligence — is not sufficient” to meet the narrow Birklid test. This is because the Birklid “actual knowledge” test is designed to allow lawsuits against employers for on-the-job injuries only “in those egregious cases where the employer deliberately intended to injure workers.”

Walston is a victory for Washington employers, especially construction contractors who often work on jobsites that may contain hazardous materials.  It is important to note, however, that the broad IIA immunity may not automatically apply to all parties on a worksite.  While employers are insulated from liability subject only to the “actual knowledge” standard, third parties who do not employ the injured worker are not immune from suit under the IIA.  For example, on a construction site with third-party subcontractors, an employee of a subcontractor who is injured on the job may sue the project (premises) owner and the general contractor for damages resulting from personal injuries.

Construction

Ryan G. Foltz



Construction

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