Injured on the Job by Someone Else's Negligence? The Supreme Court Just Limited the BWC's Cut of Your Settlement

Published October 12, 2023 · Ohio Supreme Court

Lamar Thomas was doing his job for a waste-management company when another driver caused a collision that injured him. Like many Ohio workers hurt on the road, he ended up with two claims: a workers' compensation claim, and a personal-injury claim against the driver who caused the crash. When he settled the second one, the Bureau of Workers' Compensation reached into his settlement and took back, among other things, the money it had spent on a doctor hired to help deny part of his claim.

On October 3, the Supreme Court of Ohio said the BWC had no right to do that. Thomas v. Logue, Slip Opinion No. 2023-Ohio-3522, is a meaningful decision for any worker hurt in a car or truck crash on the job.

The two-track recovery, briefly

When you are hurt at work, workers' compensation pays medical bills and part of your lost wages regardless of fault. But workers' compensation does not pay for pain and suffering, and it does not replace all of your lost income. If someone other than your employer caused the injury, such as a negligent driver, a trucking company, or the maker of a defective machine, you can also bring a claim against that "third party" for your full damages. We explained how the two claims work together in Injured on the Job by Someone Else.

There is a catch. Under R.C. 4123.931(A), when the BWC pays benefits, it becomes "subrogated" to your rights against the third party. In plain English, it gets to be repaid out of your recovery for what it paid you, so you are not paid twice for the same loss. That repayment right covers recoveries from your own uninsured and underinsured motorist coverage as well, under R.C. 4123.931(I)(1).

How much the BWC gets depends on its "subrogation interest," which R.C. 4123.93(D) defines as past, present and estimated future payments of compensation, medical benefits, rehabilitation costs or death benefits, "and any other costs or expenses paid to or on behalf of the claimant." That last phrase is what Thomas was about.

What happened to Lamar Thomas

According to the opinion, the BWC allowed Thomas's initial claim. His treating physician then concluded that the collision had aggravated preexisting degenerative disc disease and spondylolisthesis in his lower back, and Thomas asked to have those conditions added. Rather than accept his doctor's opinion, the BWC paid another physician to review his records. That reviewer concluded the conditions were degenerative and unrelated to the crash, and the additional claim was disallowed.

Thomas later settled his injury case against the at-fault driver. The BWC asserted its subrogation interest and was paid, and the amount it collected included the reviewer's fee. Thomas filed a class action in the Ohio Court of Claims on behalf of himself and similarly situated workers, arguing that the BWC could recover only costs paid on the worker's behalf, not costs it spent fighting the worker's claim.

What the Supreme Court decided

In a 4-3 decision written by Justice Brunner, the Court agreed with Thomas and with the Tenth District Court of Appeals. The majority's reasoning came down to three points:

• The review was not paid "on behalf of" the worker. The payments went to the reviewing doctor because the BWC was trying to deny coverage. The Court said the medical review was "not obtained on behalf of Thomas or for his benefit" but as a second opinion on whether the crash aggravated his spine conditions.
• The worker could never have recovered that cost from the at-fault driver. A BWC file-review fee is not a medical expense or any other kind of damages Thomas could have claimed in his injury case. It makes no sense, the Court reasoned, to shrink his settlement to repay an expense that was never part of it.
• The statutes are construed in favor of workers. R.C. 4123.95 requires the workers' compensation statutes to be liberally construed in favor of employees. Letting the BWC recoup the cost of reviews it uses to deny claims would be a construction in favor of the BWC instead.

The Court also reaffirmed that the purpose of BWC subrogation is to prevent a double recovery, and that it cannot be used to take more from a worker's injury recovery than the BWC actually paid out for the same losses. The Court called the BWC's attempted expansion of subrogation in this context "unlawful."

Chief Justice Kennedy, joined by Justices DeWine and Deters, dissented. The dissent read "on behalf of" to include a review that gave the worker another chance to prove his claim.

The case now returns to the Court of Claims for further proceedings on the class claims.

What the decision does not do

It is important not to overstate Thomas. The BWC still has a statutory right to be repaid from your third-party recovery for benefits it actually paid on your behalf, such as your medical bills and wage-loss compensation. What Thomas does is draw a line around that right: the BWC cannot pad its subrogation claim with the costs of administering and contesting your claim.

How the BWC's share is calculated

Many injured workers do not realize that the BWC's share of a settlement is not simply "everything it paid." Under R.C. 4123.931(B), when a third-party claim settles, the net recovery (after attorney fees and costs) is divided by formula between the worker and the BWC, in proportion to the worker's uncompensated damages and the BWC's subrogation interest, unless the two agree to a fairer split.

A simplified example: if your damages are worth $200,000, the BWC's subrogation interest is $40,000, and your uncompensated damages are therefore $160,000, the BWC's share is 40/200, or 20 percent, of the net recovery. Every dollar improperly added to the subrogation interest increases the BWC's percentage and reduces yours. That is why the line the Court drew in Thomas matters in real cases.

Our guide chapter on medical bills, health insurance, and liens explains how subrogation and reimbursement claims work generally, and why every claimed lien should be verified rather than paid on demand.

What this means for you

If you were hurt in a crash while working, as a delivery driver, a utility worker, a home health aide driving between patients, or anyone else on the clock:

• You likely have two claims. Do not assume workers' compensation is the end of it. Our car and truck accident practice handles the third-party claim alongside your comp claim.
• Give proper notice. R.C. 4123.931(G) requires a worker to notify the BWC and the Ohio Attorney General of every third party against whom the worker may have a claim, and a settlement is not final without that notice. Skipping it can make you personally liable for the full subrogation amount.
• Scrutinize the subrogation claim. After Thomas, costs the BWC spent contesting your claim should not be in it. Ask for an itemization.
• Value the whole case. Pain and suffering and the full value of lost earning capacity come only from the third-party claim. Our chapter on what your case is worth explains those damages.

Workers who are hurt by their employer's intentional conduct have other options as well, which we discussed in our post on union workers' intentional-tort claims.