CHICAGO—A company can refuse to hire someone it considers “a workers' comp claim waiting to happen,” but experts advise against it.
The Tennessee Supreme Court on Aug. 28 ruled that an employer can refuse to hire a job applicant who has filed or is likely to file a workers' compensation claim.
Kighwaunda M. Yardley, who worked as a housekeeping aide for University Medical Center in Lebanon, Tenn., was injured in 2010 and began receiving workers' comp benefits.
She returned to light-duty work in July 2012 and was released to full-duty work later that summer, court records show.
However, as of the start of 2012, the hospital contracted with Austin, Texas-based Hospital Housekeeping Systems L.L.C., which interviewed the medical center's existing workers but retained the right not to rehire them.
In an email to Hospital Housekeeping Systems executives, Michael Cox, division vice president for Hospital Housekeeping Systems, advised against hiring Ms. Yardley, saying she had been out on workers' comp, her shoulder was again hurting and hiring her would be “a workers' comp claim waiting to happen,” according to the state high court's ruling.
Ms. Yardley sued in the U.S. District Court in Nashville, Tenn., arguing that workers would be less likely to file comp claims if employers can refuse to hire them—thereby depriving them of “their rightful remedies” under the state's Workers' Compensation Act.
Hospital Housekeeping Systems argued that, because Ms. Yardley was an applicant and not an employee, it had no obligation to her under the state's workers' comp law and the state's at-will employment law.
In its unanimous ruling, the state court said employers do not violate workers' comp law by taking such a stance.
The court also noted: “In Tennessee, there is no statutory or common law cause of action for retaliatory failure to hire.”
States such as Florida, Louisiana, Maine and Massachusetts do have such laws, the Tennessee court noted in returning the case to the lower court, the ruling stated.
The court isn't saying it's fine to discriminate against a job applicant for filing a prior workers' comp claim, said Steve Coonrod, a partner at McConnaughhay, Duffy, Coonrod, Pope, Weaver, Stern & Thomas P.A. in Tallahassee, Fla. Rather, it decided such an action does not violate the state's comp law.
Such a stance could lead to a disability discrimination claim under the federal Americans with Disabilities Act (ADA), Mr. Coonrod added.
Albert B. Randall Jr., Baltimore-based principal at law firm Franklin & Prokopik P.C. and president of the National Workers' Compensation Defense Network, said his advice to employers is to “be very cautious about using prior workers' compensation claims as part of their decision-making process....
“Some courts—perhaps many courts—would” consider this a “violation of the ADA or the state equivalent under the 'regarded as' theory.”
The theory, which does extend to applicants, states that an employer can't regard an individual as being disabled, Mr. Randall added.
And while Tennessee's workers' comp law does not bar employers from refusing to hire an applicant who has filed a workers' comp claim, it is a violation of state law to fire an employee for filing one, the state high court noted in its ruling.
This report appeared in Business Insurance magazine, a Chicago-based sister publication of Tire Business.