Insurance Law Journal

Employees Emotional Distress Lawsuit Barred by Workers Compensation Statute

By Bruce Voss

An employee’s lawsuit for emotional distress arising out of her employment is barred by the exclusive remedy provision of Hawaii’s workers compensation statute, the Hawaii Intermediate Court of Appeals has ruled.

The case, Yang v. Abercrombie & Fitch, arose after $600 disappeared from a customer’s wallet held in the safe at Abercrombie & Fitch’s Ala Moana store. The company’s security personnel apparently believed that Yang, the store manager, had taken the money. Yang was escorted to another manager’s office, in plain view of other employees, where she was questioned about the missing money. Yang “felt embarrassed, harassed, insulted, and humiliated,” and later sued the company, claiming among things intentional infliction of emotional distress.

Abercrombie & Fitch moved to dismiss Yang’s emotional distress claim based on Hawaii’s workers’ compensation statute. The trial court denied the motion, finding that other employees’ intentional acts were not “accidents” under workers compensation law. The appeals court reversed, in a lengthy opinion that reinforced the principle that employees generally cannot sue their employer for work-related injuries, including most emotional distress injuries.

The appeals court stated: “The exclusivity provision in (Hawaii’s workers compensation law) bars Yang’s suit against Abercrombie & Fitch for alleged injuries suffered because of her employment, which were caused by the alleged willful acts of her co-employees acting in the course and scope of their employment.”

The opinion is a significant victory for employers, because in many cases it should eliminate an intentional infliction of emotional distress claim employees commonly make in lawsuits against their employers. The ruling also makes clear that Hawaii’s appellate courts will not create judicial exceptions to employers’ worker compensation protections, that only the Legislature should create such exceptions.

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