Workers' Comp 'Exclusive Remedy' Rule Barred Barista's Lawsuit

​A coffee barista who was injured at the grocery store where she worked could not bring a negligence action against the store because of the workers' compensation "exclusive remedy" rule, a California appellate court held. The rule provides that when an employee is injured at work, workers' compensation is generally the employee's sole recourse against the employer. 

The rule applied even though the employee's workers' compensation settlement identified the grocery store's parent company as her employer, the court said.  

The employee fell and injured her knee when she was struck by the door of a service elevator in the store. About a month later, she filed an application for adjudication of her workers' compensation claim with the Workers' Compensation Appeals Board in which she listed "Ralphs Grocery Co." as her employer.

She ultimately settled her workers' compensation claim for a lump sum payment of $50,000. The compromise and release identified "The Kroger Co." as her employer. The order approving the compromise and release identified the defendant as "The Kroger Company, dba Ralphs Grocery Co."

While the employee's workers' compensation claim was still pending, she filed a negligence lawsuit against Ralphs. Ralphs sought to have the action dismissed before trial on the ground that the employee's claim against it was barred by the workers' compensation exclusive remedy rule. 

The trial court dismissed the lawsuit, reasoning that both Kroger and Ralphs were the worker's employers, and both were protected by the workers' compensation exclusive remedy rule. The employee appealed.

Employer for Purposes of Rule

Under the California Workers' Compensation Act, the exclusive remedy rule does not bar a negligence action when there is no employment relationship between the plaintiff and the defendant.  

The act defines employment broadly in terms of "service to an employer" and includes the general presumption that any person "in service to another" is a covered employee.
In determining whether an employment relationship exists for purposes of the act, courts use what is known as the Borello test, which focuses on the company's right to control how the work is done.

An employee may have more than one employer for purposes of the Workers' Compensation Act—each of which is protected by the exclusive remedy rule—but the Borello right-of-control test must be satisfied as to both, the appellate court said. 

The court noted that the worker herself acknowledged an employment relationship with Ralphs in the paperwork for her workers' compensation claim, although she reversed course when Ralphs filed to dismiss her negligence lawsuit.

"We do not believe this later epiphany defeats the significance of her earlier expressed belief that she was employed by Ralphs when she was working in the store, when she sought workers' compensation benefits, and when she commenced this action," the court said.

In addition, the court said, the worker's statements were not the only evidence that she was employed by Ralphs. A Kroger employee submitted a statement attesting that Kroger did not hire the employee and did not participate in the day-to-day operations of the store where she worked, which means that Kroger did not supervise the employee's training, scheduling, work assignments or discipline.

This supports the inference that Ralphs had the right of control with respect to the employee's work, the court said.

And the court rejected the employee's allegation that Kroger's involvement in the settlement of the employee's workers' compensation claim undermined the notion that Ralphs was her employer. Evidence of an employment relationship with Kroger is not proof that there was no employment relationship with Ralphs, the court said.

The employee's relationship with Kroger is independent of her relationship with Ralphs, the court added. While Kroger employees are not necessarily Ralphs employees, they can be.

Nothing in the workers' compensation documents mentioned an employer other than Ralphs that managed the day-to-day operations of the store at which the employee worked, the court said, concluding that Ralphs was the worker's employer, and thus, the lawsuit was barred.

Lenzy v. Ralphs Grocery Co., Calif. Ct. App., No. B308069 (April 18, 2022).

Joanne Deschenaux, J.D., is a freelance writer in Annapolis, Md.