Can an employee sue an independent claims administrator of a self-insured employer for failure to pay workers' compensation benefits?

California, United States of America


The following excerpt is from Schlick v. Comco Management, Inc., 196 Cal.App.3d 974, 242 Cal.Rptr. 241 (Cal. App. 1987):

The exclusive jurisdiction rule protects the integrity of the workers' compensation system, a comprehensive scheme designed for the worker's benefit which "provides a quick, simple and readily accessible method of claiming and receiving compensation." (Everfield v. State Comp. Ins. Fund (1981) 115 Cal.App.3d 15, 20, 171 Cal.Rptr. 164.) The rule promotes the "uniform and exclusive application of the law" (Noe v. Travelers Ins. Co. (1959) 172 Cal.App.2d 731, 737, 342 P.2d 976) and the efficient use of judicial resources.

Courts have disagreed on the issue of whether an employee may sue an independent claims administrator of a self-insured employer for failure to pay workers' compensation benefits. (Denning v. Esis Corp. (1983) 139 Cal.App.3d 946, 189 Cal.Rptr. 118 and Santiago v. Employee Benefits Services (1985) 168 Cal.App.3d 898, 214 Cal.Rptr. 679 [suit prohibited]; Dill v. Claims Admin. Services, Inc. (1986) 178 Cal.App.3d 1184, 224 Cal.Rptr. 273 [suit permitted].) Cases that have denied the employee a right of action have stressed the board's exclusive jurisdiction over compensation claims, focusing on the substance of the complaint as the primary basis for jurisdiction. These cases recognize exclusive jurisdiction in the board where "the gravamen of the complaint is the delay of or refusal to make payment of a compensation award." (Santiago v. Employee Benefits Services, supra, 168 Cal.App.3d at p. 902, 214 Cal.Rptr. 679; see also Denning v. Esis Corp., supra, 139 Cal.App.3d at p. 948, 189 Cal.Rptr. 118.) The Santiago court cited the exclusive jurisdiction directive of section 5300, subdivision (a) in support of its conclusion. (Santiago v. Employee Benefits Services, supra, 168 Cal.App.3d at p. 901, 214 Cal.Rptr. 679.)

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