Johns-Manville Products Corporation v. Superior Court

Rudkin, a long-time employee of the defendant corporation, developed pneumoconiosis, lung cancer, or other asbestos-related illnesses from his work with asbestos. The defendant knew about the harms of exposure to asbestos, yet it hid that information from Rudkin and continued to encourage him to work in an unsafe environment. After Rudkin had developed an industrial disease, it hid that fact from Rudkin, doctors retained by the defendant and the State of California. If the employer had not done this, Rudkin would have been able to receive more prompt care for his illness.

Rudkin brought suit against the defendant, but the trial court rejected the claims as barred due to worker’s compensation. This appeal is to determine whether worker’s compensation bars intentional torts of fraud and conspiracy relating to workplace injuries.

The Court held that Rudkin was not barred from bringing an action in law as the defendant’s actions were an aggravation of the initial work-related injury.

The Court acknowledged that worker’s compensation was the exclusive remedy for industrial injuries, including when the employer acts with “serious and willful misconduct.” This misconduct includes intentional misconduct. However, the Court differentiated this case by noting that the misconduct relates to work-place injuries, such as knowingly not providing a safe work environment. In some “exceptional circumstances” the employer can harm the employee in a way that worker’s compensation was not meant to cover. After reviewing the varying case history, the Court determined that a worker is not barred from bringing a legal action if the employer acts intentionally to harm an employee or if the employer’s intentional conduct consists of aggravation of a work-place injury. Focusing on the instant case, the Court concluded that the allegation that the defendant preventing proper treatment by fraudulently concealing the state of Rudkin’s health would demonstrate that the defendant aggravated Rudkin’s industrial disease.

The Court also noted that the defendant’s actions are so egregious that punitive damages are justified.

The dissent held that worker’s compensation should be Rudkin’s only remedy. The dissent viewed that this intentional misconduct was precluded by worker’s compensation and that the injury was clearly due to working with asbestos in the course of employment. It also noted that this ruling would encourage employers to “remain ignorant” of possible health concerns of its employees.

“… [W]e perceive in Magliulo, Meyer and Unruh a trend toward allowing an action at law for injuries suffered in the employment if the employer acts deliberately for the purpose of injuring the employee or if the harm resulting from the intentional misconduct consists of aggravation of an initial work-related injury.” (Page 3)

“In the present case, plaintiff alleges that defendant fraudulently concealed from him, and from doctors retained to treat him, as well as from the state, that he was suffering from a disease caused by ingestion of asbestos, thereby preventing him from receiving treatment for the disease and inducing him to continue to work under hazardous conditions. These allegations are sufficient to state a cause of action for aggravation of the disease, as distinct from the hazards of the employment which caused him to contract the disease.” (Page 4)