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Governor Nixon Signs Important Fix to Workers’ Compensation Law, Reversing case law interpretations regarding Occupational Disease

On July 10, 2013, Governor Nixon signed Missouri Senate Bill 1 fixing two prominent issues related to workplace injury: occupational disease under the Workers’ Compensation Law and the Second Injury Fund.  Prior to this legislation and pursuant to a 2005 change in the statute, Missouri courts had narrowly construed the term “accident” to exclude occupational diseases from being covered under the Workers’ Compensation framework.  Employers were thus no longer immune from lawsuits relating to occupational diseases.  As a resul,t employees began suing employers for occupational diseases claiming they were injured as a result of toxic exposures at work.  The new law signed by Governor Nixon reverses those decisions and makes it clear that occupational disease is covered by the Workers’ Compensation framework.  

In a compromise required to get the new law signed, the statute carves out ten special disease categories for enhanced remedies.  Among the disease categories are mesothelioma, asbestosis, berylliosis, coal worker’s pneumoconiosis, silicosis, and manganism.  For these occupational diseases related to toxic exposures, employers can choose coverage under a special risk pool, which pays an enhanced remedy of $500,000, or take their chances in court when sued by the employee.

The law also provides important additional funding for the Second Injury Fund, which had been underfunded since 2005 when the legislature capped employer’s contributions at 3%.  The Second Injury Fund was designed as an incentive to employers to employ disabled employees.  If a disabled employee was then injured on the job, employers are not responsible for the cost of the existing disability, only the injury on the job.  The Second Injury Fund pays the additional disability resulting from the combined injuries. 

The Bill also provides the following regarding the Second Injury Fund: 

  1. Prevents employees from stacking injuries to be more than 100% injured and still work.
  2. Temporarily increases the employer paid surcharge to the Fund for 7 years.
  3. Lowers interest rate from 9% to prime or 5% whichever is more on outstanding claims.

Both of these fixes to the Workers’ Compensation system should benefit employers and employees in a long awaited compromise.