Court: Worker’s Abuse Suit Against Supervisor Not Barred by Exclusivity
- The North Carolina Court of Appeals ruled on Oct. 14 that workers’ compensation exclusivity does not bar a worker’s lawsuit against his supervisor over allegations that he repeatedly struck the worker regularly on the head and neck. The court affirmed the trial court’s denial of the supervisor’s motion to dismiss without deciding whether he is liable.
- The worker for Hendrick Automotive Group LLC alleged the supervisor struck him and other subordinates as a form of motivation. He says the conduct escalated through 2022 even though the supervisor knew the worker had undergone neck surgery in 2015, and he attributes neurological symptoms and a cervical spinal condition that progressed to total disability to the alleged abuse.
- The supervisor had argued the North Carolina Industrial Commission had exclusive jurisdiction over the injury claim.
- The appellate court said state law allows civil claims against co-employees for willful, wanton and reckless negligence. It rejected the supervisor’s argument that the complaint failed to allege the necessary intent, saying the relevant intent is the intent to make unwanted physical contact, not the intent to cause the resulting harm.
Maryland Reviews Whether Nonprofit Hospitals’ Offshore Captives Should Be Taxed
- Maryland Insurance Administration officials held the first public information-gathering session this week on whether nonprofit hospitals’ offshore captive insurance companies, domiciled in the Cayman Islands, should be subject to state premium taxes. The agency must deliver a study with recommendations to lawmakers by Jan. 1, 2027, and those recommendations could inform legislation.
- Whistleblower Jason Schupp, who testified in April before the House Ways and Means Committee, estimates as much as $3 billion in hospital funds sits in the offshore captives. He said the tax is essentially on the honor system because the agency has difficulty detecting in-house captive transactions, and that most captive owners do not report them or pay the tax.
- Maryland Hospital Association general counsel Andrew Nicklas said hospitals set aside their own money based on actuarial assessments of their risks, gain no tax deduction advantage, and use captives because Maryland’s rate restrictions limit their other options. He called the practice not “nefarious” and suggested hospitals could register their captives with the state for greater transparency.
- Maryland is one of 15 states without a regulatory framework allowing captives to be formed in-state, which is why hospitals set up captives offshore decades ago.