Workers’ Comp Does Not Cover Sexual Harassment by Supervisors

As both a CFO and a COO, I’ve had to address cases of large workers compensation claims. If unresolved, they can result in payments totally hundreds of thousands of dollars. Businesses’ insurance rates can increase rapidly from such claims.

One of my sons attends Guilford College in North Carolina. I have a Google Alert set to notify me about information about the college. I was surprised recently when the following news item showed up in the Business Management Daily.

When a supervisor sexually harasses a subordinate, the subordinate has a potential Title VII lawsuit. However, she does not have a workers’ compensation claim.

Recent case: Back in 1988, when Pamela Cagle worked in the Guilford College cafeteria, she claimed she was cornered by her supervisor and harassed. Cagle said the man demanded that she touch his penis and also grabbed her breasts.

Cagle complained and the college agreed to consider the case a workers’ compensation matter. For the next 17 years, workers’ comp insurance paid for Cagle’s psychological treatment, supposedly caused by the harassment.

Then the insurer stopped paying. It argued it never should have been involved in the case because the supervisor wasn’t acting within the scope of his employment when he harassed Cagle.

The court agreed and cut off the payments. (Cagle v. Marriott, et al., No. COA11-816, Court of Appeals of North Carolina, 2012)

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