Johns-Manville Products Corp. v. Superior Court

In Johns-Manville Products Corp. v. Superior Court (1980) 27 Cal. 3d 465 165 Cal. Rptr. 858, 612 P.2d 948, 9 A.L.R.4th 758, the employer mined, milled, manufactured, and packaged asbestos. Working in a Johns-Manville plant for 29 years continually exposed plaintiff Rudkin to asbestos, which caused him to develop pneumoconiosis, lung cancer, or other asbestos-related illnesses. Since 1924, Johns-Manville had known that long exposure to or ingestion of asbestos was dangerous to health, but the company concealed this knowledge from Rudkin. Johns-Manville advised Rudkin it was safe to work in close proximity to asbestos, failed to provide him with adequate protective devices, and did not operate the plant in accordance with state and federal regulations governing dust levels. Johns-Manville also retained unqualified doctors to examine Rudkin, did not provide the doctors with adequate information about the risk of asbestos exposure, and did not inform the doctors that exposure to asbestos while he worked at the plant caused Rudkin's pulmonary disease. Finally, Johns-Manville willfully failed to file a first report of occupational injury or illness with the State of California regarding Rudkin's injury as required by law. If Johns-Manville had made this filing and revealed the danger from asbestos, Rudkin would have been protected. Johns-Manville performed these acts and omissions falsely and fraudulently, with intent to induce Rudkin to continue to work in a dangerous environment. Rudkin was ignorant of the risks involved, and would not have continued to work in such an environment if he had known the facts. Rudkin's complaint alleged causes of action for fraud and conspiracy with others to perpetrate these acts. Johns-Manville's answer alleged that the WCA exclusive remedy provision barred the action. (Johns-Manville, supra, 27 Cal. 3d at pp. 469-470.) Johns-Manville concluded that the WCA, in section 4553, was designed to penalize an employer's intentional misconduct and to compensate injuries resulting from such acts. (Johns-Manville, supra, 27 Cal. 3d at p. 473.) Section 4553 provides that if an employee is injured by reason of the "serious and willful misconduct" of the employer or the employer's managerial personnel as designated by the statute, the amount of compensation otherwise recoverable shall be increased by one-half. In this connection, Johns-Manville held that workers' compensation provided the exclusive remedy for injuries suffered because the employer made false representations about, or concealed dangers inherent in, a material employees were required to handle. (Id. at pp. 473-474.) Workers' compensation also provided the exclusive remedy for injuries caused by an employer's malicious misconduct in allowing an employee to use a machine without proper instruction. (Ibid.) Where an employer knows a danger to an employee exists but fails to take corrective action or warn the employee of the risk, "such conduct may be characterized as intentional or even deceitful. Yet if an action at law were allowed as a remedy, many cases cognizable under workers' compensation would also be prosecuted outside that system. The focus of the inquiry in a case involving work-related injury would often be not whether the injury arose out of and in the course of employment, but the state of knowledge of the employer and the employee regarding the dangerous condition which caused the injury. Such a result would undermine the underlying premise upon which the workers' compensation system is based." (Id. at p. 474.) To permit an action at law for damages for any intentional misconduct by an employer would significantly disturb the compensation bargain upon which the WCA is based. "Section 4553 is the sole remedy for additional compensation against an employer whose employee is injured in the first instance as the result of a deliberate failure to assure that the physical environment of the work place is safe. Thus, if the complaint alleged only that plaintiff contracted the disease because defendant knew and concealed from him that his health was endangered by asbestos in the work environment, failed to supply adequate protective devices to avoid disease, and violated governmental regulations relating to dust levels at the plant, plaintiff's only remedy would be to prosecute his claim under the workers' compensation law." (Johns-Manville, supra, 27 Cal. 3d at pp. 474-475.)