Key point 8-07.2. All states have enacted workers' compensation laws to provide benefits to employees who are injured or become ill in the course of their employment. Benefits generally are financed through insurance premiums paid by employers. Churches are subject to workers' compensation laws in most states.
The Arkansas Supreme Court ruled that the exclusive remedy of a female employee who was sexually assaulted by a manager was workers' compensation, and accordingly the woman's lawsuit for monetary damages based on her employer's negligence had to be dismissed.
A woman claimed she was sexually assaulted by a store manager where she worked. She sued her employer alleging that it was negligent in its supervision, retention, and hiring of the manager. The store filed a motion to dismiss the complaint on the basis of the "exclusive remedy" afforded by the state workers' compensation law. The state supreme court agreed that the lawsuit had to be dismissed:
An employer who has secured for its employees the benefits of workers' compensation is immune from liability for damages in a tort action brought by an injured employee. This rule, known as the exclusivity doctrine, arises from [the state workers' compensation law] which provides that "the rights and remedies granted to an employee subject to the provisions of this chapter, on account of injury or death, shall be exclusive of all other rights and remedies of the employee, his legal representative, dependents, [or] next of kin." Essentially, if an employee is granted a right or remedy under the Workers' Compensation Act, the employee is limited to the relief provided under the Act.
What this means for churches
Many churches have been sued by an employee for emotional or physical injuries stemming from the sexual harassment, sexual assault, or other sexual offense by a supervisor or fellow employee. In many states, workers' compensation is the sole remedy available to an employee in such cases so long as the injury is work related and no exception applies.
Some church leaders wrongly assume that churches are exempt from workers' compensation law, exposing their church to potentially sizable uninsured claims and eliminating the exclusive remedy of workers' compensation benefits for work-related injuries. Truman Arnold Companies v. Circuit Court, 513 S.W.3d 838 (Ark. 2017).