Academic journal article The University of Memphis Law Review

Tennessee's Workers' Compensation Second Injury Fund: Purpose and Practice

Academic journal article The University of Memphis Law Review

Tennessee's Workers' Compensation Second Injury Fund: Purpose and Practice

Article excerpt


In 1919, the Tennessee Legislature enacted Tennessee's Workers' Compensation Act,1 with the principal purpose of providing injured employees compensation for lost wages.2 The statute represents a quid pro quo: employees give up certain common law causes of action in return for a system of more certain compensation in the event of injury.3 The resulting balance allows employees to bring claims against their employers under the statute without the burden of proving liability under traditional common law negligence principles,4 and it shields employers from common law liability.5 The statute is to be liberally construed to favor employee compensation.6 Tennessee Code Annotated section 506-116 provides that the rules of common law statutory construction should not apply to a claim under the Tennessee Workers' Compensation Act:

The rule of common law requiring strict construction of statutes in derogation of common law shall not be applicable to the provisions of the Workers' Compensation Law, but the same is declared to be a remedial statute which shall be given an equitable construction by the courts, to the end that the objects and purposes of this chapter may be realized and attained.7

The fact that the statute contains liberal construction language and that it is declared to be remedial in nature favors compensating injured employees.8

Before the enactment of Tennessee's Second Injury Fund, both employers and employees suffered when an employee sustained successive injuries.9 Tennessee and other states used various systems to address the liability of an employer to an employee for successive injuries. One such system is the full responsibility or non-apportionment rule which holds the employer liable for the total resulting disability of the employee's successive injuries.10 Conversely, the apportionment rule provides that the "employer only pays for the single member lost in its employment."11 In states that follow the full responsibility rule, employers have great incentive not to hire, or fire, employees who come to the job with a pre-existing injury for fear that the employee would sustain another injury, making the employer liable for the total disability award to the employee.12 Application of either of these two systems produced adverse effects on employees because implementation of an apportionment scheme left employees with awards "far less than their actual condition required to prevent destitution," and full-responsibility schemes led to the non-hiring or discharge of employees with prior injuries.13

When Tennessee enacted its second Injury Fund Statute in 1945, the purpose was clear: to promote the hiring of employees who have been previously injured.14 Tennessee's Second Injury Fund statute encourages the hiring of employees with prior injuries15 by providing assurance to employers that they will be liable for the disability caused only by the second injury16 or that the employer will not be liable beyond one hundred percent of an employee's disability award17 if the employee suffers a second injury. This note defines and explains the second Injury Fund statute, analyzes the different situations for which the statute is intended to apply, and addresses problems raised by the statute's application.


Tennessee Code Annotated section 50-6-208 provides for an application of the second Injury Fund in two situations.18 These two situations are covered by subsections (a) and (b), respectively, of the second Injury Fund statute.

A. T.C.A. § 50-6-208(a)

To illustrate how and when section 50-6-208(a)19 applies to the first situation, consider the following:


a) an employee has previously sustained a permanent physical disability, regardless of whether the disability stems from a work or non-work related injury;20 and

b) the employer has actual knowledge of the permanent and preexisting disability at the time the employee was hired or at a time prior to injury;21 and

c) the employee suffers an additional injury, while working for the second employer, that, in conjunction with the preexisting injury, now renders the employee permanently and totally disabled;22 and

d)the court determines that the employee has sustained some percentage of the permanent and total disability from the second injury,23


the employer only pays for the disability that would have resulted from the second injury, and the Second Injury Fund pays for the remaining disability. …

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