Employers Can No Longer File Counterclaims to Advance to Trial and Save on Litigation Costs

The Nebraska Supreme Court recently issued an opinion in Wilmer Interiano-Lopez v. Tyson Fresh Meats, Inc., holding that an employer’s counterclaim against an employee cannot proceed to trial following an employee’s dismissal of an action under Neb. Rev. Stat. § 48-177.

Employee Wilmer Interiano-Lopez filed a Nebraska Workers’ Compensation claim against Tyson. Tyson filed an answer and counterclaim. Shortly thereafter Interiano-Lopez moved to dismiss the action. The compensation court dismissed the petition but proceeded to trial on Tyson’s counterclaim and found Interiano-Lopez had failed to prove a workplace injury. At trial Interiano-Lopez argued that the action should be dismissed. pursuant to Neb. Rev. Stat. § 48-177, as nothing survived the dismissal of the cause without prejudice. The compensation court overruled the motion to dismiss and the matter proceeded to trial on Tyson’s counterclaim.

In addressing Tyson’s counterclaim and the subsequent trial on only the counterclaim, the Nebraska Supreme Court concluded that the Workers’ Compensation Court did not have the authority to continue litigating any aspect of the cause once the attorney for Interiano-Lopez requested dismissal without prejudice. The Supreme Court ruled that Tyson’s counterclaim was not the functional equivalent of a petition, and as such, the Workers’ Compensation Court acted in excess of powers by proceeding to trial after Interiano-Lopez exercised his right to dismiss the cause without prejudice.

The question now is what is the practical effect of the Supreme Court’s decision in Interiano-Lopez v. Tyson: An employer can no longer file a counterclaim in order to prevent a claimant from subsequently dismissing their action in order to keep the costs of litigation down. However, an employer can continue to file a petition under Neb. Rev. Stat. § 48-173, as it permits “either party at interest” to file a petition. As a result, if an employer wishes to “protect” itself from a dismissal by a claimant at the 12^th hour, an employer could still file a petition when they are sued by a claimant. Additionally, an employer may then seek a consolidation of the two actions; the petition filed by the claimant and the petition filed by the employer.

If you wish to discuss the implications of Interiano-Lopez or have general workers’ compensation questions, please do not hesitate to contact one of our workers’ compensation attorneys, Thomas Shires at tshires@baylorevnen.com or Paul Barta at pbarta@baylorevnen.com or call (402) 475-1075 to speak to any of our attorneys.