State News

Among the hardest cases for employers to contend with are those where the claimant already has an advanced degenerative or arthritic condition and then has an injury.  That was the situation when Veronica Graham, a 55-year-old Certified Nursing Assistant, fell on a wet floor at work on June 25, 2011.  She landed on her left hip, buttocks, and back and was diagnosed with a contusion of the left hip. 

            Initially Graham returned to work with no pain, but within a few days she began to have hip pain.  She was referred to a physician who recommended three physical therapy sessions.  She was placed on light duty while in physical therapy and then returned to work full duty on her discharge date of  July 18, 2011.

            Graham said that she did not experience pain after the accident but did start having pain following physical therapy for her left hip.  She had to stop working in October due to her pain. 

            In November 2011, Graham met with Dr. Gregory S. Maslow, an orthopedic surgeon, who prescribed Percocet for pain management and took x-rays, which showed moderately severe degenerative arthritis of the left hip.  The x-rays showed petitioner lacked cartilage between her hip bone and hip socket.  Dr. Maslow gave an opinion that the work accident caused a previously asymptomatic condition to become symptomatic and thereby accelerated the time frame for a need for hip replacement surgery.

            The respondent’s expert, Dr. Hausmann, an orthopedic surgeon, opined that petitioner had “very severe arthritis” and said that this condition predated the work accident.  In his opinion, petitioner would have needed total hip replacement surgery regardless of the fall at work.  He said that there was a complete loss of the joint space and large spurs around the hip joint.

            The Judge of Compensation accepted the testimony of Dr. Maslow over Dr. Hausmann and found for the petitioner.  The employer appealed and argued that there was insufficient evidence to support the finding in favor of petitioner.  For one thing, the employer argued that petitioner had showed a lack of candor when she failed to disclose an earlier automobile accident and therefore could not be found to be credible in her entire testimony.  There is a doctrine in the law derived from the Latin phrase, “falsus in unum, falsus in omnibus.”  It means false in one thing, false in everything. The Judge of Compensation disagreed with this philosophy and found that the petitioner’s lack of candor was inconsequential since the prior car accident did not pertain to any hip problem.

            The Appellate Division affirmed the decision in favor of petitioner.  The court said,“With respect to petitioner’s claim of exacerbation and acceleration of degenerative arthritis, the record amply supports the judge’s finding that petitioner’s accident caused her previously asymptomatic hip to become symptomatic and increasingly painful.” The court cited previous case law to the effect that “Employers take their employees as they find them, ‘with all of the pre-existing disease and infirmity that may exist.’ “Verge v. Cnty. Of Morris, 272 N.J. Super. 118, 125 (App. Div. 1994).

            This case involves a fairly common situation for employers.  The case involved mostly the concept of “acceleration. ”  There was no dispute that petitioner would have needed a hip replacement at some point in time, so the issue in the case was whether the timing of that surgery changed because of the work accident.  The court was of the opinion that if the accident hastened the need for surgery, even if surgery would have been inevitable eventually, then the employer must pay for the surgery.  In handling similar cases, employers need to focus on prior medical discovery because this case turned on the fact that respondent was never able to prove petitioner had prior hip complaints.  The case also shows that proof that a claimant is not candid in testimony will not necessarily doom the petitioner’s case if the judge feels the lack of candor was not material to the claim.

            This case may be found at Graham v. Silver Care Nursing Center, A-2923-12T2 (App. Div. March 7, 2014).

Many clients ask what the difference is between the defense of independent contractor and casual employment.  The truth is that the defenses are very similar, and one important case,Berkeyheiser v. Mollie S. Woolf, 71 N.J. Super. 171, (App. Div. 1961), illustrates this point.

            The case involved a man who worked full time for St. Regis Paper Company as a pipefitter five days a week, seven and one half hours per day.  From time to time, he performed some odd jobs for Mollie S. Woolf, who owned several buildings. He repaired some doorbells in buildings in 1956.  In September 1957, he repaired a damaged ceiling in a building.  He also installed some shields over doorbells to prevent children from unnecessarily pushing on them.  In November 1957, he repaired apartment windows that had been damaged and installed two window sashes in an apartment.  In February 1958 he repaired some outlets and worked all day.

            On July 12, 1958, Mr. Berkeyheiser borrowed a drill from his son and started to install an electric outlet for a refrigerator in the home of Mollie S. Woolf.  The drill struck a live wire and caused injury to his right eye and facial scars.  He filed a workers’ compensation claim. 

            The facts showed that Mr. Berkeyheiser did not hold himself out to the general public as a repair person.  He had only done some repair work for one other person besides respondent.  The respondent would provide the equipment, of if she did not have the equipment, Berkeyheiser would purchase it and bill respondent.  He was paid by the hour and there was no withholding from his pay.

            The Judge of Compensation found petitioner to be an independent contractor, and the County Court affirmed.  Berkeyheiser appealed and argued that the work he performed was essential to the maintenance and operation of respondent’s business, the so-called relative nature of the work test. 

            The Court said, “Overlapping between casual employees and independent contractors is common, and it is not unusual that a petitioner falls into either or both unprotected classes.”  The Appellate Division held that there a number of factors arguing against employment here.  Petitioner had a regular and permanent full-time job at a substantial salary.  He had no expectation of regular and steady employment by the respondent and only worked when the need arose.  He did not perform repairs on a scheduled basis but would choose the times when he would appear to make repairs. 

We conclude that the character of the work was such as to preclude petitioner from the right to compensation under the Workers’ Compensation Act.  We have accepted all his factual contentions as true, but they do not establish the essential existence of an employer-employee relationship.  Whether he was more a casual employee or an independent contractor need not be decided.  There is no merit to petitioner’s claim that would justify an award, either within the letter or spirit of this remedial legislation.

            This case is useful for practitioners in dealing with these two very close cousins:  the independent contractor defense and the casual employee defense.

St. Louis attorney, J. Bradley Young, recently posted an interesting blog article entitledThis Story Shows Why Employers are Frustrated with Workers Comp Judges. In the article, he reported on a New Jersey case in which the claimant was involved in a car accident while driving off of her employer’s property. She was actually in the process of turning out of the employer’s property at the time of the collision. The Coming and Going Rule would have been an excellent defense except for the fact that it was established that the rear bumper of the car was still hanging over the employer’s property at the time of impact. Since New Jersey is a Positional Risk Doctrine state, it was easy for the employee to win once the Court determined that she was, at least partially, on her employer’s property. In Positional Risk Doctrine states, the employee only need show that the accident would not have happened but for her employment. In other words, if she had not been leaving work that day, the accident would have never happened.

MY TWO CENTS:

If this had happened in Alabama, the result would have been different. Assuming that the Alabama judge also agreed that a hanging bumper thwarted the Coming and Going Rule, the employee would still have had her work cut out for her. The reason being that Alabama is an Increased Risk Doctrine state. This means that the employee must prove that the employment somehow increased the risk to the employee of such an accident occurring. Since car accidents happen to people on and off the job, she would have had to show that the employer’s exit was located in a place that made her more susceptible to getting hit. Of course, if that was the case, the employer would have wanted to accept it as a workers’ compensation matter in order to be afforded the protections of the Exclusivity Doctrine.

_________________________________

About the Author

This article was written by Michael I. Fish, Esq. of Fish Nelson LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation matters. Fish Nelson is a member of The National Workers’ Compensation Network (NWCDN). If you have any questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author atmfish@fishnelson.com or any firm member at 205-332-3430.

Ex parte Southern Erectors, Inc.

Petition for Writ of Mandamus

On February 21, 2014, the Alabama Court of Civil Appeals granted Southern Erectors, Inc.’s (SEI) Petition for Writ of Mandamus. The trial court had denied SEI’s summary judgment motion that was based on the Alabama court not have subject matter jurisdiction over the on the job injury that occurred in Kansas. The Alabama Court Civil of Appeals agreed with SEI and remanded the case with an order to dismiss the workers’ compensation case based on lack of subject matter jurisdiction.

The employee lived in Alabama and learned of a job opening in 2010 with SEI in Wyoming. He left Alabama and traveled to Wyoming for the job. The plaintiff worked on several different job sites in various states over the year for SEI. In February of 2011, the employee, while in Alabama, learned of another job with SEI in Kansas. Once he was told the date he should arrive he left and, upon arrival, completed a new application, Kansas Employee’s Withholding Certificate and stayed in a Kansas Hotel while performing the job. On March 14, 2011 the employee was injured while performing his job in Kansas. He was provided benefits under Kansas Workers’ Compensation and even completed a Kansas Workers’ Compensation form.

On March 13, 2013, the employee file suit for workers’ compensation benefits under the Alabama Act. In agreeing with SEI and ordering that the workers’ compensation claim be dismissed, the Alabama Court of Civil Appeals stated that the trial court did not have subject matter jurisdiction over the claim. The Court of Civil Appeals pointed out that in order for an out of state injury to be compensable under the Alabama Workers’ Compensation Act the requirements of §25-5-35(d) must be met. Subsection (2) and (3) of this section applicable to this case state that benefits are owed for an injury that occurs out side of this state if benefits would have been owed had the injury occurred in Alabama, provided that at the time of injury (2) he was working under contract for hire made in this state in employment not principally localized in any state, and (3) he was working under a contract of hire made in this state in employment principally localized in another state whose workers’ compensation law was not applicable to his employer. The Court of Civil Appeals found that the employee impliedly accepted the job offer by traveling to Kansas.See Ex parte Robinson, 598 So. 2d 901, 904 (Ala. 1991). Therefore, the employee was under a contract for hired entered into in Alabama. However, the Court of Civil Appeals stated that this conclusion does not automatically mean that the Alabama Workers’ Compensation Act applies. See Ex parte Fluor Corp., 960 So. 2d 701 (Ala. Civ. App. 2006). §25-5-35(d)(2)&(3) requires that the court also consider the principal location of the employment as defined in §25-5-35(b). The Supreme Court stated inEx parte Flour Corp. that principally localized pursuant to §25-5-35(b) merely means the employee worked for the employer at a designated place within a state.

The Court of Civil Appeals considered the following factors to determine the principal location of employment in the present case: (1) the application was completed in Kansas, (2) work was being performed in Kansas at the time of injury, (3) he was living in a Kansas hotel at the time of the accident, (4) he completed Kansas tax withholding forms and (5) SEI was operating out of Kansas for that job creating a place of business there. For these reasons, the Court of Civil Appeals found that the employee’s employment was principally localized in Kansas. Therefore, §25-5-35(d)(2) would not apply because SEI was principally localized in Kansas and §25-5-35(d)(3) would not apply because there was no evidence that Kansas workers’ compensation laws were not applicable to SEI.

The Court of Civil Appeals rejected the employee’s argument that the employer had to have a permanent and continuous presence in the state to establish a principal location in the state (the employee had cited an Alabama Federal case that used this language but that case applied to venue and not §25-5-35(d)).

___________________________

ABOUT THE AUTHOR

The article was written by Joshua G. Holden, Esq. a Member of Fish Nelson, LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation and related liability matters. Mr. Holden is AV rated by Martindale-Hubbell, which is the highest rating an attorney can receive. He has been selected as a "Rising Star" by Super Lawyers. He is the past Chair of the ABA/ TIPS Workers’ Compensation and Employers’ Liability Committee. Holden and his firm are members of The National Workers’ Compensation Defense Network (NWCDN). If you have questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author atjholden@fishnelson.com or 205-332-1428.

Iowa Supreme Court Schedules Special Evening Session

Des Moines, February 24, 2014 —On Tuesday evening, March 4, the Iowa Supreme Court will hear oral arguments in the case of Godfrey v. State of Iowa, et al., beginning at 7:00 p.m. in the Supreme Court Courtroom on the fourth floor of the Judicial Branch Building, 1111 East Court Avenue, Des Moines. The evening session is an opportunity for central Iowa residents, who may not be able to attend the court's regular morning and afternoon sessions, to watch the court conduct oral arguments.

Attorneys' briefs for the case and a guide to oral arguments are posted on the Iowa Judicial Branch website at:

http://www.iowacourts.gov/About_the_Courts/Supreme_Court/Evening_Oral_Arguments_Des_Moines/index.asp

Proceedings will be streamed live from the Iowa Judicial Branch web site at:http://www.iowacourts.gov/About_the_Courts/Supreme_Court/Oral_Argument_Videos/.

In this case, the Iowa Supreme Court will be asked if tort claims against state officials must be brought under the Iowa Tort Claims Act, Iowa Code chapter 669. The statute provides that if the actions of state employees that are the basis of the claim were within the scope of their employment, the employees have immunity and the State of Iowa will be substituted as defendant for the individual employees.

Plaintiff Christopher Godfrey is serving a statutory six-year term as Iowa's Workers' Compensation Commissioner. His term is due to expire April 30, 2015. He has sued the State of Iowa and several individuals, including Governor Terry Branstad and Lt. Governor Kim Reynolds, on a variety of claims, including violation of his constitutional rights, defamation, and intentional interference with contract.

Under Iowa Code section 669.5, the Iowa attorney general certified that defendants' actions were within the scope of their employment with the state. Based on the attorney general's certification, the individual defendants asked the district court to substitute the State of Iowa as the sole defendant in the case. The district court concluded that chapter 669 mandated a finding that the attorney general's certification on scope of employment was conclusive, requiring the court to substitute the State of Iowa for individual defendants. Plaintiff Godfrey contends the district court was wrong to dismiss the individual defendants from the case.

On appeal of the district court's ruling, issues before the Iowa Supreme Court include:

I. Does the attorney general's certification pursuant to Iowa Code section 669.5(2)(a) conclusively establish that a state employee was acting within the scope of his or her employment (and therefore the action is deemed to be an action against the state and the state is substituted as the defendant in place of the employee) or is the attorney general's certification subject to the court's (or a jury's) independent review?

II. If the attorney general's certification does conclusively establish that a state employee was acting within the scope of employment, then does the application of section 669.5(2)(a) result in an unconstitutional deprivation of plaintiff's due process rights?

A public reception with the supreme court justices will follow the oral arguments.

For more information, visit http://www.iowacourts.gov/About_the_Courts/Supreme_Court/

          Adesina Mercer worked for the Arc of Prince George County from 2004 to 2011.  Her job included applying for and processing initial applications for benefits for Food Stamps and Social Security. 

            In May 2007, The Arc put Mercer on conditional employment status due to poor work performance.  She was returned to regular status the next month. However, while she was on medical leave in 2009, her co-workers discovered that many of the Arc’s food-stamp-eligible clients were no longer receiving benefits.  When Mercer returned to work, this issue was addressed with her and she was instructed to take steps to renew those clients’ benefits.

            In October 2010, Mercer received a performance review which was largely average with only one category being above average.  The next month, The Arc once again discovered that some food-stamp-eligible clients were not receiving benefits.  Mercer was provided with a list of clients and told to pursue reinstatement of benefits.

Mercer countered that these kinds of lapses in benefits were fairly commonplace.  She felt that she should not be reprimanded for these lapses.

            In January 2011, Mercer was involved in a car accident with injuries that kept her out of work for about three weeks.  She requested and obtained FMLA leave.   While Mercer was on leave, other workers performed her job and discovered again that there were many more eligible clients not receiving benefits due to Mercer’s failure to submit renewal or redetermination requests.

            Mercer returned to work on February 22, 2011 and was placed on administrative leave due to poor job performance.  At the end of the five-day administrative leave period, Mercer sought additional FMLA leave until March 14, 2011.

            The investigation of Mercer continued, leading The Arc to conclude Mercer grossly deviated from her job’s requirements and failed to obtain Food Stamp benefits for 99 of 160 eligible clients.  For this reason her employment was terminated during her FMLA leave.  

            Mercer sued and argued that her termination constituted unlawful interference with the exercise of her FMLA rights.  The Arc moved to dismiss the case, and the district court ruled for the Arc.  Mercer appealed to the Fourth Circuit Court of Appeals.  The Court said that “being on FMLA leave does not provide an employee any greater rights than he or she would have had without taking leave, and an employee’s right to reinstatement is not absolute.”

An employer has discretion to discipline or terminate the employment of an at-will employee for poor performance regardless of whether the employer’s reason for terminating the employment was discovered while the employee is taking FMLA leave.

Mercer argued that her employer improperly used her leave request to generate a reason for termination.  The Court said the fact that the leave permitted The Arc to discover the problems with Mercer’s job performance could not logically be a bar to the employer’s ability to fire a deficient employee. 

            The case is helpful because it demonstrates an important rule, namely that an employee on FMLA leave is not entitled to greater rights than the employee would have had without taking leave.  The case can be found atMercer v. The Arc of Prince George County, Inc., 2013 U.S. App. LEXIS 14060 (4^th Cir. 2013).

In a move akin to the zombie apocalypse, a West Virginia legislator attempts to resurrect dead provisions in legislation filed on February 10, 2014.   State Senator Jack Yost, a Democrat from Brooke County, introduced eight bills that eviscerate the legislative progress made in West Virginia’s workers’ compensation system since 2003. 

Highlights of the legislation include:

·        Re-establishment of rule of liberality requiring all “reasonable inferences” be drawn to a claimant’s benefit due to the remedial nature of workers’ compensation legislation

·        Statutorily mandated deference to treating physician and elimination of the current preponderance of the evidence standard of review

·        Requiring approval of any diagnostic testing causally related to the injury and any new diagnosis revealed by the diagnostic testing is “automatically granted” if deemed by the treating physician to be related to the compensable injury

·        Eliminating the Rule 20 medical management rule where the guidelines differ from the opinion of the treating physician

·        Treble damages if treatment denial is reversed

·        Insurance Commissioner makes all initial compensability rulings but no corresponding change to allow for employer protests to the compensability rulings

·        Lowers PTD threshold to 40% from 50%

·        Vocational assessments consider 30 miles the maximum for viable employment from the current rule of 75 miles

·        CTS and other disease impairments based on symptoms rather than measureable impairment may be counted in the PTD threshold

·        No offsets on TTD payments for wage replacement plans

·        PTD benefits payable until death (currently age 70 cutoff)

·        No PTD re-assessments after age 60

·        Occupational pneumoconiosis coverage extended to out-of-state employment performed at the direction and under the care of the employer rather than current rule where only in-state exposures are considered in the compensability of such claims

·        Extension of the statutory presumption in favor of compensability of certain diseases suffered by professional firefighters to volunteer firefighters; also expanding the diseases presumed to be compensable

·        Reinstatement of the 5% PPD award for any claimant with a diagnosis of occupational pneumoconiosis without evidence of pulmonary impairment

We are investigating the impetus behind these bills and monitoring the committees in which they are assigned.  Senator Yost is the chair of the Labor Committee and vice chair of the Military Committee.  He also sits on the Energy, Industry and Mining Committee, the Finance Committee, and Health and Human Resources Committee, among others.   In our opinion, the proposed legislation is an attempt to undermine the workers’ compensation reforms that have been enacted since at least 2003 when we had our first significant bout of reforms.   For any questions, comments, or concerns, please feel free to contact us.

Karin Weingart and Dill Battle, February 12, 2014

Spilman Thomas & Battle, PLLC

kweingart@spilmanlaw.com

dbattle@spilmanlaw.com

The City of Gibraltar employed 41 employees excluding its “volunteer” firefighters.  When it fired one of the firefighters, Paul Mendel, he sued under the FMLA. The City countered that it was not covered under the FMLA because it had less than 50 employees. There were 25-30 “volunteer firefighters” whom the City contended were not truly employees and should not be counted toward the 50 employee threshold.

            The issue in the case came down to the definition of “employee” for purposes of the FMLA.  The firefighters did not receive health, sick, or vacation benefits; nor did they receive social security benefits.  They did training on their own time.  On the other hand, when the volunteer firefighters responded to any emergency call or maintained equipment, there were paid $15 per hour. 

1.      The Sixth Circuit Court of Appeals studied the Fair Labor Standards Act to obtain the definition of “employee” since the FMLA and FLSA use the same standard.  The Court observed that the United States Supreme Court previously adopted an “economic reality” test to determine whether someone was an employee for purposes of the FLSA. While the district court found that the City had no control over the firefighters, the Court of Appeals said that lack of control was not sufficient to account for the result in this case.  “Each time a firefighter responds to a call, he knows he will receive compensation at a particular hourly rate -- which happens to be substantially similar to the hourly rates paid to full-time employed firefighters in some of the neighboring areas.”

            The Court noted that the FLSA excludes those who receive only a nominal fee from the definition of employee, but the Court did not consider a payment of $15 per hour to be a nominal fee. Therefore the Court held in favor of employment status for the so-called City of Gibraltar volunteer firefighters.  It found that the FMLA applied to the City and to Mr. Mendel’s law suit:

Despite the fact that the Gibraltar firefighters are referred to as ‘volunteers,’ the inescapable fact nevertheless remains that they ‘work in contemplation of compensation.’  Thus, the Gibraltar firefighters are ‘employees’ and not ‘volunteers’ within the meaning of the FLSA.

There was an interesting dissent in this case in which it was argued that the City does not require a firefighter to respond to any fires and did not supervise such firefighters on the scene.  Someone could go for years without responding to a single fire.  The dissent pointed out that the volunteers really were not paid $15 per hour considering the fact that they had to complete 152 hours of training, pass an exam and then complete an additional 73 hours of training each year -- all without pay.

This case can be found at Mendel v. City of Gibraltar, 727 F.3d 565 (6^th Cir. 2013).

The Office of Injured Employee Counsel is holding its annual stakeholder meeting in a few days.  A key part of the agenda is OIEC’s legislative agenda for the 2015 Legislative Session. Not surprisingly, OIEC’s wish list would create considerable expense to Carriers. Here are the changes OIEC wants –

Expand LIBs – OIEC wants a statutory amendment clarifying that a Claimant qualifies for LIBs if he or she loses use of a body part as a result of a compensable injury even if the Claimant’s compensable injury was not to that body part. 

Increase TIBs Amount – OIEC wants increases in TIBs calculations: (1) increase in the benchmark earning rate from $8.50 an hour to $12.40 an hour, (2) increase TIBs from 70 percent to 75 percent of the AWW for a Claimant that earn $12.40 an hour or more, and (3) increase TIBs from 75 percent to 80 percent of AWW for a Claimant that earn less than $12.40 an hour.

Limit Carrier Ability to Dispute Extent of Injury – OIEC wants a deadline to dispute extent of injury placed in the statute. It wants a Carrier to have to dispute extent of injury within 60 days of receiving written notice that the injury extends to include a certain body part or that defense would be waived. The intention of this legislative change is to codify a 60 day waiver period in extent of injury cases, contrary to the Supreme Court’s decision inState Office of Risk Mgmt. v. Lawton.

Same Venue for Judicial Review of Medical Fee Dispute Decisions and BenefitDecisions

– OIEC wants the venue to be the same for judicial review of a medical fee dispute decision as it is for a benefit decision. That is, judicial review of both types of proceedings should be filed in county where the employee lived at the time of injury or death.

Provide Attorney’s Fees to Claimants for Medical Necessity Dispute Cases–

OIEC wants Carriers be liable for Claimants’ attorneys’ fees incurred when a Claimant prevails in a judicial review of a medical necessity dispute, if the injured employee prevailed administratively at the Appeals Panel.

Carriers Should Pay for Claimant’s Expert Evidence of Causation– OIEC wants to require Carriers to pay for treating doctors to provide opinions on causation through reports or testimony at the CCH, or if the treating doctor is not available, to pay adesignated doctor to provide such report or testimony. Alternatively, OIEC wants a legislative grant to give OIEC money to hire experts.

You might have to disgorge four times the amount of benefits withheld from the injured worker.  An alternative to statutory workers’ compensation is a plan under the Employee Retirement Income Security Act – an ERISA plan provided to an employer by a plan insurer. Like statutory comp, an ERISA plan may provide for disability benefits for an on the job injury. Unlike statutory comp, however, an insurer who denies disability benefits may be ordered to provide withheld disability benefitsand to disgorge any “profits” on the withheld benefits under an “appropriate equitable relief” provision of the ERISA statute. The U.S. Court of Appeals for the Sixth Circuit recently upheld an award of withheld benefits in addition to disgorgement of four times the amount of withheld benefits representing the insurer’s “profits” on the withheld benefits. The trial court found the insurer breached its fiduciary duty simply by denying benefits. Considering the insurer’s potential exposure for disgorgement of profits as a claims handling expense, statutory comp may be a less risky option Texas.

Rochow v. Life Ins. Co. of N. Am., No. 12-2075, 2013 U.S. App. LEXIS 24271 (6th Cir. Dec. 6, 2013).