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Colleen Fitzgerald filed a claim petition alleging that on April 26, 2010 she was walking down an alley as a zone merchandising supervisor for Walmart, when she suddenly felt a “pop” in her lower back.  She admitted that she was simply walking at the time the incident occurred.  However, prior to this popping incident she said she was doing some lifting at work.  She experienced severe pain radiating into her buttocks and down her legs.

Fitzgerald reported the injury to her zone manager but she did not fill out an accident report at that time.  She thought the pain would subside.  The next day at work the pain was more severe, causing her leg to give out and requiring her to leave work.  She saw her family doctor on April 29, 2010 who prescribed for her two medications and an MRI. 

Fitzgerald took FMLA leave for the next 12 weeks.  On May 13, 2010 the MRI was performed revealing protruding discs at L4-5 and L5-S1 with mild displacement of the right L5 and S1 nerve roots.  Fitzgerald also saw a chiropractor in May 2010.

Fitzgerald attempted to return to work following her FMLA leave but still had pain.  In June 2011, she sought additional care when her back pain increased after a coughing spell.  She then took a second leave of absence while getting epidural injections.

In September 2011, Fitzgerald was involved in a non-work-related slip-and-fall in which she broke her elbow, requiring a third leave of absence.  She did not return to work and her employment was terminated.  However, her back treatment continued into December 2013.         

Fitzgerald filed two claim petitions in April 2012: first, she argued that a traumatic accident occurred on April 26, 2010; second, she argued that her injuries were the result of occupational exposures from December 2008 until April 2010.  In December 2013 she filed a motion for medical and temporary disability benefits.  Petitioner testified in support of her motion as well as her medical and psychiatric experts.  Respondent produced its orthopedic expert and offered the report of its psychiatrist in evidence.

Both experts agreed that petitioner had protruding discs at L4-5 and L5-S1 but they disagreed completely on causation. The Judge of Compensation ruled for Walmart and dismissed both petitions.  Petitioner filed an appeal and the Appellate Division affirmed the dismissal of the cases.  The Court reviewed prior case law for the requirement that petitioner prove her injury would not have occurred but for her employment. 

Applying the test, the judge concluded the petitioner failed to satisfy the first step of the test, in part because ‘[t]he facts here do not establish that the petitioner would not have been exposed to the risk if she had not been at work.’ An appellate court must give ‘due regard to the opportunity of the one who heard the witnesses to judge of their credibility’ and owes deference to the judge’s expertise in workers’ compensation issues.

This case was handled successfully for Walmart by Lora Northen, Esq., partner with Capehart Scatchard, with assistance from Andrea Schlafer, Esq. on the legal briefs.  The case underscores the rule that just because an event happens at work does not mean it is compensable.  There are many health issues that occur during work but are not necessarily caused by work.  Feeling pain in one’s joints or spine while walking is not work related unless work effort or work premises cause or contribute to the medical condition.  This case can be found at Fitzgerald v. Walmart, A-1186-14T3 (App. Div. November 20, 2015).

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com. 

Michael Sluga worked for Metamora Telephone Company as an Outside Plant Supervisor.  On July 27, 2011 he slipped on a trailer while at work and fell two feet to the ground, tearing his rotator cuff.  He tried to work with the injury but eventually in December he asked for a six month leave of absence to obtain surgery to the shoulder and then physical rehabilitation after surgery.  His surgery took place on February 15, 2012 in Chicago, Illinois, and he was placed on FMLA leave from February 15, 2012 to May 16, 2012.

Metamora promoted another employee, Dale Matson, to Outside Work Supervisor on May 20, 2012 after Sluga’s FMLA leave expired.  Matson had previously been under Sluga’s supervision, but he had been doing Sluga’s job while Sluga was on leave. Metamora also hired Don Adams on August 6, 2012 to work on the outside crew doing line installation, filling Matson’s position.

Sluga filed a workers’ compensation claim for his shoulder and settled it.  On July 27, 2012, the treating doctor sent a report to the workers’ compensation carrier stating that he would give an opinion on Sluga’s ability to return to work in four weeks.  Ultimately, Sluga’s doctor released him to work on August 30, 2012 with certain restrictions.  At that point Metamora terminated Sluga’s employment because the company had no open jobs for him to perform.

Sluga sued under the Americans with Disabilities Act, alleging that he was discriminated against on the basis of disability for failure to make reasonable accommodations.  Metamora countered that Sluga never really asked for any accommodation.  The Court said, “Even if Plaintiff had preserved his reasonable accommodation claim, it would fail based on the evidence presented.  When an employee seeks a reassignment to a vacant position as a reasonable accommodation, as Plaintiff does here, it is the employee’s burden to show that another position for which they are qualified existed.”  The Court added that Sluga never proved that there was an available job for him to perform.

Sluga also argued that the real reason that the company terminated him was that it did not want someone  with a disability to return to work. The Court disagreed, noting that Sluga never offered evidence that the company did not honestly believe that no positions were available in August 2012. The Court examined depositions and company affidavits given in the case by managers of Metamora and concluded that the company consistently explained that there just was no job available for Sluga when he was cleared to return to work.  The Court also affirmed the principle that a company does not have to bump one employee to accommodate another employee. 

This case can be found at Sluga v. Metamora Tel. Co., 2015 AD Cases 181739 (C.D. Illinois April 27, 2015).

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com. 

Most assaults by an employee on another employee on work premises are compensable for the victim of the assault, but the facts inJoseph v. Monmouth County, A-4144-13T3 (App. Div. December 14, 2015) were most unusual.

Lesley Joseph was a nursing supervisor at a Monmouth County owned nursing home.  On June 9, 2011, Mr. Joseph was taking a break in the break room, had his feet up and his eyes closed, when his female assistant attacked him with a hammer, causing multiple injuries and cuts on his face and head.  Joseph managed to wrest the hammer away from his attacker and asked for help.  Police and paramedics responded and took him to the hospital.  Joseph filed a workers’ compensation claim which the County investigated, finding circumstances behind the attack that cast grave doubt on the compensability of the claim.

Through its investigation, the County learned that Joseph had become involved in a pyramid scheme run by his assistant.  This scheme was called a “susu,” which required an investment in which participants put money into a pot and then take turns sharing the amounts collected.  An example was provided where 20 employees would contribute $100 each week, then over the course of 20 pay periods, each employee would take turns collecting $2,000 during his or her assigned week.  No interest was paid.

Joseph participated in the “susu” on three occasions but never collected any funds.  Participants became concerned when the petitioner’s assistant said she had an upcoming wedding.  Petitioner tried to talk to his assistant, but she avoided him.  On June 9, 2011, he approached his assistant and talked about what rounds needed to be done on her shift but then started telling her that everyone in the “susu” was upset because people in the pool who were supposed to be paid the week prior had not yet been paid.  Joseph emphasized that he himself was supposed to be paid the next week.  The assistant admitted that she had to use some of the money but assured petitioner that he would get his money.  Shortly thereafter the assistant attacked petitioner and eventually pleaded guilty to aggravated assault with a deadly weapon.

The Honorable Lionel Simon III, Supervising Judge of Compensation, Monmouth vicinage, held that the confrontation between the two employees did not arise from work but rather from the fact that Joseph felt he was not going to be paid on time.  Judge Simon further found that there was no nexus to work at all. The mere fact that the attack happened at work was not sufficient for coverage because it did not arise from work activities. Petitioner appealed the dismissal of his case.

The Appellate Court said, “Assuming there was no prohibition against sleeping in the break room, petitioner’s claim still could not be sustained because its origins were only related to his involvement in the susu scheme, a personal connection to the assistant that resulted in injuries for reasons wholly unrelated to their employment.”  The Court said that the attack arose from personal motivation and was not attributable to a risk of employment.  “Had petitioner not been a participant in his assistant’s susu, the attack would not have occurred. Once he became involved and questioned his assistant about the ‘invested’ money, he was attacked at a location that just happened to be their place of employment.”

The petitioner argued that work brought the two employees together and created the conditions that resulted in the confrontation.  However, the Judge of Compensation and the Appellate Division both noted that this was a case where the friction between the two employees arose from purely personal reasons unrelated to the work that they performed at the county nursing home.

This decision is a significant one because it illustrates the exception to the general rule that the victim of an assault at work at the hands of a co-employee is generally covered.  If the origin of the animus is purely personal, having nothing really to do with work, neither the victim nor the aggressor is covered.  This case was successfully handled at both the trial level and the appellate level by Carla Aldarelli, Esq., partner in Capehart Scatchard.

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com. 

Samuel Roman formed Treeminator Tree Services, Inc. in 2007.  By 2012 he and his girlfriend, Sandra Flores, were both employees along with two others.  In 2009 Roman sought workers’ compensation coverage with NJM for Treeminator Tree Service, LLC, a company with no employees and a minimum premium.  He obtained the same type of policy in later years with Technology Insurance Company, part of the Amtrust Group. 

On May 4, 2012, Roman was cutting down a tree when he fell and suffered very serious injuries. He filed a workers’ compensation claim against Technology Insurance Company, which denied the claim on the ground that the policy indicated that Treeminator was an LLC with no employees.  Petitioner then filed a Motion for Medical and Temporary Disability Benefits, and a full trial ensued with testimony from petitioner, his girlfriend, and three witnesses associated with the insurance broker. 

The Judge of Compensation, the late Honorable Virginia Dietrich, ruled that petitioner made material misrepresentations in procuring his insurance application and was not entitled to coverage. She found that Mr. Roman provided false information in obtaining his policy in that all of his workers’ compensation policies indicated that he had no employees.  The application for the Technology policy described the business as a “one man operation – no employees.”

Further, the Judge of Compensation noted that Roman also misrepresented the nature of the business as one involving landscaping instead of the high risk work of tree removal and tree trimming.  She concluded that Roman did not intend to cover himself when he procured his workers’ compensation policy.

Roman appealed and contended that his broker erred in not procuring for him a policy listing his company as a corporation.  He argued that he himself should not suffer due to his broker’s error.  The Appellate Court noted that the Judge of Compensation rejected this argument because it was clear from the evidence at trial that Roman was trying to pay the absolute lowest amount possible for coverage as a Limited Liability Corporation (LLC) with no employees.  The Court said, “When apprised of the increased costs of insuring a company with employees, Roman chose to ‘take coverage as cheaply as he could find it.  He wanted to pay the least and hoped for the best.’”

The Appellate Court agreed with the Judge of Compensation that there was sufficient credible evidence in the record to support the finding that petitioner made a material misstatement of fact underN.J.S.A. 34:15-57.4, thereby warranting dismissal.  This matter was handled successfully by Nick Dibble, Esq. of Capehart Scatchard with assistance on the brief from the undersigned.  It can be found at Roman v. Treeminator Tree Service, A-0094-14T2 (App. Div. December 2, 2015).

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com. 

Robert Miller worked as customer service and bookkeeping associate at Saker Shoprite from 4:00 p.m. to 11:00 p.m.  On January 29, 2010, Miller came to work to pick up his paycheck at 10:00 a.m.  The store allowed employees to do direct deposit or to pick up their paychecks in person.  While he went in to get his paycheck, someone waited in the car outside. One fellow worker described Miller as wearing what appeared to be pajamas.

Miller picked up his paycheck at the courtesy desk and then cashed it.  He also bought a lottery ticket for a co-worker who was working a register in the checkout area as a cashier.  He walked over to the co-worker, handed her the lottery ticket, turned and headed toward the store exit.  As he exited, he slipped on a substance that may have been sugar or salt, falling to the floor and injuring his knee.  He was diagnosed with a medial meniscus tear.

Miller filed both a workers’ compensation claim and a parallel personal injury action in the Law Division.  The Judge of Compensation heard testimony and ruled that the accident was compensable.  The judge relied on the fact that the store allowed its employees to cash their paychecks at the store.  In the judge’s mind, this indicated that the store intended to benefit by “impulse buying” of workers who came to cash their checks in person.  The judge awarded 17.5% disability of the leg or $11,686.50.

Saker Shoprite appealed and contended that there was no legal support for a finding of compensability.  The Appellate Division reversed the Judge of Compensation, noting that petitioner was not performing any work duties at the time of his injury.  He was not dressed for work and was only there to do a personal task, namely pick up his paycheck.  In addition, the court noted that petitioner performed one other personal task in buying a lottery ticket for a co-worker.

In finding that the fall was not compensable, the court had to distinguish this case fromChen v. Federated Dep’t Stores, Inc., 199N.J. Super. 336 (App. Div. 1985).  In that case an injury to a Federated employee was found compensable during lunch hour when the employee tripped on a clothes hanger while shopping in the store.  The Appellate Division in that case found that the lunch-break shopping was beneficial to the employer and encouraged by the employer. 

In this case the court said that Miller’s injury did not occur during a lunch break but many hours before his work shift would begin.  The court also found that Miller never offered proof that Shoprite benefited from having employees pick up checks in person.  The benefits manager of the store testified that employees were generally discouraged from remaining in the store if they were not working or shopping.  The court said, “[t]here is no testimony that the store actively encouraged such conduct by check-cashing workers.  The practice was merely a gratuitous convenience provided by the employer.”

In reversing the Judge of Compensation, the Appellate Division allowed Miller to reactivate his civil suit against the store.  This case may be found atMiller v. Saker Shoprite, A-3746-13T2 (App. Div. November 13, 2015).

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com. 

Connie Chandler began working as a cleaner for Atlantic Scrap & Processing in 1994. Atlantic Scrap was a metal recycling facility.  On August 11, 2003, Ms. Chandler was walking down a flight of concrete steps when she accidentally fell backwards, striking the back of her head and neck.  She suffered a concussion, closed head injury, neck injury, right shoulder injury, and depression as a result of this fall.  She was diagnosed with cognitive impairments due to post-concussive syndrome and was also diagnosed with depression.  Her cognitive functioning and memory declined significantly after the accident.  Ms. Chandler’s intellectual functioning eventually fell to the impaired range.  By June 28, 2004, Ms. Chandler was incapable of caring for herself without assistance and could not be left alone.  She required constant supervision and attendant care services, which were provided by her husband.  On October 27, 2004, Ms. Chandler’s doctor provided the opinion that she needed constant attendant care services.  In April 2008, Ms. Chandler’s doctor provided a written note indicating that she was permanently and totally disabled due to her work-related brain injury.

This second Court of Appeals decision focused on interpreting the Supreme Court mandate in regard to the issue of attendant care. This case was previously heard by a deputy commissioner, the Full Commission, the Court of Appeals, and the Supreme Court.  The Supreme Court affirmed per curium the Court of Appeals’ decision regarding the reasonableness of the delay in Ms. Chandler’s request for payment of attendant care services and remanded for additional findings inChandler I.  The Court of Appeals in Chandler II held that the only issue for consideration upon remand was whether the Commission erred as to the award of interest for unpaid attendant care.  The Court held that the Supreme Court’s mandate was not to be construed to require “magic words” when considering whether a plaintiff had provided a defendant with a request for attendant care within a reasonable amount of time.   The Court emphasized that Defendants had actual notice of the need for attendant care less than one month after June 28, 2004.  The Court also highlighted that Ms. Chandler’s doctors were selected by Defendants and/or the nurse case manager, that Ms. Chandler’s doctors unanimously agreed that she needed constant attendant care services, and that Ms. Chandler’s mental functioning was at the level of a four-year-old child.  Ultimately, the Court interpreted the Supreme Court’s mandate to not require additional consideration of the notice issue for attendant care services.

Risk Handling Hints:  The decision in Chandler II provides additional guidance as to the facts the Court will look at when determining whether a plaintiff’s delay in requesting attendant care services is reasonable.    Based on this decision, the Court will consider:  when a defendant receives notice of the need for attendant care services; whether the medical opinion for attendant care services was provided by a doctor selected by the defendant(s); whether the opinion regarding the necessity for attendant care services is unanimous; the mental functioning of the plaintiff; and whether the plaintiff made attempts to notify the defendant(s) of the need for attendant care services.  The Court made mention of the underlying policy for requiring reasonable notice, which is to ensure that an employer is “seasonably notified” when an injured employee seeks new or different medical care because that employer is paying for these medical expenses.  If an employer or carrier becomes aware that a medical provider has recommended attendant care services, they should address the issue without delay by either making efforts to find a different provider and/or a second opinion regarding the need for services, or by agreeing to pay compensation for the attendant care services rendered.

“have fun stormin da castle”; SALADWORKS VERSUS SIX L’S

By

Kevin L. Connors, Esquire

Channeling Miracle Max from the infamous Princess Bride Movie, Circa. 1987, inSaladworks v. WCAB, decided on October 6, 2015, the Commonwealth Court has, in effect, stormed the liability-deflecting fortress that the Uninsured Employers Guaranty Fund has erected around the Pennsylvania Supreme Court’s milestone decision in Six L’s v. WCAB, 44 A.3d 1148 (Pa. 2012) in which decision the Supreme Court broadly expanded the scope of “statutory employer” liability, from its traditional matrix, as defined by the Supreme Court’s 1930 decision inMcDonald v. Levinson Steel Company, 153 A. 424, under which “statutory employer” liability for workers’ compensation coverage traditionally attached to a nexus of vertical privity between a construction site owner and the employee of an uninsured subcontractor performing work entrusted to the general contractor by the construction site owner.

In Saladworks, the Claimant, Frank Gaudioso, an employee at a Saladworks franchise restaurant, was injured in 2011, while walking out of the back of the Saladworks restaurant to throw away a box, with the Claimant falling and sustaining work-related injuries.

Filing a Claim Petition against the Saladworks franchise, corporately registered as G-21, which, coincidentally, was uninsured for workers’ compensation claims.

For that reason, the Claimant filed a second Claim Petition against the UEGF, alleging that UEGF was secondarily liable for the Claimant’s workers’ compensation benefits by virtue of the Claimant’s employer, the Saladworks franchise, being uninsured for workers’ compensation benefits.

Always seeking a tertiary target, the UEGF filed a Joinder Petition against the main Saladworks corporation, which was a franchising operation, selling and marketing franchises to franchisees; UEGF alleged, however, that Saladworks should be jointly and severally liable for any workers’ compensation benefits awarded by the WCJ to the Claimant, claiming that Saladworks was, in effect, a “statutory employer” for the Claimant.

To clear up the elusive fiction being painted by this tale of woe and weave, it is best exposed in the light of the exchange between Princess Buttercup and the Man in Black in the Princess Bride, when Princess Buttercup, in flawless diction, insisted: “You mock my pain”; to which the Man in Black reposted: “Life is pain, My Highness.  Anyone who says differently is selling something.”

What are we selling in this repository, beyond that, correct or incorrect, Six L’s continues to be an invaluable weapon in the UEGF’s arsenal, in the course of deflecting secondary liability against it to tertiary parties, either with direct or indirect involvement in the underlying employment status of the Claimant seeking workers’ compensation benefits, with Six L’s now being an established lexicon in the legal nexus that we refer to as the topography of our workers’ compensation universe in Pennsylvania.

Turning back to the UEGF’s Joinder Petition, Saladworks, in response, argued that the Joinder Petition should be dismissed and stricken, as Saladworks had no direct relationship with the Claimant, was simply a franchisor, granting certain rights to G21 to use as registered trademarks and system pursuant to the terms and conditions of its Franchise Agreement, which was introduced into evidence.

Seeking the dismissal of the Joinder Petition, Saladworks presented testimony from its Director of Franchise Administration, with that testimony setting forth the following:

·         “We only sell franchises to prospective franchisees to open up their businesses with Saladworks’ concept”;

·         “Franchises are sold under Franchise Agreements”;

·         “Saladworks, as the corporate franchisor, has no information regarding the identity of employees at franchise locations”;

·         “Saladworks, again as the corporate franchisor, does not do any of the hiring or firing of the employees at franchise locations”;

·         “Saladworks, as the corporate franchisor, does not dictate how many hours an employee might work at a franchise location, nor does it provide any training for the day to day operational employees of a franchise”.

Cross-examination of the Saladworks administrator revealed that Saladworks does train the owner of the franchise, and that its Marketing Department assists the franchisees with marketing, and it also provides assistance to the franchisee prior to the opening of the location, thereafter conducting operational performance reviews of franchisees, while retaining the authority to terminate a franchise if a franchisee fails to comply with the Franchise Agreement and a Confidential Business Manual, instructing franchises in the operational details of running the business.

The Franchise Agreement also requires the franchisee to maintain certain types of insurances, to include insurance for workers’ compensation benefits.

After hearing the testimony of Saladworks’ administrator, the WCJ granted Saladworks’ Motion to Dismiss/Strike the Joinder Petition, as the WCJ found the administrator’s testimony to be credible, further finding that Saladworks, as the corporate franchisor had no direction or control over individual franchisee’s employees, as direction and control was reserved for the franchisee location.

Not surprisingly, the UEGF appealed the denial of its Joinder Petition, arguing that Saladworks should have been considered to be the Claimant’s statutory employer, an argument that the Workers’ Compensation Appeal Board agreed with, reversing the Judge’s denial of the Joinder Petition, with the Appeal Board finding that the Pennsylvania Supreme Court’s Decision inSix L’s applied to the case at hand, and that notwithstanding that Saladworks did not own or occupy the premises where the Claimant was injured, Saladworks could nevertheless be held liable as the Claimant’s statutory employer, based upon the franchisee, G21, being uninsured for workers’ compensation benefits.

So holding, the Appeal Board held that Saladworks’ Franchise Agreement imposed upon it the contractual obligation to insure that G21 carried the appropriate workers’ compensation insurance coverage, to protect Saladworks from liability, and to insure coverage for work-related injuries to franchisee employees.

Concluding that Saladworks had not fulfilled its contractual obligation under its Franchise Agreement, the Appeal Board held that “the purpose of the statutory employer doctrine is to place responsibility for payment on the first entity in a contractor chain when an injured employee’s direct employer, subcontractor, fails to secure workers’ compensation insurance … our determination that Saladworks is a statutory employer supports that purpose as well as the humanitarian purposes of the Act.”

Time for another epistle from the Princess Bride, with Princess Buttercup, again confronting dire circumstances, as she did throughout the movie, blurted out: “We will never survive”; to which the Man in Black, ultimately cool no matter how desperate things looked, rebutted quietly with “Nonsense, you are only saying that because no one ever has before.”

As indicated earlier, Six L’s was a landmark ruling by the Pennsylvania Supreme Court in 2012, as it significantly expanded the previously-held scope of what a “statutory employer” might be under the Pennsylvania Workers’ Compensation Act.

Prior to Six L’s, the status of being a “statutory employer” under the Pennsylvania Workers’ Compensation Act was seemingly controlled by the Pennsylvania Supreme Court’s Decision inMcDonald v. Levinson Steel Company, 153 A.424 (Pa. 1930), setting forth the following conditions necessary to establish “statutory employment”, including:

·         That a contractor had a contract with a property or premises owner;

·         That the contractor under contract with the property owner was occupied and was in control of the premises where the work injury took place;

·         That the contractor entered into a subcontract with a subcontractor;

·         That the contractor entrusted a part of his regular business to the subcontractor; and,

·         That the injured employee was an employee of the subcontractor, whether insured or uninsured.

In Six L’s, the employee seeking workers’ compensation benefits was an injured truck driver, employed by an independent contractor, with the Claimant’s injury occurring on a public highway, not on premises owned or controlled by the contractor that had contracted with the subcontractor, the Claimant’s employer, with the WCJ, finding that theMcDonald “statutory employer” test had been satisfied, such that the contractor hiring the subcontractor was the Claimant’s statutory employer under Section 302(a) of the Act, as that provision provides:

“Any employer permits the entry upon premises occupied by him or under his control of a laborer or an assistant hired by an employee or contractor, for the performance upon such premises of a part of such employer’s regular business entrusted to that employee or contractor, shall be liable for the payment of compensation to such laborer or assistant unless such hiring employee or contractor, if primarily liable for the payment of such compensation, secured the payment thereof, as provided for in this act.”

Notwithstanding the WCJ’s Decision in Six L’s being overturned and reversed by the Appeal Board, the Judge’s Decision was then affirmed by both the Commonwealth Court, and by the Pennsylvania Supreme Court, which held that theMcDonald test did not apply to Section 302(a) of the Act.

Turning back to Saladworks, the Commonwealth Court determined that UEGF’s appeal was predicated upon whether the work performed by G21, the franchisee, under the Franchise Agreement was a regular or a recurrent part of the business, occupation, profession, or trade of Saladworks, the franchisor.

However, the Commonwealth Court ruled in Saladworks, that Saladworks’ main business was the sale of franchises to franchisees, in the course of which its corporate trademark and systems, as well as marketing expertise, were utilized by the franchisees.  Although Saladworks provided certain services to independent franchisees like G21, it was not in the restaurant business, nor was it in the business of selling salads, as its business was limited to selling franchises to franchisees.

For those reasons, the Commonwealth Court held that Six L’s was inapplicable to the facts inSaladworks, and that the Claimant was not, therefore, an employee of Saladworks, such that the Judge’s denial and dismissal of the UEGF’s Joinder Petition was correctly decided based upon the evidence presented by Saladworks as to its business operations as a franchisor licensing franchises to franchisees.

Illustrative, yes.

Important for what reason?

Well, first, it represents a rare instance in which the UEGF was turned away from deflecting liability against it, utilizing tangential evidence that another party should be held liable as a statutory employer of a Claimant seeking workers’ compensation benefits for a work-related injury while working for an uninsured employer.

This Decision also represents an appellate wall, potentially unscalable in affirming the separation of the contractual rights and responsibilities between a franchisor and a franchisee, in terms of secondary liability for workers’ compensation coverage and claims.

No less true, it provided an opportunity to link in unrelated and quixotic quotes from one of our favorite movies,The Princess Bride (1987).

ConnorsO’Dell LLP

Trust us, we just get it!  It is trust well spent!

We defend Employers, Self-Insureds, Insurance Carriers, and Third Party Administrators in Workers’ Compensation matters throughout Pennsylvania.  We have over 100 years of cumulative experience defending our clients against compensation-related liabilities, with no attorney in our firm having less than ten (10) years of specialized experience, empowering our Workers’ Compensation practice group attorneys to be more than mere claim denials, enabling us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania Workers’ Compensation Act.

Every member of our Workers’ Compensation practice group is AV rated.  Our partnership with the NWCDN magnifies the lens for which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania Workers’ Compensation practice and procedure.

Carl A. Nelson & Company and Zurich North American Ins. Co., v. Byran Sloan, Court of Appeals of Iowa, No. 15-0325

At the agency level, the parties stipulated Claimant, Byran Sloan, sustained an injury to his back in the course and scope of his employment on August 15, 2011, while lifting concrete forms out of a trench. Claimant was treated for what was described as a back strain, and he was returned to full-duty work with no restrictions on August 24, 2011. The dispute in this case centered on what effect an incident that occurred on October 30, 2011, had on that stipulated work injury.

On October 30, 2011, Claimant was assisting a friend move some go-kart frames into a trailer. When Claimant tried to slide a frame that had been placed on the trailer by a bobcat, he felt a sudden onset of pain and numbness in his back and legs. Claimant described the pain as being similar to what he experienced when the initial injury occurred. When conservative treatment for this injury failed, Claimant underwent back surgery and was subsequently released at maximum medical improvement on January 14, 2013. 

The workers’ compensation case was tried before a deputy commissioner on April 9, 2013. The deputy denied Claimant’s claim after determining the go-kart incident was an intervening and superseding cause of Claimant’s injury. The deputy further concluded, “There were no competent medical opinions tying [Claimant’s] original work injury to his ongoing back problems.”

 Claimant appealed to the commissioner, who reversed the deputy’s conclusion, finding “the greater weight of evidence supports the finding that claimant’s work injury was a proximate and natural cause of the disability he suffered from at the time of the arbitration hearing.” While the commissioner noted the evidence was “quite compelling” that the go-kart incident substantially worsened or aggravated Claimant’s condition, it did not amount to an intervening or superseding cause because Claimant “was simply engaged in an ordinary activity of daily living, namely helping a friend transport items on a trailer he owned” and not engaged in conduct that was “contrary to any express or implied duty owed to his employer following his work injury.” The commissioner also held the Employer is responsible for the medical treatment Claimant received following the go-kart incident. The bills that were paid by Claimant’s private health insurance “shall be reimbursed directly to [Claimant] as the Iowa Supreme Court has mandated in Ruud.” SeeMidwest Ambulance Serv. v. Ruud, 754 N.W.2d 860, 867–68 (Iowa 2008).

 The Employer filed for judicial review with the district court, who affirmed the agency’s causation opinion, finding, “the commissioner’s determination is clearly supported by substantial evidence in the record.” The court likewise affirmed the agency’s analysis of the intervening and superseding cause, concluding “there is really no point in the court reiterating that discussion when the court has no disagreement either with the commissioner’s judgment regarding the law or his application of the law to the facts.” However, the court modified the agency’s decision with respect to the payment of medical bills that had been covered by Claimant’s private health insurer. The court determined the agency misinterpreted the Supreme Court’s holding in Ruud as mandating direct reimbursement to Claimant. Instead, the district court held the Employer is to either (1) directly reimburse Claimant for the expenses approved by the commissioner as part of Claimant’s claim that were paid by the health insurer; or (2) reimburse the insurer for such amounts and pay any remaining amounts of any such expenses not paid by the health insurer directly to the provider.

 From this ruling the Employer appealed the causation ruling, and Claimant cross-appealed the ruling on the reimbursement of medical expenses paid by his private health insurer.

 The Court of Appeals agrees with the district court that substantial evidence supports the agency’s causation finding. The Court noted that the commissioner reviewed the medical opinions on the issue of causation and determined, of the three experts who offered opinions on causation, the opinion of Kenneth Bussey, M.D., was most persuasive. The commissioner credited Claimant’s testimony and concluded there was “simply no reasonable basis to disbelieve claimant’s uncontroverted, sworn testimony that he was still suffering from back and leg pain (radiculopathy) when he was released” back to work.

 The Court also agreed with the district court that the agency did not misinterpret the law with respect to intervening and superseding cause. The commissioner held the go-kart incident was a direct and natural result of the August 15, 2011 work injury based on the opinion of Dr. Bussey. The action of Claimant was not considered “negligent” so as to break the chain of causation because Claimant’s actions were not rashly undertaken with knowledge of the risk created by the weakened member. The commissioner also noted the action taken by Claimant was not “an intentional violation of an express or implied prohibition” by Claimant’s treating physician. The Court of Appeals therefore affirms the district court’s judicial review decision with respect to the Employer’s appeal.

 With respect to the cross-appeal, the Court of Appeals concluded the district court erred in its interpretation of the controlling case law. The Employer is responsible to make direct payment to Claimant for “past medical expenses paid through insurance coverage”  under Midwest Ambulance Serv. v. Ruud, 754 N.W.2d 860, 867–68 (Iowa 2008). Therefore, The Court affirmed in part and reversed in part the district court’s judicial review decision.

Call Mark Bosscher or Lee Hook with any questions @ 515-243-2100.  We’d be happy to help, whether it be a quick or a complex issue!

Eight medical professionals and their associates have been charged in federal grand jury indictments
involving a workers’ compensation kickback scheme in Southern California. The bribery plot
resulted in $25 million in improper claims for medical services and devices that were billed to
California Workers’ Compensation insurance companies. Three federal indictments were
announced by the U.S. Attorney’s office, San Diego District Attorney’s office, FBI, and the
California Department of Insurance against the purported conspirators. The indictments allege that
the defendants, which include a chiropractor, a radiologist, a medical equipment provider, a medical
clinic administrator, and a medical marketer, plus six corporations with which they did business,
paid or received tens of thousands of dollars for referrals of workers’ compensation patients to
therapy companies and a medical equipment provider, who, in turn, paid for every patient referral.
The chiropractors prescribed medical equipment, referred patients for MRIs and X-Rays, and
ordered specialized treatments such as Shockwave therapy, which ostensibly uses low energy sound
waves to initiate tissue repair. U.S. Attorney Laura Duffy called the indictments “the first wave of
charges in what we believe is rampant corruption on the part of some physicians and chiropractors.”
Although the amount pocketed by the medical professionals for any given referral could appear
somewhat de minimis (ranging between $50 and $100), in the aggregate the bills submitted by the
defendants to insurers totaled tens of millions of dollars. The Commissioner of the California
Department of Insurance, Dave Jones, called the practice “insurance fraud, which adds crippling
costs to California’s workers’ compensation system.” He elaborated, “When medical providers
defraud insurers, those costs are passed on to California businesses and consumers.