State News

FORMOLOGY UNDER PENNSYLVANIA WORKERS’ COMPENSATION LAW

By Kevin L. Connors, Esquire

In a brave and emboldened attempt to chart a Pennsylvania workers’ compensation claim by tracing the etiology of forms necessary to accept, deny, and/or administer the claim under the Pennsylvania Workers’ Compensation Act, this is intended to assist all Pennsylvania stakeholders, whether employers, insurance carriers, third-party administrators, as well as other stakeholders, including medical providers and third parties, to illustrate the necessity of viewing a Pennsylvania workers’ compensation claim under the microscope of the controlling or governing form, under which liability for compensation claims and benefits is either accepted, denied, administered, and/or compromised.

A list of the most often-used Pennsylvania workers’ compensation claim forms is set forth below:

·         Agreement for Compensation for Disability or Permanent Injury – LIBC-336;

·         Agreement for Compensation for Death – LIBC-338;

·         Agreement to Stop Weekly Workers’ Compensation Payments – LIBC-340;

·         Answer to Petition for Commutation – LIBC-35;

·         Answer to Petition to: - LIBC-377;

·         Application for Supersedeas Fund Reimbursement – LIBC-662;

·         Appeal from Judge’s Findings of Fact and Conclusions of Law – LIBC-25/26;

·         Application for Executive Officer Exception – LIBC-509;

·         Application for Fee Review – LIBC-507;

·         Authorization for Alternative Delivery of Compensation Payments – LIBC-10;

·         Claim Petition for Workers’ Compensation – LIBC-362;

·         Compromise & Release Agreement – LIBC-755;

·         Defendant’s Answer to Claim Petition – LIBC-374;

·         Employee Report of Wages and Physical Condition – LIBC-760;

·         Employee Verification for Employment – LIBC-760;

·         Employee’s Report of Benefits – LIBC-756;

·         Employer’s Report of Occupational Injury or Disease – LIBC-344;

·         Fatal Claim Petition for Compensation by Dependents of Deceased Employees – LIBC-363;

·         Fatal Claim Petition for Compensation by Dependents for Death Resulting from Occupational Disease – LIBC-386;

·         Fatal Claim Petition for Compensation by Dependents for Death Covered by the Act – LIBC-384;

·         Impairment Rating Evalutions Face Sheet & Appointment – LIBC-765;

·         Informal Conference Agreement Form – LIBC-754;

·         Notice of Ability to Return to Work – LIBC-757;

·         Notice of Change of Workers Compensation Disability Status – LIBC-764;

·         Notice of Compensation Payable – LIBC-495;

·         Notice of Reinstatement of Workers’ Compensation Benefits – LIBC-763;

·         Notice of Suspension for Failure to Return – LIBC-762;

·         Notice of Temporary Compensation Payable – LIBC-761;

·         Notice of Workers’ Compensation Benefit Offset – LIBC-761;

·         Notice of Workers’ Compensation Denial – LIBC-496;

·         Notice Stopping Temporary Compensation – LIBC-502;

·         Notice to Claimant – LIBC-758;

·         Notification of Suspension or Modification – LIBC-751;

·         Occupational Disease Claim Petition – LIBC-396;

·         Peer Review Request – LIBC-620;

·         Peer Review Transmittal Sheet – LIBC-621;

·         Petition for Commutation of Compensation – LIBC-34;

·         Petition for Joinder of Additional Defendant – LIBC-376;

·         Petition for Penalties – LIBC-686;

·         Petition for Physical Examination – LIBC-499;

·         Petition for Review of Utilization Determination – LIBC-603;

·         Physician’s Affidavit of Recovery – LIBC-497;

·         Request for Designation of a Physician to Perform an Impairment Rating Evaluation – LIBC-766;

·         Statement of Account of Compensation Paid – LIBC-392;

·         Statement of Wages – LIBC-494;

·         Supplemental Agreement for Compensation for Death – LIBC-339;

·         Supplemental Agreement for Compensation for Disability of Permanent Injury – LIBC-337;

·         Third Party Settlement Agreement – LIBC-380;

·         Utilization Review Determinate Face Sheet – LIBC-604;

·         Utilization Review Request for Consideration – LIBC-602;

·         Utilization Review Request – LIBC-601;

·         Workers’ Compensation Medical Report Form – LIBC-9;

In the beginning, there is the Report of Injury, identified as LIBC-344, with the Act and the Bureau’s Regulations requiring that it be filed by the employer, typically prepared and filed by the insurer or administrator, after an injury is reported by the employee to the employer or insurer within 48 hours of a work-related fatality, or whenever disability (lost time) exceeds 1 day.

This form is relatively generic, leaving little to the imagination, in terms of name, rank, SSN, DOB, relevant contact information for claimant, for employer, insurer, with other relevant information being the claimant’s original date of hire, date the claimant reported the injury or lost time to the employer, and a very brief description of how the injury is reported to have occurred, with no diagnostic impression of the injury being included.

The Report of Injury is akin to an OSHA report of injury.

The filing of the Report of Injury, with it being absolutely critical to understand that this Report is never admissible as evidence in a workers’ compensation litigated proceeding, then requires the employer/insurer/administrator to investigate the claim, to either accept, deny, or otherwise “compromise”, the claim within 21 days of the injury (lost time) being reported.

Consider further that Pennsylvania is a wage loss/disability jurisdiction, devoid of any true permanency standard that has any real relevance in terms of claim resolution, other than the utilization of an Impairment Rating Examination, which is simply a claim mechanism for capping the payment of temporary total disability benefits, being wage loss benefits that are payable when a claimant is unable to perform the time-of-injury job, at a total of 604 weeks of disability benefits.

Do the math!

So, an injury/lost time has been reported, and that requires the employer/insurer/administrator to either issue one of three forms, within 21 days of the injury/lost time being reported, with there being no suggestion of priority, in terms of the form to be utilized, the forms being:

• An LIBC-496 which is titled “Notice of Compensation Denial” which requires claim information as to the identity of a claimant, employer, insurer/administrator, also requiring a description of the reported injury, and its mechanism, with it also being required that the entity denying the claim identified the specific grounds for denial, there being (6) six permitted by the form, to include:

1.         The employee did not suffer a work-related injury.  The definition of injury also includes aggravation of a pre-existing condition, or disease contracted as a result of employment.

2.         The injury was not within the scope of employment.

3.         The employee was not employed by the defendant.

4.         The employee has not suffered a loss of wages as a result of an already accepted injury.

5.         The employee did not give notice of his/her injury or disease to the employer within 120 days within the meaning of Sections 311-313 of the Workers’ Compensation Act.

6.         Other good cause.  Please explain fully in the space below.

Oftentimes, the utilization of “other good cause” on the NCD is utilized when there is insufficient information upon which to accept a claim, such as the claim has not been medically verified through medical reports, diagnostic impressions, or causation opinions.    

This form, like most Pennsylvania forms, must be “served”, meaning mailed, to all parties involved with the claim, to include the Bureau now requiring electronic submission, by the insurer.

This filing almost always triggers the filing of a Claim Petition, which is the mechanism for the claimant to formally allege that he/she is entitled to workers’ compensation benefits, requiring 16 disclosures by the claimant, to include how he/she was injured, a description of the injury, when notice was given, when disability first occurred, as well as the types of benefits that the claimant is seeking for the claim. 

If the claim is not being denied at the outset, two other forms come into play.

One form is a Notice of Compensation Payable, identified as LIBC-495.

Under this form, liability for the Workers’ Compensation claim is being accepted, with the parties being identified, the injury being described, the mechanism of injury being described, and the benefits being paid also being described, with the employer/insurer/administrator having an election as to whether to pay indemnity and medical compensation benefits, or only medical compensation benefits, as there had been a complete derailment of sanity at the Bureau level, in a wake of several appellate decisions that seemingly made no statutory rational sense whatsoever, when a workers’ compensation claim was a “medical only” claim, as there is no statutory requirement for an employer/insurer/administrator to file any forms for “medical only” claims, which would seem to be the much more rational approach to the issue, given the number of “medical only” claims that routinely arise without ever evolving into “lost time” claims, although there is now decisional authority under several Pennsylvania Commonwealth Court decisions, essentially predicated on claimants being forced to litigate the compensability of “medical only” claims, prior to the expiration of the three year statute of limitations for a claimant to file a Claim Petition to prove the compensability of an injury, irrespective of whether that injury results in medical treatment only, or also involves lost time.

The most notable “medical only” decisions by the Commonwealth Court are as follows:

·         Waldameer Park, Inc. v. WCAB (Morrison), 819 A.2d 164 (Pa. Cmwlth. 2003)

·         City of Philadelphia v. WCAB (Brown), 830 A.2d 649 (Pa. Cmwlth. 2003)

·         Orenich v. WCAB (Geisinger Wyoming Valley Medical Center), 863 A.2d 165 (Pa. Cmwlth. 2004)

So, the third form that might appear before you, when deciding to deny, accept, or alternatively, to pay temporary compensation benefits, with no admission of liability, for the first 90 days post-injury, is a Notice of Temporary Compensation Payable, identified as LIBC-501.

The three forms that we have discussed so far, are the Notice of Compensation of Denial (NCD), identified as LIBC-496, which results in outright denial of the compensability of the claim, the Notice of Compensation Payable (NCP), identified as LIBC-495, which results in an outright admission of liability for the compensability of the claim, and the Notice of Temporary Compensation Payable as LIBC-501 (“NTCP”, or “TNCP”), depending upon how much coffee you have had that morning, allowing you to pay temporary compensation benefits with no admission of liability for the first 90 days of disability, although that NTCP/TNCP will automatically convert to an NCP, where you are again back to an outright admission of compensability for injury and disability, if the NTCP/TNCP is not “stopped” with a Notice to Stop Temporary Compensation Payable (“NSTC”), identified as LIBC-502, under which temporary compensation benefits are “stopped”, although it must be concurrently filed with a Notice of Compensation Denial, indicating the reason for denial of the compensability of the claim.

Oh what a wicked web of forms we weave!

To repeat, we have now covered the Report of Injury, the Notice of Compensation Denial, the Notice of Compensation Payable, the Notice of Temporary Compensation, the Notice to Stop Temporary Compensation, and where are we now?

Well, that is a form of a completely different number.

And that depends upon whether you have denied or accepted the claim. 

If you have denied the claim, the claim most likely is headed into court, with a claimant most likely filing a Claim Petition, which is LIBC-362. 

The claim petition contains 16 paragraphs, the answers to which are essentially a claimant’s burden of proof for establishing the compensability of both injury and disability. 

The 16 paragraphs deal with the basic elements of a workers’ compensation claim, including date of injury, description of injury, mechanism of injury, when notice was given to the employer, when disability began, the claimant’s compensation wage rates, requiring both the pre-injury wage and the compensation payable rate for payment of weekly workers’ compensation benefits, as well as requiring the claimant to specify exactly what benefits the claimant is seeking, there being five basic compensation benefits as follows:

• Temporary total disability benefits, meaning inability to perform the pre-injury job at pre-injury wages;
• Temporary partial disability benefits, meaning able to perform some work, but not at pre-injury wages, resulting in some compensable wage loss;
• Fatal claim benefits, meaning the complete inability to continue to exist;
• Specific loss benefits, meaning that you have lost the complete use of a body part, either through an actual or constructive amputation, and;
• Medical compensation benefits, required to be related, reasonable, and necessary.

The Claim Petition also allows a claimant seeking workers’ compensation benefits to claim entitlement to unreasonable contest to attorneys’ fees under Section 440, if it can be proven that a claim denial does not have a “reasonable basis”.

The filing of a Claim Petition with a Bureau results in the Bureau randomly assigning the petition to workers’ compensation Judge for a hearing and disposition.  The petition is assigned to a workers’ compensation Judge in the hearing district in which the claimant lives, typically assigned according to the county where the claimant lives.

There are 22 hearing districts in Pennsylvania.

There are a total of approximately 82 workers’ compensation Judges, appointed by the Department of Labor and Industry and the Bureau of Workers’ Compensation, after being formally tested as to their knowledge of workers’ compensation law. 

The assignment of a claim petition to a workers’ compensation Judge requires the employer/insurer/administrator to file an answer to the Claim Petition, within 20 days of the Bureau’s assignment of the Petition to a workers’ compensation Judge.  The assignment is perfected through issuance of a Notice of Assignment, with the assignment date placed in the top, right hand corner of the NOA.

Filing an answer to a Claim Petition requires that the answer be filed on Bureau form LIBC-374 with it being required that every allegation in the Claim Petition be specifically answered, in terms of either an admission and/or a denial, with the Answer also requiring an identification of affirmative defenses under the Act, the most recognized affirmative defenses, tracking the same grounds for denial on a Notice of Compensation Denial, to include:

·         The claimant did not sustain a work-related injury;

·         Include an alleged aggravation of pre-existing condition;

·         The alleged injury did not occur within the course of scope of employment;

·         The claimant was not employed by the defendant;

·         The claimant did not suffer a loss of wages as a result of an injury;

·         The claimant did not give notice of the injury within 120 days as required under Section 311-313 of the WCA; or,

·         That “other good cause”, requiring explanation as to the basis thereof.

After the Answer is filed, through the WCAIS Link, launched by the Bureau in September of 2013, the claim proceeds through administrative litigation, subject to the Special Rules of Practice and Procedure before Workers’ Compensation Judges.

After the assignment of the petition to a Workers’ Compensation Judge, the judge is required, by the WCA and the Bureau regulations, to schedule hearings, with WCJ’s electing to either schedule serial hearings, usually every 90 days, or to schedule “one day trials”, which results in a pre-trial hearing being scheduled at the outset of the litigation, and a final hearing being scheduled prior to the record being closed and briefs being submitted by the parties, with all evidence required to be presented to the WCJ at the final hearing. 

That is all evidence by all parties.

If the claim is denied and a Claim Petition is filed, the claim is then litigated, either until it is settled, resolved by stipulation, or decided by the workers’ compensation Judge under a Bureau-circulated Decision, which becomes final and non-appealable, if not appealed within 20 days of its circulation.

If a workers’ compensation claim is accepted, the employer/insurer/administrator is then required to continue to make regular payments of workers’ compensation benefits to the claimant, paying temporary total disability benefits consistent with the claimant’s pre-injury average weekly wage and compensation payable rate and to pay reasonable necessary and related medical expenses, subject to fees schedules, within 30 days of bill receipt.

When paying temporary total disability benefits, the payments must be made on the same payment schedule as when the claimant was working.

When medical bills are received by the employer/insurer/administrator, the medical bills must be reviewed for relatedness, and then reviewed for reasonableness and necessity, with the medical bills then being subject to Medicare reimbursement rates, with medical bills required to be paid within 30 days of bill receipt, absent the filing of a Utilization Review, which can only challenge the reasonableness and necessity of the treatment being provided and billed for the work injury. 

Requesting Utilization Review requires the filing of an LIBC-601 form, with all medical bills required to be submitted by the provider with an attached Workers’ Compensation Medical Report form, LIBC-9.

Utilization Reviews are filed with the Bureau and randomly assigned to utilization reviewers, who are then required to make utilization review determinations on LIBC-604, a Utilization Review Determination Face Sheet.

Once a claim is accepted as compensable and work-related, and benefits are paid to the claimant in accordance with the WCA, the workers’ compensation benefits must continue to be paid absent one of the following conditions occurring:

(1)               The Claimant dies, and compensation benefits terminate by operation of death;

(2)               The Claimant voluntarily returns to work in their pre-injury capacity, and there is no continuing wage loss post-return to work, such that the Claimant’s compensation benefits are suspended;

(3)               The Claimant returns to work in a modified-duty capacity, with some reduction in return-to-work wages, such that the Claimant’s compensation benefits are modified, and temporary partial disability benefits are paid, subject to the 500 week limitation;

(4)               The Claimant executes a Supplemental Agreement, perfecting either a termination, suspension, or modification of the Claimant’s workers’ compensation benefits;

(5)               The Claimant signs a Final Receipt (almost never used), under which the Claimant agrees that all compensation benefits have been paid;

(6)               The Claimant is deported by virtue of not being able to prove legal immigration status;

(7)               The claim is settled under a Compromise and Release Agreement, perfecting some type of compromise of the indemnity and medical compensation benefits liability associated with the claim; and,

(8)               The Claimant’s compensation benefits are terminated, modified, or suspended by order of a workers’ compensation judge, with the employer/insurer carrying the burden of proving the entitlement to a change in the Claimant’s benefit entitlement status.

To match the requisite forms with the triggering events listed above, the following forms are relevant:

• If death occurs, and it is not related to the work injury, compensation benefits automatically terminate by operation of death;
• If the claimant voluntarily returns to work in their pre-injury capacities, and there is no continuing wage loss post-return-to-work, benefits should be suspended, in which case benefits can either be suspended with a Notification of Suspension (LIBC-751), although that notification must be filed within 7 days of the claimant’s RTW, or benefits can be suspended under a Supplemental Agreement (LIBC-337), requiring the claimant to sign the Agreement;
• The claimant returns to work in a modified duty capacity, and is not earning pre-injury wages, the claimant’s compensation benefits can then be modified under a Notification of Modification (LIBC-751), again requiring the Notification to be filed within 7 days of the RTW, or benefits can be modified under a Supplemental Agreement (LIBC-337), again requiring claimant’s signature on the Agreement;
• The claimant, whether returning to work with the employer or not, executes a Supplemental Agreement (LIBC-337), perfecting either a termination, meaning full stoppage of workers’ compensation benefits, a suspension, in which case only the wage loss benefits are suspended as the medical benefits can continue, or a modification, in which case the wage loss benefits are modified, based on the RTW wages being less than the pre-injury wages, with medical compensation benefits continuing;
• The claimant executes a Final Receipt, otherwise known as an Agreement to Stop Weekly Workers’ Compensation Payments (LIBC-340), almost never used, asWCJ’s really do not like this form, since it is typically used with unrepresented claimants, and may or may not be conditioned upon payment of benefits in exchange for the claimant signing the form, under which all compensation benefits, both wage loss and medical compensation benefits are reflected as having been paid and, in fact, being stopped with the claimant signing the Final Receipt;
• Deportation, which stops workers’ compensation benefits just like death;
• The compensation claim is settled under a Compromise & Release Agreement, requiring the claimant to execute a Compromised & Release Agreement (LIBC-755), under which the claimant is attesting to his “understanding of the legal significance” as to the settlement of the workers’ compensation claim, with the Compromise & Release Agreement also reflecting that the settlement is not a “admission of liability” as to the compensability of the injury or worker’s compensation benefits being claimed; and/or,
• The claimant’s compensation benefits are terminated, modified, or suspended by an order of a WCJ, with the employer/insurer/administrator carrying the burden of proving the entitlement to a change in the claimant’s compensation benefit entitlement status through the filing of a Petition for Termination, etc., also from the same petition (LIBC-378), to be filed for penalties, review medical treatment, special termination, regular termination, modification, suspension, review of compensation benefits, review of a compensation benefit offset, reinstatement of compensation benefits, to set aside a final receipt, and/or to seek approval of a Compromised Release Agreement.

Like the Claim Petition, the Petition for Termination results in assignment to a WCJ, with hearings convened for the presentation of evidence, in the WCJ deciding the case on the evidence presented, the parties stipulating to a claim resolution, or entering into a Compromise &  Release Agreement.

Other forms necessary for review are:

• An Agreement for Compensation for Disability or Permanent Injury (LIBC-336), allowing:

The employer and employee to agree on the compensation to be paid as well as the period for which the benefits are being paid, with the Agreement limiting the benefits to those reflected in the Agreement, although medical compensation benefits can remain open;

·         The Agreement for Compensation for Death (LIBC-338), seemingly self-explanatory;      

·         Application for Supersedeas Fund Reimbursement (LIBC-662), where an overpayment of compensation benefits has occurred and the employers/insurer/administrator seeks reimbursement from the Supersedeas Fund;

·         Appeal from Judge’s Findings of Fact and Conclusions of Law (LIBC-25/26), required to be filed within 20 days of the issuance of a WCJ decision, and requiring specificity with regard to the Findings of Fact being appealed, as well as to the Conclusions of Law in dispute;

·         Application for Fee Review (LIBC-507), filed by a medical provider contesting a fee schedule or fee reimbursement by and employer/insurer/administrator;

·         Authorization for Alternative Delivery of Compensation Payments (LIBC-10), required to be executed by a claimant, when an employee requests that compensation benefits payments be mailed to an alternate address;

·         The Employee Report of Wages and Physical Condition (LIBC-750), required to be executed by a claimant within 30 days of issuance, with use limited to every 6 months;

·         Employee Verification for Employment (LIBC-760), again requiring execution within 30 days of issuance, and use limited to every 6 months, although claimant’s failure to return the executed form within 30 days results in a suspension of compensation benefits, requiring issuance of a Notice of Suspension for Failure to Return (LIBC-762);

·         Fatal Claim Petition (LIBC-363), used to seek fatal claim benefits for a work-related fatality;

·         Impairment Rating Evaluation Face Sheet (LIBC-765), when an impairment rating is being requested by an employer/insurer/administrator, although impairment ratings can only be requested after:

(1)  The claimant has received 104 weeks of temporary total disability benefits; and,

            (2)  The claimant has reached maximum medical improvement;

·         Notice of Ability to Return to Work (LIBC-757), required to be issued and served on the claimant whenever the claimant is released to return to some level of work, and the issuance of this form must pre-date work being offered to the claimant, if there is any contest as to the claimant’s compensation benefits being suspended or modified based on a job offer or RTW;

·         Notice of Change of Workers’ Compensation Disability Status (LIBC-764), used after an IRE, resulting in an impairment rating establishing that the claimant’s “whole person impairment” is less than 50%, with the claimant’s compensation benefits then being “automatically converted” from temporary total to temporary partial disability benefits, limiting the claimant to receiving temporary partial disability benefits for 500 weeks under Section 306 (b) Act, with a conversion of temporary total to temporary partial being “automatically converted” if the IRE is requested either 60 days before or 60 days after the claimant receives 104 weeks of compensation benefits, requiring the employer/insurer/administrator to litigate the “conversion” from temporary total to temporary partial and disability benefits, if the IRE request is made more than 60 days after the claimant has received 104 weeks of temporary total disability benefits, ultimately requiring the “conversion” to be decided by the WCJ;

·         Notice of Reinstatement of WC Benefits (LIBC-763), utilized if there has been a suspension of compensation benefits, for failure to return an Employee Verification of Employment (LIBC-760);

·         Peer Review Request (LIBC-620), rarely used;

·         Petition for Commutation of Compensation (LIBC-34), rarely used since the statutory approval of Compromise & Release Agreement in 1996;

·         Petition for Joinder of Additional Defendant (LIBC-376), required to filed within 15 days of the party seeking joinder having evidence supporting the joinder;

·         Petition for Penalties (LIBC-686), utilized by claimants alleging violations of the Act;

·         Petition for Physical Examination (LIBC-499), utilized by employers and insurers seeking independent medical examination under Section 314 of the WCA, which allows IMEs of claimants every six months;

·         Petition for Review of Utilization Determination (LIBC-603), filed when a party seeks review before a WCJ of a Utilization Determination, with the employers and insurers, carrying the burden of proof before the WCJ as to the UD;

·         Request for Designation of a Physician to Perform an IRE (LIBC-766), requested by employer/insurer/administrator seeking an IRE of a claimant;

·         Statement of Account of Compensation Paid (LIBC-392), utilized by employers and insurers as a final statement of the compensation of benefits that have been paid on a particular WC claim;

·         Statement of Wages (LIBC-494), requiring the calculation of the claimant’s pre-injury wage in compensation benefit payable rate, a reliance upon disclosure of the claimant’s quarterly wages for the fifty-two (52) weeks preceding the alleged work injury;

·         Third Party Settlement Agreement (LIBC-380), required to be filed to reflect the resolution of a workers’ compensation subrogation lien when a claimant secures a third party recovery.

As is probably self-evident, the Pennsylvania WCA and the Bureau’s Regulations effectively require that every change in the status of a workers’ compensation claim be reflected with the issuance and filing of a form reflecting that change, as Pennsylvania’s Workers’ Compensation Law absolutely prohibits an employer’s “self-help” in stopping or discontinuing workers’ compensation benefits, after acceptance of a workers’ compensation claim, except in very limited circumstances, such as when a claimant returns to work, and refuses or fails to notify the employer/insurer/administrator of the return to work, as well as refusing or failing to execute the appropriate documentation to reflect the stoppage or reduction in the workers’ compensation benefit payments, although even then there is some risk that the workers’ compensation claim remains open, and can be subject to reinstatement, if the stoppage is litigated as being violative of the WCA by a claimant whose status might change after returning to work, i.e., and the claimant stops working, for whatever reason, with the potential being that the claimant can file for reinstatement of compensation benefits, typically granted by WCJs, except for very limited circumstances, with it being best to secure claim closure through the filing of a Suspension or Modification Petition for protection against the a claim that disabilities have recurred.

This summary is intended to be a compendium contracting the most important and most often used workers’ compensation forms into a synoptic abbreviation of their utilization. 

Questions concerning the utilization of workers’ compensation forms in Pennsylvania, that we have identified as being relevant for the administration of Pennsylvania workers’ compensation claims, can be directed to our brilliantly and sagaciously-experienced workers’ compensation partners, including:

            Kevin L. Connors, Esquire

            Kate O’Dell, Esquire

            Jeffrey D. Snyder, Esquire

            Lisa A. Miller, Esquire

ConnorsLaw LLP

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

Defending workers’ compensation claims throughout Pennsylvania for employers, self-insureds, insurance carriers, and third party administrators, our 100+ years of cumulative experience defending our clients against compensation-related liabilities, empowers our workers’ compensation practice group attorneys to be more than mere claim denials, entrusting 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’s Workers’ Compensation Act.

With every member of our workers’ compensation practice group being AV-rated, our partnership with the NWCDN magnifies the lens through which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, businesses, corporations, and insurance carriers, seeking our trial and compensation acumen, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania workers’ compensation practice and procedure.

EMPLOYEE MISCLASSIFICATION ISSUES

By Kevin L. Connors, Esquire

I.                   The Problem:

     Critical distinctions exist between employees and independent contractors.

     If you hire it, it must be an employee.

     Historically, the lines distinguishing employees from independent contractors have been ambiguous in certain fields, to include construction, service-related industries, transportation and delivery services, maintenance and janitorial services, and landscaping services.

     Real problem = insuring for personal injuries.

     Independent contractors do not carry workers’ compensation insurance, as they do not have Employees.

     Employers carry both workers’ compensation insurance and general liability insurance.

II.                Employee Definition:

     There are four elements relied upon by Pennsylvania Courts, as well as courts in other jurisdictions, to determine the existence of a master/servant relationship, with the necessary nexus to characterize an employment relationship being:

§  The right to hire the worker;

§  The right to fire the worker;

§  The right to control the work performed by the workers; and,

§  The right to direct the manner in which the worker performs the work.

     Direction and control are the critical factors, given the vagaries associated with hiring and firing.

     In the absence of formal written contracts, direction and control of the work being performed trumps the vagaries of hiring and firing.

III.             Direction and Control of Employees:

  Factors evidencing direction and control include:

§  Providing employees with the tools to work with;

§  Training the employees to perform the work;

§  Directing the employee to perform the work or service;

§  Controlling the manner in which the employee performs the work or service;

§  Dictating when the employee must perform the work or service;

§  Exercising total control of an employee’s work product or service;

§  Also relevant is whether there is a written employment contract, as well as whether both parties agree that the employer retained the right to hire and fire.

IV.             Factors Indicating Independent Contractor Status:

     A written contract or subcontract;

     The written contract/subcontract delineates the scope of work to be performed under the contract;

     The type of occupation or business for which the independent contractor is being retained;

     Whether the independent contractor provides the tools to perform the work;

     Whether the independent contractor is paid for the work or project being performed, as opposed to the time to perform the work;

     Whether the work being performed is not part of the regular business of the entity hiring the independent contractor, making it more likely that the contractor’s work is “independent”.

     Also key is whether the contract controls how the work is performed, as well aswho performs the work.

V.                Statutory Consideration:

     Worker misclassification has generated a minefield of Federal and State statutes.

     Statutes affecting worker classification include:

§  Pennsylvania Construction Workplace Misclassification Act (Act No. 72);

§  Federal Employee Misclassification Act;

§  Federal Payroll Fraud Prevention Act;

§  Federal Fair Playing Field Act;

§  Federal Independent Contractor Tax Fairness and Simplification Act;

§  Federal IRS Regulations;

§  Federal Fair Labor Standards Act.

VI.             IRS Factors:

     Factors implemented by the IRS for workers misclassification purposes are:

§  No instructions: independent contractor not required to follow, nor furnished with, instructions to perform a job;

§  No training: independent contractor not trained by hiring entity, as contractor uses own methods and manner to perform work;

§  Other workers can be hired: independent contractor can retain others to do the actual work;

§  Independent contractors’ work not essential to business; hiring entity’s success not dependent on the work performed by independent contractor;

§  No time clock: independent contractors set their own work hours;

§  No permanent relationship: independent contractors do not have continuing relationship with hiring entity;

§  Independent contractors control their own workers: independent contractors do not hire, supervise, or pay assistance at the direction of the hiring company;

§  Other jobs: independent contractors permitted to pursue other gainful work;

§  Location: independent contractors control where they work;

§  Order of work: independent contractors determine the order and sequence in which work is performed;

§  No reports: independent contractors are retained for the final result only, not required to submit progress or interim reports;

§  No hourly pay: independent contractors paid by the job, not by time. Payments can include periodic payments based on job percentages;

§  Multiple firms: independent contractors often work for more than one company at a time;

§  Business expenses: independent contractors generally responsible for their own business expenses;

§  Own tools: independent contractors provide their own tools, and can lease or borrow equipment from the hiring entity;

§  Significant investment: independent contractor able to work without the hiring company’s facilities (equipment, machinery, etc.);

§  Services available to the public: independent contractors make their services available to the general public, through business signs, business licenses, listing in business directory, and advertising.

VII.          Pennsylvania Construction Workplace Classification Act:

     Effective as of 2/10/11, Pennsylvania enacted the CWPMA.

     The CWPMA classifies independent contractors, if the following criteria are met:

§  Work is performed under a written contract;

§  Contractually, the worker must be free from direction and control over his work;

§  The worker must in fact be free of control and direction over work performed;

§  The worker must be customarily engaged in an independently established trade, occupation, or business;

§  The worker must possess the essential tools, equipment, and assets to perform the work hired for;

§  The contract must provide that the worker performing the services is subject to a profit or loss for performing the services;

§  The worker must perform the services through a business in which that worker has a proprietary interest;

§  The individual must maintain a business location separate from the location of the hiring person or company;

§  The worker must perform similar services for others, likewise free of direction and control over performance;

§  The worker must hold themselves out to others for the same services; and,

§  The worker must maintain liability insurance for the term of the contract in an amount no less than $50,000.00.

     Under the CWPMA, contractors can no longer classify workers as independent contractors to avoid paying payroll taxes, workers’ compensation insurance costs, and unemployment compensation expenses.

     Violations expose contractors to civil penalties, stop work orders, and sanctions.

     Civil penalties assessed at $1,000.00 for first violation, and $2,500.00 for subsequent violations.

     Intentional violation of the CWPMA exposes the contractor to penalties under the Fair Labor Standards Act.

     The CWPMA also includes an anti-retaliatory provision.

VIII.       Federal Employee Misclassification Act:

  This EMPA amends the Federal Fair Labor Standards Act, imposing strict recordkeeping and notes requirements on businesses with respect to workers treated as independent contractors, exposing the businesses to fines from $1,100.00 up to $5,000.00 per Employee for each violation of the Law;

  EMPA requires:

§  Written notification to all workers performing labor or services that they are classified as either an Employee or “Non-Employee”;

§  Requires companies to keep records of the hours of work and wages of Employees, and to keep comparable records for “Non-Employees”;

§  Prohibits misclassifying a worker as being “Independent”;

§  Imposes a penalty for misclassifications;

§  Imposes triple damages for willful violations of minimum wage or overtime laws;

§  Establishes a misclassification website, enabling workers to file complaints online;

§  Amends the Social Security Act, establishing penalties for misclassifying Employees, or for paying unreported wages, in violation of Unemployment Compensation requirements;

§  Authorizes the DOL to report misclassification information to the IRS;

§  Directs the DOL to conduct “targeted audits” of industries with “frequent incidents of misclassifying Employees as Non-Employees”.

IX.             Federal Payroll Fraud Prevention Act:

     This Act is similar to the Federal Employee Misclassification Protection Act;

     The FPFPA empowers the Dept. of Labor to perform targeted audits, focusing on employers in industries that frequently misclassify workers.

X.                Federal Fair Playing Field Act:

     The FFPFA amends the IRS Code:

§  Treasury Secretary required to issue perspective guidance clarifying employment status of individuals for Federal employment tax purposes;

§  FFPFA amends the provisions of the tax code, specifically with regard to penalties for failure to withhold income taxes;

§  FFPFA prevents retroactive tax assessments;

§  FFPFA repeals Section 530 Safe Harbor Provisions of the IRS Code, pertaining payroll tax reporting provisions.

XI.             Independent Contractor Fair Tax and Simplification Act:

     Introduced on 12/12/12;

     Permanently codifies Section 530 of tax laws;

     Creates new “safe harbor”, covering both employment and income taxes, as well as covering the service provider and service recipient.

     Section 530 is a safe harbor preventing IRS from retroactively reclassifying independent contractors as employees, subjecting principals to federal employment taxes, penalties and interest for misclassification.

     Requirements for Section 530 relief are:

§  Consistently treating workers as independent contractors;

§  Complying with Form 1099 reporting requirements;

§  Having a reasonable basis for treating workers as independent contractors.

XII.          Classification Problems:

     From a claims perspective, we are often working backwards, from reported claim of the injury, to determine classification status, i.e. employee versus independent contractor;

     In workers’ compensation proceedings, companies claiming that their workers are independent contractors face procedural challenges, as workers’ compensation judges, in the absence of any formal contract, view the designation of “independent contractor”, as a sham for avoiding responsibility for workers’ compensation insurance coverage;

     The WCJs also view the independent contractor designation as a sham in avoidance of taxes, other employer-paid benefits, as well as unemployment compensation.

XIII.       More Problems:

     Additional problems, distinguishing employees versus independent contractors, include:

§  Who or what is being insured?

§  Is insurance adequate for the risks being written?

§  Is the failure to insure contractors as potential employees implicate payroll/premium fraud?

§  Who decides: independent contractor versus employee?

§  How do you manage the potential risks, as to whether the worker is an employee versus independent contractor, typically determined by a workers’ compensation judge, or, in the context of a personal injury claim, where the company asserting employer status seeks summary judgment on statutory immunity grounds, with civil trial judges asking the employer if workers’ compensation insurance coverage was procured?

XIV.       Checklists:

     Independent contractor checklist: no employment application;

     No written contract of hire;

     No employment documentation, as to identification, proof of citizenship, and proof of tax declaration;

     No training manual;

     No employee handbook;

     No on the job training;

     No job description;

     No time clock;

     No time sheets;

     No pay for time worked;

     No reporting requirements;

     No hourly pay;

     No instructions or orders as to what work is to be performed, or how work is to be performed;

     No reimbursement for travel or other business expenses;

     No tools provided;

     Contractor services are advertised to the general public;

     Contractors advertise their business services in a business directory;

     Contractors possess trade/skill-dependent license;

     Contractors make real investment in business operation and continuation, in terms of equipment facilities, etc.;

     Contractors have a profit and loss;

     Contractors have oral/written contract/subcontract for job/work being performed;

     Contractors cannot be fired/terminated, without potential liability for breach of contract;

     Contractors use independent judgment in performance of work/job;

     Contractors have personal/corporate reputations; and,

     Contractors agree to perform specific job/services for agreed-in-advance prices or rates.

XV.          Employee Checklists:

     Contractors responsible for/liable to own workers/employees/assistants;

     Employer advertises for employees;

     Employer pre-screens employees, through application process, checks references, does background checks, requires pre-employment physical examinations;

     Employer offers oral/written “contract-of-hire”, describing the job, duties, parameters, salary, policies, associated benefits;

     Employer retains the right to fire the employee, hired “at will”, for any reason, not limited to poor job performance, subject to the termination being non-discriminatory;

     Employer controls employee work hours, employee salary, employee job duties, employee reviews, and employee discipline;

     Wages/salary based on time worked, and not driven by assignment or project;

     Employer holds proprietary interest in all work completed by employee;

     Employer provides on-the-job orientation/training;

     Employer requires documentation of identification, citizenship, and prior work history/experience;

     Employer provides employee handbook/manual, detailing employer business operation, and benefits of employment;

     Yes, deductions for Federal and State taxes indicate employment, although the absence of deductions for taxes need not negate employment;

     Work construction/work orders given by employer;

     Employer review, on whatever timetable;

     Employee promotions, with change in position, duties, title, and/or salary;

     The right to discipline the employee, for job performance, and/or violation of employer policies;

     Attendance records maintained;

     Personal and sick leave provided;

     Vacation provided;

     Compensation for holiday leave;

     Right to control what work is performed;

     Right to control how the work is performed; and,

     Right to suspend work.

XVI.       Potential Independents:

     Volunteers;

     Construction contractors;

     Owner-operator truck drivers;

     Hairstylist/barbers;

     Disc jockeys;

     Construction estimators;

     Instructors;

     Installers;

     Commercial/residential cleaning services;

     Delivery couriers (not Fed Ex or UPS); and,

     Certain “skilled” professionals, working independently or through “temp” agencies, including attorneys, doctors, nurses, insurance agents/adjusters, accountants, actors, writers, taxicab/limousine driver, caterers, case managers.

XVII.    Synopsis:

·                     Classification dispute must be carefully analyzed on a case-by-case basis;

·                     Classifications are often subject to converse interpretations;

·                     Classifications are always fact-dependent;

·                     Classification results are not always consistent with work realities.

ConnorsLaw LLP

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

Defending workers’ compensation claims throughout Pennsylvania for employers, self-insureds, insurance carriers, and third party administrators, our 100+ years of cumulative experience defending our clients against compensation-related liabilities, empowers our workers’ compensation practice group attorneys to be more than mere claim denials, entrusting 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’s Workers’ Compensation Act.

With every member of our workers’ compensation practice group being AV-rated, our partnership with the NWCDN magnifies the lens through which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, businesses, corporations, and insurance carriers, seeking our trial and compensation acumen, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania workers’ compensation practice and procedure.

WEARABLES AND WORKERS’ COMP

By Kevin L. Connors, Esquire

Dear Client:

The following is an interesting illustration of technical advances in our respective practices by our good friend, Robert Wilson, the President and CEO of WorkersCompensation.com, with Bob recently publishing the following article on his humanizing and humorous blog site “From Bob’s Cluttered Desk”, as Bob’s thoughts are never incoherent, notwithstanding his opinions to the contrary.

Enjoy!

Wearables and Workers’ Comp, or How Did Kevin Connors Birthday

Get on My Smart Watch?

By Robert Wilson

During a session at the CCWC Conference in Anaheim, CA earlier in the month, one of the presenters said something that struck a chord with me.  It was the final session of this year’s annual conference, and several high level executives were discussing the future of workers’ compensation.  Corvel Chairman & CEO Gordon Clemons was talking about the importance of investing in technology (a man after my own heart), when he made the prediction that “this time next year we will be talking about wearables”.

It was a great prediction, but why wait until next year?  I want to talk about them now.

I’ve written about the impact of mobile and wireless technology on workers’ comp, but I’ve never addressed the concept of “wearables”.  I recognize that by putting this on the table prematurely, I will be causing CEO’s all over the nation to assemble feasibility committees within their respective organizations to study this concept.  Based on the technical prowess of our industry in general, I suspect the first assigned task for the committee will be learning what a “wearable” is.

For those of you finding yourself now assigned to that feasibility committee dedicated to the study and analysis of wearable technology uses for workers’ compensation, allow me to save you about 6 months time.  Wearables are portable technology devices that can leverage wireless communication protocols to gather, disseminate and analyze personal data.  Contrary to initial industry impressions, adult diapers and other incontinence products are not considered “wearable technology”.  Don’t waste your time analyzing those.

There.  I just saved your company hundreds of man hours and about a quarter of a million dollars.  Please stop by my website and spend it on technology.  We have a lovelycloud based forms auto-population system we would love to sell you.  But I digress…

Clemons was absolutely right with his prediction.  Wearable devices, in the form of braces, bracelets, necklaces, watches and glasses will revolutionize information management for medicine in general, and this will have great impact on care in workers’ compensation.  Sensors will be able to transmit vital health data to medical professionals; glasses such as Google Glass will be used in medical consultations and training scenarios.  The possibilities are boundless, as what we are talking about is moving and monitoring personal data securely in real time.  The more accurate and timely the information, the better the treatment and response can be.

Wearable technology is already here.  I mentioned Google Glass, but there are other devices on the market today.  Last year my wife bought a Pebble Smart Watch as a gift for my birthday.  It is a device that can interact with my smart phone, and allow me to read texts and emails without looking at my phone.  Before I had this watch I had to indicate I was bored with someone’s company by constantly looking at my phone.  Now I can indicate my boredom by repeatedly checking my watch.  Whether I am checking the time or reading the latest joke forwarded to me they will never know.  My Pebble Watch can also show me the battery status of my phone, the weather, stock information, GPS maps and navigation and events on my calendar.  It can even control the music and picture taking function on the phone – although the reason I would want to take a photo of the inside of my pocket escapes me.

I recently had a glimpse of just how much of our personal information is going to be freely distributed in the technologically mobile/wireless/wearable world.  It was the day after I flew home from the CCWC conference, July 19^th.  I happened to glance at my Pebble watch, and noticed that it was telling me that it was Kevin Connors birthday.  Now, I know Kevin Connors.  I did not know it was his birthday.  I have never known when his birthday was.  But my watch knew.

Kevin Connors is a workers’ compensation defense attorney I know through the National Workers’ Compensation Defense Network (NWCDN).  Kevin is Managing Partner, General Liability Chairperson and Sous Chef forConnors Law, LLP of Exton, PA.  A skilled attorney and creative writer, he is a product of both an overactive imagination and a Jesuit school (reformed) education.  Either that or it was a Jesuit Reform School – when asked for a clarification he simply mumbles.  At any rate, I had no earthly idea how his birthday ended up on my watch.

However, I eventually figured it out.  I am not a huge Facebook fan, and, as in real life, have relatively few friends there.  Kevin Connors is, however, one of my Facebook friends.  Even though I do not recall entering him in my phone contacts list, I found that his complete life now exists in my phone.  His phone numbers, his email addresses, his birthday – even a photo of him and his family now resides within my contacts list.

Even if you haven’t met him it’s kinda creepy.

All of this data apparently was placed there by the kind folks at Facebook.  There is even a tiny little Facebook “f” appearing next to his photo on the phone.  And from the smart phone, of course, it is just a short jump to my smart watch.

I can write this way about Kevin because, 1) he has a terrific sense of humor, and 2) my watch tells me he is in Stone Harbor on vacation and will likely never see this blog.  Still, it is evidence of the increasing pervasiveness of mobile technology leveraging personal information, and that wearables are going to be part of this revolution.  Mr. Clemons was correct.  We will be talking about wearables next year; and if at that point my watch can tell me Kevin Connors cholesterol and heart rate, by gosh, we will really have something.

ConnorsLaw LLP

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

Defending workers’ compensation claims throughout Pennsylvania for employers, self-insureds, insurance carriers, and third party administrators, our 100+ years of cumulative experience defending our clients against compensation-related liabilities, empowers our workers’ compensation practice group attorneys to be more than mere claim denials, entrusting 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’s Workers’ Compensation Act.

With every member of our workers’ compensation practice group being AV-rated, our partnership with the NWCDN magnifies the lens through which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, businesses, corporations, and insurance carriers, seeking our trial and compensation acumen, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania workers’ compensation practice and procedure.

CRUZIN’ FOR A BRUISIN

By Kevin L. Connors, Esquire

This is the story of David Cruz, an undocumented worker, in Pennsylvania, who successfully secured an award of workers’ compensation benefits, with Cruz invoking his Fifth Amendment Right against self-incrimination, when questioned at the hearing before the Workers’ Compensation Judge as to his immigration status, with the Pennsylvania Supreme Court determining, in an Opinion authored on July 21, 2014, that the Commonwealth Court had correctly concluded that there was insufficient evidence of the Claimant’s alleged lack of legal authorization to be employed in the United States to support a suspension of the Claimant’s workers’ compensation benefits, as had been ordered by the WCJ.

The claim background was that the Claimant was injured on July 19, 2008, coincidentally my birthday, when he was working as a Truck Driver for Kennett Square Specialties, which owned and operated a mushroom farm in Chester County, Pennsylvania.

As the Claimant was loading 15-20 pound barrels onto his truck, he felt something snap in his low back.

The Claimant then notified his Employer, and began seeking treatment with an Employer-designated physician.

The Claimant was then diagnosed with a herniated disk.

Due to the severity of the Claimant’s injury, the treating physician did not release the Claimant to return to his normal work duty, but instead released the Claimant to work in a restricted-duty capacity, not allowing the Claimant to lift more than 15 pounds, and to undertake no work that would involve stretching, bending, or reaching.

Initially, the Claimant was paid temporary compensation benefits under a Notice of Temporary Compensation Payable.

The temporary compensation benefits were then stopped, with a Denial Notice being issued, followed by the Claimant filing a Claim Petition.

Under his Petition, the Claimant alleged that his injury was work-related, that it rendered him totally disabled, and that he could not perform his pre-injury job, such that the Claimant sought ongoing workers’ compensation benefits.

The Claim Petition was then assigned to a WCJ, with a timely Answer to the Petition having been filed.

In the course of the Claimant testifying before the WCJ, the Claimant was cross-examined by the Employer’s counsel, as to the Claimant’s immigration status. 

Although Claimant’s counsel objected to the Claimant being questioned regarding his citizenship status, the objection was overruled by the WCJ, with the Claimant, through counsel, invoking his Fifth Amendment right against self-incrimination, by refusing to answer the questions posed by the Employer’s counsel regarding the Claimant’s citizenship status.

In support of the Claimant’s claim of disability, the Claimant presented medical evidence as to his injury and disability, with the WCJ then issuing a Decision, under which the WCJ found that the Claimant’s injury was, in fact, work-related, and that his injury also rendered the Claimant partially disabled, although the WCJ suspended the Claimant’s disability benefits, in the course of which the WCJ held that the “Employer has met its burden to establish that Claimant was not a United States citizen, and that he was not authorized to work in this country.”

The WCJ’s Decision cited to the Pennsylvania Supreme Court’s Decision in Reinforced Earth v. WCAB, 810 A.2d 99 (Pa. 2002).

Suspending the Claimant’s disability compensation benefits, the WCJ nevertheless ordered the Employer to pay the Claimant’s medical compensation benefits.

The Claimant then appealed the WCJ’s Decision, suspending his wage loss compensation benefits, with the Pennsylvania Workers’ Compensation Appeal Board, in turn, affirming the WCJ’s Decision in part, although it also reversed the Decision with respect to the suspension of the Claimant’s compensation benefits based on the Claimant’s citizenship status.

As for the Claimant’s citizenship status, the WCAB held that a party cannot carry their burden of proof in any civil proceeding merely by relying upon an adverse parties’ failure to testify, finding that the Employer had not, therefore, met his burden of proof as to the Claimant’s citizenship status, in reliance solely upon an adverse inference created by the Claimant’s failure to answer the Employer’s counsel’s questions on the subject of his citizenship, holding that the adverse inference alone was not sufficient evidence to support the suspension of the Claimant’s compensation benefits.

So ruling, the Appeal Board reversed the WCJ’s Order suspending the Claimant’s disability compensation benefits, with the Employer then appealing that ruling to the Commonwealth Court.

Affirming the Appeal Board’s ruling, the Commonwealth Court held that the WCJ had properly treated the Employer’s defense of the Claimant’s Claim Petition as a request for a suspension of the Claimant’s compensation benefits, based upon the Claimant failing to document his citizenship status.

However, the Commonwealth Court held that the Employer carried its burden of proving that it was entitled to a suspension of benefits, and, by virtue of carrying its burden of proof, as the Employer had the burden of establishing the Claimant’s eligibility status for employment, rather than the Claimant being required to establish, in support of his Petition, that he held the necessary documentation of citizenship status to prove his employment eligibility.

The Court rationalized this holding by stating:  “the reason that an adverse inference cannot serve as substantial evidence to support a finding of fact is because an adverse inference does not constitute evidence.”

Concluding that an adverse inference was not evidence, it (the adverse inference) “does not count in calculating whether a party has met its burden in introducing substantial evidence.”

There being no other evidence in the record to support the WCJ’s conclusion that the Claimant was “undocumented”, in the course of the WCJ suspending the disability compensation benefits, the Commonwealth Court affirmed the Appeal Board’s reversal of the WCJ’s Decision suspending the Claimant’s disability compensation benefits.

The Employer petitioned for allowance of appeal to the Pennsylvania Supreme Court, which granted the appeal to determine three issues:

·                     That the Commonwealth Court erred in placing the burden of proof in a Claim Petition on the Employer, when the Claimant failed to establish his ongoing entitlement to benefits by providing information on his documented status to the Employer and to the Court?

·                     Did the Commonwealth Court err in failing to consider its own holding inBrehm v. WCAB, 782 A.2d 1085 (Pa. Cmwlth. 2001), holding that a Claimant who refuses to provide either the Court or his Employer with information necessary to make a determination, may have his workers’ compensation benefits suspended until such information is provided?

·                     Did the Commonwealth Court err in concluding that the Workers’ Compensation Judge’s Decision was not supported by substantial competent evidence where the record, in its totality, together with an adverse inference, does support the contention that the Claimant is an undocumented worker, thereby entitling the Employer to a suspension of benefits?

Analyzing these issues, the Pennsylvania Supreme Court, in an Opinion authored by Madam Justice Todd, held that the case required the Supreme Court to determine the proper allocation of the burden of proof between the parties, in terms of whether the Claimant had to prove his legal status for employment eligibility, or that burden should have shifted to the Employer to prove that the Claimant was ineligible for employment, as an undocumented immigrant.

The Supreme Court held that once the Claimant establishes an entitlement to an award of benefits, the burden then shifts to the Employer to prove that employment is available within the Claimant’s work restrictions.

In Cruz, the Supreme Court concluded that the Claimant had proven that his injury was work-related, and that it was disabling, thereby entitling the Claimant to an award of workers’ compensation benefits, with the burden of proof then shifting to the Employer to prove why the Employer would have been entitled to a suspension of compensation benefits, under the authority of its Decision inVista Int’l. Hotel v. WCAB, 742 A.2d 649 (Pa. 1999).

Affirming the reversal of the WCJ’s suspension of the Claimant’s compensation benefits, the Supreme Court held that the Employer bore the burden of proving that the Claimant was ineligible to work in the United States, and that the only “evidence” of the Claimant’s ineligibility for employment was the Claimant’s invocation of his Fifth Amendment right against self-incrimination, which, alone, was insufficient to constitute the necessary substantial competent evidence to support a WCJ’s finding that the Claimant was not a United States citizen, and was not otherwise authorized to work in the United States.

Justices Baer and McCaffery joined in the Majority Opinion.

Justice Saylor filed a Concurring Opinion, joined by Chief Justice Castille.

Justice Eakin filed a Concurring and Dissenting Opinion, joined in by Justice Stevens.

While concurring with the Majority Opinion, Justice Saylor took a very different approach, in analyzing the adverse inference bubbling to the surface from the Claimant’s invocation of his Fifth Amendment right against self-incrimination, with Justice Saylor deferring to the Judge’s fact finding function to “draw reasonable inferences from basic facts to ultimate facts”, such that Justice Saylor would not conclude that the Claimant’s refusal to answer the question posed regarding his citizenship status carried “no evidentiary value”, in reliance upon the U.S. Supreme Court having observed, merely as a general precept, that refusals to answer, in non-criminal settings, and in reference to questions regarding potential criminality, can constitute “relevant facts” that might be considered in the interest of improving the chances for accurate Decision. Baxter v. Palmigiano, 425 U.S. 308 (U.S. 1976).

Who knew?

I am, therefore I must be compensated!

And who has not thought that?

In Justice Saylor’s view, the record before the WCJ did not indicate that the Claimant had refused to answer the citizenship status questions posed by Employer’s counsel, rather the record merely indicated that Claimant’s counsel interposed a timely objection to the pending question, after which Employer’s counsel never pursued finality with regard to those questions, with Justice Saylor indicating that the objections alone were insufficient to invoke the Fifth Amendment privilege on the Claimant’s behalf, as that privilege must be personally invoked, meaning that the witness must make a declaration invoking the privilege, for the privilege to even exist.

Anyone find that even remotely interesting?

What might be even more interesting is Judge Saylor’s discussion of the need to reconsider “the soundness ofReinforced Earth’s determination that a workers’ immigration status alone can present a lack of earning power for purposes of an Employer’s request to suspend benefits, so as to relieve the Employer of the burden to demonstrate physical recovery from the injury”, with Justice Saylor citing to a Nebraska Decision, in Moyera v. Quality Pork International, 825 N.W.2d 409 (Neb. 2013), a slightly overcooked tenderloin, which had referred to other Courts that had allowed benefits, concluding that “even if undocumented Employees cannot legally work in the United States, they could have worked elsewhere, but for their work-related injury”, citing also to an Illinois Decision inEconomy Packing Company v. Ill. Workers’ Comp Comm’n, 901 N.E. 2d 915 (Ill. Ct. App. 2009).

 So when do the Cruz ships dock?

A slippery slope indeed!

Justice Saylor’s Concurring Opinion was joined in by Chief Justice Castille, with Justice McCaffery joining in on the Concurring Opinion of Justice Saylor as to the necessity of re-examiningReinforced Earth.

JUSTICE EAKIN’S CONCURRING AND DISSENTING OPINION

·                     Concurring and dissenting, Justice Eakin concurred with the Majority Opinion that the Claimant had sustained his burden of proving a work-related injury resulting in wage-loss producing disability, although Justice Eakin dissented, yielding to “congressional policy that was unauthorized aliens… violating Federal law… in obtaining employment by allowing them to participate in a social insurance scheme for Pennsylvania workers.”  Citing toReinforced Earth.

·                     Justice Eakin agreed with the Majority Opinion, as well as the Concurring Opinion of Justice Saylor, that the Claimant had sustained his burden of proving that he had sustained a work-related injury resulting in wage-loss producing disability.

·                     However, Justice Eakin did not agree with the Majority and/or Concurring Opinions, that the burden of proof as to a Claimant’s immigration status should shift from the Claimant to the Employer, as Justice Eakin believed that once the Claimant’s immigration status becomes an issue, that the Claimant would carry the burden of proving that he was legally entitled to work in the United States, as a prerequisite to obtaining benefits under the Pennsylvania Workers’ Compensation Act.

·                     Finding that the Claimant failed to do so, by refusing to testify regarding his immigration status, Justice Eakin would reverse the Order of the Commonwealth Court, with Justice Stevens joining in Justice Eakin’s Concurring and Dissenting Opinion.

ANALYSIS

So where does Cruz leave us?

Well, some things are now clear.

First, there can be no assumption that the refusal to answer a question necessarily creates an adverse inference sufficient to constitute substantial competent evidence supporting the findings or conclusions of a WCJ.

Next, it is also clear that the Cruz ruling is important in terms of the balancing of public policy interests, and is not, therefore, merely the highest Court in Pennsylvania rubber-stamping Decisions by lower Courts as to the compensation benefit entitlement of undocumented immigrants.

Cruz is an attempt by the Pennsylvania Supreme Court to balance two competing public policy interests, the first being that the Pennsylvania Workers’ Compensation Act is the statutory framework for determining the compensability of work-related injury, while the second public policy interest being considered by the Cruz Court is whether the first public policy interest, being the correct application of the law governing remedies for work-related injuries, necessarily needs to be considered against whether workers who have broken Federal immigration laws, effectively “creating” the absurd result of supplying social welfare benefits in the form of a wage and employment-benefit substitute to one whom Federal law says could not lawfully obtain those wages and benefits in the first place, should still be entitled to be awarded the benefits.

In the absence of a definitive intersection between public policy concerns over the interplay between Workers’ Compensation and Federal Immigration Laws, it remains true in Pennsylvania that illegal/undocumented workers sustaining work-related injuries will be entitled to receive workers’ compensation benefits, if substantial competent evidence of the occurrence of their injury and its resulting wage-loss producing disability is presented to the WCJ, with Employers, underCruz, being required to present substantial competent evidence of the Employee’s citizenship status, if the Employer seeks a suspension of compensation benefits, limited to the wage loss benefits, in defense of a Claim Petition for workers’ compensation benefits by an undocumented worker.

Several salacious words come to mind to pin this tale to the donkey, as the Cruz ruling, while technically correct, nevertheless leaves us feeling cheated.

Time to tighten the borders!

ConnorsLaw LLP

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

Defending workers’ compensation claims throughout Pennsylvania for employers, self-insureds, insurance carriers, and third party administrators, our 100+ years of cumulative experience defending our clients against compensation-related liabilities, empowers our workers’ compensation practice group attorneys to be more than mere claim denials, entrusting 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’s Workers’ Compensation Act.

With every member of our workers’ compensation practice group being AV-rated, our partnership with the NWCDN magnifies the lens through which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, businesses, corporations, and insurance carriers, seeking our trial and compensation acumen, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania workers’ compensation practice and procedure.

Kenneth Nichols worked for Midstates Packaging, Inc. as a mechanic.  He was injured on April 7, 2008, while trying to take the transmission out of a Hyster forklift.  While underneath the forklift, Nichols heard a pop in his shoulder when the forklift rolled off the blocks and over his left shoulder.  He did not notice that his skin was broken by the fork lift; however, he reported the injury to his supervisor immediately and a co-worker drove him to Somerset Medical Center.  An x-ray was taken but was negative for fracture, and petitioner was told he pulled a muscle.

            Nichols returned to work but continued to feel pain, which he reported to his supervisor.  Two weeks later he saw his family doctor, Dr. Berdini, who prescribed antibiotics and pain medication.  One week later he saw an orthopedic surgeon, who said that if the pain did not get better, he might need surgery because he had an infection.  Nichols developed a sore red lump on his collar bone.  In May 2008, his doctor told him he would need to have an abscess drained but Nichols declined because he lacked insurance.

            In June 2008, Nichols drove to Virginia for a family funeral, collapsing upon arrival.  He was diagnosed in the hospital with liver failure, MRSA, a broken collar bone, some broken ribs and a herniated disc, spending 11 days in the hospital.  He needed a PICC line to deliver antibiotics.  On returning to New Jersey, he was advised that his job had been terminated.

            Nichols denied any prior injuries to his lower back, ribs, clavicle or shoulder, and he denied any prior MRSA condition.  He continued to see Dr. Berdini and also continued to develop new health issues, such as infections under his arms and on his scrotum, as well as numbness in his left toes.  He had an MRI done at St. Luke’s Hospital which revealed a swollen spine.  He was referred to a pain specialist, who noted that his right pinkie finger became completely rigid.  He began taking OxyContin and Percocet three to four times a day as well as antibiotics and sleeping pills.

            Respondent denied causation between petitioner’s injury and his MRSA condition.  When petitioner went to Somerset Medical Center, the history said “pain, pop after lifting heavy object this am.”  His Regional Manager testified that Nichols told him he was injured pushing a tow motor.  The records from the hospital in Virginia said he had fallen from a forklift about two months ago, injuring his left shoulder.

            The diagnosis differed among the experts in the case.  Petitioner’s expert, Dr. Theodora Maio, diagnosed a fractured clavicle and fractured rib, although the x-rays of the left shoulder showed no fracture.  She thought that the x-rays may not have included the clavicle portion.

            Dr. Leonard Joachim, an internist for the petitioner, found that the blunt injury made the skin more vulnerable to MRSA, which he felt was probably contracted at Somerset Hospital Emergency Room. 

            Respondent produced Dr. Kenneth Peacock, an orthopedic surgeon, who did not believe that the injuries were consistent with the various descriptions of the accident.  He noted that the x-rays showed no fracture while acknowledging that the x-rays did not show the medial clavicle.  Dr. Peacock felt that it would have been very difficult for petitioner to have carried out daily activities with these fractures had they happened in early April.

            Respondent’s internist, Dr. Monroe Karetzky, felt petitioner had MSSA (methicillin-susceptible staphylococcus aureus), not MRSA.  He said that the scrotal testicular fistula could not be related to an incident that happened a year before the fistula manifested.

            The Judge of Compensation found for petitioner.  She said as follows:

Granted, petitioner’s history of the accident varies a little each time he relates it, but the general idea is constant.  He hurt his shoulder at work and went to the hospital for treatment immediately.  The MRSA infection correlates with the accident in time and area of the body affected as well as treatment in the hospital, a risk factor for MRSA.  Unfortunately, petitioner is not the most articulate communicator, nor is he sophisticated as to medical causation.  He described the accident as a shoulder injury.  The hospital interpreted this to mean the shoulder joint and consequently x-rayed the joint.

The Appellate Division affirmed the ruling for petitioner, stating that the findings of the Judge were supported by credible evidence in the record.  It noted that the standard is one of reasonable probability. While there were discrepancies in the petitioner’s history of the accident, the Appellate Division agreed that these were well evaluated by the Judge of Compensation and were found to be of little weight.  The Court also noted that the petitioner was under the influence of morphine when he described the accident to the hospital staff in Virginia.  The case can be found at Nichols v. Midstates Packaging, Inc., A-2445-12T2 (App. Div. August 1, 2014). It shows how complex MRSA claims can be in workers’ compensation and how important the timeline is in deciding compensability.

On July 18, 2014, the Alabama Court of Civil Appeals released its opinion in Arthur Barney v. Elizabeth Bell, as personal representative of the estate of Maurice Bell, deceased, and William Clay Teague. In the underlying action, Barney sued two Montgomery attorneys for legal malpractice arising out of a personal injury and workers’ compensation claim they handled for Barney. Barney was injured in a work-related car accident in July of 2010. He retained the two attorneys to represent him in his claim against his employer for workers’ compensation benefits, and in a negligence claim against the driver of the other vehicle who caused the accident. Pursuant to Code Section 25-5-11, an employer or its insurer is entitled to reimbursement of workers’ compensation benefits it has paid if the claimant also recovers damages from a third-party. However, the Act provides that the employer’s right to reimbursement is subject to a portion of the employee’s attorney’s fees incurred obtaining a settlement or judgment against the liable third party. The employer’s pro-rata share of attorney’s fees is an amount proportional to the reduction in the employer’s liability, and is generally equal to the contingency fee agreement that the attorney has with the claimant.

Barney settled his workers’ comp claim for $42,500, of which the attorneys received a 15 percent fee in the amount of $6,375. However, as a material term of that settlement, the employer’s insurer reserved its rights to full reimbursement of over $65,000 in workers’ compensation benefits that it had paid Barney from any recovery Barney might later obtain as a result of the negligence action against the third party. The third party’s insurer later settled with Barney in the amount of $45,000. Since Barney had signed a 50 percent contingency fee agreement with his attorneys for handling the personal injury case, his attorneys forwarded half of the $45,000 settlement to the insurer. The attorneys then retained the other $22,500 as their fee, pursuant to their agreement with Barney. Barney then filed suit against the attorneys, alleging legal malpractice. Barney alleged that his attorneys had charged him excessive attorney’s fees in violation of Alabama law, and that they also retained some of his money for their own benefit. Specifically, Barney alleged that the insurer agreed to reduce its subrogation interest to $22,500, and that the attorneys were only entitled to $11,250 pursuant to their 50% contingency agreement. Additionally, Barney alleged that his attorneys were not entitled to retain the $6,375 attorney fee they had collected on the workers’ compensation settlement, because they had been fully compensated in the third-party case.

One of the defendant attorney’s testified that he had received a letter from an attorney informing him that he could not retain the $6,375 fee based on the holding inBynum v. City of Huntsville. However, the defendant attorney stated that he was not aware of the holding in that case, and that he did not believe he had to refund the fee to Barney unless a Court ordered him to do so. The insurer’s claims adjuster admitted in deposition that she agreed to accept half of the third party recovery in satisfaction of its statutory reimbursement of subrogation rights. However, the totality of her testimony suggested that she understood that the defendant attorneys were entitled to the other half of the $45,000 settlement, as the employer’s pro-rata share of Barney’s attorney fees.

At trial, the defendant attorneys offered the claims adjuster’s testimony, and moved for summary judgment on the grounds that the insurer did not compromise its claim, and that they were therefore entitled to the fees they had collected. The trial Court granted their motion, effectively dismissing Barney’s malpractice claims, and Barney appealed. The Court of Appeals found that the insurer did not compromise its reimbursement claim. The Court of Appeals agreed with the trial Court’s finding that the insurer’s agreement to accept $22,500 was actually an agreement to accept the full $45,000, and then pay the 50% pro-rata share to Barney’s attorneys. Therefore, the attorneys were permitted to keep the other $22,500 as their fee. However, the Court of Appeals stated that the case of Bynum v. City of Huntsville required that the Court should credit the proceeds of the third-party settlement against any workers’ compensation benefits awarded before assessing attorney’s fees, in order to prevent a claimant from paying exorbitant attorney’s fees to an attorney who prosecutes both the worker’s compensation claim and a third party claim. Since the amount of the third-party tort case settlement exceeded the amount of the workers’ compensation settlement, the attorneys were not entitled to retain the attorney’s fees they had collected on the workers’ compensation case after they received their fee on the tort claim. Therefore, the Court of Appeals reversed that portion of the trial Court’s Order, directing the trial Court to enter a judgment for compensatory damages in the amount of $6,375.00 on Barney’s malpractice claim, and to determine what, if any, punitive damages Barney is entitled to.

My Two Cents

This case raises several interesting issues. While the defendant attorneys were apparently wrong in retaining the $6,375 fee from the workers’ compensation claim based on the holding inBynum v. City of Huntsville, the Court’s conclusion that it amounts to malpractice is a bit of a stretch. Alabama law requires that an attorney shall be required to use such reasonable care and skill and diligence as other similarly situated legal service providers in the same general line of practice in the same general area ordinarily exercise in a like case. Attorneys are required to use a reasonable level of skill to research and discover the rules. While every attorney is expected to knowcommonly known rules of law, they are not required to know every rule of law orevery case on a particular issue.

Another interesting issue is whether this holding has any implications in cases where a claimant retains one attorney to handle his workers’ compensation case, and another to handle a related tort case. It would hardly seem fair to deprive one attorney of a fee for handling a worker’s compensation case, just because another attorney received a hefty fee on a related tort case.

However, this ruling may be good news for employers in some cases. If the employer knows that the claimant’s attorney cannot take a fee on the workers’ compensation claim due to a situation similar to the one inBarney, the employer should theoretically be able to obtain a better settlement. For instance, if the claimant settles a case for $100,000, he typically only gets $85,000 after 15% attorney fees are deducted. However, if the attorney cannot take a fee, that same case could probably be settled for $85,000, because the attorney fee would not be deducted, leaving the claimant with the same amount of money.

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ABOUT THE AUTHOR

This article was written by Charley M. Drummond, Esq. of Fish Nelson, LLC. Fish Nelson is a law firm located in Birmingham, Alabama dedicated to representing employers, self-insured employers, and insurance carriers in workers’ compensation cases and related liability matters. Drummond and his firm are members of The National Workers’ Compensation Defense Network (NWCDN). The NWCDN is a national and Canadian network of reputable law firms organized to provide employers and insurers access to the highest quality representation in workers’ compensation and related employer liability fields. If you have questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author at cdrummond@fishnelson.com or (205) 332-3414.

In Ex Parte Diamond Scaffold Services Group, Inc., the employee filed suit for workers’ comp benefits in Washington County, Alabama. Diamond objected asserting that Washington County was not a proper venue since the accident occurred in Mobile County and it did not conduct business in Washington County. In support of its request that the case be transferred to Mobile County, Diamond submitted evidence that the company was doing work as a subcontractor for ThyssenKrupp, and, although ThyssenKrupp did business in both Washington and Mobile County, the accident occurred in Mobile County.

The employee responded with evidence that ThyssenKrupp did business in Washington County, but the employee did not present any evidence indicating that Diamond also did business in Washington County. In any event, the trial court denied Diamond’s change of venue request. Diamond then filed a Petition for a Writ of Mandamus asking that the trial court’s order be set aside and for the case to be transferred to Mobile County.

The Appeals Court noted that when a defendant is a corporation, like Diamond, venue is proper in the county where the accident occurred, where the defendant’s principal office is located, or where the plaintiff resides if the defendant conducts business in that county. The Appeals Court noted that the plaintiff presented no evidence to the trial court that Diamond was conducting business in Washington County, and it was undisputed that the accident occurred in Mobile County. Although the plaintiff pointed out that ThyssenKrupp conducted business in Washington County, the Appeals Court noted that Diamond was the only defendant in the lawsuit, and therefore, the locations where ThyssenKrupp did business was irrelevant. The Court stated that Diamond was an agent of ThyssenKrupp, and held that it was shown no authority which would allow an action against an agent in any county where its principal does business. The Court noted that such a rule could yield shocking results. Specifically, the Court explained that ThyssennKrupp was an international corporation doing business at locations throughout the world, and it would make no sense to hold that an agent such as Diamond, which does business only in one county, might be subject to being sued anywhere its principal does business.

The Appeals Court ruled that there was nothing in the record which would allow the case to proceed against Diamond in Washington County, and ordered the trial court to transfer the case to Mobile County. In effect, employers who are subcontractors for larger companies are not automatically subject to suit in every county where the larger companies’ do business.

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About the Author

This blog post was written by Trey Cotney, Esq., of Fish Nelson & Holden LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation matters. Fish Nelson & Holden 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 attcotney@fishnelson.com or any firm member at 205-332-3430.

In a long awaited decision, the Supreme Court of New Jersey has overturned an award in the matter ofJames P. Renner v AT&T (A-71-11) (068744).  The case has drawn national attention because it dealt with a stroke claim from an employee who telecommuted quite regularly.

            Cathleen Renner worked for AT&T for 25 years as a salaried manager.  She telecommuted three days a week from home and worked the other two days in the office. On September 24, 2007, Ms. Renner worked on a project due the next day.  She spoke with her husband, who was on a business trip, around 11:00 p.m. and told him that she would be working through the night.  Her work was often deadline driven, and she would put in whatever hours were necessary to get the work done on time. 

Her son testified that she started working when they got home from dinner on September 24, 2007.  She was still working when he went to bed around 10:30 p.m.

At 7:50 a.m. she took her son to catch a school bus and grabbed her leg in pain while walking out of the house.  At 9:00 a.m. she told a co-worker by email that she did not feel well but would complete the project.  She did in fact complete the project at 10:30 a.m. and sent an email confirming this to her co-workers.

At 11:34 a.m. she called the Edison Township EMS saying she could not breathe.  She was pronounced dead on arrival at the hospital from a pulmonary embolism. An autopsy confirmed that she died of a pulmonary thromboembolism that became lodged in the main trunk of her pulmonary artery.  Her husband filed a dependency claim which eventually led to an award for petitioner at both the Division level and the Appellate Division level.

Petitioner’s expert, Dr. Leon Waller, testified that sitting at her desk the day before and day of her death contributed to her deep vein thrombosis. He said that the sedentary nature of her work “was the precipitant in her getting a pulmonary embolism which resulted in her demise.”  He gave an opinion that the cause of death was a pulmonary embolism caused by deep vein thrombosis.  He said that the clot was large and probably took hours to form, probably originating in her leg.

Respondent’s expert, Dr. William Kritzberg, said Ms. Renner’s death was caused by her morbid obesity, birth control pills, age and an enlarged heart.  He believed that her risk factors contributed more to her death than extended sitting at her desk.  He also disagreed that there was evidence of a clot in the legs or deep vein thrombosis. 

The Supreme Court reviewed the relevant statute, N.J.S.A. 34:15-7.2 and the leading decision ofHellwig v. J.F. Rast & Co., 110 N.J. 37 (1995). It said that this section of the law “reinstated the presumption that coronary-artery disease and heart attacks are the result of natural causes.” Further, the Court summarized the operative standard:

To sustain a Workers’ Compensation petition premised upon cardiovascular injury, a claimant must demonstrate that the harm was caused by a work effort or strain involving a substantial condition that exceeds ‘the wear and tear of the claimant’s daily living’ outside of the claimant’s work responsibilities. Hellwig, supra., 110N.J. at 42; see also N.J.S.A. 34:15-7.2.

The Supreme Court interestingly did not focus on a comparison between the decedent’s non-work activities and her work activities.  Her husband had testified that his wife was very active with her children both in and outside the home.  Instead, the Court focused on the language regarding a “substantial condition.”  The Court said, “Based on this record, we conclude that there has been no showing that Cathleen’s death resulted from a work effort or strain involving a substantial condition or event.”

            The Court found that her extended sitting while working at home “does not constitute a ‘work effort or strain involving a substantial condition, event or happening’ to support a compensable cardiovascular claim.”  It commented that Ms. Renner “was not confined to a specific space or instructed not to move from her workstation.”  The Court reasoned that Ms. Renner “was free to take breaks, during which she could stand, stretch, leave her workstation for a bathroom break or refreshments, or briefly exercise.”

            The case is important to practitioners because there are precious few reported workers’ compensation cases involving injuries during telecommuting.  It is also important because it focused on that part of the definition on cardiovascular claims involving proof of a substantial condition, event or happening.

Inex Graham worked for the Port Authority of New York and New Jersey.  She began her employment in June 1987 as a toll collector.  She was injured in 1989 when she slipped and fell while working at the Holland Tunnel.  She received an award in 1993 of 30% partial permanent disability for her left leg and 12.5% for her low back.

            On September 11, 2001, petitioner was attending a training session on the sixty first floor of the North Tower of the World Trade Center.  After the American Airlines plane struck the building, she walked down the stairs to safety.  Outside she was told to “run for her life.”  She scraped her knee but walked safely away before the building collapsed.  She was covered in white ash and reached a center where others helped clean her up.  She was transported to University Hospital in Newark where she was decontaminated and sent home.  She never returned to work.

            Petitioner filed a claim petition alleging orthopedic and psychiatric injuries from the events of September 11^th.  She alleged that she injured her back with left radiculopathy while running for her life, and she alleged psychiatric injuries from the day’s events, particularly from witnessing a co-worker being crushed in an ambulance as the tower fell. 

            Petitioner produced two experts at trial:  Dr. Vin Gooriah and Dr. Morris Horwitz.  Respondent produced Dr. David Gallina.  Its orthopedic report of Dr. Philip Keats was introduced into evidence by agreement of the parties.

            The Judge of Compensation awarded petitioner 75% of partial total on a psychiatric basis and 10% for her orthopedic claim with a credit of 5% for a prior low back sprain.  Neither party was aware of the prior 1993 workers’ compensation judgment at the time.  The Port Authority sought reconsideration after it became aware of the prior award, arguing that the two awards together gave petitioner 113% of partial total disability.  The Judge thereafter reduced the award to 75% of partial total with a credit of 12.5%.

            The Port Authority appealed on several grounds, including the failure of the Judge to properly credit the prior award.  The Appellate Division faulted the Judge of Compensation for not explaining why Dr. Gooriah’s testimony on the psychiatric aspect of the case was given credence over Dr. Gallina’s testimony.  Dr. Gooriah only saw petitioner once on October 1, 2007, while Dr. Gallina saw petitioner three times:  June 10, 2004, February 15, 2005, and September 28, 2006.  He opined that petitioner had a 5% disability on a psychiatric basis; Dr. Gooriah opined that petitioner had a 75% disability.

            The Court said:  “In accepting Dr. Gooriah’s recommended disability of seventy-five percent, the court made no findings and gave no explanation as to how it arrived at the figure.  The court simply restated Graham’s complaints, and concluded that the award is ‘fully supported by the testimony of Dr. Gooriah, by the petitioner’s testimony concerning her inability to function both at work and a normal life pursuits.’”

            In the opinion of the Appellate Division, Dr. Gallina had the benefit of three exams and was able to chart petitioner’s progress.  “When Dr. Gallina saw Graham in 2005, he noted that ‘she had really substantially improved.’”  He attributed the improvement to psychological counseling she had received.  “Finally, Dr. Gallina remarked that the medication prescribed by Graham’s psychiatrist had helped to calm down some of the anxiety she had been experiencing.  Dr. Gallina’s assessment after his second evaluation of Graham was that she had demonstrated ‘considerable functional improvement although she still indicated that she had some symptoms.’”

            The Court observed that Dr. Gallina still found petitioner had PTSD in his last exam but it was in partial remission.  Petitioner had no signs of depression, was able to drive a car, go to restaurants, go shopping, and her sexual libido had improved.  In a crushing admission at trial, Dr. Gooriah admitted that he could not state whether petitioner had improved more than three years after he examined her because of the lapse in time since his examination.  “Clearly, Dr. Gooriah could not present a reliable opinion based on objective medical evidence as to whether Graham showed improvement or regressed, as he only saw her on one occasion.”

            The Appellate Division reversed and remanded and reminded practitioners that an expert opinion on partial permanent disability must be supported by a recent medical examination.

            This case may be found at Graham v. The Port Authority of New York and New Jersey, A-5419-11T3 (App. Div. March 12, 2014). It is an unusual case because the Appellate Division seldom reverses a Judge of Compensation on the amount of disability.  This was not a dispute about whether petitioner had psychiatric disability from work:  the issue was how much disability she had.  The key to the victory by defense counsel was in skillfully highlighting the greater familiarity which Dr. Gallina had with the petitioner over Dr. Gooriah, and also in highlighting specific activities which petitioner was able to engage in as of the last examination by Dr. Gallina. By contrast, Dr. Gooriah merely parroted petitioner’s complaints, leaving the Judge very little basis to adopt Dr. Gooriah’s opinion as being more credible.

On July 25, 2014, the Alabama Court of Civil Appeals considered an interesting scenario where the trial judge granted an employee’s motion to strike the employer’s defenses to compensability that were asserted in its Answer and then entered an Order requiring the employer to pay for disputed medical treatment. The court also denied the employer’s motion for an independent medical examination. As a result, the employer petition the Court of Appeals for a writ of mandamus as to all three rulings.

The genesis for the above referenced flurry of motions, was a general denial filed by the employer in its Answer. This means that the employer disputed each and every allegation in the Complaint and admitted nothing. The employee took issue with the inconsistent nature of denying all allegations in the Complaint while, at the same time, paying indemnity and medical benefits, and asserting a statutory right to an IME. Basically, it was the position of the employee that the employer could not, on one hand, deny the claim while, on the other hand, treat it as accepted.

In Alabama, if the compensability of a claim is denied, then medical treatment cannot be compelled until the issue of compensability has been determined by either a trial on the merits or by way of a successful motion for summary judgment. Rather than proceed with either of these two options, the employee sought to simply have the denial itself removed from the Answer thus clearing the way for the judge to order that medical treatment be provided. While the employee gets creativity points for this approach, the Court of Appeals pointed out that the Alabama Workers’ Compensation Act and the Alabama Rules of Evidence prohibit an employee from using the payment of indemnity and/or medical benefits against an employer as an admission of compensability. Further, the employee was unable to provide any legal support for the proposition that filing a motion for an IME amounted to an admission of compensability. Since there was no apparent inconsistency between the employer’s Answer and its subsequent actions, the Court of Appeals granted the petition as to the struck defenses and the order to compel medical treatment. However, it denied the petition as to the employer’s IME request.

My Two Cents:

Even when a claim is denied and indemnity benefits are not provided, employers often times continue to provide medical care until a final ruling is made by a judge. When this option is exercised, it allows employers to retain control of the medical treatment, just in case they eventually lose. It also allows the employee to continue to receive medical treatment during the litigation process. If the Court of Appeals had ruled differently in this case, it would have likely had a chilling effect on the payment of early medical benefits. This was a good ruling for employers and employees alike.

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About the Author

This article was written by Michael I. Fish, Esq. of Fish Nelson & Holden 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 205-332-1448.