Legislative Update by Alison Stewart

On November 16, 2018, the Iowa Supreme Court issued a ruling addressing the compensability of idiopathic falls. Previously the Court said, “The workers’ compensation statute is not a general health insurance policy that extends to all injuries that happen to occur while on the job.” In Bluml v. Dee Jay’s Inc., d/b/a Long John Silvers and Commerce & Indus. Ins. Co., the Court held that there is no blanket rule rendering certain categories of workplace idiopathic falls non-compensable, so long as the employee proves that a condition of the employment increased the risk of injury.

The specifics of Bluml involve an employee who experienced a seizure while working, which caused him to fall straight backward onto the ceramic floor and strike the back of his head. He had been experiencing seizures for many years, but had been non-compliant with anti-seizure medication and there was a record of alcohol abuse. The Iowa Workers’ Compensation Commissioner deputy who heard the case denied benefits reasoning that idiopathic falls to level surfaces are not compensable under Iowa law.  On appeal to the Iowa Workers’ Compensation Commissioner, the Commissioner affirmed, but noted it was undisputed the employee’s injuries were worsened because he fell on a ceramic tile floor.

Ultimately the Supreme Court held that these types of cases should be factually analyzed on a case-by-case basis. With this decision on the books, there is no hard and fast rule in Iowa whether idiopathic falls onto level floors are compensable. An employee may recover when they prove a condition of their employment increased the risk of injury. To read the full decision,click here.

Written By: Courtney Britt

Discussion of workplace harassment reached a fever pitch last Fall when media reports streamed seemingly endless claims against Hollywood moguls and corporate giants alike.  The #MeToo movement has added force to the discussion, no doubt leaving employers feeling exposed.

Although harassment allegations are often handled in civil courts, certain allegations can be litigated in workers’ compensation claims.  Decisions in the past few years by our appellate courts and federal courts interpreting North Carolina law seem to indicate that whether alleged workplace harassment will be treated exclusively through workers’ compensation may depend on how it is pled.

It is well established in North Carolina that an injured worker can be compensated under the North Carolina Workers’ Compensation Act (“the Act”) for a mental injury.   Jordan v. Cent. Piedmont Cmty. Coll.  This is true for both mental injuries resulting from a compensable occupational disease or an injury by accident. See id; Pulley v. City of Durham.

Our Court of Appeals considered the viability of a workplace harassment claim inHogan v. Forsyth Country Club Co., decades before #MeToo.  Hogan involved former female employees of the defendant country club who brought a civil lawsuit alleging that a chef at the club was verbally abusive, made sexual advances and sexually derogatory remarks.  Their claims included intentional infliction of emotional distress (IIED) and negligent infliction of emotional distress (NIED). 

On appeal, the club argued that the employees’ claims for IIED were barred by the exclusivity provision of the Act.  The Court of Appeals disagreed, noting that the damages alleged by the employees included losses that would not be covered under the Act and that the wrongs alleged fell outside the scope of workers’ compensation.

In a more recent case, the Court of Appeals reached a different outcome in Shaw v. Goodyear Tire & Rubber Co.  Shaw claimed she was harassed by her male supervisor, including verbal abuse and intimidation, but the court specifically noted that no physical contact or sexual harassment was alleged.  Shaw filed a civil complaint including claims for wrongful discharge and NIED, the only claims that went to trial. 

After a jury verdict in Shaw’s favor, her employer appealed, arguing that the trial court lacked subject matter jurisdiction over Shaw’s NIED claim because it fell exclusively under the Act.  The Court agreed, vacating the jury verdict, explaining that Shaw’s central allegations in the NIED claim were that she complained to her employer about the harassment by her male supervisor; her employer negligently handled her complaint; and her employer’s negligence led to emotional distress and, eventually, her wrongful discharge.  The Court also specifically declined to extend the exception, allowing employees to bring a civil action against a co-employee for willful, wanton and reckless conduct, to employers accused of similar conduct.   

Interestingly, the Court also concluded Shaw’s NIED claim was an “accident” under the Act which arose out of and in the course and scope of her employment.  However, it noted this holding is limited to the unique circumstances of the case, emphasizing that it was “crucial” to Shaw’s allegations that the claimed emotional distress was due to the employer’s mishandling of her claims, not the actual harassment by her supervisor itself. 

Since Shaw, courts reviewing workplace harassment claims have come down on both sides.  InLingle v. Pain Relief Centers, P.A. (unpublished), three former employees of a medical practice alleged a physician at the practice sexually harassed them and had inappropriate physical conduct, including NIED claims.  The defendants argued, in part, that the employees’ claims for NIED were barred by the exclusivity provision of the Act.

The federal court reviewing the case disagreed, ruling that the employees’ NIED claims could proceed to trial.  It emphasized that the emotional injuries alleged by the employees were unrelated to their employment and, quotingHogan, that sexual harassment was a risk, “to which the employee could be equally exposed outside the employment.” 

The federal court in Hall v. Rockinham County (unpublished), reached the opposite conclusion regarding an employee’s NIED against her employer.  Hall was employed as the Director of 911 Communications and alleged harassment by her supervisor, making several employment law claims and NIED against her employer and supervisor.  The Court ruled that the NIED claim against Hall’s employer was exclusively under the jurisdiction of the Industrial Commission and should be dismissed from civil court, stating that Halls’ injury arose out of her employment, which included the risk that her employer would not properly supervise her workplace or handle her complaints.  However, multiple other claims were allowed to proceed in civil court.

A federal court reached a similar outcome in Baldwin v. Trademen International, Inc. (unpublished). Baldwin involved claims by two employees that their supervisor sexually harassed them and created a hostile work environment.  The Court held that the employees’ negligence claims directly against their employer were barred by the exclusivity provision.  In its ruling, the Court explained that, based on Shaw, negligence claims based on an employer’s mishandling of sexual harassment complaints falls within the Act.

Reviewing Shaw, Lingle, Hall and Baldwin offers employers guidance on which allegations a civil court will deem workers’ compensation claims.  If a court concludes that the claim is one of negligent mishandling of harassment complaints or investigation by the employer, it is more likely to be within the exclusive jurisdiction of the Industrial Commission.  However, civil claims based on the negligence of a co-employee or injuries alleged to be caused by the harassment itself (as opposed to the mishandling of complaints) may be allowed to proceed in civil court.  Employers are advised to consult their employment law and workers’ compensation attorneys when workplace harassment issues arise to determine the best defense strategy. 

Richard Helmrich worked as an Assistant Director of Food and Beverage at Mountain Creek Resort.  He was a large man, six-feet-tall with a body mass index between 40.27 and 47.53, above the threshold for obesity.  During his employment with the Resort he informed his boss of his weight and heart conditions.  His doctor diagnosed him as medically obese.  He provided his boss with a note that his cardiologist prepared for him, restricting the amount of weight that he was medically permitted to lift.

Helmrich testified that several individual defendants at the Resort regularly made observations about his weight, some of them by the owner himself within earshot of other employees.  One comment was that Helmrich needed to lose weight; another was that he needed to work harder at the gym to lose weight.  Yet another comment was that he was still fat.  Some of the comments were made in front of others, who would laugh at Helmrich’s expense.

On one occasion Helmrich notified his supervisor of one of these incidents in accordance with the Resort’s harassment policy.  A chef at the Resort said that Helmrich was “too large” and not “attractive” enough to approach customers’ tables in the restaurant.  Notwithstanding these kinds of comments, Helmrich never filed a formal complaint with Human Resources.

Helmrich did receive a written warning in July 2014 for poor performance.  He believed that his boss, Mr. Polchinksi, was delegating additional duties to him beyond the scope of his job and holding him to a higher standard than his subordinates.  He did not, however, tell anyone in supervision that he was being treated differently because of his weight.

Matters came to a head in December 2014 when his boss was promoted, thereby opening up the position of Director of Food and Beverage.  Helmrich was not told about the vacancy or encouraged to apply.  An employee who used to work under Helmrich by the name of Heaps was chosen for the position.  When that occurred, Helmrich met with supervision to ask why he was not considered for the position of Director of Food and Beverage.  He argued that he had the qualifications, holding an associate’s degree in hospitality management from Art Institute of New York.

Helmrich did not allege that he was denied the position due to his weight.  The company advised Helmrich that he was not chosen for the promotion because he failed to improve his work performance after the July 2014 written warning. The company told Helmrich that he was a good asset and a “great second man in command.” He was assured that he would be trained for future growth.

Helmrich resigned from his position on December 29, 2014 due to his perception of a hostile work environment.  He sued under both the ADA and New Jersey Law Against Discrimination.  The District Court noted that the United States Third Circuit has not expressly adopted obesity as a disability that substantially limits a major life activity.  The Court said, “Without excluding the possibility that obesity may under other circumstances constitute a disability under the ADA, the Court finds that it does not here.”  The Court observed that Helmrich never claimed that his obesity “substantially limits one or more major life activities.”  The Court added that although Helmrich had a weight lifting restriction, he did not dispute that his weight does not make it more difficult for him to stand, walk, bend or complete other movements necessary for him to work.

The Court next considered whether the Resort regarded Helmrich as being disabled.  “There is no question, therefore, that Defendants ‘regarded’ Plaintiff as obese.” The Court said that is not enough because there was no evidence that the Resort perceived him as having an impairment.  “Plaintiff does not argue that his weight limited his ability to stand, walk, bend, or complete other movements necessary for him to work.” The Court said that none of the defendants perceived Helmrich’s weight as physically interfering with his ability to do his job.  The Court found that there was insufficient evidence to prove the Resort regarded Helmrich as having a disability under the ADA.

The case is instructive.  It may be found at Helmrich v. Mountain Creek Resort Inc.,(D.N.J. October 15, 2018).  It shows that unfortunate remarks like those directed at the plaintiff may not be actionable in court if the plaintiff never tells anyone about them in HR or supervision of files a formal complaint.

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

In September 2018, the National Workers’ Compensation Defense Network (NWCDN) held it’s annual national conference and seminar in Minneapolis. It was a great success. Industry leaders and attorneys from 45 states attended. The seminar was headlined by Bob Lund, CEO of SFM, Dr. Uzma Samadani, Dr. Richard Migliori, Dr. Teresa Bartlett and Steve Perroots, Vice President of Marriott International. CWK was the host law firm. Tom Kieselbach moderated the seminar. Mark Kleinschmidt and Natalie Lund participated in the substantive program.

Annually, US News and World Report/Best Law Firms honors the top law firms in the United States.  The selection process is rigorous.Cousineau, Waldhauser & Kieselbach, P.A. has been selected as a Tier 1 law firm for Workers Compensation-Employers, 2019. We are proud of the honor and thank our peers for selecting us.  We have been selected every year as a Tier 1 law firm/practice group since the inception of the award.

A woman who visited a chiropractor for neck manipulation intended to treat her headaches wound up with damage to her right eye. Immediately after the visit she began seeing spots which were symptoms of ruptures in the eye’s blood vessels known as preretinal hemorrhages.

The technique used by the chiropractor, known as high-velocity, low-amplitude spinal manipulation, involves the application of short, quick thrusts to the back of the patient’s neck. Those manipulations caused the woman’s retinal hemorrhages According to findings published in the September issue of theAmerican Journal of Ophthalmology Case Reports.

-  Copyright 2018,David L. Swanson, Stone Loughlin & Swanson, LLP

The Texas Supreme Court announced this month that it has set a workers’ compensation death benefits case for oral argument.  InChicas v. Texas Mutual Insurance Company, the issue is whether a court lacks jurisdiction to review the DWC’s decision in a death benefits case if the claimant files the appeal in a probate court and does not file it in a district court until after expiration of the 45-day deadline in Labor Code section 410.252(a).

Santiago Chicas was cleaning rain gutters at the home of his employer’s president when he fell from a ladder and died. His widow, Bertilla, filed a claim for death benefits and, when Texas Mutual denied the claim, she initiated a proceeding at the DWC to resolve the issue. She also filed a wrongful death action in Harris County Probate Court Number 2.

An Administrative Law Judge at DWC found that Santiago was not in the course and scope of his employment and denied Bertilla’s claim for benefits and the DWC Appeals Panel allowed the decision to become final. Within the 45-day time limit for filing a petition for judicial review, Bertilla amended her petition in the probate court to include her claim for judicial review of the DWC’s decision. Five months later, Texas Mutual filed a plea to the jurisdiction which the probate court granted. Bertilla then filed a petition for judicial review in the Harris County District Court. Texas Mutual filed a plea to the jurisdiction which the district court granted. The Houston Court of Appeals (1^st. Dist.) reversed the trial court judgment and Texas Mutual appealed to the Texas Supreme Court.

The outcome of the case turns on whether the 45-day deadline in section 410.252(a) is jurisdictional or merely mandatory. The courts of appeal are divided on this issue – at least one court has said that it is jurisdictional while others have said that it is not. Hopefully the Texas Supreme Court will resolve the conflict.

Oral argument is set for January 22, 2019.

-  Copyright 2018,David L. Swanson, Stone Loughlin & Swanson, LLP.

Two office administrators at medical clinics in Ft. Worth, Waco and Temple that treated workers’ compensation patients were arrested this month and charged with federal healthcare fraud. Melissa Sumerour and Latosha Morgan are alleged to have submitted more than $5.9 million in claims from 2011 to 2017 for services, including physical therapy, that were never performed.

For example, Sumerour is alleged to have billed for physical therapy sessions that were not provided – always billing five units of therapeutic activities, five units of therapeutic exercises, and four units of manual therapy.  This became known as the “5-5-4” rule of billing.

By maximizing billing amounts, Sumerour and Morgan allegedly received more money for themselves in monthly bonuses from the physician that operated the clinics. The complaint does not identify the physician, but media outlets identify him as Leslie Benson, M.D. Dr. Benson, who played football for the Dallas Cowboys in the 1970s, was indicted for healthcare fraud in 2017 and has relinquished his license to practice medicine in Texas.

-  Copyright 2018,David L. Swanson, Stone Loughlin & Swanson, LLP

Neal Wade Barker, M.D., a prominent bariatric surgeon in Dallas, is the seventh defendant to admit his role in an alleged $200 million scheme of health insurance fraud involving the former Forest Park Medical Center. Barker was one of 21 defendants indicted in late 2016 for what prosecutors described as a massive bribery and kickback scheme to steer business to Forest Park’s luxury hospitals at insurers’ expense. He is the seventh defendant to enter a plea of guilty. The remaining fourteen defendants await trial, currently scheduled for early 2019.

According to the indictment, Forest Park executives paid surgeons, primary care doctors, lawyers and others to refer patients to their high-end hospitals. The hospitals were designed as out-of-network facilities, enabling Forest Park to set its own prices instead of agreeing to payment rates negotiated with insurers.

While patients who treat in out-of-network facilities typically pay a higher portion of a procedure’s cost, Forest Park did not attempt to collect money from patients for those higher costs. Instead, it allegedly wrote off those payments as bad debt and made up for them by collecting exorbitant reimbursement rates from insurers. “Thousands of patients chose to have the exact same procedure performed by the exact same doctor at a facility where, absent the scheme, the costs likely would have been financially prohibitive,” the indictment said.

Federal officials have said that Barker faces five to seven years in prison. A sentencing date has not been set.

Until his indictment, Barker apparently was doing very well. Property tax records show that his home in Highland Park has an appraised value of $12,487,540.

-  Copyright 2018, David L. Swanson, Stone Loughlin & Swanson, LLP.