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The new EEOC Guidance issued on May 9, 2016 upsets many of the assumptions employers routinely make in regard to leaves of absence. The EEOC states, “An employer must consider providing unpaid leave to an employee with a disability as a reasonable accommodation if the employee requires it, and so long as it does not create an undue hardship for the employer.” The Guidance adds that this is the case when:
The employer does not offer leave as an employee benefit;
The employee is not eligible for leave under the employer’s policy; or
The employee has exhausted the leave which the employer provided as a benefit (including leave exhausted under a workers’ compensation program or the FMLA or similar state or local laws).
The EEOC provides that reasonable accommodation does not require an employer to provide paid leave beyond what it provides as part of its paid leave policy. The employer can deny requests for unpaid leave when it can show that providing the accommodation would impose an undue hardship on its operations or finances. This may sound comforting but in reality it is hard for an employer to show undue hardship as is seen below.
The following examples come from the May 9, 2016 Guidance, and this Guidance clearly may cause employers to revise their leave policies:
Example Five from the EEOC Guidance
“An employer’s leave policy does not cover employees until they have worked for six months. An employee who has worked for only three months requires four weeks of leave for treatment for a disability. Although the employee is ineligible for leave under the employer’s leave policy, the employer must provide unpaid leave as a reasonable accommodation unless it can show that providing the unpaid leave would cause undue hardship.”
Example Six from the EEOC Guidance
“An employer’s leave policy explicitly prohibits leave during the first six months of employment. An employee who has worked for only three months needs four weeks of leave for treatment of a disability and the employer tells him that if he takes the leave, he will be fired. Although the employee is ineligible for leave under the employer’s leave program, the employer must provide unpaid leave as a reasonable accommodation unless it can show that providing the unpaid leave would cause undue hardship. If the employer could provide unpaid leave without causing an undue hardship, but fires the individual instead, the employer will have violated the ADA.”
Example Seven from the EEOC Guidance
“An employer’s leave policy does not cover employees who work fewer than 30 hours per week. An employee who works 25 hours per week and who has not worked enough hours to be eligible for leave under the FMLA requests one day of leave each week for the next three months for treatment of a disability. The employer must provide unpaid leave as a reasonable accommodation unless it can show that providing the unpaid leave would cause undue hardship.”
The EEOC further states that when an employee informs the employer that an accommodation is needed for a disability, the employer should promptly engage in an interactive process with the employee. The employer may need additional information to confirm that the condition is in fact a disability under the ADA. With the employee’s permission, the employer may obtain additional information from the employee’s health care provider to understand the need for leave.
These three foregoing examples will surprise most employers. Example seven defies conventional logic because the employer is not subject to FMLA but is still required to offer unpaid leave. Examples five and six are also surprising because in both instances the employer’s leave policy is disregarded.
Tha interactive process may be very burdensome for reasons that the EEOC provides in Example 9:
Example Nine from the EEOC Guidance
“An employee with a disability is granted three months of leave by an employer. Near the end of the three month leave, the employee requests an additional 30 days of leave. In this situation, the employer can request information from the employee or the employee’s health care provider about the need for the 30 additional days and the likelihood that the employee will be able to return to work, with or without reasonable accommodation, if the extension is granted.”
The EEOC also warns employers not to ask an employee on leave with a fixed return date for periodic updates, although it says that the employer may reach out to an employee on extended leave to check on the employee’s progress. This is at best a subtle distinction: the employer may ask about progress but not about periodic updates.
Another area that the Guidance attacks is maximum leave policies. It states that although employers are permitted to have leave policies that establish the maximum amount of leave an employer will provide or permit, this policy must be flexible when someone with a disability is involved.
Example Eleven from the EEOC Guidance:
“An employer covered under the FMLA grants employees a maximum of 12 weeks of leave per year. An employee uses the full 12 weeks of FMLA leave for her disability but still needs five additional weeks of leave. The employer must provide the additional leave as a reasonable accommodation unless the employer can show that doing so will cause an undue hardship. The commission takes the position that compliance with the FMLA does not necessarily meet an employer’s obligation under the ADA, and the fact that any additional leave exceeds what is permitted under the FMLA, by itself, is not sufficient to show undue hardship. . . “
This is one of the most alarming aspects of the Guidance because it creates an open-ended period of leave beyond the FMLA requirement. It also makes it extremely difficult for HR Managers to make intelligent decisions on when to take action in the event that an employee has used up all FMLA leave time.
Example 12 from the EEOC emphasizes that it does not matter whether the employer is covered under the FMLA:
Example Twelve from the EEOC Guidance:
“An employer is not covered by the FMLA, and its leave policy specifies that an employee is entitled to only four days of unscheduled leave per year. An employee with a disability informs her employer that her disability may cause periodic unplanned absences and that those absences might exceed four days a year. The employee has requested a reasonable accommodation, and the employer should engage with the employee in an interactive process to determine if her disability requires intermittent absences, the likely frequency of the unplanned absences, and if granting an exception to the unplanned absence policy would cause undue hardship.”
The burdens on employers are significant under this Guidance. The Guidance suggests that the employer must consider the following issues:
The specific accommodation that the employee requires
The reason an accommodation or work restriction is needed
The length of time an employee will need the reasonable accommodation’
Possible alternative accommodations that might effectively meet the employee’s disability-related needs; and
Whether any of the accommodations would cause an undue hardship
The only defense an employer has to a request for reasonable accommodation for additional leave is undue hardship and that is a very vague standard. The Guidance says that in assessing undue hardship an employer may take into account leave already taken by the employee, whether or not that leave is for FMLA or workers’ compensation. The undue hardship considerations include:
The amount and/or length of leave required
The frequency of the leave
Whether there is any flexibility with respect to the days on which leave is taken
Whether the need for intermittent leave on specific dates is predictable or unpredictable
The impact of the employee’s absence on coworkers and on whether specific job duties are being performed in an appropriate and timely manner
The impact on the employer’s operations and its ability to serve customers/clients appropriately and in a timely manner
Employers will have to exercise great caution in denying unpaid leave requests in the future based on this Guidance. It is true that the Guidance is not law, but practitioners and judges do refer to Guidance regularly. The job of an HR Professional has becomes even more challenging given this new Guidance.
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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.
I received an excellent question today from a reader of this blog. The question was this: “I’m looking for some information on whether it is acceptable to bring an employee back for light duty at a wage that is lower than their pre-accident wage provided that they are paid at least at the temporary total rate. So for instance, would it be acceptable to return a construction worker to a desk job at a reduced wage?”
Let me begin by stating that there are no published cases in New Jersey which answer this question. There are also no unpublished appellate level cases that provide guidance. Decisions have been handed down within the Division of Workers’ Compensation that address this issue but they are not binding on any other court. As a result, I can only provide guidance with my answer. There is simply no case or statutory law which answers this question.
Two observations should be made at the outset. The first is that most employers pay the normal wage when someone is on light duty. The second is that no employer wants to be the first test case on the question posed above! The reason there are not published or unpublished appellate division cases is that employers recognize that if they push this issue all the way to the appellate division, they may make bad law for all employers.
Having said that, let me provide some guidelines. Temporary disability benefits replace lost wages from a work injury or occupational disease. They are non-taxable, which means that someone who earns $1,300 per week but is receiving $871 per week in temporary disability benefits is nearly made whole when one considers the non-taxability of temporary disability benefits.
The issue raised by the reader above is often discussed in workers’ compensation courts around the state. The consensus among practitioners and judges is that Judge Cox was right in his opinion in Soto v. Herr’s Foods, Inc., 2012 NJ Work. Comp LEXIS 4 (September 7, 2012). That case involved an employer who reduced an employee’s wages on light duty below the amount of temporary disability benefits. The petitioner had been earning $976.15 per week at the time of his injury. His temporary disability benefit rate was $683.31 per week. The doctor approved four hours per day of light duty initially, but the employee received a net payment of $329.43 per week, which was substantially less than his temp rate. Judge Cox wrote:
It seems rather obvious to this Court that if Respondent is responsible for the payment of temporary disability benefits, and, in this case, the amount to which Petitioner is entitled is $683.31 per week, to allow Respondent to provide minimum light duty and only pay the Petitioner an amount less than the $683.31 to which he is entitled defeats the purpose of both the temporary disability and the light duty provisions of the workers’ compensation statute.
The employer did not appeal the decision of Judge Cox. There is no doubt that the decision would have been affirmed had it been appealed. The Workers’ Compensation Act is social legislation, and courts certainly recognize that injured workers need to live on the amount of temporary disability benefits, which are capped in 2016 at $871 per week and will rise to $896 per week in 2017. Temporary disability benefits are paid at 70% of wages subject to the annual cap.
One can conclude from Judge Cox’s decision that employers would be unwise to pay someone on light duty an amount less than the temporary disability rate. For employers who do not wish to pay the full wage on light duty, they should, in this practitioner’s opinion, take into account the tax impact of earned wages to make sure the employee is getting an amount after taxes equal to the amount of temporary disability benefits. If an employee is being paid $800 per week on non-taxable temporary disability benefits and returns to work light duty at $800 taxable income per week, the employee will argue that he or she is being penalized because earned wages are taxable.
The best way to answer the reader’s question is this: an employer who pays an employee on light duty an amount less than the full wage but equal to or higher than the temporary disability rate is doing something consistent with the decision in Soto, so long as the tax impact is considered. The Soto decision did not say that the employee must receive the full wage before the injury. The philosophy behind Judge Cox’s decision is that light duty should not result in a financial penalty to injured workers. While Judge Cox’s decision is not precedential, the vast majority of judges and practitioners agree with the reasoning in the case.
What is clear is that employers who reduce pay while on light duty below the temporary disability rate run the risk of getting hit with a motion for temporary disability benefits along with penalties. Our office does not recommend reducing pay on light duty below the temporary disability rate for this reason and most of our clients pay the pre-injury wage while an employee is on light duty.
The other part of the reader’s question is whether an employee who does one type of work can be assigned to another type of work while on light duty. This is a common practice in New Jersey, and unless there is a collective bargaining agreement prohibiting temporary reassignment to another job on light duty, employers can make such temporary reassignments. After the light duty, the employee is returned to his pre-injury position.
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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.
TO APPEAL OR NOT TO APPEAL
By: Kevin L. Connors, Esquire
In a recent Pennsylvania Commonwealth Court decided on June 14, 2016, in Uninsured Employers Guaranty Fund v. Workers’ Compensation Appeal Board, the Commonwealth Court addressed an issue often unique in workers’ compensation practice, being whether the an order that is clearly marked “Interim/Interlocutory”, further specifically providing on the face of the Decision cover letter, that “This Interim/Interlocutory Order is Not Subject to Appeal”, is actually appealable, in which case a party may ultimately be precluded from appealing a final Decision if it did not previously take an appeal from the Interim/Interlocutory Order.
In the context of compensation litigation, it is sometimes necessary for a workers’ compensation judge to dispose of certain interim issues, such as an employer’s request for Supersedeas, or the request of a Claimant for the imposition of a Section 410 order, with workers’ compensation judges addressing these ancillary issues by issuing Interlocutory Orders that are not subject to appeal, as an Interim/Interlocutory Order is not a final order under the Pennsylvania Rules of Appellate Procedure.
However, in the byzantine universe of workers’ compensation procedure, there are unique instances where an order, initially described as “Interim/Interlocutory”, is one that, if not appealed, cannot later be appealed when a final decision issued by the workers’ compensation judge disposes of all litigated issues in the claim.
If there is some confusion as to what the heck we are talking about, welcome aboard.
Perhaps some facts might help cut through this procedural fog.
The UEGF case involved the Claimant filing a Claim Petition against an uninsured employer, in response to which the UEGF filed a Joinder Petition against the uninsured employer’s prior insurance carrier, Somerset Insurance..
The uninsured employer’s prior insurance carrier, in the course of answering the Joinder Petition, also filed a Motion to Strike/Dismiss, on grounds that its coverage with the uninsured employer had lapsed prior to the date of the work injury claimed by the Claimant.
Issuing a docket cleansing “Interim/Interlocutory” order, the workers’ compensation judge dismissed the Fund’s Joinder Petition, concluding that the uninsured employer’s prior insurance carrier did not provide insurance coverage to the employer on the date of injury claimed by the Claimant, with the face sheet of the decision specifically indicating that the order was Interlocutory only, and specifically indicating “this order does not constitute a final disposition of Claimant’s petition but is only a determination of the Motion to Dismiss the Joinder Petition. These Interlocutory findings of fact and conclusions of law will be incorporated into the final decision for purposes of potential appeal to the matters decided herein.”
Pretty explicit and exacting language nonetheless, the “Interim/Interlocutory” order also indicated: “This order is not subject to appeal.”
Guess who did not file an appeal?
Skipping ahead to the workers’ compensation judge’s final decision on the merits of the Claimant’s Claim Petition, in the course of which the workers’ compensation judge reaffirmed the prior Interlocutory Order regarding the Joinder Petition, the UEGF filed an appeal of the Judge’s decision to the Workers’ Compensation Appeal Board, with the Board holding that the “Interim/Interlocutory” order issued by the workers’ compensation judge to dismiss the Joinder Petition was actually a final order that should have been appealed, consequently resulting in the Appeal Board finding that UEGF’s appeal was untimely, resulting in its denial and dismissal.
The Appeal Board based its decision on Knish v. WCAB (Jerome Enterprises), 536 A.2d 856 (Pa. Cmwlth.), setting forth the elements of a final order, held to be one that “ends litigation, disposes of the entire case, puts a litigant out of court or precludes a party from pressing the merits of his claim.”
What the?
The Appeal Board also cited to the Commonwealth Court’s Decision in 3D Trucking v. WCAB (Fine), 921 A.2d 1281 (Pa. Cmwlth. 2007), holding that an order granting a Joinder Petition is not interlocutory in nature, as it resolves all issues raised by the Joinder petition.
In the case at issue, the Appeal Board drew a distinction between a Joinder Petition and an underlying Claim Petition, as the Appeal Board noted that a workers’ compensation judge is not required to necessarily consolidate a Joinder Petition with any other pending petitions, as the Joinder Petition can be granted or denied on its own merits.
In that context, an unconsolidated Joinder Petition is a procedural dispute in its own WCAIS context.
Applying that logic to the instant case, the Appeal Board held that the “Interlocutory” order granting the uninsured employer’s prior insurance carrier’s Motion to Dismiss the Joinder Petition effectively “ended the litigation against Somerset, resolved all issues raised by the Joinder Petition, and disposed of the entire case against Somerset.”
For that reason, the Appeal Board determined that the Interlocutory Order was, in actuality, a final order as to the Joinder Petition, and issues raised thereunder, notwithstanding that the Interlocutory Order had specifically said that it was not what it ended becoming, a final order.
The Appeal Board also held that the declaration by the workers’ compensation judge in the Interlocutory Order was “not subject to appeal” actually had no procedural bearing on the outcome of the Joinder Petition, being its final dismissal.
Appealing to the Commonwealth Court, the UEGF argued that the Appeal Board incorrectly dismissed its appeal as being untimely, with the Commonwealth Court holding, that an order from a workers’ compensation judge dismissing a Joinder Petition is a final and appealable order, as it addresses all issues in the Joinder Petition with finality.
However, the Commonwealth Court carefully considered the “apparent confusion” that resulted from the workers’ compensation judge’s Interlocutory Order being described as “not subject to appeal”, as a basis for considering that the UEGF might be entitled to an appeal nunc pro tunc, with the Commonwealth Court remanding the case back to the Appeal Board to determine whether the elements necessary to support a nunc pro tunc appeal were present.
Believing that the requisite elements for an appeal nunc pro tunc were present, the Commonwealth Court remanded the appeal back to the Appeal Board, directing the Appeal Board to determine if the UEGF was entitled to appeal the workers’ compensation judge’s incorrectly described “Interim/Interlocutory” order dismissing the UEGF’s Joinder Petition.
Is there a takeaway?
If there is, it is that “not subject to appeal” might not always be an accurate description of the appealability of a decision otherwise described as being “Interim”, meaning that an “Interim” order needs to be carefully reviewed to determine the issues being decided, as well as their finality.
ConnorsO’Dell LLP
Trust us, we just get it! It is trust well spent!
We defend Employers, Self-Insureds, Insurance Carriers, and Third Party Administrators in Workers’ Compensation matters throughout Pennsylvania. We have over 100 years of cumulative experience defending our clients against compensation-related liabilities, with no attorney in our firm having less than ten (10) years of specialized experience, empowering our Workers’ Compensation practice group attorneys to be more than mere claim denials, enabling us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania Workers’ Compensation Act.
Every member of our Workers’ Compensation practice group is AV rated. Our partnership with the NWCDN magnifies the lens for which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania Workers’ Compensation practice and procedure.
On January 13, 2011, Paulette Dorflaufer was hit by a car while working as a part-time crossing guard for Livingston Township. She filed a workers’ compensation claim and filed a negligence law suit against the tortfeasor. She settled that case for $95,000 for pain and suffering. PMA Management Corporation put plaintiff on notice of its workers’ compensation lien in the amount of $46,856.22 for medical expenses paid on her workers’ compensation claim.
Plaintiff refused to reimburse PMA for the statutory lien amount. She argued that she should only have to reimburse the amount paid for temporary disability benefits. Her position on the medical benefits was that they were not payable from her third-party tort action and therefore should not be reimbursed to PMA.
Both parties sought a declaratory judgment in the Law Division. On November 17, 2014, the Superior Court denied plaintiff’s motion and granted PMA its lien on the medical expenses. The court based its opinion on N.J.S.A. 34:15-40, which states that any sum the plaintiff should recover from a third party settlement is subject to a lien. The court reasoned, “There is nothing in the statute that says it matters what the settlement was specifically compensating the plaintiff for or whether the plaintiff recovered full damages from it.”
On appeal, plaintiff argued that reimbursing PMA for its lien violates the Automobile Reparation Reform Act, N.J.S.A. 39:6A-1 to -35. She contended that “since personal injury protection medical payments are not recoverable from the tortfeasor, a workers’ compensation carrier should not be able to recover medical expenses that it paid arising from an employee’s automobile accident.” The Appellate Division disagreed for the following reasons:
In circumstances where an employee is injured in a work-related automobile accident, the collateral source rule of N.J.S.A. 39:6A-6 places the primary burden of paying the employee’s medical expenses through workers’ compensation. Lefkin v. Venturini, 229 N.J. Super. 1, 9 (App. Div. 1988). Even where workers’ compensation benefits were not applied for by the employee, but would have been available, the statute provides that the PIP carrier may apply to the provider of workers’ compensation benefits for reimbursement of any benefits that the workers’ compensation carrier would have otherwise paid.
We are convinced that, based upon the plain language of Section 40, there is no bar to a workers’ compensation lien for reimbursement of medical expenses from an employee’s settlement in a third-party automobile negligence action. There is nothing in Section 40 that prevents a lien from applying where the settlement represents payment for pain and suffering. The fact that PIP benefits are not recoverable against a tortfeasor has no bearing on an employer’s Section 40 lien rights.
This case may be found at Dorflaufer v. PMA Management Corp., A-1727-14T3 (App. Div. August 9, 2016). This decision came one week after an appellate decision inDonatello v. Qual-Lynx, A-3643-14T4 (App. Div. August 2, 2016). That case involved virtually the same facts and arguments, with a different appellate panel ruling once again that medical expenses were properly included in a workers’ compensation lien. The injured worker also recovered in a third party action arising from a car accident and made the very same unsuccessful arguments that medical expenses and income continuation benefits in the third party action should be excluded from the workers’ compensation lien. The Appellate Division agreed for the same reasons stated inDorflaufer.
These two cases along with the recently published decision in Talmadge v. Burn, No. A-3160-14 (App. Div. June 22, 2016) make clear that Dever v. New Jersey Manufacturers. Ins. Co., No. A-3102-11T2 (App. Div. October 23, 2013) is bad law. Section 40 is a powerful statute which has a dominant policy of avoiding double recoveries.
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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.
Just because an employer accepts an injury to a body member as part of an award does not mean that all future treatment to that body member will be found work related. That is the rule in Daniel v. United Airlines, No. A-1252-14, 2016 N.J. Super. Unpub. LEXIS 1816 (App. Div. August 2, 2016).
Petitioner, Ancelot Daniel, injured his neck and shoulder in November 2006 which led to a settlement of 22.5% for the neck. The award was increased to 30% credit 22.5% in 2010 for the neck along with a sprain and strain with labral tear of the right shoulder. Petitioner then filed a second reopener seeking surgery to the shoulder for the alleged labral tear. Petitioner next filed a motion for medical and temporary disability benefits leading to testimony by petitioner and two experts.
Petitioner, age 59 at the time of trial, described his job, which was quite physical. He loaded and unloaded passengers’ bags at a conveyor belt where the bags are stored in the airplane. He would go inside the aircraft, get on his knees, pick up bags and put them on a belt. He said his shoulder kept getting more painful as time went on. He also experienced numbness and tingling, which had not existed at the settlement of the first reopener in 2010. He said that he could no longer throw bags using his right hand and took over-the-counter medication daily. He kept working because no doctor recommended that he stop working.
Dr. Theodora Maio testified for petitioner that petitioner’s pain was more severe and persistent than the last time she saw petitioner. He had numbness radiating down the arm into his fingers. She agreed with Dr. Jaffe, petitioner’s treating surgeon, that shoulder surgery was necessary. Dr. Maio thought petitioner had a tear of the labrum and related it to the original 2006 accident. On cross examination she admitted that without an EMG she could not say whether the tingling and numbness were coming from petitioner’s neck or shoulder. She further admitted that shoulder surgery would not be indicated for the numbness and tingling.
The key to respondent’s case was the fact that United’s expert, Dr. Arthur Canario, performed an x-ray showing that petitioner had bursitis in the shoulder. When asked about bursitis, Dr. Maio conceded that petitioner might have bursitis, but she did not back off her opinion that he also had a tear. Dr. Canario testified that petitioner’s range of motion in the right shoulder was the same as in the left. He said that the shoulder MRI showed only a possible tear, but he maintained that all petitioner really had was a sprain of the shoulder and bursitis. His clinical examination found no evidence of a labral tear, notwithstanding the MRI showing a possible tear. Dr. Canario confirmed the bursitis diagnosis with x-rays done in his office, showing “a calcific bursitis.” He said that injections would be a first step but that bursitis generally happens spontaneously and idiopathically. There was no known cause in this case, and the bursitis was not related to the 2006 work injury.
The Judge of Compensation denied petitioner’s motion for medical and temporary disability benefits. The judge found that petitioner’s likely diagnosis was bursitis, not a tear, and that the bursitis was not work related. The judge also noted that the numbness and tingling were not from the shoulder, and more likely from the neck. It was significant that petitioner’s expert never saw the x-ray films done by Dr. Canario as it put Dr. Maio at a major disadvantage.
On appeal petitioner argued that the judge should have disregarded Dr. Canario’s opinion because he did not make a comparison between petitioner’s complaints in 2010 versus 2014. The Appellate Division rejected this argument because Dr. Canario was not testifying about whether there was an increase in disability, but only whether the need for surgery was work related. The court said those are two different issues. “That said, we point out the issue before us does not involve a determination on petitioner’s application for modification of the OAS; rather, the issue before us involves the denial of petitioner’s motion for medical and temporary benefits. Significantly, the motion was limited to petitioner’s attempt to obtain medical treatment for his right shoulder; it was not a claim for modification of the previous OAS based on increased incapacity caused by the compensable injuries to both his shoulder and cervical spine.”
This decision is a useful one for practitioners. The result could have been vastly different had petitioner brought in the actual surgeon who was treating the petitioner’s shoulder. The opinion of a treating doctor is given more weight than that of an examining doctor. Without the opinion of the treating doctor, the Judge of Compensation was left with an opinion from an IME physician who never saw the x-rays which revealed bursitis.
The case also underscores that a motion for surgery on a reopener may involve different issues than simply an application on a reopener to obtain a higher award. In this case, petitioner apparently thought he lost the right to proceed for a modification of his award when he lost the motion. “We note there appears to be some confusion among the parties as to whether the denial of petitioner’s motion for medical and temporary benefits somehow disposes of his application under N.J.S.A. 34:15-27 for the modification of a previous OAS. Absent considerations not apparent from the record before us, we fail to discern how that could be so.” The court clearly suggested that petitioner still had the right to proceed with a request for modification of his prior award, even though he lost the motion for treatment.
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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.
Josephine Lucciola appealed from an order denying her request to vacate a February 23, 2012 order establishing her social security offset. She contended that the order contained the wrong offset calculation and that she was being shorted tens of thousands of dollars by her employer, Home Depot. There was no dispute that Lucciola had been found totally and permanently disabled as a result of her eye injuries sustained in an accident in 2000. She received an award in 2006 of total and permanent disability at $308.55 per week based on an average weekly wage of $440.79 per week.
When the total award was entered, the parties considered the fact that Lucciola also received social security disability benefits. The order said that Lucciola would have to reimburse Home Depot for any workers’ compensation benefits she received “in excess of the statutory offset rate during the period of time Petitioner has received Social Security Disability benefits.” For reasons unknown, the Social Security offset rate was not calculated for several years. Home Depot withheld a portion of payments pending receipt of Social Security information and calculation of the offset.
Lucciola filed a motion in 2012 to enforce the terms of the order since her employer had been withholding part of her award. The Judge of Compensation then entered an order setting petitioner’s offset rate at $125.43. That meant that she would not receive $308.55 per week but would receive $125.43 per week. The order also referred to petitioner’s average current monthly earnings (ACE) at $855.20. It noted that her initial social security entitlement was $310. Petitioner sought a penalty for Home Depot’s delay in making payments.
Sometime thereafter petitioner challenged the offset calculations. She contended that there should be no offset at all, saying that the offset only applies to Second Injury Fund cases. On that point she was incorrect. She also argued that her prior lawyer had agreed to entry of the February 2012 order without her consent.
Following argument, the Judge of Compensation found that the $125.43 offset rate was correctly determined. Petitioner appealed pro se and argued among other things that the offset calculation was incorrect. The Appellate Division agreed with petitioner that the order setting the offset rate at $125.43 was incorrect. First it noted that 42 U.S.C.A. 424a(a) states: “If the total monthly benefits (i.e. the sum of the Social Security and workers’ compensation benefit) exceed eighty percent of the individual’s average current monthly earnings (ACE), then her Social Security benefit is to be reduced to the point where the combined monthly benefit does not exceed eighty percent of her average monthly earnings.” The court also cited to Wood v. Jackson TP., 383 N.J. Super. 250, 254 (App. Div. 2006).
Importantly, the Act exempts certain states like New Jersey that adopted laws that require a reduction in workers’ compensation benefits to account for the Social Security benefits. 42 U.S.C.A. 424a(d). New Jersey is such a state where employers can reduce in certain situations the workers’ compensation benefit rate under N.J.S.A.34:15-95.5. Instead of the Social Security Administration taking the offset, New Jersey employers get the offset in certain circumstances pertaining to total and permanent disability. The Second Injury Fund need not be involved. The New Jersey statute says:
Such compensation benefits shall be reduced by an amount equal to the [Social Security disability benefit}, not to exceed the amount of the reduction established pursuant to 42 U.S.C. 424a. However, such reduction shall not apply when the combined [workers’ compensation benefit and Social Security disability benefit] is less than the total benefits to which the Federal reduction would apply, pursuant to 42 U.S.C. 424a.
The Court explained the main mistake that was made in this case. “As noted above, the weekly Social Security benefit may be subtracted from the weekly 80%-ACE only if the weekly 80%-ACE is greater than the initial workers’ compensation award. In this case, the weekly 80%-ACE, which is $157.88 (not $196.82, as respondent asserts), is less than the $308.55 initial workers’ compensation award. Therefore, the effective workers’ compensation award should be calculated by subtracting the weekly Social Security benefit ($71.58) from the initial award ($308.55). The result is a weekly benefit of $236.97.”
Another mistake that respondent’s counsel made in this case was arguing that the $855.20 figure was the 80% ACE. The actual 80% ACE was $684.16 (80% of $855.20 equals $684.16), which is why the Court said above that the 80% ACE was $157.88, not $196.82.
What this means is that Home Depot was underpaying petitioner $111.54 per week for approximately 10 years. The Appellate Division remanded the case to enter the correct offset rate and require respondent to pay petitioner the amount owed. The Court also remanded for the Judge of Compensation to determine whether petitioner is entitled to a 25% penalty.
This case shows how complex calculating offsets can be when a claimant gets total and permanent disability in workers’ compensation and Social Security Disability benefits. There is an offset worksheet available online. Employers may contact the undersigned for the form. The case may be found at Lucciola v. Home Depot, A-3055-14T2, (App. Div. July 22, 2016).
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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.
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On July 5, 2016, the DWC’s Deputy Commissioner for Hearings and Appeals Panel Director issued a joint memorandum reminding system participants of the prohibition against improper contact with Division staff or management for the purpose of influencing the outcome of a decision while the case is still pending. Citing 28 Texas Administrative Code 142.3(a), the memo reminds parties that direct or indirect communications with the Hearing Officer on any facts, issues, law, or rules pertaining to an active dispute are verboten until the decision has been issued and appeals remedies have been exhausted. Although the memo omits specific instances of such infractions, the need for the reminder presumably arose by way of some attorneys seeking to alter Hearing Officer decisions through contact with DWC managers or the members of the Appeals Panel instead of through the appeals process itself.
Beginning in June, Commissioner Brannan authorized contested case hearings to be held in the Metro Center Building, a.k.a., “Austin Central,” on a temporary basis. Despite its population, Austin has but one official Hearing Officer. The current field office lacks the space needed to accommodate a second hearing room and, by extension, a second Hearing Officer. Due to a recent surge in the number of claims, hearings were often unavoidably set in excess of the statutorily-mandated 60-day deadline for want of space on the docket. Hence, the Division decided to schedule CCH’s with attorney-represented claimants in the Tippy Foster Room in the Metro Center Building on Mondays and ombudsman-assisted claimants on Wednesdays. The Division’s two traveling Hearing Officers, both of whom are based in Metro, will preside. This secondary docket is set to last only through September, but if the number of Austin-based workers’ comp claims continues unabated, the temporary solution may become permanent.
San Antonio Hearing Officer David Northup has announced his retirement from the Division of Workers’ Compensation. A decades-long employee of the Division, Judge Northup served as a Judge Advocate General in the United States Army and as a member of the Division’s Appeals Panel before becoming a Hearing Officer. His retirement is effective August 13, 2016. We wish him only the best in his future endeavors.
On July 27, 2016, the DWC released its updated list of health care providers in the workers’ comp system whose practice has been restricted, who have been removed from the designated doctor list, or who incurred some other form of disciplinary action. The list of disciplinary actions and enforcement orders signifies what appears to be a welcome trend in combating unnecessary functional capacity evaluations, which have emerged recently as something of a ruse for extending disability and MMI dates. Among the noteworthy admonished:
· Ray Altamirano, M.D., of San Antonio was fined $1,000.00 and removed from the Texas workers’ compensation system as a health care provider for two years for providing improper, unreasonable, or unnecessary medical care, for failing to keep adequate medical records, and for failing to document aberrant drug test results.
· Tuan Anh Trinh, D.O., of Dallas was fined $4,800.00 for improperly ordering a functional capacity evaluation that was not reasonable or medically necessary.
· Scott Neuberger, D.C., of Houston was fined $5,600.00 for failing to document or incorporate results of a functional capacity evaluation in medical records and for failing to document any reasonable medical necessity requiring said FCE.
· James Galbraith, M.D., of Dallas was fined $4,800.00 for improperly ordering functional capacity evaluations that were not reasonable or necessary.
· Stephen Esses, M.D., of Houston, was fined $35,000.00 for failure to maintain efficient utilization of health care and ordering tests that were improper, unreasonable, or unnecessary.
For questions, contact Jane Stone at Stone Loughlin & Swanson, LLP.
A contractor hired a sub-contractor to perform work at one of its refineries. The contract between them established that the sub-contractor would acquire insurance coverage and a waiver of the insurer’s subrogation rights. It also contained an indemnity provision in which each agreed to indemnify the other for injuries arising out of its own negligence.
The sub-contractor did obtain work comp coverage before two of its employees were severely injured on the job. They received work comp benefits and then filed suit, eventually settling with the contractor. There was no dispute that it was the negligence of the contractor that led to the accident.
Because the Carrier would not acknowledge waiver of subrogation, it was named as a third party defendant. The Carrier argued that the waiver of subrogation applied only to liabilities assumed by the subcontractor, not the contractor.
The contractor sought to convince the court that only the waiver provision, and not the underlying contract, controlled. However, since the insurance policy references the contract, the court determined that the contract must also be considered.
Because the subcontractor was required to indemnify the contractor only for thesub-contractor’s own negligence, it had not assumed liability for the contractor’snegligence, and was therefore not contractually obligated to induce the Carrier to waive subrogation against the contractor. The court concluded that the Carrier had not waived its subrogation rights. The Insurance Company of the State of Pennsylvania v. Kevin Roberts and Exxon Mobil Corporation,– S.W.3d –, No. 01-15-00453-CV, 2016 (Tex. App.– Houston July 14, 2016).
Another case dealing with subrogation came out of the same Court on July 26. The injured worker, an employee of a contractor, was fatally electrocuted while using an electric transfer pump on an oil rig owned by the operator. Workers’ compensation coverage was supplied through the contractor, and death benefits were paid to the decedent’s family, who thereafter brought a wrongful death suit. The Carrier intervened to establish its subrogation rights.
The contract between the operator and the contractor established that the operator would obtain waivers of its insurers’ subrogation rights against the operator. The contract also included two indemnity provisions. In one, the contractor agreed to release and indemnify the operator from liability for claims arising out of the death of a contractor employee. However, in another, the contractor would not be liable for any loss or damage resulting from the use of materials furnished by the operator, and the operator would indemnify the contractor from any such liability.
The Carrier argued that the defective electric transfer pump was rightfully classified as a “material” furnished by the operator and therefore permitted subrogation against the operator under the second indemnity provision. Plaintiffs argued that the pump was not a “material,” but rather “equipment,” which would not activate the second indemnity provision, and no subrogation rights would follow.
The court agreed with the Carrier that, although undefined in the contract, the term “materials” is used throughout the contract interchangeably with other terms such as “equipment.” Without a distinction between the two terms, the court determined the contractor had not assumed liability for damage caused by the transfer pump provided by the operator, and was therefore not contractually obligated to cause its insurer to waive its subrogation rights. New Hampshire Insurance Company v. Mora, – S.W.3d –, No. 01-15-00406-CV, 2016 (Tex. App.– Houston July 26, 2016). For questions, contact Jane Stone at Stone Loughlin & Swanson, LLP.
From Robert Wilson, President & CEO of WorkersCompensation.com, comes word that the final report has been released from the 2016 Workers’ Compensation Summit held in Dallas on May 11 & 12, 2016. SLS partner Jane Stone was among those in attendance as a representative of the National Workers’ Compensation Defense Network. With the goals of increased efficiency, lower costs, and greater fairness to workers and employers, the report identifies and prioritizes the “imperative issues” affecting workers’ compensation systems nationally. Three problem areas emerged as most important following a survey of participants. First, benefit adequacy. Some states currently face constitutional challenges to their work comp systems after significantly reducing benefits. Next, regulatory complexity, which raises overall costs via increased litigation. Finally, delayed treatment while a claim that will eventually be compensable is investigated and appealed.
On the problem of delayed treatment, Paul Sighinolfi, Chairman of the Maine Workers’ Compensation Board, apprised attendees of Maine’s legislative solution, which mandates that treatment for those covered by general health or disability policies cannot be denied merely because a workers’ compensation claim has been filed. Rather than delay treatment while investigating the claim and determining whether it is a compensable work comp injury, which might only serve to worsen the underlying condition and add to medical costs, treatment proceeds first under one’s own health insurance or disability policy, and liability & reimbursement issues are addressed later in subrogation. For questions, contact Jane Stone at Stone Loughlin & Swanson, LLP.