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The Supreme Court recently confirmed the exclusive jurisdiction of the Division extends to claims made against a workers’ compensation carrier, Accident Fund General Insurance Company and its adjuster Kriste Henderson (collectively, Accident Fund) arising out of the bona fide offer of employment process. In In re Accident Fund Insurance Company, injured worker Rick Sayaz was presented with two bona fide offers of employment by the Employer. Sayaz failed to respond to the offers and failed to seek dispute resolution in the Division to determine the validity of the offers. Sayaz sued the Employer for retaliatory discharge under section 451.001 and for defamation. The injured worker also sued Accident Fund alleging it aided and abetted the Employer’s retaliatory discharge, tortiously interfered with Sayaz’s employment relationship, and conspired with the Employer to wrongfully terminate Sayaz. According to Sayaz, Accident Fund’s participation in the bona fide offer of employment process was a pretext for the retaliatory discharge.
 
In the trial court, and citing the Supreme Court’s opinions inIn re Crawford & Co. and Texas Mut. Ins. Co. v. Ruttiger, Accident Fund filed a plea to the jurisdiction arguing that Sayaz’s claims are within the exclusive jurisdiction of the Division. The plea was denied, and Accident Fund filed a petition for writ of mandamus with the court of appeals. The appellate court denied the petition, and Accident Fund sought relief from the Texas Supreme Court.
 
In aper curium opinion, the Supreme Court held that Sayaz’s claims are within the exclusive jurisdiction of the Division. The Court explained that the Act and Division rules provide the Division with exclusive jurisdiction to determine whether an offer of employment is bona fide for purposes of the Act. In this case, all of the claims alleged against Accident Fund arise from its participation in the bona fide offer of employment process and Sayaz’s complaints about that process. The question of the validity of the offers – and whether they were in fact “bona fide” – was a threshold factual determination for each of Sayaz’s claims. Therefore, Sayaz’s claims asked the trial court to make a determination on a matter within the exclusive jurisdiction of the Division. Citing Ruttiger, the Court concluded, “Sayaz’s claims against Accident Fund arise out of the statutory claims-handling process and, as a result, ‘the current Act with its definitions, detailed procedures, and dispute resolution process demonstrate[s] legislative intent for there to be no alternative remedies.’” Because the Division has exclusive jurisdiction over the bona fide offer of employment process, and Sayaz failed to exhaust his administrative remedies in the Division, the trial court lacked jurisdiction over Sayaz’s claims. The Court granted mandamus relief to Accident Fund and Ms. Henderson and directed the trial court to withdraw its orders denying their plea to the jurisdiction and dismiss all claims against them.In re Accident Fund General Insurance Co., No. 16-0556 (Tex. Dec. 15, 2017).
 
Dan Price represented Accident Fund and Ms. Henderson in this case.
 
-Dan Price, Stone Loughlin & Swanson, LLP.

Also in State Office of Risk Management v. Martinez, the Texas Supreme Court held that, to preserve their case on judicial review, workers’ compensation litigants are only required to appeal the ultimate conclusions of the Division and not the underlying findings of fact supporting those conclusions. In Martinez, the injured worker presented the Court with a cross-petition in support of the court of appeals’ dismissal of the case alleging that SORM waived its right to judicial review by not expressly appealing the Division’s findings of fact. The Supreme Court noted that the courts of appeal were split on whether each finding of fact must be appealed to avoid forfeiture of the right to judicial review. Ultimately, the Court determined that each finding of fact did not have to be appealed. The Labor Code defines incorrect findings of fact as “errors” and not appeals. The parties are entitled to a modified de novo proceeding without deference to the findings of fact of the hearing officer. For this reason, it is not the findings of fact that must be appealed. But rather, the ultimate conclusions of the hearing officer are what must be appealed. In the case of Ms. Martinez, the ultimate conclusions were whether Martinez sustained a compensable injury and whether she had disability. SORM was not required to appeal each finding of fact the hearing officer relied on in coming to these ultimate conclusions. State Office of Risk Management v. Martinez, No. 16-0337 (Tex. Dec. 15, 2017).
 
-Dan Price, Stone Loughlin & Swanson, LLP.

A litigant is entitled to judicial review of a final decision of the Division of Workers’ Compensation, but judicial review is limited to the “issues” decided by the DWC Appeals Panel. In the case ofState Office of Risk Management v. Martinez, the Texas Supreme Court explained what an “issue” is for purposes of judicial review.
 
Edna Martinez was an employee of the State of Texas, who was injured at her home. The disputed issues defined by the benefit review officer were whether Martinez sustained a compensable injury and whether she had disability. At the CCH, Ms. Martinez alleged the injury occurred while working from home. The State Office of Risk Management (SORM), on behalf of the State agency, argued the injury was not in the course and scope of employment because Martinez violated an agency policy by working from home and because the injury did not involve an instrumentality of the employer. The DWC Appeals Panel reversed the hearing officer, determining the injury did occur in the course and scope of employment. SORM filed a petition for judicial review, alleging it is relieved from liability because Martinez violated a statute by working from home. Both SORM and Martinez filed motions for summary judgment. SORM argued Martinez did not sustain an injury in the course and scope of employment while at home because working from home was prohibited by law. Martinez argued that SORM could not raise this “issue” because it was not first presented to the Division and, as such, was not an “issue” on which judicial review was sought. The trial court granted SORM’s motion and denied Martinez’s. The San Antonio Court of Appeals reversed and determined the trial court had no jurisdiction over SORM’s petition because the statutory-violation ground was not first presented to the Division. The question for the Supreme Court was, for purposes of the Workers’ Compensation Act (the Act), what is an “issue” on which judicial review is sought by a party?
 
Citing the Act, the Supreme Court explained that the “final decision of the appeals panel regarding compensability or eligibility” describes the “issues” on which the trial court may render judgment. Those “issues” are defined by the benefit review officer at the outset of the dispute and proceed through the dispute resolution process with the same definition. Because the issue is defined at this early stage, the “issue” is not – and cannot be – a point of error as can be waived in an appellate context. Nor is an “issue” an argument that must be raised at this early stage. Applying this framework, the Court explained that the relevant “issue” on which judicial review was sought was whether the Claimant was injured in the course and scope of employment. The “issue” was not each argument refuting this point, such as the statutory-violation ground raised by SORM. Because the statutory-violation ground is an argument that Martinez was not in the course and scope of employment, SORM could present the argument for the first time on appeal. State Office of Risk Management v. Martinez, No. 16-0337 (Tex. Dec. 15, 2017).
 
-Dan Price, Stone Loughlin & Swanson, LLP.

 Thomas P. Kieselbach of Cousineau, Waldhauser, & Kieselbach authored an article entitled, "Key Workers' Compensation Cases of 2017" The article was published in the Best Lawyers in America^©publication Legal Insights.

The article can be found here: https://www.bestlawyers.com/article/key-minnesota-workers-compensation-cases-of-2017/1750

Tom has been listed in Best Lawyers in America^© since 1995. CWK is a tier 1 regional firm inBest Law Firms – U.S. News & World Report. Six of its attorneys are listed inBest Lawyers in America: Jim Waldhauser, Tom Kieselbach, Mark Kleinschmidt, Richard Schmidt, Jennifer Fitzgerald, and Tom Coleman.

Written by: Matt Marriott

Starting on December 31, 2017, the North Carolina Industrial Commission will have a permanent Employee Classification Section charged with investigating and punishing employers who misclassify employees as independent contractors.  The Employee Classification Section was initially created through an executive order signed by former Governor Pat McCrory on December 18, 2015, Executive Order No. 83.  The North Carolina legislature recently codified many provisions of Executive Order No. 83 through the Employee Fair Classification Act, which was passed in August of 2017.

The Employee Classification Section is tasked with receiving complaints from the public regarding employers who are misclassifying employees and investigating those complaints.  When a complaint is received, the Director of the Section will provide the information to the North Carolina Department of Labor, the Fraud Investigation Division of the North Carolina Industrial Commission, the Division of Employment Security in the North Carolina Department of Commerce, and the North Carolina Department of Revenue.  Each agency will then conduct an investigation to assess whether the employer has violated any of their operating statutes.  If any of the agencies find a violation of an applicable statute, they will assess appropriate penalties and fines.  Each respective agency will then report its findings back to the Director of the Employee Classification Section.  Additionally, if any of the aforementioned agencies receive a direct complaint from the public regarding employee misclassification, the agency will report that complaint to the Director of the Employee Classification Section, who will pass the complaint along to all of the other agencies for investigation.

While the Employee Classification Section of the NCIC has been around since 2015, it was made a permanent fixture of the NCIC by the recently passed Employee Fair Classification Act (“EFCA”).  The EFCA also formally codified that the Employee Classification Section must takes the steps outlined in paragraph 2 above whenever it receives a complaint regarding employee misclassification.

Practice Tips: Prior to the creation of the Employee Classification Section of the NCIC, a complaint of employee misclassification often would not result in significant consequences for the guilty employer.  North Carolina is making a significant effort to reduce instances of employee misclassification going forward.  The potential penalties that could be assessed against an employer include fines for not properly carrying workers’ compensation insurance and paying back taxes on each misclassified employee for up to 5 years before the misclassification occurred.  Additionally, misclassified employees will have the ability to file private lawsuits against their employers to recover overtime wages and minimum wage amounts that should have been paid under state and federal wage and hour laws (e.g the Fair Labor Standards Act, etc.).  In some instances, the employees can also receive treble damages against the employers depending on the nature of the conduct.

Because the consequences associated with employee misclassification are greater than they have ever been in the state of North Carolina, it is imperative for employers utilizing independent contractors to consult with counsel to ensure they are not mistakenly violating any laws.  Teague Campbell’s employment law team is focused on this ever emerging issue and is ready to help employers navigate this complex area of the law.

We are please to announce that Cousineau, Waldhauser & Kieselbach has been selected as a Tier 1 law firm by “Best Law Firms”.  Six of the attorneys at CWK have been selected to be listed in “Best Lawyers in America”.

Jim Waldhauser, Tom Kieselbach, Mark Kleinschmidt, Richard Schmidt, Jennifer Fitzgerald, and Tom Coleman have been selected for inclusion in the 2018 Guide to Best Lawyers in America.

Best Lawyers and Best Law Firms have collaborated with U.S. News and World Report to evaluate attorneys and law firms throughout the world. The attorneys and law firms are selected for inclusion by peers for their responsiveness, integrity, and expertise.

Major legislative changes occurred in Iowa effective for all injuries that occur on or after July 1, 2017. Under prior law injured workers were awarded permanency benefits based on loss of earning capacity for non-extremity type injuries including the neck, shoulders, back and hips (“body as a whole” injuries). Under the new law shoulders are no longer injuries to the body as a whole, but are rather considered scheduled member-type injuries. Workers with shoulder injuries are now entitled to receive permanency benefits only to the extent of his/her functional impairment, and are not entitled to receive benefits for loss of earning capacity.

 Further, after July 1, 2017, if the injured worker sustains an injury to his/her body as a whole and returns to work or is offered work for which he/she receives or would receive the same or greater salary, wages, or earnings, than the injured worker received at the time of the injury, the injured worker is compensated based only upon his/her functional impairment resulting from the injury.

Legislative changes also stiffened the employer’s intoxication defense adding a presumption that an employee was intoxicated at the time of his or her injury if the employee had a positive test result reflecting the presence of alcohol, narcotic, depressant, stimulant, hallucinogenic or hypnotic drug not prescribed by a medical practitioner or not used in accordance with prescribed use. The new law made changes with respect to independent medical evaluations, pre-existing conditions, vocational rehabilitation, and commencement date for the payment of permanency benefits.

Legislative changes will most certainly result in a very significant decrease in the value of claims.

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

Whitney Teel prepared a chapter in “Workers’ Compensation Emerging Issues Analysis”, 2017 edition. Whitney analyzed the 2017 trends and developments in Minnesota Workers’ Compensation law.

 The Co-editors-in-chief are Thomas A Robinson of LexisNexis and the National Workers’ Compensation Defense Network (NWCDN). CWK is the Minnesota representative for NWCDN.

 This is an excellent book which is an essential tool for attorneys, risk managers, and insurance professionals. The book is a reference guide to issues and cases as well as a 50 state survey of trends and developments.

 You can purchase this tool here http://www.lexisnexis.com/wcrisk or by calling 1-800-223-1940 (mention WCRisk to receive a discount).

The California Insurance Commissioner has approved the admission of Golden Bear Insurance Company to sell “cannabis business insurance” in the state. The insurance is intended to provide coverage to the cannabis industry, including coverage for workers in the industry. The filing, the first of its kind nationwide, raises a number of questions including: will “cannabis business insurance” cover the “gaps” provided by workers’ who are intoxicated on marijuana? Will it cover slow-downs in productivity from using the product? Will it cover vending machine abuse by workers with the munchies? Inquiring minds want answers to these questions and we look forward to California providing them. HT:Insurance Journal.

The work day begins once the employee arrives at the office and thereafter any travel home which furthers the affairs of the employer is within the “course and scope” of employment. Recently, the Appeals Panel addressed this situation where an employee arrived at work, but left shortly after to return home to retrieve a work laptop he had forgotten. While on the way home, the employee was killed in a motor vehicle accident. The Appeals Panel determined the work day started when the employee arrived at his office and that his travel to and from his residence to retrieve the work laptop (which was necessary for the performance of his duties) was within the course and scope of employment. Unlike in a “coming and going” situation, the travel in this case was not simply transportation to and from the workplace, but rather was travel that both furthered the employer’s business andoriginated in the business. – Appeal No. 171936, decided October 5, 2017.