State News

In New Jersey it remains extremely difficult to bring an intentional harm claim against one’s employer.  Mere knowledge and appreciation of a risk is not intent.  That was the holding inKeller v. Township of Berkeley, A-5767-12T3 (June 22, 2015). 

Mr. Keller worked as a laborer for the Township sanitation department and suffered serious injuries when he fell from a moving garbage truck after the passenger-side door suddenly opened.  He argued that there had been many complaints about the truck’s door over several years and that the Township was aware that the door latch mechanism was not functioning well. Keller further argued that the Township violated safety standards by failing to repair the problem.

The Township, for its part, denied that it was aware of any problem with the truck and noted that an inspection by the State Police post-accident did not reveal any problem with the locking mechanism.  No OSHA violations were ever issued.

The trial judge granted summary judgment dismissing the law suit and plaintiffKeller appealed.  The trial judge did concede that there was evidence that the door latch mechanism had not been working well for a long time, and the Township was aware of this but did not fix the problem.  Nonetheless, the trial judge concluded that knowing there is a risk is not the same as intentional harm. 

The Appellate Division affirmed the dismissal of the case.  It stated, “Having reviewed the record in light of these precedents, we agree with the trial court that the unfortunate accident that Keller suffered does not satisfy the substantial-certainty standard required to vault the Act’s exclusivity bar.” Even if the conduct of the Township was grossly negligent, that is not enough to prove an intentional harm claim.  There were no OSHA violations at all, and there was no evidence of a prior similar incident where an employee was actually injured.  The court noted that there was no effort by the Township to remove the latch or perform some action that created additional danger to employees.  While the truck’s door was difficult to open and close, that in itself does not prove intentional harm.

The Appellate Division also affirmed the trial judge’s dismissal of a claim for fraudulent concealment of evidence and spoliation of evidence.  The Court said “At best, plaintiffs established sloppy record keeping by the Township.  There was simply no showing ‘[t]hat defendant intentionally withheld, altered or destroyed the evidence with purpose to disrupt the litigation’ as required byRosenblit v. Zimmerman, 166 N.J. 391, 406-07 (2001).’”

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John H. Geaney, Esq., is 

PENNSYLVANIA’S VALIDATION OF AN IMPAIRMENT

RATING EVALUATION (IRE)

By

Kevin L. Connors, Esquire

            “Facts are meaningless.  You could use facts to prove anything that’s even remotely true.”  Homer Simpson.

            A recent Decision by the Pennsylvania Commonwealth Court in Duffey v. WCAB (6/26/15), recently resulted in the Court, in an Opinion authored by Judge Cohn Jubelirer, validating an Employer Impairment Rating Evaluation that was the Claimant sought to invalidate by alleging that the IRE had not considered all of the Claimant’s work-related injuries, as the Claimant argued, thankfully unsuccessfully, that the IRE, which had considered the Claimant’s accepted work-related injuries in the course of determining the Claimant’s impairment rating under the AMA’s Guides, resulting in a conversion of the Claimant’s temporary total disability benefits (lifetime absent death, or change in medical condition effectuating full recovery or ability to return to available work), to temporary partial disability benefits (capped at 500 weeks), had not taken into account the medical opinion of treating physicians who testified that the Claimant was suffering from post-traumatic stress disorder as a result of the work injury.

            With the above sentence seemingly setting a syntactical record for inconsequentially-related phrases, it would be simple enough to leap to the end point, being that the Commonwealth Court affirmed the underlying Decision of the Appeal Board (charged with the first level of appeals of comp claims in Pennsylvania), reversing the underlying Decision of the Workers’ Compensation Judge, who had invalidated the Employer’s IRE, which preceded the employer filing a Notice of Change, converting the Claimant’s temporary total disability benefits to temporary partial disability benefits, in reliance upon the testimony of the Claimant’s treating physicians, that the Notice of Compensation Payable, describing the Claimant’s originally-accepted work-related injury, should be amended to include the newly-adjudicated injury of post-traumatic stress disorder.

            No doubt, another run for your money piecing together the above paragraph.

            In any event, this is an important Decision since it fixes the effective timeline for validating an IRE used by an Employer to mitigate the potential lifetime exposure for temporary total disability benefits into the more limited exposure of 500 weeks for temporary partial disability benefits, still representing a significant chunk of time in both the life of the Claimant and the workers’ compensation claim, as it represents 9.6 years during which an injured Claimant might still be entitled to receive indemnity workers’ compensation benefits for wage loss.

            Like Homer, ready for a few facts?

            It begins with the March 6, 2009 injury of the Claimant, who injured his hands, when picking up hot wires while working for Trola-Dyne, Inc.  This occurred while the Claimant was repairing a machine for his employer.

            In the course of accepting the Claimant’s injuries as being work-related, the employer issued a Notice of Compensation Payable (NCP), under which the Claimant’s injuries were described as “bilateral hands, electrical burn, stripping some electric wires”.

            The same description always tugs at the inherent conflict between exclusion versus inclusion, as descriptions that focus on body parts as opposed to medical diagnoses are almost always vulnerable to future enlargement and expansion, with the practical tip being to avoid use of describing injuries in terms of body parts, as opposed to describing the work injuries in terms of reasonable medical diagnoses.

            With the issuance of the NCP, the Claimant began receiving his temporary total disability benefits for wage loss, with the employer requesting an IRE under Section 306(a.2)(1) of the Act after the Claimant had received 104 weeks of wage loss benefits.

            Requesting an IRE, the employer described the Claimant’s work injuries as “bilateral hands-nerve and joint pain”, which, technically, was already expanding the description of injury under review by the IRE, with the IRE resulting in a determination that the Claimant had a 6% impairment rating, in terms of the work injuries, resulting in his compensation benefits being converted from the lifetime temporary total disability benefits to the partial disability benefits subject to the 500 week cap under Section 306(b).

            Challenging the conversion of his compensation benefits, the Claimant filed a Review Petition, alleging that the IRE was invalid, as it had not included a complete description of injury, since the Claimant alleged that the IRE should have also considered the Claimant’s post-traumatic stress disorder, although that injury had never formally been accepted as compensable and work-related by the employer, nor had there been any litigation adjudicating a determination that the Claimant’s PTSD was related to his 2009 work injury.

            Conflicting medical testimony was then presented by the parties, in support of and in opposition to the Claimant’s Review Petition, with the Claimant’s physicians testifying that the PTSD was related, and the employer’s medical expert testified that the PTSD was not related, as well as that the Claimant was fully recovered from that diagnosis.

            Finding in favor of the Claimant, the WCJ granted the Claimant’s Review Petition, amending the description of injury to include the PTSD diagnosis, as well as invalidating the IRE, on grounds that the IRE had not considered the Claimant’s PTSD.

            Appealing the WCJ’s Decision, the employer was successful in convincing the Appeal Board to reverse the WCJ’s Decision, with the Board finding the IRE to be valid as the Claimant had never formally sought to amend the NCP to include the diagnosis of PTSD and depressed mood, and the WCJ had accepted the testimony of the IRE physician that the Claimant was at MMI as of the IRE, requiring the IRE to be valid when performed.

            Petitioning for review before the Commonwealth Court, the Claimant again argued, as he had before the WCJ, that the IRE failed to consider all of his work-related injuries, as the PTSD had not been considered, with the employer countering that acceptance of the Claimant’s argument would essentially eviscerate the IRE provisions of the Act, as Claimants could always challenge IRE determinations on grounds that the IRE failed to consider injuries never formally accepted or adjudicated as being work-related, although they might be injuries of an overlay nature, as was the case in Duffey.

            In the course of affirming the Appeal Board’s determination that the IRE had been valid, based upon the Claimant never challenging the accepted description of injury prior to the IRE and the Claimant being at MMI in terms of work injuries as of the IRE being performed, the Court determined that both the statutory language and IRE legal precedents required the validity of an IRE to be dependent upon two factors, one being the Claimant’s medical state, whether at MMI or not, when the IRE is performed, as well as, secondarily, the IRE focusing in on the injuries that were determined to be work-related, whether described on an NCP, or determined in a Decision issued by a WCJ.

            Relying upon Westmoreland Regional Hospital v. WCAB, 29 A.3d 120 (Pa. Cmwlth. 2011), the Court held that “the IRE produces a snapshot of the Claimant’s condition at the time of the IRE, not a survey of the Claimant’s work-related injuries over a period of time”.

            For that reason, the Duffey Court held that the validity of the IRE is determined by “the Claimant’s physical condition at the time of the IRE”.

            The Court also ruled that it interpreted Section 306(a.2) of the WCA to not infer that the General Assembly intended to nullify performed and otherwise valid IREs, being challenged with claims of new or additional injuries not considered by the IRE physicians.

            This ruling does not necessarily foreclose Claimant’s from challenging the conversion of their compensation benefit status from total disability to partial disability, if Claimants obtain impairment ratings of at least 50% under the AMA Guides.

            Holding that an IRE that considers a Claimant’s work injury as defined and existing at the time the IRE is performed, to be valid notwithstanding an after-the-fact expansion of the scope of a Claimant’s work-related injury, the Court held that to find otherwise would be inconsistent with the WCA, and the Court’s own prior precedents.

            As Shakespeare might have said in Richard III, “My Kingdom, My Kingdom for an IRE!”

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.

Teague Campbell’s Medicare Settlement Solutions recently obtained a favorable MSA approval from CMS in a case where the plaintiff sustained a compensable back injury in 2002.  He was provided authorized medical care until his release in 2009, when his authorized treating orthopaedist indicated that he would not need any additional treatment.  In 2012, an outside MSA vendor was hired to prepare a MSA proposal.  The proposal recommended a MSA in excess of $288,000, based largely on medications prescribed for unrelated conditions.  Teague Campbell’s Medicare Settlement Solutions analyzed the file materials and relevant issues, and worked with the parties to formulate a strategy for more accurately projecting the lifetime Medicare-covered expenses specifically related to the at-work injury.  Medicare Settlement Solutions prepared a new MSA proposal and handled submission of this proposal to CMS.  CMS approved the new MSA amount with total funding of less than $9,000, which resulted in significant savings and ultimately allowed the parties to proceed with full and final settlement of the claim.

Florence Godin has retired as a Specialist I after 23years in state service.

DEPARTMENT DECISIONS

Wood v. Fairpoint Communications Opinion No. 7-15WC (Apr. 10 2015)

Attorney fees awarded following informal conference when initial denial based upon “‘lack of investigative evidence to determine causal relationship to employment.’” Treating physician altered initial treatment note to show causal connection to work but Defendant did not rescind denial.

Kurant v Sugarbush Soaring Association, Inc. (Kurant III), Opinion No. 8-15WC (April 13, 2015). Attorney fees awarded without formal hearing when Carrier refused to pay ongoing medical treatment based upon an IME report stating that such ongoing treatment is not reasonable or necessary, but no Form 27 filed in support of the IME and no other medical records filed in support thereon. “Defendant’s failure to comply with the requirements of Rule 18.2100 amounted to misconduct or neglect under Rule 10.1330. It thus became necessary for Claimant to retain an attorney, whose efforts resulted in an interim order requiring Defendant to continue benefit payments. Notably, because the benefits at issue involve ongoing medical coverage rather than a cash award, under the circumstances of this case Claimant has no other workers’ compensation-related fund from which topay his attorney for her work. If he is to be made whole, an award of attorney fees is necessary.”

Reversing and remanding Superior Court decision and finding in favor of Defendant/Appellant. Subsequent disputes as to the propriety of an initial impairment rating is not a basis for determining that a Form 22 can be modified for mutual mistake. “While we conclude here that Dr Cyr’s allegedly mistaken medical opinion is an insufficient basis for concluding that there has been a material mistake of fact, we decline to hold that an impairment rating cannever be the basis for reforming a Form 22 agreement under the material-mistake-of-fact doctrine.”

Richards v C&S Wholesale Grocers, Opinion No. 5-15WC (HO Woodruff)(Feb. 27, 2105)

In rejecting IME doctor’s opinion as to causation, Hearing Officer relies, in part, upon Vermont Supreme Court decision inStannard v. Stannard, 203 VT 52 to determine that the “work injury caused his preexisting L5-S1 pathology to become symptomatic to the point where his associated disability came upon him sooner than otherwise would have occurred.”

Herring v Department of Liquor Control, Opinion No. 6-15WC (HO Phillips) (Mar. 24, 2015).

Claimant had accepted back injury with an alleged 0% permanent impairment and files a claim for compensability determination of shoulder condition. However, Claimant withdrew the claim and six months later files a new claim for 10% permanency benefits based upon the accepted back condition. At the informal level, an interiem order issued against Defendant which pays the full 10% impairment rating. Then Claimant seeks an award of attorney fees. Analyzing the request for an award of attorney fees pursuant to the 2008 amendments to the statute and the 2010 amendments to the WC Rules governing an award of attorney fees at the informal conference level, Commissioner awards most of the attorney fees and all of the costs Claimant had sought in this matter. “[T]he amendments have effectively eliminated employer or insurance carrier delay, unreasonable denial or misconduct as a necessary prerequisite to an award of fees at the informal level. Instead, in appropriate circumstances an award can now be based solely on a finding that but for the attorney’s efforts, the claimant would not have prevailed.... [W]hile the Commissioner retains the authority to award fees when a claim is resolved informally, she is by no means compelled to do so in every case. Exercising that discretion should further the goals of (a) maintaining appropriate standards of employer and adjuster conduct; (b) discouraging excessive and unnecessary attorney involvement; and © encouraging the parties to make effective use of the informal dispute resolution process. With these goals in mind, for example, an award of attorney fees might not be appropriate in a case that would have been amenable to informal resolution but for the attorney’s unnecessarily adversarial posturing. Similarly, where the claimant’s attorney prolongs a dispute by failing to obtain and share critical information promptly and voluntarily, fees will likely be denied. There might be other instances as well where the attorney’s conduct so undermines the informal process as to negate his or her entitlement to an award of fees. And last, there might be claims that are successfully resolved largely as a consequence of the workers’ compensation specialist’s efforts rather than the attorney’s, in which case a fee award might not be justified.”

Rayford H. Taylor
Of Counsel
Gilson Athans P.C.
980 Hammond Drive, Suite 800
Atlanta, Georgia 30328
770-512-0300 - Ext. 529
770-512-0070 - Fax
rtaylor@gilsonathans.com
www.gilsonathans.com

The Appellate Court found that the evidence supported the State Board

of Worker’s Compensation’s denial of benefits to the claimant

ABF Freight System, Inc. v. Presley

(Georgia Court of Appeals)

Employee not entitled to additional benefits because he could not establish he had sustained a “fictional new accident,” but rather had merely had a “change in condition.”

Summary

Employee had to prove right knee problems were a result of a fictional new injury, rather than a change in condition arising out of normal life.  He failed to prove a new injury, so not entitled to benefits.

Discussion

Mr. Presley worked for ABF Freight System, Inc. as a truck driver and dock worker.  He sustained a compensable injury to his right knee, had surgery, and received temporary total disability (“TTD”) benefits during his absence from work.  He later returned to work without restrictions or limitations and continued to perform his normal job duties.  However, his right knee pain worsened and he was diagnosed with arthritis in the knee and was advised that he would eventually need a right knee replacement.

Mr. Presley also sustained a compensable job-related injury to his left knee, had surgery and again ultimately returned to work without restrictions or limitations and resumed his normal duties.  His right knee pain continued to worsen following his left knee surgery.  He had apparently suffered a tear of the medial meniscus to his left knee but continued his normal job duties even as his right knee pain worsened.

After an additional year of continuing to work in his regular job duties following his left meniscal tear, the doctor informed Mr. Presley that a total right knee replacement was necessary.  Mr. Presley had the surgery and was placed on a “no work” status and sought payment of TTD benefits, arguing that he had sustained a fictional new injury.  ABF argued that it was a change in condition for the worse, and the right knee condition and it was not compensable.

Whether an employee suffers a fictional new injury or change in condition is a question of fact for determination by the administrative law judge (“ALJ”).  In this case, the ALJ denied benefits, finding that Mr. Presley did not suffer fictional new injury and that the two-year statute of limitation barred his claim since he had last received TTD benefits for his right knee more than years prior.  On appeal, the State Board adopted that decision.

The parties agreed that there was no singular specific incident creating an immediate need for Presley’s total right knee replacement.  Instead, the dispute was whether Presley’s total temporary disability arising from his right knee replacement should be characterized as a fictional new accident or a change in condition for the worse.

A fictional new injury, or aggravation of a pre-existing condition, occurs when a “claimant is injured on the job but continues to perform the duties of his employment until such time that he is forced to cease work because of the gradual worsening of his condition which was at least partly attributable to his physical activity in continuing work subsequent to his injury.” Central State Hospital v. James, 147 Ga. App. 308, 309, 248 S.E.2d 678 (Ga. App. 1978). 

A change in physical condition, on the other hand, occurs when a claimant sustains an injury and is awarded compensation during his period of disability.  Subsequent thereto, the employee returns to employment performing his normal duties or ordinary work.  Then as a result of the wear and tear, ordinary life and the activity connected with performing his normal duties and not because of any specific job-related incident, his condition gradually worsens to the point where he can no longer continue to perform his ordinary work. 

Ordinarily, the distinguishing feature that determines whether that disability is either “a change of condition” or a “fictional new accident” is the intervention of new circumstances.  Whether an employee suffers a fictional new accident or a change in condition is a question of fact to be determined by the ALJ.  In this case, the Appellate Court found that under the “any evidence rule” the findings of the State Board and the ALJ had to be affirmed.

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ABOUT THE AUTHOR

The article was written by Rayford H. Taylor, Esq., Of Counsel to Gilson Athans P.C., a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation and all other liability and commercial matters.  Mr. Taylor is admitted to practice law in Florida and Georgia and is AV rated by Martindale-Hubbell, which is the highest rating an attorney can receive.  Taylor and Gilson Athans 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.

Rayford H. Taylor
Of Counsel
Gilson Athans P.C.
980 Hammond Drive, Suite 800
Atlanta, Georgia 30328
770-512-0300 - Ext. 529
770-512-0070 - Fax
rtaylor@gilsonathans.com
www.gilsonathans.com

Employee Entitled to receive Temporary Total Disability Benefits

Burns v. State of Georgia, Department of Administrative Services

(Georgia Court of Appeals)

Employee entitled to receive temporary total disability (“TTD”) benefits following termination because Employer was found to have terminated her because of her work-related injury.

Summary

LaVerne Burns was a receptionist for the State of Georgia, Department of Administrative Services.  She was injured when the chair she was sitting in collapsed.  She received worker’s compensation benefits in connection with the injury, but continued to work in her position until her employment was terminated.  She then sought TTD benefits.  An administrative law judge (“ALJ”) awarded Ms. Burns TTD benefits, finding the reasons the employer gave for terminating her employment were pretextual and she was terminated due to her work injury.  The State Board’s Appellate Division upheld the award of TTD benefits.

Discussion

Following her employer’s termination, the claimant sought TTD benefits.  The employer challenged the request on the grounds that her employment was terminated for reasons unrelated to her injury and because she had not sought another job.  After the trial, the ALJ awarded Burns TTD benefits and specifically found she was a credible witness and “the reasons given by the employer to justify her termination were pretextual and that she was terminated due to her work injury.”  Because the real reason for the termination was the work-related injury and claim, the ALJ determined Burns had carried her burden of proving, by a preponderance of the evidence, entitlement to TTD benefits. 

As a general rule to obtain benefits, a claimant is required to show either that they have searched for another position or that they had been working in a restricted capacity when their employment was terminated.  The Supreme Court of Georgia inPadgett v. Waffle House, 269 Ga. 105, 498 S.E.2d 499 (Ga. 1998), clarified that showing a diligent but unsuccessful effort to secure employment following termination was a way of establishing the necessary element of causation.  However, in this case, by proving the work-related injury was the proximate cause of the termination, the claimant established the causal link between injury and her worsened economic condition.  Therefore, she did not have to establish she had searched for another position.  Finding the reasons for the termination were a pretext to avoid continued payment of benefits satisfied the proximate cause requirement. 

The Court said the issue was not whether Burns sought new employment or whether she was working under restrictions when the employer terminated her, but whether she demonstrated the necessary causal link between her work-related injury and her worsened economic condition.  The fact that the employer gave pretextual reasons for terminating her employment, which was due in part to Burns’ work-related injury, established the causal link.  The case was remanded back to address whether or not there was sufficient evidence to establish the finding of her termination based upon a pretext.

________________________

ABOUT THE AUTHOR

The article was written by Rayford H. Taylor, Esq., Of Counsel to Gilson Athans P.C., a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation and all other liability and commercial matters.  Mr. Taylor is admitted to practice law in Florida and Georgia and is AV rated by Martindale-Hubbell, which is the highest rating an attorney can receive.  Taylor and Gilson Athans 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.

NEWS

RITSEMA & LYON WEBINAR – MEDICARE SET ASIDES

Ritsema & Lyon is hosting a webinar on Medicare set asides.  The webinar is scheduled for Thursday July 23, 2015 from 9:00 a.m. - 10:30 a.m. MDT.  Delores Dafoe will be discussing the ins & outs of preparing and handling MSAs.  Check out the Events section of our website, www.Ritsema-Lyon.com, for more information and to register.  Please contact Jennie Smith atJennie.Smith@Ritsema-Lyon.com or 303.297.7275 with any questions.

22^nd ANNUAL SEMINAR

Ritsema & Lyon’s 22^nd Annual Workers’ Compensation Seminar will be held on Friday, August 28, 2015, at the Doubletree by Hilton Hotel in Denver. Full itinerary and invitation coming soon.  Contact Jennie Smith atJennie.Smith@Ritsema-Lyon.com or 303.297.7275 with any questions.

NEBRASKA UPDATE

NEW LEGISLATION PASSED

LB480, discussed in our May 2015 newsletter was passed.  The changes are as follows:

• Benefits can be denied when an employee knowingly and willfully made false statements regarding his or her physical or medical condition by acknowledging that he or she is able to perform the essential functions of a job based on the employer’s job descriptionwhen such misrepresentation caused further injury.

• Employers are not responsible for any finance charges or late penalty payments as a result of medical services rendered by a provider.

• The interest rate applicable to late payments is now 6 percentage points above the bond investment yield, as published by the U.S. Secretary of Treasury, which is currently 2.137 percent.

• Workers’ compensation trust investment rules were changed to expand investment options.

NEBRASKA OPINIONS

The case of Canas-Luong v. Americold Realty Trust, 22 Neb. App. 999 (2015), confirmed that an employee is not at MMI until all conditions are at MMI and no permanency is due for one condition until all conditions are at MMI.  The trial court found claimant was not at MMI for her psychological injury and awarded ongoing TTD, but also awarded PPD for an upper extremity impairment.  The Court of Appeals reversed the award of the member impairment, noting that not only was the employee not at MMI for all conditions, that impairment may be factored into her overall loss of earning capacity once she did reach MMI for all conditions pursuant toBishop v. Specialty Fabricating Co., 277 Neb. 171, 760 N.W.2d 352 (2009), andMadlock v. Square D Co., 269 Neb. 675, 695 N.W.2d 412 (2005).

TALES FROM THE TRENCHES

The Omaha office successfully defended an attempt by a plaintiff to strike a counterclaim filed by the employer.  Filing counterclaims is a useful procedural tool to ensure a hearing on the merits is had if either party believes one is necessary, and is very valuable.  A different trial judge recently struck a counterclaim, which created some question on whether the practice could continue.  The favorable ruling supports its use and stems the concern that the Court as a whole may shift to disallow it.

For more information regarding counterclaims contact Jennifer Caswell in our Omaha, NE office.

Jennifer.Caswell@Ritsema-Lyon.com or 402.505.4630

On June 26, 2015, the Alabama Court of Civil Appeals released its decision in Pat Tate as Administrator of the Estate of Michael Traffanstedt v. Liberty Mutual Insurance Company and Dover Corporation. In 2006, Traffanstedt entered into an agreement to settle his workers’ compensation claim against his employer, Dover Corporation. That settlement left future medical benefits open. In 2011, Traffanstedt and Dover entered into a second settlement agreement regarding his future medical benefits, but the trial court rejected the settlement. In 2013, Traffanstedt and Dover again entered into an agreement for the settlement of his future medical benefits, and scheduled a hearing before the trial court for approval. Dover’s insurance carrier, Liberty Mutual, issued a check in the amount of $70,000 for the settlement, contingent upon court approval. However, Traffanstedt died before the settlement hearing, and Liberty Mutual refused to honor the check. Tate, the Administrator of Traffanstedt’s estate, sued Liberty Mutual and Dover, alleging breach of contract. Liberty Mutual and Dover took the position that they were not bound by the settlement agreement because it had not yet been court-approved prior to Traffanstedt’s death. They also asserted that the exclusivity provisions of The Alabama Workers’ Compensation Act barred Tate’s claims for breach of contract. The Trial Court entered Summary Judgment in favor of Liberty Mutual and Dover, and Tate appealed.

In its analysis, the Court of Appeals noted that workers’ compensation settlements, including the one at issue, are handled differently under the law than other settlements, such as those involving tort claims. The Court also stated that workers’ compensation settlements were different even than settlements involving a minor, in that a settlement contract between a minor and insurer is voidable at the election of the minor, whereas workers’ compensation settlements for less than the amount of compensation provided for in the Act are contingent upon Court approval. Therefore, the Court held that workers’ compensation settlements are not valid for any purpose until approved by the Court.

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ABOUT THE AUTHOR

This article was written by Charley M. Drummond, Esq. of Fish Nelson & Holden, LLC. Fish Nelson & Holden 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.

Intermittent leave can be extremely difficult for employers.  One important point for employers to realize is that an employee on intermittent leave who comes to work in between flare-ups may be held to all customary performance standards.  The case ofParks v. UPS Supply Chain Solutions, Inc. 2014 U.S. DIST LEXIS 13538 (E.D. Kentucky 2014) illustrates this concept.

Gene Parks worked for UPS since 1999 as a material handler.  He drove a forklift, moved boxes, picked products and controlled inventory.  He began taking leave for medical reasons in 2003, and he conceded that UPS never interfered with his leave during his early years with the company.

In 2009, Parks was transferred to a new account.  Parks began experiencing severe neck pain and applied for up to 12 weeks of intermittent leave.  The company granted this request.  In May 2010 the company issued a verbal warning to Parks for failure to meet standard productivity goals in either replenishment or picking.  The company noted that Parks had a record of poor quality in receiving, but Parks attributed his errors to a medical condition that affected his ability to concentrate.  The HR Director advised Parks that his current FMLA paperwork only authorized intermittent leave and indicated that he could perform all essential job functions between flare-ups.  She also spoke to him about additional training opportunities which Parks declined.  Parks countered that he himself had asked his doctor not to label him as disabled because he feared losing his job.  The HR Director suggested that Parks should update his FMLA paperwork; otherwise he would be held accountable for production expectations.

A few days later Parks received a first written warning for poor quality in picking.  By late 2010 the write ups became more frequent.  Parks was written up numerous times for errors.  He would put cartons away but record an incorrect location in the computer system or fail to enter their location in the computer system, or put boxes away upside down.  Parks told his supervisors that his medical condition was impacting his performance.  His supervisors advised him again that FMLA only covers missed time, not performance at work.  They recommended again that if he could not do his job for medical reasons, he should update his FMLA paperwork.

Parks next was issued warnings for conduct and behavior violations.  Around this period of time, Parks began a course of physical therapy and cortisone injections, but this treatment was also ineffective.  His doctor told him that he would need surgery some time in the future. He submitted an new FMLA certification in January 2011 stating that he would need continuous leave for neck surgery in the near future.  No specific date was given until a medical appointment in May when Parks’s doctor advised that the surgery date would be June 16, 2011.  Parks claimed he told his supervisors about the scheduled surgery at the beginning of his shift the following week.  The company denied being told any specific surgery date. Rather, they knew only that surgery would take place in the future.

On the same date that Parks says he told the company about his need for surgery on June 16, 2011, his supervisor discovered that Parks had logged an incorrect location in the computer system for a container.  Under the company’s progressive discipline system, Parks was already on a final written warning status for performance and conduct.  The company met with Parks at the end of his shift and terminated his employment.  They offered him COBRA information but Parks threw away the COBRA packet because he felt COBRA was too expensive. Parks then sued under the FMLA for interference and retaliation.  

The court noted the timing issue in this case between Parks’ alleged discussion about his upcoming surgery and his termination.  It said that the close timing between Parks’s request for leave and his termination established a prima facie case of FMLA retaliation, shifting the burden to UPS to explain a non-discriminatory reason for its actions.  UPS produced detailed information regarding the poor performance of Parks in the months leading up to his discharge.  The Court was impressed with the company’s detailed documentation:

Defendant has produced thorough documentation of Plaintiff’s performance issues at UPS.  Plaintiff received multiple written warnings for his sub-par performance, all of which indicated that he could face termination if his work did not improve.  Despite this admonition, Plaintiff declined additional training opportunities.  Although Plaintiff’s errors became more frequent as his neck condition worsened, Lovelace, Valdez and Welch repeatedly told him that, while his FMLA paperwork authorized time off to cope with his condition, it did not excuse poor performance.  As long as Plaintiff chose to work, he would have to meet the standards expected of all employees.  If Plaintiff felt that he could not do so, then he needed to update his paperwork again.  Defendant has not only demonstrated that Plaintiff had consistent performance issues, it has shown that Plaintiff failed to heed warnings or take advantage of opportunities for improvement, knowing full well that termination could result from continued errors.  Therefore, the Court finds that Defendant has articulated a legitimate, non-discriminatory reason for terminating Plaintiff, thus shifting the burden back to Plaintiff.

The court granted summary judgment to UPS and dismissed Parks’s law suit.  One important concept which this case demonstrates is that the FMLA provides only for leave. It does not insulate an employee or an exempt an employee from meeting performance standards while at work.  The employer has a right to assume that if an employee on intermittent leave comes to work, he or she will be able to meet work requirements.  In this case, UPS did an extraordinary job in documenting each and every performance issue, and this excellent documentation was the chief reason that the company prevailed.

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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.