State News : Alabama

Guyoungtech USA, Inc. v. Dees

On June 6, 2014 the Supreme Court of Alabama issued a lengthy opinion covering many issues related to a Retaliatory Discharge case tried in Conecuh County Circuit Court.

Dees, the employee, was injured on March 14, 2011, 4 months after she was hired. Shortly before hiring Dees HMMA reduced its orders from Guyoungtech. In November of 2010 Guyoungtech laid off 300 employees and then another 212 in May of 2011. Dees was one of the layoffs in May of 2011. As a result Dees filed the retaliatory discharge claims alleging she was fired because of her workers’ compensation in violation of § 25-5-11.1 of the Alabama Workers’ Compensation Act. The jury order Guyoungtech to pay $1,000,000.00 in compensatory damages and $2,500,000.00 in punitive damages. The Trial Judge remitted the damages to $300,000.00 in compensatory damages and $900,000.00 in punitive damages. Dees accepted the remitted amounts and Guyoungtech appealed the decision.

Guyoungtech argued that Dees was part of a corporate layoff and not terminated, but was definitely not terminated as a result of her workers’ compensation claim. Dees argued that Guyoungtech used the layoff as a mask to conceal the wrongful termination. Dees pointed to the proximity in time and a safety director denying knowledge of her injury which seemed implausible. The Supreme Court noted that mere proximity of time is typically not enough to establish sufficient evidence in a retaliatory discharge claim. However, the jury could have found the safety director’s testimony that she/he did not know about the injury was not credible. That, in addition to the proximity was sufficient for the jury to find liability and the Supreme Court stated they were not in a position to substitute their judgment for the jury.

However, the errors as it related to the damages resulted in the Supreme Court reversing liability and ordering a new trial.

In regards to the lost wages component of the compensatory damages, the Supreme Court pointed out that no expert testified as to Dees’ lack of employability, or restricted access to the labor market, as a result of her termination. They stated that Dees’ testimony that she was under treatment and restrictions and hampered in looking for work does not provide evidence that the discharge itself rendered her less employable. The Supreme Court stated that the extent of her disability and its effect on her ability to work was part of the workers’ compensation trial, which was severed from the discharge trial, and not at issue in the discharge case. The Supreme Court then pointed out that Guyoungtech had given her a letter stating she was laid-off, and not fired, so there was no stigma of being terminated when she went to secure employment. Therefore, no evidence was present to show the termination caused Dees to be less marketable in the work force.

As to the mental anguish component of the compensatory damages, the Supreme Court pointed out the broad discretion given to the jury in determining mental anguish. However, the Supreme Court pointed to two other decisions where the employee presented evidence of mental health medication, mental health treatment, divorce, loss of home and/or inability to pay bills where one employee was awarded $30,000.00 for mental anguish and the other was award $75,000.00. The Supreme Court stated that Dees only presented evidence of concern for the stability of her marriage. Dees did not present evidence that she had lost her home, could not pay bills, or that she required mental-health treatment.

The Supreme Court also opined that the trial court erroneously admitted Mortality Tables into evidence. Guyountech argued that Dees life expectancy was not relevant to the discharge claim, as Dees offered no evidence she could never work again. The Supreme Court pointed out that Mortality Tables are admissible when there is evidence that the plaintiff suffers from permanent personal injury.Drummond Co. v. Self, 622 So. 2d 336, 337 (Ala. 1993). The Supreme Court stated that the trial court was in error when it instructed the jury to use the mortality tables if they were reasonably satisfied that the injuries were permanent when there was no expert medical testimony that the injuries were permanent.

The verdict form did not itemize the compensatory damages and both, lost wages and mental anguish, were infected by the error of allowing the mortality table into evidence. As such, the error constituted grounds for reversal.

The Supreme Court then pointed out that for a jury to award punitive damages there must be compensatory damages.Life Ins. Co. of Georgia v. Smith, 719 So. 2d 797, 806 (Ala. 1998). Based on the reversal of the compensatory damages the punitive damages were due to be reversed as well. However, the Supreme Court offered guidance to the trial court upon remand as to the issue of punitive damages. At the trial level Dees’ argument for punitive damages was based on Guyountech’s failure to report some smaller workers’ compensation claim despite Dees’ claim being properly reported. The Supreme Court stated that punitive damages for the purpose of punishing a defendant for harm it did to others, not the plaintiff, is not supported by case law.Philip Morris USA v. Williams, 549 U.S. 346, 354, (2007). As a result, the Supreme Court pointed out that punitive damages must be based on harm to Dees, not potential harm to other individuals not a party to the litigation.

As a result of the error involving the compensatory and punitive damages a new trial was necessary because the question of damages and liability were too intertwined for the jury to just consider the issue of damages.

MY TWO CENTS

It is always important to sever your workers’ compensation trial from the discharge trial to assure there is no confusion that the disability, or inability to work due to the disability, should not be considered when determining damages in the discharge trial. Even if the judge instructs the jury not to consider the disability you can almost be sure that it will factor in if they are allowed to hear it. This will help keep the focus of the damages in the discharge trial on the termination only.

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ABOUT THE AUTHOR

The article was written by Joshua G. Holden, Esq. a Member of Fish Nelson, LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation and related liability matters. Mr. Holden is AV rated by Martindale-Hubbell, which is the highest rating an attorney can receive. Holden 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 atjholden@fishnelson.com or 205-332-1428.

In Ex parte Schnitzer Steel Industries, Inc., released on September 27, 2013 (summarized on our blog September 28, 2013), the Alabama Supreme Court granted the employer’s petition for writ of mandamus and held that the post-accident report was prepared in anticipation of litigation and, therefore, was considered work product and not discoverable.

On May 30, 2014, the Alabama Supreme Court decided not to get involved in a work product issue inEx parte USA Water Ski, Inc. and denied the petition for writ of mandamus filed by USA Water Ski, Inc. The issue came before the Supreme Court previously when USA Water Ski, Inc filed a petition for writ of mandamus in June of 2013. In June the Supreme Court found that the post accident report at issue was work product and directed the trial court vacate its order that USA Water Ski, Inc. produce the report. Upon remand additional evidence came to light suggesting the post accident report was not prepared in anticipation of litigation. The trial court once again ordered that USA Water Ski, Inc. produce the post accident report. USA Water Ski, Inc. once again file a petition for writ of mandamus and this time the Supreme Court denied the petition without an opinion. However, Chief Justice Moore wrote a concurring opinion. According to Chief Justice Moore a writ of mandamus is not proper in the context of discovery issues and the Supreme Court should not get involved. Chief Justice Moore opined that the trial court is in a better position to deal with discovery issues and petitions for writ of mandamus require the need for extraordinary remedy which is normally not present in discovery issues.

My Two Cents:

It seems that once the trial court orders a party to produce a post accident report the Supreme Court is most likely going to defer to the trial court’s opinion and not get involved. For this reason it is important for employers to establish the reason behind the creation of the post accident report. As the Supreme Court ruled in Ex parte Schnitzer Steel Industries, Incthe report does not have to be solely prepared in anticipation of litigation but there must be evidence that the employer could have reasonably assumed litigation was expected, and for that reason, as well as standard procedure or other reasons, prepared the post accident report. If the employer can establish this at the trial level the post-accident report should not be discoverable. However, if the trial court orders that it be produced the Supreme Court has indicated that they are not likely going to get involved in discovery issues.

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ABOUT THE AUTHOR

The article was written by Joshua G. Holden, Esq. a Member of Fish Nelson, LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation and related liability matters. Mr. Holden is AV rated by Martindale-Hubbell, which is the highest rating an attorney can receive. Holden 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 atjholden@fishnelson.com or 205-332-1428.

On May 16, 2014, the Alabama Court of Appeals released its opinion in Jesse Stutts, Inc. v. William Hughey overruling a trial court’s finding that the employee’s new injury was a direct and natural result of his prior compensable injury. In Alabama, if an employee’s injury is found to be the direct and natural result of a previous compensable workers’ compensation injury, then the previous employer may be responsible for benefits resulting from the new injury, even if it the injury did not occur while working for the employer. However, when it cannot be shown that the first injury was the direct cause of the second injury, then the employee cannot recover additional compensation benefits for the new injury from the original employer.

Hughey, the employee in the case at hand, injured his back while working for Jesse Stutts, Inc., in 2002, and Stutts remained responsible for medical treatment for that injury. In 2011, while working for Cracker Barrel, Hughey claimed that he fell and re-injured his back due to his leg giving out. He also claimed that his leg weakness was related to his 2002 accident and that he had fallen numerous times as a result of the weakness. From the very beginning, Hughey wanted Stutts to pay for the treatment he would need for this new injury. For reasons unknown, he never sought benefits from Cracker Barrel.

At trial, the medical evidence made no clear connection between Hughey’s legs giving out and his 2002 injury. Although it was suggested that the 2002 injury could result in weakness, there was no medical evidence directly connecting Hughey’s new injury to his 2002 accident. However, despite the evidence, the trial court found that Hughey’s 2011 fall was the direct and natural result of his 2002 injury.

On Appeal, Stutts argued that Hughey had not presented substantial evidence to support the trial court’s decision, and the Court of Appeals agreed. It was noted that there was evidence suggesting that Hughey’s legs were weak and that they would give out on him at times, causing him to fall. However, the Court also noted there was no medical evidence supporting Hughey’s contention that the weakness was the cause of his new injury. In addition, the Court pointed out that Hughey had sustained other falls and incidents which were just as likely to have caused Hughey’s condition.

The Court of Appeals found that the trial court’s determination that Hughey’s fall was the result of his 2002 injury was speculation and not supported by the evidence, and therefore, overruled the trial court’s decision.

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About the Author

This post was written by Trey Cotney, Esq. of Fish Nelson LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation matters. Fish Nelson is a member of the National Workers’ Compensation Network (NWCDN). If you have any questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author at tcotney@fishnelson.com or any firm member at 205-332-3430.

The Alabama Legislature recently passed HB-107, which would amend § 25-5-56 of The Alabama Workers’ Compensation Act. HB-107 was introduced by District 55 Representative Rod Scott (D) on January 14, 2014. The legislature passed the bill in March, and it has been sent to Governor Bentley for his signature. Under current law, if an employee dies as the result of an accident occurring in and arising out of his employment, the employer must pay burial expenses up to a maximum of $3,000.00. If Governor Bentley signs HB-107, the maximum burial expense would be increased to $6,500.00.

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ABOUT THE AUTHOR

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

On May 19, 2014, The New Mexico Court of Appeals ruled that Redwood Fire & Casualty must reimburse an injured mechanic for the cost of marijuana he was prescribed for pain due to his on-the-job injury. Gregory Vialpando injured his lower back in 2000 while working for Ben’s Automotive Services. Vialpando’s physician stated that Vialpando’ resulting pain was among the most intense, frequent and long-lasting out of thousands of patients the doctor had treated. In 2013, the workers’ compensation board approved Vialpando to use marijuana as treatment, but Redwood objected to reimbursing him for the cost of the drug due to its illegal status under federal law. While New Mexico passed theLynn and Erin Compassionate Use Act in 2007, legalizing the use of cannabis for treatment of debilitating medical conditions,The Controlled Substances Act of 1970 still classifies marijuana as a Schedule I drug under federal law with "no acceptable medical use", and makes its sale, possession, and distribution illegal. The Court of Appeals stated in its decision that neither Redwood nor Ben’s cited to any specific federal law that they would violate by reimbursing Vialpando for his herbal purchases.

MY TWO CENTS

It is unclear exactly what positions Ben’s Automotive and Redwood took at trial. However, it would appear that there are valid arguments to support denying reimbursement. By paying for Vialpando’s marijuana, Redwood would arguably be enabling Vialpando to purchase drugs that are illegal under federal law and, therefore, could arguably be considered to be conspiring to violate federal law. Section 846 of theControlled Substances Act of 1970 provides that any person who conspires to commit any other drug offense shall be subject to the same penalties as those prescribed for the offense itself. If reimbursing a person for buying drugs amounts to conspiracy to violate The Controlled Substances Act, Redwood’s concerns would certainly be understandable. Additionally, from Redwood’s perspective, insurance policies are contracts, so contract defenses would apply. Illegality is a defense to a breach of contract claim, so Redwood may have a valid defense in that regard, depending on what state’s law governs the insurance contract.

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ABOUT THE AUTHOR

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

The Court of Appeals recently reversed a trial court’s decision awarding benefits outside of the statutory schedule inAmerican Cast Iron Pipe Company v. Sharon Blackmon. The Court also reversed the trial court’s decision to grant the employee an additional authorized treating physician after she had already chosen a doctor from a panel of 4.

Blackmon worked as a pipe processor for ACIPCO, and sustained injuries to her wrist in 2008 and to her ankle in 2010. There was no dispute that the injuries were compensable, but there was disagreement over whether Blackmon’s injuries were subject to the statutory schedule.

At trial, Blackmon testified that her wrist pain did not normally extend to or affect other parts of her body, but that the pain would sometimes run up her arm. As for her ankle injury, the evidence indicated that prolonged standing would cause aching, but it did not prevent her from taking care of herself. There was no evidence that the ankle injury affected other parts of Blackmon’s body.

The trial court considered evidence provided by Blackmon’s vocational expert, and found that Blackmon suffered a 35% permanent partial disability, and awarded benefits outside of the statutory schedule. The court also granted Blackmon’s request that ACIPCO provide her treatment with a new physician of her choice.

On appeal, ACIPCO argued that the evidence did not support the trial court’s decision to award benefits outside of the statutory schedule and that the trial court should not have considered vocational evidence. The Court of Appeals agreed and stated that injuries may only be removed from the schedule when the effects of an injury to a scheduled member extend to other parts of the body and interfere with their efficiency. The Court found no substantial evidence indicating that the effects of either scheduled injury extended to or interfered with other parts of Blackmon’s body. The Court also noted that vocational evidence is generally irrelevant when compensation is limited to the statutory schedule.

The Court also agreed that ACIPCO should not have to provide Blackmon with yet another treating physician. The evidence was clear that Blackmon had already exercised her right in selecting a new treating physician from a panel of 4, and the Court held that she was not entitled to another new doctor.

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About the Author

This post was written by Trey Cotney, Esq. of Fish Nelson LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation matters. Fish Nelson is a member of the National Workers’ Compensation Network (NWCDN). If you have any questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author at tcotney@fishnelson.com or any firm member at 205-332-3430.

The Alabama Court of Civil Appeals recently released an opinion wherein it considered the difference between a temporary flare versus a permanent aggravation of a preexisting condition. InMadison Academy v. Hanvey, the plaintiff, worked as a janitor on the defendant’s campus. In May and June 2011, Hanvey was exposed to chemicals at work which aggravated her respiratory system. The symptoms continued to get worse over the next few months.

It was not until September 2011 that Hanvey was finally diagnosed with a rare disease known as myesthenia gravis (MG). Her doctors treated the disease, and by March 2012, Hanvey’s symptoms were gone and her condition was stable. Although MG cannot be cured, it can be controlled with the right medication. The medical evidence showed that Hanvey’s MG existed before her exposure to the chemicals at work and was not caused by the exposure. Her doctors stated that the preexisting condition was temporarily aggravated by the chemicals, but not worsened.

The trial court found that Hanvey was totally and permanently disabled due to her exposure to the chemicals at work. On appeal, Madison Academy argued that the root of Hanvey’s disability was her MG which the evidence indicated was not caused by her employment. And since the temporary flare up had resolved, they believed they were no longer responsible for providing benefits under the Act.

The Appeals Court noted that Hanvey’s MG was aggravated, but found that there was no evidence that the chemicals had worsened the underlying condition. Once the temporary aggravation had resolved, Hanvey was back to her baseline condition and no longer entitled to benefits since there was no permanent injury. Therefore, the Court reversed the trial court’s award of permanent and total disability benefits.

My Two Cents:

The Court of Appeals has made it very clear that employers in Alabama will not be responsible for disability stemming from preexisting conditions which are not permanently worsened by a work accident. In cases where the employment temporarily exacerbates a preexisting condition, the employer is only responsible for providing benefits for the temporary disability period caused by a work accident. Any other resulting disability from the natural progression of an underlying or preexisting condition is not compensable.

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About the Author

This post was written by Trey Cotney, Esq. of Fish Nelson LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation matters. Fish Nelson is a member of the National Workers’ Compensation Network (NWCDN). If you have any questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author at tcotney@fishnelson.com or any firm member at 205-332-3430.

Sheila W. Austin, as admin. of the estate of Rose W. McMillan v.

Providence Hosp. and Sedgwick Claim Management. Services, Inc.

Released March 21, 2014

The deceased employee’s representative appealed Summary Judgment entered by the Mobile Circuit Court in favor of the employer and its claims administrator. The underlying case was based on a breach of contract claim filed by the estate against the employer and administrator. The alleged breach of contract was based on an agreement to settle future medical benefits.

On October 27, 2011, the parties agreed to settle McMillan’s future medical benefits for $75,000.00. However, McMillan was a eligible for Medicare so the parties submitted the Medicare Set-Aside proposal to CMS for approval. On November 29, 2012 CMS determined that of the $75,000.00, $35,951.00 had to be reserved for future medical care and drug expenses. The parties had agreed that the settlement was to be court approved. However, on December 9, 2012, McMillan passed away before the court could approve the settlement. Providence and Sedgwick indicated that the settlement would not be honored because it had not been approved by the court. As a result, Austin filed the breach of contract claim.

The Trial Court entered summary judgment in favor of the employer and administrator based on the exclusivity provision of the Alabama Workers’ Compensation Act. The Trial Court also concluded that the agreement was not valid because it had not been approved and could not be made valid due to the employee’s death. The Trial Court specifically said that because future medical benefits are payable without time limitation any lump sum payment would reduce the benefits available and require court approval.

Austin argued on appeal the agreement to settle was a binding contract and survived the death of McMillan pursuant to §§ 6-5-462 and 6-5-465, Ala. Code 1975. Austin argued that the agreement became unconditional after CMS approved the medicare set-aside proposal and it was not required to be court approved because the settlement exceeded the monetary value of the future medical benefits as determined by CMS. As a result, Austin argued that § 25-5-56, Ala Code 1975, did not require approval of the settlement by the court.

The Court of Civil Appeals did not address Austin’s argument because Austin failed to address the Trial Court’s primary ground for entering summary judgment, the exclusivity provision. The Court of Civil Appeals stated that Austin failed to argue or explain how the subject claim would fall outside of the exclusivity provision. The Court of Civil Appeals stated that because the Trial Court had an alternate basis for granting summary judgment, if the appellant fails to show error as to each basis, the appellant waives any argument on those grounds and this results in an automatic affirmance of the judgment.

My Two Cents:

While the Court of Civil Appeals did not actually rule on Austin’s argument, I find it interesting that they chose to write an opinion pointing out the exclusivity provision and breach of contract. This is the first time I have seen the exclusivity provision and breach of contract mentioned at the same time. The exclusivity provision prevents recovery by any other method, unless provided for under the Act, for injury caused by an on-the-job injury. § 25-5-52, Ala. Code 1975. The question created by this case is, does a breach of contract claim qualify as a claim based on the workers’ compensation injury? The argument could definitely be made that once a valid contract to settle is entered into, that an attempt to recover under the theory of contract is no longer based on the injury itself. This would then fall outside of the exclusivity provision.

In this case it does not appear there was a valid contract to enforce because the parties had agreed to have it approved by the court making the contract contingent upon court approval. Had that not been the case, the fact that the payment was in excess of what CMS determined necessary to cover future medical benefits may have resulted the agreement not being continent upon court approval. § 25-5-56 only requires court approval when settlement is for an amount less that the amount stipulated by the Alabama Workers’ Compensation Act. Therefore, if there had not been a contingency the estate might have succeeded in arguing the exclusivity provision does not apply to a breach of contract claim because the recovery is based on the contract and not the workers’ compensation injury.

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ABOUT THE AUTHOR

The article was written by Joshua G. Holden, Esq. a Member of Fish Nelson, LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation and related liability matters. Mr. Holden is AV rated by Martindale-Hubbell, which is the highest rating an attorney can receive. He is the immediate past chair of the ABA/ TIPS Workers’ Compensation and Employers’ Liability Committee.

Holden 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 atjholden@fishnelson.com or 205-332-1428.

On March 14, 2014, the Alabama Court of Civil Appeals released its opinion in the case ofMichael Brown v. Dixie Contracting Company and Salter’s Exterminating Company, Inc. In that case, Brown sued Dixie and Salter’s for injuries he allegedly suffered in an automobile accident while working for them. The vehicle that Brown was driving at the time of the accident was owned by the owner of Dixie. Dixie and Salter’s are related companies, as the owner of Dixie was a majority shareholder in Salter’s. The two companies operated out of the same building, and they shared a secretary and receptionist. Salter’s performed termite inspection and extermination services, and Dixie would often repair termite damage discovered through Salter’s inspections. Brown alleged Dixie and Salter’s were essentially the same company, and that his injuries occurred in and arose out of his employment with both defendants. Dixie contended that Brown did not work for Dixie, and Salter’s contended that Brown was an independent contractor.

Brown testified that at the time he was hired, the owner of Dixie never specified whether Brown was being hired as an employee or independent contractor. He also testified that he did not sign a contract with Salter’s or Dixie. Brown testified that he considered himself to be an employee and that his supervisor told what time to be at work and when he could leave. Brown testified that his supervisor would tell him on any given day whether he was to sell pest control services or was to work construction. Brown testified that on some days he would sell pest control services for Salter’s, and on other days, he would perform construction work for Dixie. Brown further testified that when performing inspections for Salter’s, he was instructed to call Dixie if any termite damage was located so that Dixie could quote the repairs. Salter’s payroll records listed Brown as a 1099 "employee" who was to be paid a "draw" against commissions and sales. However, those same records indicated that Brown was actually paid at a flat rate of $80.00 per day for sales work, while he was paid at an hourly rate for construction work he performed for Dixie. Brown’s supervisor testified that he had hired Brown to work for Salter’s as a subcontractor in sales, but that Brown was also an "at will employee" that could be terminated for any reason. He testified that Brown was required to report to work by 8:00 a.m. each day. The defendants produced evidence that Brown was always paid by Salter’s and never by Dixie, and that Brown only performed construction work after the accident. However, Brown’s evidence also established that several other employees performed work for Dixie but were paid by Salter’s.

The trial court found that Brown was an independent contractor of Salter’s and that Brown did not perform any work for Dixie until after the alleged accident occurred. Based on this, the trial court denied workers’ compensation benefits. Brown appealed on the grounds that the trial court’s order did not include adequate findings of fact and conclusions of law, and was not supported by substantial evidence. The Alabama Court of Appeals agreed that the findings of fact and conclusions of law set out by the trial court were insufficient, which allowed them to look to the record in order to determine whether substantial evidence supported the trial court’s determination. The Court of Appeals noted that the primary factor in determining whether a worker is an employee or an independent contractor is whether the purported employer has reserved the right to control the manner in which the worker performs the duties of the work. In order for a worker to be considered an employee, the prospective employer must retain the right to direct not only what shall be done but also how it shall be done. The Court further pointed out that the four factors to be considered in determining whether an "employer" has retained the right of control include: (1) direct evidence demonstrating a right or an exercise of control; (2) the method of payment for services; (3) whether equipment is furnished; and (4) whether the other party has the right to terminate the employment. However, the Court also pointed out that no one fact by itself can create an employer/employee relationship, and that the retention of control necessary to establish such a relationship is determined on a case-by-case basis considering the totality of the evidence.

Based on the evidence, the Court of appeals found that Salter’s controlled nearly every aspect of Brown’s employment. Salter’s controlled whether Brown would perform tasks in pest control sales or construction as Salter’s or Dixie needed. Salter’s controlled the manner in which Brown would be paid for the different jobs he did and capped his weekly pay at $400.00. Salter’s provided the very equipment he was driving at the time of the accident. There was no contract between Brown and his employers that would prevent Brown from quitting his job at any time. Based on the totality of the evidence, the Court found that the trial court’s Order was not supported by substantial evidence, and that Brown was an employee. The case was then remanded to the trial court to determine the amount of workers’ compensation benefits Salter’s owes to Brown.

MY TWO CENTS

Employers need to be aware that paying a contractor via a 1099 as opposed to a W-2 does not necessarily preclude the contractor from recovering workers’ compensation benefits in the event of an injury. As this case demonstrates, if an employer retains the right to set the employee’s schedule, dictates which tasks he is to perform on any given day, provides his equipment, and pays him like a salaried or hourly employee, the contractor will be considered an employee.

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ABOUT THE AUTHOR

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

St. Louis attorney, J. Bradley Young, recently posted an interesting blog article entitledThis Story Shows Why Employers are Frustrated with Workers Comp Judges. In the article, he reported on a New Jersey case in which the claimant was involved in a car accident while driving off of her employer’s property. She was actually in the process of turning out of the employer’s property at the time of the collision. The Coming and Going Rule would have been an excellent defense except for the fact that it was established that the rear bumper of the car was still hanging over the employer’s property at the time of impact. Since New Jersey is a Positional Risk Doctrine state, it was easy for the employee to win once the Court determined that she was, at least partially, on her employer’s property. In Positional Risk Doctrine states, the employee only need show that the accident would not have happened but for her employment. In other words, if she had not been leaving work that day, the accident would have never happened.

MY TWO CENTS:

If this had happened in Alabama, the result would have been different. Assuming that the Alabama judge also agreed that a hanging bumper thwarted the Coming and Going Rule, the employee would still have had her work cut out for her. The reason being that Alabama is an Increased Risk Doctrine state. This means that the employee must prove that the employment somehow increased the risk to the employee of such an accident occurring. Since car accidents happen to people on and off the job, she would have had to show that the employer’s exit was located in a place that made her more susceptible to getting hit. Of course, if that was the case, the employer would have wanted to accept it as a workers’ compensation matter in order to be afforded the protections of the Exclusivity Doctrine.

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About the Author

This article was written by Michael I. Fish, Esq. of Fish Nelson LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation matters. Fish Nelson is a member of The National Workers’ Compensation Network (NWCDN). If you have any questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author atmfish@fishnelson.com or any firm member at 205-332-3430.