State News

A good Global Positioning System can make all the difference in certain kinds of cases. Longstreet v. County of Mercer, A-3361-152 (App. Div. June 20, 2017) illustrates how effective this technology can be for claims involving injuries while driving work vehicles.

The case involved a claim by a heavy equipment operator against the County of Mercer.  Mr. Longstreet reported that he injured his arm when his road grader hit what petitioner believed was a manhole while snow plowing on January 27, 2015.  He reported the incident several days later.  Petitioner said he started his shift on January 26, 2015 at 7:00 p.m. and was supposed to end his shift at 3:30 p.m. on January 27, 2015.   He began the shift loading salt, utilizing a front end loader and was then instructed to begin snow plow operations on grader #57 at midnight.  Petitioner claimed the incident occurred during snow plowing at 4:00 a.m. on Nursery Road and that he brought the grader in to the County repair shop to have the blades changed.

The problem with petitioner’s version was that the GPS showed that the vehicle petitioner said he was using to plow at 4:00 a.m. was idle from midnight to six a.m.   A county witness testified that grader #57 was parked at the North Salt Dome at Mercer County Airport around midnight.  Then it was moved around 2:00 a.m. to Interstate 95 where the vehicle remained stationary until 6:38 a.m.  From 7:30 a.m. until 10:17 a.m., the grader was used only on four separate occasions on Nursery Road.

The County argued that the case must be dismissed because petitioner clearly could not have had an accident at 4:00 a.m. using grader #57 since the vehicle was not used at all until the morning hours, and then only briefly.  During trial a repair order suddenly appeared for Grader #57.  There was no repair time noted on the order.  Witnesses at the County Garage could not recall fixing this vehicle that night, but the repair order referred to grader #57.

In spite of the overwhelming evidence that petitioner could not have been injured while using grader #57 at 4:00 a.m., the Judge of Compensation found the case compensable.  The judge reasoned that it was possible that petitioner could have begun using Vehicle #57 at around midnight, switched to another vehicle after he brought grader #57 into the repair shop, and then got injured using this new vehicle.   The Appellate Division rejected this reasoning since the record showed that petitioner was adamant that he only used one grader to plow, and that was grader #57.   He never testified to using another grader, and he insisted that his injury happened in the dark of night at 4:00 a.m..  He also said that he used his personal vehicle to revisit the scene of the accident later in the morning around 10:00 a.m.

The Appellate Division reversed the ruling for petitioner and ordered a retrial of the case.  The Court said that the ruling of the Judge of Compensation was without evidential support because the GPS system established beyond any doubt that petitioner was not using Grader #57 at 4:00 a.m.  In fact, no one was using Grader #57 between midnight and 6:38 a.m.  Petitioner could not have brought Grader #57 to the county shop until after 10:00 a.m. when the vehicle was no longer being used.

The case is fascinating because without the use of a GPS system, this case would have been found compensable, as it would have been merely an issue of credibility.  The successful appeal in this case on behalf of the County of Mercer was handled by Capehart Shareholder Lora V. Northen, and her associate, John Pszwaro.

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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. 

Clients often ask questions about the permanency phase of the New Jersey Workers’ Compensation system.  Frankly our system with respect to awards of permanent partial disability is so vastly different than those of neighboring states that it is no wonder there is confusion.  Here are some of the questions this practitioner regularly receives.

Question (1):  Why don’t employers settle cases before a workers’ compensation formal petition is filed?  Wouldn’t that be more proactive?

Answer: There are two statutory provisions that deal with this issue.  The first is N.J.S.A. 34:15-22, which states that “No agreement between an employee and his employer or insurance carrier for compensation shall operate as a bar to the formal determination of any controversy, unless such agreement has been approved by the commissioner (Judge of Compensation).”

The second section is N.J.S.A. 34:15-50, which states “Whenever an employer or his insurance carrier and an injured employee, or the dependents of the deceased employee, shall, by agreement, duly signed, settle upon and determine the compensation due to the injured employee . . . the employer or the insurance carrier shall forthwith file with the bureau a true copy of the agreement.  The agreement shall not bind the employer or injured employee, or the dependents of a deceased employee, unless approved by the bureau.”

So the basic answer is that all agreements must be approved by a Judge of Compensation in New Jersey.  If an employer and employee reach an agreement without such approval, the agreement is not valid and is not binding on the employee.

Question (2):  When the petitioner’s doctor estimate 60% permanent partial disability and the respondent’s doctor estimates 5%, why not use the AMA Guidelines to the Evaluation of Permanent Impairment to resolve the dispute?

This question underscores a basic feature of the New Jersey system:  we are one of only a few states where judges do not use the AMA Guides to the Evaluation of Permanent Impairment.  This non-use of the AMA Guidelines is by tradition, not statute.  There is no statutory prohibition against consulting the Guidelines to inform judges.  In fact, it would be helpful if judges did utilize the AMA Guidelines where opinions on disability vary to a large extent.  In respiratory claims the guidelines are extremely helpful in assessing permanency because spirometry and other pulmonary function testing are complicated to understand.  For instance, the Guidelines provide certain norms for spirometric parameters like the FVC (forced vital capacity), FEV1 (forced expiratory volume in the first second) and FVC/FEV1 ratio.  Using the AMA Guidelines would provide more uniform assessments and consistency in certain kinds of cases.

Question (3):  What type of evidence matters most to the Judge of Compensation in arriving at an award of permanent partial disability?

Judges look for evidence in two broad categories: first proof of a medical impairment, and second, proof of disability from such impairment.  An employee must prove an impairment under N.J.S.A. 34:15-36 by demonstrable objective evidence, but that alone is not enough.  If a medical impairment exists but does not affect the employee in his work or non-work life, there is no disability.  In this sense, “disability” is a broader concept than impairment.  You need both.

The employee must demonstrate that the medical impairment reaches out and affects the employee in the activities of daily living or lessens the employee’s ability to perform work in a material degree.   So judges focus on objective medical evidence like MRI results, surgical studies, CT scans, x-ray results, and they pay close attention to how the medical impairment has affected the life of the employee.  Has the employee had to give up certain sports or cut back on hobbies or activities that he or she used to enjoy?  Has the employee had to reduce hours at work or has the injury caused a reduction in pay?  This is the kind of evidence that the judge studies in order to evaluate the degree of permanent disability.  That is also why every Judge of Compensation requires testimony to support an order approving settlement regarding the complaints of the employee and the impact on work or non-work activities.

Question (4):  Why does surgery drive up the value of a workers’ comp case?  Isn’t surgery supposed to make the employee better?

This is a complicated question.  Yes we all know people who have had surgery and have been completely healed with little or no lasting restriction. Surgery is often incredibly effective.  For instance, a football player with a severe meniscal tear could never return to football again without surgery.  A pitcher without ulnar collateral ligament reconstruction, also known as Tommy John surgery, might never pitch again.  That is exactly what happened to the great Dodger pitcher, Sandy Koufax, who retired young because there was no Tommy John surgery in the 1960s. Now many pitchers with Tommy John surgery return to pitching at the same high level as before the injury, albeit perhaps with some loss of velocity.

In New Jersey, workers’ compensation practitioners are well aware that an employee has the potential to file a reopener petition should surgery be required in the future. The thinking is that if the injury does not require surgery now, it might not be as significant as it would be down the line when surgery will be required.  Our statute under N.J.S.A. 34:15-27 permits the employee to reopen the case and seek additional treatment – often surgery – within two years of the last payment of compensation, as well as additional indemnity benefits.  It is true that few if any claimants come to court and testify at settlement that their level of function is the same as they had before the work accident.  If they did, they would not be entitled to permanency benefits. The expert for the claimant may point out that in spite of the surgical procedure, the employee has lost function post-surgery. The employee will testify to limitations in work or non-work functions.  Hence, unoperated herniated discs are often valued lower than operated herniated discs because the condition has not reached a level requiring surgery.

It is also worth noting that there are many employees who have surgery who never file claim petitions because they feel they have fully recovered and have no complaints post-surgery.  We don’t see those cases but must remember that they do exist.  Not all employees who suffer work injuries in New Jersey file claim petitions for permanency.

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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. 

While the ADA does not require an employer to inquire whether an employee needs reasonable accommodation, the FMLA does require an employer to reasonably determine whether the FMLA may apply to a leave request which does not even mention the FMLA.  This burden can be very onerous on an employer as one can see in a recent New York case, Coutard v. Mun. Credit Union, 2017 U.S. LEXIS 2322 (2^ndCir. February 9, 2017).

The facts were very simple.  The plaintiff worked for MCU, a financial institution, and on January 22, 2013, plaintiff took leave from MCU to care for his 82-year-old grandfather, who had been taken to a hospital on January 22, 2013.   Mr. Coutard’s grandfather was discharged from the hospital on January 23, 2013 with bronchitis, but Coutard believed his grandfather, Mr. Dumond, was seriously ill and should not be left unattended.  He sought leave until he could obtain the assistance of a home health aide.

When Mr. Coutard requested leave, he did not mention that he had been raised by Dumond beginning at age four when Coutard’s father died, until age 14.  MCU advised Coutard that the FMLA did not apply to grandparents and declined the request for leave.  It is undisputed that the term “parent” includes not only a biological parent but also “an individual who stood in loco parentis to an employee when the employee was a son or daughter.” 29 U.S.C. 2613.

MCU also suggested that Coutard apply for a short-term leave of absence under a separate MCU personnel policy.  Coutard did not make any such application and was terminated on February 4, 2013.  Coutard later sued for interference with his FMLA rights.

The federal district court ruled in favor of MCU but the Second Circuit Court of Appeals reversed based on the following language:

[W]e conclude that the obligation of an employee to give notice of his need for FMLA leave is not the obligation, imposed by the district court on Coutard, to provide the employer with all of the necessary details to permit a definitive determination of the FMLA’s applicability at or before the time of the request.  Rather, in the absence of a request for additional information, an employee has provided sufficient notice to his employer if that notice indicates reasonably that the FMLA may apply.

Translation:  the employer had to ask Coutard whether his grandfather raised him.  In making this ruling the Court of Appeals distinguished an identical case which went the other way in favor of the employer, Sherrod v. Philadelphia Gas Works, 57 F. App’x 68 (3d. Circuit 2003).  The Court distinguished the Sherrod case, which also involved leave to care for a grandparent, by saying that the Department of Labor changed regulatory language in 2009.  The regulation used to say that an employee had to “explain the reasons for the needed leave so as to allow the employer to determine that the leave qualifies under the Act.”  In 2009 the regulation at issue was changed to state that an employee need only provide sufficient information to indicate that the FMLA may apply. 29 C.F.R. 825.303.

While the new language seems very similar to the old language, the Second Circuit Court of Appeals felt that the change was significant.  The Court concluded that this ever-so-subtle change in language shifted the obligation to the employer to ask further into the relationship between the employee and the grandfather.  For these reasons, the Second Circuit Court of Appeals reversed judgment for MCU and remanded the case for trial.

The decision will come as a surprise to many employers.  When an employee asks for leave to care for a grandparent and never mentions that the grandparent raised the employee, an employer will have no way to know any of this history. Only the employee knows this information.  According to the Second Circuit Court of Appeals, the employer now can be held liable for violating the FMLA, as in this case, if the employer does not know the law well enough to ask further about the past relationship between the employee and his or her grandparent. The case imposes no burden on the employee to volunteer this information initially.

The reality is that this was a situation where neither party really did anything wrong.  No violation should have been found.  It would be unreasonable to expect the plaintiff in this case to know the in loco parentis definition of a parent under the FMLA, but the plaintiff did certainly know that his grandfather raised him for 10 years and never mentioned this. In response to the leave request, MCU offered plaintiff a leave of absence under another policy but the plaintiff never pursued that option.   Yet MCU was held potentially liable for an FMLA violation for not asking detailed historical questions about the employee’s relationship with his grandparent.

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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. 

We are pleased to announce that Jim Waldhauser and Tom Kieselbach have once again been selected asSuper Lawyers (2017).  Whitney Teel has been selected as a Rising Star (2017). 

The selection process for Super Lawyers has been patented (U.S. Pat. No. 8,412,564).  The selection process involves three steps:  creation of the candidate pool, evaluation of candidates by the research department and peer evaluation by practice area.  Each candidate is evaluated on twelve indicators of peer recognition and professional achievement.  Candidates cannot nominate themselves nor can they pay to be on aSuper Lawyers’ list.  For more information on Super Lawyers visit www.superlawyers.com.

PROTZ ENTOMBS IREs IN PENNSYLVANIA

By Kevin L. Connors, Esquire

Ever have one of those days where you just wonder, why bother?

Today might be one of those days.

In a Homer Simpsonesque Decision, the Pennsylvania Supreme Court in Protz v. WCAB (Derry Area School District), decided on June 20, 2017, recently eviscerated the IRE (Impairment Rating Examination) provisions of Act 57, enacted in 1996, embodying the legal standard by which almost all Pennsylvania Workers’ Compensation claims have been administered and adjudicated since Act 57 became law on June 24, 1996.

Yes, your general knowledge of IREs is correct, that is that Act 57, under Section 306 (a.2) empowered insurance companies, after an injured Employee/Claimant had received 104 weeks of temporary total disability benefits, to request that the injured Employee/Claimant undergo an Impairment Rating Examination, applying standards adopted by the American Medical Association inGuides to the Evaluation of Permanent Impairment, for purposes determining whether the injured Employee/Claimant had an Impairment Rating of the work-related injury, applying a whole person standard, of less than 50%, which, if so, would then allow the insurance company to convert the injured Employee/Claimant’s temporary total disability benefits into temporary partial disability benefits, which, under Section 306 (b) of the Act, were then only payable for 500 weeks, not inclusive of the 104 weeks already paid, such that an injured Employee/Claimant with an IRE rating of less than 50% would, statutorily, still be entitled to receive 104 weeks of temporary total disability benefits, followed by 500 weeks of temporary partial disability benefits, without reduction of the weekly compensation benefit being paid, absent evidence of “earning power” which, if proved, could reduce the weekly compensation benefit being paid based upon a continuing wage loss to be calculated by incorporating the “earning power” of the temporary partial disability benefit rate that might continue to be owed to the injured Employee/Claimant.

Awaking on June 20, 2017, after having recently attended the Department of Labor Industries’ Bureau of Workers’ Compensation Conference in Hershey, Pennsylvania, on June 12, 2017 and June 13, 2017, I was not intellectually prepared for the massive headache that would be created by the Pennsylvania Supreme Court ruling in Protz that Section 306 (a.2) of the Act, the provision dealing with IREs, was unconstitutional, effectively eviscerating a procedure that has been utilized by Insurance Carriers, Third-Party Administrators, and Employers since 1996.

The first question, what does this mean for all workers’ compensation stakeholders?

Well, if you are an injured Employee/Claimant, or an Attorney representing one, you are likely toasting the Pennsylvania Supreme Court’s June 20, 2017 ruling inProtz v. WCAB (Derry Area School District).

However, if you are an Insurance Carrier, Third-Party Administrator, or Employer, you are scratching your head and going “WTF?,” wondering how a Statutory Provision that was more effective in facilitating settlements and reducing reserves than actually changing an injured Employee/Claimant’s compensation benefit rate, and that had been used without constitutional challenges, before Protz filed her initial challenge to her IRE Determination in 2011, as all IREs performed under Section 306 (a.2) of Act 57 are now null and void, having no legal consequence or validation under the Pennsylvania Workers’ Compensation Act on the Supreme Court’s June 20, 2017 Decision inProtz.

 At this juncture, under Protz, IREs simply now have no validity under the Pennsylvania Workers’ Compensation Act, and their utilization, absent legislative action by the Pennsylvania General Assembly, is now an administrative and litigation black hole.

If you are feeling like you forgot to get dressed today, you are not alone.

Yes, true, there will also be an economic impact as the litigation mechanism for modifying compensation benefits will revert back to requiring proof that an injured Employee/Claimant has sufficiently recovered from a work injury to be able to return to available work, being actually available or available under a “earning power” analysis in the form of a Labor Market Survey, potentially not only extending the shelf life of workers’ compensation claims, but also potentially driving Claimant’s settlement values for Compromises and Releases even higher.

Moreover, Protz’ evisceration of IREs potentially will set in motion a chain of Reinstatement Petitions being filed for injured Employees/Claimants whose compensation benefits had been modified to temporary partial disability benefits under, what was then regarded as statutorily legal, IREs, after which the injured Employee/Claimant had exhausted the 104 weeks of temporary total disability benefits, paid before the IRE was requested, as well as the 500 weeks of temporary partial disability benefits, paid at the temporary total disability benefit rate, after the IRE evidencing an impairment of less than 50% was secured, and the injured Employee/Claimant’s compensation benefits were modified/reduced.

Query:  What will the effect of Protz be upon claims subject to IREs of a less than 50% Impairment Rating, where 604 weeks of compensation benefits have been paid, and the injured Employee/Claimant files to reinstate his/her workers’ compensation benefits as temporary total disability benefits, alleging that the administrative process used to suspend their weekly compensation benefits at 604 weeks has now been ruled unconstitutional, such that the injured Employee/Claimant now claims that there is no administrative or adjudicated form or Decision that bars them from seeking to reinstate their compensation benefits to temporary total disability benefits.

First, if the issue of the IRE rating was litigated, and a Workers’ Compensation Judge modified the injured Employee/Claimant’s workers’ compensation benefits from temporary total to temporary partial disability benefits in reliance upon an IRE rating with a less than 50% Impairment Rating, and the injured Employee/Claimant did not file an Appeal, it is our impression that the injured Employee/Claimant has waived the right to seek to re-open their workers’ compensation claim, in order to strike/remove the suspension of their workers’ compensation benefits, as they have not properly preserved that issue under the Pennsylvania Workers’ Compensation Act, and the Bureau’s regulations.

The same answer would be given if an injured Employee/Claimant had stipulated to the conversion of temporary total disability benefits to temporary partial disability benefits in reliance upon an IRE with a less than 50% Impairment Rating, particularly true, since the Stipulation would then have been adopted by a Workers’ Compensation Judge in a Bureau-circulated Decision, presumably never appealed.

Again, that would bring finality to the constitutional issue, and could be argued as a waiver of Section 306 (a.2) being challenged on constitutionality grounds.

Potentially more problematic, although there are probably much fewer claims like this, would be claims where the IRE was a basis for filing a Notice of Change, converting temporary total disability benefits to temporary partial disability benefits, with no Petition challenging the change ever being filed or litigated by the injured Employee/Claimant.  The concern with those claims would beProtz’ evisceration of the Statutory Provision empowering the change of benefits from temporary total disability to temporary partial disability, potentially opening the “what if” door which, as we all well know, has pretty squeaky hinges, greased with the sweat of humanitarianism.

No question, Protz is a life-altering Decision by the Pennsylvania Supreme Court, for anyone involved with Pennsylvania workers’ compensation claims.

Like you, we are less concerned with how the Supreme Court arrived at its ruling, than we are with the consequences of this Decision, which we will all now be dealing with its holding through retirement.

In answer to the obvious question as to why an issue this important, with the potential risks associated therewith was not settled by the parties prior to its eventual resolution by the Pennsylvania Supreme Court, one can only assume, based upon the involvement of the Pennsylvania Association of Justice (PA Trial Lawyers Bar), which has been salivating at the constitutional challenge to IREs since 1996, that the claim might have been over-valued for settlement, in an attempt to defeat claim resolution prior to Supreme Court determination.

This is not the time to point fingers.

We can hear war drums beating in the offices of Claimant Attorneys statewide; time to circle the legislative wagons and seek amendment of the Workers’ Compensation Act to insure a cap in compensation benefits.

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.

ANNOUNCEMENT

By Kevin L. Connors, Esquire

It is with both congratulations and regrets that we announce that Kate O’Dell, a Partner in our firm, and Co-Chair of our Workers’ Compensation Practice Group, has elected to trade the outrageous slings and arrows of compensation claims for the tranquility and joyous personal redemption of semi-retirement, as Kate transitions from being a founding Partner to assuming the role “of Counsel” with our firm, allowing Kate to re-assign workers’ compensation cases that she was handling for our firm, and defending for our Clients, to other firm Partners in our Workers’ Compensation Practice Group, while Kate has graciously agreed to serve as “of Counsel” to the firm, as coverage needs and her personal schedule might dictate.

Having had the honor and privilege of being Kate’s Partner for 17 years, there is no question but that I will personally feel the deep sense of loss without her delicious wisdom and wit being available on a daily basis in our office.

Her intelligence and integrity to detail will also be sorely missed.

She has been, and remains, a dear friend, both to me, and to our firm.

Throughout her storied career with our firm, she has attained national and regional honors for her knowledge and professionalism in the defense of workers’ compensation claims.

Honoring her years of service to our firm, we will continue to strive, as a firm, to achieve and maintain the high idea and professionalism that Kate exhibited every day since her 1985 graduation from Law School.

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.

Later this year, the Supreme Court of the United States will address the enforceability of class action waivers in employment arbitration agreements inErnst & Young LLP v. Morris. The Supreme Court’s decision will resolve a disagreement among the National Labor Relations Board (“NLRB”) and several courts of appeals over whether arbitration agreements that prohibit employees from participating in “any class, collective, or representative proceeding” violate the employees’ right to engage in concerted activity under the National Labor Relations Act (“NLRA”). If the Supreme Court rules that class action waivers violate the NLRA, then the decision whether to include such waivers in employment arbitration agreements is easy. Otherwise, employers will have to consider several pros and cons when deciding whether class action waivers should be included in their employee arbitration agreements.

Countless newsletters and client alerts have been written about the pros and cons of employment arbitration agreements in which an employee and employer agree to arbitrate disputes between them rather than sue each other in court.See, e.g., Peter R. Rich, Pros and Cons of Employee Arbitration Agreements – A Practical Discussion. It is now well settled that courts will enforce employment arbitration agreements like any other contract.See Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001). A class action waiver adds another layer of protection to the agreement: it requires that an employee arbitrate claims against an employer on an individual, rather than collective, basis.

While courts have enforced class action waivers outside the employment context,e.g., Salem Int’l Univ., LLC v. Bates, 793 S.E.2d 879 (W. Va. 2016), the NLRA adds a wrinkle for agreements involving employees protected by the NLRA. Under section 7 of the NLRA, employees have the right to engage in concerted activity for, among other things, their mutual aid and protection. This includes employees’ efforts “to improve their working conditions through resort to administrative and judicial forums.”Eastex, Inc. v. NLRB, 437 U.S. 556, 565-566 (1978). In 2012, the NLRB proclaimed that, “notwithstanding the Federal Arbitration Act,” agreements to arbitrate on an individual basis (and waiving the right to proceed on a class or collective basis) with non-management employees violate section 7 of the NLRA. D. R. Horton, Inc., 357 N.L.R.B. 2277 (2012).

Since D. R. Horton, several courts of appeals have considered the NLRB’s position. The Second, Eighth and Fifth Circuits have rejected the NLRB’s position. Consequently, federal courts in 13 states (Connecticut, New York, Vermont, Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, Texas, Louisiana and Mississippi) will enforce class action waivers in employment and arbitration agreements. The Seventh and Ninth Circuits, however, supported the NLRB’s position, meaning federal courts in seven states (Illinois, Indiana, Wisconsin, Alaska, Arizona, California and Hawaii) willnot enforce class action waivers in employment arbitration agreements. That is the issue the Supreme Court will resolve during the upcoming term inErnst & Young LLP v. Morris. The Fourth Circuit, which includes federal courts in Maryland, North Carolina, South Carolina, Virginia and West Virginia, has ordered that an appeal of a district court opinion rejecting the NLRB’s position be held in abeyance pending the Supreme Court’s decision in Ernst & Young LLP v. Morris. Carmax Auto Superstores, Inc. v. Sibley, 215 F. Supp. 3d 430, 432 (D. Md. 2016).

If the Supreme Court holds that class action waivers violate the NLRA, then the decision for employers is easy—do not include class action waivers in employment arbitration agreements with non-management employees. If, however, the Supreme Court holds that class action waivers do not violate the NLRA, employers will have to decide whether to include these provisions in employment arbitration agreements. Rather than blindly assume they will be better off with class action waivers, employers should critically assess whether they are desirable for their business. There are obvious benefits to class action waivers. They eliminate the risk of the legal blackmail that accompanies the exponential nature of exposure in class actions. Also, negotiating a settlement with one person is always easier than several. The consequences are less obvious. Class actions can efficiently resolve an entire class of employees’ claims all together. Instead of worrying about litigating several copycat claims, an award for the employer or settlement may wipe out all class members’ claims. On the other hand, if the employer wins the initial individual arbitration case, it may serve to dissuade prospective copycats from bringing the same claim, which effectively achieves the same effect.

Of course, if you have any questions about the pros and cons of class action waivers, please contact us.

Mitchell J. Rhein

Associate

Spilman Thomas & Battle, PLLC

304.340.3889

mrhein@spilmanlaw.com

One of the most controversial issues in New Jersey workers’ compensation has to do with whether an injured worker who has been fired is entitled to temporary disability benefits.  The leading case is Cunningham v. Atlantic States Cast Iron Pipe Co., 386 N.J. Super. 423 (App. Div.), certif. denied, 188 N.J. 402 (2006).   That case was a true disrupter because until it was decided, the general consensus was that the employer paid temporary disability benefits post-termination until the point of maximum medical improvement.

But where did the rule in Cunningham come from? The roots of the Cunningham decision rest in Outland v. Monmouth-Ocean Educ. Serv. Comm’n, 154 N.J. 531 (1998).  Outland was a Supreme Court case which focused on whether a teacher who was injured during the school year was entitled to temporary disability benefits over the summer months when the teacher would not have been working due to the closing of school.   The Supreme Court held that such a teacher is not entitled to temporary disability benefits in the summer months unless the teacher could prove that he or she would have been working in some other summer job.  Evidence of prior summer employment and an offer of upcoming summer employment would suffice, but without that evidence, the teacher would not be entitled to temporary disability benefits during the summer months, even if the teacher was actively treating for the workers’ compensation injury.

The theory in Outland is simple:  there is really no wage loss during the summer for many teachers, except for those who had a job lined up and now cannot perform it due to the work injury.  Eight years after Outland was decided, Mr. Cunningham tested the same waters.  He was fired from Atlantic States for reasons of work misconduct but then returned to the authorized workers’ compensation doctor who had been treating his knee.  The authorized doctor then recommended surgery on petitioner’s knee.  Cunningham sought temporary disability benefits for the period of his surgery, but the employer argued that he had no wage loss because he had been fired.  The Court agreed with the employer and ruled no temporary disability benefits were due unless Mr. Cunningham could prove that he would have been working in some other job but for the work injury.

This same rationale carried the day in Gioia v. Herr Foods, Inc., No. A-0667-10T4 (App. Div. October 11, 2011).  In that case the petitioner had a legitimate work injury, fracturing his foot stepping from his delivery truck. The company required a post-accident drug test, which came back positive, leading to the termination of petitioner, who was on light duty at the time.  The petitioner argued that he was entitled to temporary disability benefits because he was actively treating.  But the employer prevailed, arguing that petitioner had no wage loss since he had been fired for violation of the company drug policy, and he had no proof of another job offer.

Other cases have patterned themselves on the Cunningham case, and practitioners need to be aware of this line of cases.   The rule remains that an employer can deny temporary disability benefits following job termination unless the injured worker can prove that he or she would have worked in another position but for the work injury.  The Cunningham also case makes clear that it does not matter if the employee quit or was fired:  the same test applies, namely would the employee have been working some other job but for the work injury?

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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. 

Don Drysdale, a skilled carpenter, works for Craftsmen Trades and seldom goes to the company office in Mt. Laurel, N.J.  He generally spends weeks or even months working at major job sites.  On May 1, 2017 he drives his personal vehicle from his home in Cherry Hill, N.J. to a job site in Woodbridge, N.J. where a large commercial building is being constructed.  He has been working at that site for a month.  As he is driving up the Turnpike, a truck veers into his lane and strikes his vehicle, causing Mr. Drysdale serious injuries.  Is he covered for workers’ compensation purposes?

The starting point is to study the language of N.J.S.A. 34:15-36, which states that “employment shall be deemed to commence when an employee arrives at the employer’s place of employment to report for work . . . provided, however, when the employee is required by the employer to be away from the employer’s place of employment, the employee shall be deemed to be in the course of employment when the employee is engaged in the direct performance of duties assigned or directed by the employer; but the employment of employee paid travel time by an employer for time spent traveling to and from a job site or of any employee who utilizes an employer authorized vehicle shall commence and terminate with the time spent traveling to and from the job site.”

This first question to ask is whether this commercial site is the “employer’s place of employment?”  The answer to that question is probably no since Craftsmen Trades has an office in Mt. Laurel, N.J.  That is the employer’s place of employment.  The second question is whether this commute falls under the special mission exception cited above for those trips that are “away from the employer’s place of employment?”  The answer to this question is also likely no because this location in Woodbridge would qualify as a job site since Drysdale works there for weeks or months at a time.  So we have to consider what the test is for driving to and from a job site.

Based on the statutory language above, Don Drysdale’s drive is only covered if he is using an employer authorized vehicle or if he is paid travel time for the commuting segment of his day.  In this case, he is driving his personal vehicle, so he does not meet the “authorized vehicle” exception.  But we do not yet know whether he is paid travel time.  If not, the commute is not compensable.

One case which is helpful on this issue is Mahon v. Reilly’s Radio Cabs, Inc., 212 N.J. Super. 28 (App. Div. 1986).  In that case the injured worker, a New Jersey Transit employee, was traveling on a New Jersey Transit Bus, driven by defendant Cruz, from Hoboken to his place of employment.  He paid no fare as he was provided free transportation on all NJ Transit buses as part of his Collective Bargaining Agreement.   The bus stopped at a dangerous angle in the street, and when Mahon exited the bus and walked into the street, a cab driven by Cruz struck him causing serious injuries.  Mahon sued the cab driver and NJ Transit.  NJ Transit argued that petitioner was in the scope of his employment and therefore could not sue his own employer.  NJ Transit further contended that Mahon was provided free transportation in an employer authorized vehicle.  Both the trial court and the appellate court disagreed with these arguments.

First, the Appellate Division distinguished the “place of employment” from “job site” in the above statute.  “In this case before us, the plaintiff’s accident did not occur while he was traveling to a job site away from the employer’s place of employment.  Rather, he was injured while on the way to the place of employment.”  What this meant is that the language about authorized vehicle and travel time did not apply.  Secondly, the Court said that when someone is driving to his or her place of employment, it does not matter if the transportation is cost free to the employee.  “That he was provided free transportation on NJT buses as a benefit of his employment, which he could utilize in commuting to work, does not operate to bring this travel within the scope of his employment.”  The Court cited to Nebesne v. Crocetti, 194 N.J. Super.  278 (App. Div. 1984) for the proposition that an employer does not render a commute to work compensable just because the employer reimburses all travel expenses.

The analysis workers’ compensation practitioners should make when dealing with commuting issues is this:

1.       Was the employee commuting to the employer’s place of employment? If that is the case, the travel is not compensable, including alternate places of employment.  So if an employer has an office in Trenton, an office in Parsippany and an office in Harrisburg, PA., and throughout the year the employee has to drive to all three offices, the commute to any of these offices is not compensable because all three locations would qualify as an employer’s place of employment.

2.      Was the employee commuting to a job site? If so, this commute is only compensable if the employee was using an authorized company vehicle or paid travel time.

3.      Was the employee reporting to a location that is not the employer’s place of employment and not a job site?  If so, this commute will likely qualify as a special mission and the commute will be covered because it will be “away” from the employer’s place of employment.

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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. 

A leave of absence can qualify as a reasonable accommodation under the ADA, but how long should employers consider granting such leaves?  In Echevarria v. Astrazeneca Pharmaceutical, LP, 33 A.D. Cases 673 (1^st Cir. 2017), some practical guidance emerges on this issue.  The case involved a Pharmaceutical Sales Specialist named Taymari Delgado Echevarria (hereinafter Delgado) who developed a small brain tumor in November 2010, followed by recurrent depression and anxiety.

On December 12, 2011, Delgado’s physician, Dr. Sanchez, recommended that Delgado take time off work for reasons of severe depression and anxiety.   She eventually received short term disability benefits retroactive to December 12, 2011.  Those benefits continued until March 11, 2012, but were terminated because Delgado failed to submit adequate documentation of her disability.  Human Resources then wrote to Delgado and advised her that she must return to work by March 22, 2012.  The letter made clear that if she failed to return to work, Delgado would be considered to have abandoned her employment.

Delgado did not return to work on March 22, 2012, so the HR rep offered her a severance package if she were to resign.  That conversation set Delgado back and caused her condition to relapse, according to Dr. Sanchez.  Astrazeneca then extended Delgado’s leave until April 29, 2012. Another letter was sent to Delgado advising that she must return to work by May 17, 2017 or be considered to have resigned.

Delgado did not return to work on May 17, 2012.  Dr. Sanchez wrote to the company HR rep stating that Delgado would need another 12 months of leave before she could return to work.  Eventually Delgado was terminated in mid-July 2012.  Delgado refused to accept a severance package and sued for discrimination under the ADA.  She argued that her request for leave constituted a reasonable accommodation under the ADA.  The Court said:

The combined effect of two aspects of this case convince us that Delgado has failed to show that her request for twelve more months of leave was a reasonable accommodation.  First, it seems doubtful that Delgado shouldered her burden of showing that the requested accommodation would have enabled her to perform the essential functions of her position.  Second, Delgado has not shown that additional leave for this duration is a facially reasonable accommodation. . .

In an interesting opinion, the Court considered the effect of such a request on the operations of an employer. “Compliance with a request for a lengthy period of leave imposes obvious burdens on an employer, not the least of which entails somehow covering the absent employee’s job responsibilities during the employee’s extended leave.”

This case makes sense.  While it does not answer what the outcome would have been had a shorter period of time been requested, it does provide useful guidance for employers in requiring the employee to show that the requested accommodation would allow the employee to perform the job and is a reasonable request.  Certainly a request for three months of leave would be considered by most courts to be reasonable, just as a request for one year would be considered unreasonable. The gray area is in between the three month period and one year, and the specific facts will always be critical in determining the outcome.

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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.