State News

Our little birds tell us that Hearing Officer Tom Hight has replaced Cheryl Dean as the North Texas
Team Lead. Congratulations, Judge Hight!
We’ve also heard a rumor that Brenna Arredondo, who rose to prominence as a Customer Service
Representative, is currently training to be the new permanent Benefit Review Officer in the Austin
Field Office. We’re saddened to lose Ms. Arredondo in the customer service role, but we look
forward to working with her as a Benefit Review Officer.

A claimant cannot bring a declaratory judgment action with an action for judicial review. The
claimant filed suit against the carrier seeking judicial review of the Division’s determination that
her injury was no longer compensable based on an injurious practices defense. She also sought a
declaration that the injurious practices defense is not a proper defense under the Workers’
Compensation Act. The claimant brought suit against the carrier, but the Division intervened in the
suit as a necessary party to the declaratory judgment action, which it considered “an impermissible attempt to control state action.” The Court dismissed the declaratory judgment action and held that
it was barred by the doctrine of sovereign immunity. The Court noted that the claimant did not
challenge the validity of a statute, but rather its interpretation.
Tex. Dept. of Ins. v. Green, 2016 WL 2745063 (Tex. App.—Houston [1st Dist.] 2016).
A different Court of Appeals has also held that a claimant cannot bring a declaratory judgment
action with an action for judicial review. The claimant sought judicial review of the Division’s
determination that he was not a covered employee at the time of injury and that his injury was not
compensable. He also sought declarations that he was a covered employee, regarding various
provisions of the client contract at issue, and that a worker becomes a covered employee when
certain criteria are met. The claimant brought suit against the carrier, the Division, and the
Commissioner for all claims asserted. The Court held that the judicial review claims were barred by sovereign immunity as against the
Division and the Commissioner, and that no exception applied. Concerning the declaratory
judgments, the Court held that sovereign immunity bars claims against the state that seek
interpretation of a statute, as opposed to challenging the validity of the statute, and the claimant only
sought interpretation of a statute. It held that the claims against the Commissioner did not allege an
ultra vires act, as they challenged a discretionary act only – the decision to deny the claim for
compensation, and were thus barred. It held that, even ignoring sovereign immunity, the remedies
sought by the declaratory judgments were redundant, and in fact identical, to the relief sought in the
judicial review action. Lastly, the Court held that a declaration sought regarding when any worker
becomes a covered employee is not ripe for adjudication, as it concerns the rights of other workers
not before the Court. All claims against the Division and the Commissioner were dismissed.
Texas Dept. of Ins. v. Brumfield, 2016 WL 293380 (Tex. App.—San Antonio 2016).

The Labor Code limits an injured worker’s eligibility for income benefits to 401 weeks from the date
of injury. The injured worker in this case did not receive a certification entitling him to IIBs until
423 days after the date of injury. The carrier argued that he was thus ineligible to receive any IIBs.
The injured worker argued that the statute should be interpreted to mean that an injured worker
cannot receive more than 401 weeks of income benefits total. The Court sided with the injured
employee and found that the maximum number of weeks of income benefits, including TIBs, IIBs,
and SIBs, that an injured worker can receive is 401, but that benefits can be paid after 401 weeks
from the date of injury.
Tex. Mut. Ins. Co. v. McGahey, 2016 WL 2753981 (Tex. App.—San Antonio 2016).

The time limit to seek judicial review is mandatory, and failure to seek judicial review before the
deadline with deprive a court of jurisdiction to hear the claim. The claimant appealed an adverse
Decision & Order to the Appeals Panel, who affirmed the Hearing Officer. The claimant then filed
a bad faith action in district court, which was dismissed. The claimant did not appeal the dismissal,
but several months later filed a new action seeking judicial review of the Decision & Order.
Because the claimant did not file her action for judicial review within 45 days from the date the
Appeals Panel’s determination was mailed to her, the trial court lacked jurisdiction to hear her claim
for judicial review.
Baldwin v. Zurich Am. Ins. Co., 2016 WL 2907939 (Tex. App.—Austin 2016).

The exclusive remedy defense is alive and well. An injured worker won an $8.7 million judgment
at trial against his employer. The plaintiff was hired by Job Link, who assigned him to work for
Tractor Supply. He was injured and brought suit against Tractor Supply. The Court found that he
was a temporary employee of Tractor Supply, as he was working on their premises in the furtherance
of their day-to-day business, his injury was caused by his work for Tractor Supply, he was trained
by, supervised by, and received his assignments from Tractor Supply employees.
The Court next considered whether Tractor Supply, who did not carry their own policy for their
permanent employees, was covered under Job Link’s policy. The court found that they were
covered, because Job Link’s workers’ compensation policy contained a blanket Alternate Employer
Endorsement and they provided the carrier with a list of covered client companies to the carrier
listing Tractor Supply and describing the Plaintiff’s job duties. The Court reversed the award of
damages and held that Tractor Supply was entitled to the exclusive remedy defense.
Tractor Supply Co. of Texas, LP v. McGowan, 2016 WL 1722873 (Tex. App.—Waco 2016).

Multiple Guaranty Associations brought claims for breach of contract stemming from unpaid policy
deductibles. The trial court granted Defendant Hill Bros.’ summary judgment concluding the
Associations’ claims were time-barred. After determining that various Guaranty Associations had
standing to bring suit on the underlying policy issued by an impaired carrier, the Third Court of
Appeals reversed the trial court and remanded the case for further proceedings.
The appellate court held that the statute of limitations on a breach of contract claim for failure to
reimburse deductibles does not accrue until a demand is made to the insured and the insured fails
to pay on demand. Because large deductible endorsements do not specify the time period within
which demand must be made by the carrier, the court concluded that demand for payment must be
made “within a reasonable time.” A “reasonable time for demand,” the Court explained, is
coincident with the four year limitations period for a breach of contract claim. In other words, in
Texas, a carrier has up to four years to make a demand for reimbursement of a deductible, and the
statute of limitations begins to accrue once the insured fails to make payment on demand.
Applying this rule to the Guaranty Associations’ claims, the court reversed the trial court’s judgment
on limitations and remanded the case for further proceedings.
Cal. Ins. Guar. Assoc., et al. v. Hill Bros. Transp. Co., 2016 WL 2991081 (Tex. App.—Austin
2016).

Most employers put limits on light duty and do not allow permanent light duty.  That was the case of the employer in the matter of Frazier-White v. David Gee, 2016 U.S. App. LEXIS 6318 (11th. Cir. 2016).  Plaintiff Frazier-White worked as a community service officer for the Hillsborough County Sheriff’s Office (HCSO).  She was responsible for security at a detention center.  She was injured in a work-related accident on July 29, 2010, when a heavy metal door closed on her right arm, pinning her against a door frame.  She was placed on light-duty status and temporarily assigned to a position as a records desk clerk. The HCSO policy limited light duty to 270 days in a two-year period.

During the period of time that plaintiff was on light duty from August 2010 to June 2011, she saw several doctors who found she was at maximal medical improvement and had no restrictions.  Plaintiff sought another evaluation in March 2011.  Her physician ordered an MRI of the neck, which showed degenerative abnormalities which the doctor thought were not caused by work but may have been aggravated by the work incident.  He too put Frazier-White at MMI with no restrictions but he did recommend a neurosurgical consult.

The sheriff’s department wrote to plaintiff several times as she approached the 270-day light duty limit.  In April 2011, plaintiff wrote to Gee saying she was still having problems with her neck and requested “an extension to continue to receive care.”  She did not specify the length of time she would need; nor did she suggest any accommodations that would allow her to return to full duty by April 24, 2011.

The HCSO Risk Management Director Richard Swann wrote to plaintiff on April 11, 2011 advising her that she had been on light duty for 256 days as of April 11, 2011.  He encouraged plaintiff to contact him about potential ADA accommodations that she may be requesting or to make applications for other civil service full-duty jobs.  Plaintiff did not respond,  leading HCSO to take disciplinary action.  A hearing was scheduled once plaintiff passed the 270-day light-duty limit.  By the time of the hearing, plaintiff had been on light duty for 299 days.  Swann asked plaintiff in the hearing whether she would return to full duty within a reasonable period of time.  Plaintiff replied that her most recent MRI showed serious spinal damage.  Her doctor was recommending a spinal fusion surgery.  She said she could not estimate when she could return to full duty.  She did not request any accommodations that would allow her to perform the essential functions of her job, and she did not apply for any other full-time jobs.  HCSO therefore terminated plaintiff’s employment as of June 20, 2011.

Following her termination, plaintiff sued under the ADA and the Florida Civil Rights Act alleging disability discrimination.  The federal court granted summary judgment to HCSO.  The Court of Appeals affirmed.  First the Court said, “To the extent Plaintiff intended to request a permanent light-duty position, it is undisputed that no such position existed.  SOP 213.00 provides that every HCSO employee is essential to its efficient operation, and that eligibility for light-duty status is thus limited to 270 days during a two-year period.  Defendant was not required by the ADA to create a permanent light-duty position especially for Plaintiff.”

Plaintiff produced records showing numerous vacancies in the HCSO during the time she was on light duty.  However, the Court pointed out that she never requested any of the positions.  Further, the Court observed that plaintiff’s testimony was that she could not have physically returned to any full-time work given her serious neck problems.  The Court concluded, “Plaintiff’s only response was to request an indefinite extension of her light-duty status, an unreasonable accommodation as a matter of law.”

This case is relevant for employers because most employers have policies that end light duty based either on a specific time limit or on reaching maximal medical improvement.  Such policies must be flexible enough to consider requests for reasonable accommodation under the ADA or state civil rights law even after the time limit has ended.  In this case HCSO wrote several times to the employee asking her if she was requesting accommodations or other positions that would allow her to return to work full duty.  The plaintiff in this case, as is quite common, simply wanted an indefinite leave extension.  Courts in just about every state believe that indefinite leave is simply an unreasonable request.

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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. 

In the most recent special session of the Arkansas legislature, an Act was passed ending claims against the Death and Permanent Total Disability Trust Fund effective June 30, 2019.   Prior to that date, death and PTD exposure for carriers and self-insured employers is capped with any additional benefits being paid by the state Fund.  

The most expansive discussion of confidentiality in workers’ compensation comes ironically from a civil law suit in the matter of Seymoure v. A.O. Smith Water Products Company, et. al., A-3967-14T3 (App. Div. May 11, 2016).  The case arose from an asbestos law suit filed by Gwendolyn Seymoure, who sued several defendants, including Union Carbide Corporation (hereinafter UCC) for manufacturing, supplying or distributing asbestos products that led to the death of her husband from mesothelioma.  Plaintiff Seymoure alleged that her husband was exposed to asbestos while making deliveries and pick-ups at UCC’s Bound Brook facility.

Seymoure filed a discovery request in 2013 seeking workers’ compensation records of other UCC employees.  Eventually the Law Division judge ordered UCC to produce the records.  UCC then moved for a protective order to limit disclosure of the files of other workers’ compensation claims to just this particular litigation.  That request was denied.  The judge required  the following: 1) UCC must advise former/current employees of production of documents within seven days; 2) UCC may redact social security numbers only, but not names; and 3) UCC had to produce all documents within 14 days.

UCC appealed and contended that the court’s order violated privacy rights under the New Jersey Workers’ Compensation Act. The company argued that current and former employees have a reasonable expectation of privacy in their records.  It relied onN.J.S.A. 34:15-128(a)(1) which prohibits disclosure of workers’ compensation records unless the information is provided in a way that makes it impossible to identify any claimant.

For his part, plaintiff’s counsel argued that he needed to use the records obtained in this law suit in other litigation against Union Carbide.  He stated that he fully anticipated using the medical records from other employees in future litigation that he might file.  Counsel also argued that N.J.S.A. 34:15-62 provides that all workers’ compensation hearings “shall be open to the public.”

The Appellate Division ruled, “As the judge’s protective order fails to adequately protect the privacy interests of UCC”s former employees, we are remanding this matter for the entry of a more comprehensive protective order. Both N.J.S.A. 34:15-128 and N.J.S.A. 34:15-128.3(a) prohibit disclosure of workers’ compensation records unless all personal identifying information has been removed.  Thus, a protective order would require the redaction of all personal identifying information of the employee.”

The Court also observed that requiring hearings to be public is not the same thing as giving third parties not involved in the workers’ compensation case access to medical information of other claimants.  The Court concluded, “Finally, the interest that plaintiff’s counsel has in expediting other asbestos litigation against UCC does not outweigh the privacy interests the former employees have in their medical records.  Unless the former employees specifically consent to the use of their unredacted medical records beyond this litigation, the use will be limited to this matter.”

This case deals with provisions of the New Jersey Workers’ Compensation Act that seldom, if ever, draw mention from courts. It is noteworthy that hearings in the Division are open to the public by statute.  Yet that does not mean that third parties can access medical information of claimants.  Only the parties to the case, such as the judge, carrier, third party administrator, treating doctor, experts, and counsel have access to medical information of the claimant.  There is no right of access, however, to medical information of other claimants not involved in the litigation.  Had the decision in this case gone the other way, there would be no way to protect medical information of claimants in the Division.

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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. 

This is the second article devoted to fitness-for-duty examinations and Functional Capacity Exams (FCE) in workers’ compensation. The first segment focused on how such examinations can lead to significant cost savings for employers and common mistakes that are made by employers.  This segment will focus on when to order a fitness exam or FCE and how to avoid conflict with the FMLA and ADA.

A fitness-for-duty examination must be job-related and consistent with business necessity according to the relevant EEOC Guidance. When an FCE is ordered by a physician as part of a workers’ compensation case, it is generally related to medical care or to determining return-to-work status.  When a physician requests an FCE, more often than not, it is because the physician is not sure that the injured worker can perform light duty or full duty work.  Under those circumstances, the FCE is job related.

Many employers also request FCEs or fitness-for-duty examinations on their own when an employee has been out of work for a lengthy period of time, usually following surgery.  This is particularly true where the employee has a physical job, like maintenance, custodian, construction or the like.  An employer’s request would meet the job-related standard if the employee has certain restrictions imposed by the treating physician, or if the employee has requested accommodations at work.   Employers should be aware, however, of one limitation on such exams: namely those that occur during the 12-week FMLA period.  All workers’ compensation lost time cases are generally FMLA events, and most employers designate the absence from work as FMLA leave.  They run FMLA time concurrent with workers’ compensation absences.  The FMLA does not permit second opinions on return to work.  So if the treating doctor issues a return-to-work note, stating that the employee can perform the functions of his or her job, there is no right to a fitness exam within the 12-week FMLA period.

After 12 weeks when FMLA has expired, an employer has more leeway in requesting an FCE or fitness examination.  The employer must still show that there is a job-related need for the FCE or fitness examination.  That could be satisfied by observations that the employee is having problems walking or getting around.  Alternatively, the employee may speak to supervisory staff indicating that he or she is not sure about being able to perform the essential job functions.  The employee may ask for assistance in doing certain essential functions should he return to work or request that certain functions be eliminated.  All of these reasons justify a fitness-for-duty examination or an FCE.

It is very important to make sure that the physician who is performing a fitness-for-duty examination is familiar with the essential job functions.  The same is true of physical therapists who are performing FCEs.  Functional job descriptions are of great value to doctors and physical therapists.  The examination should be tailored to the injury that the employee has and should not be focused on long-standing medical conditions that have nothing to do with the work injury.  The physician should address the ability of the employee to perform essential job functions as well as  the direct threat standard.

Sometimes employees do not recover adequately from work injuries to be able to return to work and perform their job functions safely.  Before making such a determination, the employer should carefully review the FCE or fitness assessment and then meet with the employee to engage in an interactive dialogue with the employee.  Because the ADAAA so widely expands ADA disability coverage, it is better to assume that the injured employee following surgery or significant injuries is potentially covered under the ADA.  In that meeting, the employer will be able to hear first-hand whether the employee is requesting reasonable accommodations that would allow the employee to perform the essential functions of the job.  It is the employee’s responsibility to make the request for the accommodation, not the employer’s job to guess what they might be.  However, it is the employer’s obligation to decide which accommodation would work best and whether the accommodation poses an undue hardship.

Sometimes treating doctors give short shrift to the return-to-work process and issue full clearance notes without the benefit of an FCE.  The result is that many employees in New Jersey who have had some serious injuries with lasting complaints of pain and limitations may struggle with work duties.  When an employer has job-related reasons to require a fitness examination of an existing employee, the employer should utilize the FCE or fitness-for-duty process.  If an employee in a factory setting with very physical job duties comes into work limping and in pain, the wrong thing to do for the supervisor is to walk past the employee and bid him or her a good day.  That is exactly the circumstance that may justify a fitness-for-duty examination.

Employers should also take note that when a workers’ compensation case is settled in the Division, the employee has to provide his or her complaints on the record to support the award of disability.  The only time this does not happen is when the settlement is under N.J.S.A. 34:15-20.  All orders approving settlement with percentages of disability are premised on proof by the employee of either a substantial limitation in working ability or a substantial impact on non-work activities — or both. Seldom are employers in court to hear these complaints but the defense lawyer should provide details in the closing letter to the client so that the employer is aware that an employee may be complaining of physical problems in doing the essential job functions.  If that is the case, the employer has a right to obtain a fitness-for-duty examination.  An employer can also ask for a copy of the transcript of the testimony before the Judge, as this is sworn testimony.

In this practitioner’s opinion, the reason there are so many re-injuries in New Jersey is that there is not enough attention to the issue of fitness for duty.  Unlike other states where employees settle their cases and agree as a condition of settlement not to return to work, almost every employee in New Jersey returns to the former job because New Jersey is a functional loss state in contrast to Pennsylvania, which is a wage loss state.  Re-injuries are expensive and often lead to much higher awards and sometimes total disability awards costing the employer millions of dollars.  The cost of an FCE or a fitness examination, by contrast, is very modest but that well-timed examination may save the employer tens or even hundreds of thousands of dollars down the line.

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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.