NWCDN Members regularly post articles and summary judgements in workers’ compensations law in your state.
Select a state from the dropdown menu below to scroll through the state specific archives for updates and opinions on various workers’ compensation laws in your state.
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In a surprising decision that is particularly topical with various states facing similar issues with the popular company UBER, the Appellate Division held inBabekr v. XYZ Two Way Radio, A-3036-13T3 (App. Div. August 6, 2015) that a limo driver was not an employee when his vehicle was involved in a crash during the course of his work.
Babekr provided chauffeuring services to XYZ, a car limousine service, since 1988. The company had about 430 drivers and 50 other employees doing administrative duties in its office. XYZ is made up of individual drivers, including Babekr, who own shares in XYZ. The drivers elect the “board members,” who make decisions on operations.
Petitioner worked as a driver 10-12 hours per day, six days per week. He decided the days and hours he wanted to work, generally from early evening to 6:00 a.m. He did not have to work at all; it was up to him. He used his own car to chauffer passengers and paid for his car insurance. No evidence was offered that he was reimbursed for gasoline or other expenses.
The company gave each driver a computer to install in his car. Drivers would log on when they were ready to work. Most communications between XYZ and a driver came through the computer. When a driver was in a zone, he could alert XYZ that he was available to pick up a passenger but he would have to get in line behind other drivers in that zone. The driver could reject any offer to transport a passenger but if that happened, he could not receive any communications from XYZ for 30 minutes.
Passengers had accounts with XYZ and paid their fares directly to it. XYZ then forwarded to drivers a percentage of the fares generated by the driver. The company issued each driver a 1099 form and took out no deductions for taxes. The company did require drivers to dress a certain way.
After petitioner was injured in a car accident on October 21, 2011, he filed a motion for medical and temporary disability benefits. XYZ denied that he was an employee. The Judge of Compensation ruled for XYZ and the Appellate Division affirmed the dismissal of petitioner’s case. It said:
XYZ exercised very little control over the means and manner of petitioner’s performance. While petitioner had to dress in a certain way and drive a particular kind of car, these were hardly exacting, controlling measures and he was otherwise left on his own and was largely unaccountable to XYZ. XYZ located passengers for him when he chose to log onto the computer and, in return, he transported the passengers for a percentage of the fare.
The Court said that petitioner could work when he pleased and that he did not lose the right to log on if he limited his hours or did not work at all. The Court interpreted this to mean that he could not be terminated from his job for not showing up for work. The Court also emphasized that XYZ did not need to provide any direction over how petitioner drove passengers to their destinations. It said that petitioner supplied his own equipment but for the computer that XYZ installed. He used his own car, insured it himself and did not get reimbursed for expenses. It also said that petitioner was free to use or not use XYZ as a source to locate passengers. Petitioner had no retirement benefits or annual leave.
The more dominant test is the relative nature of the work test. The Court admitted, “Here, to be sure, transporting passengers was an integral part of XYZ’s business. But those who transported the passengers were not employees but co-owners of XYZ. The understanding between XYZ and the drivers was that, in exchange for producing passengers for the drivers, the drivers would transport the passengers and take a percentage of the fare.”
The Court seemed to misapply the concept of mutual dependency. “Moreover, the evidence indicated that XYZ was never dependent upon any one particular driver to carry out the job of transporting passengers. If one driver were not available to pick up and transport a passenger, another was waiting in line ready to do so. No one driver was ever so essential to the effective functioning of the business to become a cog in its wheel.” In prior cases, this test has not focused on the company’s relationship to any one person but on the relationship of alleged workers generally with the company. InRe/Max v. Wausau Ins. Cos., 162 N.J. 282 (2000) the Supreme Court found that real estate agents were employees even though they could choose their own hours of work and used their own vehicles, as well as running their own advertisements. In that case, the Supreme Court said, “We hold that the innovative structure created by the Re/Max agreement is simply another sophisticated attempt to thwart the employer-employee relationship…”Id. at 288.
The decision in Babekr should not be seen in isolation. While it appears to depart from prior case law holding that cab drivers were employees of cab companies and real estate agents were employees of real estate agencies, this case is now the second one this year to find in favor of the independent contractor defense. The other case of great importance isKotsovska v. Liebman previously discussed in this Blog where the Supreme Court ruled this year that a personal caretaker for an elderly gentleman was not an employee, reversing the Appellate Division’s holding. The tide may be turning in favor of the independent contractor defense, but it is hard to square the reasoning of these recent cases with prior case law.
In sum, the rumors of the death of the independent contractor defense in New Jersey appear to be rather premature.
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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.
Colleen Pizzo worked as a custodian for the Lindenwold Board of Education in Camden County, New Jersey. She went out of work beginning June 19, 2012 for depression. She filed the formal FMLA request on June 26, 2012. The Board approved the leave beginning June 19, 2012. While she was out, Pizzo requested an extension of her FMLA leave until September 10, 2012.
The Board policy stated that an employee’s twelve-month FMLA cycle begins “after the request for leave.” However, in actual practice, the Board used a method measuring FMLA forward from the date an employee actually began leave. In this case, the difference was about seven days between the date Pizzo left work and the date she requested FMLA leave. The Board advised Pizzo that her 12 weeks of FMLA leave would expire on September 10, 2012. The Board also advised Pizzo that she used up all sick, vacation and personal leave time as of August 20, 2012.
Pizzo returned to work but continued to miss work sporadically due to her depression. She missed five days of work in December 2012 and January 2013 combined. She missed three days of work in February 2013. The Board did not terminate Pizzo for these additional absences. However, after Pizzo accumulated eight more absences in March 2013, the Board terminated her employment on March 28, 2013. Before the termination occurred, Pizzo submitted a request for a “sick bank” for “work-related stress.” The Board denied her sick bank request (where employees donate their unused paid sick days to another employee) due to past abuse of attendance over the years.
The circumstances regarding termination are important. Pizzo called out sick on March 21, 2012 and told her supervisor that her doctor would fax a letter to the Board. She did not say anything about what specific condition she had and did not say when she would return to work. The supervisor said Pizzo told him she would be out indefinitely, but Pizzo denied this in her law suit. The Board made the decision to terminate employment partly because Pizzo said she would be out indefinitely and partly because of excessive use of sick time. Prior to her termination, Pizzo had never been disciplined for her absences. After termination occurred, the Board received a letter from Pizzo’s doctor stating that Pizzo requested leave for an indefinite period of time.
Pizzo sued alleging violations of the FMLA and NJLAD. The Board filed a motion for summary judgment on all of Pizzo’s claims. The federal court found that the Board’s FMLA policy was equivocal in stating on the one hand that FMLA begins after a request for leave but in practice starting FMLA at the beginning of leave. However, the court felt summary judgment was appropriate for the Board because Pizzo failed to give sufficient notice to her employer that she was requesting leave under the FMLA in March 2013. Merely calling out sick is not sufficient for FMLA notice.
Nor is there any evidence that Defendant received other notice from Plaintiff in the days after March 21st. Plaintiff did not return to work after that day and she specifically testified that her physician never sent her employer a doctor’s note about her ailment. Although Defendant eventually received a letter from Dr. Murphy excusing Plaintiff for her absence, the letter was dated March 28th, the same day Plaintiff was fired, and was not received by Defendant until April 8th.
The court held that calling out sick did not provide enough information to the Board that Pizzo was suffering from a serious medical illness. Nor did the phone call provide enough information to trigger the Board’s obligation to ask for additional information to determine if the absence was FMLA protected. Similarly, because the Board had no idea that Pizzo was invoking her FMLA rights, the court dismissed the claim for FMLA retaliation as well.
One other interesting aspect of this case pertained to the request of Pizzo for a sick bank. Pizzo argued that the failure of the Board to consider this request violated the New Jersey Law Against Discrimination. Failure to make reasonable accommodation constitutes a potential violation of the law. The court denied the Board’s request for summary judgment on this claim because the court believed that a reasonable jury could find that the Board failed to accommodate Pizzo when it denied her request for a sick bank, where other employees donate their unused paid sick time. The court noted that the request for a sick bank was made on March 12, 2013, a mere 16 days before her termination. Pizzo never heard back from the Board and never had a chance to even discuss her request with the Board prior to her termination. This issue was therefore permitted to go to a jury.
This case is important for employers for a number of reasons. First, it is aNew Jersey federal court case that deals with key provisions of the FMLA, particularly the quality of notice that must be given by employees for an employer to know that absences from work are FMLA protected. Second, it is one of the few published FMLA cases pertaining to school boards. Third, it deals with issues pertaining to measuring the FMLA period and problems when there is inconsistency between a written policy and the actual implementation of the policy. In this case, Pizzo was arguing she was entitled to more FMLA time because technically her request for leave was not transmitted until a week after she went out of work. Finally, the case also deals extensively with the requirements on employers to engage in an interactive dialogue when dealing with reasonable accommodation requests.
This decision is very well written and easy to follow. Readers who are interested can request a copy from the undersigned. The cite isPizzo v. Lindenwold Bd. Of Educ., No. 1:13-cv-03633 (D. N.J. March 31, 2015).
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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.
Patrick Vasnaik worked for Providence Health & Services - Oregon as a security officer from 2006 to 2012. His performance evaluations over the years fluctuated between requiring improvement to exceeding expectations. However, he required several coachings over the years for not arriving on time to work. In May 2010 he received a “documented coaching” after getting two tardies and three absences in a rolling 12-month period.
He also was coached for violating lost and found procedures: once in 2010 he mistakenly took home a lost wallet which he put in his own pocket and forgot to log, and again in 2011 when he erroneously informed a woman that her lost necklace had been found.
One part of Vasnaik’s job was to park patients’ vehicles if the patient had to be taken into the hospital immediately. In February 2011 he parked a patient’s vehicle in a designated disabled space without a permit, causing the patient to receive a $300 ticket. He was also coached about radio communications and emergency room standby procedures.
A recurring criticism of Vasnaik by his superiors was that he did not prioritize security calls or respond to them with urgency. Once he did not answer an officer’s call because Vasnaik was eating lunch. His 2010 review noted that he only had one speed in which he performed every task and needed to augment his pace. This criticism was noted again in 2011.
In May 2011 Vasnaik received a written warning when he lost track of a stand by patient he was guarding because he was using a computer and got distracted. Some time thereafter he was written up for walking away from a marked patrol vehicle with the keys in the ignition and the engine running.
The final violation of Providence’s policy occurred on September 3, 2012 when he parked his personal vehicle in the West Parking Structure, which was reserved for patients and visitors only. Wasnaik noted that he was running late that day, and that the lot was almost empty because it was Labor Day weekend. He later claimed that he parked there because of his work-related knee condition. His employment was terminated on September 17, 2012.
During the last three years of his employment, Vasnaik had four workers’ compensation injuries. The first was on July 16, 2009 when he injured his knee while working with a patient. The second was June 2010 when he severely injured his right knee restraining a psychiatric patient. That injury led to knee surgery and a seven-month absence from work. The third was on August 30, 2011 again involving the left knee, and the final injury occurred on September 2, 2012 when a psychiatric patient bit him on the left forearm. This occurred two weeks before he was fired.Providence argued that it did not know about the last incident until after the company fired Wasnaik.
Vasnaik sued under the ADA and also theOregon state law prohibiting retaliation for filing workers’ compensation injuries. The Court noted that Vasnaik claimed that his knee injuries substantially limited his major life activities, specifically his mobility and quickness on his feet. However, his only proof of this was an independent medical examination dated June 20, 2010 which occurred before his corrective surgery. “Taking that evidence as true, it still does not establish the knee injuries substantially limited any of Vasnaik’s major life activity after his surgery and recovery,” the Court stated. His doctor’s note post-surgery gave him a full release with no restrictions. The Court also noted that “quickness on one’s feet” is nowhere listed as a major life activity under theADA.
The Court took a different view, however, of his workers’ compensation retaliation claim. Vasnaik’s argument was thatProvidence demonstrated increased scrutiny of him following his 2010 workers’ compensation claim. He also argued that his firing followed closely on the heels of his fourth workers’ compensation claim when he was bitten by a patient.
The Court was not impressed with the increased scrutiny logic because there was ample evidence in the record thatProvidence was unsatisfied with Vasnaik’s work pace well before his workers’ compensation injuries. However, the Court was concerned about the temporal proximity between the injury on September 2, 2012 and the termination on September 17, 2012. Vasnaik said that he notified his employer around September 13, 2012 that he needed treatment for the biting incident. That was one day beforeProvidence made the decision to terminate his employment. The Court consideredProvidence’s stated non-discriminatory reasons for firing Vasnaik and also considered Vasnaik’s assertion that the timing of his termination was extremely suspicious:
Although there is no dispute that Vasnaik had received a written warning, and that he admits the underlying incidents were true, the Court finds a reasonable juror could interpret the evidence Vasnaik has produced as indicative of a discriminatory intent. Vasnaik testified that he felt ‘singled-out on this particular incident. . . and the supervisors are very . . . aware that a lot of people do park there.’”
The Court also commented that most of Vasnaik’s annual reviews were fairly positive. The review from 2012, two months before his termination suggested Vasnaik was performing satisfactorily and was meeting expectations. The Court concluded, “The close temporal proximity between Mullen’s positive review, Vasnaik’s injury, and his termination could lead a reasonable juror to conclude that Providence’s proffered reason for terminating him -- that he parked in an essentially empty patient parking lot during the Labor Day weekend -- was pretextual.”
For this reason the Court denied summary judgment toProvidence on the workers’ compensation retaliation claim but granted summary judgment on theADA claim to the employer. The case shows the perils of terminating an employee within days of a reported workers’ compensation claim, particularly when written job evaluations are at best equivocal, if not essentially positive. The case can be found at Vasnaik v. Providence Health & Services - Oregon, 2015U.S. Dist. LEXIS 61068 (D. Oregon, May 9, 2015).
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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.
Employers are aware that if the claimant has not pursued his or her third party civil action within a year of the injury, the employer can provide a 10-day notice and then sue in the name of the injured worker. But what happens if the injured worker will not cooperate with the law suit? Can the employer settle the third party case without the consent of the injured worker?
The most helpful decision yet on this subject isElhelou v. CVS Pharmacy, Inc., v. Lipinski Outdoor Services v. All State Power Wash, A-4731-13T1, (App. Div. July 9, 2015). Mr. Elhelou, the manager of a CVS store inJamesburg, N.J., was injured in February 2010 when he slipped and fell while shoveling snow from a loading dock in the rear of the CVS. He retainedRaymond Shebell, Esq. and recovered medical and indemnity benefits in workers’ compensation. Elhelou did not pursue any third party law suit arising from this accident.
On February 16, 2011, the third party administrator, Gallagher Bassett Services, wrote to Elhelou stating that his injuries may been caused by the negligence of a third party. GB provided the proper 10-day notice stating that if Elhelou did not settle with the third party who may have been responsible for his injuries, then GB would protect its rights and file suit.
On March 1, 2011, Shebell wrote to attorney Laub, representing CVS and GB, advising Laub that GB was not to contact his client directly. GB then wrote to the insurance carrier for Lipinski Outdoor Services, which was responsible for the snow removal at the CVS, putting Lipinski on notice of its workers’ compensation lien. The lien at that time was $90,630.87.
Laub wrote again to Shebell on December 9, 2011 asking whether Shebell intended to file suit against Lipinski. When Laub received no response, he filed a complaint against Lipinski on January 23, 2012 in the name of Elhelou, CVS and GB. Lipinski filed an answer and a third party complaint against All State PowerWash asserting that All State was responsible for clearing ice and snow on the premises.
On January 24, 2013, Lipinski’s lawyers wrote to Laub requesting that Elhelou appear for an IME. Laub wrote to Shebell also advising that he needed to take the deposition of Elhelou. Laub asked for permission to contact Elhelou and then followed with another request. Finally, Laub wrote directly to Elhelou advising that his deposition would be taken on February 15, 2013. Elhelou appeared for the deposition but not for the IME because he had upcoming surgery. The lien was by then $105,129.45.
Laub next wrote to Elhelou to advise that his presence would be needed at an arbitration. Elhelou appeared at the arbitration and his testimony was taken. The arbitration resulted in a non-binding award in the amount of $105,129.45. CVS negotiated a settlement of $93,500 to resolve its lien against Lipinski andAll State. The lien eventually climbed to $198,000. Laub then wrote to Elhelou requesting that he sign and return a release of his claim against Lipinski andAll State. Robert Morley of the Shebell Law Firm then wrote to Laub advising that Elhelou was seeking the firm’s advice regarding whether he should sign the release. Morley explained that it advised Elhelou not to sign the release until the Shebell firm could review the entire litigation file.
Several months went by without progress, so in March 2014, Laub filed a motion to compel Elhelou to sign the release or alternatively the court should enter an order declaring that Elhelou’s release was not required. Elhelou filed a cross-motion seeking the following: 1) permission for the Shebell firm to appear in the action; 2) denying the relief requested by CVS and GB; 3) disqualifying Laub’s law firm; 4) substituting Shebell as counsel, and 5) compelling the turnover of the entire litigation file.
The Superior Court ruled in favor of CVS and GB and held that the suit by CVS was more a “subrogation action” than a personal injury action. The Court said that there was no attorney-client relationship between Laub and Elhelou and no obligation on Laub’s part to do anything other than to protect the Section 40 lien rights on behalf of CVS. The Court further held that there was no obligation on the part of CVS to seek a settlement in excess of the lien, which was then $198,000. Elhelou appealed.
The Appellate Division made a number of very important rulings in this case:
A) “Thus, to the extent that N.J.S.A. 34:15-40(f) grants an employer or compensation carrier a right of statutory subrogation, it cuts off the employee’s right to participate in settlement or file a lawsuit, and limits the employee’s right of recovery to the excess of the compensation lien.”
B) The employer or carrier has a right “to settle with the third party or its insurance carrier, or to bring an action to recover personal injury damages from a third party when the employee fails to do so.”
C) The employer or carrier’s action “shall constitute a bar to any further claim or action by the injured employee . . . against the third person.”
D) “If the amount recovered ‘is in excess of the employer’s obligation to the employee . . . and the expenses of suit, such excess shall be paid to the employee.’”
E) “Even though the statute requires no notice of the settlement to the employee, its consummation acts as ‘a bar to any further claim or action by the injured employee.’ “
F) “Similarly, the statute does not require that the employee be given notice of a suit brought by the employer or its carrier. The only notice required by the statute is the ten-day notice of the employer or carrier’s right to bring such suit, which must be given prior to the filing of the complaint. There are no notice requirements after that point.”
G) “[I]f the employee has brought and abandoned his or her own action, the statute allows the employer or carrier to reopen the action and prosecute it ‘in the name of the injured employee,’ rather than on behalf of the employee directly.”
H) The statute does not “mention any right of the employee to participate in reaching a settlement, whether in lieu of litigation or to conclude litigation.”
I) Just as an employee can settle his or her third party action without involvement by the workers’ compensation carrier, the workers’ compensation carrier is authorized to settle or bring suit against the third party after providing a 10-day notice following one year from the date of accident.
The Appellate Division said, “In summary, we hold that CVS and Gallagher had no obligation to inform Elhelou in advance of the settlement. Instead, they had the right to settle the subrogation action without Elhelou’s consent.” It said that since the Shebell loaw firm took no steps to file suit in Elhelou’s name during the one-year period and during the 10-day notice period, neither Shebell nor Elhelou could bring any action after the 10-day period.
This case poses the most complete analysis of the rights of an employer to protect its statutory lien when the employee files no civil suit. The case is particularly helpful because it dealt with an attempt by the injured employee to engineer a last minute derailment of the settlement effected by CVS. The Court made clear that no consent was needed by CVS from the injured employee.
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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 New Jersey it remains extremely difficult to bring an intentional harm claim against one’s employer. Mere knowledge and appreciation of a risk is not intent. That was the holding inKeller v. Township of Berkeley, A-5767-12T3 (June 22, 2015).
Mr. Keller worked as a laborer for the Township sanitation department and suffered serious injuries when he fell from a moving garbage truck after the passenger-side door suddenly opened. He argued that there had been many complaints about the truck’s door over several years and that the Township was aware that the door latch mechanism was not functioning well. Keller further argued that the Township violated safety standards by failing to repair the problem.
The Township, for its part, denied that it was aware of any problem with the truck and noted that an inspection by the State Police post-accident did not reveal any problem with the locking mechanism. No OSHA violations were ever issued.
The trial judge granted summary judgment dismissing the law suit and plaintiffKeller appealed. The trial judge did concede that there was evidence that the door latch mechanism had not been working well for a long time, and the Township was aware of this but did not fix the problem. Nonetheless, the trial judge concluded that knowing there is a risk is not the same as intentional harm.
The Appellate Division affirmed the dismissal of the case. It stated, “Having reviewed the record in light of these precedents, we agree with the trial court that the unfortunate accident that Keller suffered does not satisfy the substantial-certainty standard required to vault the Act’s exclusivity bar.” Even if the conduct of the Township was grossly negligent, that is not enough to prove an intentional harm claim. There were no OSHA violations at all, and there was no evidence of a prior similar incident where an employee was actually injured. The court noted that there was no effort by the Township to remove the latch or perform some action that created additional danger to employees. While the truck’s door was difficult to open and close, that in itself does not prove intentional harm.
The Appellate Division also affirmed the trial judge’s dismissal of a claim for fraudulent concealment of evidence and spoliation of evidence. The Court said “At best, plaintiffs established sloppy record keeping by the Township. There was simply no showing ‘[t]hat defendant intentionally withheld, altered or destroyed the evidence with purpose to disrupt the litigation’ as required byRosenblit v. Zimmerman, 166 N.J. 391, 406-07 (2001).’”
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John H. Geaney, Esq., is
Intermittent leave can be extremely difficult for employers. One important point for employers to realize is that an employee on intermittent leave who comes to work in between flare-ups may be held to all customary performance standards. The case ofParks v. UPS Supply Chain Solutions, Inc. 2014 U.S. DIST LEXIS 13538 (E.D. Kentucky 2014) illustrates this concept.
Gene Parks worked for UPS since 1999 as a material handler. He drove a forklift, moved boxes, picked products and controlled inventory. He began taking leave for medical reasons in 2003, and he conceded that UPS never interfered with his leave during his early years with the company.
In 2009, Parks was transferred to a new account. Parks began experiencing severe neck pain and applied for up to 12 weeks of intermittent leave. The company granted this request. In May 2010 the company issued a verbal warning to Parks for failure to meet standard productivity goals in either replenishment or picking. The company noted that Parks had a record of poor quality in receiving, but Parks attributed his errors to a medical condition that affected his ability to concentrate. The HR Director advised Parks that his current FMLA paperwork only authorized intermittent leave and indicated that he could perform all essential job functions between flare-ups. She also spoke to him about additional training opportunities which Parks declined. Parks countered that he himself had asked his doctor not to label him as disabled because he feared losing his job. The HR Director suggested that Parks should update his FMLA paperwork; otherwise he would be held accountable for production expectations.
A few days later Parks received a first written warning for poor quality in picking. By late 2010 the write ups became more frequent. Parks was written up numerous times for errors. He would put cartons away but record an incorrect location in the computer system or fail to enter their location in the computer system, or put boxes away upside down. Parks told his supervisors that his medical condition was impacting his performance. His supervisors advised him again that FMLA only covers missed time, not performance at work. They recommended again that if he could not do his job for medical reasons, he should update his FMLA paperwork.
Parks next was issued warnings for conduct and behavior violations. Around this period of time, Parks began a course of physical therapy and cortisone injections, but this treatment was also ineffective. His doctor told him that he would need surgery some time in the future. He submitted an new FMLA certification in January 2011 stating that he would need continuous leave for neck surgery in the near future. No specific date was given until a medical appointment in May when Parks’s doctor advised that the surgery date would be June 16, 2011. Parks claimed he told his supervisors about the scheduled surgery at the beginning of his shift the following week. The company denied being told any specific surgery date. Rather, they knew only that surgery would take place in the future.
On the same date that Parks says he told the company about his need for surgery on June 16, 2011, his supervisor discovered that Parks had logged an incorrect location in the computer system for a container. Under the company’s progressive discipline system, Parks was already on a final written warning status for performance and conduct. The company met with Parks at the end of his shift and terminated his employment. They offered him COBRA information but Parks threw away the COBRA packet because he felt COBRA was too expensive. Parks then sued under the FMLA for interference and retaliation.
The court noted the timing issue in this case between Parks’ alleged discussion about his upcoming surgery and his termination. It said that the close timing between Parks’s request for leave and his termination established a prima facie case of FMLA retaliation, shifting the burden to UPS to explain a non-discriminatory reason for its actions. UPS produced detailed information regarding the poor performance of Parks in the months leading up to his discharge. The Court was impressed with the company’s detailed documentation:
Defendant has produced thorough documentation of Plaintiff’s performance issues at UPS. Plaintiff received multiple written warnings for his sub-par performance, all of which indicated that he could face termination if his work did not improve. Despite this admonition, Plaintiff declined additional training opportunities. Although Plaintiff’s errors became more frequent as his neck condition worsened, Lovelace, Valdez and Welch repeatedly told him that, while his FMLA paperwork authorized time off to cope with his condition, it did not excuse poor performance. As long as Plaintiff chose to work, he would have to meet the standards expected of all employees. If Plaintiff felt that he could not do so, then he needed to update his paperwork again. Defendant has not only demonstrated that Plaintiff had consistent performance issues, it has shown that Plaintiff failed to heed warnings or take advantage of opportunities for improvement, knowing full well that termination could result from continued errors. Therefore, the Court finds that Defendant has articulated a legitimate, non-discriminatory reason for terminating Plaintiff, thus shifting the burden back to Plaintiff.
The court granted summary judgment to UPS and dismissed Parks’s law suit. One important concept which this case demonstrates is that the FMLA provides only for leave. It does not insulate an employee or an exempt an employee from meeting performance standards while at work. The employer has a right to assume that if an employee on intermittent leave comes to work, he or she will be able to meet work requirements. In this case, UPS did an extraordinary job in documenting each and every performance issue, and this excellent documentation was the chief reason that the company prevailed.
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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group. Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com.
In 2014 an important appellate court decision was decided on whether all cases involving the interpretation of employee status must be referred to the Division of Workers’ Compensation. On June 11, 2015, the New Jersey Supreme Court reversed the Appellate Division in Estate of Myroslava Kotsovska v. Saul Liebman (A-89-13) (073861).
The facts were tragic. Saul Liebman was living alone after the recent death of his wife in September 2008. He was 89 years of age. His daughter attempted to find someone who could help her father in his home and take care of his meals and daily activities. Myroslava Kotsovska, a 59-year-old Ukranian woman, was referred to Liebman. She met with Liebman through her son-in-law, who interpreted for her, and she agreed to do laundry, cooking, light housekeeping, and assisting with general tasks in exchange for $100 per day in cash. She had no social security number and no checking account. There were no discussions about whether she would be considered an employee or an independent contractor. There were no formal agreements drafted and the only discussion of medical benefits was that the son-in-law would take care of any necessary medical bills.
On December 8, 2008, Liebman and Kotsovska ran some errands and stopped at the Millburn Diner for lunch. Kotsovska exited the car and stood on the sidewalk while Liebman pulled into the parking space on front of her. Liebman accidentally pressed the accelerator, causing the car to lurch over the parking block and onto the sidewalk where Kotsovska was standing. The force of the car pinned Kotsovska against a low wall, severing her leg. She died from the injuries within an hour.
The estate of Kotsovka filed a wrongful death action against Liebman in Superior Court. The estate never filed a workers compensation claim. Liebman argued that the civil suit must be referred to the Division of Workers’ Compensation because the Division had exclusive jurisdiction over the issue of employee status. The homeowner’s carrier stipulated that the accident arose from the decedent’s employment.
The trial judge ruled for the estate and awarded it $300,000 for the decedent’s pain and suffering and $225,000 for her wrongful death. The Appellate Division reversed, stating that the matter should have been transferred to the Division of Workers’ Compensation on the issue of whether Kotsovska was an employee or an independent contractor. The New Jersey Supreme Court then reversed on June 11, 2015 in favor of the estate.
In ruling that the Superior Court has jurisdiction over employee status, the Supreme Court first distinguished several cases that seemed to suggest that this issue should be resolved in the Division of Workers’ Compensation. The Court said that what makes this case different from prior cases is that the estate of Kotsovska never filed a workers’ compensation claim. The only claim that was filed was a wrongful death action. “Moreover, petitioner did not file a petition for workers’ compensation with the Division. Thus, as the trial court noted, there was no claim pending before the Division over which it could assert jurisdiction. Under these circumstances, we conclude that the Superior Court had jurisdiction to decide the question of decedent’s employment status.”
In ruling in favor of the estate, the Supreme Court did not reject the concept that the Division of Workers’ Compensation has primary jurisdiction on issues of compensability and related employment matters. However, it said there is a four-part test that must be considered to determine if the Division has primary jurisdiction.
1) whether the matter at issue is within the conventional experience of judges; 2) whether the matter is peculiarly within the agency’s discretion, or requires agency expertise; 3) whether inconsistent rulings might pose a danger of disrupting the statutory scheme; and 4) whether prior application has been made to the agency.
On the second part of this test, the Supreme Court surprisingly said, “. . . theCompensation Court is in no better position to make the threshold determination of a worker’s employment status than the Superior Court.” It also again noted that there was no risk of a conflicting decision between the Superior Court and Division of Workers’ Compensation in this case because the estate of Kotsovka only filed in Superior Court. It upheld the decision of the trial judge that Kotsovska was not an employee but an independent contractor in spite of the apparent control over Kotsovska’s activities that Liebman had and the economic dependency that Kotsovska had on Liebman. In the portion of the decision dealing with jury charges, the Court said, “A worker’s economic dependence upon the employer is a factor to be considered when a worker performs a function that constitutes a part of the employer’s business.” It said in this case that Kotsovska’s employment was not in furtherance of Liebman’s business.
One is left to wonder what the result would have been had the estate of Kotsovska filed both a workers’ compensation claim and wrongful death action simultaneously. Many lawyers do this to protect the statute of limitations from running in both actions. If the Superior Court were to find employee status, the timely filing in workers’ compensation court would protect the rights of the employee. There is certainly language in this decision suggesting that if the claimant files both a workers’ compensation claim asserting employee status and a civil claim for wrongful death, the Division should have primary jurisdiction to decide the employment status issue. On the other hand, the Supreme Court also said that the Judge of Compensation is in no better position to decide on a worker’s employment status.
What practitioners are likely to do in situations like this where it is unclear whether the worker is an independent contractor or an employee is to file in superior court and defer any filing in workers’ compensation until just before the statute of limitations should run. The most important comment from this Supreme Court decision is that the Superior Court is equally competent in making employment status determinations.
The stakes are higher in civil law suits and that will favor filings in superior court over workers’ compensation, and the emphasis on social legislation which pervades workers’ compensation decisions may not play such a large role outside workers’ compensation court. In this writer’s view, the decision inKotsovka will likely lead to a divergence in legal analysis on independent contractor status emerging from workers’ compensation and the superior court. In the workers’ compensation arena, a finding of independent contractor status is very rare because using both the “control” test and the “relative nature of the work test” favors employee status. For instance, babysitters who come to a home fairly regularly are found to be employees, and Kotsovka would likely have been found to be an employee in compensation court, contrary to the analysis used in the Superior Court decision. In the last analysis, the rule now is that when it comes to the initial employee status interpretation, the Division does not have primary jurisdiction if the plaintiff only files suit in Superior Court.
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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.
Every New Jersey workers’ compensation practitioner must evaluate the benefits of a Section 20, (which is a lump sum full and final payment), versus an order approving settlement, (which involves an award of a percentage of disability under Section 22). About twice as many cases settle under orders approving settlement in New Jersey than under Section 20 settlements.
Here are the main features of a Section 20:
* A lump sum payment -- not weekly payments over time
* No admission of liability by the employer
* Not a workers’ compensation payment except for insurance rating purposes
* The petitioner cannot reopen the case in the future
* The petitioner and respondent must agree to the Section 20, and the Judge must also approve the settlement. If any party rejects the Section 20, this option is out
* There must be a genuine issue of causation, liability, jurisdiction or dependency; otherwise, there is no possibility to close the file under a Section 20
Here are the main features of a Section 22 order approving settlement:
* The employee receives a percentage of disability, such as 20% of the arm
* The employee can apply to modify the award within two years of the last payment of benefits and seek additional medical, temporary or permanent disability benefits
* The employer accepts a specific medical condition or conditions, such as a torn rotator cuff or herniated cervical disc
* If there is a reinjury to that body part in the future resulting in an increase in disability, the employer gets a credit for the percentage paid
Employers generally prefer Section 20 settlements because they close the particular file at issue for good. However, Section 20 settlements are not obtainable where the accident is admitted and there is permanent disability resulting from the accident. Carriers and third party administrators often as the following question:
If the employee has returned to work, does a Section 20 settlement make sense?
This is a complicated issue with many considerations, but the answer is that most of the time, it makes more sense to do a Section 20 even if the employee has returned to work rather than admit the specific medical condition and deal with reopener rights.
There are two main objection that are raised to the notion of effecting a Section 20 on someone who has returned to work:
1) What if the employee gets injured in the future?
2) Can the employer still get a credit if there is a future injury to the same body part and the case has already been resolved on a Section 20?
Let’s deal with question one first: can’t the employee get reinjured in the future injury? Yes, but this is not really a valid consideration. Assume the employee has a herniated disc and has returned to work. There is an issue of causation or liability which raises the potential for a Section 20. The employer has two choices: pay the case under Section 22 for perhaps 22.5% permanent partial disability and accept that the herniated disc is compensable, or, pay a lump sum on a Section 20 admitting nothing. Whichever option the employer chooses, the employee may have a future injury. There is no way to predict that or stop that. So when it comes to the potential for reinjury given that the employee is back to work at the time of settlement, it makes no difference whether the settlement was done under Section 20 or Section 22. The manner of settlement will not prevent a future injury.
Question two is more complex and raises legitimate considerations: namely,will the employer get a credit for the prior payment if the prior payment was a Section 20 and not a percentage of disability? There is no question that it is simpler to get a credit for a prior payment under Section 22. If the employer settles the case for 22.5%, and the employee reinjures his back in three years, raising the disability percentage to 32.5%, the employer will get a credit for 22.5%. So isn’t this the better way? No, not really, because there are two ways of getting a credit in New Jersey: one is for a prior payment or an award by subtracting the percentage paid, and the other is under theAbdullah case andN.J.S.A. 34:15-12(d), both of which permit employers to get credits for previous established disability even if there is no prior percentage award.
So how does an employer get a credit where the prior settlement was under Section 20 and the employee had a herniated disc at that time? In the event of a new injury to the low back at some future date, the employer will send the prior medical records to the examining doctor, who will be asked to apportion the disability between that which existed before the new accident and that which exists after the new accident. Sometimes this is not even necessary, as the parties can often negotiate the credit in court.
Skilled practitioners are aware that often it is very costly for an employer to have settled a case under an order approving settlement with a percentage of disability when the employer had a chance to do a Section 20 -- particularly when the employee remained at work following the initial settlement. The following scenarios illustrates this point:
SCENARIO ONE
Let’s assume the employer chooses not to do a Section 20 on herniated disc back case and settles for 25% permanent partial disability at 2014 rates because the employer is worried about the fact that the employee has returned to work. The settlement at 25% cost the employer $38,340. The employer is thinking about future credits and decides to go for 25% rather than do a Section 20. Three years from now the employee reinjures his back and now the judge feels that the new percentage of disability is 10% more or 35%. While that is only a 10% increase, the problem is that rates rise after 180 weeks. That pushes the settlement of 35% to $82,530 with the credit for 25% being merely $38,430. That 10% increase cost the employer $44,100!!!
Now consider if the employer settled the original case on a Section 20 for $40,000. It paid a about $1,600 more to get the Section 20 on the 2014 case.
SCENARIO TWO
Assume there was an issue of causation or liability and all parties agreed on the Section 20 settlement in 2014 for $40,000. The employee remained at work and a reinjury occurs in 2017 to the low back. Remember, under the Section 20 there was no award percentage on the record -- and that is a very good thing. The parties agree that the petitioner’s back is 10% worse than it was in 2014. But because there was no prior percentage award, it is harder for the petitioner’s attorney to argue that the new award should be 35%. The employer has a much better chance of negotiating a lower credit (which benefits the employer) precisely because there was no set percentage established in 2014. The employer’s strategy is to settle the case for 30% credit 20%, which is $49,554 credit $28,992. That is $20,562, or about $24,000 less than the scenario in which the employer paid under an order approving settlement!
In this situation, the employer saved over $22,000. It paid slightly more for the original settlement but saved $24,000 when the reinjury occurred. Why did this happen? Because the Section 20 gave the employer’s lawyer more flexibility in negotiations on the credit. The lower the credit percentage, the better for the employer in this situation.
The lesson is that the employer is almost always better off with a Section 20 over an order approving settlement with a percentage of disability, particularly on significant cases. To recap, the main advantages of the Section 20 over Section 22 are clear, even if the employee is back to work doing the same job for the employer:
* The employer has not admitted liability for the condition at issue
* The employer can still get a credit in the event of a future reinjury
* The old case is closed forever and that case cannot be reopened
* The employer has more flexibility in the future to argue for a lower credit, which is a critical advantage to employers
Having said all that, there is one last wrinkle in this analysis. If the employee wants a huge premium for the Section 20 over the Section 22 settlement, that may not make sense for the employer. In the example above, the order approving settlement at 25% cost the employer $38,430, and the Section 20 was only about $1,600 more to obtain at $40,000. But if the employee wanted an additional $15,000 for the Section 20, that would negate the benefit for the employer. So the amount of the premium that the employer pays to get a Section 20 is an important factor in this calculus.
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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.
Sanctions against an employer in workers’ compensation are rather rare, and the case ofPschunder-Haaf v. Synergy Home Care of South Jersey, A-3138-13T3, (App. Div. May 12, 2015) provides some guidance on conduct that may lead to such sanctions.
The petitioner, Pschunder-Haaf, a home health aide, injured her low back when a patient fell on her. She filed a workers’ compensation claim, and the Judge of Compensation entered an order requiring Synergy to provide medical and temporary disability benefits to her. The Judge also required an evaluation byDr. Luis Cervantes, a neurosurgeon. An order dated September 7, 2010 ordered treatment with Dr. Cervantes and continuing temporary disability benefits until either Dr. Cervantes cleared petitioner to return to work or until the company offered light duty authorized by Dr. Cervantes.
Synergy did not pay certain medical bills and terminated temporary wage benefits. There is no indication in the decision to suggest thatDr. Cervantes cleared petitioner to return to work or that petitioner returned to light duty work. Petitioner therefore filed a motion to enforce the prior court order. That led to a second order awarding petitioner temporary disability benefits, medical care, and counsel fees assessed against Synergy.
Fusion surgery followed, and petitioner alleged that she injured her left shoulder during the fusion surgery. Synergy did not accept the left shoulder injury alleged to derive from surgery, leading to another motion for medical benefits. Once again the Judge of Compensation ordered the company to provide treatment for the shoulder.
The petitioner amended the original claim petition to include injuries to her left shoulder and left knee. When Synergy failed to provide additional medical treatment, petitioner filed yet another motion. Her expert,Dr. Rosen, argued that her right leg gave way as a result of instability caused by radicular pain from her spine, and that in turn caused left knee problems.
The Judge of Compensation accepted the testimony of Dr. Rosen, petitioner’s expert, over that ofDr. Maslow, respondent’s expert, on the question of causation of the left knee condition. She ordered that Synergy provide treatment for the petitioner’s primary and derivative injuries. She denied Synergy’s motion for reconsideration and assessed sanctions of $5,000 and $10,000 against Synergy. She awarded petitioner $7,500 in counsel fees and $5,654.14 in reimbursement for expenses, including the cost ofDr. Rosen’s testimony, which was $4,500.
Synergy appealed both the order in respect to the derivative shoulder and knee claims and the sanctions. First, the Appellate Division found that there was credible evidence to support the judge’s decision that the derivative claims arose from work.
Second the court noted that there was substantial evidence in the record to support the judge’s conclusion that the shoulder was injured during the fusion procedure, and the left leg was injured because the right leg kept giving out due to radicular pain from petitioner’s work-related back condition.
On the sanctions issue, however, the Appellate Division took issue with some of the court orders. First, it noted that the Administrative Rules of the Division of Workers’ Compensation allow fines and penalties in an amount not to exceed $5,000 for unreasonable delay or continued noncompliance. The Court vacated the $10,000 sanction because it exceeded the amount contained inN.J.A.C. 12:235-3.16(h)2. Next, the Court focused on the award for costs of $800 and $4,500, the latter being the expense ofDr. Rosen’s testimony. It cited N.J.S.A. 34:15-64(a), which limits the fee to an evaluating physician likeDr. Rosen to $400 for the report and another $400 for testimony. It found that the order for costs was in excess of the amounts allowed by the statute.
The Court did affirm the $5,000 sanction against Synergy and the assessment of counsel fees of $7,500.
The case is important for practitioners because it is one of a very few appellate decisions that focuses on sanctions and costs as well as the statutes and rules that apply. Employers run the risk of sanctions if they choose to disregard a court order as opposed to filing a motion to be relieved form the court order.
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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.
Alphonso Myers worked as a security guard and was injured in that position. He applied for and received social security disability benefits. In his application, he advised the Social Security Administration that he was in pain all the time during the period of his application, he could only stand for twenty minutes and could only walk for 10 to 15 minutes. He said sometimes his pain was so severe that he needed to remain at home and lie down. Since 2005 he was unable to lift more than 10 pounds.
While Myers was applying for social security disability benefits, he was also applying or a job withKnight Protective Service for a position as an armed security guard. As part of the post-offer process, Myers indicated he had no relevant disabilities. A supervisor noticed that Myers seemed to be in pain on the job. Myers admitted that he had undergone neck and back surgeries and had recurrent pain. The supervisor became concerned that Myers was not fit for the job of a security guard because someone might grab his weapon or even take him hostage. Myers was told that the company wanted him to pass a fitness examination.
For reasons that are unclear, the company never set up the fitness examination, and Myers felt that he was effectively terminated by the company. He sued under theADA and claimed that he was discriminated against based on disability. The trial court rejected his suit, and Myers appealed. The U.S. Court of Appeals, 10th Circuit, affirmed the dismissal of the law suit.
First, the court said Myers was not able to show that he was qualified for the position that he sought atKnight Protective Service. “As he acknowledged in his written application with Knight, the essential functions of his job as an armed security guard required him to engage in frequent and prolonged walking, standing, and sitting; to react quickly to dangerous situations; to subdue violent individuals; and to lift heavy weights.”
The court emphasized that Myers represented to the Social Security Administration that he was in pain frequently and could often only stand for 20 minutes. “When a plaintiff makes seemingly inconsistent statements like those before us he must offer a ‘sufficient explanation’ for the apparent contradiction.” The court made clear that every plaintiff should have an opportunity to explain apparently contradictory statements on a social security application under the case ofCleveland v. Policy Mgmt. Sys. Corp., 526U.S. 795, 805 (AD Cases 941) (1999). But in this case Myers was unable to reconcile his statements to the Social Security Administration with his assertions in court that he could do his job. In fact, there was no dispute that since 2005 Myers had been unable to lift more than 10 pounds.
The lessons from this case are worth remembering. First, there is great value in post-offer medical examinations. Fitness-for-duty examinations are also invaluable, but the mistake the company made in this case was not setting up the examination. Secondly, employers who face workers’ compensation or disability discrimination suits should always pursue the records of any social security application. In the workers’ compensation context, employers who may be confronted with fitness issues should always read the claimant’s statements to the various IME physicians as well as the statements that the claimant makes in court regarding limitations in work or non-work activities. Sometimes claimants make statements in workers’ compensation court or to IME physicians that suggest that the job is continuing to injure them or that they cannot perform the duties of the job safely. All too often this information does not get to the insured.
This case can be found at Myers v. Knight Protective Serv., Inc., U.S. Court of Appeals, Tenth Circuit, No 12-6056 (December 22, 2014).
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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.