State News : New Jersey

It remains very difficult for New Jersey insurers to cancel policies in workers’ compensation.  Strict compliance with N.J.S.A. 34:15-81 is required because the state’s policy favors continuation of insurance coverage. The decision in Pierson v. Travelers Indemnity Company, A-3838-19T2 (App. Div. December 7, 2020) illustrates the specific problem of cancellation related to non-payment of an audit increase of premium.

Nelson Pierson alleged he was injured at Tremarco Brothers on May 7, 2016.  The carrier moved to dismiss the workers’ compensation claim petition based on the cancellation of Tremarco’s insurance coverage.  The coverage at issue began in March 2014.  Tremarco applied to the New Jersey Workers’ Compensation Plan for assignment of an insurance company for workers’ compensation coverage.  Travelers was assigned and provided coverage for 2014-2015.  It also issued a policy for 2015-2016.

The problem in this case began when the carrier requested an audit during the second policy term.  The carrier said that Tremarco failed to cooperate with the audit.  The result of the audit led to an amount almost double the previously billed premium.  In the pivotal allegation of the case, the carrier alleged that it sent on July 6, 2015 a notice that declared the policy would be cancelled on July 24, 2015 if Tremarco did not pay the additional premium.  When Tremarco failed to pay the additional premium by July 24, 2015, the policy was cancelled.

Travelers produced as its witness Timothy Lukes, a senior account manager underwriter, but Lukes was not actually the individual who handled the Tremarco account. Therefore Lukes’ testimony was limited to discussion of how the carrier conducts premium audits and cancellation of policies.  The Judge of Compensation noted that Lukes was “unable to explain specific actions or the reasons for the actions taken by Travelers on the Tremarco account.”  The individual who actually handled the Tremarco account was not called to testify.

It was the position of the carrier that the July 6 notice would have advised Tremarco that the policy would be cancelled on July 24 unless the additional premium were timely paid.  The Judge of Compensation felt that this testimony was at odds with another statement Lukes made, namely that when an additional premium after an audit is being sought, the notice would not ordinarily state that a failure to pay would result in cancellation, only that the failure “can affect your insurability.”

The Judge of Compensation concluded that the cancellation was not clear and unambiguous.  The carrier appealed, and the Appellate Division affirmed the conclusion of the Judge of Compensation, rejecting the cancellation. The Appellate Division found it significant that the carrier never produced a witness with personal knowledge of the mailing and receipt of the cancellation notice. The Appellate Division recognized that “facts about mailing may be proven with evidence of an office custom,” but the Court did not believe that sufficient evidence of office custom was proffered. The Court concluded that ultimately it was not clear what the July 6 notice actually said.  That fact more than any other doomed the cancellation.

The case shows just how hard it can be to effect cancellation of a policy in New Jersey even when an insured refuses to participate in an audit of its premium and then fails to make timely payment.  The public policy in favor of continuation of coverage is so powerful that it can only be overcome with absolute precision with respect to every element of N.J.S.A. 34:15-81, and any variation whatsoever can result in voiding an otherwise legitimate attempt to cancel a workers’ compensation insurance policy.

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John H. Geaney, Esq., is a Shareholder and Co-Chair 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. 

Understanding the difference between “impairment” and “disability” is important in properly reserving files and in defending workers’ compensation cases. Many people use the terms synonymously, but there is an important legal distinction. An impairment refers to a problem with the structure or organ of the body. Disability focuses on the functional limitations that are caused by the impairment with regard to performing activities at work or outside work.

This may sound like a subtle distinction but it makes a difference in the value of workers’ compensation cases and the validity of certain IMEs. Two employees who are the same age can have the same injury, perhaps a medial meniscus tear requiring surgery, and both may file a workers’ compensation claim seeking an award of partial permanent disability for the leg.  Employee A has unsuccessful knee surgery and has had to give up her favorite passion of running.  Employee B has successful knee surgery and is able to pursue her favorite passion of running.  She has run several 5k races as fast as ever and even a few half marathons.  They each had the same impairment of the knee but would they receive the same award in court?  If you said no you are correct because they don’t have the same level of disability.

The New Jersey Supreme Court explained in Perez v. Pantasote that the employee must not only show an injury which restricts the function of the body or an organ (an impairment) but must also show either a lessening to a material degree of working ability or “a substantial interference with the other, non work-related aspects of petitioner’s life” (the disability).

What are the implications of this distinction for medical experts, adjusters, lawyers and judges? Let’s start first with medical experts.  If a medical expert is going to provide an opinion in an IME that an injured worker has a disability of a certain percentage, the expert has to consider how the injury affects the worker’s work life or non-work life.  Last week I read an IME from an often-used petitioner’s orthopedic expert who concluded that an employee had multiple disabilities from a significant accident.  When you added up the various disability estimates, they totaled over 100%.  There were several significant impairments – fractures and tears.  But on closer inspection of the report, it was noteworthy that the medical expert never asked whether the employee had ever returned to work (he had), whether the injury caused a reduction in hours (it had not), whether the individual had reduced non-work activities, whether the individual had given up hobbies or exercise, and indeed whether this accident had affected the worker’s function in any way whatsoever.  The expert’s disability estimates were in essence meaningless because he knew nothing about the man’s life before the accident and after he reached maximal medical improvement.

The problem with this particular IME was that the doctor focused only on impairment but not on disability.  He did observe that the accident caused daily pain and that cold and damp weather aggravated discomfort. But that is not enough.  Very often IME physicians evaluate medical records instead of the individual.  Examiners on both sides make this mistake from time to time. The IME physician may do a great physical examination, a splendid summary of the treating records but still neglect to ask questions about the effect of the work injury on the examinee’s work life or non-work activities compared to the level of function before the injury occurred.

What are the implications for adjusters and defense lawyers?  When new files come in, it is critical to reserve the case for likely exposure.  The medical records are reviewed, particularly objective studies like MRIs and operative reports, and a reserve is established based on medical impairment. That is all we have at the initial stage.   It is too early to know the effect that this accident will have on work or non-work life because no one really knows at the outset whether the worker will return to work, or even return to work and get a second job, or return to doing all his or her former non-work activities. So the initial focus is limited to impairment.  As the case progresses, the focus needs to shift to the level of function of the injured worker in all aspects of life, namely the overall disability.  That is why it is helpful to obtain prior medical records and to investigate through the employer what the employee’s activity level was before the accident. 

The New Jersey workers’ compensation system has a major flaw in allowing virtually no discovery, so often the only way to find out about level of function outside work is through social medial searches or field surveillance.  An IME performed after MMI has been reached is also helpful when the IME doctor asks the right questions.  Did the worker golf before the accident but now cannot golf any longer due to severe back pain?  Did the worker recover so well that she or he added a part-time construction job on top of the original job?  Is the worker now unable to do overtime work?  Once the lawyer or adjuster has this information, very accurate reserves for disability awards can be established.

For judges this distinction between impairment and disability is always important.  Every good Judge of Compensation understands that the award is not based on a diagnosis.  Judges don’t award disability based on operative reports or MRI results.  They try to get a sense of the effect of the injury on the injured worker’s work life and non-work life, and they factor that information into the value of the case.  A judge will have extensive knowledge and experience with workers who undergo surgery for complete rotator cuff tears, for example, but the judge wants to know what the impact of this injury and surgery was in this particular worker’s case.   Disability awards are case by case.

Take the hypothetical of an athlete like Cody Bellinger, for example, the Los Angeles Dodgers 2019 National League MVP. In the recent 2020 World Series, Bellinger hit a home run and after he touched home plate, he high fived a teammate, causing his shoulder to suddenly dislocate.  This had happened to him before, so he popped his shoulder back into place and stayed in the game.  Following the World Series, he had surgery to repair the shoulder.  If he were to file a workers’ compensation claim petition under New Jersey law, what would the Judge ask?  What would be relevant for an athlete?  The Judge of Compensation would consider whether he was able to recover the ability to throw a ball from center field to second base on the fly, hit home runs like he used to, and raise his arm overhead to catch a fly ball.  The judge would not base the award solely on the fact that he had a shoulder dislocation but on the impact of his impairment on his career and non-work activities.  If the injury turned out to have no impact on any of his life functions, the award could be as low as zero. 

This explains why it is ultimately insufficient for lawyers to say to clients that an operated rotator cuff tear is worth 25% permanent partial disability in New Jersey.  That statement tends to equate impairment with disability. The award in each case depends on the extent of recovery, the ability to restore pre-injury functions, and the ability to function at work and at home.  Some people with rotator cuff tears have minimal issues post-surgery, and their award may be far less than 25%.  For others the injury could end a career and be worth far more than 25%.   The lesson is that workers’ compensation practitioners need to focus heavily on the level of function both before the accident and after treatment has ended.  For practitioners and IME doctors, a thorough investigation of pre injury and post injury functions is essential in every case in order to accurately assess disability.

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John H. Geaney, Esq., is a Shareholder and Co-Chair 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. 

Earlier this year the new hand and foot bill became effective on January 21, 2020.  This bill marked a significant change in the New Jersey Workers’ Compensation Act.  The language was unambiguous in augmenting the number of weeks for injuries of the hand, foot and fingers.  However, the language was less than clear concerning its effective date. Did it apply only to cases filed after January 21, 2020?  Did it apply to all cases pending as of January 21, 2020?

On October 30, 2020, Governor Phil Murphy signed legislation amending L. 2019, c. 387 to clarify that the law was intended to apply to cases that were pending in the Division but not yet settled and cases that were filed on or after the date of enactment.  Now the question is what do practitioners and judges do in regard to orders that were entered over the past 10 months using the pre-2020 rates for a hand or foot injury?

Before addressing this issue, let’s recap how this law changes New Jersey Workers’ Compensation Act.  Until the passage of this law, under N.J.S.A. 34:15-12 an injured worker would receive 2.45 weeks for each percentage of compensation for hand injuries.  The law increased the weeks to 2.6 for each percentage of compensation until the level of 25%.  At that level and above, each percentage gets compensated at 3 weeks.

Similarly, the new law raised the long-standing compensation for foot injuries from 2.3 weeks per percentage to 2.5 weeks until the level of 25%. At that level and above, each percentage gets compensation at 2.85 weeks.   It should be noted that the hand and foot law does not apply to reopener claims. 

The law made some other minor changes such as raising the weeks for finger injuries and raising the death benefit to $5,000 from $3,500 for a person who died from any cause other than the accident or occupational disease during the period of payments of permanent injury.

When the law passed in January, judges and practitioners seemed to split fairly evenly around the state on whether the law should only apply to cases newly filed after January 21, 2020 as opposed to cases pending in the Division in January 2020 but filed before that date.  Given the lack of consensus, many pending cases were settled using pre-2020 rates.  That meant somewhat less money in permanency awards for petitioners.

In light of the recent legislation from the Governor clarifying the effective date of this law, employers and practitioners are now asking the following questions:

1.      Did the parties expressly agree to use the pre-2020 rates as part of negotiations and was this agreement made part of the court record?

2.      Did petitioner reserve rights to revisit the issue of the law’s effective date in the event of clarification from the Appellate Division or the Governor?

3.      Was the issue never discussed or addressed at all on the record when the case settled?

In the first situation, respondents will argue that the order should not now be amended.  In the second and third situations, applications to modify the award may be filed, or the parties may even consent in some cases to amend the prior order should they agree.  When there is a genuine dispute, it will become important to obtain a copy of the transcript at the time the order was entered to see what the parties stipulated to on the record and whether rights were reserved.  Correspondence between counsel before the date of settlement may also be relevant in determining the intent of the parties.  Given that hand and foot injuries comprise a large percentage of New Jersey claims, one can anticipate significant disputes over the ensuing months.

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John H. Geaney, Esq., is a Shareholder and Co-Chair 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. 

The New Jersey Assembly Appropriations Committee passed A1708 on October 26, 2020, setting the stage for an eventual full Assembly vote on an important piece of legislation concerning the obligation of workers’ compensation carriers and automobile insurers to pay for costs of medical marijuana.  Strangely enough, this Bill is being advanced at the same time as the New Jersey Supreme Court is scheduled to hear oral arguments in the case of Hager v. M&K Construction, 462 N.J. Super. 146 (App. Div.), certif. granted, 241 N.J. 484 (2020).  This case deals directly with several issues addressed in A 1708.

The proposed Assembly Bill states: “Notwithstanding the provisions of subsection a. of this section, an employer or workers’ compensation carrier or private passenger automobile insurance carrier shall provide coverage for costs associated with the medical use of cannabis . . . “ provided that the insured or the employee is a qualifying patient authorized for the medical use of cannabis.

The Bill further provides, “c.  Notwithstanding any provision of the insurance policy to the contrary, if for any reason payment by the insurer to the medical cannabis dispensary is not feasible, the insurer shall remit directly to the insured the costs for any benefits associated with the medical use of cannabis upon proof of payment by the insured to the medical cannabis dispensary.”

A 1708 seems premature given that the New Jersey Supreme Court has taken certification in Hager.  In this January 13, 2020 published case, the Appellate Division ruled for petitioner that he should be reimbursed by the workers’ compensation carrier for his expenses in connection with the use of medical marijuana for chronic pain.  The Appellate Division addressed five separate arguments, some or all of which are likely to be addressed by the New Jersey Supreme Court.  The issues addressed by the Appellate Division in Hager are set forth below:

1) Does the Controlled Substance Act (CSA) which makes it a crime to manufacture, possess or distribute marijuana, preempt the New Jersey MMA?

2) Does the MMA violate the CSA by aiding and abetting in the commission of a crime?

3) Does compliance with the court order expose M&K to the threat of federal prosecution?

4) Should a workers’ compensation insurer be treated the same under the MMA as a private health insurer?

5) Can medical marijuana be considered reasonable and necessary under the New Jersey Workers’ Compensation Act?

It would seem to make more sense and to accord appropriate respect to the judicial process for the legislature to wait for a very significant decision from our highest state court, given potential constitutional issues have been raised in this appeal.

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John H. Geaney, Esq., is a Shareholder and Co-Chair 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. 

An important decision came down today on an issue that concerns practitioners, employers, carriers and third party administrators.  The decision is the first appellate level opinion on a long-running dispute over jurisdiction in certain MCP cases filed by medical providers in New Jersey. The decision is likely to affect hundreds of pending cases with similar facts in the New Jersey Division of Workers’ Compensation.

In Anesthesia Associates of Morristown, P.A. v. Weinstein Supply Corp.,  Nos. A-5033-18T4, A-5718-18T4 (App. Div. October 7, 2020), two Medical Claim Petition applications involving similar facts were heard back to back by the Appellate Division.  The first case pertained to an application filed by Anesthesia Associates of Morristown, Pennsylvania, hereinafter (AAM). The case involved an employee who was injured in 1998 in the State of Pennsylvania. The employee was a resident of Pennsylvania and his employer was based in Pennsylvania.  A claim was filed with the Pennsylvania Bureau of Workers’ Compensation.

All connections were with Pennsylvania, except that petitioner had a medical procedure in New Jersey.  AAM submitted its charges of $12,992 under the Pennsylvania fee schedule and got paid $1,070.31.   AAM then filed an MCP application in New Jersey seeking the balance.  Liberty Mutual, the carrier for Weinstein Supply, took the position that there was no jurisdiction in New Jersey over this MCP application.

The Judge of Compensation dismissed the MCP application and ruled that the underlying workers’ compensation case needs to be compensable under New Jersey law for jurisdiction over the MCP application.  In this case the Judge concluded there were insufficient contacts in the State of New Jersey with respect to the underlying compensation claim.

The other case which was argued on the same day involved Surgicare of Jersey City v. Waldbaum’s.  In this case, the facts were identical except that virtually all contacts were in the State of New York instead of Pennsylvania.  The injured worker resided in New York, worked in New York and was injured in New York.  The worker filed a claim in New York against Stop & Shop, the employer, which was treated as one and the same as Waldbaum’s of Montvale, N.J.

On March 6, 2017, the New York Workers’ Compensation Board determined that surgery was necessary in the underlying workers’ compensation case.  The employee then underwent surgery at Surgicare of Jersey City’s facility in Jersey City.  Surgicare billed $252,900 but received payment of $20,085.28 through the New York Workers’ Compensation Board.  Like Pennsylvania, New York has a fee schedule.  Surgicare then filed an MCP application in New Jersey to obtain the balance of its original charges of $252,900. 

The Judge of Compensation found that virtually all material connections in the underlying workers’ compensation case were in New York, other than a one-day procedure in Jersey City, N.J.  The Judge of Compensation therefore dismissed the MCP application. 

The Appellate Division adopted in both cases the reasoning of both judges of compensation.  The Court first acknowledged that the New Jersey Legislature amended N.J.S.A. 34:15-15 in 2012 to grant exclusive jurisdiction to the New Jersey Division of Workers’ Compensation for any disputed medical charge arising from any claim for compensation for work related accident or illness.

The Appellate Division went on to embrace the six factors that courts must consider in deciding jursidction set forth in Larson’s Workers’ Compensation Law. 

1.      Place where the injury occurred;

2.      Place of making the contract;

3.      Place where the employment relation exists or is carried out;

4.      Place where the industry is localized;

5.      Place where the employee resides; or

6.      Place whose statute the parties expressly adopted by contract

The Appellate Division agreed with both judges of compensation that the 2012 amendment did not apply to MPC applications in matters where the Division did not have jurisdiction over an employee’s underlying compensation claim. The Court concluded:

Applying these considerations to the two cases before us, we agree with the two judges of compensation that there was no cognizable claim for a work-related injury in either case.  Therefore, the Division did not have jurisdiction over AAM’s or SJC’s claims and they were appropriately dismissed, substantially for the reasons expressed by the two judges of compensation.

The Appellate Division gave short shrift to the argument of the medical providers that the employers were in breach of contract.  “Suffice it to say that their contentions based on an alleged breach of contract are unsupported by any evidence of an agreement between either of them and the injured employees’ employers.” 

These two cases are the first appellate division decisions directly on point in MCP jurisdictional disputes.  The case is currently unreported but its logic is unassailable. The losing medical providers could still seek certification from the Supreme Court. We will keep readers posted if that does occur.

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John H. Geaney, Esq., is a Shareholder and Co-Chair 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. 

What happens when an order is entered against an employer to pay a workers’ compensation award and then respondent appeals the decision? Does respondent have to pay benefits pending appeal?  If it does have to pay benefits during the appeal period, what happens if the Appellate Division reverses the award?  Can respondent get a court order for repayment of benefits and counsel fees paid during the appeal?

These are very important questions for practitioners, employers, carriers and third party administrators.  An answer was provided in Malone v. Pennsauken Bd. of Educ., No. A-3404-18T3 (App. Div. July 28, 2020). The case involved a full trial in which petitioner, a custodian, claimed that his need for bilateral total knee replacements was caused by the physical stresses of his job over several years.   Malone won a substantial award of $109,214 in permanency benefits and $7,638 in temporary disability benefits, and his lawyer received a counsel fee of $21,840.  The Board appealed and argued that there was no reliable evidence showing that the knee pathology and knee replacements were work related.

Naturally, the Board did not want to pay the award while the appeal was pending since appeals can take a very long time.  The Board therefore sought what is known as a “stay” of the award pending appeal.  In essence, that is a request by the employer for permission to suspend payments until a decision comes down on appeal.  The request for a stay was denied by both the Judge of Compensation and by the Appellate Division.  That meant that the Board had to pay the award during the many months of the appeal period.  Although the Judge of Compensation denied the request for a stay, she did alert petitioner to the potential need to reimburse the award in the event of a reversal of her decision:

I’m going to deny the motion to stay. I do believe your argument is that in the event the Appellate Division does overturn my decision that it would be difficult for you to recoup your money. Petitioner needs to be aware of the fact that those monies would, in fact, have to be repaid in the event that the Appellate Division reverses my decision . . .

On appeal, respondent persuaded the Appellate Division to reverse the award of all benefits by arguing that petitioner failed to prove that petitioner’s bilateral knee conditions were work related.

Following the successful appeal, the Board next filed a motion with the Judge of Compensation seeking an order requiring petitioner and his attorney to repay the Board of Education all the funds that had been paid pursuant to the reversed order. The Judge of Compensation denied the Board’s motion stating that she did not believe she had the power to do this:

I do believe that once the case is appealed, the Appellate Division, if they accept it, they have jurisdiction. In this case, the decision was reversed, it was not remanded. The issue of repayment was not addressed by the Appellate Division. But I have no statutory authority to do anything with the Malone matter at this point in time, because the Appellate Division still, in my mind, has jurisdiction over this matter.

That left respondent with only one more option:  to return to the Appellate Division.  The Court cited N.J.S.A. 34:15-57 stating that every Judge of Compensation “. . . shall have power to modify any award of compensation, determination and rule for judgment or order approving settlement and to provide for the commutation of any such award, determination and rule for judgment or order approving judgment.”

The Appellate Division disagreed with the Judge of Compensation and held that the statute vests the Judge of Compensation with the authority to enter a judgment against Malone and his attorney for the amounts the Board paid to them under the order which had been reversed. 

This is a very important decision because there really are few appellate decisions, if any, in workers’ compensation that address whether a Judge of Compensation has the power to order a petitioner or his/her attorney to repay benefits after an appeal. 

Congratulations to Capehart partner, Adam Segal, Esq., in winning the appeal of the award and then winning the argument that a Judge of Compensation can in fact order a petitioner to repay benefits when an award is reversed.

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John H. Geaney, Esq., is a Shareholder and Co-Chair 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. 

On Monday, September 14, 2020, New Jersey Governor Phil Murphy signed S2380 dealing with COVID-19 and essential workers in respect to workers’ compensation benefits.  The bill was signed on the very last day before the bill would have automatically become law. 

It is important to consider what this bill does and what it does not do.  The essence of the bill is that it creates a rebuttable presumption for essential employees that their contraction of the coronavirus is employment related for workers’ compensation purposes.   The employer can rebut the presumption by a preponderance of the evidence (more than 50%) by showing that the worker was not exposed to the disease while working in the place of employment.  Essential workers are defined as:

1.      Public safety workers or first responders;

2.      Those involved in providing medical and other healthcare services, emergency transportation, social services, and other care services, including services provided in health care facilities, residential facilities or homes;

3.      Those who perform functions which involve physical proximity to members of the public and are essential to the public’s health, safety, and welfare, including transportation services, hotel and other residential services, financial services, and the production, preparation, storage, sale and distribution of essential goods such as food, beverages, medicine, fuel, and supplies for conducting essential business and work at home, or;

4.      Anyone deemed an essential employee by the public authority declaring the state of emergency

The effect of a legal presumption is to shift the burden of proof to the employer to disprove the case. Normally the injured worker has the burden of proving his or her case by a preponderance of the evidence.  If a worker contracts COVID-19 and meets one of the categories above, then the workers’ compensation claim will be found to have arisen from work, unless the employer can rebut the claim by showing the worker contracted the disease in a non-work scenario.  Disproving the case may involve proof that the worker more likely contracted the disease from a family member, from an outside gathering, from travel out of state, or perhaps proof that there was no exposure to the coronavirus at work.

Readers need to reflect on what the bill does not do. A presumption of compensability is not a presumption of impairment.  There is no presumption of impairment under the law.  To receive an award of permanent partial disability in New Jersey, one must prove a work-related impairment which restricts the function of the body and causes either a lessening to a material degree of working ability or a substantial impairment of non-work functions.  If one has fully recovered from the illness, proof of impairment will often be very difficult.  Many of the claim petitions that have been filed in New Jersey do not indicate any particular impairment at all, just referring to “residuals of COVID-19.”  Some claim petitions refer to “respiratory illness” without any treatment having occurred by a pulmonologist.

The first issue is therefore whether the illness arose from work.  The presumption helps the injured worker in close cases on the issue of connection to work.  However, the second proof issue will be difficult for many of those who have recovered from the coronavirus, namely proof by objective evidence that the illness has caused a permanent partial or total impairment. That will require good science and good medicine.   The impairment must be a present one, not merely a potential for injury in the future. 

The effective date of the bill is March 9, 2020.  Clients have inquired whether this means that they should reevaluate all the COVID-19 cases that they made decisions on during the past six months.  The bill does not require this, and there is really little to be gained by doing this.  If there is a dispute over workers’ compensation benefits, the injured worker will likely address the issue with the employer or file a claim petition to obtain medical, temporary or permanent partial disability benefits.  Many recovered COVID-19 cases simply do not involve a dispute over workers’ compensation benefits.  Notably, numerous dependency claims have already been filed long before the passage of S2380.  Employers can expect the filing of more COVID-19 cases as a result of the passage of S2380, but the bill does not make it any easier for claimants to prove objective evidence of an impairment that meets the Supreme Court standard set forth in Perez v. Pantasote, 95 N.J. 105 (1984).

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John H. Geaney, Esq., is a Shareholder and Co-Chair 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. 

Many readers have asked about the status of two very significant bills affecting New Jersey workers’ compensation practice.  They are S2380 and A4134.

S2380 – The Essential Employees Bill

We are down to the wire on S2380.  The Governor has until September 13, 2020 either to sign this bill or veto it; otherwise, S2380 will become law automatically.  This bill creates a rebuttable presumption for essential employees that their contraction of the coronavirus is work related.  The employer can rebut the presumption by a preponderance of the evidence (more than 50%) by showing that the worker was not exposed to the disease while working in the place of employment.  Essential workers are defined as:

1.      Public safety workers or first responders;

2.      Those involved in providing medical and other healthcare services, emergency transportation, social services, and other care services, including services provided in health care facilities, residential facilities or homes;

3.      Those who perform functions which involve physical proximity to members of the public and are essential to the public’s health, safety, and welfare, including transportation services, hotel and other residential services, financial services, and the production, preparation, storage, sale and distribution of essential goods such as food, beverages, medicine, fuel, and supplies for conducting essential business and work at home, or;

4.      Anyone deemed an essential employee by the public authority declaring the state of emergency.

A4134 – Clarification of Hand And Foot Bill On Retroactivity

This Assembly bill has attracted less attention than S2380, but it is important.  It clarifies whether the legislation that became law on January 21, 2020 had secondary retroactive effect.  The bill created enhanced compensation for hand, foot and finger injuries. However, the bill contained no clear language on which cases it applied to.  Questions arose immediately among judges, claimants, practitioners, employers, carriers, and third party administrators regarding the application of the law to claim petitions pending in the Division of Workers’ Compensation as of January 21, 2020 but filed before the effective date of the law.

This bill clearly states that the enhanced compensation for hand, foot and finger injuries applies to all cases pending but not yet settled or filed on or after the date of enactment  –  January 21, 2020.  However, the bill states that the law will not be applicable to cases which have been reopened.  The law obviously would not apply to cases that were settled before January 21, 2020.

This bill is limited to the issue of secondary retroactivity and was passed by the Assembly on August 27, 2020.  It will be scheduled next for a hearing before the Senate.  Readers should be aware that another aspect of this bill raises the cost of burial expenses in cases of compensable accident or occupational disease from $3,500 to $5,000, and that provision too would be applicable to claim petitions pending in the Division of Workers’ Compensation as of January 21, 2020.

Readers who are interested in the method used to compute the enhanced compensation for hand, foot and finger injuries can view the January 23, 2020 blog addressing this subject.

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John H. Geaney, Esq., is a Shareholder and Co-Chair 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. 

Workers’ compensation claims professionals know how important it is to ask about prior injuries in workers’ compensation.  That information can bear directly on causation and will often lead to credits at the time of settlement. But an underrated area of investigation remains subsequent injuries that take place after the date of the workers’ compensation injury but before the workers’ compensation case actually settles.

Consider a case involving a work-related back injury.  The parties have each obtained their IMEs but before settlement occurs, the adjuster runs an ISO report. That report reflects a recent motor vehicle accident involving the low back.  This non-work injury is significant enough to lead to orthopedic treatment and a law suit for personal injuries against the other driver.  How does this information impact settlement negotiations?

Petitioner’s counsel might argue that it doesn’t really matter because counsel already has an IME estimating 45% permanent partial disability for an unoperated herniated disc and respondent’s counsel has an estimate of 5% permanent partial disability.  Respondent’s counsel will maintain that this information is of great importance to consider.  To get maximum impact from the new accident defense counsel must obtain all treating records from the subsequent car accident.  Let us assume in this hypothetical situation that these new records show treatment at the same level of the spine with a recommendation for future surgery.  This could be a game changer and may lead to several results:

1.      A section 20 settlement for considerably less money than had been anticipated on an Order Approving Settlement;

2.      An order approving settlement for a lower percentage with a statement that the overall disability is now greater, providing insulation from any reopener; or,

3.      Perhaps even a trial if the client insists on a dismissal of the case.

The argument that defense counsel has in its favor is that an award of permanent partial disability is based on present complaints, not on complaints given in the past to IME doctors.   That is the rule from Allen v. Ebon, which established that awards of permanent partial disability should be based on recent medical evaluations, not stale ones.  New exams may have to be ordered.  When it comes time to negotiate settlement, defense counsel can argue that the petitioner’s current complaints must inevitably relate to the subsequent injury.  The Judge of Compensation will ultimately have to decide whether the current complaints and permanent impairment reflect in part the prior work injury or mainly the new car accident.  In this hypothetical one thing is for sure: the new accident completely alters the negotiations and must lower the value of the case where the new injury is to the same body part as the original work injury.

This scenario often occurs in reopener cases.  Defense counsel will request answers to reopener interrogatories, and sometimes the answers to interrogatories contain information about a new, non-work injury to the same part of the body that was injured in the work accident. If the original injury was to the neck, and now petitioner admits to a new injury to the neck with a new MRI, what does respondent do?  The best argument, of course, should be for dismissal of the reopener.

As mentioned above, step one is to obtain all the new treating records, including any new MRIs, CT scans and x-rays.  Step two to send the records to the IME physicians for an opinion on whether the current diagnosis and complaints are causally related to the subsequent accident.  If there is evidence that the medical condition at issue has been worsened by the subsequent accident, defense counsel should have a very strong argument for a dismissal of the reopener petition.  Counsel for petitioner will try to argue that the condition was getting worse before the new accident occurred.  But that seldom makes logical sense.  Consider a motorist who got a crack in her car windshield from a fender bender caused by another driver.  Then one month later the motorist gets into another car accident caused by the negligence of some other driver, this time knocking out the entire windshield.  Would anyone seriously expect the insurance company from the first fender bender to pay for part of the windshield repair?  Of course not. The insurance company for the second accident would have to pay for the entire repair. 

The lesson is that workers’ compensation professionals need to put systems in place to make sure that a new ISO is run every six months or so during the progression of the case to see if there are new non-work injuries.  An ISO doesn’t cost much and it can lead to enormous savings.  The ISO may not be the only way to discover this information.  Sometimes the treating records, particularly PT notes, may make mention of a new injury; and sometimes the employer is aware of the new injury and communicates this information to the carrier or third party administrator. On occasion a petitioner’s own Facebook page may reveal a new injury.   No matter what, when testimony is taken at the time of settlement in support of any award, defense counsel must always ask the injured worker whether he or she has had any new accidents with additional treatment since the time of the accident or initial award.

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John H. Geaney, Esq., is a Shareholder and Co-Chair 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

There is a fairly widespread belief that any injury that occurs at work must be covered under workers’ compensation.  But that is not true.  There are several categories of injuries that happen at work which simply are not compensable.  Injuries which do not arise out of employment are not covered in workers’ compensation.  Not only must an injury occur during work, but it must arise out of work. In every state there are a number of useful doctrines that help explain and expand on the definition of “not arising out of employment” for traumatic injuries.

*  Idiopathic Claims and Personal Risk Claims

These two doctrines are very similar.  The concept of idiopathic applies when the employee has a preexisting medical condition which is the true cause of the injury.  For example, an employee with severe osteoarthritis is walking down the corridor at work when his knee locks, without striking anything or falling.  The doctor examines and advises that further knee damage was caused by the act of walking on account of severe osteoarthritis. This is a classic idiopathic claim because the injury was entirely personal to the employee, not caused by work. 

Consider also an employee with prior shoulder dislocation issues who puts on her coat to go home after work and experiences a new dislocation of her shoulder. Although this happened at work, it was not caused by work.  All the petitioner was doing is something that we do when we leave work on a cold day:  namely we put on our coats.  The dislocation of the shoulder would be considered idiopathic and unconnected to the activities of work.  

The personal risk doctrine is very similar to the idiopathic claim doctrine but it better fits a situation where there is no prior medical condition.  One of the best cases for this doctrine is Coleman v. Cycle Transformer Corp., 105 N.J. 285 (1986).  The petitioner got a permanent wave solution in her hair, and the next day at work, she lit a cigarette prompting her hair to burst into flames and resulting in burns. The Supreme Court found this injury not compensable because the risk was personal to the employee due to her permanent wave solution, and the connection to work was negligible.

*  Deviation from Employment

This doctrine has two major applications.  The first applies to an activity that is either unconnected to work or so far afield that a reasonable person would never do it.  For example, a lawyer is outside his office and calls a colleague on his cell phone who is working at his desk, asking the colleague to come outside and help carry work files into the office. The colleague decides not to walk down the steps or take the elevator but instead opens his window and jumps 20 feet to the ground breaking his leg. This activity of jumping from one’s window is so hazardous that no reasonable person would do it.  The injury clearly happened during work but it would be a deviation from employment.  An employer should not have to insure against inherently dangerous activities that no reasonable person would undertake.

Similarly, in Money v. Coin Depot Corp., 299 N.J. Super. 434 (App. Div.), certif. denied, 151 N.J. 171 (1997), the petitioner was an armored truck security guard who began playing Russian Roulette with his gun while he and his colleagues were transporting money.  The gun discharged and killed the petitioner. The court found that this activity was a major deviation from employment because it was so inherently dangerous.

The second type of deviation from employment is found in connection with travel that is unconnected to work.  The leading case is Jumpp v. City of Ventnor, 351 N.J. Super. 44 (App. Div. 2002), aff’d, 177 N.J. 470 (2003).  In that case the petitioner worked as a pumping station operator, driving throughout the city.  He got permission from his supervisor to stop and get his mail in the morning as he was driving along the main road in town to the next pumping station.  He fell and fractured his pelvis returning to his municipal vehicle parked in the post office lot after getting his mail.  The court considered petitioner’s injury to be a major deviation because the activity of getting his own mail, even it if it was permitted, had no connection to his work.

*  Intentional Self Injury

Employees who deliberately injure themselves will almost always be denied compensation.  If an angry employee punches a wall in an argument at work and breaks her hand, that injury would not be compensable because the action of punching a wall is highly likely to cause self injury.  In the same way, if Employee A assaults employee B and Employee A is injured in that process, courts will almost always find this to be self-inflicted and not compensable.  The injury to Employee B, of course, would be covered as the victim of an assault.

*  Recreational Activities

Suppose an employee decides during a break in the morning to pull out some rope, moves away from his desk, and begins to jump rope for a few minutes, only to get her foot tangled up in the rope leading to an injury.  Would this be covered in workers’ compensation?  It did happen at work, right?  Under New Jersey law this would not be compensable because recreational activities that just promote the health of the employee are not covered.  For a recreational activity to be covered it must create a benefit to the employer greater than health and morale and must be a regular incident of employment.  Few recreational activities can meet this test of promoting a benefit to the employer greater than health and morale.  The same is true of social activities.

However, if two employees are fooling around at work and kidding each other, and then one throws a pencil at the other as a joke, but the pencil strikes the other employee in the eye, the judge will probably view this activity as horseplay  – – not a recreational activity.  Unlike the law in many states, horseplay is NOT a defense in New Jersey.  Horseplay is always compensable as to the victim and sometimes compensable as to the instigator. There is a line between horseplay and assaults/altercations, and outcomes may differ depending on whether that line is crossed.

There are certainly other doctrines that overlap some of the above examples. There are a few cases which discuss the doctrine of “abandonment of employment.” In my view that doctrine is really synonymous with deviation from employment.  The differences are subtle.  One can say safely say that when a  traumatic claim is denied for an activity which occurred at work, one of the above doctrines will constitute the legal basis for the denial under the broad heading of not arising from the 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.