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Written by: Tracey Jones and Lindsay Underwood
The North Carolina Industrial Commission recently issued decisions in the first round of extended benefits cases, in which claimants are arguing entitlement to temporary total disability benefits past the 500-week cap on benefits. The cases have only been heard at the Deputy Commissioner level but provide insight into how this issue may be treated in the near future while we await inevitable appeals to the Full Commission and Court of Appeals. To obtain benefits beyond the 500-week cap, the claimant must request a hearing and present evidence supporting an allegation of a total loss of wage-earning capacity. The claimant is only eligible to request a hearing on this issue after 425 weeks have passed from the first date of disability. In the cases that have been decided so far, the decisions are split. What precedent is this setting for North Carolina and what can we learn from comparable jurisdictions who have analyzed similar statutory caps?
North Carolina: Statutory Language
N.C.G.S § 97-29(d) outlines the physical and mental requirements for showing an entitlement to extended benefits. As stated above, to obtain benefits beyond the 500-week cap, the claimant must request a hearing and present evidence supporting an allegation of a total loss of wage-earning capacity. It should be noted that there are certain claims which allow for automatic permanent and total disability benefits (i.e., catastrophic cases where a claimant loses two or more limbs). These claimants are entitled to lifetime benefits without findings concerning work ability or wage-earning capacity. Three other categories of claims create a rebuttable presumption of permanent and total disability benefits: (1) spinal injuries involving severe paralysis of both arms, both legs, or the trunk; (2) severe brain or closed-head injuries evidenced by severe and permanent motor or communication disturbances; and (3) second- or third-degree burns to 33% or more of the total body surface. Under these three categories of claims, if the employer can prove that the claimant is capable of suitable employment, then permanent and total disability would not be due and payable.
North Carolina: Deputy Commissioner Extended Benefits Decisions to Date
The first case, Milton Nobles v. North Carolina DHHS and CCMSI, was issued by Deputy Commissioner Robert Harris on January 25, 2021. The claimant in that case had no formal education outside of a high school diploma. He had work experience primarily as a health care technician. On June 26, 2011, the claimant was working for a hospital and sustained injuries while breaking up a fight, which ultimately resulted in headaches, PTSD, and depressive disorder. Dr. Thomas Gualtieri saw the claimant for a one-time neuropsychiatric evaluation in September 2011 and opined that claimant was malingering. He testified in line with the same at hearing. Claimant then began seeing Dr. Edwin Hoeper, a psychiatrist, on his own starting in May 2012. Claimant was still seeing him as of the date of the hearing. Dr. Hoeper provided testimony for claimant that his PTSD would never be cured and that his treatment could only improve his life slightly. Dr. Hoeper testified that claimant was permanently and totally disabled, and unemployable in any job. Dr. Manish Fozdar also conducted a one-time independent medical examination of claimant. Dr. Fozdar found claimant to be uncooperative and opined claimant was malingering. He opined any further mental health treatment was not related to his initial injury. Defendants also hired a rehabilitation professional, who produced a labor market survey and identified several positions she believed claimant could perform. The vocational expert never met with claimant. Deputy Commissioner Harris determined that claimant was entitled to extended benefits beyond the 500 weeks. The Deputy found that claimant had long-term chronic PTSD and chronic major depression and that he had satisfied the requirements under N.C. Gen. Stat. § 97-29(c), and had proven by the preponderance of the evidence in view of the entire record that he “has sustained a total loss of wage-earning capacity.” Dr. Hoeper’s testimony was given more weight than that of Dr. Fozdar, Dr. Gualtieri, or of the vocational rehabilitation professional. Thus, the claimant was entitled to extended benefits.
The next case, Mary Betts v. North Carolina Department of Health and Human Services and CCMSI, was issued on March 12, 2021, also by Deputy Commissioner Robert Harris. The claimant in that case graduated from high school and had CNA qualifications. She was a certified EMT, but her certifications had elapsed. The claimant worked as a health care technician and sustained her injury on August 12, 2011, while trying to restrain a combative patient. She sustained an injury to the ankle which resulted in multiple surgeries. The claimant had sedentary work restrictions, but the claimant’s treating physicians noted that even while performing sedentary work, she would still experience pain and swelling. Evidence showed that claimant remained involved with the Girls Scouts as a troop leader and summer camp director, volunteered with the PTA, cut her own grass, and did crafts. The vocational expert hired by claimant testified that claimant’s condition prevented her from being employable. The defendant also hired a vocational expert, who did not meet or speak with the claimant and did not contact any potential employers to discuss the claimant’s limitations. The Deputy Commissioner found the defendant’s vocational expert’s report to be too general and not tailored specifically to the claimant. Accordingly, the Deputy found that claimant had proven by the preponderance of the evidence in view of the entire record that she “has sustained a total loss of wage-earning capacity” because of this compensable long-term ankle condition. As such, claimant was entitled to extended compensation.
The third case, Michelle Brown v. NC Department of Public Instruction/Surry County Schools and Sedgwick, was issued on May 4, 2021, by Deputy Commissioner Jesse Tillman, III. The claimant was working as a teacher’s assistant at a high school on February 24, 2012, when she sustained an injury. The claimant worked for the county in multiple capacities in the past, including bus driver, substitute teacher, tennis coach, and band director, and had experience as a CNA, truck dispatcher, cashier, food preparation, a line worker, and phlebotomist. The claimant had permanent sedentary work restrictions. The claimant testified that she rode a motorcycle a few times during the summer, used a riding lawnmower, could walk one to two miles without issue, bowled twice a week, cared for multiple animals, and actively swam. A vocational expert provided a labor market survey that showed the availability of jobs within claimant’s work restrictions. The claimant presented no evidence that she continued to suffer a total loss of wage-earning capacity. The Deputy found that the claimant could at least work a part-time, sedentary job. The claimant’s claim for extended benefits was denied.
The last new case is Martin Strudivant v. North Carolina Department of Public Safety and CCMSI. The decision was issued by Deputy Commissioner Erin F. Taylor on May 5, 2021. The claimant sustained a compensable back injury on July 23, 2013. He was a high school graduate and had completed some post-graduate courses. He was certified to dive a forklift, had training in blueprint reading, and had CPR experience. The claimant had been on his church’s Board of Trustees since 2008. On the date of his injury, claimant was working transporting inmates. Four of the claimant’s physicians testified claimant could work and noted he could perform many of the essential functions of his prior job as a correctional officer. Defendants’ vocational expert also testified that claimant had capacity for work. It was determined that claimant could not show a “total loss” of wage-earning capacity; thus, claimant could not show entitlement to compensation beyond the 500-week cap on benefits.
As you can see, the four decisions issued to date have been a 50-50 split on entitlement to extended benefits. The cases are also very fact specific. What is clear from the decisions where entitlement to extended benefits has been denied is that the testimony from medical providers and a vocational rehabilitation specialist are necessary to support a finding that a claimant has wage earning capacity. Defendants should make sure to have good experts secured prior to the hearing, along with possible surveillance and a labor market survey tailored specifically to claimant. It is also helpful to have a complete picture of the claimant’s job history, educational background, and other activities outside of work or education, like the ability to exercise, do yardwork, or maintain positions on boards or as a volunteer.
Jurisdictional Comparison
As we continue to forecast how the Court of Appeals will address extended benefits, we anticipate they will look to other jurisdictions with similar statutory caps on benefits. South Carolina, Virginia, Tennessee, and Georgia have similar statutes and their case law may provide guidance on how entitlement to extended benefits will be analyzed in North Carolina.
South Carolina
South Carolina places a 500-week limit on total disability. Their provision is stricter than North Carolina’s, and only allows extended benefits in very specific circumstances. S.C. Code Ann. § 42-9-10 establishes the cap on benefits. Any person determined to be totally and permanent disabled who, due to a compensable injury, is a paraplegic, a quadriplegic, or has suffered physical brain damage is not subject to the 500-week limitation and shall receive the benefits for life. There is no additional provision under the South Carolina limitation that allows for proving extended benefits beyond the 500-week cap, outside of those circumstances outlined above. The main disagreements in South Carolina case law arise due to arguments regarding the “level of severity” of brain injuries.
For example, in Crisp v. SouthCo., 401 S.C. 627, 738 S.E.2d 835 (2013), the claimant sustained injury to the head and right hand while working in construction. The claimant was ultimately diagnosed with a cognitive disorder. When the claim went to hearing, the claimant alleged injury to his head, brain, neck, back, right upper extremity, and psyche and sought continued temporary benefits and continued medical treatment, including treatment in a traumatic brain injury program. In the alternative, the claimant sought a finding that he was permanently and totally disabled and entitled to lifetime compensation benefits due to “physical brain damage.” The claimant argued to the Supreme Court that the presence of any physical brain injury, regardless of degree, entitles the claimant to benefits beyond the 500-week cap on benefits, per the statute. The Supreme Court, however, emphasized that “inherent in the requirement that the injury to the brain be severe is the factor that the worker is unable to return to suitable gainful employment.” Thus, the analysis hinges on whether the claimant with the diagnosed brain injury can return to work in light of the severity of the injury.
Based on this type of precedent in South Carolina, we can see how difficult it would be for a claimant to prove entitlement to extended benefits outside of the specific circumstances outlined above. Similar to North Carolina, testimony about educational background, work history, and expert testimony on the issue of functionality seem to be important factors in determining return to work options for claimants with a brain injury, which is one of the few conditions that allow benefits beyond the 500-week cap.
Virginia
Virginia is another comparable jurisdiction. They have a 500-week cap, which is enforced even where the claimant continues to have work restrictions after receiving 500 weeks of indemnity/wage loss benefits and is unable to return to his pre-accident job or similar work. Va. Code Ann. § 65.2-503(c) outlines benefits for permanent and total incapacity. Under this code, a claimant may receive permanent total disability benefits when there is:(1) loss of both hands, both arms, both feet, both legs, both eyes, or any two of these body parts in the same work accident;(2) injury that results in total paralysis, as determined by the Virginial Commission on the medical evidence before it; or, (3) an injury to the brain that is traumatic and severe enough to render the worker permanently unemployable in gainful employment.
Most of the determinations of permanent and total incapacity in the Virginia system concern the level of permanent partial impairment ratings, coupled with the factors above. In practice, the courts consider wage-earning capacity and apply similar factors that the North Carolina courts will also be likely to consider.
In Georgia-Pac. Corp. v. Dancy, 24 Va. App. 430, 482 S.E.2d 867 (1997), aff'd, 255 Va. 248, 497 S.E.2d 133 (1998), the claimant’s legs were crushed by a conveyor while at work. The claimant attempted to return to work on one occasion but was sent home after a few hours. The claimant was seen by a company doctor who opined “I do not think that he is ever going to return to work under these circumstances.” Another physician completed a permanent disability assessment and assigned a 100% disability to one leg and a 15% disability to another leg. He was restricted to no standing longer than one hour, no sitting greater than two hours, and no climbing, stooping, crawling, or working on uneven ground. The record showed that the claimant had a tenth-grade education and had experience only in heavy physical labor jobs. A rehabilitation counselor testified that with the claimant’s limited education, time in the service, geographical location, and medical condition, there were some things he could do at least on a part time basis, providing there were no complications. For example, he could work at a nursery watering flowers, or work at a senior citizens’ home, or at a medical clinic preforming local driving tasks.
The lower courts determined the claimant was permanent and totally disabled. The Virginia Court of Appeals cited Va. Code § 65.2-503, noting that permanent and total incapacity shall be awarded where there is loss of both hands, both arms, both feet, both legs, both eyes, or any two thereof in the same accident. Even so, they stressed that in determining the extent of the loss of use of two members, the inability of the injured employee to engage in gainful employment is a proper element to consider. Virginia Oak Flooring Co. v. Chrisley, 195 Va. 850, 858–59, 80 S.E.2d 537, 542 (1954). The medical evidence showed a rated loss of 100% and 15%, respectively, of his left and right legs. The Commission had found, despite the testimony concerning the ability to return to work including that from the rehabilitation counselor, evidence in the record that the combination of the losses to the legs rendered the claimant unemployable. The Court of Appeals agreed, finding that the proper inquiry was whether the rated loss of use in the claimant’s legs rendered both legs unusable. The court affirmed the finding of permanent and total incapacity and awarded extended benefits.
Although the case is unpublished, Hopkins v. RDA, Inc., No. 1053-11-4, 2012 WL 48156 (Va. Ct. App. Jan. 10, 2012), further demonstrates how courts examine the permanent and total disability analysis. The claimant argued he was entitled to extended benefits. The courts first note that the claimant’s physicians disagreed about whether he was permanent and totally disabled and he saw a number of physicians. As to the ability to work, Dr. Harry Li, the authorized treating physician, testified claimant’s disability was total and permanent and that he should be removed from the work force. Dr. Zeena Doria, the authorized treating neurosurgeon stated that claimant was partially disabled due to his lumbar condition and stated claimant should receive permanent partial disability to the right leg only. Dr. Michael Shear stated that claimant was permanently and totally disabled and concluded he could not work for even an hour or so at a time. Dr. John Bruno, an orthopedic surgeon who conducted an independent evaluation, opined that claimant’s permanent partial impairment rating to his spine should be split to assign an 11.5% rating to each leg. Dr. Bruno reviewed claimant’s FCE and noted claimant was totally disabled from gainful employment. Dr. James Melisi and Dr. Charles Citron opined that there were no objective findings that claimant could not work in any capacity, and found claimant was not permanent or totally disabled. Dr. Anthony Debs specifically testified that claimant could work light duty or sedentary work. Dr. Debs also commented on “splitting the ratings” to each leg as suggested by Dr. Bruno, and disagreed, stating he would assign a rating to the right leg, but not the left leg. The Deputy Commissioner and Full Commission found claimant was not permanently and totally disabled. They gave little weight to Dr. Bruno’s ratings to both legs and noted that the evidence failed to demonstrate a loss of use of both lower extremities, and claimant failed to show he was unable to use his legs to any substantial degree in gainful employment.
The court agreed with the Commission’s findings that the claimant was not permanently and totally disabled, and the decision was affirmed. The court found that there was credible evidence to support the Commission’s findings. Specifically, Dr. Dorai found claimant had no impairment to the left leg and Drs. Melisi, Citron, and Debs all opined claimant was capable of light duty or sedentary work and was not permanently disabled.
It appears that the main difference between the Georgia and Hopkins decisions lie in the lack of high ratings to both legs, as well as the inability of the claimant to demonstrate that he was not capable of gainful employment due to said ratings. Though there was some evidence of the ability to work in the Georgia decision, the 100% rating to one leg, and additional rating to the other leg, outweighed that opinion. The Virginia case law again emphasizes the importance of obtaining credible expert physicians who will provide good evidence on disability and work ability. Further, it is interesting to note how the Virginia courts look to impairment ratings assigned to body parts as part of their analysis in determining entitlement to total disability.
Tennessee
Tennessee utilizes a 450-week cap on benefits similar to North Carolina. Tenn. Code Ann. § 50-6-102(15)(D) provides: “For injuries occurring on or after July 1, 2014, the maximum total benefit shall be four hundred fifty (450) weeks times one hundred percent (100%) of the state's average weekly wage… except in instances of permanent total disability.” Tennessee courts also appear to analyze the amount of a permanent impairment rating when considering entitlement to extended benefits.
A claimant who is unable to return to any job in the open market because he/she retains a permanent disability from a work injury may be entitled to permanent total disability benefits.Bomely v. Mid-Am. Corp., 970 S.W.2d 929, 931 (Tenn. 1998). This benefit continues at the claimant’s compensation rate until the claimant is eligible for retirement based on their age under the Social Security Law.
The Hinson case is particularly instructive. Hinson v. Wal-Mart Stores, Inc., 654 S.W.2d 675 (Tenn. 1983). In this case, the claimant fell off a ladder at work and sustained injury to the femur. The trial court held that claimant was permanently and totally disabled, and the Supreme Court of Tennessee agreed. Specifically, the court emphasized that “it must be kept in mind that this Court makes a clear distinction in worker's compensation cases between anatomical impairment as determined by a physician and disability to work which results from such impairment.” Federated Mut. Implement & Hardware Ins. Co. v. Cameron, 220 Tenn. 636, 422 S.W.2d 427 (1967). The court recognized that in determining what may constitute permanent and total disability many pertinent factors should be considered, including the skills, education, and training of the claimant as well as job opportunities and other factors bearing upon employability. In determining the sufficiency of evidence to support disability, the extent of the disability should be determined through further medical evidence and lay testimony. The court also stated that the judge should not be bound by the physicians’ opinions only but should analyze evidence from expert and non-expert witnesses, including those outside of the medical field.
In another case, which is unpublished, Darnell v. Connecticut Indem. Co., No. M2003-00914-SC-WCMCV, 2005 WL 625885, at *1 (Tenn. Workers Comp. Panel Mar. 17, 2005), the claimant began working as a machinist out of high school where he sustained injuries to the right upper back and shoulder. The doctor that treated claimant assigned a 49% permanent partial impairment to the body as a whole. The claimant was able to use his left arm. The claimant attended a second opinion with another physician and his diagnosis was confirmed. There was also testimony from a vocational counselor for the claimant, who concluded that the claimant was permanently and totally disabled considering the medical opinions and educational history of claimant. Another vocational expert testified for the employer and was of the opinion that there were jobs available in the labor market that could be performed with the use of one hand or arm.
The trial court found claimant was totally disabled, and the workers’ compensation panel agreed. The record established that the claimant, a high school graduate, was right hand dominant. Although he occasionally managed to hunt and perform other functions, he was in constant pain, which caused him the need to lie down. The authorized treating physician testified that the claimant could perform work using his left arm. Although the vocational expert for defendants testified that there were jobs available in the marketplace, there was no evidence presented that those jobs actually existed in the marketplace where the claimant lived. Considering the physical limitations of the claimant and other factors such as past work history, job skills, training, education, and job opportunities, it was concluded that the claimant was totally disabled.
This case helps emphasize the factual specificity that may be very important in each extended benefits case. For example, it is foreseeable that, even where a vocational expert provides good testimony on job availability and prospective employment, there may need to be specific considerations for geographical location and actual real-world availability.
Georgia
Georgia also has a 400-week limit on benefits per Ga. Code Ann. § 34-9-261. In the event of a catastrophic injury, there may be an entitlement to extended benefits. Ga. Code Ann. § 34-9-200.1 outlines the possible catastrophic injuries and defines this type of claim as one of more of the following: the claimant has a severe brain or closed head injury; the claimant has a spinal cord injury resulting in severe paralysis of the arm, leg, or trunk; the injury resulted in an amputation of arm, hand, foot, or leg; the injury resulted in second or third degree burns covering a specific percentage of the body; the worker has a diagnosis of industrial or total blindness; or the injuries render him unable to perform his prior work, as well as any additional work available for which he is otherwise qualified. The last group, as expected, results in the most litigation and involves a more subjective analysis of entitlement to benefits. The courts have typically analyzed educational history, work background and experience, the current labor market, vocational experts and analysis, and the possibility of job training when considering whether the claimant is entitled to extended benefits under that classification.
In Reid v. Georgia Bldg. Auth., 283 Ga. App. 413, 641 S.E.2d 642 (2007), the claimant sustained a work-related hand injury and requested a hearing to determine whether her claim was catastrophic under the Act. The State Board of Workers’ Compensation found the injury was catastrophic and the appellate court agreed. The superior court reversed the state board and the claimant appealed. The Georgia Court of Appeals upheld the superior court’s ruling. The claimant argued that her claim was catastrophic as it prevented her from returning to work. There was no dispute that she could not perform her pre-injury job. The only question was whether there was any work available within the national economy for which claimant was otherwise qualified.
The evidence showed that claimant previously did housekeeping work that included “[s]weeping, mopping, dusting, and regular ... cleaning,” and required the ability to “lift, push, pull, and carry heavy item[s].” Her physician released her to limited work of no heavy gripping, lifting, or carrying over 10 pounds. She returned to work, but was unable to perform her duties, so stopped working in any capacity altogether. Claimant’s physician ultimately concluded she was permanently and totally disabled from performing her previous job. The state board found that the claimant was 66 years old and had performed housekeeping work her entire life. She had no computer skills, completed school only through the 11th grade, and had no specialized training. It was further found that she could not perform work activities over four hours per day without experiencing swelling in the hand.
The Court of Appeals found that the claimant did not present any competent evidence that she was unable to perform any work available in substantial numbers within the national economy. At the bare minimum, she should have tried to demonstrate that she attempted to obtain employment within her limitations. The sole evidence regarding her job search was a general statement at hearing that she “looked for work.” She also did not present a vocational expert. Thus, the court held there was insufficient evidence that the claimant was entitled to extended benefits.
In another case, Caswell, Inc. v. Spencer, 280 Ga. App. 141, 633 S.E.2d 449 (2006), the claimant argued his back claim was catastrophic in nature and he was entitled to extended benefits. The State Board of Workers’ Compensation found his injuries were catastrophic and cited, among other things, the claimant’s age of 62 years, stating it rendered him unable to even adapt to light duty work. Defendants appealed and were granted a hearing with an administrative law judge, who rejected the state board’s decision and found that the injuries were not catastrophic. The appellate division of the board agreed. Claimant then appealed to superior court, arguing that the board failed to consider his age. The superior court agreed and remanded the case.
The case was then appealed to the Court of Appeals. The court found that the record showed the claimant’s age was fully considered, it was simply that the administrative law judge and appellate division of the board found the testimony from a vocational specialist to be more credible. The vocational expert disagreed with the statement that someone who is 62 years old is unable to learn new skills, noting he was not aware of any rule or school of thought that supported that contention. The vocational expert also provided research that many retired individuals were going back to work. The expert also testified that, in the national economy, there were something like four million jobs the claimant could perform. The Court of Appeals found that the superior court’s decision that age was not considered was unfounded. Thus, the claim was remanded to the board for reconsideration.
Practical Takeaways for Jurisdictions with Statutory Caps
The case law and jurisdictional analyses above help to forecast what issues North Carolina Appellate Courts will consider when analyzing extended benefits cases in the days to come. What is less clear is whether North Carolina Courts will adopt an analysis similar to Georgia, which requires more of an “obliteration” or complete loss of any wage-earning capacity, or whether it will be similar to Virginia where the medical aspect of the case, as well as “loss of use,” will be extremely important to the outcome.
When we zoom out and examine the trends from this analysis, a list of general takeaways emerges on how to defend a claim for benefits beyond a statutory cap:
1. Each case will be fact specific; documentation and communication remain critical.
2. The claim will require the use of credible, and in many cases multiple, experts.
3. Defendants should obtain solid expert opinions, both medical and vocational, that clearly support a finding that a claimant can participate in some form of employment.
4. It is important to elicit detailed testimony, including dates, times and follow-ups, from the claimant regarding his or her job search, or lack thereof.
5. The vocational expert should meet with the claimant in person to identify jobs within the claimant’s labor market that are readily available in light of his or her work restrictions and educational and vocational background. Additionally, the vocational counselor should contact those potential employers to determine the likelihood that the claimant can secure employment within his or her work restrictions.
6. It is important to have a detailed understanding of the claimant’s job history, educational background and daily activities, including volunteer activities, as evidence of the claimant’s wage-earning ability.
7. It will benefit the defense to develop solid medical evidence about the claimant’s loss of use or impairment ratings by highlighting the functionality of the injured body part.
Written by: Elizabeth Ligon
North Carolina Supreme Court remands Lauziere v. Stanley Martin Communities, LLC, 376 N.C. 789, 854 S.E.2d 579 (2021) to the Full Commission for further findings.
In a recent decision issued by the North Carolina Supreme Court, the judges remanded a case back to the Full Commission where a plaintiff’s case was dismissed with prejudice for failure to prosecute.
Plaintiff was employed as a realtor and allegedly sustained an injury while trying to manually shut a garage door at a model home. Defendants denied Plaintiff’s claim. Plaintiff’s case was originally set to be heard in May 2016, but the case was continued because Plaintiff had not responded to discovery. On June 16, 2016, Plaintiff produced discovery responses to Defendants and asked to be placed on an expedited hearing docket. Defendants alleged Plaintiff’s discovery responses were insufficient. Over a year later, Defendants moved to dismiss the claim with prejudice. The Commission filed an Opinion and Award, dismissing Plaintiff’s case with prejudice pursuant to Industrial Commission Rule 616(b). Plaintiff appealed to the Full Commission, and the Full Commission affirmed the decision.
The sole issue on appeal to the Court of Appeals was whether the Commission erred in dismissing Plaintiff’s claim with prejudice. The Court of Appeals looked to North Carolina Civil Procedure Rule 41(b) for guidance and noted that the Commission must address three factors before it can dismiss a workers’ compensation claim for failure to prosecute under Rule 616(b). First, “whether the plaintiff acted in a manner which deliberately or unreasonably delayed the matter.” Lee v. Roses, 162 N.C. App 129, 132, 590 S.E.29 404, 407 (2004). Second, “the amount of prejudice, if any, to the defendant caused by the plaintiff’s failure to prosecute.” Id. Third, “the reason, if one exists, that sanctions short of dismissal would not suffice.” Id. at 133, 590 S.E.2d at 407.
The Court of Appeals found that the Commission erred on three grounds due to a lack of competent evidence. First, Defendants offered no competent evidence to support a finding that they had been materially prejudiced because they were unable to direct medical treatment since the claim was denied. Second, Defendants did not produce any evidence that supported their contention that they bore “substantial” expenses. Third, there was no evidence that Plaintiff could not have afforded to pay a monetary sanction, if so ordered, so the finding that Defendants’ monetary damages could not have been recouped was not supported by the evidence.
The Court of Appeals found that other, less permanent, sanctions remained available, such as civil contempt. The Full Commission’s order of dismissal was reversed, and the case was remanded to the Commission.
Judge Dillon concurred in part and dissented in part. While not all of the Commission’s findings were supported by the evidence, he believed that the remaining findings were sufficient to support a dismissal in the exercise of the Commission’s discretion. However, he could not conclude that the Commission would have reached the same result based on the remaining findings. Therefore, he voted to vacate the dismissal, remand the matter for further proceedings, and allow the Commission, in its discretion, to order dismissal or lesser sanctions.
Defendants appealed to the North Carolina Supreme Court. The Court remanded the case to the Full Commission to review the award, and as it deems necessary, reconsider the evidence, receive further evidence, rehear the parties or their representatives, and, if proper, amend the Award.
We will continue to monitor this case to determine the implications it has on the evidence defendants need to present in order to successfully secure a dismissal with prejudice. The Commission will likely be reluctant to dismiss a claim with prejudice, so defendants must carefully document and present evidence that plaintiff deliberately or unreasonably delayed the matter, that defendants were prejudiced by plaintiff’s actions, and that no other sanctions short of dismissal would suffice. Such evidence may include documentation of how the delay impaired defendants’ ability to locate witnesses, medical records, treating physicians, or other data; how much money defendants expended, how often they traveled, or how far they traveled to litigate the claim; and financial documentation or other evidence to show why defendants’ costs could not be recouped from plaintiff.
Written by: John Tomei
In nearly all instances, when a worker is injured on the job in North Carolina, the North Carolina Industrial Commission has jurisdiction over the claim. One notable exception involves out-of-state employers who do not regularly employ three or more employees in North Carolina or voluntarily purchase North Carolina workers’ compensation coverage.
So, what happens when a worker is injured in another state and asserts a claim for benefits in North Carolina? Does the North Carolina Industrial Commission have jurisdiction over that claim? If North Carolina does have jurisdiction, what are the coverage implications under a workers’ compensation insurance policy?
Under the N.C. Workers’ Compensation Act, pursuant to N.C.G.S. 97-36, the North Carolina Industrial Commission has jurisdiction over claims for injuries occurring outside the state of North Carolina under three circumstances:
With regard to the contract of employment, North Carolina follows the “last act” test. More specifically, the Industrial Commission and the courts look at where the last act necessary for formation of the contract occurred to determine the state where the contract was formed.
If the last act occurred in North Carolina, then the North Carolina Industrial Commission has jurisdiction over the claim. These last acts can include taking a drug test, accepting an offer of employment over the telephone in North Carolina, or a requirement that the employee begins the work in North Carolina. A contract’s modification can sometimes confer or even remove jurisdiction. As is often the case, these claims are very fact specific, and must be carefully analyzed at the outset of the claim.
With regard to where an employer’s principal place of business is located, there are constitutional requirements for the Industrial Commission to be able to exercise jurisdiction over an employer, inasmuch as the Commission must first have personal jurisdiction over the employer by having sufficient minimum contacts in North Carolina to meet constitutional due process requirements. If those initial due process requirements are met, then the Commission and the courts will look at factors, such as where the employer is headquartered, to determine where the employer’s principal business is located.
The employee’s principal place of employment is often at issue in claims where the employee works in the trucking, transportation or delivery business. In those instances, an employee will often work in multiple states. As is the case with issues regarding the contract of employment, the determination of the employee’s principal place of employment is exceedingly fact-driven. For example, in Davis v. Great Coastal Express, 169 N.C. App. 607, 610 S.E. 2nd 276 (2005), it was found that the Industrial Commission lacked jurisdiction where a truck driver was injured, hired, paid, and made the majority of his deliveries in Virginia. On the other hand, in Perkins v. Arkansas Trucking Services, Inc., 134 N.C. App. 490, 518 S.E. 2nd 36 (1999), the Court found that the Industrial Commission did have jurisdiction over an out-of-state corporation where the employee’s residence was in North Carolina, and where he conducted aspects of his business in North Carolina, including receipt of assignments, storage and maintenance of the truck, and receipt of paychecks. Also, the employee made 18 to 20% of his pickup stops in North Carolina. Again, close analysis of each claim’s facts is crucial in determining the location of the injured employee’s principal place of employment.
The Act is clear that if an injured worker recovers benefits under the laws of another state’s workers compensation system, the carrier in North Carolina is entitled to a credit for any benefits received from that other state, up to the limits of the Act.
Since a North Carolina employer can face liability for a workers’ compensation claim in multiple states, how can that employer adequately protect itself from a potential multistate claim? Also, what coverage defenses in North Carolina are potentially available to a carrier?
The North Carolina Workers’ Compensation Policy and Information Page include the following language:
Other States Insurance: Part Three of the policy applies to the states, if any, listed here:
PART THREE
OTHER STATES INSURANCE
A. How This Insurance Applies
B. Notice
Tell us at once if you begin work in any state listed in Item 3.C. of the Information Page.
The language in the above-listed standard North Carolina workers’ compensation policy is clear that an employer must designate which state’s workers compensation law is going to apply to the policy and, additionally, what “other States” will apply, noting that “other state’s insurance” will likely only apply if the “other state” is listed in item 3.C. Obviously, if an employer knows it is conducting business in multiple states, it should list those states in 3.C. However, issues can nonetheless arise where a claim is made in a state not listed in 3.C. and whether the carrier can therefore effectively deny coverage for that claim. To resolve those issues, general principles of contract law provide that the clear and unambiguous terms of a policy are to be applied and enforced as written in the policy. Also, any ambiguity is construed against the drafter of the contract which, in these cases, is almost always the carrier who drafted the policy language.
In a case successfully handled by Teague Campbell, the North Carolina Court of Appeals addressed the interpretation of this policy language in Harrison v. Tobacco Transport, Inc., 139 N.C. App. 561, 533 S.E. 2nd 871, petition for discr. rev. den’d, 353 N.C. 263, 546 S.E. 2d 96 (2000), which involved a trucker who was hired, worked, resided and was injured in North Carolina. The employer’s policy only contained 3.A. coverage for Kentucky, and no states were listed in 3.C. As one would expect, the carrier denied coverage on the ground that the policy did not provide coverage for employees working in North Carolina. However, the employer contended that the policy was ambiguous and, therefore, unenforceable. On appeal, the Court agreed with the Commission and carrier, and found the policy language to be unambiguous. In reviewing the North Carolina standard policy provisions (listed above), the Court stated, “… the language unambiguously requires that [the employer] must have worked in North Carolina on the effective date of the policy, and that it have notified [the carrier] of such work within 30 days of that date period.” Since there was no evidence that the employer notified the carrier within 30 days of the effective date of the policy that it was working in Kentucky, there was no coverage provided to the employer under 3.C.
Given the Act’s jurisdictional provisions and the enforceability of the standard workers’ compensation policy language in North Carolina, an employer is well-advised to carefully monitor those states in which its employees are working and, if necessary, abide by the notice requirements of the policy by adding any such states to its workers compensation policies. Not only is this important in the context of the location of the employee’s principal place of employment, but a contract of employment can be made in North Carolina simply with a telephone call, which can unwittingly confer North Carolina’s jurisdiction on that employer, thereby subjecting it to exposure.
Carriers, as well, need to be aware of the law in North Carolina as to jurisdiction and the interpretation and enforcement of workers’ compensation policy provisions in these multistate claims, in the event coverage defenses are available.
Written by: Lindsay Underwood
The Commission has recently issued decisions in the first extended benefits cases, in which plaintiffs are arguing entitlement to benefits past the 500-week cap provided in the 2011 reform. The cases have only been heard at the Deputy Commissioner level but give some additional insight into how they may be treated in the near future while we await inevitable appeals to the Full Commission and Court of Appeals. As a reminder, to obtain benefits beyond the 500-week cap, the injured employee must request a hearing and present evidence supporting an allegation of a total loss of wage-earning capacity. The employee is only eligible to request a hearing on this issue after 425 weeks have passed from the first date of disability. In the cases below, the decisions are split.
The first case, Milton Nobles v. North Carolina DHHS and CCMSI, was issued by Deputy Commissioner Robert Harris on January 25, 2021. The plaintiff in that case had no formal education but did have a high school diploma. He had work experience primarily as a health care technician. On June 26, 2011, he was working for a hospital and sustained injury while breaking up a fight. He experienced a significant beating, which ultimately resulted in headaches, PTSD, and depressive disorder. Deputy Commissioner Harris determined that was entitled to extended benefits beyond the 500 weeks. The Deputy found that plaintiff had long-term chronic PTSD and chronic major depression and that he had satisfied the requirements under N.C. Gen. Stat. § 97-29(c), and he has proven by the preponderance of the evidence in view of the entire record that he “has sustained a total loss of wage-earning capacity.” Thus, he was entitled to extended benefits. The plaintiff presented expert evidence that the plaintiff was totally disabled from any employment and the defendants presented medical evidence that the plaintiff was not disabled at all. The case basically hinged on which medical expert was found to be most credible.
The next case, Mary Betts v. North Carolina Department of Health and Human Services and CCMSI, was issued on March 12, 2021, also by Deputy Commissioner Robert Harris. The plaintiff in that case graduated from high school and had CNA qualifications. She was a certified EMT, but her certifications had elapsed. Plaintiff worked as a health care technician and sustained her injury on August 12, 2011, while trying to restrain a combative patient. She sustained injury to the ankle which resulted in multiple surgeries. Plaintiff had sedentary work restrictions. Evidence showed that plaintiff remained involved with the Girls Scouts as a troop leader and summer camp director, volunteered with PTA, cut her own grass, and does crafts. The vocational expert testified that plaintiff’s condition prevented her from being employable. The Deputy found that plaintiff had proven by the preponderance of the evidence in view of the entire record that she “has sustained a total loss of wage-earning capacity” because of this compensable long-term ankle condition. As such, Plaintiff was entitled to extended compensation.
The third case, Michelle Brown v. NC Department of Public Instruction/Surry County Schools and Sedgwick, was issued on May 4, 2021, by Deputy Commissioner Jesse Tillman, III. The plaintiff was working as a teacher’s assistant at a high school on February 24, 2012 when she sustained injury. Plaintiff worked for the County in multiple capacities in the past, including bus driver, substitute teacher, tennis coach, band director, and had experience as a CNA, truck dispatcher, cashier, food preparation, a line worker, and phlebotomist. Plaintiff had permanent sedentary work restrictions. Plaintiff testifies that she rides a motorcycle a few times during the summer, uses a riding lawnmower, can walk 1-2 miles without issue, bowls twice a week, cares for multiple animals, and actively swims. A vocational expert provided a labor market survey that showed the availability of jobs within plaintiff’s work restrictions. Plaintiff presented no evidence that she continued to suffer a total loss of wage-earning capacity. The Deputy found that plaintiff could at least work a part-time, sedentary job. Plaintiff’s claim for extended benefits was denied.
The last new case is Martin Strudivant v. North Carolina Department of Public Safety and CCMSI. The decision was issued by Deputy Commissioner Erin F. Taylor on May 5, 2021. Plaintiff sustained a compensable back injury on July 23, 2013. He was a high school graduate and had completed some post-graduate courses. He was certified to dive a forklift, had training in blueprint reading, and had CPR experience. Plaintiff had been on his church’s Board of Trustees since 2008. On the date of his injury, plaintiff was working transporting inmates. Four of plaintiff’s physicians testified plaintiff could work and noted he could perform many of the essential functions of his prior job as a correctional officer. Defendants’ vocational expert also testified that plaintiff had capacity for work. It was determined that plaintiff could not show a “total loss” of wage-earning capacity and that the plaintiff’s wage earning capacity had not been destroyed. Thus, plaintiff could not show entitlement to compensation beyond the 500-week cap on benefits.
As you can see, the four decisions that have been issued to date have been a 50-50 split on entitlement to extended benefits. The cases are also very fact specific. What is clear from the decisions where entitlement to extended benefits has been denied is that the testimony from medical providers and a vocational rehabilitation specialist are necessary to support a finding that a plaintiff has wage earning capacity. Defendants should make sure to have good experts secured prior to the hearing, along with possible surveillance and a labor market survey. It is also helpful to have a complete picture of the plaintiff’s job history, educational background, and other activities outside of work or education, like the ability to exercise, do yardwork, or maintain positions on boards or as a volunteer. We will continue to monitor cases as they are issued at the Deputy level, and as they are appealed to the Full Commission and Court of Appeals.
Wanda Blanche Taylor was confirmed by the North Carolina General Assembly to serve as a Commissioner replacing former Commissioner and Chair of the Commission, Charlton Allen. Commissioner Taylor’s term begins immediately and runs through June 30, 2026.
The General Assembly has confirmed Governor Roy Cooper’s appointment of Adrian A. Phillips to serve as a Commissioner on the North Carolina Industrial Commission. Phillips will begin serving her term upon taking her oath of office.
Mike MacKay was recently hired as the Director of Claims Administration at the IC. Attorney MacKay has extensive experience in Worker’s Compensation. Most recently, he was the managing attorney of the Worker’s Compensation Department at the Law Offices of James Scott Farrin and had previously represented defendants in Worker’s Compensation and personal injury cases at the law firm of Cranfill Summer.
Wes Saunders, most recently an Assistant Atty. Gen. at the Department of Justice handling Worker’s Compensation cases, was appointed as a Deputy Commissioner and is assigned to the Commission’s Raleigh office.
Celeste Harris was recently appointed as a Deputy Commissioner and assigned to the Winston-Salem regional office. Attorney Harris has represented injured individuals for over 30 years in the areas of Worker’s Compensation, personal injury and Social Security disability. She is also a North Carolina State Bar Board Certified Specialist in Worker’s Compensation law and a North Carolina Certified Mediator.
Written by: Daniel Hayes
If a claimant in a workers’ compensation claim is a current Medicare beneficiary, the carrier has certain reporting obligations to the Centers for Medicare and Medicaid Services (CMS). Under Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA), the carrier’s Responsible Reporting Entity (RRE) must not only report any settlement as fulfillment of its Total Payment Obligation to Claimant (TPOC), but also whether the carrier has any obligation to provide medical compensation, or Ongoing Responsibility for Medicals (ORM). The carrier’s ORM is indicated to CMS as either “yes” or “no,” reflecting whether responsibility for payment of medicals under the workers’ compensation claim is admitted or denied. Once ORM is indicated as “yes,” CMS will assume any and all medicals arising out of the accident are the responsibility of the workers’ compensation carrier as primary payer, or debtor. This ORM will trigger ongoing reviews for any Medicare conditional payments, with the Commercial Repayment Center (CRC) seeking reimbursement for these Medicare conditional payments, as necessary.
In North Carolina, there are two important statutes of limitation that may allow a workers’ compensation carrier to terminate ORM. Under Section 97-25.1 of the North Carolina Workers’ Compensation Act, a two-year statute of limitations limits the claimant’s ability to seek additional medical care after the last payment of medical or indemnity compensation, as follows:
97-25.1. Limitation of duration of medical compensation.
The right to medical compensation shall terminate two years after the employer’s last payment of medical or indemnity compensation unless, prior to the expiration of this period, either: (i) the employee files with the Commission an application for additional medical compensation which is thereafter approved by the Commission, or (ii) the Commission on its own motion orders additional medical compensation. If the Commission determines that there is a substantial risk of the necessity of future medical compensation, the Commission shall provide by order for payment of future necessary medical compensation.
N.C. Gen. Stat. 97-25.1. The carrier may use this two-year period from the last payment of medical or the last payment of indemnity, whichever is later, to know and calendar when ORM should be terminated.
Under Section 97-47, the legislature provided a separate two-year statute of limitations for pursuing a change of condition claim, as follows:
97-47. Change of condition; modification of award.
Upon its own motion or upon the application of any party in interest on the grounds of a change in condition, the Industrial Commission may review any award, and on such review may make an award ending, diminishing, or increasing the compensation previously awarded, subject to the maximum or minimum provided in this Article, and shall immediately send to the parties a copy of the award. No such review shall affect such award as regards any moneys paid but no such review shall be made after two years from the date of the last payment of compensation pursuant to an award under this Article, except that in cases in which only medical or other treatment bills are paid, no such review shall be made after 12 months from the date of the last payment of bills for medical or other treatment, paid pursuant to this Article.
N.C. Gen. Stat. 97-47 (emphasis added). The carrier may also use this two-year period from the last payment of compensation under an award to know and calendar when ORM should be terminated.
Please note, as highlighted above, the statue also includes a one-year statute of limitations for seeking a change of condition in a medical only claim. This would appear to allow the carrier to use a one-year period from the last payment of medical compensation to diary the termination of ORM in a medical only claim.
Practice Tip: With regard to medical only claims, there is some inherent inconsistency in these statutes. To our knowledge, there is no case that directly addresses the one-year change of condition period under Section 97-47 for a medical only claim. It is unclear whether Sections 97-47 and 97-25.1 may conflict with the claimant’s right to seek additional medical care in a medical only claim under certain circumstances.
Written by: Matthew Flammia
As we head into the summer season, there is no better time for a refresher on the calculation of average weekly wages for seasonal employees.
A seasonal employee is one whose primary employment is during “peak” times versus “slack” times. When looking into this issue, it is important to remember a couple of guidelines that have been established by the North Carolina Courts:
In North Carolina, there are five methods for calculating an injured employee’s average weekly wage.
Method 1: Is to be used when the employee worked for the employer 52 weeks prior to the date of injury and did not miss more than seven (7) consecutive days at one or more times. The average weekly wage is simply calculated by dividing the total wages over 52 weeks by 52.
Method 2: The employee worked for the employer 52 weeks prior to the date of injury, but missed seven (7) consecutive days at one or more times over those 52 weeks. To calculate the average weekly wage under Method 2, calculate the total wages over 52 weeks and divide by the number of weeks remaining after subtracting one week for each seven-day period missed.
Method 3: Is to be used when the employee worked for the employer less than 52 weeks prior to the date of injury. To calculate the average weekly wage under Method 3, divide the total wages of the employee by the total number of weeks the employee worked for that employer.
Method 4: Is to be used when the employee has worked for employer for only a short period of time or employment has been casual intermittent and it is impractical to use Method 1, 2 or 3. To calculate the average weekly wage under Method 4, you would use a similar situated employee with the same grade paid in a similar position during the 52 weeks prior to the date of injury.
Method 5: Is the “catch-all” provision that may only be used when the prior Methods produced an unjust result to either party. There is no prescribed Method to calculate the average weekly wage under Method 5.
Generally, for seasonal workers, also sometimes categorized as temporary, intermittent or casual employees, we will look to Method 5 and use a hybrid approach to determine the average weekly wage.
For seasonal workers, the average weekly wage would be calculated by dividing the amount the employee earned by 52 weeks, no matter the length of employment. Using this method will account for the peak and down time during the season and rest of the year. Otherwise, if you only used the weeks that an employee worked or earned wages, the seasonal position would be turned into a full-time, year-round employment. Again, the Courts have held that the average weekly wage should be fair and just to both parties.
Around this time of year, North Carolina’s agriculture business tends to increase, which in turn leads to an increase in seasonal agricultural employees. One type of specialized seasonal agricultural employees are called H-2A workers. This program is administered by the North Carolina Growers Association (NCGA), and in fact, "approximately thirty percent (30%) of NC agricultural employees rely on the H-2A agricultural visa program to keep farming.” Calculating an H-2A’s average weekly wage should be performed in the same manner as seasonal employees, but there are some things to remember regarding these employees.
With any agriculture employee, if the employment contract provides compensation in lieu of wages (e.g. wage withholding for lodging) these allowances are deemed to be part of the employee’s earnings and should be included within the average weekly wage calculation. Generally, this is done by considering the fair market value of such lodging in the area and incorporating it into the employee’s earnings.
Finally, with agricultural employees, and commonly seen with H-2A workers, there may be a joint employment contract. H-2A workers in North Carolina are under a joint employment contract managed by the NCGA. These employees may work for any employer participating in the H-2A program with the NCGA, and therefore, the average weekly wages for the H-2A employees must consider the wages the employee earned from all of the joint employers that were part to the contract. This is not an exception to the general rule, but instead, reflects the relationship of the employee’s multi-employer contract.
Written by: Tracey Jones
Occupational diseases that attack injured workers’ lungs are often filed with the North Carolina Industrial Commission. The most common lung diseases include: (1) silicosis; (2) asbestosis; (3) byssinosis; and (4) occupational asthma. Silicosis and asbestosis are specifically enumerated in N.C Gen. Stat. § 97-53. Byssinosis and occupational asthma are not specifically enumerated under this statute, but fall under the “catch-all” provision of the statute.
Silicosis is a progressive disease that belongs to a group of lung disorders called pneumoconiosis. Silicosis is marked by the formulation of lumps (nodules) and fibrous scar tissue in the lungs. It is the oldest known occupational lung disease and is caused by exposure to inhaled particles of silica, mostly from quartz in rock, sand, and similar substances.
The precise mechanism that triggers the development of silicosis is still unclear. What is known is that particles of silica dust get trapped in the tiny sacs (alveoli) in the lungs where air exchange takes place. Diagnosis of silicosis is based on a detailed occupational history, chest X-rays, bronchoscopy and lung function tests. There is currently no cure for silicosis; however, treatment is available to relieve symptoms, treat complications, and prevent respiratory infections.
Asbestosis is a chronic, progressive inflammation of the lungs. Asbestosis is a consequence of prolonged exposure to large quantities of asbestos, a material once widely used in construction, insulation, and manufacturing. Asbestosis is most common in men over 40 who have worked in asbestos-related occupations. Smokers or heavy drinkers have the greatest risk of developing the disease.
Occupational exposure is the most common cause of asbestosis. Screening of at-risk workers can reveal lung inflammation and lesions including fibrosis (scarring of the lungs), as well as restriction on pulmonary function testing (PFT). The scarring is usually in the lower lobes of the lungs and the scarring is normally bilateral, or seen in both lungs. Pleural plaques are also seen in workers exposed to asbestos, but these plaques are generally not compensable under the NC Workers’ Compensation Act as they do not cause breathing impairment.
Byssinosis is a chronic, asthma-like narrowing of the airways. It is also known as the “Brown Lung” disease. The disease results from inhaling particles of cotton, flax, hemp or jute. More than 800,000 workers in the cotton, flax and rope-making industries are exposed in the workplace to airborne particles that can cause byssinosis.
Occupational asthma is a form of lung disease in which the breathing passages shrink, swell or become inflamed or congested as a result of exposure to irritants in the workplace. At least 15% of all cases of asthma can be tied to exposure to: animal hair, dander, dust, fumes, insulation and packaging materials, mites and other insects, or paints. Occupational asthma is most likely to impact workers who have personal or family histories of allergies or asthma, or who are often required to handle or breathe dust or fumes created by especially irritating material.
Short-term exposure to low levels of one or more irritating substances can cause a very sensitive person to develop symptoms of occupational asthma. A person with occupational asthma may have one or more symptoms, including cough, shortness of breath, tightness in the chest, and wheezing. The most effective treatment for occupational asthma is to reduce or eliminate exposure to symptom-producing substances. It is also important to note that this disease can be reversible.
Each of these diseases, the symptoms, and the treatment required are unique and should be treated as such. When a plaintiff files a workers’ compensation claim alleging an occupational disease lung claim with the North Carolina Industrial Commission, defendants must be prepared to proactively defend the claim with expert medical and vocational assessments.
Written by: Tracey Jones
The tripartite relationship refers to the relationship between the insurer, the insured, and the attorney arising out of the insurance contract. Each party to the relationship has their own respective duties and roles, which will be discussed in turn. In litigation, it is critical for each member of the tripartite relationship to understand its role and responsibilities. .
*The role between the insured and the insurer is defined by the insurance contract, with any ambiguities being interpreted by the courts in favor of the insured.
The tripartite relationship is formed with the primary objective of achieving a successful result in litigation. This relationship, while seemingly simple on the surface, can create numerous, and often complex questions depending on the peripheral goals and interests of the parties, which are not always mutual. Understanding the roles and each role’s responsibility is critical throughout the claims process.
[1] N.C. Admin. Code, Tit.27, Ch2, Canons I-VIII.
Written by: Luke West
As 2020 unfolded and the COVID-19 pandemic set in across the world, it altered our way of life. In addition to closing schools and borders, the U.S. economy essentially shut down. Some businesses and industries were better equipped than others to handle the economic and public health fallout, and directed employees to work from home indefinitely. However, millions of workers, who provide services critical to the functioning of society, did not have the option to work from home.
According to the National Conference of State Legislators, these workers, who have been labeled “frontline” or “essential,” were in industries such as food and agriculture, health care, emergency services, transportation and delivery, energy, water and wastewater management, and critical manufacturing. These workers were, and still are, reporting to work every day.
COVID-19 has proved to be something of a moving target with the lockdown measures, new variants, and impact of vaccinations. The question of whether workers’ compensation covers communicable diseases, such as COVID-19, looms large. For carriers, employers, and workers’ compensation practitioners, the pandemic also begs other questions, such as:Are all communicable diseases the same? What are the critical factors for determining compensability of communicable diseases? Does the designation of an epidemic or pandemic change the way statutes are interpreted? Is there a way to reduce risk from these relatively common yet silent threats?
Are all communicable diseases the same?
Yes and no.
Communicable diseases are also known as infectious or transmissible diseases. The Wisconsin Department of Health reports that communicable diseases result from the infection and growth of pathogenic (disease causing) biologic agents in a human or other animal host. These types of diseases include Hepatitis A, B, and C, HIV, measles, salmonella, and COVID-19. Some communicable diseases have been found to be compensable, such as serum hepatitis in a lab worker.Booker v. Duke.
According to the Centers for Disease Control and Prevention (CDC), communicable diseases are spread through direct contact with a sick person, breathing in airborne viruses and bacteria, contact with blood and bodily fluids, contact with a contaminated surface, or insect or animal bites. All communicable diseases are not the same, and COVID-19 is a particularly insidious disease with specific peculiarities that we are just beginning to understand. The easy transmission and resulting widespread nature of COVID-19 creates increased chances of contracting the disease in public when compared to other communicable diseases.
Person-to-person spread is most likely to occur during close contact with infected persons and is mainly effectuated via droplets of respiratory secretions produced when an infected person cough or sneezes. It is also widely believed that COVID-19 can be transmitted by infected people who are asymptomatic. According to the Occupational Safety and Health Administration (OSHA), jobs that require sustained or frequent close contact with co-workers, customers, and/or members of the public who may be infected places them at an increased risk of contracting the disease.
By that standard, certain essential workers may be at an increased risk of contracting COVID-19 by virtue of their employment. However, OSHA’s guidance on control and prevention of COVID-19 also states that most types of workers have a similar risk of contracting COVID-19 as the general public. In fact, a recent study[1] suggests healthcare professionals actually have a greater risk of contracting the virus outside of the workplace, rather than at work. This may be due to the strict prevention controls present in the healthcare setting.
The problem of tracing the source of a COVID-19 infection is an important emerging issue in the workers’ compensation arena, especially considering the evolving medical guidance regarding prevention, the various vaccines available, and the effect on community spread. All of these issues have a direct bearing on whether a particular COVID-19 infection is compensable.
Does the designation of an epidemic or pandemic change the way statutes are interpreted?
There have been questions around whether the designation of COVID-19 as a worldwide pandemic puts it in a completely different category than how communicable diseases are typically defined within legal statutes.
The short answer is no.
There is no cannon of state statutory construction or interpretation that kicks in once a pandemic is declared. While we have seen in several states, the designation of a pandemic has had an impact on the back end by prompting some state legislatures to introduce bills modifying laws or issuing special directives making it easier for frontline or essential workers to have their COVID-19 claim covered under the workers’ compensation system.
Within North Carolina, a legislative push to streamline COVID-19 workers’ compensation claims for specific categories of essential workers did not cross the goal line. Last year, House Bills 1056 and 1057 proposed adding a presumption of workplace exposure and compensability for COVID-19 (and other pandemic) infections in a number of specific industries such as police, healthcare, fire, and anyone designated essential. However these bills appear to have stalled in Committee. As denied COVID-19 workers’ compensation claims in North Carolina reach the Industrial Commission, it will be essential to monitor the opinions and tailor your business operations and legal practice with respect to COVID-19 accordingly.
What are the critical factors for determining compensability of communicable diseases?
In most states, workers’ compensation injuries fall into one of two categories:
(1) Accidental injuries that can be traced to a specific time, place, and work-related cause (an injury by accident); and
(2) Occupational diseases to which the worker was exposed because of their employment.
The very nature of communicable diseases such as COVID-19 makes it difficult to fit particularly well into either category. In a state-by-state survey of COVID-19 compensability compiled by the National Workers’ Compensation Defense Network (NWCDN), Mimi Metzger of Ritsema & Lyon, LLC, reported that a survey of Colorado case law revealed claimants would typically bring communicable disease claims under both injury by accident and occupational disease categories. However, in most jurisdictions, Colorado included, it appears a potential claimant would have a better chance of proving compensability by pursuing an occupational disease claim. In particular, because COVID-19 is spread from person to person, rather than from exposure to some fixed aspect of the workspace, such as the presence of asbestos, satisfying the requisite causation element may be a difficult proposition.
In North Carolina, the burden for proving the causation requirement for occupational disease claims falls under the so-called “increased risk” rule (also the majority rule), where the employee must prove the risk of contracting the disease was inherent in the employment and that the employment presented an increased risk of contraction when compared to the general public.
Under this category, occupational diseases are not generally compensable if the risk of contracting the illness is common to the general public. If the disease is not the result of a risk specific to the workplace, there is a chance it would not compensable. The problem for Workers’ Compensation Boards, the Industrial Commission, and practitioners is that communicable diseases, such as COVID-19, are spread in the community and something to which the general public is easily exposed. How does one prove when, where, or how they contracted a virus when there is community spread? How does one defend against these claims and seek to prove a negative:that the worker did not contract the virus at work?
In North Carolina, an increased risk state, a COVID-19 infection would generally not be considered compensable because you would arguably be just as likely to contract the disease out in public as you would be at your job. That said, occupational disease claims are extremely fact-specific, so an important factor to consider is whether the job in question regularly exposes the worker to COVID-19 positive persons, such as certain workers in the healthcare field.
The difficulty in proving exposure can pose an issue for essential workers and others who are regularly exposed to the general public in the course and scope of their employment, but who are also human beings outside of work who, despite social distancing, mask regulations and even vaccines, could just as easily be exposed to COVID-19 outside of work. OSHA has tacitly recognized this proposition in its COVID-19 guidance by acknowledging that jobs requiring close contact with others may place those workers at a higher risk of contracting COVID-19 and that occupations which do not require that level of close contact may place those workers at a risk level akin to the general public. The fundamentally altered landscape in the United States during intense lockdown measures seems to cut against a defense that a worker could have just as easily contracted the disease by being out in public. However, as states begin to re-open, the likelihood of establishing increased risk at work when compared to the general public seems to decline.
The following are things to consider when determining whether there will be enough of a causal connection between employment and the contraction of COVID-19:
(1) The employee is a healthcare worker or other frontline worker who regularly comes into contact with COVID-19 positive persons;
(2) Evidence the employee was in direct contact with a COVID-19 positive person at work;
(3) Reliable expert evidence that their employment placed them at a greater risk of contracting the disease when compared to the general public;
(4) A plausible source of contraction at the workplace and incubation period that fits within the infection timeline; and/or
(5) A lack of equally plausible infection sources outside of the workplace. This would also require the demonstration of additional factors, such as:
· How many people the employee was in close contact with on an average day for 14 days prior to diagnosis;
· Whether the employee was provided with safety precautions, such as PPE, at work;
· Whether the employee used PPE outside of work;
· Hand sanitizing/washing stations at work;
· Hand sanitizing/washing practices outside of work;
· The extent to which the employee was or was not engaging in social distancing; and,
· Other measures that were present both inside and outside the workplace to reduce the risk of contracting the disease.
At this time, there are still questions within North Carolina on how COVID-19 compensability claims will be addressed by the Industrial Commission and the appellate courts. It is critical for an employer to be aware the employee’s burden of proof in regards to increased risk and to take steps to mitigate that risk to the extent practicable.
Now that we have an idea of how COVID-19 workers’ compensation claims are handled in North Carolina, let’s look at some of the steps that an employer can take to reduce their risk of an employee contracting COVID-19 while on the job.
Ways of Limiting Workers’ Compensation Risk for COVID-19
On an almost weekly basis, new research is published on the long-term health outcomes for COVID-19 survivors. An increasing body of research suggests that more serious long-term complications can include inflammation of the heart muscle (cardiovascular disease), lung function abnormalities (respiratory disease), acute kidney injury (renal disease), sensory problems and concentration/memory difficulties (neurological disease), and even psychiatric complications. While the pandemic data is starting to show some encouraging trends (at least, domestically) in terms of infection and death rates, the need for realistic exposure mitigation strategies should remain a priority for employers.
OSHA initially developed guidance for organizing worker exposure risk into various levels of risk and has provided specific guidance for each level in their “Guidance on Preparing Workplaces for COVID-19,” which is available on their website. (OSHA No. 3990-03, 2020). Additionally, the CDC’s National Institute for Occupational Safety and Health (NIOSH) provides guidance in the form of factsheets directed toward specific industries such as airports, banks, construction, critical infrastructure, manufacturing, meat and poultry processing, and transit workers. This information is available on the CDC’s website. These are good starting points for businesses looking to limit the risk of COVID-19 exposure and potential workers’ compensation claims.
Some general guidance from OSHA for employers seeking to reduce the risk of COVID-19 exposure includes:
· Promptly investigate any COVID-19 claim and take immediate steps to protect the infected employee and remainder of the workforce;
· Enhance ventilation by increasing air exchanges in rooms;
· Modify workstation layouts to ensure all employees remain six feet apart;
· Close common areas where employees are likely to congregate;
· Increase the frequency of cleaning frequently touched surfaces;
· Encourage sick employees to stay home;
· Send sick employees home immediately;
· Follow CDC-recommended guidance;
· For non-healthcare workers, the CDC recommends cloth face coverings in public and where social distancing measures are difficult to maintain;
· The EEOC indicated that employers could require employees to wear PPE to reduce the transmission of COVID-19, though OSHA leaves the determination of whether to require masks to the employer based on its assessment of risk factors to employees, recommending PPE for anyone in the medium or greater risk groups; and
· Educate employees about how they can reduce the spread of COVID-19.
OSHA has continued to update their recommendations for mitigating the risk of workplace exposure. To the extent practicable, employers are encouraged to:
· Develop an infectious disease preparedness plan;
· Implement basic infection prevention measures, detailed above; and
· Develop policies and procedures for prompt identification and isolation of sick employees, if appropriate;
As we continue learning more about this disease, and as more claims work their way through the state systems, we should be able to better assess the relevant workers’ compensation risks. In the meantime, the compensability analysis for COVID-19 in many states, including North Carolina, will continue to be fact-specific and will vary depending upon what is going on in the state in terms of rate of infection, the type of work being performed, comorbid health conditions of the particular infected employee, and the impact of vaccinations.
If you have questions or wish to discuss this further, please contact Heather Baker, Luke West, or your Teague Campbell workers’ compensation attorney.
This article, in its original format, appeared in the 2020 Larson Series, “Workers’ Compensation Emerging Issues Analysis: COVID-19 in the Workplace”.