State News : Pennsylvania

By Kevin L. Connors, Esquire

Well, the wheel turns again.

Mental/mental injuries have always been, well, pretty mental under Pennsylvania Workers’ Compensation Law.

Duh, mental/mental claims are always difficult to prove and defend, in the absence of an objective physical injury.

This conundrum formed the spine for the Pennsylvania Supreme Court’s landmark Decision inMartin v. Katchum, Inc., 568 A.2d 159 (Pa. 1990).

In Martin, the Pennsylvania Supreme Court adopted the analysis below, for determining whether a mental injury was compensable, under the Pennsylvania Workers’ Compensation Act:

·                     The Claimant must produce objective evidence which is corroborative of his/her subjective description of the working conditions alleged to have caused the psychiatric injury; 

·                     Because psychiatric injuries are by nature subjective, we believe that if a Claimant has met his burden of proving the existence of a psychiatric injury, he cannot rely solely upon his own account of the working environment to sustain his burden of proving that the injury was not caused by a subjective reaction to normal working conditions; and,

·                     A Claimant’s burden of proof to recover benefits for a psychiatric injury is, therefore, twofold; “he must prove by objective evidence that he has suffered a psychiatric injury and he must prove that such an injury is other than a subjective reaction to normal working conditions.”

In PA Liquor Control Board v. WCAB (Kochanowicz), decided by the Commonwealth Court on December 30, 2014, the Court was ordered, by the Pennsylvania Supreme Court in a Decision rendered on February 12, 2014, to determine whether the Workers’ Compensation Judge’s Decision, granting the Claim Petition filed by the Claimant, Gregory Kochanowicz, wherein the Claimant was seeking workers’ compensation benefits for a work-related injury, alleged to have occurred as a result of the Claimant, a General Manager of a Pennsylvania Retail Liquor Store, subsequent to which the Claimant developed post-traumatic stress disorder, adjustment disorder with mixed anxiety, and depression, was entitled to workers’ compensation benefits, with the Workers’ Compensation Judge having found that the Claimant had proven a mental/mental injury under the Act.

The WCJ’s Decision was then appealed to the Appeal Board, which concluded that the Claimant had not sustained his burden of proving a work-related injury, resulting in the Commonwealth Court, in its 2011 Decision in this case, holding that the Claimant should have anticipated the possibility of being robbed at gunpoint, and, therefore, that the armed robbery resulting in the Claimant’s alleged mental/mental injuries “was a normal condition of his retail liquor store employment.”

The Commonwealth Court’s ruling was then appealed to the Supreme Court, which granted the Claimant’s Appeal, vacating the Commonwealth Court’s denial of workers’ compensation benefits, and remanding the case back to the Commonwealth Court, in reliance upon the Supreme Court’s Decision in Payes v. WCAB, 79 A.3d 543 (Pa. 2013), in which the Supreme Court had held that mental/mental injury cases are highly fact-sensitive, requiring the Court, at whatever level, to give deference to the fact-finding functions of the Workers’ Compensation Judge, thereby limiting the Appellate review to determining whether the Judge’s findings of fact were supported by substantial competent evidence.

As for the underlying claim, the Claimant had been working an evening shift, and was preparing to close the store in April of 2008, when a masked man approached him with a drawn gun.  The Claimant was asked to remove all money from the store safe, with the armed robber holding a gun to the back of the Claimant’s head.

The Claimant was then tied to a chair, along with a co-worker, with the Claimant getting agitated and anxious when the gunman put the gun to the back of the Claimant’s head.

After the gunman left, the Claimant freed himself, called the Police, and his Supervisor.

The Claimant then asked Human Resources if he could take time off of work, because of the robbery.

The Claimant had never been robbed during his thirty years of employment, and the Employer referred the Claimant to a panel social worker.

The Claimant then saw his own personal physician the following day, and then began to treat with a psychologist, to whom the Claimant had been referred by his counsel.

Applying the legal precedent set by the Pennsylvania Supreme Court in Payes, the Commonwealth Court held that a Claimant seeking workers’ compensation benefits carries the initial burden of proving that he sustained a mental/mental injury within the course and scope of his employment, and that the injury results in a loss of earning power, the standard for proving disability under the Pennsylvania Workers’ Compensation Act.

Once the mental injury is proven by the Claimant, the Claimant carries a secondary burden of proof, requiring that the injury is “other than a subjective reaction to normal working conditions.”

In Kochanowicz, the Employer did not contest that the Claimant had sustained a mental injury in the course and scope of his employment, as the Employer defended the claim on grounds that the Claimant’s injury was merely a “subjective reaction to normal working conditions.”

To prove the subjective reaction defense to normal working conditions, the Employer presented evidence as to the number of robberies at State liquor stores, to include armed robberies, that the Claimant had attended Employer-sponsored training on workplace violence, that the Employer provided pamphlets and educational tools to its Employees, in the handling of a workplace robbery, and workplace violence.

However, although the Workers’ Compensation Judge concluded that the armed robbery resulting in the Claimant’s mental/mental injury was an “abnormal working condition”, and that although workplace violence does occur, that fact alone does not “place workplace violence into the realm of a normal working condition”, finding as well that “robbery by gunpoint at the back of the head is neither a normal societal occurrence, nor a normal working condition.”

Finding that the WCJ’s findings of fact were supported by substantial competent evidence, the Commonwealth Court deferred to the Supreme Court’sPayes’ dictate, that the Claimant had been subjected to a “singular, extraordinary event during a work shift” causing the Claimant’s post-traumatic stress disorder, and that the Claimant had proven, in deference to the workplace violence training and statistics evidence presented by the Employer, that the armed robbery that the Claimant was a victim of, was “not a normal working condition.”

This resulted in the Claimant being awarded workers’ compensation benefits for a mental/mental injury, as the Workers’ Compensation Judge had granted the Claimant’s Claim Petition, and the Appeal Board had affirmed that award of workers’ compensation benefits to the Claimant.

ConnorsO’Dell LLP

Trust us, we just get it!  It is trust well spent!

Defending workers’ compensation claims throughout Pennsylvania for employers, self-insureds, insurance carriers, and third party administrators, our 100+ years of cumulative experience defending our clients against compensation-related liabilities, empowers our workers’ compensation practice group attorneys to be more than mere claim denials, entrusting us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania’s Workers’ Compensation Act.

With every member of our workers’ compensation practice group being AV-rated, our partnership with the NWCDN magnifies the lens through which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, businesses, corporations, and insurance carriers, seeking our trial and compensation acumen, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania workers’ compensation practice and procedure.

PENNSYLVANIA GOING TO WORK DECISIONS By Kevin L. Connors, Esquire Two recent Pennsylvania Commonwealth Court Decisions review the importance of factual nuances in determining whether Employees driving to work are within the course and scope of employment when injured in automobile accidents. The Decisions are Dane Holler v. WCAB (Tri Wire Engineering Solutions, Inc.) and Joseph Simko v. WCAB (United States Steel Corporation-Edgar Thomson Works). Both Decisions were issued by the Pennsylvania Commonwealth Court on October 17, 2014. In Holler, the Workers’ Compensation Judge denied the Claimant’s Claim Petition for compensation benefits, with the denial of benefits being affirmed by the Pennsylvania Appeal Board, and then reversed by the Pennsylvania Commonwealth Court. In Simko, the Workers’ Compensation Judge granted the Employee’s claim, which was then reversed by the Appeal Board denying benefits to the Employee, with the denial of benefits being affirmed by the Pennsylvania Commonwealth Court. Holler was injured in an automobile accident, as he was driving to work. He worked as a Cable Technician, and was responsible for installing to Tri Wire’s customers. His routine would be that he would drive to the Home Office, where he would check-in, receive his assignments, pick up his equipment, and then begin working at various customer locations. Tri Wire allowed the Claimant to take his company vehicle home each night, and to then use it to report to work. Tri Wire specifically prohibited the Claimant from using the company vehicle for any other purpose, or from allowing anyone else to drive it. Tri Wire also would not allow the Claimant to have any passengers in its vehicle. Driving to work on August 13, 2010, the Claimant was driving the company vehicle, and he was injured in a single-vehicle accident. He was injured when his vehicle ran off the road, struck a telephone pole, with the Claimant sustaining significant injuries, requiring that he be life-flighted to the hospital. He did not return to work after that accident. Seeking workers’ compensation benefits, the Claimant testified before the Workers’ Compensation Judge, admitting that there was no contract with Tri Wire for transportation. The Workers’ Compensation Judge determined that the Claimant had a fixed place of work, that there were no facts in the case indicating that the Claimant was on a special assignment when injured, and that there were no special circumstances from which it could be determined that the Claimant was furthering the business interests of Tri Wire. In reliance upon those findings, the Workers’ Compensation Judge concluded that the Claimant was not acting in the course and scope of employment, when the motor vehicle accident occurred, resulting in his injuries. The Claimant appealed the Judge’s Decision to the Pennsylvania Appeal Board. In reliance upon long-standing Pennsylvania Workers’ Compensation Decisions, involving the “coming and going rule”, injuries occurring going to or coming from work can be considered to have occurred within the course and scope of employment if one of the following four exceptions applies: • The Claimant’s employment contract includes transportation to and from work; • The Claimant has no fixed place of work; • The Claimant is on a special mission for the Employer, such that the Claimant is furthering the business interests of the Employer; or, • Special circumstances are such that the Claimant was furthering the business of the Employer. In Holler, the Claimant asserted that the second exception, that he had no fixed place of work, with the Commonwealth Court citing several Decisions that involved the no fixed place of work scenario, including Beaver & Casey, Inc. v. WCAB, 661 A.2d 40 (Pa. Cmwlth. 1995); Jamison v. WCAB (Gallagher Home Health), 955 A.2d 494 (Pa. Cmwlth. 2008); Toal Assocs. v. WCAB (Sternick), 814 A.2d (Pa. Cmwlth. 2003); Peterson v. WCAB (PRN Nursing Agency), 597 A.2d 1116 (Pa. 1991). Citing to an unreported Opinion in Comcast v. WCAB (Clark), (Pa. Cmwlth., 1645 C.D. 2011), the Pennsylvania Commonwealth Court held that the Holler case was factually indistinguishable from Clark, since the Claimants in both cases, would only report to their Home Offices for a few minutes, before then spending their entire day travelling to various customer sites, to install services, or make repairs. Adopting its reasoning in Clark, the Pennsylvania Commonwealth Court held in Holler that the Claimant was a travelling Employee with no fixed place of work, and was then exempt from the coming and going exclusion, with the Claimant then being entitled to the presumption that he was working for Tri Wire, when driving from his house to the Home Office. The Holler Court further held that Tri Wire did not present any evidence to suggest that the Claimant’s drive to work the morning of his injury either removed him from his employment, or constituted an abandonment of his employment, with the Commonwealth Court remanding the case back to the Workers’ Compensation Judge, to enter findings in favor of the Claimant and against Tri Wire. In Simko, the Pennsylvania Commonwealth Court held that the Claimant was not in the course and scope of employment, when he was driving to work for a stand-down meeting, which were infrequently scheduled by United States Steel, and were differentiated from monthly safety meetings, which always dealt with particular topics, and were held at the same time each month for each department, at which, attendance was mandatory for all Employees. With the Workers’ Compensation Judge having found that the Claimant was in the course and scope of employment when he was injured, finding that the Claimant was entitled to workers’ compensation benefits, as the evidence that he presented established that he was on a “special mission” exception to the coming and going rule, the Pennsylvania Commonwealth Court affirmed the Pennsylvania Appeal Board’s determination that the Workers’ Compensation Judge had erred in concluding that the Claimant was in the course and scope of employment when injured, as it held that where Employees are required to attend to their regular work duties, attendance at this meeting was not a special mission. For that reason, the Pennsylvania Commonwealth Court did not find that the Claimant was in the course and scope of employment when injured, as attendance at the meeting was mandatory, travelling to the meeting was not a special mission, and the Claimant’s drive to work could only be construed as normal commuting to work. The Holler and Simko cases are easily distinguishable, as in Holler, the Claimant’s routine would be a very brief check-in at the office, to receive assignments and pick up equipment, after which the Claimant’s workday would be travelling to various customer locations, such that the Pennsylvania Commonwealth Court determined that the Claimant did not have a fixed place of work, resulting in the Pennsylvania Commonwealth Court concluding that the Claimant’s workers’ compensation claim was not precluded by the “coming and going” rule that is applied to Pennsylvania workers’ compensation claims where Employees are injured either driving to or from work. Simko, however, is distinguishable from Holler, as Simko was injured as he was driving to work for a mandatory meeting, such that his commute to work that day did not fit any of the four exceptions to the “coming and going” rule, excluding workers’ compensation benefits being awarded to Employees who are injured driving to or from work. Both Holler and Simko illustrate that each Decision hinges upon not only the evidence presented, but also how that evidence is characterized, in order to either fit within one of the four exceptions to the “coming and going” rule, such that injuries become compensable when driving to or from work, or, the factual evidence presented does not fit any of the four exceptions, such that workers’ compensation benefits cannot be awarded, as the injuries occur during a normal commute to or from work. ConnorsLaw LLP Trust us, we just get it! It is trust well spent! Defending workers’ compensation claims throughout Pennsylvania for employers, self-insureds, insurance carriers, and third party administrators, our 100+ years of cumulative experience defending our clients against compensation-related liabilities, empowers our workers’ compensation practice group attorneys to be more than mere claim denials, entrusting us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania’s Workers’ Compensation Act. With every member of our workers’ compensation practice group being AV-rated, our partnership with the NWCDN magnifies the lens through which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, businesses, corporations, and insurance carriers, seeking our trial and compensation acumen, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania workers’ compensation practice and procedure.

SUPER CONGRATULATIONS

By Kevin L. Connors, Esquire

            ConnorsLaw proudly congratulates its partners, Kevin L. Connors, Chair of its General Liability Practice Group, and Robert F. Horn, Esquire, Chair of Its Subrogation Practice Group, as both have been named as 2014 Super Lawyers, and we think it about time for this professional acclamation and affirmation of their peer-generated reputations.

            Evincing the high professional standards maintained by both Kevin and Bob, their practices include:

·         General Liability Defense;

·         Product Liability Defense;

·         Automobile Liability Defense;

·         Workers’ Compensation Defense;

·         Workers’ Compensation Subrogation;

·         General Property Subrogation.

            On behalf of ConnorsLaw, their clients and contacts, we proudly congratulate Kevin and Bob on their sensational success.

ConnorsLaw LLP

Trust us, we just get it!  It is trust well spent!

Defending workers’ compensation claims throughout Pennsylvania for employers, self-insureds, insurance carriers, and third party administrators, our 100+ years of cumulative experience defending our clients against compensation-related liabilities, empowers our workers’ compensation practice group attorneys to be more than mere claim denials, entrusting us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania’s Workers’ Compensation Act.

With every member of our workers’ compensation practice group being AV-rated, our partnership with the NWCDN magnifies the lens through which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, businesses, corporations, and insurance carriers, seeking our trial and compensation acumen, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania workers’ compensation practice and procedure.

FORMOLOGY UNDER PENNSYLVANIA WORKERS’ COMPENSATION LAW

By Kevin L. Connors, Esquire

In a brave and emboldened attempt to chart a Pennsylvania workers’ compensation claim by tracing the etiology of forms necessary to accept, deny, and/or administer the claim under the Pennsylvania Workers’ Compensation Act, this is intended to assist all Pennsylvania stakeholders, whether employers, insurance carriers, third-party administrators, as well as other stakeholders, including medical providers and third parties, to illustrate the necessity of viewing a Pennsylvania workers’ compensation claim under the microscope of the controlling or governing form, under which liability for compensation claims and benefits is either accepted, denied, administered, and/or compromised.

A list of the most often-used Pennsylvania workers’ compensation claim forms is set forth below:

·         Agreement for Compensation for Disability or Permanent Injury – LIBC-336;

·         Agreement for Compensation for Death – LIBC-338;

·         Agreement to Stop Weekly Workers’ Compensation Payments – LIBC-340;

·         Answer to Petition for Commutation – LIBC-35;

·         Answer to Petition to: - LIBC-377;

·         Application for Supersedeas Fund Reimbursement – LIBC-662;

·         Appeal from Judge’s Findings of Fact and Conclusions of Law – LIBC-25/26;

·         Application for Executive Officer Exception – LIBC-509;

·         Application for Fee Review – LIBC-507;

·         Authorization for Alternative Delivery of Compensation Payments – LIBC-10;

·         Claim Petition for Workers’ Compensation – LIBC-362;

·         Compromise & Release Agreement – LIBC-755;

·         Defendant’s Answer to Claim Petition – LIBC-374;

·         Employee Report of Wages and Physical Condition – LIBC-760;

·         Employee Verification for Employment – LIBC-760;

·         Employee’s Report of Benefits – LIBC-756;

·         Employer’s Report of Occupational Injury or Disease – LIBC-344;

·         Fatal Claim Petition for Compensation by Dependents of Deceased Employees – LIBC-363;

·         Fatal Claim Petition for Compensation by Dependents for Death Resulting from Occupational Disease – LIBC-386;

·         Fatal Claim Petition for Compensation by Dependents for Death Covered by the Act – LIBC-384;

·         Impairment Rating Evalutions Face Sheet & Appointment – LIBC-765;

·         Informal Conference Agreement Form – LIBC-754;

·         Notice of Ability to Return to Work – LIBC-757;

·         Notice of Change of Workers Compensation Disability Status – LIBC-764;

·         Notice of Compensation Payable – LIBC-495;

·         Notice of Reinstatement of Workers’ Compensation Benefits – LIBC-763;

·         Notice of Suspension for Failure to Return – LIBC-762;

·         Notice of Temporary Compensation Payable – LIBC-761;

·         Notice of Workers’ Compensation Benefit Offset – LIBC-761;

·         Notice of Workers’ Compensation Denial – LIBC-496;

·         Notice Stopping Temporary Compensation – LIBC-502;

·         Notice to Claimant – LIBC-758;

·         Notification of Suspension or Modification – LIBC-751;

·         Occupational Disease Claim Petition – LIBC-396;

·         Peer Review Request – LIBC-620;

·         Peer Review Transmittal Sheet – LIBC-621;

·         Petition for Commutation of Compensation – LIBC-34;

·         Petition for Joinder of Additional Defendant – LIBC-376;

·         Petition for Penalties – LIBC-686;

·         Petition for Physical Examination – LIBC-499;

·         Petition for Review of Utilization Determination – LIBC-603;

·         Physician’s Affidavit of Recovery – LIBC-497;

·         Request for Designation of a Physician to Perform an Impairment Rating Evaluation – LIBC-766;

·         Statement of Account of Compensation Paid – LIBC-392;

·         Statement of Wages – LIBC-494;

·         Supplemental Agreement for Compensation for Death – LIBC-339;

·         Supplemental Agreement for Compensation for Disability of Permanent Injury – LIBC-337;

·         Third Party Settlement Agreement – LIBC-380;

·         Utilization Review Determinate Face Sheet – LIBC-604;

·         Utilization Review Request for Consideration – LIBC-602;

·         Utilization Review Request – LIBC-601;

·         Workers’ Compensation Medical Report Form – LIBC-9;

In the beginning, there is the Report of Injury, identified as LIBC-344, with the Act and the Bureau’s Regulations requiring that it be filed by the employer, typically prepared and filed by the insurer or administrator, after an injury is reported by the employee to the employer or insurer within 48 hours of a work-related fatality, or whenever disability (lost time) exceeds 1 day.

This form is relatively generic, leaving little to the imagination, in terms of name, rank, SSN, DOB, relevant contact information for claimant, for employer, insurer, with other relevant information being the claimant’s original date of hire, date the claimant reported the injury or lost time to the employer, and a very brief description of how the injury is reported to have occurred, with no diagnostic impression of the injury being included.

The Report of Injury is akin to an OSHA report of injury.

The filing of the Report of Injury, with it being absolutely critical to understand that this Report is never admissible as evidence in a workers’ compensation litigated proceeding, then requires the employer/insurer/administrator to investigate the claim, to either accept, deny, or otherwise “compromise”, the claim within 21 days of the injury (lost time) being reported.

Consider further that Pennsylvania is a wage loss/disability jurisdiction, devoid of any true permanency standard that has any real relevance in terms of claim resolution, other than the utilization of an Impairment Rating Examination, which is simply a claim mechanism for capping the payment of temporary total disability benefits, being wage loss benefits that are payable when a claimant is unable to perform the time-of-injury job, at a total of 604 weeks of disability benefits.

Do the math!

So, an injury/lost time has been reported, and that requires the employer/insurer/administrator to either issue one of three forms, within 21 days of the injury/lost time being reported, with there being no suggestion of priority, in terms of the form to be utilized, the forms being:

• An LIBC-496 which is titled “Notice of Compensation Denial” which requires claim information as to the identity of a claimant, employer, insurer/administrator, also requiring a description of the reported injury, and its mechanism, with it also being required that the entity denying the claim identified the specific grounds for denial, there being (6) six permitted by the form, to include:

1.         The employee did not suffer a work-related injury.  The definition of injury also includes aggravation of a pre-existing condition, or disease contracted as a result of employment.

2.         The injury was not within the scope of employment.

3.         The employee was not employed by the defendant.

4.         The employee has not suffered a loss of wages as a result of an already accepted injury.

5.         The employee did not give notice of his/her injury or disease to the employer within 120 days within the meaning of Sections 311-313 of the Workers’ Compensation Act.

6.         Other good cause.  Please explain fully in the space below.

Oftentimes, the utilization of “other good cause” on the NCD is utilized when there is insufficient information upon which to accept a claim, such as the claim has not been medically verified through medical reports, diagnostic impressions, or causation opinions.    

This form, like most Pennsylvania forms, must be “served”, meaning mailed, to all parties involved with the claim, to include the Bureau now requiring electronic submission, by the insurer.

This filing almost always triggers the filing of a Claim Petition, which is the mechanism for the claimant to formally allege that he/she is entitled to workers’ compensation benefits, requiring 16 disclosures by the claimant, to include how he/she was injured, a description of the injury, when notice was given, when disability first occurred, as well as the types of benefits that the claimant is seeking for the claim. 

If the claim is not being denied at the outset, two other forms come into play.

One form is a Notice of Compensation Payable, identified as LIBC-495.

Under this form, liability for the Workers’ Compensation claim is being accepted, with the parties being identified, the injury being described, the mechanism of injury being described, and the benefits being paid also being described, with the employer/insurer/administrator having an election as to whether to pay indemnity and medical compensation benefits, or only medical compensation benefits, as there had been a complete derailment of sanity at the Bureau level, in a wake of several appellate decisions that seemingly made no statutory rational sense whatsoever, when a workers’ compensation claim was a “medical only” claim, as there is no statutory requirement for an employer/insurer/administrator to file any forms for “medical only” claims, which would seem to be the much more rational approach to the issue, given the number of “medical only” claims that routinely arise without ever evolving into “lost time” claims, although there is now decisional authority under several Pennsylvania Commonwealth Court decisions, essentially predicated on claimants being forced to litigate the compensability of “medical only” claims, prior to the expiration of the three year statute of limitations for a claimant to file a Claim Petition to prove the compensability of an injury, irrespective of whether that injury results in medical treatment only, or also involves lost time.

The most notable “medical only” decisions by the Commonwealth Court are as follows:

·         Waldameer Park, Inc. v. WCAB (Morrison), 819 A.2d 164 (Pa. Cmwlth. 2003)

·         City of Philadelphia v. WCAB (Brown), 830 A.2d 649 (Pa. Cmwlth. 2003)

·         Orenich v. WCAB (Geisinger Wyoming Valley Medical Center), 863 A.2d 165 (Pa. Cmwlth. 2004)

So, the third form that might appear before you, when deciding to deny, accept, or alternatively, to pay temporary compensation benefits, with no admission of liability, for the first 90 days post-injury, is a Notice of Temporary Compensation Payable, identified as LIBC-501.

The three forms that we have discussed so far, are the Notice of Compensation of Denial (NCD), identified as LIBC-496, which results in outright denial of the compensability of the claim, the Notice of Compensation Payable (NCP), identified as LIBC-495, which results in an outright admission of liability for the compensability of the claim, and the Notice of Temporary Compensation Payable as LIBC-501 (“NTCP”, or “TNCP”), depending upon how much coffee you have had that morning, allowing you to pay temporary compensation benefits with no admission of liability for the first 90 days of disability, although that NTCP/TNCP will automatically convert to an NCP, where you are again back to an outright admission of compensability for injury and disability, if the NTCP/TNCP is not “stopped” with a Notice to Stop Temporary Compensation Payable (“NSTC”), identified as LIBC-502, under which temporary compensation benefits are “stopped”, although it must be concurrently filed with a Notice of Compensation Denial, indicating the reason for denial of the compensability of the claim.

Oh what a wicked web of forms we weave!

To repeat, we have now covered the Report of Injury, the Notice of Compensation Denial, the Notice of Compensation Payable, the Notice of Temporary Compensation, the Notice to Stop Temporary Compensation, and where are we now?

Well, that is a form of a completely different number.

And that depends upon whether you have denied or accepted the claim. 

If you have denied the claim, the claim most likely is headed into court, with a claimant most likely filing a Claim Petition, which is LIBC-362. 

The claim petition contains 16 paragraphs, the answers to which are essentially a claimant’s burden of proof for establishing the compensability of both injury and disability. 

The 16 paragraphs deal with the basic elements of a workers’ compensation claim, including date of injury, description of injury, mechanism of injury, when notice was given to the employer, when disability began, the claimant’s compensation wage rates, requiring both the pre-injury wage and the compensation payable rate for payment of weekly workers’ compensation benefits, as well as requiring the claimant to specify exactly what benefits the claimant is seeking, there being five basic compensation benefits as follows:

• Temporary total disability benefits, meaning inability to perform the pre-injury job at pre-injury wages;
• Temporary partial disability benefits, meaning able to perform some work, but not at pre-injury wages, resulting in some compensable wage loss;
• Fatal claim benefits, meaning the complete inability to continue to exist;
• Specific loss benefits, meaning that you have lost the complete use of a body part, either through an actual or constructive amputation, and;
• Medical compensation benefits, required to be related, reasonable, and necessary.

The Claim Petition also allows a claimant seeking workers’ compensation benefits to claim entitlement to unreasonable contest to attorneys’ fees under Section 440, if it can be proven that a claim denial does not have a “reasonable basis”.

The filing of a Claim Petition with a Bureau results in the Bureau randomly assigning the petition to workers’ compensation Judge for a hearing and disposition.  The petition is assigned to a workers’ compensation Judge in the hearing district in which the claimant lives, typically assigned according to the county where the claimant lives.

There are 22 hearing districts in Pennsylvania.

There are a total of approximately 82 workers’ compensation Judges, appointed by the Department of Labor and Industry and the Bureau of Workers’ Compensation, after being formally tested as to their knowledge of workers’ compensation law. 

The assignment of a claim petition to a workers’ compensation Judge requires the employer/insurer/administrator to file an answer to the Claim Petition, within 20 days of the Bureau’s assignment of the Petition to a workers’ compensation Judge.  The assignment is perfected through issuance of a Notice of Assignment, with the assignment date placed in the top, right hand corner of the NOA.

Filing an answer to a Claim Petition requires that the answer be filed on Bureau form LIBC-374 with it being required that every allegation in the Claim Petition be specifically answered, in terms of either an admission and/or a denial, with the Answer also requiring an identification of affirmative defenses under the Act, the most recognized affirmative defenses, tracking the same grounds for denial on a Notice of Compensation Denial, to include:

·         The claimant did not sustain a work-related injury;

·         Include an alleged aggravation of pre-existing condition;

·         The alleged injury did not occur within the course of scope of employment;

·         The claimant was not employed by the defendant;

·         The claimant did not suffer a loss of wages as a result of an injury;

·         The claimant did not give notice of the injury within 120 days as required under Section 311-313 of the WCA; or,

·         That “other good cause”, requiring explanation as to the basis thereof.

After the Answer is filed, through the WCAIS Link, launched by the Bureau in September of 2013, the claim proceeds through administrative litigation, subject to the Special Rules of Practice and Procedure before Workers’ Compensation Judges.

After the assignment of the petition to a Workers’ Compensation Judge, the judge is required, by the WCA and the Bureau regulations, to schedule hearings, with WCJ’s electing to either schedule serial hearings, usually every 90 days, or to schedule “one day trials”, which results in a pre-trial hearing being scheduled at the outset of the litigation, and a final hearing being scheduled prior to the record being closed and briefs being submitted by the parties, with all evidence required to be presented to the WCJ at the final hearing. 

That is all evidence by all parties.

If the claim is denied and a Claim Petition is filed, the claim is then litigated, either until it is settled, resolved by stipulation, or decided by the workers’ compensation Judge under a Bureau-circulated Decision, which becomes final and non-appealable, if not appealed within 20 days of its circulation.

If a workers’ compensation claim is accepted, the employer/insurer/administrator is then required to continue to make regular payments of workers’ compensation benefits to the claimant, paying temporary total disability benefits consistent with the claimant’s pre-injury average weekly wage and compensation payable rate and to pay reasonable necessary and related medical expenses, subject to fees schedules, within 30 days of bill receipt.

When paying temporary total disability benefits, the payments must be made on the same payment schedule as when the claimant was working.

When medical bills are received by the employer/insurer/administrator, the medical bills must be reviewed for relatedness, and then reviewed for reasonableness and necessity, with the medical bills then being subject to Medicare reimbursement rates, with medical bills required to be paid within 30 days of bill receipt, absent the filing of a Utilization Review, which can only challenge the reasonableness and necessity of the treatment being provided and billed for the work injury. 

Requesting Utilization Review requires the filing of an LIBC-601 form, with all medical bills required to be submitted by the provider with an attached Workers’ Compensation Medical Report form, LIBC-9.

Utilization Reviews are filed with the Bureau and randomly assigned to utilization reviewers, who are then required to make utilization review determinations on LIBC-604, a Utilization Review Determination Face Sheet.

Once a claim is accepted as compensable and work-related, and benefits are paid to the claimant in accordance with the WCA, the workers’ compensation benefits must continue to be paid absent one of the following conditions occurring:

(1)               The Claimant dies, and compensation benefits terminate by operation of death;

(2)               The Claimant voluntarily returns to work in their pre-injury capacity, and there is no continuing wage loss post-return to work, such that the Claimant’s compensation benefits are suspended;

(3)               The Claimant returns to work in a modified-duty capacity, with some reduction in return-to-work wages, such that the Claimant’s compensation benefits are modified, and temporary partial disability benefits are paid, subject to the 500 week limitation;

(4)               The Claimant executes a Supplemental Agreement, perfecting either a termination, suspension, or modification of the Claimant’s workers’ compensation benefits;

(5)               The Claimant signs a Final Receipt (almost never used), under which the Claimant agrees that all compensation benefits have been paid;

(6)               The Claimant is deported by virtue of not being able to prove legal immigration status;

(7)               The claim is settled under a Compromise and Release Agreement, perfecting some type of compromise of the indemnity and medical compensation benefits liability associated with the claim; and,

(8)               The Claimant’s compensation benefits are terminated, modified, or suspended by order of a workers’ compensation judge, with the employer/insurer carrying the burden of proving the entitlement to a change in the Claimant’s benefit entitlement status.

To match the requisite forms with the triggering events listed above, the following forms are relevant:

• If death occurs, and it is not related to the work injury, compensation benefits automatically terminate by operation of death;
• If the claimant voluntarily returns to work in their pre-injury capacities, and there is no continuing wage loss post-return-to-work, benefits should be suspended, in which case benefits can either be suspended with a Notification of Suspension (LIBC-751), although that notification must be filed within 7 days of the claimant’s RTW, or benefits can be suspended under a Supplemental Agreement (LIBC-337), requiring the claimant to sign the Agreement;
• The claimant returns to work in a modified duty capacity, and is not earning pre-injury wages, the claimant’s compensation benefits can then be modified under a Notification of Modification (LIBC-751), again requiring the Notification to be filed within 7 days of the RTW, or benefits can be modified under a Supplemental Agreement (LIBC-337), again requiring claimant’s signature on the Agreement;
• The claimant, whether returning to work with the employer or not, executes a Supplemental Agreement (LIBC-337), perfecting either a termination, meaning full stoppage of workers’ compensation benefits, a suspension, in which case only the wage loss benefits are suspended as the medical benefits can continue, or a modification, in which case the wage loss benefits are modified, based on the RTW wages being less than the pre-injury wages, with medical compensation benefits continuing;
• The claimant executes a Final Receipt, otherwise known as an Agreement to Stop Weekly Workers’ Compensation Payments (LIBC-340), almost never used, asWCJ’s really do not like this form, since it is typically used with unrepresented claimants, and may or may not be conditioned upon payment of benefits in exchange for the claimant signing the form, under which all compensation benefits, both wage loss and medical compensation benefits are reflected as having been paid and, in fact, being stopped with the claimant signing the Final Receipt;
• Deportation, which stops workers’ compensation benefits just like death;
• The compensation claim is settled under a Compromise & Release Agreement, requiring the claimant to execute a Compromised & Release Agreement (LIBC-755), under which the claimant is attesting to his “understanding of the legal significance” as to the settlement of the workers’ compensation claim, with the Compromise & Release Agreement also reflecting that the settlement is not a “admission of liability” as to the compensability of the injury or worker’s compensation benefits being claimed; and/or,
• The claimant’s compensation benefits are terminated, modified, or suspended by an order of a WCJ, with the employer/insurer/administrator carrying the burden of proving the entitlement to a change in the claimant’s compensation benefit entitlement status through the filing of a Petition for Termination, etc., also from the same petition (LIBC-378), to be filed for penalties, review medical treatment, special termination, regular termination, modification, suspension, review of compensation benefits, review of a compensation benefit offset, reinstatement of compensation benefits, to set aside a final receipt, and/or to seek approval of a Compromised Release Agreement.

Like the Claim Petition, the Petition for Termination results in assignment to a WCJ, with hearings convened for the presentation of evidence, in the WCJ deciding the case on the evidence presented, the parties stipulating to a claim resolution, or entering into a Compromise &  Release Agreement.

Other forms necessary for review are:

• An Agreement for Compensation for Disability or Permanent Injury (LIBC-336), allowing:

The employer and employee to agree on the compensation to be paid as well as the period for which the benefits are being paid, with the Agreement limiting the benefits to those reflected in the Agreement, although medical compensation benefits can remain open;

·         The Agreement for Compensation for Death (LIBC-338), seemingly self-explanatory;      

·         Application for Supersedeas Fund Reimbursement (LIBC-662), where an overpayment of compensation benefits has occurred and the employers/insurer/administrator seeks reimbursement from the Supersedeas Fund;

·         Appeal from Judge’s Findings of Fact and Conclusions of Law (LIBC-25/26), required to be filed within 20 days of the issuance of a WCJ decision, and requiring specificity with regard to the Findings of Fact being appealed, as well as to the Conclusions of Law in dispute;

·         Application for Fee Review (LIBC-507), filed by a medical provider contesting a fee schedule or fee reimbursement by and employer/insurer/administrator;

·         Authorization for Alternative Delivery of Compensation Payments (LIBC-10), required to be executed by a claimant, when an employee requests that compensation benefits payments be mailed to an alternate address;

·         The Employee Report of Wages and Physical Condition (LIBC-750), required to be executed by a claimant within 30 days of issuance, with use limited to every 6 months;

·         Employee Verification for Employment (LIBC-760), again requiring execution within 30 days of issuance, and use limited to every 6 months, although claimant’s failure to return the executed form within 30 days results in a suspension of compensation benefits, requiring issuance of a Notice of Suspension for Failure to Return (LIBC-762);

·         Fatal Claim Petition (LIBC-363), used to seek fatal claim benefits for a work-related fatality;

·         Impairment Rating Evaluation Face Sheet (LIBC-765), when an impairment rating is being requested by an employer/insurer/administrator, although impairment ratings can only be requested after:

(1)  The claimant has received 104 weeks of temporary total disability benefits; and,

            (2)  The claimant has reached maximum medical improvement;

·         Notice of Ability to Return to Work (LIBC-757), required to be issued and served on the claimant whenever the claimant is released to return to some level of work, and the issuance of this form must pre-date work being offered to the claimant, if there is any contest as to the claimant’s compensation benefits being suspended or modified based on a job offer or RTW;

·         Notice of Change of Workers’ Compensation Disability Status (LIBC-764), used after an IRE, resulting in an impairment rating establishing that the claimant’s “whole person impairment” is less than 50%, with the claimant’s compensation benefits then being “automatically converted” from temporary total to temporary partial disability benefits, limiting the claimant to receiving temporary partial disability benefits for 500 weeks under Section 306 (b) Act, with a conversion of temporary total to temporary partial being “automatically converted” if the IRE is requested either 60 days before or 60 days after the claimant receives 104 weeks of compensation benefits, requiring the employer/insurer/administrator to litigate the “conversion” from temporary total to temporary partial and disability benefits, if the IRE request is made more than 60 days after the claimant has received 104 weeks of temporary total disability benefits, ultimately requiring the “conversion” to be decided by the WCJ;

·         Notice of Reinstatement of WC Benefits (LIBC-763), utilized if there has been a suspension of compensation benefits, for failure to return an Employee Verification of Employment (LIBC-760);

·         Peer Review Request (LIBC-620), rarely used;

·         Petition for Commutation of Compensation (LIBC-34), rarely used since the statutory approval of Compromise & Release Agreement in 1996;

·         Petition for Joinder of Additional Defendant (LIBC-376), required to filed within 15 days of the party seeking joinder having evidence supporting the joinder;

·         Petition for Penalties (LIBC-686), utilized by claimants alleging violations of the Act;

·         Petition for Physical Examination (LIBC-499), utilized by employers and insurers seeking independent medical examination under Section 314 of the WCA, which allows IMEs of claimants every six months;

·         Petition for Review of Utilization Determination (LIBC-603), filed when a party seeks review before a WCJ of a Utilization Determination, with the employers and insurers, carrying the burden of proof before the WCJ as to the UD;

·         Request for Designation of a Physician to Perform an IRE (LIBC-766), requested by employer/insurer/administrator seeking an IRE of a claimant;

·         Statement of Account of Compensation Paid (LIBC-392), utilized by employers and insurers as a final statement of the compensation of benefits that have been paid on a particular WC claim;

·         Statement of Wages (LIBC-494), requiring the calculation of the claimant’s pre-injury wage in compensation benefit payable rate, a reliance upon disclosure of the claimant’s quarterly wages for the fifty-two (52) weeks preceding the alleged work injury;

·         Third Party Settlement Agreement (LIBC-380), required to be filed to reflect the resolution of a workers’ compensation subrogation lien when a claimant secures a third party recovery.

As is probably self-evident, the Pennsylvania WCA and the Bureau’s Regulations effectively require that every change in the status of a workers’ compensation claim be reflected with the issuance and filing of a form reflecting that change, as Pennsylvania’s Workers’ Compensation Law absolutely prohibits an employer’s “self-help” in stopping or discontinuing workers’ compensation benefits, after acceptance of a workers’ compensation claim, except in very limited circumstances, such as when a claimant returns to work, and refuses or fails to notify the employer/insurer/administrator of the return to work, as well as refusing or failing to execute the appropriate documentation to reflect the stoppage or reduction in the workers’ compensation benefit payments, although even then there is some risk that the workers’ compensation claim remains open, and can be subject to reinstatement, if the stoppage is litigated as being violative of the WCA by a claimant whose status might change after returning to work, i.e., and the claimant stops working, for whatever reason, with the potential being that the claimant can file for reinstatement of compensation benefits, typically granted by WCJs, except for very limited circumstances, with it being best to secure claim closure through the filing of a Suspension or Modification Petition for protection against the a claim that disabilities have recurred.

This summary is intended to be a compendium contracting the most important and most often used workers’ compensation forms into a synoptic abbreviation of their utilization. 

Questions concerning the utilization of workers’ compensation forms in Pennsylvania, that we have identified as being relevant for the administration of Pennsylvania workers’ compensation claims, can be directed to our brilliantly and sagaciously-experienced workers’ compensation partners, including:

            Kevin L. Connors, Esquire

            Kate O’Dell, Esquire

            Jeffrey D. Snyder, Esquire

            Lisa A. Miller, Esquire

ConnorsLaw LLP

Trust us, we just get it!  It is trust well spent!

Defending workers’ compensation claims throughout Pennsylvania for employers, self-insureds, insurance carriers, and third party administrators, our 100+ years of cumulative experience defending our clients against compensation-related liabilities, empowers our workers’ compensation practice group attorneys to be more than mere claim denials, entrusting us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania’s Workers’ Compensation Act.

With every member of our workers’ compensation practice group being AV-rated, our partnership with the NWCDN magnifies the lens through which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, businesses, corporations, and insurance carriers, seeking our trial and compensation acumen, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania workers’ compensation practice and procedure.

EMPLOYEE MISCLASSIFICATION ISSUES

By Kevin L. Connors, Esquire

I.                   The Problem:

     Critical distinctions exist between employees and independent contractors.

     If you hire it, it must be an employee.

     Historically, the lines distinguishing employees from independent contractors have been ambiguous in certain fields, to include construction, service-related industries, transportation and delivery services, maintenance and janitorial services, and landscaping services.

     Real problem = insuring for personal injuries.

     Independent contractors do not carry workers’ compensation insurance, as they do not have Employees.

     Employers carry both workers’ compensation insurance and general liability insurance.

II.                Employee Definition:

     There are four elements relied upon by Pennsylvania Courts, as well as courts in other jurisdictions, to determine the existence of a master/servant relationship, with the necessary nexus to characterize an employment relationship being:

§  The right to hire the worker;

§  The right to fire the worker;

§  The right to control the work performed by the workers; and,

§  The right to direct the manner in which the worker performs the work.

     Direction and control are the critical factors, given the vagaries associated with hiring and firing.

     In the absence of formal written contracts, direction and control of the work being performed trumps the vagaries of hiring and firing.

III.             Direction and Control of Employees:

  Factors evidencing direction and control include:

§  Providing employees with the tools to work with;

§  Training the employees to perform the work;

§  Directing the employee to perform the work or service;

§  Controlling the manner in which the employee performs the work or service;

§  Dictating when the employee must perform the work or service;

§  Exercising total control of an employee’s work product or service;

§  Also relevant is whether there is a written employment contract, as well as whether both parties agree that the employer retained the right to hire and fire.

IV.             Factors Indicating Independent Contractor Status:

     A written contract or subcontract;

     The written contract/subcontract delineates the scope of work to be performed under the contract;

     The type of occupation or business for which the independent contractor is being retained;

     Whether the independent contractor provides the tools to perform the work;

     Whether the independent contractor is paid for the work or project being performed, as opposed to the time to perform the work;

     Whether the work being performed is not part of the regular business of the entity hiring the independent contractor, making it more likely that the contractor’s work is “independent”.

     Also key is whether the contract controls how the work is performed, as well aswho performs the work.

V.                Statutory Consideration:

     Worker misclassification has generated a minefield of Federal and State statutes.

     Statutes affecting worker classification include:

§  Pennsylvania Construction Workplace Misclassification Act (Act No. 72);

§  Federal Employee Misclassification Act;

§  Federal Payroll Fraud Prevention Act;

§  Federal Fair Playing Field Act;

§  Federal Independent Contractor Tax Fairness and Simplification Act;

§  Federal IRS Regulations;

§  Federal Fair Labor Standards Act.

VI.             IRS Factors:

     Factors implemented by the IRS for workers misclassification purposes are:

§  No instructions: independent contractor not required to follow, nor furnished with, instructions to perform a job;

§  No training: independent contractor not trained by hiring entity, as contractor uses own methods and manner to perform work;

§  Other workers can be hired: independent contractor can retain others to do the actual work;

§  Independent contractors’ work not essential to business; hiring entity’s success not dependent on the work performed by independent contractor;

§  No time clock: independent contractors set their own work hours;

§  No permanent relationship: independent contractors do not have continuing relationship with hiring entity;

§  Independent contractors control their own workers: independent contractors do not hire, supervise, or pay assistance at the direction of the hiring company;

§  Other jobs: independent contractors permitted to pursue other gainful work;

§  Location: independent contractors control where they work;

§  Order of work: independent contractors determine the order and sequence in which work is performed;

§  No reports: independent contractors are retained for the final result only, not required to submit progress or interim reports;

§  No hourly pay: independent contractors paid by the job, not by time. Payments can include periodic payments based on job percentages;

§  Multiple firms: independent contractors often work for more than one company at a time;

§  Business expenses: independent contractors generally responsible for their own business expenses;

§  Own tools: independent contractors provide their own tools, and can lease or borrow equipment from the hiring entity;

§  Significant investment: independent contractor able to work without the hiring company’s facilities (equipment, machinery, etc.);

§  Services available to the public: independent contractors make their services available to the general public, through business signs, business licenses, listing in business directory, and advertising.

VII.          Pennsylvania Construction Workplace Classification Act:

     Effective as of 2/10/11, Pennsylvania enacted the CWPMA.

     The CWPMA classifies independent contractors, if the following criteria are met:

§  Work is performed under a written contract;

§  Contractually, the worker must be free from direction and control over his work;

§  The worker must in fact be free of control and direction over work performed;

§  The worker must be customarily engaged in an independently established trade, occupation, or business;

§  The worker must possess the essential tools, equipment, and assets to perform the work hired for;

§  The contract must provide that the worker performing the services is subject to a profit or loss for performing the services;

§  The worker must perform the services through a business in which that worker has a proprietary interest;

§  The individual must maintain a business location separate from the location of the hiring person or company;

§  The worker must perform similar services for others, likewise free of direction and control over performance;

§  The worker must hold themselves out to others for the same services; and,

§  The worker must maintain liability insurance for the term of the contract in an amount no less than $50,000.00.

     Under the CWPMA, contractors can no longer classify workers as independent contractors to avoid paying payroll taxes, workers’ compensation insurance costs, and unemployment compensation expenses.

     Violations expose contractors to civil penalties, stop work orders, and sanctions.

     Civil penalties assessed at $1,000.00 for first violation, and $2,500.00 for subsequent violations.

     Intentional violation of the CWPMA exposes the contractor to penalties under the Fair Labor Standards Act.

     The CWPMA also includes an anti-retaliatory provision.

VIII.       Federal Employee Misclassification Act:

  This EMPA amends the Federal Fair Labor Standards Act, imposing strict recordkeeping and notes requirements on businesses with respect to workers treated as independent contractors, exposing the businesses to fines from $1,100.00 up to $5,000.00 per Employee for each violation of the Law;

  EMPA requires:

§  Written notification to all workers performing labor or services that they are classified as either an Employee or “Non-Employee”;

§  Requires companies to keep records of the hours of work and wages of Employees, and to keep comparable records for “Non-Employees”;

§  Prohibits misclassifying a worker as being “Independent”;

§  Imposes a penalty for misclassifications;

§  Imposes triple damages for willful violations of minimum wage or overtime laws;

§  Establishes a misclassification website, enabling workers to file complaints online;

§  Amends the Social Security Act, establishing penalties for misclassifying Employees, or for paying unreported wages, in violation of Unemployment Compensation requirements;

§  Authorizes the DOL to report misclassification information to the IRS;

§  Directs the DOL to conduct “targeted audits” of industries with “frequent incidents of misclassifying Employees as Non-Employees”.

IX.             Federal Payroll Fraud Prevention Act:

     This Act is similar to the Federal Employee Misclassification Protection Act;

     The FPFPA empowers the Dept. of Labor to perform targeted audits, focusing on employers in industries that frequently misclassify workers.

X.                Federal Fair Playing Field Act:

     The FFPFA amends the IRS Code:

§  Treasury Secretary required to issue perspective guidance clarifying employment status of individuals for Federal employment tax purposes;

§  FFPFA amends the provisions of the tax code, specifically with regard to penalties for failure to withhold income taxes;

§  FFPFA prevents retroactive tax assessments;

§  FFPFA repeals Section 530 Safe Harbor Provisions of the IRS Code, pertaining payroll tax reporting provisions.

XI.             Independent Contractor Fair Tax and Simplification Act:

     Introduced on 12/12/12;

     Permanently codifies Section 530 of tax laws;

     Creates new “safe harbor”, covering both employment and income taxes, as well as covering the service provider and service recipient.

     Section 530 is a safe harbor preventing IRS from retroactively reclassifying independent contractors as employees, subjecting principals to federal employment taxes, penalties and interest for misclassification.

     Requirements for Section 530 relief are:

§  Consistently treating workers as independent contractors;

§  Complying with Form 1099 reporting requirements;

§  Having a reasonable basis for treating workers as independent contractors.

XII.          Classification Problems:

     From a claims perspective, we are often working backwards, from reported claim of the injury, to determine classification status, i.e. employee versus independent contractor;

     In workers’ compensation proceedings, companies claiming that their workers are independent contractors face procedural challenges, as workers’ compensation judges, in the absence of any formal contract, view the designation of “independent contractor”, as a sham for avoiding responsibility for workers’ compensation insurance coverage;

     The WCJs also view the independent contractor designation as a sham in avoidance of taxes, other employer-paid benefits, as well as unemployment compensation.

XIII.       More Problems:

     Additional problems, distinguishing employees versus independent contractors, include:

§  Who or what is being insured?

§  Is insurance adequate for the risks being written?

§  Is the failure to insure contractors as potential employees implicate payroll/premium fraud?

§  Who decides: independent contractor versus employee?

§  How do you manage the potential risks, as to whether the worker is an employee versus independent contractor, typically determined by a workers’ compensation judge, or, in the context of a personal injury claim, where the company asserting employer status seeks summary judgment on statutory immunity grounds, with civil trial judges asking the employer if workers’ compensation insurance coverage was procured?

XIV.       Checklists:

     Independent contractor checklist: no employment application;

     No written contract of hire;

     No employment documentation, as to identification, proof of citizenship, and proof of tax declaration;

     No training manual;

     No employee handbook;

     No on the job training;

     No job description;

     No time clock;

     No time sheets;

     No pay for time worked;

     No reporting requirements;

     No hourly pay;

     No instructions or orders as to what work is to be performed, or how work is to be performed;

     No reimbursement for travel or other business expenses;

     No tools provided;

     Contractor services are advertised to the general public;

     Contractors advertise their business services in a business directory;

     Contractors possess trade/skill-dependent license;

     Contractors make real investment in business operation and continuation, in terms of equipment facilities, etc.;

     Contractors have a profit and loss;

     Contractors have oral/written contract/subcontract for job/work being performed;

     Contractors cannot be fired/terminated, without potential liability for breach of contract;

     Contractors use independent judgment in performance of work/job;

     Contractors have personal/corporate reputations; and,

     Contractors agree to perform specific job/services for agreed-in-advance prices or rates.

XV.          Employee Checklists:

     Contractors responsible for/liable to own workers/employees/assistants;

     Employer advertises for employees;

     Employer pre-screens employees, through application process, checks references, does background checks, requires pre-employment physical examinations;

     Employer offers oral/written “contract-of-hire”, describing the job, duties, parameters, salary, policies, associated benefits;

     Employer retains the right to fire the employee, hired “at will”, for any reason, not limited to poor job performance, subject to the termination being non-discriminatory;

     Employer controls employee work hours, employee salary, employee job duties, employee reviews, and employee discipline;

     Wages/salary based on time worked, and not driven by assignment or project;

     Employer holds proprietary interest in all work completed by employee;

     Employer provides on-the-job orientation/training;

     Employer requires documentation of identification, citizenship, and prior work history/experience;

     Employer provides employee handbook/manual, detailing employer business operation, and benefits of employment;

     Yes, deductions for Federal and State taxes indicate employment, although the absence of deductions for taxes need not negate employment;

     Work construction/work orders given by employer;

     Employer review, on whatever timetable;

     Employee promotions, with change in position, duties, title, and/or salary;

     The right to discipline the employee, for job performance, and/or violation of employer policies;

     Attendance records maintained;

     Personal and sick leave provided;

     Vacation provided;

     Compensation for holiday leave;

     Right to control what work is performed;

     Right to control how the work is performed; and,

     Right to suspend work.

XVI.       Potential Independents:

     Volunteers;

     Construction contractors;

     Owner-operator truck drivers;

     Hairstylist/barbers;

     Disc jockeys;

     Construction estimators;

     Instructors;

     Installers;

     Commercial/residential cleaning services;

     Delivery couriers (not Fed Ex or UPS); and,

     Certain “skilled” professionals, working independently or through “temp” agencies, including attorneys, doctors, nurses, insurance agents/adjusters, accountants, actors, writers, taxicab/limousine driver, caterers, case managers.

XVII.    Synopsis:

·                     Classification dispute must be carefully analyzed on a case-by-case basis;

·                     Classifications are often subject to converse interpretations;

·                     Classifications are always fact-dependent;

·                     Classification results are not always consistent with work realities.

ConnorsLaw LLP

Trust us, we just get it!  It is trust well spent!

Defending workers’ compensation claims throughout Pennsylvania for employers, self-insureds, insurance carriers, and third party administrators, our 100+ years of cumulative experience defending our clients against compensation-related liabilities, empowers our workers’ compensation practice group attorneys to be more than mere claim denials, entrusting us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania’s Workers’ Compensation Act.

With every member of our workers’ compensation practice group being AV-rated, our partnership with the NWCDN magnifies the lens through which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, businesses, corporations, and insurance carriers, seeking our trial and compensation acumen, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania workers’ compensation practice and procedure.

WEARABLES AND WORKERS’ COMP

By Kevin L. Connors, Esquire

Dear Client:

The following is an interesting illustration of technical advances in our respective practices by our good friend, Robert Wilson, the President and CEO of WorkersCompensation.com, with Bob recently publishing the following article on his humanizing and humorous blog site “From Bob’s Cluttered Desk”, as Bob’s thoughts are never incoherent, notwithstanding his opinions to the contrary.

Enjoy!

Wearables and Workers’ Comp, or How Did Kevin Connors Birthday

Get on My Smart Watch?

By Robert Wilson

During a session at the CCWC Conference in Anaheim, CA earlier in the month, one of the presenters said something that struck a chord with me.  It was the final session of this year’s annual conference, and several high level executives were discussing the future of workers’ compensation.  Corvel Chairman & CEO Gordon Clemons was talking about the importance of investing in technology (a man after my own heart), when he made the prediction that “this time next year we will be talking about wearables”.

It was a great prediction, but why wait until next year?  I want to talk about them now.

I’ve written about the impact of mobile and wireless technology on workers’ comp, but I’ve never addressed the concept of “wearables”.  I recognize that by putting this on the table prematurely, I will be causing CEO’s all over the nation to assemble feasibility committees within their respective organizations to study this concept.  Based on the technical prowess of our industry in general, I suspect the first assigned task for the committee will be learning what a “wearable” is.

For those of you finding yourself now assigned to that feasibility committee dedicated to the study and analysis of wearable technology uses for workers’ compensation, allow me to save you about 6 months time.  Wearables are portable technology devices that can leverage wireless communication protocols to gather, disseminate and analyze personal data.  Contrary to initial industry impressions, adult diapers and other incontinence products are not considered “wearable technology”.  Don’t waste your time analyzing those.

There.  I just saved your company hundreds of man hours and about a quarter of a million dollars.  Please stop by my website and spend it on technology.  We have a lovelycloud based forms auto-population system we would love to sell you.  But I digress…

Clemons was absolutely right with his prediction.  Wearable devices, in the form of braces, bracelets, necklaces, watches and glasses will revolutionize information management for medicine in general, and this will have great impact on care in workers’ compensation.  Sensors will be able to transmit vital health data to medical professionals; glasses such as Google Glass will be used in medical consultations and training scenarios.  The possibilities are boundless, as what we are talking about is moving and monitoring personal data securely in real time.  The more accurate and timely the information, the better the treatment and response can be.

Wearable technology is already here.  I mentioned Google Glass, but there are other devices on the market today.  Last year my wife bought a Pebble Smart Watch as a gift for my birthday.  It is a device that can interact with my smart phone, and allow me to read texts and emails without looking at my phone.  Before I had this watch I had to indicate I was bored with someone’s company by constantly looking at my phone.  Now I can indicate my boredom by repeatedly checking my watch.  Whether I am checking the time or reading the latest joke forwarded to me they will never know.  My Pebble Watch can also show me the battery status of my phone, the weather, stock information, GPS maps and navigation and events on my calendar.  It can even control the music and picture taking function on the phone – although the reason I would want to take a photo of the inside of my pocket escapes me.

I recently had a glimpse of just how much of our personal information is going to be freely distributed in the technologically mobile/wireless/wearable world.  It was the day after I flew home from the CCWC conference, July 19^th.  I happened to glance at my Pebble watch, and noticed that it was telling me that it was Kevin Connors birthday.  Now, I know Kevin Connors.  I did not know it was his birthday.  I have never known when his birthday was.  But my watch knew.

Kevin Connors is a workers’ compensation defense attorney I know through the National Workers’ Compensation Defense Network (NWCDN).  Kevin is Managing Partner, General Liability Chairperson and Sous Chef forConnors Law, LLP of Exton, PA.  A skilled attorney and creative writer, he is a product of both an overactive imagination and a Jesuit school (reformed) education.  Either that or it was a Jesuit Reform School – when asked for a clarification he simply mumbles.  At any rate, I had no earthly idea how his birthday ended up on my watch.

However, I eventually figured it out.  I am not a huge Facebook fan, and, as in real life, have relatively few friends there.  Kevin Connors is, however, one of my Facebook friends.  Even though I do not recall entering him in my phone contacts list, I found that his complete life now exists in my phone.  His phone numbers, his email addresses, his birthday – even a photo of him and his family now resides within my contacts list.

Even if you haven’t met him it’s kinda creepy.

All of this data apparently was placed there by the kind folks at Facebook.  There is even a tiny little Facebook “f” appearing next to his photo on the phone.  And from the smart phone, of course, it is just a short jump to my smart watch.

I can write this way about Kevin because, 1) he has a terrific sense of humor, and 2) my watch tells me he is in Stone Harbor on vacation and will likely never see this blog.  Still, it is evidence of the increasing pervasiveness of mobile technology leveraging personal information, and that wearables are going to be part of this revolution.  Mr. Clemons was correct.  We will be talking about wearables next year; and if at that point my watch can tell me Kevin Connors cholesterol and heart rate, by gosh, we will really have something.

ConnorsLaw LLP

Trust us, we just get it!  It is trust well spent!

Defending workers’ compensation claims throughout Pennsylvania for employers, self-insureds, insurance carriers, and third party administrators, our 100+ years of cumulative experience defending our clients against compensation-related liabilities, empowers our workers’ compensation practice group attorneys to be more than mere claim denials, entrusting us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania’s Workers’ Compensation Act.

With every member of our workers’ compensation practice group being AV-rated, our partnership with the NWCDN magnifies the lens through which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, businesses, corporations, and insurance carriers, seeking our trial and compensation acumen, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania workers’ compensation practice and procedure.

CRUZIN’ FOR A BRUISIN

By Kevin L. Connors, Esquire

This is the story of David Cruz, an undocumented worker, in Pennsylvania, who successfully secured an award of workers’ compensation benefits, with Cruz invoking his Fifth Amendment Right against self-incrimination, when questioned at the hearing before the Workers’ Compensation Judge as to his immigration status, with the Pennsylvania Supreme Court determining, in an Opinion authored on July 21, 2014, that the Commonwealth Court had correctly concluded that there was insufficient evidence of the Claimant’s alleged lack of legal authorization to be employed in the United States to support a suspension of the Claimant’s workers’ compensation benefits, as had been ordered by the WCJ.

The claim background was that the Claimant was injured on July 19, 2008, coincidentally my birthday, when he was working as a Truck Driver for Kennett Square Specialties, which owned and operated a mushroom farm in Chester County, Pennsylvania.

As the Claimant was loading 15-20 pound barrels onto his truck, he felt something snap in his low back.

The Claimant then notified his Employer, and began seeking treatment with an Employer-designated physician.

The Claimant was then diagnosed with a herniated disk.

Due to the severity of the Claimant’s injury, the treating physician did not release the Claimant to return to his normal work duty, but instead released the Claimant to work in a restricted-duty capacity, not allowing the Claimant to lift more than 15 pounds, and to undertake no work that would involve stretching, bending, or reaching.

Initially, the Claimant was paid temporary compensation benefits under a Notice of Temporary Compensation Payable.

The temporary compensation benefits were then stopped, with a Denial Notice being issued, followed by the Claimant filing a Claim Petition.

Under his Petition, the Claimant alleged that his injury was work-related, that it rendered him totally disabled, and that he could not perform his pre-injury job, such that the Claimant sought ongoing workers’ compensation benefits.

The Claim Petition was then assigned to a WCJ, with a timely Answer to the Petition having been filed.

In the course of the Claimant testifying before the WCJ, the Claimant was cross-examined by the Employer’s counsel, as to the Claimant’s immigration status. 

Although Claimant’s counsel objected to the Claimant being questioned regarding his citizenship status, the objection was overruled by the WCJ, with the Claimant, through counsel, invoking his Fifth Amendment right against self-incrimination, by refusing to answer the questions posed by the Employer’s counsel regarding the Claimant’s citizenship status.

In support of the Claimant’s claim of disability, the Claimant presented medical evidence as to his injury and disability, with the WCJ then issuing a Decision, under which the WCJ found that the Claimant’s injury was, in fact, work-related, and that his injury also rendered the Claimant partially disabled, although the WCJ suspended the Claimant’s disability benefits, in the course of which the WCJ held that the “Employer has met its burden to establish that Claimant was not a United States citizen, and that he was not authorized to work in this country.”

The WCJ’s Decision cited to the Pennsylvania Supreme Court’s Decision in Reinforced Earth v. WCAB, 810 A.2d 99 (Pa. 2002).

Suspending the Claimant’s disability compensation benefits, the WCJ nevertheless ordered the Employer to pay the Claimant’s medical compensation benefits.

The Claimant then appealed the WCJ’s Decision, suspending his wage loss compensation benefits, with the Pennsylvania Workers’ Compensation Appeal Board, in turn, affirming the WCJ’s Decision in part, although it also reversed the Decision with respect to the suspension of the Claimant’s compensation benefits based on the Claimant’s citizenship status.

As for the Claimant’s citizenship status, the WCAB held that a party cannot carry their burden of proof in any civil proceeding merely by relying upon an adverse parties’ failure to testify, finding that the Employer had not, therefore, met his burden of proof as to the Claimant’s citizenship status, in reliance solely upon an adverse inference created by the Claimant’s failure to answer the Employer’s counsel’s questions on the subject of his citizenship, holding that the adverse inference alone was not sufficient evidence to support the suspension of the Claimant’s compensation benefits.

So ruling, the Appeal Board reversed the WCJ’s Order suspending the Claimant’s disability compensation benefits, with the Employer then appealing that ruling to the Commonwealth Court.

Affirming the Appeal Board’s ruling, the Commonwealth Court held that the WCJ had properly treated the Employer’s defense of the Claimant’s Claim Petition as a request for a suspension of the Claimant’s compensation benefits, based upon the Claimant failing to document his citizenship status.

However, the Commonwealth Court held that the Employer carried its burden of proving that it was entitled to a suspension of benefits, and, by virtue of carrying its burden of proof, as the Employer had the burden of establishing the Claimant’s eligibility status for employment, rather than the Claimant being required to establish, in support of his Petition, that he held the necessary documentation of citizenship status to prove his employment eligibility.

The Court rationalized this holding by stating:  “the reason that an adverse inference cannot serve as substantial evidence to support a finding of fact is because an adverse inference does not constitute evidence.”

Concluding that an adverse inference was not evidence, it (the adverse inference) “does not count in calculating whether a party has met its burden in introducing substantial evidence.”

There being no other evidence in the record to support the WCJ’s conclusion that the Claimant was “undocumented”, in the course of the WCJ suspending the disability compensation benefits, the Commonwealth Court affirmed the Appeal Board’s reversal of the WCJ’s Decision suspending the Claimant’s disability compensation benefits.

The Employer petitioned for allowance of appeal to the Pennsylvania Supreme Court, which granted the appeal to determine three issues:

·                     That the Commonwealth Court erred in placing the burden of proof in a Claim Petition on the Employer, when the Claimant failed to establish his ongoing entitlement to benefits by providing information on his documented status to the Employer and to the Court?

·                     Did the Commonwealth Court err in failing to consider its own holding inBrehm v. WCAB, 782 A.2d 1085 (Pa. Cmwlth. 2001), holding that a Claimant who refuses to provide either the Court or his Employer with information necessary to make a determination, may have his workers’ compensation benefits suspended until such information is provided?

·                     Did the Commonwealth Court err in concluding that the Workers’ Compensation Judge’s Decision was not supported by substantial competent evidence where the record, in its totality, together with an adverse inference, does support the contention that the Claimant is an undocumented worker, thereby entitling the Employer to a suspension of benefits?

Analyzing these issues, the Pennsylvania Supreme Court, in an Opinion authored by Madam Justice Todd, held that the case required the Supreme Court to determine the proper allocation of the burden of proof between the parties, in terms of whether the Claimant had to prove his legal status for employment eligibility, or that burden should have shifted to the Employer to prove that the Claimant was ineligible for employment, as an undocumented immigrant.

The Supreme Court held that once the Claimant establishes an entitlement to an award of benefits, the burden then shifts to the Employer to prove that employment is available within the Claimant’s work restrictions.

In Cruz, the Supreme Court concluded that the Claimant had proven that his injury was work-related, and that it was disabling, thereby entitling the Claimant to an award of workers’ compensation benefits, with the burden of proof then shifting to the Employer to prove why the Employer would have been entitled to a suspension of compensation benefits, under the authority of its Decision inVista Int’l. Hotel v. WCAB, 742 A.2d 649 (Pa. 1999).

Affirming the reversal of the WCJ’s suspension of the Claimant’s compensation benefits, the Supreme Court held that the Employer bore the burden of proving that the Claimant was ineligible to work in the United States, and that the only “evidence” of the Claimant’s ineligibility for employment was the Claimant’s invocation of his Fifth Amendment right against self-incrimination, which, alone, was insufficient to constitute the necessary substantial competent evidence to support a WCJ’s finding that the Claimant was not a United States citizen, and was not otherwise authorized to work in the United States.

Justices Baer and McCaffery joined in the Majority Opinion.

Justice Saylor filed a Concurring Opinion, joined by Chief Justice Castille.

Justice Eakin filed a Concurring and Dissenting Opinion, joined in by Justice Stevens.

While concurring with the Majority Opinion, Justice Saylor took a very different approach, in analyzing the adverse inference bubbling to the surface from the Claimant’s invocation of his Fifth Amendment right against self-incrimination, with Justice Saylor deferring to the Judge’s fact finding function to “draw reasonable inferences from basic facts to ultimate facts”, such that Justice Saylor would not conclude that the Claimant’s refusal to answer the question posed regarding his citizenship status carried “no evidentiary value”, in reliance upon the U.S. Supreme Court having observed, merely as a general precept, that refusals to answer, in non-criminal settings, and in reference to questions regarding potential criminality, can constitute “relevant facts” that might be considered in the interest of improving the chances for accurate Decision. Baxter v. Palmigiano, 425 U.S. 308 (U.S. 1976).

Who knew?

I am, therefore I must be compensated!

And who has not thought that?

In Justice Saylor’s view, the record before the WCJ did not indicate that the Claimant had refused to answer the citizenship status questions posed by Employer’s counsel, rather the record merely indicated that Claimant’s counsel interposed a timely objection to the pending question, after which Employer’s counsel never pursued finality with regard to those questions, with Justice Saylor indicating that the objections alone were insufficient to invoke the Fifth Amendment privilege on the Claimant’s behalf, as that privilege must be personally invoked, meaning that the witness must make a declaration invoking the privilege, for the privilege to even exist.

Anyone find that even remotely interesting?

What might be even more interesting is Judge Saylor’s discussion of the need to reconsider “the soundness ofReinforced Earth’s determination that a workers’ immigration status alone can present a lack of earning power for purposes of an Employer’s request to suspend benefits, so as to relieve the Employer of the burden to demonstrate physical recovery from the injury”, with Justice Saylor citing to a Nebraska Decision, in Moyera v. Quality Pork International, 825 N.W.2d 409 (Neb. 2013), a slightly overcooked tenderloin, which had referred to other Courts that had allowed benefits, concluding that “even if undocumented Employees cannot legally work in the United States, they could have worked elsewhere, but for their work-related injury”, citing also to an Illinois Decision inEconomy Packing Company v. Ill. Workers’ Comp Comm’n, 901 N.E. 2d 915 (Ill. Ct. App. 2009).

 So when do the Cruz ships dock?

A slippery slope indeed!

Justice Saylor’s Concurring Opinion was joined in by Chief Justice Castille, with Justice McCaffery joining in on the Concurring Opinion of Justice Saylor as to the necessity of re-examiningReinforced Earth.

JUSTICE EAKIN’S CONCURRING AND DISSENTING OPINION

·                     Concurring and dissenting, Justice Eakin concurred with the Majority Opinion that the Claimant had sustained his burden of proving a work-related injury resulting in wage-loss producing disability, although Justice Eakin dissented, yielding to “congressional policy that was unauthorized aliens… violating Federal law… in obtaining employment by allowing them to participate in a social insurance scheme for Pennsylvania workers.”  Citing toReinforced Earth.

·                     Justice Eakin agreed with the Majority Opinion, as well as the Concurring Opinion of Justice Saylor, that the Claimant had sustained his burden of proving that he had sustained a work-related injury resulting in wage-loss producing disability.

·                     However, Justice Eakin did not agree with the Majority and/or Concurring Opinions, that the burden of proof as to a Claimant’s immigration status should shift from the Claimant to the Employer, as Justice Eakin believed that once the Claimant’s immigration status becomes an issue, that the Claimant would carry the burden of proving that he was legally entitled to work in the United States, as a prerequisite to obtaining benefits under the Pennsylvania Workers’ Compensation Act.

·                     Finding that the Claimant failed to do so, by refusing to testify regarding his immigration status, Justice Eakin would reverse the Order of the Commonwealth Court, with Justice Stevens joining in Justice Eakin’s Concurring and Dissenting Opinion.

ANALYSIS

So where does Cruz leave us?

Well, some things are now clear.

First, there can be no assumption that the refusal to answer a question necessarily creates an adverse inference sufficient to constitute substantial competent evidence supporting the findings or conclusions of a WCJ.

Next, it is also clear that the Cruz ruling is important in terms of the balancing of public policy interests, and is not, therefore, merely the highest Court in Pennsylvania rubber-stamping Decisions by lower Courts as to the compensation benefit entitlement of undocumented immigrants.

Cruz is an attempt by the Pennsylvania Supreme Court to balance two competing public policy interests, the first being that the Pennsylvania Workers’ Compensation Act is the statutory framework for determining the compensability of work-related injury, while the second public policy interest being considered by the Cruz Court is whether the first public policy interest, being the correct application of the law governing remedies for work-related injuries, necessarily needs to be considered against whether workers who have broken Federal immigration laws, effectively “creating” the absurd result of supplying social welfare benefits in the form of a wage and employment-benefit substitute to one whom Federal law says could not lawfully obtain those wages and benefits in the first place, should still be entitled to be awarded the benefits.

In the absence of a definitive intersection between public policy concerns over the interplay between Workers’ Compensation and Federal Immigration Laws, it remains true in Pennsylvania that illegal/undocumented workers sustaining work-related injuries will be entitled to receive workers’ compensation benefits, if substantial competent evidence of the occurrence of their injury and its resulting wage-loss producing disability is presented to the WCJ, with Employers, underCruz, being required to present substantial competent evidence of the Employee’s citizenship status, if the Employer seeks a suspension of compensation benefits, limited to the wage loss benefits, in defense of a Claim Petition for workers’ compensation benefits by an undocumented worker.

Several salacious words come to mind to pin this tale to the donkey, as the Cruz ruling, while technically correct, nevertheless leaves us feeling cheated.

Time to tighten the borders!

ConnorsLaw LLP

Trust us, we just get it!  It is trust well spent!

Defending workers’ compensation claims throughout Pennsylvania for employers, self-insureds, insurance carriers, and third party administrators, our 100+ years of cumulative experience defending our clients against compensation-related liabilities, empowers our workers’ compensation practice group attorneys to be more than mere claim denials, entrusting us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania’s Workers’ Compensation Act.

With every member of our workers’ compensation practice group being AV-rated, our partnership with the NWCDN magnifies the lens through which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, businesses, corporations, and insurance carriers, seeking our trial and compensation acumen, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania workers’ compensation practice and procedure.

“SHOW ME THE MONEY!”

By Kevin L. Connors, Esquire

Sound familiar?

It is an all too familiar refrain in the context of workers’ compensation subrogation recoveries, with insurers simply seeking the equitable redistribution of no-fault compensation dollars paid by compensation insurers as a result of third-party negligence.

A recent Commonwealth Court Decision in Natasha Young v. WCAB (Chubb Corporation), decided on March 10, 2014, is an affirmation of an insurer’s statutory entitlement to subrogation, where workers’ compensation benefits were paid under the Pennsylvania Workers’ Compensation Act, although the third-party negligence occurred in a neighboring jurisdiction, with the accident giving rise to the workers’ compensation claim occurring in Delaware, as well as all litigation over the third-party personal injury lawsuit also being filed in Delaware, against a Delaware Third-Party Defendant.

The relevant facts in Young are/were:

·         Work-related motor vehicle accident in Delaware;

·         Third-party Defendant was a Delaware resident;

·         Pennsylvania workers’ compensation benefits paid to the Claimant pursuant to an NCP issued by the Employer/Insurer, accepting liability, under the Pennsylvania Workers’ Compensation Act, for the Claimant’s work injury;

·         Claimant filed a personal injury lawsuit in Delaware, seeking personal injury damages against the Third-Party Delaware Driver;

·         The Third-Party personal injury lawsuit in Delaware was settled for $160,000.00;

·         The Employer/Insurer asserted a statutory right of subrogation against the Claimant’s Third-Party recovery;

·         The Claimant challenged the Employer/Insurer’s right to subrogation, contending that Delaware, and not Pennsylvania, law should apply to the parties’ dispute over subrogation; and,

·         Employer/Insurer filed a Review Petition against the Claimant, seeking satisfaction of its workers’ compensation subrogation lien, equaling $101,381.94.

Correctly so, the WCJ granted the Employer/Insurer’s Review Petition, which was, in turn, then affirmed by the Workers’ Compensation Appeal Board.

Appealing to the Commonwealth Court, the Claimant argued that Delaware and not Pennsylvania law should be applied to the issue of the Employer/Insurer’s subrogation rights, given that the Claimant characterized Delaware’s subrogation laws as being more equitable than Pennsylvania subrogation law, and that the Claimant’s third-party recovery had been limited by Delaware law, such that the Claimant argued that Delaware law should also apply to the insurer’s right of subrogation.

Both at the WCJ and the Appeal Board levels, the Claimant’s argument that Delaware law should be applied was soundly rejected in reliance uponAllstate v. McFadden, 595 A.2d 1277 (Pa. Super. 1991), a Decision that had applied a significant contacts test to determine whether Pennsylvania or New Jersey law would apply to a workers’ compensation subrogation claim.

Claiming that there was a direct conflict between Delaware and Pennsylvania workers’ compensation laws, as Delaware specifically excludes certain expense items from subrogation, as the items are not admissible at Trial under the Delaware Code, in contrast to Pennsylvania law, which has long been interpreted to provide Employers with an absolute right of subrogation released only by their prorata share of costs and fees, the Claimant sought to apply Delaware subrogation law to the insurer’s subrogation claim.

This conflict of law disparity required the Commonwealth Court to utilize the Pennsylvania Supreme Court’s significant contact qualitative analysis underGriffith v. United Airlines, Inc., 203 A.2d 796 (1964) under which the Pennsylvania Supreme Court had held that a potential conflict between the application of state laws required the consideration of the policies and interests underlying the particular issue being brought before the Court, requiring that when jurisdictions are compared, the qualitative factors override quantitative factors when analyzing jurisdictional control.

Under Allstate, applying Griffith, the Pennsylvania Superior Court, in the course of examining the contacts each State, Pennsylvania and New Jersey, had with the underlying controversy, being the Employer’s subrogation rights, vis-à-vis its payments of workers’ compensation benefits, the Pennsylvania Superior Court had ruled inAllstate that “Pennsylvania has a significant interest in payments made under its Act and the subrogation of Pennsylvania Employers to monies paid to its Employees by a Third-Party.”Allstate, 595 A.2d at 1279.

Other factors relevant to the Allstate holding included the Claimant being a Pennsylvania resident, the Employer being a Pennsylvania Corporation, the Claimant regularly working in Pennsylvania, and the Claimant being paid workers’ compensation benefits under a policy of workers’ compensation insurance coverage satisfying the insurance requirement of the Pennsylvania Workers’ Compensation Act.

Relying upon those factors, the Superior Court had ruled in Allstate that Pennsylvania was “the State with the most significant interest in determining the right of the Employer to subrogation where it has made payments to an injured Employee” under its workers’ compensation statute.

The reasoning applied by the Pennsylvania Superior Court in Allstate became the controlling holding inByard F. Brogan, 637 A.2d at 693, involving a Pennsylvania worker injured in a motor vehicle accident in West Virginia, who was paid workers’ compensation benefits under the Pennsylvania Workers’ Compensation Act, with the Employer seeking to enforce its right of subrogation, and the Pennsylvania Court applying Pennsylvania, and not West Virginia, law to the issue, although at the time that case was litigated, the Pennsylvania Motor Vehicle Financial Responsibility Law had abrogated an Employer’s right of subrogation for motor vehicle accidents, with that right being subsequently reinstated by subsequent Amendments to the Pennsylvania Workers’ Compensation Act in 1996.

Relying upon Griffith, Allstate, and Brogan, the Pennsylvania Commonwealth Court held inYoung, that the State with the most significant contact to a workers’ compensation claim, and the potential right of subrogation for workers’ compensation payments made, is the jurisdiction whose workers’ compensation laws have been applied to the underlying entitlement to receive workers’ compensation benefits for work-related injuries.

So concluding, the Young Court held that the Pennsylvania WCA applied “because it is the State with the most significant interest in determining the right of an Employer to subrogation where it has made payments to an injured Employee.”

Did we also mention that the Claimant had, in the course of the workers’ compensation claim being resolved, entered into a Compromise and Release Agreement with the Employer/Insurer, under which the C&R Agreement specifically indicated that the Employer/Insurer was reserving its right of subrogation, an issue not contested by the Claimant in the course of receiving an $85,000.00 C&R payment.

Resolving the choice of law “significant context” jurisdictional question, theYoung Court further upheld the underlying Decisions of the WCJ and Appeal Board, that the Employer/Insurer’s subrogation lien included the twenty percent attorneys’ fees that were deducted from the Claimant’s compensation benefit payments, in satisfaction of the Claimant’s Contingent Fee Agreement with her workers’ compensation attorney, as the Claimant sought to exclude those payments from the subrogation lien, contending that they were not compensation benefit payments.

Are you kidding?

A final desperate argument was raised by Claimant, requesting that the Court limit the Employer’s subrogation lien recovery to one-third of the Claimant’s Third-Party settlement, as monies sufficient to satisfy a one-third distribution had been escrowed by the Claimant, with the Commonwealth Court denying that request, finding it had no authority to order the Employer to accept one-third of the Claimant’s Third-Party settlement, when the Employer’s rights to enforce its subrogation lien could only be abrogated by the Employer/Insurer’s consent.

Denying the Claimant’s request, the Commonwealth Court also denied the Employer’s request, seeking counsel fees, pursuant to Pennsylvania Rule of Appellate Procedure No. 2744, permitting an Appellate Court to award reasonable attorneys’ fees, if it is determined “that an Appeal is frivolous or taken solely for delay or that the conduct of the participant against whom costs are being imposed is dilatory, obdurate, or vexatious”, with the Commonwealth Court holding that, underPhillips v. WCAB, 554 Pa., 721 A.2d 1091 (1999), Employers are not entitled to counsel fees under P.R.A.P. 2744.

Show me the money!

Being Practical

Seeking enforcement of a subrogation lien for workers’ compensation benefits paid in Pennsylvania, when the Third-Party personal injury claim arose in or is litigated in another State,Young would require a Pennsylvania Court to apply Pennsylvania law to the Employer’s statutory subrogation lien rights if the underlying workers’ compensation claim is administered and paid under Pennsylvania’s WCA.

This is an important Decision for Pennsylvania Employers and Insurers seeking protection of their statutory subrogation rights under Section 319 of the Act.

It is also an important Decision for clarifying what constitutes the lien benefits that can be asserted in the context of subrogation, to include the actual payments of workers’ compensation benefits to the Claimant, which include not only attorneys’ fees deducted from the Claimant’s compensation benefits, but also medical expenses and reasonable expenses incurred in the administration of the workers’ compensation claim.

ConnorsLaw LLP

Trust us, we just get it!  It is trust well spent!

Defending workers’ compensation claims throughout Pennsylvania for employers, self-insureds, insurance carriers, and third party administrators, our 100+ years of cumulative experience defending our clients against compensation-related liabilities, empowers our workers’ compensation practice group attorneys to be more than mere claim denials, entrusting us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania’s Workers’ Compensation Act.

With every member of our workers’ compensation practice group being AV-rated, our partnership with the NWCDN magnifies the lens through which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, businesses, corporations, and insurance carriers, seeking our trial and compensation acumen, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania workers’ compensation practice and procedure.

“PRACTICE, WHY PRACTICE?”

By Kevin L. Connors, Esquire

No, we are not taking about the iconic Allen Iverson whose penchant for missing team practices while the leading scorer for the Philadelphia 76ers throughout his turbulent career became well-documented by his own tattooed admission before a viral TV reporter audience became the stuff of ignorant legend.

No, this time we are talking about the invalidation of an IRE physician who had originally been certified by the Pennsylvania Bureau of Workers’ Compensation as a certified IRE physician, by virtue of the physician having initially met the threshold credentialing requirement of being “active in clinical practice” for at least twenty hours per week when originally approved to conduct IREs, the seemingly mystical assessment of determining whole person impairment in reliance upon the byzantine AMA Guides to Impairment.

The case being discussed is the recent Commonwealth Court Opinion in Verizon v. WCAB (Ketterer), authored by Senior Judge Colins on March 12, 2014.  The issue examined by the Commonwealth Court was whether the IRE doctor’s (Dr. Antonelli) discontinuance of an “active clinical practice” negated/eviscerated her authority to perform an Impairment Rating Evaluation on the Claimant.

The Claimant had been a service technician for Verizon, performing installations and repairs for telephone, television, and computers.  He injured his neck and back while working for Verizon on August 27, 2008, when his service vehicle was rear-ended.

The claim was accepted, as some claims are, and the Claimant began receiving temporary total disability benefits, although the Employer filed a Termination Petition in 2009, seeking to terminate its liability for compensation benefits under the Notice of Compensation Payable.

Verizon’s Termination Petition was, however, denied by the Workers’ Compensation Judge, with there being no discussion in the Decision regarding the evidence presented in support of and in opposition to the Termination Petition.

Several months after the Termination Petition was denied, the Employer requested that the Bureau designate a physician to perform an IRE.

This is a two-step process, the first being that the IRE Physician Designation can only be requested after the Claimant has received 104 weeks of temporary total disability benefits, although the formal request can be made 60 days in advance of the Claimant receiving two years of compensation benefits.

The second step is that the Bureau then randomly assigns the IRE request, using a list of physicians that the Bureau has vetted through a credentialing and qualification process, seemingly untethered to specific medical specialties, requiring the following qualifications:

·         A license to practice medicine in Pennsylvania;

·         Physician training on the AMA’s Guides to the Evaluation of Permanent Impairment;

·         Board-certification in a medical specialty;

·         The hands-on requirement that IRE physicians must maintain a medical practice involving twenty hours per week of clinical medicine; and,

·         Formal approval of IRE physician status by the Bureau.

In Verizon, the Bureau had randomly assigned Verizon’s IRE Physician Designation request to Dr. Elena Antonelli, whom the Bureau had approved as an IRE physician in 2008.  In 2008, Dr. Antonelli maintained an active clinical patient practice with Capital Health.

Fast forward to Dr. Antonelli’s 2010 IRE of the Claimant, resulting in a 16% impairment rating, an impairment rating that would effectively convert the Claimant’s entitlement to temporary total disability benefits to only being entitled to receive temporary partial disability benefits, the relevance of which is that the Claimant would then be limited to receiving another 500 weeks of temporary partial disability benefits, the statutory limit under Section 306(b) of the Pennsylvania WCA, as opposed to there being no limit whatsoever for temporary total disability benefits.

Following the IRE, Verizon petitioned to modify the Claimant’s compensation benefits from temporary total to temporary partial disability benefits, the statutory mechanism for converting the Claimant’s compensation benefits status when the IRE Physician Designation request has not been made either 60 days before or 60 days after the Claimant receives 104 weeks of temporary total disability benefits, as an IRE request within that window of claim time entitles the Employer to an automatic conversion of the Claimant’s compensation benefits from temporary total to temporary partial disability benefits, while an IRE Physician Designation request made 60 days after the Claimant has received 104 weeks of temporary total disability benefits requires the Employer to Petition to Modify/Convert the compensation benefits from temporary total to temporary partial.

Presumably, that is the procedural background for how the IRE issue was litigated.

In defense and support of Verizon’s Modification Petition, Dr. Antonelli testified that her practice was essentially limited to conducting IMEs, IREs, and physical examinations for Pilots and Truck Drivers, as she was not otherwise engaged in an active clinical practice, testifying “I don’t have that much of a clinical practice any longer.”

Of course, this fact should have been disclosed by Dr. Antonelli before she was paid handsomely for her deposition testimony.

In fact, she testified that her practice was largely “administrative”, bizarrely not a credentialing requirement imposed by the Bureau for conducting IREs.

In reliance upon Dr. Antonelli’s admission of not having an active clinical practice, the WCJ denied Verizon’s Modification Petition, with that denial being affirmed by the Commonwealth Court in the course of which it has now been held, in a case of first impression, there being no statutory definition of “clinical practice” in the WCA, although the Bureau has addressed that definition in the Bureau Regulations that deal with Impairment Rating Evaluations, defining “active in clinical practice” as “the act of providing preventative care and evaluation, and treatment and management of medical conditions of patients on an ongoing basis.”34 Pa. Code § 123.103(b), with the Commonwealth Court holding that the Bureau’s regulatory definition requires that an active clinical practice involve both “preventative care and evaluation, and treatment and management” of medical conditions of patients, being a conjunctive grammatical structure, the conjugation of which requires an “and”, as opposed to an “or”.

“Practice, why practice”, means, yes, that an IRE physician must practice clinical medicine at least 20 hours per week, in the course of which the physician must not only evaluate patients, but must also manage their care and treatment.

In Verizon’s defense, Verizon argued that the legislative intent behind the requirements should be interpreted to mean that IRE physicians insure that their qualifications and medical knowledge are current and updated, with the Commonwealth Court interpreting that legislative intent to require that “physicians have a medical practice in which their judgments have genuine consequences for patient care and treatment”, to the exclusion of physicians whose work is primarily opinion-driven for legal determinations.

Holding that a physician whose practice consists solely of conducting independent medical examination of workers’ compensation claims, performing IREs for workers’ compensation claims, and physical examinations for certification and qualification requirements, does not satisfy the statutory requirements imposed under the Act for physicians to perform IREs, the Commonwealth Court affirmed the underlying Decisions of the WCJ and the Workers’ Compensation Appeal Board, denying the Employer’s Modification Petition.

Being Practical

This being a case of first impression, this Decision will impose another level of scrutiny on Employers and Insurers seeking to modify compensation benefits through the utilization of an IRE, requiring yet another threshold to be crossed, before the liability-capping actuality of an IRE can be realized.

So the Verizon ruling makes it clear that no one can assume that a physician designated by a Bureau to perform an IRE currently meets the Bureau’s regulatory requirements, in terms of maintaining an “active clinical practice”, such that any Employer/Insurer seeking to modify a Claimant’s compensation benefits in reliance upon an IRE, must be sure that the IRE physician is engaged in an “active clinical practice”, at the time that the IRE physician performs the IRE, so that the IRE is not later being challenged for having failed to meet all regulatory requirements, including the physician’s qualifications.

This ruling could potentially result in there being Claimant-focused discovery directed at determining whether an IRE physician meets the regulatory requirements of maintaining an “active clinical practice” and that could well turn into a paper chase of hours worked and patients consulted, requiring validation as a threshold to efficacy.

Despite Allen Iverson’s query to the contrary, practice is an essential test of professional skill and judgment, as well as being the regulatory requirement for conducting IREs.

ConnorsLaw LLP

Trust us, we just get it!  It is trust well spent!

Defending workers’ compensation claims throughout Pennsylvania for employers, self-insureds, insurance carriers, and third party administrators, our 100+ years of cumulative experience defending our clients against compensation-related liabilities, empowers our workers’ compensation practice group attorneys to be more than mere claim denials, entrusting us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania’s Workers’ Compensation Act.

With every member of our workers’ compensation practice group being AV-rated, our partnership with the NWCDN magnifies the lens through which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, businesses, corporations, and insurance carriers, seeking our trial and compensation acumen, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania workers’ compensation practice and procedure.

MEDIATING THE PENNSYLVANIA WORKERS’ COMPENSATION CLAIM

By Kevin L. Connors, Esquire

Recently attending the ABA Workers’ Compensation Mid-Winter Seminar and Conference, in Chicago, over St. Patrick’s Day no less, and having been a presenter on the panel that addressed “Negotiation and Mediation Techniques:  The Latest Advice, The Latest Literature”, chaired and moderated by the Honorable David Torrey, a Pennsylvania Workers’ Compensation Judge in Pittsburgh, Pennsylvania, of infamous renown to all Pennsylvania Workers’ Compensation practitioners as being a veritable encyclopedia of knowledge concerning workers’ compensation practices, procedures, and training, both nationally and locally, this article will review practical lessons from the ABA panel’s presentation.

Before doing so, it should be noted that this pre-eminent panel consisted of three Workers’ Compensation Judges, the Honorable David Torrey, a Pennsylvania Workers’ Compensation Judge, the Honorable Ellen Lorenzen, a Workers’ Compensation Judge in Tampa, Florida, and Chairman Mike Alvey, chairing the Kentucky Workers’ Compensation Appeal Board.

Claimants were represented on the panel by Richard Johnson, a Workers’ Compensation Practitioner in Chicago, Illinois.

The panel, consisting of veterans of their workers’ compensation systems, provided advice with regard to the successful negotiation of workers’ compensation claims, to include the process of mediating workers’ compensation claims, as well as critiquing the latest thoughts and trends on mediation techniques.

As Pennsylvania practitioners will recognize, mediation has had a growing influence in Pennsylvania since the 1996 adoption of Act 57, allowing parties to settle workers’ compensation claims under Compromise and Release Agreements.

In 2006, the Workers’ Compensation Act was amended, to include provisions for Mandatory Mediation, resulting in mediations being required in all litigated workers’ compensation claims, with the Workers’ Compensation Judge presiding over a litigated workers’ compensation claim being required to refer the Petition being litigated to another Workers’ Compensation Judge, for the Petition to then be mediated, absent the parties proving to the presiding Workers’ Compensation Judge that mediation would be “futile”, with there apparently being some super-secret coded directive issued by authorities reviling disclosure, that “futility”, is/will not be an adequate reason to be excused from Mandatory Mediation.

Obviously, voluntary mediations have also been “in play” since the enactment of Act 57 in 1996, again allowing parties to settle workers’ compensation claims, although voluntary mediations have fallen in disfavor, given the costs associated with the same, with the nascent advent of free mandatory mediations, post-2006, through Bureau dictate.

In the course of enforcing mandatory mediations, the Bureau, in its infinite wisdom, has required all Workers’ Compensation Judges to undergo preliminary training in the skills necessary to mediate workers’ compensation claims, with some degree of success and failure being evidenced across Pennsylvania workers’ compensation judicial benches, as mediations have been embraced by some, and reluctantly undertaken by others.

No less true, mediating litigated cases, whether in the workers’ compensation system, or in any other system, requires a special skill set, and not all possess those skills equally.

As for the panel’s discussion regarding mediating workers’ compensation claims at the ABA Mid-Winter Seminar Conference, there was general agreement among the panel that there are several keys to successful mediations, to include the following:

·         First, both parties must be in agreement that mediation is worthwhile;

·         The litigated claim must be ripe for mediation;

·         The parties must have adequately exchanged sufficient information, through discovery or actual fact-finding, to have a clear understanding as to the issues in dispute, and the issues that would need to be resolved, in order to engage in a successful resolution of the workers’ compensation claim;

·         The parties must remain flexible in the course of attempting to resolve their disputed issues;

·         The parties must be prepared to understand the position held by the opposing party, without engaging in umbrage and incivility;

·         The parties must be clear in their objectives in the course of mediating the workers’ compensation claim;

·         The parties must be clear about their expectations and goals before and during the mediation process;

·         The parties must practice intelligent listening, as well as being internally honest as to the stakes involved;

·         Whether in confidence, or other, both parties must be honest with the mediator, in terms of the procedural, factual, legal, and medical issues involved in the claim;

·         Both parties must be prepared to think about compromise, eliminating unrealistic expectation, as well as the necessity of thinking that the purpose of the mediation is to vanquish the opponent;

·         Both parties must also leave emotions at the mediation door, as it is of no value whatsoever in the throes of mediation; and,

·         No less true, it is critical to “trust” not only the power of the mediation process, but to also revel in the candor and credibility of the mediator as an “agent of reality” to quote the Honorable Susan Cercone, a Workers’ Compensation Judge in Allegheny and Beaver Counties, Pennsylvania.

Privileged to have been a panel presenter with the Honorable David Torrey, we strongly encourage our clients to consider the advantages of mediation, as a testament to risk aversion and claim finality.

ConnorsLaw LLP

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Defending workers’ compensation claims throughout Pennsylvania for employers, self-insureds, insurance carriers, and third party administrators, our 100+ years of cumulative experience defending our clients against compensation-related liabilities, empowers our workers’ compensation practice group attorneys to be more than mere claim denials, entrusting us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania’s Workers’ Compensation Act.

With every member of our workers’ compensation practice group being AV-rated, our partnership with the NWCDN magnifies the lens through which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, businesses, corporations, and insurance carriers, seeking our trial and compensation acumen, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania workers’ compensation practice and procedure.