The case of Apperman v. Visiting Nurse Association of Westfield, A-5446-15T3 (App. Div. October 30, 2017) presented an unusual situation where a carrier agreed to pay benefits that exceeded its obligation under the statute.  The case involved the tragic death of Phyllis Apperman who died in a motor vehicle accident in December 2003. The claim was accepted by New Jersey Manufacturers, which agreed to pay dependency benefits to Eric Apperman, the decedent’s husband, and Harold Apperman, a 34-year-old son who was legally incapacitated.

Dependency payments to Eric Apperman ended when he remarried.  In 2007 at the time of settlement, NJM’s counsel stipulated to the following terms in respect to benefits for the incapacitated son:

However, we are here today as he has requested benefits for his son as a dependent, and we do stipulate that the son is incompetent and should receive dependency benefits at the amount of fifty percent of Phyllis Apperman’s wages of $800.  So, he will get $400 per week for 450 weeks and continuing as long as he remains incompetent.  Payments shall date back to March 4, 2005.

The Judge of Compensation entered an order stating that the son’s dependency benefits “shall continue for 450 weeks and shall be paid thereafter pursuant to N.J.S.A. 34:15-12(b) et seq.”  When the 450 week period ended, NJM correctly stopped payments based on the language of the statute which limits payments to 450 weeks for adult children who are incapacitated.  Eric Apperman then appealed the denial of benefits past 450 weeks in part based on the agreement made by NJM counsel at the time of settlement.

The Judge of Compensation heard the motion of petitioner’s counsel to enforce the prior agreement and ruled that NJM’s agreement to pay beyond 450 weeks was a mistake of law.  Therefore, the Judge of Compensation ruled against Apperman, who then filed an appeal.

The Appellate Division first examined the precise language of N.J.S.A. 34:15-13, which states that “payments to such physically deficient persons as are for such reason dependent shall be made during the full compensation period of 450 weeks.”  The statute further states that benefits for dependents under age 18 shall continue until they reach the age of majority.

In this case, the Appellate Division held that payments for those under age 18 can continue for over 450 weeks until the age of majority, but payments for an adult person who is mentally incapacitated are limited to 450 weeks by statute.  The Court further said, “Neither party has cited any authority, nor have we found any, that would confer jurisdiction on the Division of Workers’ Compensation to sanction the payment of dependency benefits for a period exceeding that authorized by statute.”

To petitioner’s argument that NJM had previously agreed on the record to make payments beyond 450 weeks, the Court responded that a Judge of Compensation does not have authority to enforce an order that would extend benefits beyond statutory limits. The Court said that the Division of Workers’ Compensation lacks equitable powers.  Finally, the Court noted that it was sympathetic to the plight of petitioner since he remained incapacitated, but any change in the law must be effected by the Legislature.

This decision is noteworthy because there are so few cases involving dependent adults who are incapacitated and also few cases involving mistakes of law.  The ruling is correct that a Judge of Compensation is limited to his or her statutory powers.  For example, if there is no jurisdiction in New Jersey, (no accident, no contract and no employment in New Jersey), the Judge cannot hear the case even if the parties agree to present it in New Jersey.  Similarly, when a claim is time barred, even if the respondent agrees to waive the statute, the Judge cannot hear the case, because powers of the Judge of Compensation are limited to claims timely filed in the Division.

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com. 

Can an employee maintain both a workers’ compensation retaliation claim at the same time as he alleges discrimination under the New Jersey Law Against Discrimination (LAD)? That was one issue answered in Larson v. City of Paterson, A-2526-15T4 (App. Div. October 26, 2017).

Carl Larson worked as a firefighter for the City of Paterson from 1987 to 2013. He filed a number of workers’ compensation claims. In 2008 he underwent surgery for his neck from a work-related injury. In March 2010 he injured his left ankle exiting a fire truck and returned to work within two months. In 2010 and 2011 he filed for neck and ankle injuries and settled those cases for $105,876 in early 2013.

Following the approval of the workers’ compensation settlement, Larson was at home for a few days due to a non-work matter when he got a phone call. He was advised that he needed to attend a fitness-for-duty examination. Larson agreed to attend the examination. However, he was told that the Fire Chief wanted him to remain off-duty until further notice.

Larson was concerned and spoke with his union representative, Captain Michael Caposella, who advised that the City was considering termination because of Larson’s numerous workers’ compensation claims. The Captain urged Larson to meet with the Chief.   That meeting occurred in mid-March 2013. Larson alleges that he was asked if he was wearing a recording device. The Chief allegedly said that due to his multiple awards, Larson was viewed as a liability. He was further advised that some council members allegedly thought Larson and his doctors were defrauding the city.

Larson said that he did not want to retire. He claimed that the Chief then said, “Well, if you are telling me you are not disabled and you come back to work you are suspended without pay.” Larson was warned that if he fought this issue, he would go one or two years without a paycheck.

Based on this conversation, Larson decided to retire, fearing suspension if he did not do so. He then filed a complaint alleging retaliation under the New Jersey Workers’ Compensation Act and discrimination based on age under the NJLAD. The trial judge dismissed Larson’s workers’ compensation retaliation claim as barred because he also sought a remedy under the NJLAD. The judge reasoned that any claim for being “required to retire” must be filed under the NJLAD.

The Appellate Division disagreed that the NJLAD was Larson’s only remedy. It said that asserting a “required to retire” claim under the NJLAD is quite different from asserting a claim for retaliation on account of assertion of rights to workers’ compensation benefits. The former claim is focused on impermissible acts of discrimination, while common law workers’ compensation retaliation claims are focused on asserting rights under the New Jersey Workers’ Compensation Act.

The Court went on to explain that when one files for age discrimination, for example, he or she must file such a claim under the NJLAD because the NJLAD protects victims of discrimination. But workers’ compensation retaliation claims emanate from the state’s workers’ compensation law.   The Court considered Larson’s retaliation claim to assert “constructive discharge.”   The Court said “[A] constructive discharge occurs when an employer engages in ‘severe or pervasive’ conduct that is ‘so intolerable . . . a reasonable person would be forced to resign rather than continue to endure it.’” (citations omitted).

The Court concluded that there was sufficient evidence for Larson to prove in a jury trial that he was forced to retire. Larson believed he could return to work and twice requested a fitness-for-duty examination. Nonetheless, according to Larson, he was forced out due to misconceptions about his ability to perform job duties. The Court noted that both sides offered different versions of fact, but if the jury were to accept the version Larson presented to the effect that he would be suspended without pay should he return to work, that would support a jury verdict of discriminatory conduct by the city.   The Court summarized, “Based on our review of the record, and viewing the evidence in the light most favorable to plaintiff, we are convinced a reasonable trier of fact could conclude that plaintiff was constructively discharged and forced to retire.”

This case is helpful to practitioners because New Jersey has surprisingly few published and unpublished retaliation claims. It is also helpful because it shows how different a claim is under the NJLAD and the New Jersey Workers’ Compensation Act. In New Jersey, a retaliation claim focuses on the assertion of rights under our workers’ compensation law as opposed to discriminatory conduct.

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com. 

Written by: Scott Farwell 

An independent contractor is an individual who generally falls outside of the structure of the Workers’ Compensation Act. Whether a person employed to perform specified work for another is to be regarded as an independent contractor or as an employee within meaning of Workers’ Compensation Act is determined by application of ordinary common-law tests.  Youngblood v. N. State Ford Truck Sales, 321 N.C. 380, 364 S.E.2d 433 (1988). There are generally eight factors, with no one factor being determinative, which indicate classification as an independent contractor – namely, the person employed: (1) is engaged in independent business, calling, or occupation; (2) is to have independent use of his special skill, knowledge, or training in execution of work; (3) is doing specified piece of work at fixed price or for lump sum or upon quantitative basis; (4) is not subject to discharge because he adopts one method of doing work rather than another; (5) is not in regular employ of other contracting party; (6) is free to use such assistants as he may think proper; (7) has full control over such assistants; and (8) selects his own time. McCown v. Hines, 140 N.C. App. 440, 537 S.E.2d 242 (2000) aff’d, 353 N.C. 683, 549 S.E.2d 175 (2001). The fact that the work must meet specific standards and requirements is not enough to find sufficient control. The control must be in the method in which the results were obtained, not in the results themselves. Grouse v. DRB Baseball Mgmt., Inc., 121 N.C. App. 376, 465 S.E.2d 568 (1996).

The term “statutory employer” is not defined in the North Carolina Workers’ Compensation Act. However, North Carolina Courts have applied the term in situations involving general and sub contractors when the sub contractor is the employer but has neglected to cover themselves with workers’ compensation insurance. The chain of liability for making workers’ compensation payments extends from the immediate employer of the injured employee up the chain to the first responsible contractor who has the ability to pay. N.C. Gen. Stat. § 97–19. Spivey v. Wright’s Roofing, 737 S.E.2d 745 (N.C. Ct. App. 2013).

The statutory employer statute (N.C. Gen. Stat. 97-19) is an exception to the general definitions of “employment” and “employee” set forth in the Workers’ Compensation Act, and provides that a principal contractor, intermediate contractor, or subcontractor may be held liable as a “statutory employer” where two conditions are met: (1) the injured employee must be working for a subcontractor doing work which has been contracted to it by a principal contractor, and (2) the subcontractor does not have workers’ compensation insurance coverage covering the injured employee. Putman v. Alexander, 194 N.C. App. 578, 670 S.E.2d 610 (2009).[1]

As long as the general contractor obtains a certificate of insurance (COI) from the subcontractor, the general contractor will not be liable for workers’ compensation benefits for injured employees of the subcontractor. N.C. Gen. Stat. § 97–19. In Patterson v. Markham & Associates, 123 N.C. App. 448, 474 S.E.2d 400 (1996), a general contractor was not a statutory employer where the plaintiff worked for a subcontractor on a job which was contracted to the subcontractor by the general contractor because when work under the contract began, the subcontractor’s insurance agent sent the general contractor a certificate of insurance indicating coverage for the subcontractor for one year; and when the subcontractor’s insurance was canceled for its failure to pay its premium, the general contractor was not notified of the cancellation.

[1] In Masood v. Erwin Oil Co., 181 N.C. App. 424, 639 S.E.2d 118 (2007), a petroleum wholesaler had a contractor/subcontractor relationship with its gas station operator, who did not have workers’ compensation insurance, and thus the wholesaler was the gas station cashier’s statutory employer for purposes of the cashier’s workers’ compensation claim.

The Washington Post recently published a story about an emerging trend among senior citizens: worker camps. As life expectancy continues to rise and social security benefits stagnate, more and more would-be retirees find they lack the retirement savings to provide for themselves and their lifestyles. The number of senior workers in the United States has more than doubled since the year 2000, and now nearly 20% of Americans over 65 are working. Contributing factors for this phenomenon are the 2008 recession, a shift from pensions to worker-based retirement programs, such as 401(k)’s, and rising costs of healthcare.

“Workampers” is the appellation for a growing group of seniors who have adopted an itinerant lifestyle of traveling the nation’s highways, often in an RV (hence the nickname), driving state to state looking for seasonal employment. The jobs are typically low-paying and devoid of benefits but are increasingly necessary to an expanding class of citizens who simply do not have the retirement savings to provide for themselves in their final years.

As the work camp movement spreads, it can be expected to generate confusion in states’ workers’ compensation programs. “Workampers” routinely travel between states seeking employment, leading to inevitable disputes over which state’s work comp program has jurisdiction over a particular claim. Beyond that, the seasonal nature of the employment will almost surely complicate calculation of a given worker’s average weekly wage and, by extension, the value of his or her weekly benefits. Finally, as employees age, they naturally become more susceptible to workplace illness and injury, which means that as more seniors opt to postpone retirement—by choice or out of necessity—a rise in overall work comp claims can also be anticipated. 

Well-placed sources inform us that the powers that be within the Division have begun focusing on the number of dispute proceedings held each month, supposedly as a means of gauging the effectiveness and productivity of the Hearings section. The higher the number of proceedings held, the reasoning goes, the greater the number of disputes that have been resolved. 

However, as usual, a strict quantitative analysis (i.e., pure statistics and number-crunching) tells only part of the story and provides skewed results. In accumulating their data, the DWC makes no differentiation between Contested Case Hearings that result in a Decision & Order and those that are merely convened and continued at the outset. In other words, a hearing that continues at the scheduled start time is considered a “proceeding held,” while a hearing for which a motion to continue is granted before the proceeding will not count toward the tally.

There are two obvious results of this practice. First, the DWC can artificially inflate its total number of proceedings held per month by urging judges to postpone ruling on continuance requests until the day of the hearing. Second, the costs associated with preparing for and traveling to a Contested Case Hearing, only to find that is has been continued at the last minute, are passed along to system participants.

The Texas hiring freeze for state workers lapsed on September 1, 2017, and since then the Division of Workers’ Compensation has hired three new Administrative Law Judges. 

Ana Kirk Thornton will soon begin presiding over disputes in the new San Antonio Field Office.  Ms. Thornton is a graduate of Trinity University and The University of Texas School of Law. She has been licensed since 1991 and most recently worked with another state agency, the Texas Workforce Commission. 

Christopher Maisel is another graduate of The University of Texas School of Law but has recently returned to Texas after practicing in California. He brings with him decades of experience in bankruptcy, mergers & acquisitions, and insurance law. Mr. Maisel will become one of two new ALJ’s in the Houston West Field Office.

The other new Houston judge is Eric Robertson, a Baton Rouge native but longtime Texas resident. A degree in Business Administration brought him to Texas Wesleyan University School of Law, and he has been licensed in Texas since 2014. Mr. Robertson first practiced criminal law before moving into the realm of workers’ compensation in January 2017 at the firm of Bailey & Galyen. 

In its October 5, 2017 edition, the New York Times reported on an alarming development in some Japanese workplaces: “karoshi,” which translates to “death from overwork.” First emerging in the production boom of the 1980’s,karoshi initially affected blue-collar workers disproportionately, as employees in manufacturing industries pushed themselves to dangerous levels of fatigue by way of inordinately high overtime hours per month. Over the past three decades, the tendency to forego sleep, work on weekends, and bypass holiday leave in an effort to clock ever higher numbers of overtime hours has seeped into the white collar realm.

The reporting was based around the recent disclosure of the 2013 death of Miwa Sado, a journalist at NHK, Japan’s premiere broadcasting company. Sado clocked 159 hours of overtime in one month before passing away of congestive heart failure at age 31. Following a government investigation, it was determined that Ms. Sado’s death was directly attributable to her work schedule, which produced persistent fatigue and chronic sleep deprivation.

For many Japanese workers, especially those employed by prestigious companies, exhaustion by way of overwork is a sign of one’s commitment to an employer. Karoshi can sometimes require employees to continue working after the end of shift by entertaining business clients well into the evening. Workers under the age of 35 were found to be particularly susceptible to the alarming phenomenon, according to the Japan Institute for Labor Policy and Training.  

The new prosecution unit of the Texas Department of Insurance, Division of Workers’ Compensation, has obtained indictments against a Massachusetts company and three individuals for organized crime activity pertaining to workers’ compensation fraud. The indicted defendants are EME International Inc. and Christine Caldwell, both of Marblehead, Massachusetts, and Enrique Colon and Marcos Ricoy of Deer Park, Texas and Rancho Viejo, Texas, respectively. 

Charges include submitting false workers’ compensation health care claims to Texas Mutual Insurance Company pertaining to functional capacity evaluations of injured workers. The defendants are alleged to have submitted false medical claims for more time than the services required in order to defraud the insurance company in an amount between $20,000 and $100,000.

The indictment is the first step in the trial process. We will keep you posted as the cases develop.

It seems that every month we have something to relate about the ongoing national opioid epidemic, and, unfortunately, this month is no different. Recent reporting from Bloomberg news indicates that, while opioid dependence is a growing cause of unemployment, about two-thirds of those who abuse pain relievers are still employed. The impact of such a scenario should be obvious: opiate use in the workplace lowers attentiveness and increases the risk of injury to the affected worker and his or her colleagues. Additionally, according to Castlight Health, a San Francisco-based healthcare information company, the cost of healthcare expenses posed to an employer by an opioid-dependent worker is roughly twice as much as that of clean employee. 

Drug-testing among employers is on the rise, but synthetic opioids such as oxycodone are frequently omitted from testing, perhaps because of their basis in seemingly legitimate prescriptions from medical providers. 

The crisis was addressed at the 2017 Risk Management Summit in Las Vegas. Greater employer involvement, specifically through the use of nurse case managers, was touted as a particularly effective tool in preventing opioid dependence among injured employees, returning them to work quickly, and maintaining productivity upon their return. When a physician has prescribed narcotics, a nurse case manager can engage the prescribing physician in discussions about how best to wean an injured employee off the medication, stopping dependence before it begins.