On December 11, 2020, the Alabama Supreme Court rendered a decision finding that collateral estoppel does not violate the constitutional right to a trial by jury.  This finding was based on a review of a Motion for Summary Judgment Order granted in favor of the employer by the Circuit Court of Shelby County, Alabama, in a retaliatory discharge case.

In that case, the employee was terminated for misconduct according to the employer.  The termination occurred after a worker’s compensation claim had been filed.  The employee ultimately filed for unemployment, and the city defended the unemployment claim, asserting that he was not due unemployment because he was terminated for misconduct.  The record clearly showed that the employee and employer proceeded to a hearing with both parties presenting evidence and securing testimony of witnesses before an administrative officer.  The initial ruling by the unemployment board was that the employee was terminated for misconduct.  The employee appealed this decision on multiple levels, but he ultimately chose not to move forward and appeal it all the way to the Circuit Court.  The employee instead amended his complaint in his workers’ compensation case to add a retaliatory discharge claim shortly before the final decision was issued by the unemployment board.  The employer filed a Motion for Summary Judgment which was granted but then set aside due to service issues.  The Summary Judgment was reinstated and ultimately denied by the court, which found that it was not ripe for a decision at that time.  Discovery in that case went forward, and the employer ultimately renewed its Motion for Summary Judgment. The employee filed its opposition arguing that he did not have adequate opportunity to litigate the issue and that applying collateral estoppel would violate his constitutional right to a trial by jury. 

The Supreme Court held that, for collateral estoppel to apply in these types of cases, the same parties must be identified in both actions. In addition, the parties must have adequate opportunity to litigate the issues upon which collateral estoppel is being based. The Supreme Court ultimately determined that the employee had adequate opportunity to argue that he was wrongfully terminated in his unemployment case.  This included the chance to submit evidence as well as call witnesses to testify.  Even though the employee did not take advantage of his opportunity to litigate the issue, collateral estoppel could still be applied.  Therefore, the decision at the unemployment hearing that he was terminated for misconduct prevented the employee from now arguing he was terminated solely because he filed a workers’ compensation claim.

The Supreme Court then addressed the employee’s argument that applying collateral estoppel in cases where the prior decision was administrative only and not decided by a jury was a violation of his constitutional rights.  The Alabama Supreme Court stated that while it had not addressed the issue, multiple other courts had, including the United States Supreme Court.  The Alabama Supreme Court cited cases which held that courts have not hesitated to apply res judicata when an administrative agency was acting in a judicial capacity to resolve disputed issues of fact involving the same parties. B&B Hardware, Inc. v. Hargis Industries, Inc., 575 U.S. 138, 150, (2015) in which the United States Supreme Court stated, “The Court has already held that the right to a jury trial does not negate the issue-preclusive effect of a judgment, even if the judgment was entered by juryless tribunal”.  Id. The Alabama Supreme Court stated that the United States Supreme Court held that the 7th Amendment does not prevent competent tribunals from issuing judgments that have a preclusive effect.  Therefore, the Alabama Supreme Court held that if the administrative process in question had the characteristic of adjudication, there would be no reason why the administrative proceeding should not have the same preclusive effect that a court decision would have.  The Court noted that the reasoning behind this was that the administrative proceeding that the employee was involved in had the essential elements of adjudication which included adequate notice to persons who were bound by the adjudication and the right on the behalf of the party to present evidence and legal arguments to support their contentions and/or to rebut evidence and argument made by the opposing party.  As a result, the Alabama Supreme Court ultimately determined that collateral estoppel would still apply and would not violate the constitutional right to trial by jury in cases where an employer seeks to have the decision in an unemployment hearing preclude a retaliatory discharge claim under the Workers’ Compensation Act. 

MY TWO CENTS

As we have noted in prior blog posts, decisions in unemployment hearings can be beneficial in a workers’ compensation case that involves a retaliatory discharge claim.  For this reason, we recommend to all employers that they secure legal representation and fully participate in the unemployment hearing to secure a favorable decision.

ABOUT THE AUTHOR

The article was written by Joshua G. Holden (with contributions from all attorneys with Fish, Nelson & Holden, LLC), Esq. a Member of Fish, Nelson & Holden, LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation and related liability matters. Mr. Holden is AV rated by Martindale-Hubbell, which is the highest rating an attorney can receive. Holden and his firm are members of The National Workers’ Compensation Defense Network (NWCDN). The NWCDN is a national and Canadian network of reputable law firms organized to provide employers and insurers access to the highest quality representation in workers’ compensation and related employer liability fields

Get Keen on the Vaccine: Considerations for Employers Considering a Mandatory COVID-19 Vaccine - Webinar 

12/17/20 - 12:00 p.m. EST 

Thu, Dec 17, 2020 12:00 PM - 1:00 PM EST 

With the release of a new COVID-19 vaccine comes hopes of a return to "normalcy" and new concerns for how to protect your workforce. Can you make vaccines mandatory for your employees? If so, what considerations must you take into account as you craft your policies? In this webinar, Spilman attorneys Carrie Grundmann, Megan Mullins, and Eric Kinder will walk you through how to manage this transition while ensuring you stay compliant with existing labor and employment laws. 

https://register.gotowebinar.com/register/8129411155170322700 

By Carrie H. Grundmann 

336.631.1051 

cgrundmann@spilmanlaw.com

Coronavirus Considerations and Hot Topics Heading into 2021 

By Carrie H. Grundmann 

336.631.1051 

cgrundmann@spilmanlaw.com 

When much of the country locked down in March 2020, very few expected us to still be dealing with this pandemic in December 2020. And yet, here we are. In fact, coronavirus cases are rising sharply throughout much of the country, and the prospect of additional shutdowns is growing more probable by the day. Not all news is bad. Pfizer, Moderna and AstraZeneca have produced what appear to be viable vaccines that could be available as early as this month. As we look to 2021, here are a few issues that employers should have on their radar. 

Expiration of Paid Leave Under FFCRA 

Since April 2020, many employers have been providing up to two weeks of paid sick leave and 10 weeks of paid family medical leave to employees impacted by the coronavirus pursuant to the Families First Coronavirus Response Act ("FFCRA"). Barring an agreement being reached in Congress to extend these leave laws (which seems unlikely between now and the inauguration), these paid leave provisions -- and the employer tax credits associated with providing the leave -- expire on December 31, 2020. 

Employers should take steps now to determine how they will handle absences related to COVID-19 after December 31, 2020. Even where an employer chooses to discontinue paid leave, they should still provide flexibility, including considering telework, to employees who must be absent because of COVID-19. 

Once you have determined how you will handle COVID-19 absences, communicate with your workforce. All employees should be provided advance notice that the FFCRA expires at the end of December as well as how COVID-19-related leave will be handled after that. If there are employees who will be out on FFCRA-related leave as of December 31, 2020, you should clearly communicate with them how their paid leave will be impacted, if at all. 

Mandatory Coronavirus Vaccinations for the Workplace 

With viable vaccines on the horizon, many employers want to know: Can they require employees to get vaccinated? 

The answer is yes, but with exceptions. 

In 2009, the EEOC issued guidance on this very issue, but in the context of the flu shot vis-à-vis H1N1. As part of its 2020 guidance to employers, the EEOC reissued its 2009 guidance, thus, it is clear the EEOC would recognize certain exceptions to any mandatory vaccination requirement. According to the EEOC, employees may be exempt from an employer's mandatory vaccination requirement under one of the following circumstances: 

The Americans with Disabilities Act may exempt an individual who has a disability that prevents them from getting the vaccination; or 

Title VII of the Civil Rights Act requires employers to grant an accommodation to an employee where his/her sincerely held religious belief prevents them from receiving a vaccination. 

Employers faced with either a disability or a religious exemption should engage in an interactive discussion with the employee to determine what accommodation might be granted. In many cases, the appropriate accommodation will be an exemption from the vaccination, perhaps coupled with other safeguards, such as mandatory mask usage even when other employees are no longer required to wear theirs. Regardless, employers remain free to encourage (rather than require) and/or facilitate employees receiving the vaccination. While there is no requirement that employers pay for these vaccines, employers may find the convenience of providing vaccinations to its workforce to be worth the cost in light of increased productivity, much like some employers have long provided free flu vaccinations. 

The situation with the coronavirus remains in flux and likely will remain so for the near future. Employers who have questions about handling coronavirus issues should contact their legal counsel, or the Spilman COVID-19 Task Force. 

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

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

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

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

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

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

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

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

Membership in the AWCO offers several professional and social opportunities annually to interact with other workers' compensation professionals. Usually, the highlight of the year is the annual AWCO Spring Conference where its members come together for two days of education, fun, and fellowship.  This year, the pandemic forced the conference to be postponed to November, but it was held and held in person (and virtually).  Hopefully, things will improve, and the conference can, again, be held in person in 2021.  Membership is only $75 if paid prior to February 28, 2021.  After that, the annual fee goes up to $150.  Once you are an AWCO member, the Annual Conference is free.  You pay nothing, nada, zero, zilch to register and attend. You can complete your membership registration at www.awcotoday.com/membership.  We hope to see you at the conference and in person in 2021!

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About the Author

This blog submission was prepared by Mike Fish, an attorney with Fish Nelson & Holden, LLC, a law firm dedicated to representing self-insured employers, insurance carriers, and third party administrators in all matters related to workers’ compensation. Fish Nelson & Holden is a member of the National Workers’ Compensation Defense Network. If you have any questions about this submission or Alabama workers’ compensation in general, please contact Fish by e-mailing him at mfish@fishnelson.com or by calling him directly at 205-332-1448.

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

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

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

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

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

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

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

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

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

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

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

November 2020

New Denial Form for Tennessee Workers’ Compensation Claims

Under prior regulations, Tennessee maintained two different forms for the denial of claims:

-  The C-23 Notice of Denial form was used when a claim was denied from the outset of the claim, with no benefits having been paid; and 

- The C-27 Notice of Controversy form was used when a claim was denied during the pendency of the claim, after some benefits had been paid.  

However, the C-27 Notice of Controversy form has now been eliminated. For all denials going forward, the adjusting entity should file the revised C-23 Notice of Denial form. This revised form will encompass denials for any claim, regardless of whether benefits have been paid. Likewise, this revised form will encompass partial denials, where only a particular aspect of the claim is being denied.

For any questions, or for a copy of the revised C-23 form, please contact:

Fredrick R. Baker, Member
Wimberly Lawson Wright Daves & Jones, PLLC
1420 Neal Street, Suite 201
P.O. Box 655
Cookeville, TN 38503-0655
Phone: 931-372-9123
Fax:  931-372-9181
fbaker@wimberlylawson.com
www.wimberlylawson.com