Covid by the Numbers 

Death on the Job*

DWC announced the release of its 2020 annual report on fatal work injuries on December 16, 2021. Here are some of the key takeaways. There were a total of 469 fatal work injuries in Texas in 2020 which is a decrease of 139 fatalities, or 23%, from 2019. The incident rate of fatalities in Texas was 3.9 per 100,000 full-time employees compared to 3.4 nationwide.  The construction industry had the highest number of fatalities with 127 incidents and the occupation with the highest number of fatalities was driver/sales workers and truck drivers with 101 incidents. Here is a breakdown of the 2020 fatalities by event or exposure:   



Also noteworthy, 93% of the total fatalities were men and 47% were Hispanic employees.
  
You can view the complete report here.  

*Death on the Job is a 1991 documentary film about work-related fatalities.  The AFL-CIO also publishes an annual report by the same name.
 

Let’s Talk About . . . Workers’ Comp

Photo of injured employee malingering (DWC’s glossary does not include pictures but it may be something to consider for future editions).
    
Please let us know if you think of any alternate definitions for DWC’s workers’ compensation terms or any other terms that should be included.

Copyright 2021, Stone Loughlin & Swanson, LLP

H. Douglas Jones and Margo J. Menefee, JSB Attorneys, PLLC

So you’ve settled a workers compensation claim on a full and final basis with all waivers including reopening rights. Congratulations, now you can close that file and move on to the next. But wait, what if the employee dies after the settlement and the death is attributable to the work injury?

In Kentucky when an employee dies due to a work injury or occupational illness, the employee’s surviving spouse and dependents are entitled to “death benefits” per KRS 342.750. The weekly benefits payable to all beneficiaries in case of death can equate to as much as 75 percent of the average weekly wage of the state (current max is $688.34 weekly for injuries in 2021). Continued payment of those weekly benefits can continue until the date the deceased indemnity benefits would have ended per KRS 342.730 (age 70 or 4 years after injury, whichever occurs last).

In addition to the above weekly benefits, if the death occurs within four years of the date of injury, the deceased’s estate is entitled to a lump sum payment (currently $90,150.18 for injuries in 2021).

Death benefits can be quite the contingent liability, yet they are rarely discussed or analyzed as part of the settlement of a workers’ compensation claim. That’s because when we think of death benefits, we usually think of some catastrophic accident that has caused the death of the employee before that employee is able to adjudicate his/her own claim. The estate gets the lump sum payment, and the surviving spouse and dependents get weekly benefits as described above.

When settling a workers’ compensation claim with an injured worker, the parties usually don’t consider a possible future death relating to the work injury. However, what happens if a death occurs several years after the accident and after settlement of the underlying claim?

In the Supreme Court of Kentucky case Family Dollar v. Baytos, 525 S.W.3d 65 (Ky. 2017), the employee tore his aortic artery at work. He entered into a “full and final” settlement of all claims and died a year later as a result of the torn artery. His wife brought a claim for death benefits despite the prior settlement. The court affirmed the death benefit award, holding that death benefits are not derivative of the injured employee’s claim and therefore were not covered under the prior “full and final” settlement of her husband’s claim. Acknowledging that this interpretation of KRS 342.750 doubled the employers’ exposure, the court stated it was bound by the text of the statute.

KRS 342.750 creates a separate cause of action for surviving spouses and dependents when an injured worker dies as a result of a work injury, which results in a lingering contingent liability even after a claim is settled or paid in full. Whether the claimant can waive the rights of estates and death benefit recipients as part of a full and final settlement has not been resolved, but it is worth discussing death benefits as part of the settlement. We have included such waivers, along with additional consideration to the spouse as part of full and final settlements and would recommend exploring same when settling claims -- especially in high value and serious injury cases.

2021 has been a year of contrast in comparison to its predecessor.  Our Board did continue with limited and restricted business at the beginning of 2021 and as we all adjusted to the use of “zoom” for depositions and hearings, court events and proceedings again gained some badly needed momentum.  At present, in-person hearings have been reinstated with some continued restrictions and Zoom hearings and mediations have continued to play major roles in the handling of caseloads.  To their credit, the Georgia SBWC has done an admirable job in maintaining vital safety standards while remaining open.  Stunningly, claims between 2019 and 2020 were down only 3%, which is evidence of the efforts expended by all involved.  As of 2021, our new Chairmen Ben Vinson, reported that as of 2021, legal proceedings with hearings, mediations and PMT calls are all up over 30% and that there are no case backlogs to report internally.  Certainly, we expect for that trend to continue as we hopefully progress to a status quo similar to 2019.

              From a legislative and revised Board Rule changes perspective, there is nothing to report.  Although some proposals were reported, no new legislation emerged from the 2021 session that would impact our 34-9 statutes.  Board Rule changes were limited to revisions to very nominal and minimal issues that require no further comment here.  In sum, all smooth sailing to report on the legal front.

              2021 has also brought about little in the way of reported caselaw of interest.  In Baxter v. Tracie McCormick, 2021 WL 2701286 (July 1, 2021), the Georgia Court of Appeals provided further guidance on the Cap on Dependency benefits as referenced in O.C.G.A. 34-9-265.  In Baxter, the insurer suspended benefits due to reaching the cap of $150,000.00 in payout.  At the time of death, the deceased left a surviving spouse but no other minor children or other dependents.  Baxter argued that her mother-in-law was a partial dependent and that this status should invalidate the cap in that regard.  The Court of Appeals did not agree, finding that the mother-in-law was a partial dependent and could only receive dependency benefits if there were no persons wholly dependent.  Of course, this finding further confirmed the long-standing rule that partial dependents may only recover in the absence of those that are wholly dependent.

              In Sunbelt Plastic Extrusions Inc. et al. v. Paguia, A21A0867, Court of Appeals of Georgia (August 19, 2021), further guidance on the application of the change in condition two-year statute of limitations was provided.  In Sunbelt, the Claimant was paid TTD through November 29, 201 and filed a WC 14/Request for Catastrophic Designation on November 20, 2018.  The employer asserted a 34-9-104 Statute of limitations defense in that the last payment of TTD was “actually made” on November 15, 2016 and that the WC 14 was therefore filed after two years from that date.  This issue had been previously addressed by the Court of Appeals in finding that the critical date to be determined was when the last payment was ‘mailed’ to the recipient.  Unfortunately for the insurer, the evidence provided through adjuster’s testimony was not certain enough to prove by a preponderance of the evidence that the last payment was “actually made” on November 15, 2016.  It was the adjusters opinion that this was the date of mailing but further confirmed to lacking certainty of that fact.   Moreover, in denying the application of the Statute of Limitations, the Court of Appeals further affirmed the Board’s finding that the underlying claim was, in fact, Catastrophic.  The lesson for employers and insurers is to fully document the date that TTD payments are “actually made” with as much certainty as possible.

History of Board Application of Change of Condition

In its decision, the Full Board recited its consistency over the years in deciding the timeliness of Applications to reopen claims. Indeed, the Board’s enabling statute, Ind. Code § 22-3-1-3, grants it the ongoing power and jurisdiction to modify or change awards – as long as an Application for same is otherwise timely filed. In both Fitzgerald v. U.S. Steel, 892 N.E.2d 659 (Ind. Ct. App. 2008), and Krause v. IUPUI, 866 N.E.2d 846 (Ind. Ct. App. 2007), Indiana Courts have upheld the ongoing jurisdiction of the Board over previous awards. As the Court noted in Krause, it upheld the Board’s allowance of an Application within two years of the last day for which compensation was paid in reliance on the Board’s interpretation of the statute it administers and “in light of its expertise.”

As the Board award noted, to find otherwise would result in an inhumane interpretation of the principle on which the Indiana Act, and similar laws nationally, were enacted. If not for the ongoing jurisdiction of the board under Ind. Code § 22-3-3-27, the workers most significantly impacted would be those severely and permanently injured for whom medical treatment and ongoing compensation for disability is routinely provided by statute for a period of years. If the employer’s arguments were adopted, those injured workers would be required to hire counsel and file Applications within two years of the original injury simply to avoid losing employer-provided medical care after two years, even in an otherwise accepted and compensable case. The result would be increased legal costs and litigation expenses to employers and employees alike, along with significantly increased and pointless litigation.

Instructive Guidance

The instructive guidance in these two cases clarifies and assists worker’s compensation attorneys in our ability to provide counsel to our clients and appropriately defend untimely filed cases.

Submitted by:

Diana L. Wann Jackson Kelly PLLC 317-695-0552

diana.wann@jacksonkelly.com 221 NW 5th St.

Evansville, IN 47706

Virginia S. Gautier, Wise Carter Child & Caraway, PA

All settlements of workers’ compensation claims in Mississippi must be submitted to the Mississippi Workers’ Compensation Commission for approval.  Typically, if the claimant is represented by counsel and both the employer/carrier and the claimant mutually agreed to the terms of the settlement, the Commission will approve the settlement, absent unusual circumstances.  However, in the recent case of Himeliz v. Hog Slat, Inc. and Ace American Ins. Co., 322 So. 3d 956 (Miss. Ct. App. 2021), the Commission refused to approve a settlement reached by the represented claimant with the employer/carrier on the grounds that the settlement amount was insufficient to adequately compensate the claimant for his future medical care and was not in the claimant’s best interest.

In Himeliz, the claimant, legally working in the United States on a work visa, “sustained a compensable injury that rendered him a quadriplegic during the course and scope of his employment.”  The injuries resulted in Himeliz’s permanent and total disability, as well as the need for lifetime medical treatment.  He was paid the maximum amount of disability benefits, via a lump sum, to which he was entitled under Mississippi law, but the medical claim remained open.  Thereafter, through a mediation between the parties, Himeliz and his employer reached a structured settlement to close out his future medical.  Through a joint petition, the parties sought approval of the settlement from the Mississippi Workers’ Compensation Commission as required by the procedural rules of the Commission.  When submitted to the Commission, Commissioner Beth Aldridge reviewed the proposed settlement and would not approve it.  The Commission expressed concerns that (1) the life care plan “provided only ‘the best case scenario for [Himeliz]’”; (2) Himeliz’s family would actually be available to provide care for him at all times for the remainder of his life; and (3) the life care plan did not provide for an interpreter for claimant’s life expectancy. 

Following denial of the settlement, counsel for the claimant then sought a review by the full Commission (consisting of three Commissioners), but learned from the Commission’s staff attorney that neither Mississippi statute nor the Commission’s rules allowed for a request for review of a denied settlement by the full Commission.  As a result, “[t]he parties filed a joint emergency petition for review of proposed settlement” which was denied since there were no procedures allowing for such review under Mississippi law.  The claimant then filed an appeal with the Mississippi Court of Appeals on the grounds that he was not afforded a hearing before the full Commission upon the denial and that Commissioner Aldridge’s denial of the settlement was not based upon the substantial evidence, resulting in error.

Upon appeal, Himeliz argued that his settlement should have been approved as he was represented by counsel and determined competent by an independent doctor.  In considering Himeliz’s arguments, the Mississippi Court of Appeals reviewed the rules of the Commission, as well as the statute governing workers’ compensation settlements, noting that

In every case of compromise settlement, the proposed settlement will be explored

and medical reports will be examined to determine if the amount of the proposed

settlement appears fair and reasonable. The Commission or Administrative Judge

shall not approve the settlement if it is: 

a.     not accurately reported,

b.     not completely understood by the claimant, or

c.     not in the best interest of the claimant.

The Commission or Administrative Judge will approve the settlement if:

a.     the underlying facts, terms, and amount of the settlement are accurately

reported,

b.     claimant understands the settlement's import and effect, and

c.     the settlement is in claimant’s best interest. 

See Rule 2.15 of the Rules of the Mississippi Workers’ Compensation Commission.  The Court of Appeals noted that neither Rule 2.15 of the Commission’s rules nor Miss. Code Ann.§ 71-3-29 required a hearing for a settlement presented to the Commission when the claimant is represented.  The Court further noted that Himeliz cited no legal authority for requiring a hearing to review a settlement.  Finding that the “denial of the settlement was based on substantial evidence” and that the Court is required to give the Commission deference upon judicial review due to the Commission’s experience in administrative matters, the Court of Appeals upheld the Commission’s denial of approval of the settlement. 

The Himilez case has made clear that even if both the represented claimant and the employer/carrier agree to the terms of the settlement of the workers’ compensation claim, the Mississippi Workers’ Compensation Commission may deny approval of the settlement if the settlement does not appear to be in the best interest of the injured worker.  Of particular interest was the Court of Appeal’s statement that Himeliz set forth in his Petition to the Commission that the settlement was in his best interest, yet he did not list specific facts to support his assertion.  This statement by the Court is instructive in that settlements presented in the future by the parties in cases with significant injuries such as those sustained by Himeliz, should include facts to support the claimant’s averment that the settlement is in his or her best interest.  To help reduce the likelihood that a settlement will be denied by the Commission, the parties should further consider language barriers faced by the claimant and provide a realistic assessment of future medical costs, taking into account all facts known at the time of settlement.    

By Charity Lawrence and Dill Battle

              The 2021 West Virginia Legislative Session produced a major change for West Virginia workers’ compensation litigation in the West Virginia Appellate Reorganization Act of 2021.  Specifically, Senate Bill 275 was enacted and creates an Intermediate Court of Appeals for West Virginia.  It also eliminates the Workers’ Compensation Office of Judges (“OOJ”) and establishes the West Virginia Workers’ Compensation Board of Review (“BOR”) as the initial reviewing body for objections to decisions made by insurers regarding workers’ compensation claims.

              After June 30, 2022, the OOJ will be eliminated and, effective July 1, 2022, all powers and duties of the OOJ will be transferred to the BOR.  (W. Va. Code § 23-1-1h). After this date, all objections to decisions of the Insurance Commissioner, private carrier, or self-insured employer, must be filed with the BOR instead of the OOJ.  The BOR will have exclusive jurisdiction to review objections to a decision of the Insurance Commissioner, private carrier, or self-insured employer.  (W. Va. Code § 23-5-8b).  Instead of the 3 member-panel currently comprising the BOR, the BOR will consist of 5 members appointed by the Governor.  (W. Va. Code § 23-5-11a).

              The OOJ will officially terminate on or before October 1, 2022.  (W. Va. Code § 23-5-8a).  On or before September 30, 2022, the OOJ must issue a final decision or otherwise dispose of each matter pending before the OOJ.  (W. Va. Code § 23-5-8b(b)).  If a final decision on any pending matter before the OOJ has not been entered at the time of the OOJ’s termination, that matter will be transferred to the BOR.  (W. Va. Code § 23-5-8a).  For transferred matters, the BOR will adopt any existing records of proceedings from the OOJ, conduct further proceedings, and collect evidence necessary to issue a final decision.  (W. Va. Code § 23-5-8b(b)).  The BOR must review and decide all remaining appeals filed with the BOR regarding OOJ decisions issued prior to June 30, 2022.  (W. Va. Code § 23-5-8b(e)).

              The chair of the BOR shall assign, on a rotating basis, a member of the BOR to preside over the review process and issue a decision in each objection (formerly referred to as a “protest”) properly filed with the BOR.  (W. Va. Code § 23-5-9a).  That board member may delegate his or her duties to a hearing examiner employed by the BOR, but any order or decision of the BOR (except time frame orders, continuance orders, etc.) must be issued and signed by the BOR member assigned to the objection.  (W. Va. Code § 23-5-9a).  Hearing examiners must be persons admitted to the practice of law in West Virginia with at least 4 years of experience as an attorney.  (W. Va. Code § 23-5-8a).  The chair of the BOR will supervise hearing examiners.  (W. Va. Code § 23-5-8a).  If a hearing examiner is assigned to review an objection, the hearing examiner will submit the designated record at the end of the review process to the member of the BOR who was assigned the objection, along with the hearing examiner’s recommendation of a decision affirming, reversing, or modifying the action protested.  (W. Va. Code §23-5-9a).  The board member will render a decision with findings of fact and conclusions of law.  (W. Va. Code § 23-5-9a). 

              An appeal from a BOR decision may be filed with the West Virginia Intermediate Court of Appels within 30 days of receipt of notice of the BOR decision or within 60 days of the date of the decision, regardless of notice.  (W. Va. Code § 23-5-10a).  Any employer, employee, claimant, dependent, or the Insurance Commissioner, private insurer, or self-insured employer aggrieved by a BOR decision has a right to appeal to the Intermediate Court by filing a written notice of appeal stating the grounds for review and whether oral argument is requested.  (W. Va. Code § 23-5-12a).  A filing fee of $200 may be charged to the petitioner.  (W. Va. Code § 51-11-7).  Upon appeal to the Intermediate Court, the Workers’ Compensation BOR will then send a transcript of BOR proceedings to the Intermediate Court, including a brief recital of the proceedings in the matter and each order or decision entered.  (W. Va. Code § 23-5-12a).

              The WV Intermediate Court of Appeals will have exclusive jurisdiction of:

·       decisions or orders issued by the OOJ after June 30, 2022 and prior to the OOJ’s termination, and

·       final orders or decisions issued by the BOR after June 30, 2022.

(W. Va. Code § 23-1-1h).  The Intermediate Court may affirm, reverse, modify, or supplement the decision of the BOR.  (W. Va. Code § 23-5-12a).  It may also remand the case for further proceedings.  (W. Va. Code § 23-5-12a).  A decision of the BOR will be reversed, vacated or modified if the substantial rights of the petitioner have been prejudiced because the BOR’s findings are:

·       in violation of statutory provisions;

·       in excess of the statutory authority or jurisdiction of the BOR;

·       made upon unlawful procedures;

·       affected by other error of law;

·       clearly wrong in view of the reliable, probative, and substantial evidence on the whole record; or

·       arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.

(W. Va. Code § 23-5-12a).  An appeal of the Intermediate Court’s final decision may be sought by petition to the Supreme Court of Appeals of West Virginia.  (W. Va. Code § 29A-6-1).  The Supreme Court has discretion to grant or deny the petition for appeal of an Intermediate Court decision.  (W. Va. Code § 51-11-10).

              The Intermediate Court will be comprised of a three-judge panel.  (W. Va. Code § 51-11-3). Initially, the judges will be appointed by the Governor, with the advice and consent of the Senate.  Then, after the initial appointment by the Governor, the judges will be elected.  (W. Va. Code § 3-1-16, § 3-5-6e, and § 51-11-6).  The judges of the Intermediate Court must be members in good standing of the West Virginia State Bar and admitted to practice law in West Virginia for at least 10 years prior to their appointment or election, and also be residents of West Virginia for 5 years prior to appointment or election.  (W. Va. Code § 51-11-3). 

              This new legislation impacts workers’ compensation in several ways.  Eliminating the OOJ potentially eliminates experienced administrative law judges with significant knowledge (15-25 years) in workers’ compensation jurisprudence, and the practice in West Virginia.  New practice and procedure rules before the new BOR provides uncertainty of what parts of the OOJ's rules of practice and procedure will be adopted. The BOR’s ability to hire hearing examiners with only 4 years of legal experience and without workers’ compensation litigation experience may be detrimental to decisions affecting claimants, employers and insurers. However, the hearing examiners’ recommendations are not final decisions and must be reviewed by the BOR members, and the BOR members must issue the final decisions.  The hearing examiners will also be supervised by the BOR chair.  Hopefully, this will prevent the issuance of uneducated decisions.  Additionally, the new implementation of a $200 filing fee for appeals to the Intermediate Court will likely discourage claimants from appealing decisions of the Board of Review, which will decrease the overall number of workers’ compensation appeals.  SB 275 passed April 1, 2021, and is effective 90 days from passage (June 30, 2021).  The bill was sent to Governor Jim Justice on April 5, 2021, and is expected to be signed.

By:

Charity Lawrence

304-720-4056

clawrence@spilmanlaw.com

Dill Battle

304-340-3823

dbattle@spilmanlaw.com

Spilman Thomas & Battle, PLLC

300 Kanawha Blvd, E.

Charleston, WV 25301

Spilman Thomas & Battle, PLLC is the West Virginia member of the National Workers' Compensation Defense Network. The NWCDN is a nationwide network of defense firms specializing in protecting employers and carriers in workers' compensation claims and regulatory matters. For more information, visit www.nwcdn.com.

Effective October 19, 2021, the Tennessee Bureau of Workers’ Compensation adopted new regulations addressing the use of telehealth in the context of workers’ compensation claims. The purpose of the rules is to provide Tennessee workers’ compensation claimants with an option to utilize telehealth while treating for their injuries.

Under the regulations, telehealth may only be provided with the voluntary consent and agreement of the injured worker and the willingness of the healthcare provider. However, telehealth is not permitted for conditions which require an in-person physical examination. The regulations provide several examples of such conditions, including chest pain, significant burns, deformity of an extremity or suspicion of a fracture, and any bleeding that has not already stopped by direct pressure. However, this list is not exhaustive.

The treatment provided via telehealth is subject to utilization review and must follow all Tennessee standards of medical practice. The use of telehealth does not change any of the requirements for causation, date of maximum medical improvement, or permanent impairment ratings.

Employers are still subject to the same requirement to provide a medical panel to injured workers, and the panel must still include at least three medical providers who are qualified, willing, and able to timely treat the worker’s injury in person, but the panel doctors may also provide their services via telehealth with the employee’s consent. Before receiving medical benefits in the form of telehealth, the injured worker must be given an opportunity to receive in-person treatment. An injured worker may refuse a telehealth encounter at the time of the panel choice without affecting future care to which the injured worker is entitled.

The newly revised C-42 Medical Panel form also includes a space for an optional fourth choice of physician, which is a telehealth-only provider. However, this does not alleviate the employer’s obligation to still list three medical providers who can see the employee in person.

At any point during the initial visit or follow-up medical visits, the injured worker may refuse telehealth and request in-person care. If the authorized treating physician who is chosen from the medical panel declines to see the injured worker in person, the worker must select a new authorized treating physician from the names remaining on the original panel. The subsequent choice will become the new authorized treating physician.

The Tennessee Medical Fee Schedule applies to providers of telehealth services, and coding and billing regulations must follow the Medicare guidelines in effect for the date of service with no geographic qualifier.

These new regulations will have several practical effects on the way that employers, carriers, and third-party administrators handle their Tennessee claims, including:

-          Medical panels must now be provided on the newly revised medical panel form C-42, which may be found at https://www.tn.gov/content/dam/tn/workforce/documents/Forms/c42.pdf.

-       Regardless of these new telehealth rules, the medical panel still must include three or more doctors, surgeons, chiropractors, or specialty practice groups who are located in the employee’s community, and who are able to treat the employee in person.

-        When completing the medical panel form C-42 with the three medical providers who can see the injured worker in person, the medical panel form also requires that the employer indicate whether those providers also have a telehealth option, and if so, document that on the panel.

-       In addition to the three “in-person” medical providers, employers now have the option of including a fourth option, which is a telehealth-only option.  However, note that there are several types of medical conditions that cannot be treated by telehealth, and that the injured worker always retains the right to refuse the telehealth option.

For any questions, 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

The “statutory employee doctrine was included in the initial 1936 draft of the Workers’ Compensation Act and is now found in S.C. Code Ann. § 42-1-400 and -410.  For decades, the appellate Courts have relied upon the following three factor test to determine a claimant’s statutory employment status:

1.     Is the worker’s activity an important part of the owner’s business;

2.     Is the worker’s activity a necessary, essential or integral part of the owner’s business; and

3.     Has the identical activity been performed by the employees of the principal owner.

Glass v. Dow Chemical Co., 325 S.C. 198, 482 S.E.2d 49 (1997).  However, in an August 2021 decision by the South Carolina Supreme Court in Keene v. CNA Holdings, LLC, the Supreme Court seemingly abandoned these three tests, and replaced them with a much more employer-centric approach. Keene v. CNA Holdings, LLC, 2021 WL 3521085 (SC 2021).

In Keene, the estate of a deceased worker brought a survival and wrongful death action against the manufacturer (CNA Holdings) that hired the claimant’s employer (Daniel Construction Co.), a sophisticated international construction company, based on the claimant’s asbestos exposure while maintaining and repairing pumps, valves, and other equipment in the piping network of a CNA plant.  The Circuit Court and Court of Appeals found CNA was not a statutory employer of deceased claimant and therefore found the claimant’s estate was not limited to the exclusive remedy of the Workers’ Compensation Act.  In affirming the lower courts’ decisions, the South Caroline Supreme Court acknowledged a shift from the previous three tests of “importance,” “necessity,” and “identical activity,” and recognized the importance of “corporate decision making” in allowing “owners” to contract out work when such outsourcing is economically beneficial, instead of holding the owner accountable regardless of the purpose. 

In redefining what is considered part of an owner’s trade, business, or occupation for statutory employment issues, the Court in Keene stated,

[W]hat is or is not part of the owner’s business is a question of business judgment, not law.  If a business manager reasonably believes her workforce is not equipped to handle a certain job, or the financial or other business interests of her company are served by outsourcing the work, and if the decision to do so is not driven by a desire to avoid the cost of insuring workers, then the business manager has legitimately defined the scope of her company’s business to not include that particular work.

Under this new rule, the Court found the deceased claimant was not a statutory employee of CNA Holdings, LLC, because: (1) only employees with the claimant’s company performed maintenance and repairs on the equipment in the plant; (2) none of the CNA Holdings employees performed maintenance and repair work; (3) CNA Holdings contracted with claimant’s company because it was a “qualified, capable contractor that can do the expert work that CNA needed done;” and (4) there was no evidence presented that proved that CNA’s corporate purpose included equipment maintenance.”  Id. at 7.

The Court further concluded that this decision did not run afoul of the original purpose of the statutory employee doctrine because the deceased claimant presumably received Workers’ Compensation benefits through his employer (Daniel Construction) since the contract between CNA Holdings and Daniel Construction required Daniel to provided workers’ compensation benefits to its workers.  Id.  The Court found that “it is not the role of the court to second-guess a legitimate business decision whose effect – far from the improper purposes the statutory employee doctrine was designed to prevent – was actually to guarantee that the workers affected by the decision would be insured against work-related injuries.  Id.

This Opinion of the Court, for which a Petition for Reconsideration is pending, could create a more subjective “business judgment” analysis as to the intent of the business owner as opposed to the traditional objective analysis of the actual activities of the business.  Any shift in how these cases are adjudicated will have far-reaching consequences particularly as it pertains to the protections afforded business by the exclusive remedy doctrine.  Further updates on this issue will undoubtedly be forthcoming in the next few months.