Legal Corner

FMLA
ABA’s summary of 2019 FMLA decisions

Each year, the American Bar Association’s (ABA) Federal Labor Standards Legislation Committee publishes a comprehensive report of FMLA decisions handed down by the federal courts in the previous year. This handy report summarizes every FMLA decision from November 1, 2018 through October 31, 2019 in a user-friendly manner.

 

Workers’ Compensation
“Borrowed servant” provisions prevent temporary worker’s tort action against employee – Georgia

In Sprowson v. Villalobos, Waste Pro USA entered into a contract with Labor Ready for providing temporary employees to perform work under Waste Pro’s general or direct supervision. A temporary employee was working on a sanitation truck driven by a Waste Pro employee when he was pinned between the truck and a tree. He received comp benefits from Labor Ready and filed tort action against Waste Pro and the driver of the truck.

A judge dismissed the case against Waste Pro, noting it was barred by the exclusive remedy provisions, but allowed the case against the driver to proceed. The Court of Appeals found that the driver was “an employee of the same employer” and, thus, was protected by the exclusive remedy provisions. The court explained that even if the worker works for a different employer, when he is a “borrowed servant,” he is the co-employee of the borrowing employer’s regular employees, even though temporarily.

 

Case to watch: Worker who died from COVID-19 sues Walmart – Illinois

The family of a Walmart worker who died from complications of COVID-19 is suing the retailer in Estate of Wando Evans vs. Walmart, Inc. Four days after her death, another employee at the Chicago area store died of complications from COVID-19 and other employees exhibited symptoms. The case alleges that the retailer failed to cleanse and sterilize the store, failed to adhere to social distancing guidelines, failed to provide proper PPE, failed to notify employees of known cases, failed to follow OSHA and CDC guidelines, failed to provide employees with soap and wipes, failed to train personnel to minimize threat of COVID-19, failed to monitor employees for symptoms, and hired by phone without verifying they did not have the virus.

 

Additional evidence allowed to support claim of mental injury – Missouri

In Department of Transportation v. Labor and Industrial Relations Commission, a worker for the Department of Transportation (DOT) worked for more than 20 years responding to accident scenes. Her case went through several appeals and ultimately the Supreme Court vacated the finding of compensability, noting that the wrong standard was applied to determine if the work-related stress was “extraordinary and unusual.”

The case was remanded with the directive to review the case against the proper standard, “whether the same or similar actual work events would cause a reasonable highway worker extraordinary and unusual stress.” In turn, the worker filed a motion to submit additional evidence and the DOT filed a request for writ relief, which was denied by the courts.

 

High court denies benefits for injury at doctor’s office – Missouri

In Schoen v. Mid-Missouri Mental Health Ctr., a charge nurse had a reaction to an insecticide that was sprayed around air conditioning units to control ants. The health center sent her to a physician for an evaluation. As she was being escorted by the doctor to a pulmonary function test, the doctor tried to divert a dog and accidentally tripped the nurse. She fell and allegedly sustained permanent injuries to her knees, lower back, hip, and neck, although the physician completed his exam and found she could return to regular duty.

The case made its way to the Supreme Court. Although the employee argued that her tripping injuries were the natural consequence of her cypermethrin exposure, the Court found that the risk of being tripped accidentally was a risk to which she was equally exposed outside of her employment.

 

Future wage replacement benefits denied because of misrepresentation – New York

In Matter of Teabout v. Albany County Sheriff’s Dept., an appellate court confirmed a WCLJ’s and WC Board’s ruling that an employee could not receive future wage replacement benefits because she had misrepresented her work activities and failed to disclose important information to the examining physician. The worker had sustained a foot injury and received a permanent total disability classification. However, while she denied working following the injury, she was running a photography business.

Further, she had denied any psychiatric history prior to her work accident, as well as any family psychiatric history. Based on those denials, the treating physician diagnosed adjustment disorder with a depressed mood that was causally related to her 1997 injuries. However, later the physician received medical records that revealed a strong history of psychiatric issues.

 

Traveling employee rules lead to benefits for traumatic brain injury – New York

In Matter of Wright v. Nelson Tree Serv., an appellate court affirmed a decision by the Workers’ Compensation Board that awarded benefits to a worker who suffered a traumatic brain injury in a motor vehicle accident. The tree service worker was assigned to various locations, sometimes over six hours from his home when he opted to stay at a local hotel for the workweek. He was paid a per diem for food and lodging.

He and his coworkers would drive from the hotel to the same parking lot to pick up a bucket truck and proceed to the designated work site. En route to the parking lot, he was seriously injured. While a WCLJ found the injury was not compensable, the Board reversed and the Appellate Court agreed. It applied the traveling employee exception, where injuries may be compensable even if the employee at the time of the accident was not engaged in the duties of his or her employment, provided that the employee was engaged in a reasonable activity.

 

Traveling employee’s fall in hotel laundry room not compensable – North Carolina

In McSwain v. Industrial Commercial Sales & Serv., LLC, a worker was part of a crew working on a project in California. They finished a day early, but the company opted not to change their flight due to the high cost. On the day off, one worker started a load of laundry then joined his coworkers on the patio for some drinks. When he returned to retrieve his laundry he slipped on a wet spot and fell in the hotel lobby and filed a WC claim.

The Court of Appeals upheld the denial of the claim. While the court noted that when employees are required to stay overnight away from home, they are treated as being within the course of their employment for the duration of the trip “except when a distinct departure on a personal errand” is shown. Doing the laundry was not considered a personal need, such as eating a meal.

 

Court overturns worker’s reinstatement petition – Pennsylvania

In Communication Test Design v. WCAB (Simpson), the Commonwealth Court held that a WCJ erred in granting a worker’s reinstatement petition and awarding unreasonable contest fees. The employer accepted liability for medical bills for an eye laceration. Soon after the company began paying disability benefits, it stopped and denied that the employee suffered a work injury.

The worker argued the company failed to issue a notice that it was stopping its payment of benefits within five days after the last payment of temporary compensation. However, the court found that there was no evidence to prove this and the act provides no remedy for non-compliance. Moreover, the worker had never established disability prior to the filing of the Reinstatement Petition and it was his burden to establish his right to reinstatement. The court noted, the employer not only contested the Reinstatement Petition, but it also proved that the worker did not suffer a disability. Accordingly, the WCJ erred by awarding unreasonable contest fees.

 

Injuries not compensable caused by “Act of God” – Virginia

In Sylvia Martin v. Virginia Beach Schools and Corvel Corp., a school security guard fell when a gust of wind suddenly caused a metal gate, through which she had just passed, to close behind and strike her. The guard, who was on work restrictions from an earlier fall, filed a claim more than four months after the second incident, asserting that she had landed on her left side, injuring her left leg, left hip, ribs, back, neck, left hand, and right hand.

The Workers’ Compensation Commission denied the claim and the appeals court affirmed. Applying the “risk test,” the Commission noted that she did not face a risk that was any greater than the public at large. The fall was caused by a natural wind force which, standing alone, had to be considered an “act of God.”

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

Legal Corner

ADA

Construction company pays $100K for firing worker with epilepsy

A Bellingham, Washington company, formerly doing business as Diamond B Constructors, Inc. and its successor, Harris Companies, will pay $100,000 and provide other relief to settle a disability discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC). A pipefitter, who also holds a rigger’s certification, was dispatched by her union to work on a project. When she told her supervisor that she has epilepsy, he and other supervisors determined she could not work safely at heights and terminated her. She had not requested accommodations, had no medical restrictions, and her epilepsy was well controlled by medicine.

The law requires employers to make a case-by-case assessment of an employee’s ability to perform the job when safety concerns exist. EEOC Seattle Field Director Nancy Sienko said, “Epilepsy reportedly affects 2.2 million Americans and affects each person differently. It is critical that employers not base job decisions on stereotypes, but instead carefully consider each individual’s abilities.”

FMLA

FMLA doesn’t provide protection for employees to evaluate family member’s medical condition

In Schaar v. U.S. Steel Corp., a manager in the customer quality engineering department, who lived in Michigan, was aware of problems with a top customer in Mississippi. When the matter became urgent, he was onsite in Tennessee and was ordered to travel to Mississippi to handle the problem himself. He refused because his wife had a heart condition and wasn’t feeling well and he had to return to Michigan to assess the situation. When he arrived home, he determined his wife did not require medical attention.

Returning to work the next day in Michigan, he was fired for insubordination. The manager sued under the FMLA for both interference and retaliation. The U.S. District Court for the Eastern District of Michigan ruled in favor of U.S. Steel on its motion for summary judgment on both claims. The manager never requested FMLA leave or a reduced work schedule to care for his wife.

Distinguishing between providing care to a family member and evaluating a family member’s condition, the court determined he was not providing care and was not entitled to FMLA leave.

Workers’ Compensation

Comp settlement bars claim for disability discrimination – California

In an unpublished decision, Kennedy v. MUFG Union Bank, a bank employee claimed she worked in a hostile work environment and took a medical leave for stress, anxiety, and depression. While she was out, the bank restructured and eliminated her position. Unlike others, she did not receive a severance package.

Her request to return on a reduced work schedule was denied because the position was eliminated, so she filed a comp claim. When it was settled, she resigned voluntarily. She then filed suit based on disability and her race. The court argued there could be no wrongful termination because she was not terminated and that the record demonstrated a legitimate, nondiscriminatory reason for the increased supervision.

Employer not liable for fatal accident caused by injured employee – California

While commuting to work, an employee of the City of Los Angeles struck and killed a pedestrian. A chemist who worked in the lab, the employee did not use his car for employment. He did have a neurological condition and had fallen at work, suffering a back sprain. After some time off, he was allowed to return to work with restrictions. About three weeks later he was driving to work and struck and killed a pedestrian. Initially his license was suspended, but it was reinstated and he was not charged.

Two brothers of the deceased argued the city should be held responsible because it knew of his condition and allowed him to return to work prematurely, so the “work-spawned risk endangering the public” exception to the going and coming rule applied. The court disagreed and found the chemist was on his commute to work and the accident was unrelated to his employment.

Exclusive remedy defense in civil suit allowed in spite of comp denial – Florida

In McNair v. Dorsey, an appellate ruled that the employer’s denial of liability for a comp claim did not prevent it from using the exclusive remedy defense in a civil case. The employee worked for James Armstrong’s tree service company and was working with a coworker, Dorsey, when he alleged he suffered injuries. The insurance company found that there was no compensable claim. He then voluntarily dismissed the comp claim and alleged negligence on the part of both Armstrong and Dorsey, arguing the exclusive remedy defense did not apply since his claim had been denied.

While a trial court found in favor of the employer, the appellate court noted an employer can be barred from raising a workers’ compensation exclusivity defense if the employer denies the employee’s claim “by asserting that the injury did not occur in the course and scope of his or her employment.” However, the court noted that the employer is not always foreclosed from claiming immunity to a lawsuit simply because it denied compensability in an earlier proceeding.The factfinder needs to determine if the accident occurred in the course and scope of employment and would have been covered by workers’ comp and protected by exclusive remedy.

Worker who filed comp claim after being fired can bring retaliatory discharge suit – Florida

In Salus v. Island Hospitality Florida Management Inc. a worker reported an injury and later told the employer he was having difficulty getting follow-up treatment. Two weeks later he was fired, allegedly for threatening physical harm to a co-worker, which he denied. He filed suit for retaliatory discharge. The trial court found that reporting an injury was not the same as filing a claim and granted summary judgment to the employer.

The appellate court disagreed. It noted it would not make sense to limit the statute to retaliatory acts that occurred after filing the claim because an employer could easily avoid liability by firing the employee right away. Further the employee’s actions were consistent with a workers’ comp claim that is protected. Since there was a genuine issue of material fact as to the reason for termination, summary judgement was inappropriate.

Health care providers can’t go after comp settlement – Illinois

After an injured employee filed for bankruptcy protection for minimal assets and her pending workers comp claim ($31,000), the state Supreme Court ruled that the proceeds of a workers comp settlement are exempt from claims made by medical providers who treated the injury or illness in re Hernandez. She owed a combined $138,000 to the three medical practices.

Section 21 of the statute provides that any payment, award or decision under the Workers’ Compensation Act is unequivocally free from claims to satisfy debt; however, the health care providers argued that amendments in 2005 provide an exception to the exemption. The court disagreed, noting there was “no ambiguity whatsoever in this provision.”

Employer does not have to pay for rehab after injury is resolved – Minnesota

In Ewing v. Print Craft Inc., an employee sprained his ankle and there was medical disagreement as to whether he developed complex regional pain syndrome (CRPS). His primary care provider and podiatrist found he had, but doctors at the Mayo Clinic disagreed and said the injury was resolved. He met with a rehabilitation consultant who prepared a rehabilitation plan and submitted it to the Department of Labor and Industry and also provided medical management services to address Ewing’s reported symptoms.

Although the insurance company notified her that they were requiring an IME and would not pay for any further services, the consultant continued to provide services. The IME found that the employee had suffered an ankle sprain and did not have CRPS. A compensation judge held the injury was resolved on the date provided by the Mayo Clinic. The consultant appealed and the WC Court of Appeals overturned, noting the print company needed to provide notice and show good cause to terminate the rehabilitation plan.

The Supreme Court reversed, noting an employer’s liability ends when the worker is no longer disabled.

Worker who intentionally shot self with nail gun denied comp – Nebraska

In Eddy v. Builders Supply Co. Inc., an employee said a nail gun misfired and caused a three-quarter-inch nail to become embedded in her right temple. There were no witnesses. While co-workers testified that guns had misfired in the past, the company presented evidence regarding her personal life and a possible suicide note. The compensation court found that the employee shot herself intentionally and the Supreme Court agreed.

Misrepresentations about job search nix benefits – New York

In Matter of Calabrese v. Fortini Inc., an appellate court upheld a finding that a worker had made misrepresentations about his efforts to find a new job, thereby forfeiting his entitlement to benefits. The employer’s investigator contacted several of the employers identified by the worker and found he had not submitted an application, applied for a job that did not exist, or the contact did not exist.

Although the appellate court acknowledged that this evidence was hearsay, it was sufficiently reliable and provided substantial evidence to support the Workers’ Compensation Board finding that the worker had made false representations to obtain benefits.

Award of benefits for unwitnessed and unexplained fall upheld – New York

In Matter of Docking v. Lapp Insulators LLC, a truckdriver was loading a cart when he apparently fell and was found unconscious and bleeding by co-workers. When he regained consciousness, he had no memory of what happened. Under state law, there is a presumption of compensability for accidents occurring during the course of employment, which are unwitnessed or unexplained, and he was awarded benefits by a compensation law judge.

Upon appeal, a state appellate court noted to rebut the presumption, it is the employer’s burden “to provide substantial evidence that the accident was not work-related.” While the employer presented medical testimony that the fall and resulting brain injury were caused by a preexisting cardiovascular condition, the Emergency Room doctor testified that there were no signs of heart damage or atrial fibrillation. The possibility of a preexisting, idiopathic condition was not enough to overturn the decision.

Assaulted bus driver not fully disabled by PTSD and morbid obesity – New York

In Matter of the Claim of Robert Rapaglia v. New York City Transit Authority, the Supreme Court Appellate Division affirmed a Workers Compensation Board decision that the driver had a 60% loss of earning capacity but was not fully disabled. The bus driver argued that the board failed to consider his obesity and limited education and work experience in calculating his percentage of lost wage-earning capacity.

The court noted that in rating the severity of a medical impairment due to PTSD or other causally-related psychiatric conditions, “the evaluation should include the impact of the psychiatric impairment on functional ability, including activities of daily living.” While there was conflicting medical testimony, the court found the Board had not erred in finding that he could not drive a bus, but was capable of other work, nor could it conclude that his obesity was causally related to the workplace injury.

Employer may have to pay for expensive compound cream – Pennsylvania

In Workers’ First Pharmacy Services LLC v. Bureau of Workers’ Compensation Fee Review Hearing Office (Gallagher Bassett Services), the Commonwealth Court ruled that a pharmacy did not prematurely file a fee review petition to challenge an employer’s refusal to pay for a compound cream that had been prescribed to an injured employee. The employee had injured her shoulder and the comp claim was accepted. Her physician prescribed a compound cream, which the pharmacy dispensed and billed the employer $4,870.

The employer refused to pay, and the pharmacy filed a fee review application, which the employer argued was premature because it had not been established that the cream was related to the work injury. However, the pharmacy argued that company waived its right to challenge the cream as unrelated because it did not seek a Utilization Review (UR).

After several appeals, the Commonwealth Court ruled that employers or insurers must make payments to providers for treatment within 30 days unless there is a dispute as to the reasonableness or necessity of the treatment, in which case the payer may seek a UR. The court vacated the decision and remanded for a fee review determination.

Widow and children to receive death benefits for fatal workplace stabbing – Pennsylvania

In JBS Holdings USA Inc. v. Workers’ Compensation Appeal Board, a worker was stabbed to death by a co-worker. While the company argued that the murder was related to a “personal animus” and not work-related, the court ruled there was no evidence of personal animosity. The ruling was upheld upon appeal.

Temporary worker who experienced horrific injuries fails to win tort lawsuit – Tennessee

In Henry v. CMBB LLC, the 6th U.S. Circuit Court of Appeals held in a 2-1 decision that the employee’s intentional tort lawsuit was barred by the exclusive remedy provision of the Tennessee Workers Compensation Act. The temporary worker was assigned to work at a manufacturing facility and operated a 200-ton metal press, which contains a light curtain that prevents it from cycling when it detects a worker nearby. An operator had reported that the curtain was not working properly and one was on order, but the press remained in service.

The temp worker was operating the press when the machine cycled, crushing her arms, both of which were amputated below the elbow. She and her husband filed a lawsuit arguing the company intended to injure her because it was well aware of the danger but continued to operate the machine. The courts, however, noted that even if the employer was aware of the potential for injury, it does not mean the employer intended to injure the worker. Precedent has held that even egregious safety violations fail to show actual intent to injure and the exclusive remedy provision prevails. In Tennessee, the intentional tort exception is quite narrow.

Two years apart, injuries can stem from same accident – Virginia

In Merck & Co. v. Vincent, a worker injured his neck and arm in 2009. In 2011, he became dizzy and fell as a result of pain medication, seriously injuring his knee. The Court of Appeals upheld the Workers’ Compensation Commission ruling that the injuries arose from “the same accident” for purposes of determining whether he was permanently and totally disabled. The Virginia statute provides for an award of permanent total disability benefits to a worker who has suffered the functional loss of two limbs “in the same accident.”

The court noted the “compensable consequence” doctrine, which says that if an injury arises out of and in the course of employment, “every natural consequence that flows from the injury likewise arises out of the employment unless it is the result of an independent intervening cause attributable to claimant’s own intentional conduct.”

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

 

Legal Corner

Workers’ Compensation 

WCAB does not have authority to overturn award of medically necessary housekeeping services – California

When housekeeping services are requested by a physician and are reasonably required for an injured worker, they qualify as medical treatment. As such, the Court of Appeals for the 2nd District ruled that if a physician makes a request for a medical treatment, an employer cannot deny it unless a utilization reviewer determines that it is medically unnecessary.

In Allied Signal Aerospace, Constitution State Service Company v. Workers’ Compensation Appeals Board and Maxine Wiggs, the injured worker was receiving housekeeping services twice a month, but the physician requested a change to every week. The company submitted the request to utilization review. The reviewer found the more frequent schedule was not medically necessary. However, the WCAB supported a judge’s ruling to submit the records to a registered nurse who had made an earlier assessment of need for review.

The 2nd DCA vacated the WCAB’s ruling noting that since there was no stipulation to displace the provision of housekeeping from the UR-IMR process, the WCAB had no jurisdiction to review the medical necessity and reasonableness of service.

Exclusive remedy bars personal injury claim by firefighter kicked in the groin by supervisor – California

In Tibbett v. Los Angeles County Fire Department an appellate court affirmed a jury’s ruling that a firefighter’s unintentional injuries were barred by the exclusive remedy of workers’ compensation. The incident occurred when the firefighter complained to a supervisor about how a situation with a hostile victim was handled. The fire captain said he was showing a maneuver to keep volatile patients away by obstructing their vision, but the firefighter moved and he kicked him in the groin with a steel-toed shoe.

The firefighter had emergency surgery to remove his left testicle and underwent more surgeries that rendered him sterile. The court agreed with the jury, finding the fire captain did not intend to harm the firefighter; therefore, workers’ comp was the exclusive remedy.

Challenge to the presumption of correction for the opinions of EMAs rejected – Florida

In De Jesus Abreu v. Riverland Elementary School, the 1st District Court of Appeal rejected a constitutional challenge to the statutory presumption of correctness for the opinions of expert medical advisers (EMA). The employee suffered a compensable injury to her shoulder and an arthroscopic shoulder surgery was performed to address a partial rotator cuff tear.

While the physician deemed she had reached MMI, she continued to report pain and she sought care from an unauthorized orthopedic physician who recommended further surgery. The company authorized another orthopedist, who did not recommend further surgery. However, the employee obtained an IME from a doctor who thought surgery was appropriate.

Because of the conflicting opinions, a JCC appointed an EMA who opined that no further surgery was recommended or medically necessary. The JCC denied surgery because state statutes provide that the opinion of an EMA is presumed to be correct unless there is clear and convincing evidence to the contrary.

The employee appealed, arguing that the presumption improperly usurps the rulemaking authority of the state Supreme Court and that the presumption interferes with the executive branch’s ability to fairly adjudicate workers’ compensation claims. The court disagreed.

Restaurant manager shot in off-hours robbery can receive benefits – Georgia

In Kil v. Legend Brothers, the Court of Appeals overturned a denial of benefits to a restaurant manager who was shot as he was arriving home from work with the day’s receipts, which he regularly reviewed when he got home. The worker lived with the restaurant owner and his coworker. When he arrived home with his coworker, they were attacked by three men who demanded money. When the attackers realized the worker had a gun, they fled, but shot him in the forearm and he has not been able to work.

Both an administrative law judge and later the state Board of Workers’ Compensation awarded him comp benefits, ruling that his injury arose within the scope and course of employment. However, a state superior court reversed, finding that he was not at work at the time of the armed robbery and shooting-that he was home and that he was shot because he had a gun, which “had nothing to do with performing his duties for his employer.”

The Court of Appeals disagreed, noting one of the worker’s key job responsibilities was to spend around an hour every day going over the restaurant’s daily sales, receipts, accounts and inventory and that he was continuing his duties as manager.

Insurer must pay for injuries despite misinformation in policy – Georgia

In Grange Mutual Casualty Co. v. Bennett, several mistakes were made when an insurance agent took the company’s business information from its policy with a former insurer. She misclassified the company that was a construction company involved in greenhouse repair and maintenance as providing janitorial services and erroneously noted that employees did not travel out of state and that workers did not perform work above 15 feet. While the owner signed the policy, there was a dispute whether it was complete at the time.

When an injury that occurred out of state was denied, the company told the agent the policy had to be changed because most of its business was out of state. When the insurer learned more about the business operations it said it would not have issued the policy if the application had correctly stated that the company operated in 30 states because Grange Mutual was not licensed to issue policies in all of those states. It sent a cancellation notice but gave the company 90 days to find an alternative.

In less than 90 days, another worker was injured out of state, suffering extensive injuries in a truck accident. An administrative judge held that Grange Mutual’s policy covered the employee’s injuries and that by agreeing to pay for workers’ comp claims under the laws of Georgia, the Georgia-based company’s workers were covered even when out-of-state. Further, an appellate court held that Grange Mutual waived its void policy defense when, after discovering the inaccurate information on the application, it informed the company that its coverage would continue for 90 days. The court said that if the insurer “believed that the policy was void based on fraud, it should have immediately rescinded it.”

Borrowing employer’s immunity from tort liability not dependent on insurance – Illinois

In Holten v. Syncreon North America, an appellate court ruled that a temporary staffing service’s employee could not pursue a negligence suit against his borrowing employer for work injuries. The worker received comp benefits from the staffing agency for injuries resulting from a forklift accident, but filed suit against the borrowing employer, asserting its negligence had led to his injuries.

The state Workers’ Compensation Act provides that the lending and borrowing employers are jointly and severally liable for workers’ compensation benefits, but both do not have to provide the insurance. As long as one of the employers pays benefits, both have civil immunity. The immunity springs from the borrowed-employee relationship itself.

Employee can sue Canada – Massachusetts

Federal law immunizing foreign governments from liability does not protect Canada from being sued as an uninsured employer under the state’s workers’ compensation statute for injuries suffered by a consulate employee in Boston, the 1st U.S. Circuit Court of Appeals ruled in a 2-1 decision. In Merlini v. Canada, the Court found that the Foreign Sovereign Immunities Act provides an exception to immunity for a foreign state that engages in a “commercial activity.” The court said Canada entered into a contract for commercial services by hiring Merlini and failed to carry workers’ comp insurance as required of commercial employers in the state.

Worker who resigned after injury can collect unemployment – Minnesota

In Interplastic Corp. v. Rausch, a long-time employee injured his back and was transitioned to a lower job but received the same wage and accompanying pay raises over the next three years. He was then notified his wage was being reduced to align with the position and he was ineligible for future raises. About the same time, the workers’ compensation claim was settled and he received a $25,000 payout and agreed to “voluntarily terminate his employment.”

When he applied for unemployment benefits, he was denied because he had voluntarily quit. However, a three-judge appellate court panel affirmed an unemployment law judge’s decision that a substantial pay reduction, the lack of future earnings potential, and the claim settlement allowed the worker to fall under the state’s statutory exception for unemployment eligibility.

Worker’s manufacture of meth does not forfeit comp benefits – New York

In Robert Stone v. Saulsbury/Federal Signa et al., an appellate court ruled that a worker’s conviction for manufacturing methamphetamine did not forfeit his entitlement to benefits for two industrial injuries. The court upheld the WCB ruling that the man who had been collecting indemnity benefits for a compensable injury prior to his conviction and incarceration did not violate state workers’ compensation laws when he became involved in the production of illegal drugs.

The insurer contended that the manufacture of methamphetamine constituted “work”. The court disagreed, “substantial evidence supports the Board’s finding that the conviction alone is insufficient to establish any work activity by claimant or that he received any type of remuneration.”

Denial of occupational disease does not prevent new theory of accidental injury – New York

In Matter of Connolly v. Covanta Energy Corp., an appellate court reversed the state Workers’ Compensation Board’s finding that a worker suffered from an occupational disease (allergic bronchopulmonary aspergillosis) and remitted the matter to the Board for further proceedings. However, this would not prevent the worker from arguing an accidental injury claim on essentially the same facts. After remand, the Board was free to consider the new theory for the claim.

Elimination of labor attachment requirement for PPD not retroactive – New York

In Matter of the Claim of Scott v. Visiting Nurses Home Care, a worker who was classified as having a permanent partial disability, was found to have voluntarily withdrawn from the labor market and benefits were suspended twenty-two years after her injury. In 2017, the law was amended to provide that proving attachment to the labor market was no longer necessary for permanent partial disability compensation.

After the amendment took effect, she filed a request for reinstatement of benefits. A law judge, the Board, and the Appellate Division’s 3rd Department all agreed that the amendment did not apply retroactively.

Failure to mention side business not fraud – New York

In Matter of Permenter v. WRS Envtl. Servs. Inc., a truck driver’s failure to disclose his involvement in an online and retail flower business was not the sort of misrepresentation that should disqualify him from receiving workers’ compensation benefits according to an appellate court ruling. The employee had freely admitted that he owned a company engaged in the flower business, but the employee did not consider it work because it was not profitable.

Termination of benefits OK for a minor physical deformity, but no physical impairment – Pennsylvania

In Paolini v. Delaware County Memorial Hospital, the Workers’ Compensation Appeals Board held that the workers’ compensation judge (WCJ) did not err in awarding benefits to a nurse who sustained physical injuries and post-traumatic stress disorder as a result of a dog bite while performing a home visit. Her doctor provided unequivocal medical testimony that she had sustained PTSD as a result of her work injury, even though her Facebook page showed her swimming and parasailing.

However, the board reversed the WCJ’s denial of the employer’s termination petition, as the employer’s examining physician found that although the nurse had slight discoloration and subjective, mild numbness, she had fully recovered from the physical dog bite.

Injuries incurred on railroad bridge not covered by longshore comp – Virginia

In Muhammad v. Norfolk Southern Railway Co., a three-judge panel of the 4th U.S. Circuit Court of Appeals reversed and remanded a district court’s holding that the worker’s negligence claim was barred by the exclusive remedy under the Longshore and Harbor Workers’ Compensation Act (LHWCA). While working on a bridge that crosses a navigable river, a portion of the walkway collapsed beneath the employee and he sustained serious injuries.

He filed suit against the railway, asserting a negligence claim under the Federal Employers Liability Act, but the company argued the claim was subject to the LHWCA. The district court agreed, finding repairing and rebuilding the bridge was an “essential and integral element” of the maritime traffic flowing under the bridge, therefore, his work constituted as engaging in maritime employment.

Upon appeal, the 4th U.S. Circuit Court of Appeals reversed and remanded the district court’s decision. It noted that the LHWCA requires employee work “upon navigable waters” and that a bridge would not be covered by the statute.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

HR Tip: Court ruling does not affect ACA obligations

The recent court ruling by a federal judge in Texas that the Affordable Care Act (ACA) is unconstitutional, does not affect the coverage and reporting obligations for employers. The ruling is a declaratory judgment and not an injunction to freeze the ACA and most expect the case will make its way to the Supreme Court.

Similar to the past two years, the IRS has extended the original Jan. 31, 2019, deadline for employers to distribute 2018 Forms 1095-C or 1095-B to employees to March 4, 2019. The critical 2019 filing deadlines for forms that detail 2018 coverage are now as follows:

ACA Requirement Deadline
Paper filing with IRS Feb. 28
1095 forms delivered to employees March 4 (extended from Jan. 31)
Electronic filing with IRS April 1

Employers that file 250 or more information returns with the IRS must file the returns electronically. Because of the extension, the 30-day extension that would normally be available on a showing of good cause is not available – March 4 is a hard deadline.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

HR Tip: 12 tips to keep your holiday party under control

The holiday season is a time to spread cheer and a festive spirit, but some celebrations morph into legal nightmares or workers’ comp claims for employers. Here are 12 tips for a party that is fun and safe:

  1. Charge your leadership team with setting the tone for responsible and professional behavior.
  2. Limit or do not serve alcohol. Do not have an open bar. Close the bar at least one hour before the end of the party. Be sure that alcohol is served by a professional bartender or at a licensed establishment that knows when to stop serving an individual. Serve plenty of food. Arrange for no-cost transportation for any employee who should not drive home.
  3. Be sure workers understand that attendance is voluntary. This should be clearly stated in the invitation and all related communications.
  4. Hold after work hours and off site, reducing the likelihood the party will be perceived as work related.
  5. Don’t encourage attendance by either implying attendance will help the employee advance or that failure to attend sends the message the worker isn’t a team player.
  6. Avoid presentation of awards, bonuses or other recognition that suggest employees are there for business reasons.
  7. Be cautious about inviting vendors, clients or others with whom you have a business relationship.
  8. Invite spouses and significant others.
  9. Remind employees that normal workplace standards of conduct are to be respected. Parties, particularly when alcohol is served, can lead to sexual harassment or discrimination claims. Treat any discrimination or harassment claims seriously and conduct appropriate investigations.
  10. Don’t allow employees to post company party images/comments on social media outlets without having a policy in place.
  11. Be sensitive of language and decorations – don’t call it a Christmas party or invite “husbands and wives.”
  12. Discuss your exposure with your insurance agent.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

Things you should know

NLRB issues proposed rule on joint employers

As expected, the National Labor Relations Board (NLRB) has announced publication of a proposed rule on joint employers. The rule will effectively discard the expanded definition of joint employer in the Browning-Ferris Industries decision during the Obama era and return to the much narrower standard that it had followed from 1984 until 2015. An employer may be found to be a joint-employer of another employer’s employees only if it possesses and exercises substantial, direct and immediate control over the essential terms and conditions of employment.

NIOSH publishes guide on air-purifying respirator selection

NIOSH has issued a guide intended to help employers select appropriate air-purifying respirators based on the environment and contaminants at specific jobsites.

Top trend in workers’ comp reform – legislation impacting first responders

According to National Council on Compensation Insurance (NCCI), the introduction of legislation impacting first responders was the top trend in workers’ compensation reforms countrywide, although few bills have passed. In 2018, there were 103 bills dealing with first responders battling post-traumatic stress disorder or cancer, but only five bills passed. Washington and Florida both passed bills that would allow first responders with PTSD to file workers’ compensation claims under certain circumstances, and Hawaii and New Hampshire revised or enacted presumption bills for firefighters battling certain types of cancer. New Hampshire also passed a law that calls for a commission to “study” PTSD in first responders.

Worker fatalities at road construction sites on the rise: CPWR

A total of 532 construction workers were killed at road construction sites from 2011 through 2016 – more than twice the combined total for all other industries – according to a recent report from the Center for Construction Research and Training, also known as CPWR. In addition to the statistics, the report highlights injury prevention strategies for road construction sites from CPWR and several agencies.

State-by-state analysis of prescription drug laws

The Workers Compensation Research Institute published a report that shows how each of the 50 states regulates pharmaceuticals as related to workers’ compensation. Some of the highlights include:

  • 34 states now require doctors to perform certain tasks before prescribing
  • At least 11 states have adopted drug formularies
  • 15 states do not have treatment guidelines to control the prescription of opioids, and preauthorization is not required
  • In at least 26 states, medical marijuana is allowed in some form and nine of those states specifically exclude marijuana from workers’ compensation

Guide and study related to workers and depression

Workers who experience depression may be less prone to miss work when managers show greater sensitivity to their mental health and well-being, recent research from the London School of Economics and Political Science shows. The study was published online in the journal BMJ Open.

In March, the Institute for Work and Health published a guide intended to aid “the entire workplace” in assisting workers who cope with depression or those who support them.

11 best practices for lowering firefighter cancer risk

A recent report from the International Association of Fire Chiefs’ Volunteer and Combination Officers Section and the National Volunteer Fire Council details 11 best practices for minimizing cancer risk among firefighters.

NIOSH offers recommendations for firefighters facing basement, below-grade fires

The Workplace Solutions report offers strategies and tactics for fighting basement and below-grade fires, along with a list of suggested controls before, during and after an event.

Predicting truck crash involvement update now available

The American Transportation Research Institute has updated its Crash Predictor Model. It examines the statistical likelihood of future truck crashes based on certain behaviors – such as violations, convictions or previous crashes – by using data from 435,000 U.S. truck drivers over a two-year period.

This third edition of CPM includes the impact of age and gender on the probability of crashes. It also features average industry costs for six types of crashes and their severity.

State News

California

  • Governor signed four bills related to comp. A.B. 1749 allows the first responder’s “employing agency” to determine whether an injury suffered out of state is compensable. A.B. 2046 requires governmental agencies involved in combating workers compensation fraud to share data, among other changes to anti-fraud efforts. S.B. 880 allows employers to pay indemnity benefits with a prepaid credit card. S.B. 1086 preserves the extended deadline for families of police and firefighters to file claims for death benefits.
  • Governor vetoed bills that would have prohibited apportionment based on genetics, defined janitors as employees and not contractors, identified criteria doctors must consider when assigning an impairment rating for occupational breast cancer claims, called for the “complete” disbursement of $120 million in return-to-work program funds annually, and required the Division of Workers’ Compensation to document its plans for using data analytics to find fraud.
  • The Division of Workers’ Compensation revised Medical Treatment Utilization Schedule Drug List went into effect Oct 1.
  • Independent medical reviews (IMRs) used to resolve workers’ comp medical disputes in the state rose 4.4 percent in the first half of 2018 compared to the first half of 2017; however, in over 90 percent of those cases, physicians performing the IMR upheld the utilization review (UR) physician’s treatment modification or denial. – California Compensation Institute (CWCI)

Florida

  • Workers’ compensation coverage for post-traumatic stress disorder (PTSD) for first responders like firefighters, EMTs, law enforcement officers and others went into effect Oct. 1.

Indiana

  • Workers’ Compensation Board will destroy paper documents in settlements. If parties mail or drop off paper-based settlement agreements and related documents, it will trash them and notify the parties by phone or email to submit online. The board urges parties to follow the settlement checklist and procedure posted on its website.

Minnesota

  • The Department of Labor and Industry formally adopted a number of changes to fees for rehabilitation consultants.
  • Department of Labor and Industry approved rule changes that slightly increase fees for medical and vocational rehabilitation services, and increase the threshold for medical, hospital and vocational rehabilitation services that treat catastrophically injured patients.
  • Effective Jan. 1, the assigned risk rate, which insures small employers with less than $15,000 in premium, and employers with an experience modification factor of 1.25 or higher, will decrease 0.7%.

Missouri

  • A new portal from the Department of Labor offers safety data, video, and training programs.

New York

  • The Workers’ Compensation Board has launched its virtual hearings option for injured workers and their attorneys. For more information.
  • Attorneys or representatives are now required to check-in to all hearings using the online Virtual Hearing Center when appearing in person at a hearing center.

Virginia

  • The Department of Labor and Industry has issued a hazard alert warning of the potential dangers of unsafe materials handling and storage in the beverage distribution and retail industry.
  • The Workers’ Compensation Annual Report for 2017 shows claims and first report of injury are trending up, bucking the downward trend nationally. There has also been a big jump in alternative dispute resolutions.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

 

Legal Corner

Workers’ Compensation
Appellate court clarifies permanent disability rule – California

In Department of Corrections and Rehabilitation v. Workers Compensation Appeals Board and Dean Fitzpatrick, the issue revolved around whether the Workers’ Compensation Appeals Board applied the correct standard when calculating a worker’s permanently disabled rating. The Board had affirmed an administrative law judge’s ruling of 100% permanent disability, based on Labor Code Section 4662.

Upon appeal, the Appellate Court noted that Section 4662 of the law does not provide for permanent total disability separate from Section 4660, which governs how the finding and award of permanent total disability shall be made “in accordance with the fact” as provided in 4662. It annulled the Board’s decision and remanded the issue for further proceedings.

Federal court upholds use of state worker classification test – California

In a blow to the California Truckers Association (CTA), the U.S. 9th Circuit Court of Appeals ruled that federal deregulation of the trucking industry does not pre-empt the state agency from applying a common law test, called the Borello test, because the law only pre-empts state rules that are “related to prices, routes, or service.” Named for a 1989 state Supreme Court case, the Borello test is the standard used to determine whether a worker is an employee or an independent contractor. California Trucking Association v. Su, No. 17-55133

Reasonableness of refusal to accept job considered in nixing TTD – Florida

In Employbridge v. Rodriguez, the 1st District Court of Appeal overturned an award of temporary total disability benefits to an injured worker who refused a job offer because the commute was too long. In this case, a worker and her husband both worked for Employbridge, a staffing service provider. When they received a new assignment in Largo, they moved to Largo from Tampa. A few years later, the worker fell at work and injured her knee. Initially, the company accommodated her work restrictions with a clerical position at their Largo offices. She was then offered a similar position at the Tampa office, but turned it down.

A Judge of Compensation Claims found the commute between Largo and Tampa justified the decision to refuse the position and awarded TTD benefits. However, in a split decision the 1st District Court of Appeals overturned the award.

Worker wins retaliation case for filing a workers’ compensation claim – Michigan

In Mitchell v. Dore & Associates Contracting (D & A), a worker broke his leg in a work-related accident and received benefits. D & A would hire workers for projects and lay them off when the job was complete. Workers believed if they were injured on the job, they’d never be asked to work again.

After the worker recovered, a former supervisor asked him to work on a project. While working he heard his supervisor speaking with the risk manager for D & A. The worker alleges the supervisor said the risk manager no longer wanted Mitchell on the project and he was never recalled to work.

While the Court of Appeals noted that causation between the workers’ comp claim and layoff is difficult to prove, it found that the trial judge had properly kept information about criminal convictions and excused work absences from the jury and upheld the jury verdict that D & A had unlawfully retaliated.

Damages of $873,000 upheld in negligence suit against supervisor – Missouri

While the statute generally immunizes co-employees from civil liability for a workplace injury, if a co-employee engaged in a negligent act that purposefully and dangerously increased the risk of injury to another employee, the suit can proceed. An employee of a staffing agency was working for a manufacturer and operating a lamination machine. He noticed glue on the bottom rollers and notified the lamination line supervisor, who removed a metal grate and allegedly told the worker to clean the bottom rollers with a wet rag. (The company prohibited workers from running the machine without the guard installed, and the machine displayed a warning against operation without it.)

The worker’s thumb was pulled in and crushed and he filed a personal injury suit against the supervisor and the manufacturer of the laminating machine. He settled with the machine manufacturer, and, while the other case was pending, the supervisor died, so a defendant ad litem was then substituted. Based on the jury’s findings and the settlement with the machine manufacturer, the trial judge awarded $873,000 in damages. The Court of Appeals upheld the decision.

Invalid arbitration agreement means discrimination and retaliation suits can proceed – Missouri

In Caldwell v. UniFirst Corp, a worker was diagnosed with lumbar disc protrusions and herniations and given work restrictions, which the company accommodated initially. His doctor imposed more restrictions and his supervisor allegedly objected to a request for time off and repeated requests for accommodations. After surgery, the company did not allow him to return to work, but extended his medical leave, then fired him.

The worker filed suit against his former employer and supervisor, alleging discrimination on the basis of his disability and retaliation for pursuing a comp claim. The defendants moved to compel arbitration, noting that the former worker had signed an employment agreement that included an agreement to arbitrate any employment-related claims.

A trial judge denied the motion to compel, finding that the arbitration agreement was invalid and the Court of Appeals agreed. For an agreement to be enforceable each party must provide something of value to the other – some form of “consideration,” which was lacking in this situation.

Employer must reimburse firm for third-party settlement of over $1 million – Nebraska

In 2008, an explosion at a Conagra Foods Inc. plant in Garner, North Carolina, killed three Conagra employees and injured more than 60 others while the food company was installing a new water heater. The company that provided a contracted engineer to oversee the project, Dallas-based Jacobs Engineering Group Inc., was sued and settled the claims after failing to obtain contractual indemnification from Conagra.

The engineering company sued Conagra and a jury in district court awarded Jacobs the full amount of the settlement payments, $108.9 million. The Supreme Court affirmed, noting the food company’s “negligence was the proximate cause of Jacobs’ damages” stemming from the lawsuits following the explosion.

Untimely claim denied since employer had no knowledge of injury – New York

In Matter of Taylor v Little Angels Head Start, a worker filed a comp claim more than one year after the employer had put her on medical leave. She claimed her bilateral knee condition was caused from walking between the employer’s work sites and the repetitive stair climbing associated with her job duties. A workers’ comp judge awarded benefits, but the Workers’ Compensation Board found she had failed to give her employer timely notice of injury.

The Board can waive the thirty-day notice if notice could not be given, the employer had knowledge of the injury, or the employer is not prejudiced. While the employer knew of the knee condition, she did not tell her employer it was work-related for over a year.

Scheduled loss of use award can be adjusted for prior injuries – New York

In Matter of Genduso v. New York City Department of Education, a worker injured his right knee and filed a comp claim. He had had two previous injuries to his right knee, which resulted in loss of use awards of 20% and 12.5%. An expert opined that there was a 40% loss of use and the judge deducted the prior awards, leading to a 7.5% scheduled loss of use. The Workers’ Compensation Board and Appellate Court affirmed the award.

Worker’s tort claim against insurer for allegedly providing false information to the police can proceed – North Carolina

Although a workers’ compensation insurer generally enjoys the same immunity from tort liability afforded the employer, there are limits to that immunity. In Seguro-Suaraez v. Key Risk Inc. Co., a worker suffered a serious brain injury in a work-related accident and suffers from significant behavioral and memory deficits. While the insurance company found the injuries compensable, it denied a request for an occupational home therapy evaluation. Over a six-month period, the company video-taped the worker, edited nine hours of surveillance to 45 minutes, and showed to a neuropsychologist, who said the worker was exaggerating his symptoms.

The Industrial Commission issued a decision in the workers’ favor and the insurance company conducted an independent medical exam, which determined the symptoms were valid. In spite of this, the company directed its investigator to convince the Lincolnton Police Department to bring criminal charges against the worker – that he was obtaining his workers’ compensation benefits by false pretenses. This led to his arrest and jailing and indictment on 25 counts of obtaining property by false pretenses and one count of insurance fraud. The charges were dismissed after a psychological examination to determine competency to stand trial noted conditions consistent with his documented medical history.

The Court of Appeals upheld a trial court ruling that the worker can pursue malicious prosecution, abuse of process and unfair and deceptive trade practices claims, but found the trial court erred in failing to dismiss the bad faith and civil conspiracy claims.

Return-to-Work notice requirements clarified – Pennsylvania

The Workers’ Compensation Act requires an employer provide a worker with “prompt written notice” when the employer receives medical evidence that the worker is able to return to work in any capacity. Although “prompt” is not defined, the notice must give the worker a reasonable period of time before the employer requests a modification of benefits.

In County of Bucks v. WCAB (LePosa), the worker received a notice of her ability to return to work along with a letter offering her pre-injury position at the same wage, which had no expiration date. When she did not return to work, the county filed for a suspension of benefits. The Workers’ Compensation Appeal Board said the county was required to prove the worker had received a notice of her ability to return to work before sending her the job offer. The Commonwealth Court disagreed since the offer had no expiration date, noting a notice of ability to work sent with a job offer letter does not, as a matter of law, render the notice not prompt.

Worker with lifetime medical care award must be weaned from opioids – Tennessee

In C.K. Smith Jr. v. Goodall Buildings Inc., an injured worker with an award of lifetime medical care from his employer received high dosages of opioids to manage pain. Several years after the injury, the doctor expressed concern about the possibility of addiction. About the same time, the employer requested a Utilization Review (UR) of the employee’s medications and prescriptions and the UR Board recommended weaning down. The employee then requested a new physician panel, which a trial court approved. However, the Supreme Court’s special workers’ compensation appeals panel reversed that determination, stating that it would violate state code and remanded the case to trial court.

High court finds injury an advancement of preexisting condition and overturns disability award – Tennessee

In Thomas D. Flatt v. West-Tenn Express Inc., a worker fell when a coworker dropped his side of an oil-drip pan, which they were carrying together and claimed to injure his neck and left arm. The worker was in a work-related auto accident one year earlier, but maintained he was fully recovered. The trial court found the new injury was compensable and the impairments did not stem from the auto accident and awarded a 44% permanent partial disability rating.

On appeal, the trucking company had the employee undergo examination by four doctors. Upon reviewing the medical testimony, the Special Workers’ Compensation Appeals Panel with the Supreme Court overturned the trial court ruling. It determined this was not a new, distinct injury, but an advancement of a preexisting condition.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

HR Tip: New FMLA forms available from DOL

The Family and Medical Leave (FMLA) certification forms and notices are now valid until Aug. 31, 2021. DOL didn’t make any substantive changes to the forms, other than the new expiration date. Here they are:

Notices

Certification forms

The DOL must submit its FMLA forms to the Office of Management and Budget (OMB) for approval every three years. OMB review is required to ensure the FMLA certification and notice process isn’t too bureaucratic.

While the forms aren’t mandatory, many employers use them. Some employers copy and paste the DOL form into their own form, replacing the DOL logo with their own.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

Are Employees Covered when they leave the state? Maybe Not!

You have a workers’ compensation policy that covers your employees. So when your employee travels for work, you assume that they are covered should they be injured while “on the job”. Assuming wrong, and you may be opening up your own checkbook. Where the employee goes to, and how long they are there, does have barring on if your employee’s injury is covered.

On Monday, March 12th, 2018, I posted my monthly Legal Corner blog post about recent case rulings that impact employers when it comes to HR & Safety Compliance as well as Workers’ Compensation. After every blog post I usually receive a dozen or so calls or emails from people that were looking for more information on the subject of the post, however, in this post’s case, I have received a hundreds of questions, from employers to insurance agents, stemming from one specific Workers’ Compensation Case Law Ruling in that Legal Corner post.

Here is the case I referenced: Employer discovers lower quote does not mean same coverage when out of state accident is not covered – Indiana

Custom Mechanical Construction (CMC) is an Indiana-based mechanical contractor but is authorized to do business in Kentucky. Since its establishment in 2005, it had used the same insurance agent and the same carrier for workers’ comp. In 2015, the agent solicited bids from other carriers and secured a $3,000 lower quote. The company claims that it was led to believe that the coverage was the same. When a CMC worker was injured on a job in Kentucky, the carrier filed suit in a federal trial court in Indiana seeking a judicial determination that its policy does not cover claims from Kentucky. CMC counterclaimed that the carrier wrongly and unreasonably denied coverage, and that the broker is liable for failing to procure adequate coverage. The judge found that CMC had no viable claim for bad faith nor negligence and that the broker was not an agent of the carrier. Accident Fund Insurance Co. of America v. Custom Mechanical Construction.

So, does a workers’ compensation policy have a coverage territory/travel restriction? The answer is yes/no.

The Employers Liability portion of the policy provides coverage for suits brought in the USA, its territories or possessions, or Canada. Sounds fair, and aligns with your business auto and general liability policy definitions of a coverage territory. If you are doing business only in the USA and Canada, you might think you are OK. If your employee travel outside of the USA and Canada, even for a day, you need to make sure you have Foreign Voluntary Workers’ Compensation Coverage, and should also make sure you have appropriate liability coverages as well.

However, the Workers’ Compensation portion of the policy does not define a territory, so that sounds even better does it not?  Not really. It does something that should cause all employers to ask more questions. A Workers’ Compensation policy provides statutory coverage for an employer for the specific state(s) listed in 3. A. on the declaration page of the workers’ compensation policy. So two little, abbreviated letters, in one big, multi-page policy actually defines where you have coverage

If you have physical locations in MD, NY and PA, and MD, NY, and PA are listed in 3.A. of your policy, you think you are all set. But what if your employee travels to NJ, VA, DC, NY or OH?

What if you have a telecommuter that works from home in another state? What if you have a employee that lives in OH but works from your PA location, but then travels back into OH for business purposes? This is where things actually get confusing.

With 50 states, and several territories including PR & DC, explaining all possible variations would cause this to be an extremely long blog post, so I am not about to address every issue. Therefore, I am going to point out the key issues you need to look into to make sure you are properly covered. The best thing to do, is to ask questions.

  • Effective Date of the Policy – The workers’ compensation policy defines that you have coverage for the states listed in 3.A. of the declaration page.  It also defines that if on the effective date of the policy.  If you have employee(s) working in another state not listed in 3.A. on your actual renewal date, or have an ongoing operation in another state, you do not have coverage in that state during the remainder of that policy year. It does have a provision to allow you 30 days from the effective date to inform the insurance company.  If you forget, you have an issue.
  • With 50 states, and several territories including PR & DC, each state and territory has their own rules. The two key provisions you need to understand are:
    • Extraterritoriality – what your state’s workers’ compensation laws allows in terms of coverage when an employee leaves the covered state.  A state may provide coverage for an unspecified period of time, or it might allow for a limited number of days such as 30 or 90 days.  If you meet the extraterritoriality provisions, your employee may be covered when out of the covered state
    • Reciprocity – is whether or not the state’s workers’ compensation laws, of the state that the employee is in when injured, allows allow the your policy to provide coverage for the employee in that state while there.  A state’s law may allow another states coverage to ally for an unspecified period of time, or it might allow for a limited number of days such as 30 or 90 days, or not allow any coverage to extend to that state.  Therefore, if that state does not allow your coverage to extend to the state, you would need to add that state as a covered state in 3. A.
    • For example, due to OH reciprocity with PA, a PA based construction employee can work in OH for up to 90 days in any 12 month period before the employer would need to purchase OH workers’ compensation coverage for that PA employee. (Note: an OH BWC employee has recently told me this is now 30 consecutive days.) However, if that PA employee travels to a NY jobsite, even for a day, the employer would need to purchase NY workers compensation due to the NY reciprocity rules.  A similar rule applies to an construction employee going to work in FL.
  • All States Endorsement – Many employers believe they have coverage in every state as some insurance agents leave them to believe that since there may be a provision that says something like “all other states…” is listed in Other States Coverage of 3.C. on the declaration page.  There is no such thing as a “All States Endorsement”. If you look at it closely, at best, it will state “All other states except 3.A and monopolistic states”. Plus, once again, with 50 states, and several territories including PR & DC, each state and territory has their own rules.
    • Other states (“3.C.”) coverage allows the your workers’ compensation policy to comply with the statutory benefits required by the other state where an employee is injured but in which you do not currently have on-going operations, and do not plan to have on-going operations during the policy period.  If you did, doing so would require that state to be scheduled as a primary coverage state in 3. A. Employees injured while working in a listed 3.C. state will receive the benefits under that state’s law if made necessary by law or court decision. Basically, the workers’ compensation policy responds and pays benefits in listed 3.C. states just as if the state was scheduled under 3.A.
    • Monopolistic States – OH, WY, WA, ND – are states that the only way to provide coverage in that state in section 3 of a policy is by purchasing coverage from that state’s workers’ compensation bureau.  No insurance company can provide coverage in those state, however, your states’ extraterritoriality or that monopolistic state’s reciprocity may allow for temporary coverage.
    • However, do not assume that if a state is listed in 3.C. that you have coverage as the listed state my not allow that due to reciprocity rules.  I point out once again, that NY will require a contractor to have NY in 3.A., and not 3. C. for even 1 day of work.
    • Although there might be a small charge on your policy, listing your bordering states, or ones you frequently travel to, might be a good idea.
  • Telecommuting employee – if you have an employee that lives and works from home in another state, although you as an employer do not have a physical location in that state, you do have an ongoing operation in that state.  Therefore, you need to add that state to your policy and list it in 3.A.
  • Employee Residing out of state – you may have an employee that lives in one state, and commutes to your state to work.  If they are injured in your state (listed in 3.A.), than your workers’ compensation policy will respond.  However, if that employee needs to travel back into their state of residency for business purposes, most likely their state’s laws will supersede your state’s laws, or the employee may chose to file for that states benefits especially if they are higher than in your state.  Either way, you may need to have coverage in any state that an employee both resides and works in.
  • Subcontractors
    • Should you hire a subcontractor that is based out of another state, you need to make sure that they have coverage in your state.
    • If you are hiring a subcontractor to work for you at a job in another state, you need to make sure you have coverage in 3.A of that state.  If that subcontractor somehow ends up not having workers’ compensation coverage, you as the hiring “general” contractor would be responsible to provide the statutory coverage in that state.

I cannot spell out every variable that you may be thinking of when it comes to your operations and employee travel, the main point of this post is help to create more awareness that you should not assume that your workers’ compensation will cover your traveling employees. You should speak with a Certified WorkComp Advisor, or an experienced agent, and make sure you get your answers in writing.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

Things you should know

The importance of contractor selection and oversight

The Chemical Safety Board has published a new Safety Digest highlighting insufficient safety requirements in contractor selection and oversight. The digest summarizes separate CSB incident investigations and recommendations from 2007 and 2011 in which the agency concluded that inadequate contractor selection and oversight contributed to a combined 10 fatalities and four injuries.

New hazard alert and toolbox talk on opioid-related overdose deaths in construction

In an effort to raise awareness of opioid-related overdose deaths among construction workers, the Center for Construction Research and Training, CPWR, has published a hazard alert and toolbox talk on the topic. The hazard alert and toolbox talk are available in English and Spanish

ISEA/ANSI 121-2018 first in the industry to address tethering practices

The International Safety Equipment Association (ISEA) and the American National Standards Institute (ANSI) developed the first industry standard to reduce the risk of dropped objects in industrial and occupational settings. The standard, ANSI/ISEA 121-2018, American National Standard for Dropped Object Prevention Solutions, sets the minimum design, performance, labeling, and testing requirements for tethering practices.

The standard contains four active controls, which are:

  • Anchor attachments
  • Tool attachments
  • Tool tethers
  • Containers (buckets, pouches)

ISEA/ANSI 121-2018 is available online from ISEA.

CSB issues investigation update, animated video on Wisconsin refinery explosion, fire

The Chemical Safety Board has released an update of its investigation into an April 26 explosion and fire at the Husky Energy refinery in Superior, WI, as well as an animated video that explores the cause of the incident.

State News

California

  • The Labor Enforcement Task Force (LETF) issued 26 orders shutting down unsafe machines or operations at workplaces it inspected during the fiscal year 2017-2018 and found that 93% of businesses inspected were out of compliance with labor laws.

Florida

  • The National Council on Compensation Insurance (NCCI) is recommending a 13.4% decrease in rates, the second straight year that the rating organization has recommended a reduction in the state.

Illinois

  • Governor vetoed a bill that would have amended workers compensation law in relation to fees and electronic claims.

Minnesota

  • Department of Commerce has approved a 1.2% increase in the overall average pure premium level, effective Jan. 1.

Nebraska

  • Workers’ Compensation Court has redesigned its website, offering the Google platform for forms and distribution of court news. Previously bookmarked links to the court’s website will no longer work, so users are encouraged to delete their old links, then find the updated pages and bookmark them for future use.
  • Hospitals and insurers may now file diagnosis-related group (DRG) reports through the Workers’ Compensation Court’s web application.

North Carolina

  • Industrial Commission announced a $36 increase in the maximum weekly workers’ compensation benefit, starting Jan. 1. The maximum benefit will rise from $992 for this year, to $1,028.

Tennessee

  • The NCCI has proposed a statewide reduction of 19% for average voluntary market loss cost levels. By industry, contracting saw the greatest decrease of 20.7%, office and clerical was next at 20.6%, goods and services at 19.7%, manufacturing at 18% and miscellaneous at 16.8%. The new rates, which are under review, would become effective March 1, 2019.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com