Christina Lumbreras

Christina Lumbreras is a Legal Editor for Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at riskletters@lrp.com

You Be the Judge

Can Injured Temp Sue Second Employer for Negligence?

An employer seeks immunity from tort liability after a temporary employee blames his injury on the company's negligence.
By: | March 27, 2015 • 2 min read
You Be the Judge

An employee of Staffmark, a temporary employment agency, was assigned to work in the warehouse of Americold Logistics. There was no written employment contract between the worker and Americold. While driving a forklift, the employee suffered a severe spinal injury. Staffmark accepted the employee’s workers’ compensation claim and paid appropriate benefits.

The employee also sued Americold for negligence. Americold sought to dismiss the lawsuit, contending that as the employee’s special employer, it was immune from tort liability. The trial court suspended action on the negligence claim until the Workers’ Compensation Commission determined whether there was an employer-employee relationship between the worker and Americold.

Before the administrative law judge, Americold’s general manager testified that when Staffmark sent workers to Americold, “they were our associates” to be directed, disciplined, or discharged by Americold, and that Staffmark’s role at that point was “just to hand them a paycheck.” The worker testified that he didn’t believe he was Americold’s employee and that Americold disavowed the existence of an implied employment contract until it was sued for negligence.

The ALJ determined that there was an implied employment contract between the employee and Americold, that the work performed at the time of the injury was that of Americold, and that Americold paid the employee’s wages and controlled every aspect of his work. The ALJ concluded that Americold was a special employer and that the worker was a temporary employee of Americold’s. Thus, under the dual-employment doctrine, Americold was immune from tort liability. The commission affirmed and adopted the ALJ’s decision.

The employee appealed, arguing that Americold wasn’t his employer because there was no implied employment contract.

Poll Question

Did the appellate court find fault with the determination of an implied contract?

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How the court ruled:

A is incorrect. The court explicitly stated that the fact that the implied contract was initiated through a temporary employment agency didn’t negate the fact of the employee’s dual employment.

C is incorrect. Americold’s initial denial that an implied employment contract existed didn’t impact the determination that such a contract was present.

B is correct. In Randolph v. Staffmark, et al., No. CV-14-815 (Ark. Ct. App. 02/25/15), the Arkansas Court of Appeals held that substantial evidence supported the commission’s determination that an implied employment contract existed between the employee and Americold. The court explained that an implied contract is shown through the parties’ general course of dealings indicating an intent to make a contract. Here, the court observed, both parties operated on the belief that the employee would gain full-time employee benefits after logging a sufficient number of hours of work. Additionally, the employee provided work to Americold and Americold treated the employee as any other worker and paid for his services. These facts supported a finding that an implied contract existed and that a dual-employment scenario was in place.

Editor’s note: This feature is not intended as instructional material or to replace legal advice.

Christina Lumbreras is a Legal Editor for Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at riskletters@lrp.com
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The State of the States

Regulatory Review

A round-up of nationwide regulatory changes affecting the workers' compensation industry.
By: | March 27, 2015 • 4 min read
mississippi capitol

Mississippi

Benefits

The Mississippi Workers’ Compensation Commission announced that effective Jan. 1 the weekly maximum benefit rate is $463.59. The overall maximum rate is $208,615.50.

Hearings

The Mississippi Workers’ Compensation Commission updated the Official Notice of Hearing on the Merits form to include a statement requiring the claims adjuster on a claim to be present at the hearing or available by telephone for the duration of the hearing.

Mileage

The Mississippi Workers’ Compensation Commission announced that effective Jan. 1 the mileage reimbursement rate is 57.5 cents per mile.

New Mexico

IME Providers

The New Mexico Workers’ Compensation Administration announced that it is accepting applications from health care providers to be approved as independent medical exam providers. Applications are being accepted through April 30. Written public comments on any health care provider being considered or any current IME provider will be accepted from May 1-31.

New York

Medical Treatment Guidelines

The New York State Workers’ Compensation Board announced that new Non-Acute Pain Medical Treatment Guidelines, as well as revisions to the existing Medical Treatment Guidelines, went into effect on Dec. 15, 2014. 12 NYCRR 324.2 was amended to incorporate the Non-Acute Pain MTG as well as revisions to the third editions of the mid and low back, neck, shoulder, and knee MTGs and the second edition of the carpal tunnel syndrome MTG. Additionally, Intrathecal drug delivery (pain pumps) have been added to the list of procedures requiring prior authorization. The board stated that the new Non-Acute Pain MTG presents a comprehensive approach to the management of patients with chronic pain, including best practice recommendations for the appropriate use of narcotics. E-learning training programs have been developed to facilitate compliance with both the new Non-Acute Pain MTG and revised MTGs recommendations. The training consists of medical courses that enable providers to earn CME credits, as well as courses for nonmedical professionals. These programs are free and are available on the board’s website. In addition, the Non-Acute Pain Medical Treatment Guidelines training is available on the Medical Society of the State of New York’s website.

North Carolina

Benefit Rates

The North Carolina Industrial Commission established the 2015 maximum weekly benefit pursuant to N.C. Gen. Stat. § 97-29. The maximum weekly benefit applicable to all injuries and claims arising on and after Jan. 1, 2015, is $920.

Medical Fee Schedule

The North Carolina Industrial Commission announced the approval of three administrative rules revising its medical fee schedule. The new rules were approved by the Rules Review Commission on Feb. 19. The changes to fees for institutional services are scheduled to take effect on April 1 while the revised rates for professional services will take effect starting on July 1. The new schedule was developed in response to legislation requiring the Industrial Commission to revise its medical fee schedule to use current Medicare reimbursement rates and payment methodologies. The commission stated that the changes reflect a compromise agreement between insurance carriers, hospitals, physicians, and other medical care providers. As a result, maximum fees for hospitals and other institutional providers are set to decrease while fees for physicians, nurses, and other professional providers will increase. An analysis by the National Council on Compensation Insurance projects that the new Medical Fee Schedule will result in approximately $27 million in annual savings to the North Carolina workers’ compensation system. This estimate is based upon 2013 written workers’ compensation insurance premiums and self-insured employer data.

Ohio

Medical Fees

The Ohio Bureau of Workers’ Compensation scheduled a public hearing to consider amendments to: 1) Rule 4123-6-37.2 regarding payment of hospital outpatient services; 2) Rule 4123-6-37.3 regarding payment of ambulatory surgical center services; 3) Rule 4123-6-08 regarding the bureau fee schedule; and 4) Rule 4123-6-21.3 regarding the outpatient medication formulary. The amendments are required to comply with R.C. 119 requiring agencies to review their rules every five years and to update fees paid by the bureau to medical care providers.

South Carolina

Forms

The South Carolina Workers’ Compensation Commission announced that it has adopted the International Association of Industrial Accidents Boards and Commissions Claims EDI Release 3.0 standard for the voluntary electronic transfer of Subsequent Report of Injury information in place of the SCWCC Form 18 Semi Annual Reporting as of March 2. The commission implemented the mandatory submission for First Report of Injury in place of the SCWCC Form 12A as of Jan. 1, 2014. The new SROI process will allow electronic submission and improve the claims adjudication process and maintain industry standards in data reporting. Informal Conference requests will not be accepted electronically by SROI. Requests for ICs must be submitted on a Form 18 by email, U.S. Postal Service, or delivered to the commission.

Christina Lumbreras is a Legal Editor for Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at riskletters@lrp.com
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View From the Bench

Workers’ Comp Docket

Significant workers' comp legal decisions from around the country.
By: | March 23, 2015 • 11 min read
judge

GM Can’t Coordinate Pension Benefits With Disability Retirement Benefits

Arbuckle v. General Motors LLC, No. 310611 (Mich. Ct. App. 02/10/15, unpublished)

Ruling: In an unpublished opinion, the Michigan Court of Appeals reversed the Michigan Workers’ Compensation Commission’s decision allowing General Motors to coordinate a retired employee’s workers’ compensation benefits with his disability retirement benefits. Under the specific facts of this case, the court found the commission erred in concluding that the company had authority to coordinate such benefits.

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What it means: Where a collective bargaining agreement in effect at the time of an injured worker’s retirement prohibits coordination of workers’ compensation benefits with disability retirement benefits, and the worker, as a retiree, has no representation when the employer and union subsequently attempt to amend the terms of his benefit structure, the employer does not have authority to coordinate such benefits.

Summary: An auto worker was injured in 1991 and began receiving a total and permanent disability pension in 1993. In 1995, a workers’ compensation magistrate awarded him workers’ compensation benefits. Pursuant to a pension agreement and a 1990 Letter of Agreement, the worker’s workers’ comp benefits were not reduced by his disability pension benefits. He later began receiving Social Security disability insurance benefits.

In 2007, GM and the United Auto Workers union reached a contractual Letter of Agreement applicable to employees retiring after the 2007 agreement permitting GM to apply a new formula when determining whether a disability retiree’s workers’ comp benefits could be reduced. However, in 2009, GM renegotiated with the UAW wherein the 2007 Letter of Agreement would encompass a larger group of former employees — those who retired before Jan. 1, 2010. The new compromise allowed GM to coordinate pension benefits and workers’ comp benefits.

The worker was advised that his workers’ comp benefits would be reduced pursuant to this new formula. The magistrate denied GM’s right to coordinate his benefits, reasoning that the union lacked the authority to negotiate different retirement benefits after he retired. The commission reversed the magistrate’s ruling that the union lacked authority to bind retirees and affirmed his finding that GM did not violate MCL 418.354(11).

The Michigan Court of Appeals held that in this case the commission erred in concluding that GM had the authority to coordinate the worker’s benefits. When GM attempted to amend the terms of his benefit structure, the worker, as a retiree, had no representation. There was no bargaining between the worker and the union with regard to the allowance of coordination.

Driver’s Failure to Prove Retaliatory Motive for Discharge Ends Suit

Holder v. Olin Corp., No. 13-cv-1236-SMY-DGW (S.D. Ill. 02/05/15)

Ruling: The U.S. District Court, Southern District of Illinois dismissed a former employee’s retaliatory discharge lawsuit against Olin Corp. because the employee did not show that his termination was motivated by workers’ compensation retaliation.

What it means: “Sloppy personnel practices” by an employer before terminating an injured worker are not enough to prove the termination was motivated by workers’ compensation retaliation. The plaintiff must show that his termination was causally related to his pursuit of a workers’ compensation claim.

Summary: A forklift driver for Olin Corp. injured his back while working. The medical department advised the driver to see his personal doctor, who provided him with an off-work note stating he was unable to return to work. He requested that his doctor fax the note to his temporary supervisor, and then he contacted the supervisor to confirm he received it. The human resources department never received the off-work note from the driver’s doctor.

After not reporting to work the next three days or calling in, the driver was discharged by the director of labor relations for violation of company policy. The director stated she did not know the reason for the driver’s absences or have any knowledge of the driver’s previous workers’ compensation claims. The driver sued, claiming he was terminated in retaliation for incurring a potential workers’ compensation claim by being injured at work. The U.S. District Court, Southern District of Illinois granted Olin’s motion for summary judgment, reasoning that the driver did not provide any evidence of a retaliatory motive based on his potential workers’ compensation claim.

Although the driver contacted a supervisor regarding his doctor’s recommendation that he not return to work, there was no evidence that the person responsible for making the decision to terminate him had any knowledge of the potential workers’ compensation claim. The director of labor relations was adhering to established company policies in terminating the driver. Furthermore, the driver offered no evidence to show that any other person with knowledge of his potential workers’ compensation claim was responsible for the decision to terminate his employment.

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While the failure to communicate regarding the driver’s medical situation may constitute sloppy personnel practices, this was insufficient to show a retaliatory motive. Therefore, the driver failed to present sufficient evidence creating a genuine issue of material fact as to the cause of his termination.

Return to Job Means Benefits Can Be Suspended Despite Drop in Earnings

Donahay v. WCAB (Skills of Central PA Inc.), No. 869 C.D. 2014 (Pa. Commw. Ct. 2015)

Ruling: The Pennsylvania Commonwealth Court affirmed a ruling suspending a group home worker’s partial disability benefits even though she was earning less than her preinjury wages when she returned to work. The evidence indicated that her loss of earnings was attributable to economic conditions, not her work injury.

What it means: Under Pennsylvania law, a claimant’s medical restrictions after returning to her preinjury job are not relevant if they do not require a modification of her preinjury job duties. Furthermore, where the claimant’s loss of post-injury earnings is due to the employer’s addition of staff and the limitation on overtime for all employees because of funding cuts, not her work injury, her benefits may be suspended.

Summary: A team leader and residential services assistant at a group home for mentally challenged adults sustained a work-related ruptured right biceps and was paid disability benefits. She eventually returned to her job with restrictions. In February 2012, the employer filed a petition to suspend benefits. The Pennsylvania Workers’ Compensation Appeal Board affirmed an order suspending partial disability benefits even though the assistant was earning less than her preinjury wages when she returned to work. Her loss of earnings was attributable to economic conditions, not her work injury. Upon review, the Pennsylvania Commonwealth Court affirmed.

Because the specialist was doing her preinjury job, and not a light-duty position, the board properly applied the legal principles of Trevdan Building Supply v. Workers’ Compensation Appeal Board (Pope) to this case. Under Pope, medical restrictions are not relevant if they do not require a modification of the claimant’s preinjury job duties. Here, the assistant’s medical restrictions did not affect her ability to perform her regular work duties. The assistant acknowledged she has been doing her regular job and has not been asked to do anything that exceeds her doctor’s restrictions. She was performing her preinjury job without modification. Furthermore, she earned a higher hourly wage postinjury, and her work injury did not limit the number of overtime hours she could work. Her loss of earnings resulted from the addition of staff and the limitation on overtime for all employees because of funding cuts, not her work injury.

Therefore, the court concluded, the board did not err in granting the employer’s request to suspend benefits.

Nurse Overcomes Alternative Theories Explaining Fall in Hallway

Worthington v. Samaritan Medical Center, No. 517508 (N.Y. App. Div. 01/29/15)

Ruling: The New York Supreme Court, Appellate Division affirmed the award of benefits to a registered nurse who was injured when she fell while making her rounds and checking on patients at a hospital.

What it means: New York workers’ compensation law presumes that an accident that occurs in the course of employment also arises out of that employment. Where an employer’s medical testimony offering a variety of alternative causes for an employee’s fall is based on mere speculation, it is insufficient to rebut this statutory presumption.

Summary: The claimant, a nurse, testified that she was walking down the hallway of the hospital when her foot became stuck and she fell forward. She said she injured her right foot, left wrist, and face. The hospital presented medical testimony offering a variety of alternative causes for the fall, including her preexisting diabetic condition and other idiopathic medical conditions. The court said the hospital’s theories were based on mere speculation and were insufficient to rebut the statutory presumption, set forth in NYWCL Section 21, that an accident that occurs in the course of employment also arises out of that employment.

Deferring to the New York Workers’ Compensation Board’s credibility determinations regarding the conflicting medical evidence and witness testimony, the court found substantial evidence supported its determination that the nurse’s injuries arose out of and in the course of her employment.

UPS Must Pay Whole Disability From Work Injury, Diabetic Neuropathy

Sullins v. United Parcel Service, Inc., No. SC19226 (Conn. 02/17/15)

Ruling: The Connecticut Supreme Court affirmed a judgment in favor of an injured United Parcel Service worker, concluding the company should pay the entirety of the worker’s permanent partial disability to his arms and hands, instead of apportioning the payment so that UPS paid only for the proportion of disability attributed to the worker’s occupational injuries.

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What it means: Under Connecticut law, if an employee with a preexisting disability incurs a second disability from a work-related injury, which results in a permanent disability that is materially and substantially greater than the disability that would have resulted from the work-related injury alone, the employee is entitled to compensation for the entire amount of disability.

Summary: The plaintiff worked for UPS for 32 years, unloading trucks and sorting small parts. He was diagnosed with diabetes in 1987 and with diabetic neuropathy in 1998. The diabetic neuropathy caused impairment to his arms and hands, including weakness and tingling in his hands and difficulty in grasping things. In 2003, he suffered a work-related injury to his upper arms and hands. He eventually returned to work without restrictions until he retired in 2008.

In 2010, the plaintiff was assigned a disability rating of 44 percent permanent partial impairment to his bilateral upper extremities (arms) and 40 percent permanent partial impairment to his hands. Ten percent of the 44 percent impairment was attributed to work-related cubital tunnel syndrome, and 10 percent of the 40 percent impairment to work-related carpal tunnel syndrome. The reviewing surgeon also opined that the plaintiff’s occupation and work activities had no influence on the development of the nonoccupational disease to his arms and hands.

The issue certified to the Connecticut Supreme Court was whether a disability arising from a progressive nonoccupational condition that manifests prior to an occupational injury that further disables the same body part is a compensable preexisting injury or a noncompensable concurrently developing disease under the apportionment rule set forth in Deschenes v. Transco, Inc., 288 Conn. 303, 953 A.2d 13 (Conn. 2008).

The court held that Deschenes was applicable and that the defendants should pay the entirety of the plaintiff’s permanent partial disability to his upper extremities and hands. The medical evidence demonstrated that the permanent disability resulted from a combination of the diabetic neuropathy and impairment from the work-related injury. Approximately one-quarter of the plaintiff’s disability was caused by his work-related injury.

Evidence that the preexisting impairment materially increased the overall disability was sufficient to warrant application of Conn. General Statutes 31-349. The prior impairment did not have to combine with the compensable injury in any special way but merely had to add something to the overall disability.

Questions About Later Start Time Advance Worker’s Claims

Jansen v. Michael J. Hall & Co., No. C13-5954 BHS (W.D. Wash. 02/11/15)

Ruling: The U.S. District Court, Western District of Washington denied summary judgment to an insurance company on an employee’s state law disability discrimination claims. The court found there were questions of fact that a jury had to decide.

What it means: Shifting the schedule of an employee with a disability may be a reasonable accommodation if it allows her to do the essential functions of the job and doesn’t create an undue hardship for the employer. Where an employee could have been accommodated and was not, disability discrimination may arise if she is terminated for performance deficiencies that may have been addressed by her requested accommodation. In this case, an employee created a jury issue as to whether she could have been reasonably accommodated with a later start time.

Summary: Questions about whether a customer service representative’s presence was needed in the mornings and whether she could have avoided the issues leading up to her termination with an accommodation defeated an insurance company’s push for summary judgment on the representative’s disability discrimination claims under state law. The court held that the representative, who had a series of health challenges related to a prior spinal injury, presented enough evidence to allow a jury to hold in her favor on her failure to accommodate and disability discrimination claims.

The representative was terminated when the company decided that her late arrivals, early departures, and absences were becoming excessive. She claimed that her attendance problems could be remedied with a later arrival time because leg spasms kept her awake at night. The court explained that the company did not present enough to conclusively show that her presence was required in the morning. Contrary to its assertion that she had 10 to 20 emails waiting from clients when she arrived at 8 a.m., evidence showed that the representative spent only one to two hours per day on emails.

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The court explained that because there were issues for the jury about whether a later start time would help the representative perform her job, it was disputed as to whether her termination was due to performance or disability-based animus. The court explained that the link between a disability and a termination is “particularly strong” where an employer’s failure to reasonably accommodate an employee leads to a discharge for performance inadequacies that result from the disability.

Christina Lumbreras is a Legal Editor for Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at riskletters@lrp.com
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