View From the Bench

Workers’ Comp Docket

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

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 App. 02/10/15, unpublished)

Ruling: In an unpublished opinion, the Michigan Court of Appeals reversed the Michigan Workers’ Compensation Commission’s decision allowing General Motors to coordinate a retired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.


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.


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.


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.


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
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Drug-Free Workplace

Solid Substance Abuse Program Can Combat Legal, Safety Issues

Organizations need to develop and implement clear and defensible substance abuse programs to keep abusers from putting themselves and others at risk.
By: | March 23, 2015 • 4 min read
pot smoking

More than one-third of workers’ comp claims involve issues surrounding substance abuse, says a risk manager who specializes in workplace substance abuse prevention.  Alcohol and drugs are also major contributors to work-related motor vehicle accidents.


Employers spend an estimated $7,000 per year per substance abuser in direct operational costs. With some estimates suggesting up to 20 percent of workers are substance abusers, organizations need to develop and implement clear and defensible programs.

“It’s not a moral or ethical issue, it’s a business decision,” said Christine Clearwater, president of Drug-Free Solutions Group, “and a very important one to decide where you want to position your company and communicate that to your organization.”

Failing to address the issue can not only land an organization in a legal quagmire but also puts the safety of the entire company at risk. In a recent webinar produced by the National Safety Council, Clearwater outlined the risks employers face and provided solutions.


In addition to states that allow recreational use of marijuana, 23 allow the drug for medicinal purposes. Clearwater said the effects of the drug can create safety risks in the workplace even two days after use.

While the person may feel “high” for several hours after smoking marijuana, THC, the active ingredient in marijuana, reduces pressure on the optic nerve and can alter depth perception for up to 48 hours.

“So a person works with machines and doesn’t know if something is 5 or 7 inches away,” she said. “If you drive a forklift you don’t know if something is 5 or 10 feet away. … Hundreds of studies show this.”

The fact that federal law still bans the use of marijuana is good news for employers. “In workers’ comp, most states don’t require payment for the injured worker if he is under the influence at the time of an accident,” Clearwater said. “At this point in time, the system is supporting the employer.”

Other Drugs

“Herbs coated with chemicals not designed for human consumption” is how Clearwater defines synthetic drugs. They are one of the fastest growing and readily accessible drugs and are designed to simulate the effects of specific illegal drugs.

“They are fundamentally poisonous with plant fertilizer, etc.,” Clearwater said. “They are 500 times stronger than the actual drug it is simulating.”

Synthetic drugs are illegal in all 50 states, she said. The challenge is that labs making them develop new ones constantly.

“The majority of these simulate marijuana,” Clearwater said, “so you want to be talking to whoever is doing your testing to expand your testing profile.”

Methamphetamine, a synthetic version of cocaine, has grown to epidemic proportions, Clearwater said. It is highly addictive and may be associated with side effects such as paranoia and violent behavior.

Drugs such as Ecstasy and LSD are also prevalent. Clearwater said the LSD on the market today is simply chemicals.

Employer Solutions

Substance abuse issues can be “a hotbed for litigation,” Clearwater said. “The key factor is to have a very comprehensive sound policy that takes into consideration federal law, state law, and case law.”

A company’s substance abuse program should include several defensible elements, said Clearwater. The following five elements are program objectives to reach:

  • Policy and procedures.
  • Education for employees, which is mandatory in some states. “Educated employees are three times less likely to produce a positive test result,” Clearwater said. “They understand what you are trying to accomplish, and they don’t want to lose their jobs.”
  • Training for managers, which may also be mandatory. Trained managers are much more likely to use the policy.
  • Drug and alcohol testing. “Look at how you communicate your program,” she said. “Many companies say they have a program. But look at it as a substance abuse prevention program rather than a testing program.”
  • Access to support. This may range from a formal employee assistance program to just a listing of local resources.


The substance abuse policy needs to be clear as to when and how much alcohol can be consumed, she added. Retirement or holiday parties, or when employees are traveling and entertaining may be occasions when alcohol is allowed.

“If it’s not written down, it is not a rule and is difficult to take action on,” Clearwater said. “Alcohol is a big hotbed for being exposed to litigation.”

Clearwater also suggests workplace substance abuse policies define the level of “under the influence.”

For prescription medications, employers are advised to clarify employees who must report a specific prescription. “Often I see companies say, ‘all employees need to report prescriptions.’ We can’t do that today,” she said. “We can ask employees in safety-sensitive positions to report a prescription drug that may affect their ability to do their jobs.”


The policy should specify what should be reported and in what form, whom to report it to, and who decides whether reasonable accommodation is warranted.

If drug and alcohol screening is included in the program, employers need to determine which drugs they are including in the drug panel. Many test for five drugs following the Department of Transportation’s drug testing protocol.

“I’d highly recommend moving that to nine or 10,” Clearwater said. “The additional four or five are generally your prescription drugs. Otherwise, you are not capturing potential problems of prescription drugs.”

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at
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Sponsored: Lexington Insurance

What Is Insurance Innovation?

When it comes to E&S insurance, innovation is best defined as equal parts creativity and speed.
By: | March 2, 2015 • 4 min read

SponsoredContent_LexingtonTruly innovative insurance solutions are delivered in real time, as the needs of businesses change and the nature of risk evolves.

Lexington Insurance exemplifies this approach to innovation. Creative products driven by speed to market are at the core of the insurer’s culture, reputation and strategic direction, according to Matthew Power, executive vice president and head of strategic development at Lexington, an AIG Company and the leading U.S.-based surplus lines insurer.

“The excess and surplus lines sector is in a growth mode due, in no small part, to the speed at which our insureds’ underlying business models are changing,” Power said. “Tomorrow’s winning companies are those being built upon true breakthrough innovation, with a strong focus on agility and speed to market.”

To boost its innovation potential, for example, Lexington has launched a new crowdsourcing strategy. The company’s “Innovation Boot Camps” bring people together from the U.S., Canada, Bermuda and London in a series of engagements focused on identifying potential waves of change and market needs on the coverage horizon.

“Employees work in teams to determine how insurance can play a vital role in increasing the success odds of new markets and customers,” Power said. “That means anticipating needs and quickly delivering programs to meet them.”

An example: Working in tandem with the AIG Science team – another collaboration focused on innovation – Lexington is looking to offer an advanced high-tech seating system in the truck cabs of some of its long-haul trucking customers. The goal is to reduce driver injury and fatigue-based accidents.

SponsoredContent_Lexington“Our professionals serving the healthcare market average more than twenty years of industry experience. That includes attorneys and clinicians combining in a defense-oriented claims approach and collaborating with insureds in this fast-moving market segment. At Lexington, our relentless focus on innovation enables us to take on the risk so our clients can take on the opportunities.”
— Matthew Power, Executive Vice President and Head of Regional Development, Lexington Insurance Company

Power explained that exciting growth areas such as robotics, nanotechnology and driverless cars, among others, require highly customized commercial insurance solutions that often can be delivered only by excess and surplus lines underwriters.

“Being non-admitted, our freedom of rate and form allows us to be nimble, and that’s very important to our clients,” he said. “We have an established track record of reacting quickly to trends and market needs.”

Lexington is a leading provider of personal lines coverage for the excess and surplus lines industry and, as Power explains, the company’s suite of product offerings has continued to evolve in the wake of changing customer needs. “Our personal lines team has developed a robust product offering that considers issues like sustainable building, energy efficiency, and cyber liability.”

Most recently the company launched Evacuation Response, a specialty coverage designed to reimburse Lexington personal lines customers for costs associated with government mandated evacuations. “These evacuation scenarios have becoming increasingly commonplace in the wake of recent extreme weather events, and this coverage protects insured families against the associated costs of transportation and temporary housing.

The company also has followed the emerging cap and trade legislation in California, which has created an active carbon trading market throughout the state. “Our new Carbon ODS product provides real property protection for sequestered ozone depleting substances, while our CarbonCover Design Confirm product insures those engineering firms actively verifying and valuing active trades.” Lexington has also begun to insure new Carbon Registries as they are established in markets across the country.

Lexington has also developed a number of new product offerings within the Healthcare space. The Affordable Care Act has brought an increased focus on the continuum of care and clinical patient safety. In response, Lexington has created special programs for a wide range of entities, as the fast-changing healthcare industry includes a range of specialized services, including home healthcare, imaging centers (X-ray, MRI, PET–CT scans), EMT/ambulances, medical laboratories, outpatient primary care/urgent care centers, ambulatory surgery centers and Medical rehabilitation facilities.

“The excess and surplus lines sector is in growth mode due, in no small part, to the speed at which our insureds’ underlying business models are changing,” Power said.

Apart from its coverage flexibility, Lexington offers this segment monthly webcasts, bi-monthly conference calls and newsletters on key risk issues and educational topics. It also provides on-site risk consultation (for qualifying accounts), access to RiskTool, Lexington’s web-based healthcare risk management and patient safety resource, and a technical staff consisting of more than 60 members dedicated solely to healthcare-related claims.

“Our professionals serving the healthcare market average more than twenty years of industry experience,” Power said. “That includes attorneys and clinicians combining in a defense-oriented claims approach and collaborating with insureds in this fast-moving market segment.”

Power concluded, “At Lexington, our relentless focus on innovation enables us to take on the risk so our clients can take on the opportunities.”

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Lexington Insurance. The editorial staff of Risk & Insurance had no role in its preparation.

Lexington Insurance Company, an AIG Company, is the leading U.S.-based surplus lines insurer.
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