Cook's unpaid, voluntary work at store fails to support showing of fraud
Artec Services v. Cummings, No. S-14457, No. 6754 (Alaska 03/08/13).
Ruling: The Alaska Supreme Court held that an injured cook did not fraudulently misrepresent her employment status for the purpose of obtaining workers' compensation benefits.
What it means: In Alaska, a worker can be ordered to reimburse workers' compensation benefits if she subjectively intended to defraud the employer.
Summary: A cook hurt her neck, back, and hip while lifting a grill cover. Her employer accepted that her injuries were compensable and began paying workers' compensation benefits. The cook continued to receive chiropractic treatment. She applied for reemployment benefits and told a rehabilitation counselor that her long-term goal was to open a store that sold herbal remedies.
Several months after her injury but before she began the reemployment process, she received a business license in the name of an herbal remedies business. The license expired a month later, but her boyfriend used the same business name to obtain a business license. The two rented a store in a mall. A private investigator observed the cook spending a considerable amount of time in the store assisting customers and selling herbs. She was not paid for her work. The cook said that she considered her work at the store to be a hobby. The employer filed a petition alleging that the cook fraudulently misrepresented her employment status for purposes of obtaining benefits. The Alaska Supreme Court held that the cook's statements were not knowingly false and therefore not fraudulent.
The court concluded that "knowingly," for purposes of fraud claims, requires the subjective intent to defraud. The Workers' Compensation Board found credible the cook's testimony that she was never paid for her work at the store, it was voluntary, she was pursuing a hobby, and she did not consider her work to be employment that she needed to report. The court found this testimony supported a finding that the employer failed to prove that she knowingly made a false or misleading statement for the purpose of obtaining benefits.
Read more at the WorkersComp Forum homepage.
June 10, 2013
Copyright 2013© LRP Publications