Legal Corner

ADA
Court upholds $27M award to train conductor barred from returning to work

In Granas vs. Union Pacific Railroad Company, a federal district court in Oregon affirmed a jury's finding that the railroad violated the ADA and Oregon law by terminating a train conductor who was medically cleared to return to work after dislocating his right shoulder in a personal injury based on the blanket application of its "one percent rule." The policy prohibited workers in safety-sensitive positions from working or returning to work if they had a medical condition that put them at a one percent or greater risk of sudden incapacitation. Implemented in 2016, the rule listed various conditions, such as stroke, seizures, heart attack, embolism, or diabetic coma, as well as the conductor's condition-anterior shoulder dislocation.

Although the conductor had been working on ladders at his ranch and in construction to help pay the bills and was cleared without restrictions, the railroad concluded he was prohibited from climbing and, therefore, could not perform the essential functions of his job. The court agreed with the jury that the one-percent rule was unlawful because it did not allow for individualized determinations. The court also refused to reduce the jury award of $27M to the ADA compensatory and punitive damages cap because the jury found that the company violated both the ADA and Oregon law.

While the court stayed execution of the judgment until the exhaustion of the appellate process, employers should take note that the court held it only needed to find intentional discrimination to support a punitive damages award, not egregious conduct. The imposition of permanent restrictions on the employee rather than an individualized determination was intentional discrimination.

Workers Compensation
Discovery disclosure requirements clarified by WCAB - California

In DiFusco v. Hands On Spa, the Workers' Compensation Appeals Board's (WCAB) recent en banc decision significantly broadens disclosure requirements for defendants in workers compensation cases. The requirements governing the identification of liable parties have been shaped by an earlier en banc decision, Coldiron v. Compuware Corp., and the Code of Regulations, Title 8, § 10390. However, there was ambiguity as to whether the regulations superseded the more detailed disclosure requirements of Coldiron.

In this case, a massage therapist was awarded home health services as part of a settlement conference, however, the home health care provider had not been paid and was going to stop rendering service. Her attorney sent a discovery request, citing the Coldiron decisions, and asked for detailed information about the insurance coverage, including policy limits, primary and secondary excess carriers, and any other potential payors. Defense counsel contended that it had complied with the law by identifying the insurance carrier and that no further disclosure was require since the regulation had superseded Coldiron.

The unanimous ruling held that CCR 10390 does not supersede Coldiron and that the detailed disclosure requirements articulated in that case remain binding precedent, applying to all defendants, regardless of whether there is a third-party administrator. This decision is binding precedent for all Workers Compensation Appeals Board panels and all workers compensation administrative judges.

Court overturns WCAB decision and denies coverage for ex-NFL player's claim - California

In Atlanta Falcons v. Workers' Compensation Appeals Board, the WCAB held that a rookie contract signed by the Los Angeles Rams gave it jurisdiction over the claim of cumulative trauma and occupational disease filed against the Atlanta Falcons two decades later. The 4th District Court of Appeal disagreed, citing 2013 legislation that limited the ability of professional athletes to pursue comp claims in the state.

The law provides that professional athletes claiming a cumulative injury who have worked for both a California employer and other employers is exempt from coverage under the state's comp law if all the teams in their final year of employment as a professional athlete are exempt, unless they spent two complete seasons or 20 percent of their career duty days for a California-based team.

Termination for misconduct is basis for suspension of benefits - Florida

In Cobb v. TECO Energy Inc., an appellate court upheld a ruling denying temporary partial disability benefits to an employee who was terminated for misconduct following a wrist injury. After being released to light duty, he was fired for repeatedly violating several company policies, including sitting idle during company time, despite several warnings. State law provides that temporary partial disability benefits are not payable if an employee is fired from post-injury employment due to misconduct. The Judge of Compensation Claims found his conduct met the statutory definition of "misconduct" and the appeals court agreed.

Subrogation lien only available against economic losses - Georgia

In McLeod v. BITCO Insurance Cos., an employee sued several parties in a motor vehicle accident. He eventually settled his civil action for a lump sum of $325,000. The insurance company that provided his work comp intervened to assert its subrogation rights. A judge granted enforcement of a lien of $166,371.

Upon appeal, the court noted the judge's finding that the worker had been fully compensated did not differentiate between economic and non-economic losses. Under state law a subrogation lien is available only against recovery for economic losses, therefore, the carrier would have to show that no portion of the lien "is taken against recovery for non-economic losses" to enforce the lien. Unable to do so, the carrier failed to meet its burden of showing the employee was fully and completely compensated.

Medical provider cannot pursue claim against employer - Illinois

In Midwest Neurosurgeons v. F.W. Electric, Inc., an appellate court considered whether a medical provider could recover $87,204.33 in unpaid medical bills for the costs of services rendered to an injured employee directly from an employer under the terms of a workers compensation settlement agreement. In the settlement, the employer agreed to "pay the reasonable, necessary, and causally related medical expenses."

The medical provider filed a breach of contract action against the employer alleging that it was a third-party beneficiary to the agreement. The court reasoned whether an entity is a third-party beneficiary of a contract depends on the intent of the parties, as evidenced by the contract language. It noted the settlement was solely between the injured employee and his employer and did not express an intent to benefit medical providers directly. Further, providers cannot pursue private claims against employers for unpaid bills; only the injured employee may enforce payment obligations.

Over $5M awarded to widow for restaurant worker's death from anaphylactic shock - Illinois

In Rivas v. Benny's Prime Chophouse LLC, an appellate court upheld a $5.78 million judgment for the death of a restaurant worker who suffered a fatal allergic reaction after eating a free employee meal containing seafood. His widow sued the restaurant for negligence, arguing it failed to label or warn employees about allergens. The court found that the exclusive remedy did not apply because his death did not arise out of or in the course of his employment, since the meal was optional and his allergy was a personal risk unrelated to his work duties. It affirmed findings that the restaurant was negligent, and the worker was 40 percent at fault.

High court to rule on policy of denying comp benefits to undocumented workers - Michigan

In MIRC v. Whitmer, the Michigan Immigrant Rights Center (MIRC) argued the policy of denying comp benefits to undocumented workers who are injured on the job violates state precedent and due process, while the Governor's office argued the case should be dismissed and change should come from the legislature. The Governor's office supports a Court of Appeals ruling that a lower court should have granted the state's motion for summary disposition in the case since MIRC's suit was not "timely." The state allegedly started violating workers' rights more than a year prior.

The high court heard arguments on October 8.

High court clarifies comp for voluntary employer-sponsored recreational program injuries - Minnesota

In Workers' Compensation Court of Appeals (Erin Lindsay) v. Minneapolis Public School District., the Supreme Court ruled that the state law excluding coverage for injuries sustained during voluntary employer-sponsored recreational programs applies only to activities intended to benefit employees - not those serving the employer's mission. A math teacher at Sullivan STEAM School, injured her knee while playing basketball with students after school. The district denied her workers compensation claim, citing the statute that bars coverage for voluntary recreational activities.

A workers' compensation judge and the Workers Compensation Court of Appeals both found her injury compensable, reasoning that her participation aimed to build relationships with students, a goal encouraged by the school and tied to her employment duties. The Supreme Court affirmed, holding that "voluntary employer-sponsored recreational programs" refer only to activities for employees' personal benefit, such as wellness programs or staff picnics. Because her participation benefited the students and aligned with her teaching responsibilities, the exclusion did not apply.

Delivery service must change policies and pay $800,000 to continue classifying workers as contractors - Minnesota

In State of Minnesota by Attorney General Keith Ellison vs Shipt, Inc., a same-day delivery service owned by Target agreed to pay $800,000 and implement new policies to continue classifying its workers as independent contractors. Instead of workers compensation coverage, Shipt agreed to provide occupational accident insurance with at least $1 million in medical benefits and $500 a week in disability payments. It also will not keep tips and will make it easier for drivers to receive higher ratings.

Surveillance does not prove fraud when symptoms vary - New York

In Harmon v. Faxton Sunset St. Luke's Health Care Center Inc. a nurse was punched in the face two times by a patient and suffered a concussion and broken nose. She told doctors her conditions waxed and waned and she was not always able to perform some regular activities, such as walking and driving, and needed to wear sunglasses because of headaches and received compensation for her claim. Based on video surveillance, her employer accused her of fraud. It showed her outside of her home not wearing sunglasses, walking around in stores, and squatting and bending in her yard.

The Workers Compensation Board found that there was insufficient evidence to establish fraud and the appellate court agreed. The court credited her testimony that symptoms "waxed and waned" and that she followed her doctor's advice to increase her physical activity gradually. It also noted that on some days she was without eye protection because it was cloudy outside.

Construction firm to pay $1.4M to workers for violating rights - New York

New York Attorney General Letitia James announced an $1.4M settlement with Alba Services, Inc., its owner Andrew Horan, and a network of related New York City construction and demolition companies for violating workers compensation laws, retaliating against injured workers, and failing to address sexual harassment in the workplace. The company failed to report workplace accidents for 675 employees, many of whom are immigrants. It also reportedly interfered with medical treatment, directed workers to specific clinics to conceal injuries, and retaliated against injured workers who tried to file claims by publicly accusing them of fraud or using threats and harassment.

Under the terms of the settlement, Alba must pay $1.4 million in restitution to current and former Alba employees, adopt reforms to comply with labor and human rights laws, and pay $100,000 for a settlement administrator.

Supreme Court affirms the statutory employer defense - Pennsylvania

In Yoder v. McCarthy Construction, Inc., the Supreme Court unanimously reaffirmed the statutory employer doctrine under the Workers Compensation Act. An employee of a subcontractor suffered critical injuries when he fell through an uncovered hole during a roofing project at a public library. He received comp benefits from the subcontractor and sued the general contractor (GC) for negligence.

A judge ruled that the GC did not meet the five-prong test to qualify as a statutory employer, and a jury awarded $5.6M. On appeal, the Superior Court reversed, and the worker appealed to the Supreme Court. The court considered whether the statutory employer defense can be denied if the GC has not paid workers compensation benefits and whether the defense can be waived.

The court ruled there was no basis to overwrite 26 years of precedent, and a GC remains entitled to "historic immunity as a 'statutory employer' from suit for common law negligence...even though the subcontractor which directly employed the injured worker carried workers compensation insurance which paid benefits for the worker's injuries." However, the Superior Court abused its discretion by exceeding its scope of review. The trial judge precluded the GC from raising the statutory employer defense at trial and there were no records to assess if the GC satisfied the first, second, and fourth elements of the statutory employer test. The case was remanded to the trial court for further proceedings to determine whether the GC satisfies these disputed elements.

Firefighter's PTSD denial overturned - Pennsylvania

In Ganley vs. Upper Darby Township, the Commonwealth Court reversed a WCAB ruling and awarded comp benefits to a firefighter who was diagnosed with post-traumatic stress disorder (PTSD) after performing cardiopulmonary resuscitation on two infants who died in his care. Although a judge and the WCAB found that performing CPR and witnessing death are not abnormal working conditions for a first responder, the court found that performing CPR and witnessing the deaths of two infants in a 16-month period is abnormal.

High court rules worker entitled to new panel of physicians - Tennessee

In LeMaire v. Lowe's Home Centers LLC, the Supreme Court's Special Workers Compensation Appeals Panel upheld a decision granting a worker a new panel of physicians after her treating doctor discharged her from care. Following treatment for a compensable foot injury, the worker was diagnosed with complex regional pain syndrome (CRPS). After disputes over impairment ratings and treatment, she sought an opinion from an orthopedist and received a higher impairment rating. The trial court approved the rating but refused the request for a new panel of physicians even though she had declined the physician's CRPS recommendations.

The relationship deteriorated during a follow-up visit, and the physician testified he discharged her because it had broken down beyond repair. The worker then sought additional medical benefits and a new panel of physicians. The Appeals Board held, and the high court affirmed, that she remained entitled to medical treatment necessary for her injury and that no law required her to accept optional treatment recommendations. Therefore, the employer must provide a new panel of physicians.