Archive for the ‘Law’ Category

Employee Misclassification: The Beat Goes On And On And On And…

Wednesday, July 8th, 2015

Bill Clinton used to say that (fill in the blank) would last “until the last dog dies.” Well, friends, today’s topic is all about a dog that won’t die, absolutely refuses to die, will outlive us all, cannot be killed. You get the point.

Eleven years ago (I almost feel like writing “in a galaxy far away”), the Insider started to track the illegal practice of misclassifying employees. We found that, while it was almost ubiquitous in the construction industry, its tentacles reached into other industries as well. We saw it as widespread right in our backyard of Massachusetts. We found a 2005 paper addressing the issue in the Maine construction industry published by the Labor and Worklife Program, Harvard Law School and the Harvard School of Public Health. We conducted employer seminars on it in many states.

At the time, we thought it was a pretty egregious practice that would be hard for state Attorneys General to ignore, so it would probably get fixed lickety split. We were half right. It was egregious, and Ags from the majority of states published stern regulations, as did state Departments of Insurance. But “fixed?” Nope.

Then, in 2005, a national class-action lawsuit with hundreds of plaintiffs from 30 states was filed against FedEx Ground alleging that workers were misclassified as independent contractors. This was mother’s milk to us. We had our bogeyman, and his name was Fedex. Since then, we’ve written about this Dorian Grey issue ten times. Here’s an example from 2006

FedEx loses contractor battle in Mass – Last year, my colleague Jon Coppelman blogged that FedEx should beware of Massachusetts when calling drivers “independent contractors.” Last week, the Massachusetts Department of Workforce Development ruled that a FedEx ground driver was not an independent contractor, and was therefore illegally denied unemployment benefits. Of course, this opens a can of worms about the denial of other statutory benefits, like workers comp. This is not the end of the lawsuits by any means. FedEx faces ongoing challenges in multiple states. The moral of the story: if you work with independent contractors, be sure they meet state and federal criteria to qualify as such.

Fast forward to now. Specifically, to Wall Street Journal writer Laura Weber’s 30 June story “Bosses Reclassify Workers To Cut Costs.” Ms. Weber’s story manages to be both objective reporting and poignant at the same time. Here’s an exccerpt:

Employers have long shifted work from employees to independent contractors, often relabeling the workers and slightly altering the conditions of their work, court documents and settlements indicate. Now, businesses are turning to other kinds of employment relationships, such as setting up workers as franchisees or owners of limited liability companies, which helps to shield businesses from tax and labor statutes.

In response, some state and federal agencies are aggressively clamping down on such arrangements, passing local legislation, filing briefs in workers’ own lawsuits, and closely tracking the spread of what they see as questionable employment models.

All this is happening against the backdrop of a broader shifting of risk from employers to workers, who shoulder an increasing share of responsibility for everything from health-insurance premiums to retirement income to job security. Alleged misclassification of workers has been one of the primary battlegrounds of this shift, leading to high-profile lawsuits against Uber Technologies Inc. and FedEx Corp., among others. Both have recently lost or settled big cases. Uber is appealing one decision, and FedEx settled in California for $228 million but is continuing to challenge classification lawsuits in other states.

Today I’m an employee; tomorrow I’m an Independent Contractor; the next day a Franchisee, or, oh, I don’t know, CEO of my own one-person LLC. Not only will the dog not die, his bark is really loud.

Very smart people are cooking up these schemes. I ask you – Do you think they are:

  • Bettering the lives of America’s workers?
  • Enhancing American productivity?
  • Propelling more workers into the ranks of the dwindling middle class?
  • Growing shareholder value?

I’d like to know what you think. Write me at tomlynch@lynchryan.com.

Exclusive Remedy wins: Safe in Florida … for now. Also upheld in DBA suit

Thursday, June 25th, 2015

The big workers comp news of the week: A three-judge panel of the 3rd District Court of Appeal overturned a ruling that challenged the concept exclusive remedy: Appeals court tosses out key workers-comp ruling. Refresher: In the 2014 Florida case often referred to as the Padgett ruling, Miami-Dade Circuit Judge Jorge Cueto ruled ruled workers compensation unconstitutional, commenting that state legislative reforms had weakened the law to a point where the remedy for employees was no longer sufficient to warrant the loss of their right to sue employers.

But before exclusive remedy proponents break out the champagne to celebrate the victory, in Padgett Out, Now What? Dave DePaolo dissects the ruling, explaining why any celebrations may be premature.

“But the 3rd DCA set aside Judge Cueto’s ruling on procedural grounds, not addressing any of the merits. This leaves the question open.

The organizations pushing the constitutional challenge have vowed to continue the fight.

And those defending the system realize that the attacks will continue, particularly since there are still two cases pending in the Florida Supreme Court attacking smaller provisions of the law on similar grounds (Westphal v. City of St. Petersburg is about the statutory limits on the payment of temporary total disability benefits, and Castellanos v. Next Door Co. involves a challenge to the cap on claimant attorney fees).”

For the legal nerds in the crowd, a must-see analysis on the case can be found at Judge David Langham’s post It is Padgett Time, Third DCA Reverses. As Deputy Chief Judge of Compensation Claims for the Florida Office of Judges of Compensation Claims and Division of Administrative Hearings, Langham wields some expertise on the matter — his post is worth reading.

Exclusive remedy upheld in Defense Base Act ruling

In other recent exclusive remedy legal news, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) reaffirmed that the Defense Base Act (DBA) is the exclusive remedy for contract workers. See: The D.C. Circuit’s Message to Injured Government Contractor Employees: ‘There’s an Exclusive Remedy For That’ in National Law Review.

“Despite the Act’s broad exclusivity provision, in Brink v. Continental Insur. Co., an estimated class of 10,000 contractor employees who were injured in Iraq and Afghanistan brought a purported class-action lawsuit for $2 billion against dozens of government contractors, alleging that the contractors conspired with their respective insurance carriers to deny the workers DBA benefits. But a three-judge panel of the D.C. Circuit unanimously rejected plaintiffs-appellants’ claims and, in a 17-page opinion, made five key findings that will help government contractors defend similar lawsuits in the future.”

Related

3rd DCA Reverses Summary Judgment in FWA Constitutional Challenge to Exclusive Remedy

Brink v. Continental Insurance Company, Court of Appeals

Appeals Court Tosses Out Key Workers Comp Ruling

D.C. Circuit tosses suit brought by injured military contractors

“Calling a dog’s tail a leg does not make it a leg”: Big court loss for FedEx

Monday, September 15th, 2014

Over the years, we’ve devoted a few dozen posts to the issue of FedEx and its drivers. Here’s the issue in a nutshell: FedEx thinks its Ground drivers are independent contractors and the drivers generally disagree.

For the eleven years we’ve been blogging, this issue has been wending its way through state courts, with a win for the company here, a win for the drivers there. On August 27, FedEx suffered a massive one-two punch at hands of the Ninth U.S. Circuit Court of Appeals in San Francisco, who overturned a lower court’s decision in Alexander v. FedEx, ruling that 2,300 drivers were indeed employees. Within a few days, the same court ruled that some 360 Oregon drivers were also employees (Slayman v. FedEx.) In making the ruling, the Court found that when the rubber hit the road, the lower court had overstated the entrepreneurial opportunities factor that benefited the so-called independent contractors. It apparently wasn’t enough of a benefit to sway the court.

To paraphrase our illustrious VP, “…this is a big effing deal.”

Contractors and small business are being chased down aggressively by state authorities (and rightly so, we think) to make them shoulder responsibility for employment obligations that other businesses carry. But in the land of the giant employers, many use independent contractor and subcontractor mechanisms to shield themselves from workers comp, Social Security, unemployment insurance, the provision of benefits like healthcare and paid vacation, and the obligation to protect workers in a variety of ways.
For your further edification on this important issue, we defer to business and legal experts. We’ve gathered opinions and analyses from a variety of sources and offer excerpts.

What court rulings against FedEx mean for workers
“It seems likely FedEx will want to appeal the 9th Circuit decisions to the Supreme Court. But it may face some difficulty in doing so, because — even though made at the federal level — the two decisions concern matters of state law rather than federal. Their reach is similarly limited; they apply only to FedEx drivers in California and Oregon. But there’s a decent chance the 9th Circuit’s decisions will influence future decisions in other jurisdictions. At the very least, they are shining more light on corporations’ maddening reluctance to take responsibility for the folks who represent them most directly to the public.”

FedEx Latest Company Slammed Over ‘Independent’ Employees
“What the 9th Circuit did was to apply the more traditional measure. Judge Stephen Trott, a Reagan appointee in a concurring opinion, quoted Abraham Lincoln: “‘If you call a dog’s tail a leg, how many legs does a dog have?’ His answer was, ‘Four. Calling a dog’s tail a leg does not make it a leg.'” Trott also admonished FedEx for presenting some information out of context and told the company’s lawyers that they “would be well advised not to elide the truth, the whole truth, and nothing but the truth.”

Reagan Appointee ‘Unravels FedEx’s Business Model’ In Court Ruling
“FedEx is largely credited with having pioneered the “independent contractor” work model in the logistics industry. Under this system, workers function as self-employed drivers with their own routes, covering the costs of their own trucks, gasoline, uniforms and so forth.

While corporations claim the contractor system gives drivers flexibility and strong incentives as “small businesses,” critics say it’s simply a way to shift the costs of employment onto workers and avoid payroll taxes and workers’-compensation costs.

The basic question in lawsuits involving the independent contractor model is whether or not a company like FedEx still maintains control over the work itself. In Wednesday’s ruling, the judges asserted that it does.”

Employment Law Summer Recap 2014: Part 1 of 11 – FedEx sings Nico & Vinz’s “Am I Wrong”…to Classify Our Drivers as Independent Contractors?
“The decision will likely upend FedEx’s driver business model in part because it makes it more expensive for FedEx to operate its business – an added expense that we can expect it will pass along to us, the consumers. Why more expensive? Because, among other things, FedEx will now have to (i) make the required employer contributions on behalf of these individuals (i.e. to Social Security and unemployment benefit funds); (ii) take out new insurance policies (i.e. for workers’ compensation insurance); (iii) offer them health insurance and (possibly) pension benefits along with other benefits like paid vacation; (iv) incur the administrative and operational costs associated with treating these individuals as employees (i.e. additional training and development, compliance, etc.); and (v) potentially pay them back for millions in lost wages. Further, these individuals can now sue FedEx under many of the employment laws that did not previously cover them (i.e. Title VII) – yet another potential expense for FedEx.”

Who’s the Boss
“It has become harder and harder for workers to tell who their employer is. Companies have engaged in vertical dis-integration as franchised businesses have become increasingly prominent and contracting out of operations by traditional firms has increased. The expanded reach of private equity funds as owners of Main Street companies has also undermined the traditional employment relationship.

In both cases, a complex web of legally distinct entities has been put in place whose aim is to separate a business’s actual owners and managers from responsibility for the effects of their decisions on workers.”

‘Seismic’ 9th Cir. rulings nix FedEx claim its drivers aren’t employees, could cost company millions
“By retaining independent contractors to perform work instead of employees, companies can potentially save a lot of money that would go toward overtime pay and other benefits such as social security. FedEx also has reportedly required its drivers to pay for their own uniforms and trucks. But if companies are determined to have misclassified employees as independent contractors, they can wind up paying not only the original employee costs they avoided but substantial penalties, as an earlier ABAJournal.com post about the FedEx litigation details.”

Is this the end of the independent contractor as we know it?
“This case also confirms that if you exercise any control over how workers perform services for you, it is likely that they should be classified as employees, not independent contractors. This distinction is important, because, unlike contractors, employee are subject to a host of employment laws, including the anti-discrimination laws, workers’ comp laws, and wage-and-hour (minimum wage and overtime) laws.

While this case only covers employers governed by California law in the 9th Circuit, I would expect the filing of copycat lawsuits under the laws of different states in different courts. In other words, this case is not the final word on this issue. Thus, to answer the specific question I posed in the title to this post, while this case does not necessarily spell the end of the independent contractor, it very well could be the beginning of trend of cases leading down this path.”

FedEx Refuses to Treat Your Friendly Delivery Guy Like a Real Employee And an important new court ruling could change that
“This is a classic example of employee misclassification, but such employer malfeasance is not limited to FedEx. It’s a nationwide problem that shifts significant costs to workers, eliminates employment-related protections, deprives the government of billions of dollars in revenue and prevents workers from unionizing. On Wednesday, labor earned a big victory when the Ninth Circuit Court of Appeals ruled in two cases that the shipping company misclassified the employment status of 2,300 California drivers and 363 Oregon drivers. It’s an important, if limited, step towards rectifying this widespread problem.”

Court rejects FedEx Ground’s driver business model
“Ross said that FedEx now requires its contractors based in California to hire a secondary workforce of FedEx drivers, who do the same work as the plaintiffs under the same contract. She said the Alexander decision “calls into question FedEx’s strategy of making plaintiffs the middle men” between the secondary workforce of drivers and FedEx. “We have heard of many instances where the secondary drivers are earning such low wages that they have to rely on public assistance to make ends meet.”

Zohydro ER Vs. Deval Patrick: The Latest Gunfight at the OK Corral

Wednesday, April 9th, 2014

The U.S. Food and Drug Administration (FDA) has acknowledged that prescription drug overdoses are now the leading cause of injury-related death in America, surpassing auto accidents. Couple that with the Agency’s approval last October of Zohydro ER, the first pure opiate painkiller, and you begin to understand why many lawmakers are left scratching their heads. More than half the states’ attorneys general have asked the FDA to withdraw approval of the drug. But the Agency is unrepentant. FDA Commissioner Margaret Hamburg told the Senate that the drug is a safe and effective option for patients with excruciating pain.
In late March, a stymied Governor Deval Patrick took the highly unusual step of banning the sale in Massachusetts of the controversial opioid made by California-based Zogenix, Inc. Many in the Massachusetts legislature as well as a number of workers compensation claims professionals thought it was the best thing any governor had ever done, a bold step to protect the citizenry.
Only it’s not as simple as that. It’s turning out that, however well-intentioned Governor Patrick may be, he probably can’t ban the sale of the drug, after all. Yesterday, US District Court Judge Rya W. Zobel told state lawyers that by Monday she wanted to see a lot more research that would buttress the Governor’s ban. Nonetheless, she said that she would more than likely grant a preliminary injunction on behalf of Zogenix that would allow Zohydro ER’s sale in Massachusetts. Said Zobel, “I think, frankly, the governor is out of line on this.”
According to Patrick, his issue with Zohydro ER is that it is not in “an abuse-resistant form,” meaning that it is not crush-resistant. Consequently, addicts (or anyone else who has the drug, for that matter,) can crush it and snort it or inject it.
Why would anyone want to do that instead of simply washing it down with a sip of water? Because in its pill form Zohydro ER is an “extended release” medication. That’s what the ER stands for. In fact, Zohydro’s full legal name is Zohydro ER (hydrocodone bitartrate) Extended Release Capsules. Crushing and snorting or injecting simply bazookas the whole dose at one time, which can be a deadly proposition.
Zogenix’s President, Steven J. Farr, attended yesterday’s hearing and, afterwards, took pains to let everyone know that Zohydro ER is safer than other hydrocodone drugs because it does not contain Acetaminophen, which can cause liver damage and failure with prolonged, high-dose usage. Farr did not mention that Zohydro ER contains up to five times the hydrocodone found in Vicodin. He did say that the company is in early stage development of abuse-deterrent formulations of the drug. That gave cold comfort to the Governor.
Whatever happens, it is hard to believe that Governor Patrick, a very smart lawyer, actually thinks he’s on firm legal footing here, although outside the courthouse that’s exactly what he said. As Judge Zobel pointed out (and she was decidedly irate that Patrick banned the drug without ever talking with Zogenix), Patrick cannot blame the Massachusetts opioid epidemic on Zohydro ER because the drug has yet to be dispensed in the state. She urged lawyers for the state and Zogenix to meet before the hearing scheduled for Monday, but she told everyone that Zogenix “probably will prevail.”
I have a few thoughts about this little mess:
First, it is not the fault of Zogenix that we have an opioid epidemic in Massachusetts or anywhere else. Yes, there’s an epidemic, but drug makers didn’t cause it. Irresponsible physicians, doctors who consider the Hippocratic Oath to be a mere suggestion, have placed their patients on the slippery slope to hell by prescribing over and over again strong and addictive narcotics for conditions for which those narcotics were never intended.
Second, the vast majority of physicians would never knowingly over-prescribe any medication. They have not forgotten that Oath and why they went to medical school. The ones I know resent and cannot understand the over-prescribers.
Third, although I wish it had built crush-resistance into Zohydro ER from the beginning, Zogenix did nothing wrong here. In fact, the Zogenix complaint notes: “When FDA approved Zohydro, it considered but rejected the idea of requiring the drug to utilize abuse-deterrent technology.” The company did everything it was supposed to do in gaining FDA approval. And that isn’t easy. One of the more difficult tasks in the universe is to get FDA approval for a new drug. The camel through the eye of the needle doesn’t even begin to describe the process. It takes many years and boatloads of money. So, you can understand that after all those years and money devoted to bringing this drug to market, to have it summarily banned is a bit hard to take.
Fourth, there are many people who suffer with agonizing pain. Think end-stage cancer. Those human beings need and deserve the best pain amelioration they can get, and the goal of the pharmaceutical industry, in addition to making money, is to give them that relief.
Finally, ending the opioid epidemic will require political courage and a much more highly-regulated process to oversee and assure that the relatively few ethically-challenged, weak-kneed and overly greedy physicians who now abuse their privilege are forced to change their bad behavior and follow that “do no harm” rule. If it weren’t for them, there would be no epidemic.

New York Self Insurance: Chicken Stew

Tuesday, May 28th, 2013

The folks at Murray Bresky Consultants are just trying to scratch out a living by raising chickens – not just any chickens, but free range chickens that are “happy and healthy.” Their signature breed is “fed an all-natural and all-vegetable diet that, combined with plenty of exercise, makes our birds the leanest on the market. The leisurely lifestyle eliminates the need for antibiotics to prevent diseases commonly found in chickens as a result of stress and confined living conditions. Minimally processed, without the use of preservatives or other artificial ingredients, Murray’s Certified Humane Chicken is truly all chicken.”
Unfortunately for the company, they secured workers comp insurance through New York Compensation Managers (NYCM), the now defunct operator of a dozen self-insurance groups in New York. NYCM claimed to offer favorable rates, strict underwriting standards and exemplary claims services. They ended up with egg on their face with their inadequate rates, suspect underwriting and rampant under-reserving of claims. In retrospect, the operation ran around like a chicken with its head cut off. By the time the problems emerged (in 2006), it was too late to shake a feather and correct the problems.
Following the SIG’s failure, Murray Bresky Associates was hit with a $1.2 million assessment to make up their share of the SIG’s deficit. That ain’t chicken feed.
A Game of Chicken
Murray Bresky is not chickening out of a fight. Indeed, the chickens have come home to roost in the form of a lawsuit filed against NYCM and its board of trustees. The lawsuit seeks to recover the $1.2 million and then some, alleging breach of contract and breach of fiduciary duty. The case worked its way up to the NY Supreme Court, Appellate Division, where the motion by the defendents to dismiss the lawsuit was, for the most part, dismissed.
Now the defendents are walking on egg shells, facing the prospect of personal liability for the failures of the SIG. Where they once feathered their nests with the proceeds of the operation, their financial security has flown the coop. This is a legal mess perhaps best described by the late Lyndon Baines Johnson: “Boys, I may not know much, but I know chicken poop from chicken salad.”
Roles and Irresponsibilities
One of the former trustees of the SIG is squawking that he was not aware that he was, in fact, a trustee. He may have signed off on a few trustee documents, he may have performed some of the functions of a trustee, but he insists that he had no memory of being appointed. He insisted that he was not a bad egg and claimed that he had no place in the pecking order. The court, however, ruled otherwise.
As the saying goes, you have to break eggs to make an omelette. Quite a few more eggs will be broken before this particular concoction is served up. Hard-boiled attorneys will parse the details to figure out who, if anyone, owes Murray Bresky Consultants and exactly how much they owe.
Pecking Orders
The courts now rule the roost. They have upheld Murray Bresky’s right to sue, with the exception of some actions that are time-barred. There may well be a sunny side up in the chicken company’s quest for justice. We look forward to the final resolution of this stew, the chicken scratch of a judge’s signature that will put a final number on the liability of an insurance operation that flaps my wattles (ie., annoys me).
Here’s a little unsolicited advice to Murray Bresky Consultants: don’t count your chickens before they hatch. This one has a long way to go before the company can feather its nest with the proceeds of a complex litigation. In the meantime, their free range chickens have the run of the coop, enjoying their cage-free, stress-free lives right up to the very end. Bon appetite!

Policy Wonks, Lend Me Your Ears!

Thursday, February 7th, 2013

The Insider is very much looking forward to the Workers Compensation Research Institute (WCRI) annual conference, taking place on February 27-28 in the virtual epicenter of wonkiness, Cambridge MA. There is always much food for thought in these annual gatherings of insurance execs, state officials, policy makers, attorneys, medical specialists, employers and safety/loss control practitioners.
This year’s agenda has zeroed in on the fundamental medicine-related conundrums facing workers comp systems across the country. All of us in workers comp long for insights into the following:
Unnecessary medical care and its impact on treatment guidelines. (Back surgery, anyone?)
Medical price regulation: what are the essential elements of an effective fee schedule? (Beware of the state where the doctors love comp…did someone mention “Connecticut”?)
The Opioid epidemic: treatment protocols involving the generous and prolonged distribution of opioids are destroying lives across the country. Why are so many doctors so clueless about the proper use of pain killers? Whatever happened to “do no harm”?
WCRI’s head honcho, Dr. Richard Victor, will host a discussion on health care policy involving (the presumably liberal) Howard Dean and (the assuredly conservative) Greg Judd. The dialogue might not equal the fireworks of July 4th on the Esplanade, but it might come close. The Insider will be listening closely for any indications of that rarest of phenomena: a common ground.
From Gorilla to ?
Last year, Dr. Victor concluded the conference with a discussion of the “gorilla in the room”: the enormous and perhaps insoluble problem of structural unemployment among the 20 million people who lost jobs in the recent recession. For many of these people, especially those in their 50s and 60s, there is little prospect of returning to jobs with anywhere near the same rate of pay as before. Many will find themselves lost in the new economy, cobbling together part-time employment without benefits, while struggling to hold onto housing where mortgages exceed the value of the home. Tough times and, so far, not much in the way of effective solutions.
This year Dr. Victor will have to find some other animal analogy to glean lessons from history: Giraffe in the closet? Rhino in the den? He tells us that the lesson might have something to do with the first century Ephesians, toward whom St. Paul addressed some rather famous snail mail. While some might find such a teaser a bit obscure and full of religious overtones, the Insider looks forward to the story. Indeed, we look forward to this year’s entire conference with great anticipation. There are few things better for policy wonks – our people! – than listening to the latest research from WCRI. Diligent note-taking will be in order.
If you count yourself among those with wonkish tendencies and you haven’t signed up yet, you’d best jump on it immediately. If you have any questions about the conference, contact Andrew Kenneally at WCRI: 617-661-9274.

Annals of Aging: Return to Work at 80?

Wednesday, December 26th, 2012

As the New Year looms, the 100 year old workers compensation system continues its awkward foray into the 21st century, it encounters problems beyond its original design: the widespread availability of opioids, increasing sophistication in medical interventions, and an aging workforce. Today we examine a formerly inconceivable conundrum: can an 80 year old man be expected to return to work after an injury?
Kenneth Brunner graduated high school in 1949 and worked steadily all his life: From 1951 through 1993 he ran the family dairy farm with help from his wife, an accountant. Brunner raised crops; used a tractor, plow and other farm machines, kept track of feed and each animal’s output. He took milk samples from each cow and sent them for analysis; after receiving reports, he adjusted feed for each animal to maximize output. He supervised two to three individuals on the farm.
From 1954 through 1984 he supplemented his farm income by driving a school bus – work which, in the view of the Ohio workers comp commission, required the ability to work independently and use judgment.
From 1968 through 2000 Brunner also was employed as an insurance adjuster. He estimated crop loss for an insurance company, a job that required using scales, taking samples and writing reports. In 1990, at age 58, he was certified for insurance sales.
In January 2011, at age 77, he was working in a maintenance job, when he tripped on a drain pipe and fell face first onto pavement. His injuries were severe:bilateral frontal bone fracture; fracture lateral wall right maxilla; fracture bilateral paranasal sinuses; closed fracture bilateral nasal bone; open wound of forehead; abrasion face; closed fracture C2 vertebra.
He received workers comp benefits. A couple of years into his recovery, he filed for permanent total benefits (PTD). Brunner was 80 years out and had had enough of working.
Brunner’s treating doctor concluded that he would never work again:

This claimant has an injury that is permanent and for which there is no curative therapy. This claimant has progressively suffered loss of function and has had to endure progressively more pain. The exam above shows that there is so little functional capacity and that the claimant is so affected by his condition and its required care, that there is no capacity for sustained remunerative employment and that there is no reasonable employer that would ever hire the claimant expecting any work capacity.
Based on the examination above, review of documents, and based on sound medical reasoning I find that the allowed physical conditions, independently and by themselves, render the claimant permanently and totally disabled and unfit for all sustained remunerative employment.

Once a Worker, Always a Worker?
The Ohio workers comp commission reviewed Brunner’s claim for PTD benefits. They took into account his age, as well as his resume in determining that he was still capable of working. While most of his living involved physical labor, throughout his working life Brunner had displayed skills that at least theoretically were transferable to sedentary work. As a result, they rejected Brunner’s request for PTD benefits. The commission did not address the likelihood of anyone offering Brunner a sedentary job.
An appeals court upheld the denial of the claim, finding that the commission did not abuse its discretion: (1) in weighing Brunner’s age in assessing the non-medical factors; and (2) in determining that Brunner has some transferable skills.
It appears that Brunner’s longevity worked against him. He labored well into his 70s and displayed unusual fortitude in recovery from serious injuries. Because the premise of PTD payments is protection for disabled workers who are available for work but no longer able to do it, Brunner finds himself ineligible for benefits. In a supreme irony, his ability to work as an older worker precluded the conclusion that he was unable – even at 80 – to continue working.
Brunner’s dilemma is by no means unique. As the workforce ages, as more and more workers continue labor late into their seventies and even 80s, a paradox emerges: the point where one is too old to work recedes into the haze of the future, leaving injured older workers in a gray zone where their permanent injuries may or may not be compensable and where their (theoretical) ability to work mitigates against their being paid not to work.
In the months and years ahead we will see more and more litigation involving the claims of “older” workers with ages far beyond what was contemplated in the original workers comp system. State by state, the system will have to respond, becoming the focal point of economic, social and even psychological forces that are far larger than workers, comp stakeholders and state policy makers combined. This is an evolving narrative of surpassing interest. Stay tuned.

Annals of Compensability: These Boots Ain’t Made for Walking…

Friday, November 16th, 2012

John Pearson was diagnosed in his mid-20s with diabetes and was insulin dependent. About fifteen years after the diagnosis, he was working for an Arkansas temporary placement agency, Worksource, which sent him to a steel fabricator. His temporary employer gave him a pair of steel toe boots and assigned him the task of covering warm steel bundles with blankets. The job required a lot of rapid walking across a large field, as the bundles emerged from the plant at odd intervals. In the course of the day he experienced discomfort in his left foot and at the end of the day he found a blister on his left great toe. The next day he requested a wider pair of boots, but none were available. The employer suggested he buy them, but he could not afford to do so before being paid – and payday was still a couple weeks away.
Two weeks later Pearson was diagnosed with “diabetic neuropathy and cellulitis.” Worksource sent him to another doctor, who diagnosed a diabetic ulcer and cellulitis and placed him on light duty, restricting his standing and walking. (The court is silent on how long Pearson continued to work at the steel fabricator.) Ultimately, surgery was performed on the toe, which fortunately did not require amputation, and Pearson was able to begin working again, albeit with (temporary) restrictions. Pearson took a job in a Waffle House, where he was able to resume full time work. In the meantime, he was faced with lost wages and formidable medical bills.
Proving Compensability
Pearson filed a workers comp claim, which at first was accepted and then denied on appeal to the Arkansas Workers Compensation Commission. The denial was based upon an interpretation of state law:

(4)(A) “Compensable injury” means:
(i) An accidental injury causing internal or external physical harm to the body
or accidental injury to prosthetic appliances, including eyeglasses, contact lenses, or
hearing aids, arising out of and in the course of employment and which requires
medical services or results in disability or death. An injury is “accidental” only if it
is caused by a specific incident and is identifiable by time and place of occurrence;
(ii) An injury causing internal or external physical harm to the body and arising
out of and in the course of employment if it is not caused by a specific incident or is
not identifiable by time and place of occurrence, if the injury is:
(a) Caused by rapid repetitive motion.
[Arkansas Code Annotated section 11-9-102(4)(A) (Supp. 2011)]

The Arkansas Court of Appeals agreed with the commission that the injury did not meet first criteria: there was no specific incident identifiable by time and place. However, the Court found that the injury was caused by “rapid repetitive motion,” applying a two-pronged test that is stunning in its obviousness: did injury involve “repetition” and did it involve “rapidity”?
The “repetitive” part involved walking itself: Pearson walked up and down the field in tight boots, watching for the steel bundles as they emerged from the plant. The rapid part involved his walking briskly to protect the bundles as they appeared. He walked from bundle to bundle, as fast as he could, performing the job as instructed. In doing so, the boots rubbed his toe continuously over the course of the day, resulting in a blister. For most people, a blister is no big deal. For a diabetic, it could lead directly to amputation.
Lessons for management?
It is difficult to draw conclusions from this unusual case. Because Pearson was a temporary employee, the steel company had no awareness of his diabetes and no reason to be aware of it: he was able to perform the work as assigned. Theoretically, they could have done better on Pearson’s request for wider boots, but they had no reason to anticipate a serious problem beyond a bit of discomfort. Pearson himself was probably unaware of the risks involved in wearing the tight boots. He obviously was feeling pressure to earn money and probably thought the discomfort, while painful, was not a serious matter.
Perhaps the most important aspect of this case is Pearson himself: despite a life-altering health problem, he is strongly motivated to work. In the few months described in the court narrative, he tries hard to do what he’s supposed to do and he keeps working as best he can. Given comfortable footwear, Pearson will do just fine.

Marijuana: coming to a state near you – and probably sooner than you think!

Thursday, November 15th, 2012

OK, this is something we never contemplated…straight from the Seattle Police Department’s Blotter, we bring you Marijwhatnow? A Guide to Legal Marijuana Use In Seattle.
The guide offers an FAQ for citizens about the recently enacted Washington law, which decriminalizes possession of small amounts of marijuana by adults over the age of 21. And Washington is not alone… in Colorado, 55% of the voters recently voted to legalize individual possession of small “recreational” amounts of marijuana. Contrary to what you might think, the vote wasn’t all cast by erstwhile hippies and young pot aficionados – some conservative proponents cited the potential billions in tax revenue and the benefits of unclogging the court systems and freeing police time by removing nettlesome petty criminal prosecutions
These voter approvals for recreational use mark a new twist – prior legislative approvals have dealt with medical use of the drug. Last week’s election saw other marijuana ballot initiatives in this vein – medical marijuana use was approved in Massachusetts, making it the 18th state (plus DC) to give the nod to medical marijuana use; however, Arkansas voters nixed their ballot initiative 51% to 48%.
The Devil is in the Details
Even with state initiatives, marijuana is still illegal at the federal level. Plus, as with most things, the devil is in the details and most states are scrambling to figure things out. But the train has left the station and is definitely gathering steam so this is an issue that employers need to take seriously. In the Seattle Police guide linked above, we note that the police are looking at the employment-related implications of the law, as well as other matters.

Q. Will police officers be able to smoke marijuana?
A. As of right now, no. This is still a very complicated issue.
Q. If I apply for a job at the Seattle Police Department, will past (or current) marijuana use be held against me?
A. The current standard for applicants is that they have not used marijuana in the previous three years. In light of I-502, the department will consult with the City Attorney and the State Attorney General to see if and how that standard may be revised.

“Complicated issue” sums things up nicely. We’ve compiled some commentary on the matter from various employment law authorities (and will no doubt bring you more in the future!)
Over at the LexisNexis Employment Law Community, attorney Donna Ballman reminds employees that Legal Marijuana Use Can Still Get You Fired. She cites case law on issues ranging from drug testing to the ADA. Most interestingly, she also discusses state laws that prohibit discrimination against medical marijuana users and prohibitions against termination/discrimination based upon an employee’s lawful activities off-duty.
Vance O. Knapp writes about Amendment 64: how do employers address the legalization of marijuana in Colorado? He discusses this new law and the state’s prior law allowing for medical marijuana use, and offers thoughts for employers. He cites this passage from Colorado’s law:

Nothing in this Section is intended to require an employer to permit or to accommodate the use, consumption, possession, transfer, display, transportation, sale or growing of marijuana in the workplace or to affect the ability of employers to have policies restricting the use of marijuana by employees.

His post appears at Lexology, which has a good library of employment-law related articles on medical marijuana
Greg Lamm of the Puget Sound Business Journal spoke with labor and employment attorney James Shore, who offered five tips for employers to prepare for the new law. You should read his comments in full detail, but here’s a quick summary of key points:
1. Have a written policy covering substances such as drugs and alcohol.
2. Make sure that policy covers any drugs that are illegal under state, federal and local law
3. Make sure that the policy prohibits any detectable amount of illegal drugs, as opposed to using an “under the influence” standard.
4. Employers with multiple locations in multiple states should have one consistent policy
5. Be prepared to see marijuana come up in collective-bargaining and termination negotiations with unionized employees.
We’ve also dusted off a few prior posts that we made on medical marijuana because they outline some issues employers will need to consider.
The current buzz on medical marijuana and the workplace
One Toke Over the Line
You can find more of our blog posts about pot by searching “marijuana.”

Mental Illness in the Cockpit, Revisited

Tuesday, November 13th, 2012

The last time we encountered Clayton Osbon, he was strapped to a gurney after being forcibly removed from an airplane. Osbon was a Jet Blue pilot who had a psychotic break during a flight from New York to Las Vegas back in March. He randomly flipped switches in the cockpit, turned off the radio and told his co-pilot that “things just don’t matter.” When he left the cockpit to go to the bathroom, the co-pilot locked him out of the cabin, after which he ran up the aisles, shouting incoherently about religion and terrorists. The flight was diverted to Amarillo Texas, where Osbon was arrested and charged with interfering with a flight crew – his own, as he was crew leader.
The psychotic episode lasted about a week. After a July trial, Osbon was sent to a prison medical facility in North Carolina for evaluation. He apparently suffered another psychotic episode in prison – a significant event, as it demonstrated that his illness was not a one-time incident caused by the combination of sleep deprivation and substance abuse.
At a recent hearing in Amarillo, a forensic neuropsychiatirst testified that Osbon had experienced a “brief psychotic episode” brought on by lack of sleep. Osbon was found not guilty by reason of insanity. The medical records are sealed – as they should be – but the requirement that Osbon attend a treatment program for substance abuse makes it clear that drugs or alcohol were a factor in the incident. U.S. District Judge Mary Lou Robinson has prohibited Osbon from boarding an airplane without the court’s permission; he and a Jet Blue colleague had to drive the 1,300 miles from Georgia to Amarillo for the hearing. The court has also ordered him to seek alternative employment, as his prospects for flying an aircraft are likely gone forever.
Living with Mental Illness
Given his age (49) and the court directive to find alternative employment, Osbon finds himself in the same position as injured workers in the comp system whose disabilities prevent them from returning to their original jobs. As a pilot, Osbon has a formidable set of transferable skills, which theoretically should make finding a new career relatively easy. It is likely, however, that his earnings capacity will be severely reduced. In addition, given the fragility of his current mental state, he may be months away from being able to function in a work environment.
In the course of a few days in March, Osbon went from being a skilled and productive member of society to a confused, fragile individual incapable of functioning in the world as we know it. He is fortunate to be supported by his family – often the sine qua non of survival for people with mental illness. In rebuilding his life, Osbon faces the burden of demonstrating to others – and to himself – that he can once again be sane, reliable and stable.
Osbon’s story embodies mystery – and agony – of mental illness. In his case, psychosis appears to have been triggered by a combination of sleep deprivation and substance abuse. But taking it one step further, perhaps the sleep deprivation and substance abuse were part of a desperate effort to mask and subdue a more primal turmoil in his mind. We only know the end result of that fierce inner struggle: a battle was lost, at least for the moment, and Osbon now faces a future where every gesture is scrutinized with fear and every day looms with uncertainty.
Formidable challenges now confront Osbon and those who support him: the search for a return to the simple joys of everyday life, where he can be comfortable in knowing who he is and what he needs to do. We can only wish him well.