Workers’ Compensation Law Prof Blog

Breaking Down Rodriguez v. Brand West Dairy & the Farm-Ranch Worker Exclusion

At first blush, nothing was especially remarkable about the workers’ compensation claims of chile picker Maria Aguirre and dairy worker and herdsman Noe Rodriguez, claims that would have the effect of extinguishing the Farm-Ranch workers exclusion last June in Rodriguez v. Brand West Dairy, 378 P.3d 13 (NM 2016).  Aguirre slipped in a field and broke her wrist while picking chiles. Rodriguez was pushed up against a door and “head-butted” by a cow. Each injury would almost certainly have been compensable under general principles of workers’ compensation law in that they arose “by accident arising out of and in the course of employment.” Neither claim was accepted as compensable during early-stage, administrative claims processing, however. Certain categories of agricultural workers had always been denied coverage under the New Mexico workers’ compensation law. Indeed, the exclusion is currently in effect in seventeen states. In most of these states, employers take on workers’ compensation coverage voluntarily, and many larger employers immunize themselves from tort liability, the immunity being available only to employers covered by a workers’ compensation statute. The claims eventually became noteworthy because of how the New Mexico Supreme Court analyzed them.   

The U.S. Constitution gives state legislatures broad latitude to enact laws treating similarly situated individuals differently. Generally, if a state legislature has a rational basis for treating workers differently from the general population, or for treating one group of workers differently from another group, the legislation creating the differing treatment will be upheld provided it is both solely economic and rationally related to a legitimate state interest. The burden is on the plaintiff to prove that it is neither. This lowest, rational-basis judicial scrutiny contrasts with intermediate scrutiny, which is reserved for laws creating sex-based classifications or for legal restrictions based on illegitimacy. When intermediate scrutiny is triggered, the burden is on the state to show that the law or policy being challenged furthers an important government interest by methods substantially related to that interest. The most in-depth judicial review is termed strict scrutiny and is triggered when a fundamental constitutional right is infringed, or when state action applies to a suspect classification, such as race or national origin. A good deal of criticism has been leveled at this taxonomy because it effectively limits review of most legislative action creating classifications of persons to a rational basis review that tends to summarily uphold the legislative action. 

Continue reading

Workers' Compensation and the Role of Agency Medical Directors

            In my experience, many beginning workers’ compensation lawyers are unfamiliar with the state administrative system which is charged with operating the workers’ compensation program as a whole. Thus, in teaching workers’ compensation, I always review in detail the responsibilities of workers’ compensation agencies in their oversight and regulatory functions.

            This aspect of workers’ compensation is treated nicely in the Little, Eaton & Smith workers’ compensation textbook (first sections of Chapter 10), and it is also the subject of Professor Duff’s book, similarly at Chapter 10.  

            A neglected subject (including by myself) in this area is the role of agency medical directors.  I was thus pleased that the managed care expert and blogger Joe Paduda has published the edifying article, “Where are the Medical Directors?,” in the new issue (July 2016) of the IAIABC periodical Perspectives. See www.IAIABC.org.  As to Mr. Paduda’s blog, see http://www.joepaduda.com/.

            Paduda wonders out loud why more legislatures do not create, in their state workers’ compensation agencies, a strong medical director. By his count, only seven states do so.  The familiar example is Colorado, where Dr. Karen Mueller is well-known for having been a leader in developing medical treatment guidelines for her state’s system.  However, Paduda also identifies Washington and Ohio (both, notably, fund jurisdictions), as major states that have influential medical directors.  In both states, for example, these officials have developed opioid use guidelines.

            In Paduda’s view, the rapidly-changing medical treatment world calls for effective agencies to have this type of leadership.  He asserts, specifically, that state agencies with medical directors are better equipped and positioned to address challenging medical issues that develop, including the opioid abuse crisis and other over-utilization of medications.

            The idea of a medical director is unfamiliar in Pennsylvania (my state) – our Act has never provided for such a position.  Thus, Pennsylvania is a jurisdiction where Paduda’s rhetorical query applies with full force.  It is notable that the Pennsylvania agency, like many in the nation, has always been on the passive side in terms of regulatory policy.  More room (I am thinking), presumably exists for this sort of pro-activity in fund states, where administration and oversight of the law is comprehensively managed by state government.

            What, precisely, are the responsibilities of such officials?  Paduda explains that medical directors set policy, provide guidance and input into agency decision-making, review medical treatment, participate in guideline assessment, educate legislators, testify with regard to proposed legislation, and develop recommendations for new medical conditions and treatment.  He points out a problem with not having such a position: agencies are, as a result, dependent upon special local interests, like medical societies, for the development of policy and promulgation of regulations.  

The Applicability of “No-Fault” Liability – How Far is Too Far?

One of the most controversial Illinois Supreme Court opinions regarding Workers’ Compensation is Interstate Scaffolding v. Illinois Workers Compensation Commission, 358 Ill.App.3d 1040 (2008). In Scaffolding, an injured worker, in an accepted case, was back working on accommodated light duty restrictions. An argument arose between the worker and his employer regarding his pay. The injured worker in anger over the dispute, took matters into his own hands and vandalized company property and was caught. He was terminated from employment immediately. What did the clever attorney for the injured worker do? He demanded the immediate payment of weekly temporary total disability benefits be paid to his client. It is now obvious why the case made it to the Illinois Supreme Court, which is a rarity.

            What did the Supreme Court do? They told the employer’s carrier to pay the injured worker just as his lawyer had suggested. Why? First, the Court undertook a thorough and detailed investigation into the Act itself. They did so of course hoping that within the four corners of the Act, the question would be addressed. It was not. The Court  used this absence to reach its holding, reasoning that since the Act was silent, the commonly accepted rules regarding payments of benefits applied. Those rules in Illinois are that temporary weekly benefits are due until a time that the injured worker’s condition had stabilized as long as the case is accepted and the injured worker has either a valid off-work note from his physician or light duty restrictions from his physician which cannot be accommodated by the employer.

            This decision changed the landscape of Workers’ Compensation in Illinois, as before the decision, practitioners almost universally accepted amongst themselves that a termination for cause precluded weekly benefits going forward. I was at the first docket in my region after the decision and the docket was abuzz with conversations between the attorneys. Of course, injured workers attorneys like myself, lauded the courage of the Supreme Court’s strict review of the statute, because quite frankly, we liked the outcome. Our opponents representing employers were beside themselves with the Court and cried foul. Another decision from a pro-worker Court had been sent down from Mt. Olympus to their viewing.

            To bolster their disdain for the decision, counsel for employers, almost in a hive mind, were making various versions of this slippery slope argument, that if Scaffolding is to remain the law of the land, what happens when an injured worker shoots his boss? What happens when he steals merchandise? What happens when….insert horrible act. In fact these arguments make sense.

            In Illinois we tend to only have the legislative stomach to reform about once every five years or so. There was a major reform in 2011 and the Scaffolding “problem” was pushed to the sideline and no amendment was made to the Act regarding termination for cause and its affect on weekly benefits. We had bigger issues like causation standards to grapple over. The proverbial “can” was kicked down the road. It is however only a matter of time before one of these “horrible” fact patterns occurs.

            What is the answer? Should the legislature carve out some kind of felony exception to receiving weekly benefits? What would that look like? Where will the bright line be? Enforcement would certainly be an issue. How far is too far to protect the bargain? Only time will tell. Stay tuned, because as most commentators would agree, there is no place like Illinois for the law and politics.

Jason Caraway

Oklahoma Opt Out Law Struck by Oklahoma State Supreme Court

In a not-unexpected development, the Oklahoma Supreme Court has today struck down that state's workers' compensation"opt out law," the Oklahoma Injury Benefit Act. The Court narrowly based its decision on a portion of the Oklahoma constitution regulating "special laws":

Laws of a general nature shall have a uniform operation throughout the State, and where a general law can be made applicable, no special law shall be enacted.  

The Injury Benefit Act (IBA) purported to be an alternative to the conventional Oklahoma Act - the Administrative Workers' Compensation Act. While the IBA required opt out employers to provide the "same form of benefits" as under the conventional Act, it also explicitly permitted them to establish alternative benefit plans not complying with large swaths of the conventional Act. Thus, when the plaintiff suffered an injury allegedly contributed to by a preexisting condition, the employer's alternative benefit plan concluded that the resulting disability was not an injury as defined by the plan. Because the IBA also provided that the terms of an alternative plan were the exclusive remedy for an injured employee, the failure of coverage left the plaintiff with no remedy. Because employees of non-opt-out employers were not summarily excluded from coverage under the conventional Act, the plaintiff was treated differently than similarly situated employees of non-opt-out employers. Furthermore, the IBA on its face created the conditions for systemic disparate treatment of injured employees and was accordingly a prohibited special law.

Although there will be broad expectation that the Oklahoma decision has "stopped opt out," I would be hesitant to reach such a sweeping conclusion. The state constitutional provisions in Oklahoma differ significantly from those in many other states. Typically, legislatures are given broad latitude as a matter of state constitutional law to effectuate changes to injury remedies under a deferential "rational basis" standard of review. For that reason it is not at all clear that the Oklahoma ratio deciendi could be persuasive outside of Oklahoma. Moreover, the ERISA issues that would likely be central to opt out litigation outside of Oklahoma were only cursorily addressed in a concurrence to the majority opinion. While a full ERISA analysis is beyond the scope of this post, suffice it to say that there remain substantial ERISA questions that can only be resolved by the federal circuit courts.

Still, perhaps the architects of "opt out" statutes will conclude that the battle to establish similar statutes throughout the country is not worth the cost, both in terms of money and of negative public relations. My suspicion, however, is the this was the first round in a multi-round fight. Download Vasquez supreme court opinion

Michael C. Duff

Fault: Creeping Back Into Workers' Compensation

Workers’ Compensation is a compromise. As originally crafted in 1911 and as interpreted, Wisconsin Workers’ Compensation is a compromise in which both employers and employees surrender certain advantages in order to gain others that are deemed more important. Employers give up the immunity that would otherwise apply in cases where they were not at fault and employees surrender their former right to full damages in the few instances when they could recover under tort law and instead accept more modest assured benefits for injuries and deaths (without having to prove fault).

The concept of negligence should play no role whatsoever in the workers’ compensation system. The doctrine of liability without fault is part of the compensation system; the 1911 legislature attempted to guarantee payments by the employer for injuries arising out of and in the course of employment. The economic burden shifted from the employee to the consuming public.

Traditionally, the only vestiges of fault and negligence that remained in Wisconsin involved penalties involving employer or employee safety violations. If an employee was hurt because of the employer’s safety violation, the benefits to which the worker was entitled were increased by 15% and paid directly by the employer. Similarly, if the employee committed a safety violation causing injury, benefits from the insurance carrier or self-insured employer could be reduced by 15%.

Recent revisions in the law (2015 Wis. Act 180 made significant changes to the workers’ compensation law—for employers and employees. This blog will explore those changes in a series of upcoming posts) effective March 2, 2016, chip away at the “Grand Bargain,” the legislative deal made in 1911 where workers surrendered all rights to sue their employers for negligence in return for which the employer paid for work-related injuries regardless of fault.

An employee who had sustained a work-related injury and would return to work for an employer has always received the protection of the Workers’ Compensation Statute. Even if the employee was terminated for good cause during a post-injury healing, he was entitled to continued receipt of Temporary Total Disability benefits (2/3 of time-of-injury wages). However, effective March 2, 2016, a new Statute now states that if an employee is discharged or suspended for misconduct or substantial fault, as these terms are defined by the Unemployment Compensation statutes, the employee’s Temporary Total Disability benefits could be suspended. The legal standard for what constitutes “sufficient grounds for termination for misconduct” and “substantial fault” will be defined by the Unemployment Compensation Law (These are employer-friendly changes that were implemented in the UC system in 2014).

Going forward, administrative hearings in both the Unemployment Compensation and Worker’s Compensation forums will occur. The issue of whether a decision binding on one forum will be binding on another remains to be seen. A worker could face the “double whammy” of being denied benefits in both the workers’ compensation and unemployment compensation case.

Additionally, the new law indicates that an employee who violates an employer’s drug and alcohol policy at the time of injury (where the violation is causal to the injury) is not entitled to anydisability benefits under the Workers’ Compensation system. This harsh 100% penalty is a substantial change from the now pedestrian 15% diminution that formerly applied to injuries before March 2, 2016.

Lastly, the new law allows apportionment of Permanent Partial Disability in cases of traumatic injuries between that permanency caused by the work injury and that “caused by other factors.” The statute is silent as to the meaning of the term disability, or “other factors,” and the problems raised by the possible interpretations of these terms will be determined in subsequent court decisions.

The net result will clearly be more disputes in the supposedly “no fault” compensation system—likely resulting in more litigation and potentially raising the cost of workers’ compensation for all stakeholders.

Thomas Domer

 

Trombones, Law School, and Workers’ Compensation

Last week my son started 5^th grade and was afforded an opportunity to study a musical instrument, which he took on with gusto. He researched, and consulted, and chose – a trombone. “No kidding?” said I. I’m from a musical family and I don’t think we’ve counted a single trombone player among our ranks. “OK,” I said, “a trombone it is,” knowing full well that there would be weeks and months devoted to simply eliciting a single sound, not to mention what I’m sure will be the tricky business of matching notes with slide positions.

My son, however, has an advantage that first year law students don’t. He knows he does not know how to play. He will listen to his teacher (not me) and will not—if I’m doing my job—take it too hard when he experiences those initial, inevitable, failures. He also knows that neither his dad or anyone else would expect him to be able to play trombone without working really hard at it for a long time.

Compare this state of affairs to the first year law students I encounter each fall semester (I’m encountering them now, in fact). Because they have, as a rule, been very good students, and speak their primary language reasonably well, they tend to believe they should understand perfectly a beginning law case—say, Brown v. Kendall—the first time they read it. Of course, they don’t; because they can’t. From this point, they fall into two groups: those who don’t know but think they do (the most difficult group); and those who don’t know and become upset because they don’t know (a better group to work with provided they don’t get too upset).

I love teaching law students. I’m fortunate because I’ve had the kind of legal career that places me in a good position to teach both the art of cross-examination and the finer points of the Cardozo/Andrews debate in Palsgraf; or Holmes’s dissent in Vegelahn v. Guntner. The negativity surrounding law school over the last several years has been socially debilitating. I can speak persuasively (I like to think) to most of the issues people are discussing. But despite what you or I (or anyone else) might think about law school, there is one truth that cannot be avoided: there is no running away from the legal world we have created. ERISA, the Internal Revenue Code, and workers’ compensation statutes won’t be going away any time soon.

In just the last few weeks’ thinking about workers’ compensation, I have been fighting my way through ERISA preemption, reviewing attorney’s fees laws and cases, and considering the inclusion of farmworkers within the workers’ compensation system in New Mexico after a century of exclusion. In thinking about these issues, I have drawn on my understanding of statutory interpretation, administrative law, equal protection doctrine, and various theories of preemption. In short, workers’ compensation is becoming more complex every day, and anyone imagining we will work through our challenges without the assistance of bright, engaged legal minds is simply wrong. This is not a question of whether one “likes” lawyers. This is a question of requiring expertise to solve problems. We destroy the conditions necessary to foster such expertise at our peril. It is my intention to teach, and teach well. And I will learn to love the trombone.

Michael C. Duff     

Thoughts on Teaching Workers' Compensation, Part II

            One of the most enriching and personally rewarding aspects of teaching workers’ compensation at Pitt Law School has been my sponsoring and co-coaching of the school’s team of students dispatched to the annual Zehmer Workers’ Compensation Appellate Moot Court Competition in Orlando, FL.  The competition was just held from August 20-22, 2016, and the winner this year was from Jackson, MS-based Mississippi College of Law.

            This year, our fourth Pitt Law venture, my two co-coaches and I spent much of the summer teaching appellate advocacy skills and assisting the students in figuring out the competition vehicle, a brain-teaser based on a controversial aspect of Florida workers’ compensation law.  Pitt didn’t prevail, as foreshadowed above, but the team performed at a 110% level, and the experience for the students (now all 3L’s), will surely be a learning and networking adventure they will always remember. 

            The vehicle, written by Florida Deputy Chief Judge Dave Langham (blogging at http://flojcc.blogspot.com/), dealt specifically with an ambiguity in the state law’s provision for an “Expert Medical Advisor,"  or EMA, in litigated cases.  Under this reform innovation, the judge faced with a bona fide dispute in the expert medical opinions is obliged to appoint an the impartial EMA, and hence avoid the time-honored spectacle of a purportedly feckless layperson (the judge), choosing between two “dueling doctors.”  The judge in Florida is bound by the EMA opinion unless a party opposing the EMA’s opinion can prove, by clear and convincing evidence, that his or her opinion is incorrect.  It’s a heavy burden. 

            This challenging problem was the best vehicle I have encountered, both as a judge of the competition, and more recently as a coach, so Judge Langham is to be commended! 

            This type of reform has, notably, been around for a while, and states like Colorado, Maine, Utah, and Wyoming have impartial physician provisos.  I am pleased to say that Professor Mike Duff, whose law school textbook I use at Pitt, treats this issue nicely, and hence the students and their coach already had the basic concept of EMA’s under our belts.

            The innovation of impartials, I believe, was a phenomenon of the cost crises of the 1980’s and 1990’s, and has not been pursued aggressively by the majority of states.  Still, the idea of taking most medical disputes away from lay judges, at least in the first instance, is an enduring theme of business-friendly reform efforts.  The idea is in fact a staple of the trend of legislatures instituting treatment guidelines, and making review over disputes surrounding application of the same, restricted on appeal.  The Louisiana reform is an example. 

            For more information about the moot court, send me a note and I’ll connect you with the organizers.  (They are, notably, soon to initiate a website of their own.)