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View From the Bench

Workers’ Comp Docket

Significant workers' comp legal decisions from around the country.
By: | November 28, 2016 • 12 min read

Benefit Limit for Undocumented Workers Unconstitutional

Martinez v. Lawhon, et al., No. M2015-00635-SC-R3-WC (Tenn. 11/21/16, unpublished)

Ruling: In an unpublished decision, the Tennessee Supreme Court held that a law limiting the maximum permanent partial disability benefits an injured undocumented worker can receive is unconstitutional.

What it means: In Tennessee, the law limiting the maximum permanent partial disability benefits an injured undocumented worker can receive is unconstitutional.

Summary: An undocumented worker was operating a lawn mower on a hillside in the course of his employment when he slipped on wet grass and fell, losing control of the mower. The mower ran over his left arm, causing severe injuries.

Because of the worker’s undocumented status, the employer did not return him to work after the injury. The worker sought workers’ compensation benefits and challenged the constitutionality of a law limiting his award to one and one-half times the medical impairment rating. The Tennessee Supreme Court held that the provision is unconstitutional.

According to the law, the permanent partial disability benefits that a worker who is not legally allowed to return to work because of federal immigration law can receive are limited to a cap of one and one-half times the medical impairments rating. The court pointed out that other workers who do not fall within this exception are entitled to a multiplier of up to six times.

The court found that the provision was preempted by federal immigration law. The legislative history of the provision showed that the legislature intended for an additional sum to be paid by employers as a penalty. The court explained that the provision was preempted by federal law because the legislature intended and attempted to establish what amounted to a state immigration policy.

The court also explained that by reducing the liability of employers of undocumented workers to one and one-half times the medical impairment rating, the law made it less costly to hire those workers and potentially created an incentive for employers to hire undocumented workers, especially in high-risk jobs that often result in workers’ compensation claims.

In this case, the court found that the worker sustained an 84 percent permanent partial impairment to the left arm as a result of his work injury.

Attorney Fees Warranted When Employer’s Actions Delayed Surgery

Bockus v. First Student Services, et al., No. S-15784, 7137 (Alaska 12/02/16)

Ruling: The Alaska Supreme Court held that a driver was entitled to attorney’s fees because the employer resisted furnishing medical care by unreasonably delaying his third surgery.

What it means: In Alaska, an employer’s acquiescence to a claim before a hearing does not prevent a finding that the employer resisted providing the benefit.

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Summary: A school bus driver injured his back while pulling open a chain-link gate. He felt a pop in his back and severe pain radiating into his legs. He had two spinal surgeries, and his surgeon recommended a third. At about the same time, the employer scheduled an independent medical examination. This delayed the surgery because the surgeon would not schedule the surgery while the IME was pending.

The driver filed a workers’ compensation claim for the third surgery, and the employer’s doctor ultimately agreed that a third surgery was appropriate. The Alaska Supreme Court held that the driver was entitled to attorney’s fees because the employer resisted furnishing medical care by unreasonably delaying the third surgery.

The driver asserted that the employer delayed his surgery because it “had ample information” about the compensability of the surgery before the IME. The employer argued that it was merely exercising a statutory right to an IME and it rescheduled the IME at the driver’s request.

The court pointed out that the employer authorized the third surgery when it was required to answer the driver’s claim. The court pointed out that an employer’s acquiescence to a claim before a hearing does not prevent a finding that the employer resisted providing the benefit.

The court explained that the IME was not directed at an opinion about the surgery itself. Instead, the adjustor listed nine treatment options and asked for an opinion about the reasonable necessity of all treatments.

The court found that this broad request was not reasonable because the driver and his surgeon, after trying conservative care, had decided that surgical treatment was the best option for addressing his condition.

The court pointed out that the employer had adequate information about the reasonable necessity of the surgery well before the surgery was authorized. The information the employer sought from the IME was not reasonably related to the narrow question of the compensability of and the need for the requested surgery.

Inability to Obtain Job Doesn’t Warrant Benefits for 100 Percent Loss

Hathorn v. ESCO Corp., No. 2015-WC-01528-COA (Miss. Ct. App. 11/15/16)

Ruling: The Mississippi Court of Appeals held that a grinder was entitled to benefits for a 50 percent industrial loss.

What it means: In Mississippi, the fact that an injured worker is unable to obtain employment is not conclusive proof that he is unemployable.

Summary: A grinder for ESCO suffered a compensable injury to his right hand while operating his grinder. He returned to work with medical restrictions, including not using a grinder and to not lift more than 50 pounds. At work, he performed various janitorial and maintenance duties and ran errands.

After he claimed that his hand swelled from driving a forklift, the grinder was terminated for insubordination when he did not provide a written work restriction stating that he could not operate a forklift. The Workers’ Compensation Commission awarded him benefits for a 50 percent industrial loss. The Mississippi Court of Appeals affirmed the commission’s decision.

The grinder claimed that because of his injury he was unable to find work and could no longer perform the substantial acts of his usual employment. However, the court found that the grinder’s post-injury employment at ESCO demonstrated that he could perform some of the substantial acts of his usual employment.

He worked for more than a year after he reached maximum medical improvement. The court also pointed out that the grinder’s post-injury employment was consistent with a number of previous jobs he had. Also, many of the grinder’s previous job duties were within his medical restrictions.

The court found that even though the grinder’s job search was not successful, this was not conclusive proof that he was unemployable. The grinder admitted that he did not seek employment in the security, maintenance, or housekeeping fields.

Assault By Student Doesn’t Fall Under Intentional Act Exception

Field, et al. v. Lafayette Parish School Board, No. 16-495 (La. Ct. App. 11/09/16)

Ruling: The Louisiana Court of Appeal held that a teacher’s suit was barred by the exclusive remedy provision of the workers’ compensation law. The teacher failed to establish that the intentional act exception applied.

What it means: In Louisiana, for the intentional act exception of the workers’ compensation law to apply, the worker must prove an employer’s intent, which is defined as consciously desiring the physical results of the conduct or knowledge that the physical results were substantially certain to follow such conduct.

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Summary: A student of a high school English teacher had a dispute with another student and attempted to leave the classroom to fight with him in the hallway. The teacher tried to keep the student inside the classroom by holding the door closed, but the student hit her repeatedly in the stomach.

The teacher was six weeks pregnant. Later, the teacher’s child was born with a congenital kidney condition. The teacher received workers’ compensation benefits but also sued the Lafayette Parish School Board, the principal of her school, and the student.

The teacher asserted that the intentional act exception of the workers’ compensation law applied. The Louisiana Court of Appeal held that the teacher’s suit was barred by the exclusive remedy provision of the workers’ compensation law.

The court concluded that the intentional act exception did not apply. For the intentional act exception to apply, the worker must prove an employer’s intent, which is defined as consciously desiring the physical results of the conduct or knowledge that the physical results were substantially certain to follow such conduct.

In this case, the court found that the teacher failed to prove the school board’s intent for the harm that occurred in her classroom. While the student had an extensive history of disciplinary issues, the school board’s knowledge of his issues and readmittance into the high school did not amount to an intentional act.

The court pointed out that no evidence showed that the student had previously attacked a teacher.

Director Who Tripped on Stairs Not Entitled to Compensation

Mojares v. RK Chevrolet, Inc., No. 1016-16-2 (Va. Ct. App. 11/22/16, unpublished)

Ruling: In an unpublished decision, the Virginia Court of Appeals held that a director’s fall on stairs did not arise out of his employment.

What it means: In Virginia, a worker who trips while walking up a staircase at work cannot recover compensation unless something about the steps presented a hazard or danger peculiar to the work site.

Summary: A finance director for a car dealership was in a hurry to deliver paperwork for a sale when he fell while walking up stairs. The director had preexisting injuries that left him permanently partially disabled. His gait was affected, he had limited use of his right hand, and he walked with a cane.

When the director fell, he was holding files and his cane in his left hand and using the railing for the stairs with his right hand. He could not explain what caused his fall and said that he tripped himself. The Virginia Court of Appeals held that he was not entitled to benefits.

The director argued that his preexisting condition combined with the configuration of the stairs increased his risk of falling. The court concluded that the director failed to establish that his injury arose out of his employment. The record established that the director simply and inexplicably fell.

The court also explained that under the idiopathic fall doctrine, if a fall results from a preexisting condition, any resulting injury is compensable only when the conditions of the workplace aggravate the worker’s injury.

Here, the director fell while simply walking up the non-defective steps. The record showed that the director’s fall was not caused by his preexisting conditions. The court found that his injury was not causally related to his employment.

Intoxication Doesn’t Block Benefits When Flat Tire May Have Caused Accident

Diaz v. National Retail Transportation, Inc., No. A-3927-14T2 (N.J. Super. Ct. App. Div. 11/09/16, unpublished)

Ruling: In an unpublished decision, the New Jersey Superior Court, Appellate Division held that a mechanic was entitled to benefits for his injury.

What it means: In New Jersey, when a worker’s intoxication is the “natural or proximate cause” of an injury, benefits will not be provided. Courts have interpreted the intoxication defense to mean that the worker’s intoxication must be the sole cause of the accident.

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Summary: A mechanic for National Retail Transportation was injured when he attempted to move a heavy metal lift that fell over on him. He said that the lift fell when it tilted to one side. The mechanic said that after the lift fell on him, he noticed that one of the tires on the lift was flat.

National conceded that a tire was deflated. The mechanic filed a claim for workers’ compensation benefits. National denied benefits and asserted the intoxication defense, arguing that the mechanic’s intoxication was the proximate cause of the accident.

The mechanic admitted that before going to work, he drank at least two eight-ounce glasses consisting of half whiskey and half ice water. National’s toxicologist opined that, based on the blood sample drawn from the mechanic after the accident, that he was intoxicated and impaired at the time of the accident.

The New Jersey Superior Court, Appellate Division held that the mechanic was entitled to benefits.

The court concluded that substantial credible evidence established that the flat tire may have caused the lift to fall, and therefore, intoxication was not established to be the sole cause of the accident.

The court found there was sufficient evidence that the flat tire may have also contributed to the accident. Without testimony eliminating the flat tire as a cause of the accident, the court found that National did not carry its burden to prove that the mechanic’s intoxication was the sole cause of the accident.

Comp Doesn’t Cover Officer’s Crossfit Injury

Maley v. Borough of Penbrook, 31 PAWCLR 191 (Pa. W.C.A.B. 2016)

Ruling: The Pennsylvania Workers’ Compensation Appeals Board reversed the workers’ compensation judge’s finding that a police officer was in the course and scope of his employment when he was injured while performing box jumps at a CrossFit gym.

What it means: In Pennsylvania, where a police officer is not required by either the employer or the SWAT team to join a CrossFit gym or perform box jumps as a part of any physical fitness test, his injuries sustained while performing this activity do not fall within the course of his employment.

Summary: The board reversed the WCJ’s finding that a police officer was in the course and scope of his employment when he was injured while performing box jumps at a CrossFit gym.

The employer had a wellness and fitness policy, which recommended that the officers stay physically fit so they can perform their duties in a safe and healthy manner. Because the employer did not have a workout room, the officer joined a CrossFit gym.

He also was a SWAT team member for the county. His participation in the SWAT team was not required by the employer. In denying benefits, the board noted that the officer’s participation in the employer’s physical fitness program was completely voluntary.

The employer did not mandate that the officer undergo any physical fitness tests, and choosing not to participate in the testing would not result in disciplinary action.

Also, although the officer’s involvement with the SWAT team required him to undergo periodic fitness testing, his participation in that program was not a mandatory part of his employment.

In addition, the officer was not required by either the employer or the SWAT team to join a CrossFit gym or perform box jumps as a part of any physical fitness test.

Christina Lumbreras is a Legal Editor for Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]

Cyber Resilience

No, Seriously. You Need a Comprehensive Cyber Incident Response Plan Before It’s Too Late.

Awareness of cyber risk is increasing, but some companies may be neglecting to prepare adequate response plans that could save them millions. 
By: | June 1, 2018 • 7 min read

To minimize the financial and reputational damage from a cyber attack, it is absolutely critical that businesses have a cyber incident response plan.

“Sadly, not all yet do,” said David Legassick, head of life sciences, tech and cyber, CNA Hardy.

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In the event of a breach, a company must be able to quickly identify and contain the problem, assess the level of impact, communicate internally and externally, recover where possible any lost data or functionality needed to resume business operations and act quickly to manage potential reputational risk.

This can only be achieved with help from the right external experts and the design and practice of a well-honed internal response.

The first step a company must take, said Legassick, is to understand its cyber exposures through asset identification, classification, risk assessment and protection measures, both technological and human.

According to Raf Sanchez, international breach response manager, Beazley, cyber-response plans should be flexible and applicable to a wide range of incidents, “not just a list of consecutive steps.”

They also should bring together key stakeholders and specify end goals.

Jason J. Hogg, CEO, Aon Cyber Solutions

With bad actors becoming increasingly sophisticated and often acting in groups, attack vectors can hit companies from multiple angles simultaneously, meaning a holistic approach is essential, agreed Jason J. Hogg, CEO, Aon Cyber Solutions.

“Collaboration is key — you have to take silos down and work in a cross-functional manner.”

This means assembling a response team including individuals from IT, legal, operations, risk management, HR, finance and the board — each of whom must be well drilled in their responsibilities in the event of a breach.

“You can’t pick your players on the day of the game,” said Hogg. “Response times are critical, so speed and timing are of the essence. You should also have a very clear communication plan to keep the CEO and board of directors informed of recommended courses of action and timing expectations.”

People on the incident response team must have sufficient technical skills and access to critical third parties to be able to make decisions and move to contain incidents fast. Knowledge of the company’s data and network topology is also key, said Legassick.

“Perhaps most important of all,” he added, “is to capture in detail how, when, where and why an incident occurred so there is a feedback loop that ensures each threat makes the cyber defense stronger.”

Cyber insurance can play a key role by providing a range of experts such as forensic analysts to help manage a cyber breach quickly and effectively (as well as PR and legal help). However, the learning process should begin before a breach occurs.

Practice Makes Perfect

“Any incident response plan is only as strong as the practice that goes into it,” explained Mike Peters, vice president, IT, RIMS — who also conducts stress testing through his firm Sentinel Cyber Defense Advisors.

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Unless companies have an ethical hacker or certified information security officer on board who can conduct sophisticated simulated attacks, Peters recommended they hire third-party experts to test their networks for weaknesses, remediate these issues and retest again for vulnerabilities that haven’t been patched or have newly appeared.

“You need to plan for every type of threat that’s out there,” he added.

Hogg agreed that bringing third parties in to conduct tests brings “fresh thinking, best practice and cross-pollination of learnings from testing plans across a multitude of industries and enterprises.”

“Collaboration is key — you have to take silos down and work in a cross-functional manner.” — Jason J. Hogg, CEO, Aon Cyber Solutions

Legassick added that companies should test their plans at least annually, updating procedures whenever there is a significant change in business activity, technology or location.

“As companies expand, cyber security is not always front of mind, but new operations and territories all expose a company to new risks.”

For smaller companies that might not have the resources or the expertise to develop an internal cyber response plan from whole cloth, some carriers offer their own cyber risk resources online.

Evan Fenaroli, an underwriting product manager with the Philadelphia Insurance Companies (PHLY), said his company hosts an eRiskHub, which gives PHLY clients a place to start looking for cyber event response answers.

That includes access to a pool of attorneys who can guide company executives in creating a plan.

“It’s something at the highest level that needs to be a priority,” Fenaroli said. For those just getting started, Fenaroli provided a checklist for consideration:

  • Purchase cyber insurance, read the policy and understand its notice requirements.
  • Work with an attorney to develop a cyber event response plan that you can customize to your business.
  • Identify stakeholders within the company who will own the plan and its execution.
  • Find outside forensics experts that the company can call in an emergency.
  • Identify a public relations expert who can be called in the case of an event that could be leaked to the press or otherwise become newsworthy.

“When all of these things fall into place, the outcome is far better in that there isn’t a panic,” said Fenaroli, who, like others, recommends the plan be tested at least annually.

Cyber’s Physical Threat

With the digital and physical worlds converging due to the rise of the Internet of Things, Hogg reminded companies: “You can’t just test in the virtual world — testing physical end-point security is critical too.”

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How that testing is communicated to underwriters should also be a key focus, said Rich DePiero, head of cyber, North America, Swiss Re Corporate Solutions.

Don’t just report on what went well; it’s far more believable for an underwriter to hear what didn’t go well, he said.

“If I hear a client say it is perfect and then I look at some of the results of the responses to breaches last year, there is a disconnect. Help us understand what you learned and what you worked out. You want things to fail during these incident response tests, because that is how we learn,” he explained.

“Bringing in these outside firms, detailing what they learned and defining roles and responsibilities in the event of an incident is really the best practice, and we are seeing more and more companies do that.”

Support from the Board

Good cyber protection is built around a combination of process, technology, learning and people. While not every cyber incident needs to be reported to the boardroom, senior management has a key role in creating a culture of planning and risk awareness.

David Legassick, head of life sciences, tech and cyber, CNA Hardy

“Cyber is a boardroom risk. If it is not taken seriously at boardroom level, you are more than likely to suffer a network breach,” Legassick said.

However, getting board buy-in or buy-in from the C-suite is not always easy.

“C-suite executives often put off testing crisis plans as they get in the way of the day job. The irony here is obvious given how disruptive an incident can be,” said Sanchez.

“The C-suite must demonstrate its support for incident response planning and that it expects staff at all levels of the organization to play their part in recovering from serious incidents.”

“What these people need from the board is support,” said Jill Salmon, New York-based vice president, head of cyber/tech/MPL, Berkshire Hathaway Specialty Insurance.

“I don’t know that the information security folks are looking for direction from the board as much as they are looking for support from a resources standpoint and a visibility standpoint.

“They’ve got to be aware of what they need and they need to have the money to be able to build it up to that level,” she said.

Without that support, according to Legassick, failure to empower and encourage the IT team to manage cyber threats holistically through integration with the rest of the organization, particularly risk managers, becomes a common mistake.

He also warned that “blame culture” can prevent staff from escalating problems to management in a timely manner.

Collaboration and Communication

Given that cyber incident response truly is a team effort, it is therefore essential that a culture of collaboration, preparation and practice is embedded from the top down.

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One of the biggest tripping points for companies — and an area that has done the most damage from a reputational perspective — is in how quickly and effectively the company communicates to the public in the aftermath of a cyber event.

Salmon said of all the cyber incident response plans she has seen, the companies that have impressed her most are those that have written mock press releases and rehearsed how they are going to respond to the media in the aftermath of an event.

“We have seen so many companies trip up in that regard,” she said. “There have been examples of companies taking too long and then not explaining why it took them so long. It’s like any other crisis — the way that you are communicating it to the public is really important.” &

Antony Ireland is a London-based financial journalist. He can be reached at [email protected] Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]