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View From the Bench

Workers’ Comp Docket

Significant workers' compensation legal decisions from around the country.
By: | February 6, 2017 • 12 min read

Marijuana Use Doesn’t Prevent Award of TTD Benefits

State ex rel. Cordell v. Pallet Co., Inc., et al., No. 2015-0163 (Ohio 12/29/16)

Ruling: The Ohio Supreme Court held that a worker was entitled to temporary total disability benefits.

What it means: In Ohio, when a worker is terminated after a workplace injury for conduct prior to and unrelated to the workplace injury, his termination does not amount to a voluntary abandonment of employment that will preclude temporary total disability compensation when: 1) the discovery of the dischargeable offense occurred because of the injury; and 2) at the time of the termination, the worker was medically incapable of returning to work as a result of the injury.

Summary: A worker for Pallet Co. was injured in the course and scope of his employment when he fell between a dock and a truck, fracturing his leg. At the hospital, the worker’s urine was collected and sent for a toxicology screening. The worker sought workers’ compensation benefits the day after the accident. Subsequently, the worker’s toxicology results showed that he tested positive for marijuana metabolites. He was terminated that day for violating Pallet’s drug-free workplace policy. The Ohio Supreme Court held that the worker was entitled to temporary total disability benefits.

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The court explained that the worker’s marijuana use was not the proximate cause of his injury. Also, when he was terminated, he had not returned to work, he had not been released by his doctor to return to work, he had not reached maximum medical improvement, and he was physically incapable of returning to work.

The court also concluded that the worker’s termination did not amount to a voluntary abandonment of his employment because he was medically incapable of returning to work when he was terminated. Also, the court explained that this case involved the violation of a work rule before the injury that was discovered as a result of the injury.

Dissenting judges opined that the worker voluntarily abandoned his employment when he used an illegal controlled substance in violation of Pallet’s drug-free workplace policy. A dissenting judge said that the worker’s misconduct severed the causal connection between the injury and the wage loss.

Unpaid Intern’s Benefits Based on Assumed Wage

Rehfeld v. Sedgwick Claims Management Services, No. A157406 (Or. Ct. App. 01/05/17)

Ruling: The Oregon Court of Appeals sent the case back to the Workers’ Compensation Board for a determination of an intern’s temporary disability benefits.

What it means: In Oregon, for workers who have no wages, benefits must be calculated on the “assumed wage” on which the employer’s premium is based.

Summary: An intern’s work for Wend Magazine involved graphic design, selling advertising, and modeling sports clothing for photo shoots. The intern was unpaid in part and paid in part on commission for advertising sales. After working one month for Wend, she was injured when she fell and broke her wrist while modeling skateboard clothing for a photo shoot. At the time of her injury, the intern had not finalized any advertising sales and had not earned a commission. Because of Wend’s noncomplying status, the Workers’ Compensation Board was unable to determine a weekly wage for the intern. The intern argued that her benefits should be based on the minimum wage. The board concluded that she was entitled to the statutory minimum benefit of $50. The Oregon Court of Appeals reversed and sent the case back to the board.

For workers like the intern who have no wages, benefits must be calculated on the assumed wage on which the employer’s premium is based. The intern did not have an assumed wage because Wend was a noncomplying employer. The court explained that a compensable injury to a worker employed by a noncomplying employer is compensable to the same extent as if the employer had complied with the law. Had Wend complied, the intern’s benefits would have been calculated using the assumed rate on which Wend’s premium was based.

The court sent the case back to the board to determine the intern’s temporary disability benefits based on the assumed wage on which Wend’s premium would have been had it provided insurance.

Employee Awarded Comp for Injury in Public Street in Front of His Home

Balloli v. New Haven Police Department, et al., No. SC 19584 (Conn. 12/27/16)

Ruling: The Connecticut Supreme Court held that a police officer’s back injury was compensable.

What it means: In Connecticut, a police officer’s injury in a public street while on his way to work is within the course of his employment.

Summary: A police officer for the New Haven Police Department moved his vehicle out of his driveway so that his son could move another vehicle out of the driveway. The officer parked his vehicle in the street directly in front of his house. About 30 minutes later, the office walked to his car to drive to work. While standing in the street, he dropped his keys, which landed under his vehicle. The officer squatted down and twisted to pick up his keys, injuring his lumbar spine. The officer filed a workers’ compensation claim. The Connecticut Supreme Court held that his injury was compensable.

The court explained that for a police officer, “in the course of employment” encompasses his departure from his place of abode to duty, his duty, and his return to his place of abode after duty. The legislature provided examples to help define the term “place of abode,” including areas related to where an individual resides such as walkways, breezeways, yards, and driveways. The court noted that this list did not include public areas adjacent to a person’s property such as sidewalks or streets. The court found that construing “place of abode” to include a public street would frustrate the remedial purpose of the law.

The court concluded that when the officer dropped his keys in the street and was injured, he was acting within the course of his employment. The fact that he had left his driveway and entered the public street on his way to duty was sufficient to establish that he was covered. It was not necessary to demonstrate that he entered his vehicle or started his engine.

A dissenting judge opined that the officer’s place of abode extended to the street where his vehicle was parked.

Time Limitation on Claim Doesn’t Allow Worker to Sue Employer

Hendrix v. Alcoa, Inc., No. CV-15-558 (Ark. 12/15/16)

Ruling: The Arkansas Supreme Court held that an estate’s wrongful death suit against a deceased worker’s employer should be dismissed.

What it means: In Arkansas, a worker can sue his employer when there is no remedy under the workers’ compensation law. The time limitation on filing a workers’ compensation claim does not equate to the absence of a remedy.

Summary: A former worker for Alcoa was diagnosed with mesothelioma, an asbestos-related cancer 17 years after he stopped working for the employer. He filed a claim against Alcoa for workers’ compensation benefits, alleging that he was exposed to asbestos during the course of his employment. The administrative law judge found that the claim was time-barred because it was not filed within three years of the last date of injurious exposure. Subsequently, the worker died. His estate sued Alcoa. In a case of first impression, the Arkansas Supreme Court dismissed the suit.

The estate asserted that because the statute of limitations extinguished the worker’s remedy under the workers’ compensation law before it accrued, the exclusive remedy provision did not apply. The court rejected the argument. The court explained that a worker can sue an employer only if the workers’ compensation law provides no remedy for the worker’s condition. The workers’ compensation law covers occupational diseases, including asbestos-related claims. The court found that the temporal limitation on recovery did not equate to the absence of a remedy under the workers’ compensation law.

The court also explained that it could not have been the legislature’s intent to absolve an employer of liability for workers’ compensation after a period of time only to subject the employer to liability in a suit after that period ended. The court noted that its result “smack[ed] of unfairness,” particularly when it was well-known that mesothelioma has a long latency period. However, any inequity must be addressed by the legislature.

Dissenting judges opined that the majority deprived the estate of the opportunity to pursue its only remedy. The dissent also said that the majority’s holding deprived workers whose injuries and disease do not manifest during the three-year statute of limitations of a remedy, essentially allowing employers to escape liability.

Unexplained Death Presumption Doesn’t Extend to Worker Who Survived

Turner v. SAIIA Construction, et al., No. 5458 (S.C. Ct. App. 12/07/16)

Ruling: The South Carolina Court of Appeals held that an operator was not entitled to benefits for the injuries he sustained from an unexplained fall.

What it means: In South Carolina, the unexplained death presumption does not apply in cases where the worker survives the injury but had no memory of the events leading up to the injury.

Summary: A heavy equipment operator for SAIIA Construction was found lying on his back next to his dump truck. The operator said that he had no memory of the accident or how it happened. A few weeks before the accident, the operator sought medical care for his lower back. Two days before the accident, he complained to his supervisor that he did not feel well. The operator filed a workers’ compensation claim alleging an injury to his back, head, and thoracic spine. The South Carolina Court of Appeals held that the operator was not entitled to benefits.

The operator argued that the unexplained death presumption applied. The presumption applies when one found charged with the performance of a duty and injured while performing such duty or found injuries where his duty required him to be is injured in the course of his employment. The court declined to apply the presumption in cases where the worker survived the injury but had no memory of the events leading up to the injury. Even if the court extended the presumption, SAIIA rebutted the presumption with evidence that the operator had recent nonwork-related preexisting back conditions.

The court also found that the injury was not a compensable unexplained fall. The operator failed to establish a causal connection between his unexplained fall and his employment. The court noted that it could not determine what he was doing at the time of the incident. Although he was at work when he fell, no evidence showed that his employment contributed to the cause of the fall.

Downsized Injured Worker Was Not Victim of Discrimination

Tirk v. Dubrook, Inc., No. 16-1402 (3d Cir. 12/27/16, unpublished)

Ruling: In an unpublished decision, the 3d U.S. Circuit Court of Appeals affirmed a District Court decision granting summary judgment to an employer on an employee’s claims under ADA Title I. The 3d Circuit held that the employee’s discrimination claim failed because he showed neither causation nor pretext.

What it means: Absent evidence “unduly suggestive” of discrimination, a temporal gap of one month between a protected activity and termination does not sufficiently demonstrate a causal connection.

Summary: A maintenance worker injured his left knee several times over the course of three years. Each time, he missed several weeks of work and was put on medical restrictions, which the company accommodated. After one of the injuries, he filed a workers’ compensation claim. He injured his knee again when he fell from a ladder at work. He filed an accident report but missed no work time. He was put on temporary medical restrictions, which the company honored. One month later, the worker and two other employees were terminated for “economic reasons as part of a reduction in force.” Existing employees took over his responsibilities, and the company did not replace him. The worker sued under the ADA. In an unpublished decision, the 3d Circuit held that he showed neither causation nor pretext.

The worker argued that the company discriminated against him because of a perceived disability and that its stated reasons for terminating him were pretext. The 3d Circuit concluded that the worker failed to make a prima facie showing of causation. Although only one month transpired between the filing of his accident report and his termination, “a temporal gap of one month alone [does not] sufficiently demonstrate a causal connection.” Also, there was no basis to believe that the temporal gap was “unduly suggestive” of discrimination, given the worker’s history of knee injuries, time off from work related to those injuries, and medical work restrictions. He faced no repercussions because of prior injuries or for filing a workers’ comp claim and provided no explanation for why the most recent injury — which required no time off work and minimal work restrictions — created a perception of disability resulting in termination.

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The worker also failed to show that the company’s reasons for his termination were pretextual. He did not dispute that the company faced economic problems, that other employees assumed his responsibilities, and that he was never replaced. Rather, he argued that the company’s reasons were pretextual because three months after the RIF it partially replaced one of the other two employees. The court concluded that the company’s partial replacement three months later of another employee provided no basis to disbelieve the company’s stated reasons for terminating the worker.

Trip, Fall at Holiday Party Isn’t Covered by Comp

Lennon v. N.C. Judicial Department, et al., No. COA16-476 (N.C. Ct. App. 12/06/16, unpublished)

Ruling: In an unpublished decision, the North Carolina Court of Appeals held that a clerk’s injury at a holiday party was not compensable.

What it means: In North Carolina, an injury arising out of a recreational activity will not be compensable when the employer did not require attendance at the activity.

Summary: A deputy clerk of court in the accounting division for the Harnett County Clerk of Court planned the annual office holiday party with her division. A group of attorneys sponsored the party by paying for the venue and the food. The clerk helped design the invitations and assisted with securing catering and planning the program. She also volunteered to serve as the emcee for the event, which was to be held in the evening after work. All employees were invited to attend. Regardless of whether they attended, employees were expected to contribute $13 to pay for a gift for the clerk of court and for cleaning up after the party. On the night of the party, the clerk was entering the party venue when she tripped and fell, suffering injuries. She sought workers’ compensation benefits. The North Carolina Court of Appeals held that she was not entitled to benefits.

The clerk argued that she was required to attend the party. The court disagreed, pointing out that coworkers testified that attendance was not required. The clerk volunteered to emcee the party, the only activity that necessitated her attendance.

The court concluded that the injury did not arise out of and in the course of the clerk’s employment. The court explained that the party was not sponsored by the employer, attendance was not required, no degree of encouragement existed, the employer did not finance the occasion, the employees did not regard the event as a benefit or entitlement, and the event did not provide the employer with a benefit except for improving employee morale.

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]

More from Risk & Insurance

More from Risk & Insurance

Risk Report: Manufacturing

More Robots Enter Into Manufacturing Industry

With more jobs utilizing technology advancements, manufacturing turns to cobots to help ease talent gaps.
By: | May 1, 2018 • 6 min read

The U.S. manufacturing industry is at a crossroads.

Faced with a shortfall of as many as two million workers between now and 2025, the sector needs to either reinvent itself by making it a more attractive career choice for college and high school graduates or face extinction. It also needs to shed its image as a dull, unfashionable place to work, where employees are stuck in dead-end repetitive jobs.

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Added to that are the multiple risks caused by the increasing use of automation, sensors and collaborative robots (cobots) in the manufacturing process, including product defects and worker injuries. That’s not to mention the increased exposure to cyber attacks as manufacturers and their facilities become more globally interconnected through the use of smart technology.

If the industry wishes to continue to move forward at its current rapid pace, then manufacturers need to work with schools, governments and the community to provide educational outreach and apprenticeship programs. They must change the perception of the industry and attract new talent. They also need to understand and to mitigate the risks presented by the increased use of technology in the manufacturing process.

“Loss of knowledge due to movement of experienced workers, negative perception of the manufacturing industry and shortages of STEM (science, technology, engineering and math) and skilled production workers are driving the talent gap,” said Ben Dollar, principal, Deloitte Consulting.

“The risks associated with this are broad and span the entire value chain — [including]  limitations to innovation, product development, meeting production goals, developing suppliers, meeting customer demand and quality.”

The Talent Gap

Manufacturing companies are rapidly expanding. With too few skilled workers coming in to fill newly created positions, the talent gap is widening. That has been exacerbated by the gradual drain of knowledge and expertise as baby boomers retire and a decline in technical education programs in public high schools.

Ben Dollar, principal, Deloitte Consulting

“Most of the millennials want to work for an Amazon, Google or Yahoo, because they seem like fun places to work and there’s a real sense of community involvement,” said Dan Holden, manager of corporate risk and insurance, Daimler Trucks North America. “In contrast, the manufacturing industry represents the ‘old school’ where your father and grandfather used to work.

“But nothing could be further from the truth: We offer almost limitless opportunities in engineering and IT, working in fields such as electric cars and autonomous driving.”

To dispel this myth, Holden said Daimler’s Educational Outreach Program assists qualified organizations that support public high school educational programs in STEM, CTE (career technical education) and skilled trades’ career development.

It also runs weeklong technology schools in its manufacturing facilities to encourage students to consider manufacturing as a vocation, he said.

“It’s all essentially a way of introducing ourselves to the younger generation and to present them with an alternative and rewarding career choice,” he said. “It also gives us the opportunity to get across the message that just because we make heavy duty equipment doesn’t mean we can’t be a fun and educational place to work.”

Rise of the Cobot

Automation undoubtedly helps manufacturers increase output and improve efficiency by streamlining production lines. But it’s fraught with its own set of risks, including technical failure, a compromised manufacturing process or worse — shutting down entire assembly lines.

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More technologically advanced machines also require more skilled workers to operate and maintain them. Their absence can in turn hinder the development of new manufacturing products and processes.

Christina Villena, vice president of risk solutions, The Hanover Insurance Group, said the main risk of using cobots is bodily injury to their human coworkers. These cobots are robots that share a physical workspace and interact with humans. To overcome the problem of potential injury, Villena said, cobots are placed in safety cages or use force-limited technology to prevent hazardous contact.

“With advancements in technology, such as the Cloud, there are going to be a host of cyber and other risks associated with them.” — David Carlson, U.S. manufacturing and automobile practice leader, Marsh

“Technology must be in place to prevent cobots from exerting excessive force against a human or exposing them to hazardous tools or chemicals,” she said. “Traditional robots operate within a safety cage to prevent dangerous contact. Failure or absence of these guards has led to injuries and even fatalities.”

The increasing use of interconnected devices and the Cloud to control and collect data from industrial control systems can also leave manufacturers exposed to hacking, said David Carlson, Marsh’s U.S. manufacturing and automobile practice leader. Given the relatively new nature of cyber as a risk, however, he said coverage is still a gray area that must be assessed further.

“With advancements in technology, such as the Cloud, there are going to be a host of cyber and other risks associated with them,” he said. “Therefore, companies need to think beyond the traditional risks, such as workers’ compensation and product liability.”

Another threat, said Bill Spiers, vice president, risk control consulting practice leader, Lockton Companies, is any malfunction of the software used to operate cobots. Then there is the machine not being able to cope with the increased workload when production is ramped up, he said.

“If your software goes wrong, it can stop the machine working or indeed the whole manufacturing process,” he said. “[Or] you might have a worker who is paid by how much they can produce in an hour who decides to turn up the dial, causing the machine to go into overdrive and malfunction.”

Potential Solutions

Spiers said risk managers need to produce a heatmap of their potential exposures in the workplace attached to the use of cobots in the manufacturing process, including safety and business interruption. This can also extend to cyber liability, he said.

“You need to understand the risk, if it’s controllable and, indeed, if it’s insurable,” he said. “By carrying out a full risk assessment, you can determine all of the relevant issues and prioritize them accordingly.”

By using collective learning to understand these issues, Joseph Mayo, president, JW Mayo Consulting, said companies can improve their safety and manufacturing processes.

“Companies need to work collaboratively as an industry to understand this new technology and the problems associated with it.” — Joseph Mayo, president, JW Mayo Consulting

“Companies need to work collaboratively as an industry to understand this new technology and the problems associated with it,” Mayo said. “They can also use detective controls to anticipate these issues and react accordingly by ensuring they have the appropriate controls and coverage in place to deal with them.”

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Manufacturing risks today extend beyond traditional coverage, like workers’ compensation, property, equipment breakdown, automobile, general liability and business interruption, to new risks, such as cyber liability.

It’s key to use a specialized broker and carrier with extensive knowledge and experience of the industry’s unique risks.

Stacie Graham, senior vice president and general manager, Liberty Mutual’s national insurance central division, said there are five key steps companies need to take to protect themselves and their employees against these risks. They include teaching them how to use the equipment properly, maintaining the same high quality of product and having a back-up location, as well as having the right contractual insurance policy language in place and plugging any potential coverage gaps.

“Risk managers need to work closely with their broker and carrier to make sure that they have the right contractual controls in place,” she said. “Secondly, they need to carry out on-site visits to make sure that they have the right safety practices and to identify the potential claims that they need to mitigate against.” &

Alex Wright is a U.K.-based business journalist, who previously was deputy business editor at The Royal Gazette in Bermuda. You can reach him at [email protected]