workers' compensation: times have changed law becoming ... · times have changed presented by...
TRANSCRIPT
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Important Notice: This presentation has been prepared by Varnum LLP for informational purposes only and does not constitute legal advice. Copyright © 2018, Varnum LLP. All rights reserved.
Workers' Compensation:Times Have Changed
Presented by Richard R. Symons
Law Becoming More Favorable
Coordination of Benefits
Prior to 1987, employers could not offset workers' compensation with pension or retirement benefits.
Employee could collect full workers' compensation benefits and full pension.
Result: Every Friday, busses chartered by Plaintiff firms take retiring employees to casino to file comp claims.
Now, workers' compensation is offset by old age, social security benefits and any pension benefits the employee receives.
Also, retiring from active employment gives rise to a presumption that employee is not entitled to wage loss.
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Result
Comp claims dropped from 80,000 claims per year to 40,000.
Claims were down to about 7,000 per year by 2014.
Other Changes in the Act
What does it mean to have an "injury"?
What does it mean to be disabled?
Necessary elements of psychiatric claims.
Effect of just cause termination.
Plant shut down and other economic risks.
These are all areas when the law has become significantly more favorable for employers.
How Claims Have Changed
1. Application for benefits filed with the Bureau Takes Bureau about 8 weeks to process.
2. Pretrial No more scheduling orders.
3. Control dates for the next 18 months.
4. Mediation
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Mediation is another area of change in the workers' compensation system.
Used to be that claimants would make excessive demands, we would reject those demands, and the case would proceed to trial.
About 20 years ago, the Bureau started requiring the parties find a defense attorney and a plaintiff's attorney and then mediate the case.
You can imagine how that went. Plaintiff's attorney's mediator = $240,000
Defense attorney's mediator = $50,000
Actual settlement = $80,000
Now Cases are Mediated By Magistrates
The process is favorable for employers as the magistrates tend to be employer oriented and the law is so favorable for employers.
The goal of mediation is to determine the settlement value of a claim, adjusted up or down to a number both parties can live with.
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Mediation tends to increase the value of weak cases and lowers the value of good cases.
With mediation putting more reasonable numbers on cases, it is hard to try a case today.
The goal of mediation is to reach a number both parties can accept.
With any settlement, Medicare's interests must be considered.
How Claims Have Changed
5. Trial
Plaintiff's attorneys are afraid to try cases because of how employer-oriented the system has become.
After Trial, Losing Party Can Appeal to Appellate Commission
Before:
Magistrate's opinion was just checked boxes.
Standard of review was simply a de novo assessment of the evidence.
4-5 years to get a decision.
Since appeal was a second chance at the case, loser always would appeal.
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After Trial, Losing Party Can Appeal to Appellate Commission
Now: Standard of review is whether there is substantial
evidence on the whole record to support the magistrate's findings of fact. Did injury occur?
Which doctor did magistrate find more credible?
Does magistrate believe the claimant?
These issues won't be changed on appeal.
Questions of law are always subject to review.
Now, much more difficult to get a decision overturned than in the past.
Next appeal: Court of Appeals
Michigan Supreme Court
These courts hear few workers' comp appeals.
It matters who is on the court.
Example: Sidewalk injury case in Northern Michigan.
Main Workers' Comp Concepts
What is a Work-Related Injury? To show a work-related injury, the
claimant must prove that the injury: Arose out of the employment AND
In the course of the employment.
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Main Workers' Comp Concepts Employee passes out due to blood
sugar issue and hits head on floor. Is the head injury compensable?
Employee is dieting and passes out. She falls into a machine and is injured. Compensable?
What about employee passes out while driving during work and is injured in subsequent crash? Compensable?
Employee stumbles over his own feet into tile wall?
Main Workers' Comp Concepts
What is a work injury? A personal injury under this Act is compensable
if work causes, contributes to, or aggravates pathology in a manner so as to create pathology that is medically distinguishable from any pathology that existed prior to the injury.
“Inflammation” is not a work injury.
Change in symptoms not generally enough to meet standard.
We refer to this as a "Rakestraw problem" in settlement negotiations with plaintiff's attorney.
Note that this dramatic change in the law did not originally come from a change in the comp Act, but in the way the courts and the bureau apply the Act.
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Employees are now required to show a pathological change of condition, not just a symptomatic change. Example: Magistrate told Plaintiff's counsel
his symptomatic change of condition would be a great case 20 years ago.
Main Workers' Comp Concepts
What Does It Mean To Have A Disability?
“Disability” means a limitation of an employee’s wage earning capacity in work suitable to his or her qualifications and training resulting from a personal injury or work-related disease.
In the past, a "limitation" could be just one job.
Now, other jobs the employee can perform are considered.
Wage Loss – Must Relate To Injury
"Wage Loss" means the amount of wages lost due to the disability. The employee must establish a connection between the disability and reduced wages.
Case law in the past did not require the wage loss to be related to the work injury.
Layoffs, terminations, etc. led to payment of benefits.
Terminations for cause or due to the ups and downs of the economy (plant closings) are not compensable.
This is the opposite result from 15 years ago.
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Wage Earning Capacity: Wages Earned or Capable of Being Earned
“Wage Earning Capacity” means the wages the employee earns or is capable of earning at a job reasonably available to that employee, whether or not wages are actually earned
Use of Vocational Testimony to Reduce Workers' Comp Rate ("Stokes" Eval)
Workers' compensation used to be easy. For work injuries, you would calculate the AWW and get a comp rate. If the employee earned less, they would get differential benefits.
Now claimants are only entitled to the amount that the work injury has diminished their wage earning capacity.
Residual Wage Earning Capacity
Workers' comp pays 80% of after tax earnings, minus residual wage earning capacity.
We get vocational evaluations in many litigated comp cases.
“Stokes evaluations” for long term claimants to reduce the comp rate?
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Magistrates don't like this rule and also know the reputations of some vocational counselors.
One vocational counselor called and said "I have never asked you for anything, so can you please just schedule some evaluations?"
Termination from Favored Work for Fault Means No Wage Loss
If an employee is terminated from reasonable employment for fault of the employee, the employee is considered to have voluntarily removed himself or herself from the work force and is not entitled to any wage loss benefits.
Replaces prior 100 week rule.
Even for dates of injury before 12/19/11, employees terminated for fault likely do not get wage loss benefits as wage loss is not related to the injury.
Examples: Terminations for positive drug tests, attendance, etc. =
no wage loss.
Termination from Favored Work for Fault Means No Wage Loss
End of 100 week rule
Legislative history of 100 week rule
Comp trials were more like wrongful discharge cases Employer must prove each point was earned
More witnesses
More trial preparation
Documentation will be scrutinized
At stake: W.C. benefits for life
Case was more of a wrongful discharge claim than a workers' comp claim.
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Plant Closings
In the past, the employer bore the risk of the plant closing.
Discussion with Magistrate Grit.
New Rule – Employee must relate their wage loss to work injury at all times.
Result – Plant closing does not lead to resumption of wage loss benefits.
Dealing with Claimants Close to Retirement Age
If a workers' compensation claimant retires from "active employment," there is a presumption that the employee is not entitled to wage loss benefits.
"Active employment" includes light duty work.
With the aging workforce, retirees who have actual or potential workers' compensation claims are increasing.
Dealing with Claimants Close to Retirement Age
If you have a claimant off work who is approaching retirement age, or who has expressed interest of retirement, or a pending plant closing, get them back to some type of work. Assign someone else to help this employee if need be.
Do whatever you have to do to get them back to work before they retire.
Workers' compensation benefits are potentially life-long.
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Traveling Employees General Rule: travel to and from work is not work-
related.
Example: Employee slides off road in company car, ends up in creek, and drowns. Work-related?
Travel out of town is generally compensable until the recreational activities begin. Example: trip to the "Go-Go Bar."
Employee/Independent Contractor Defined
Often a difficult issue – no clear answers.
Previously, test was “economic reality test.”
Now, the bureau uses the IRS 20 factor test for distinguishing between employees and independent contractors.
Factors such as control of the work, how it is done,does the individual advertise and work for others,use their own tools.
Employee/Independent Contractor Defined
Employers can actually ask the bureau whether aparticular individual is an employee orindependent contractor.
Do companies want to know if an individualqualifies as an independent contractor?
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Parking Lot Injuries
Injuries sustained while on the employer's premises within a reasonable time before or after one's shift, are compensable. Massages before work are not work-related.
28th Street example. Northern Michigan – exception.
Parking lot injuries are generally compensable. Exception: The employer must own or maintain the
parking lot in order for injury to be compensable. If property is leased, the lease must be reviewed.
Higher Standard of Proof Required for Mental, Heart and Conditions of the Aging Process
Mental disabilities and conditions of the aging process, including heart conditions and degenerative arthritis, are compensable if contributed to or aggravated or accelerated by the employment in a significant manner. Test compares work related contributions versus non-work
related contributions.
The number of psychiatric claims has increased lately.
Higher Standard of Proof Required for Mental, Heart and Conditions of the Aging Process
Old test for compensability of emotional claims: honest perception test.
New Test: Must be actual events that are accurately perceived and contribute significantly to the mental disability.
These are extremely difficult cases for employees to win.
Complaints that my supervisor is mean to me will not be successful.
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Statute of Limitations for Workers’ Compensation Claims
Notice Employee must provide notice to the employer of a
work-related injury within 90 days.
Notice is waived unless the employer can prove prejudice.
The Bureau goes out of its way to not beat the claim based on failure to give notice.
Courts have held notice of an injury when applying for STD or medical benefits is sufficient.
Claim
Example of case where claim not proven: Very difficult to win cases due to failure to give
notice/claim (but it has happened – nurse case).
Employee must make a claim, or demand, for workers' compensation benefits within two years of: Date of injury;
Last date worked; or
Date disability manifested itself.
Claim
The running of a statute is tolled by payment of benefits such as STD and LTD.
Employee will simply claim he told his supervisor about his injury.
Claim once made is good forever, but recovery limited by the one and two year back rules.
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Death Benefits If no dependents, $6,000 burial fee. A surviving, dependent spouse is generally entitled to
500 weeks of benefits. Children: Receive benefits to age 16. Benefits cease at age 16 if the
child is self-supporting. Benefits end at age 18, unless extended by the Magistrate to
age 21.
Example: Employee dies on first day of work. Not married, and no kids (that we knew of …).
Medicare Set-Asides
Most claimants now file for both SSD as well as workers' compensation.
If an employee is on SSD or has a reasonable expectation of getting on Medicare, any workers' compensation settlement must take into account Medicare's interests of not paying work-related medical.
The parties, however, decide how much to set-aside for future medical.
Employee supposed to keep receipts, submit annual accounting.
Medicare Set-Asides
Medicare is willing to decide how much the set-aside will be if: The worker is on Medicare and settlement is over $25,000.
If the individual is on SSD and the settlement is over $250,000.
Dealing with Medicare's interests is an important part of case strategy.
Note that one never has to go to Medicare. The $25,000 figure is Medicare's threshold for reviewing the case.
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Scrutiny is given to selection of IMEdoctors: The magistrates know what doctors will say
anything for the party paying them.
The magistrates had experience with those doctors in their practice.
The magistrate will not accept the opinion of one of these doctors.
Examples
IME doctor faxed report to me and asked me to make any changes needed.
Plaintiff's IME doctor went from full release in report to totally disabled in deposition.
In mediation, the magistrate will tell you what they think of a particular IME doctor.
Remember, the magistrates were all in private practices and have dealt with every IME doctor.
Examples
A carrier's selection of a "less than credible" doctor puts the employer at a disadvantage from the start.
Love it when a plaintiff's attorney uses certain IME doctors. Example of local doctor regarding carpal
tunnel/elbow case.
That doctor had so little credibility we won without even having any medical.
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You must have input in the selection of the IME doctor.
You can have a standing instruction as to what IME doctor your carrier or administrator is going to use.
Be careful with emails indicating you are putting case into litigation via a cut-off doctor in order to settle it.
Importance of Accident Reports
Facts Employee shows up at emergency room
complaining of headache.
Found to have a broken tooth that has become infected.
Infection went to brain, caused tumor, multiple surgeries, brain damage.
Removed skull to allow swelling to reduce.
Skull didn't fit when they tried to put it back on.
Importance of Accident Reports
$2,000,000 in medical bills and will never work again.
Employee later claims that a piece of metal shot across the room, hit her tooth, and broke her molar, leading to infection.
Company disputed the injury happened at work.
This was all set to be a case that depended on the employee's credibility.
At trial, claimant was bombarded with all of her prior accident reports for prior injuries.
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Importance of Accident Reports
Claimant also attacked with forms she signed declining medical treatment.
The claimant signed each of these forms – not just the supervisors.
Magistrate denied the claim, citing the multiple accident reports for prior injuries and noted the employer even required the employee to sign a form refusing treatment. The lack of an accident report for this flying metal into mouth injury means it never happened.
Discussion of Magistrates
Slater
Klaeren
Timmons
Woons
Highhouse
You want the reputation that if the case is going to trial, there is a good reason behind that decision.
Discussion of Magistrates
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Magistrates remember every case, every employer, and it is hard to change your reputation.
Discussion of Magistrates
Important to know: The magistrate
The plaintiff's attorney's reputation
The defense attorney's reputation
How does the magistrate view the plaintiff's attorney?
Discussion of Magistrates
MIOSHA
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MIOSHA FINES HAVE INCREASED
New MIOSHA Fine Structure
Before Now
Serious - $7,000 $12,471
Repeat/Willful - $70,000 $124,709
In the past, appeal of citations has never been about the fine.
MIOSHA
DRUG TESTING
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New OSHA "Anti-Retaliation" Drug Testing Rule Now in Effect
As of November 30, 2016, OSHA considers its new "anti-retaliation" drug testing rule to be in effect.
Why Does OSHA Have a New Drug Testing Rule?
OSHA believes that rules requiring a drug test be performed after all workplace injuries serve to discourage the reporting of injuries, constituting retaliation for exercising a right under OSHA –Reporting an Injury.
What is OSHA's New Anti-Retaliation Drug Testing Rule?
Employers can conduct post-accident drug testing if there is a "reasonable possibility" that employee drug use could have contributed to the reported injury or illness.
If Yes Drug testing is allowed
If No Drug testing is considered retaliation for reporting the injury.
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Examples
Due to carelessness, hi-lo driver strikes another employee with hi-lo.
Okay to drug test the hi-lo driver.
Not okay to drug test the employee who was struck.
Examples
Employee reports carpal tunnel syndrome-like symptoms.
OSHA will find a drug test of that individual to be retaliatory.
OSHA'S Remedies For Retaliation
Many companies terminate employment for a positive drug test.
OSHA can order reinstatement and back pay.
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New OSHA Silica Standards
New standard cuts allowable silica exposure significantly.
New standard for construction industry went into effect on 9/23/2017. Enforcement for first month is to be lenient, supposedly.
Silica standard for General Industry goes into effect 6/2018. OSHA not expected to be flexible at implementation date.
Most foundries and other areas of significant silica concern will be over the new limit.
NOTE: Be certain the filters an employer is using is appropriate for the exposure.
Appeal of OSHA Citation
OSHA may just be wrong on the requirements of the standard. (Example: LO-TO.)
Employee misconduct is best defense.
Employer must be able to provide write ups.
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Injury/Death
Reporting
Injuries That Must Be Reported to MIOSHA
Prior MIOSHA standard only required that fatalities be reported to MIOSHA within 8 hours and work-related inpatient hospitalizations of 3 or more employees be reported within 24 hours.
Current standard requires the reporting to MIOSHA of all: Fatalities at work;
work-related inpatient hospitalizations;
work-related amputations; and
work-related losses of an eye.
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Amputation includes fingertip.
Amputated fingers that are re-attached have to be reported.
Reporting will trigger an inspection.
In case of death at work due to non-work related cause, make that clear in your reporting.
Questions?
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Thank You!