California Grubhub Driver is Independent Contractor, Not Employee

From Comp Standpoint: Are Uber, Lyft & Grubhub Truly “Disruptive?”

Lamenting that in California, a worker’s status as an employee, vis-a-vis an independent contractor, is an “all-or-nothing proposition,” a U.S. Magistrate Judge, presiding over a bench trial in the Northern District of California, has reluctantly determined that an aspiring actor, who moonlighted as a Grubhub driver for four months in late 2015 and early 2016, was an independent contractor—not an employee—and, accordingly, was not subject to California’s minimum wage, overtime, and employee expense reimbursement laws [see Lawson v. Grubhub, Inc., 2018 U.S. Dist. LEXIS 21171 (N.D. Cal., Feb. 8, 2018)].

The decision echoes a refrain heard from various parts of the workers’ compensation world and beyond, that existing laws are inadequate in handling the disruptive influences of Uber, Lyft, Grubhub, and other firms within the so-called “gig economy,” whose work forces are often made up largely of episodic, part-time workers. And yet, are existing laws really so inadequate? Are gig economy firms actually so disruptive that the workers’ compensation framework is not equipped to handle the issues presented? Do we really need some new third category of worker to respond to Uber and Grubhub? I argue below that the gig economy is not nearly as unique and troublesome as some would have us believe. Moreover, lessons from the distant past should show us that existing laws are more than sufficient to meet the demands of today and tomorrow.

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The Road Less Traveled: Wisconsin Court of Appeals Shuns Majority Rule Re: Borrowing Employer’s Tort Immunity

Temporary Employee Has Option of Claiming Benefits or Suing in Tort

Based, at least in part, on the court’s so-called “literal” reading of a Wisconsin statute [Wis. Stat. § 102.29(6)(b)1.], the Court of Appeals of Wisconsin recently held that a worker employed by one firm and assigned to a borrowing employer may proceed in tort against that borrowing employer (referred to in some jurisdictions as the “special employer”) for injuries sustained in the course and scope of the employment, so long as the worker has not already sought workers’ compensation benefits from the borrowing employer [Ehr v. West Bend Mut. Ins. Co. (In re Estate of Rivera), 2018 Wisc. App. LEXIS 16 (Jan. 9, 2018)]. In its decision, the Court adopted a position in opposition to the vast majority of jurisdictions, which generally bar tort actions by a temporary (i.e., “lent”) employee against the borrowing or special employer [see Larson’s Workers’ Compensation Law §§ 67.01, 100.01, 111.04].

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Is the Wall Strong Enough?

Recent Air Ambulance Decisions Hint that McCarran-Ferguson Insurance Barrier to Federal Involvement in Workers’ Comp May Be Decaying

Two recent court decisions, one from Texas [PHI Air Med., LLC v. Tex. Mut. Ins. Co., 2018 Tex. App. LEXIS 849 (3rd Dist., Jan. 31, 2018)], the other from the Tenth Circuit [EagleMed LLC v. Cox, 868 F.3d 893 (10th Cir. 2017) signal that the “wall” or barrier created by the McCarran-Ferguson Act (“MFA”), 11 U.S.C.S. § 1011, et seq., which generally prevents federal oversight in state workers’ compensation programs, may be showing some signs of decay. In both cases, courts have ruled that the states may not regulate the amounts air ambulance firms charge for transporting injured employees who are covered by state workers’ compensation programs. Such regulation is not allowed because air ambulances are “air carriers,” whose compensation rates are preemptively governed by the Airline Deregulation Act (“the ADA”)[see 49 U.S.C.S. § 41713(b)]. In both decisions, courts have utilized a narrow definition of “business of insurance,” as that term is used in the MFA.

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New Study Says Employer-Directed Choice of MD May Actually Increase Overall Claim Costs

Employer-Controlled Medical Care Drives Claimants to Attorneys, Erasing Savings in Medical Costs

A common mantra from the employer-carrier side of the workers’ compensation world goes something like this, “If you really want to gain control of claim costs, you need to move toward a system that gives the employer/carrier the right to choose the injured worker’s treating physician. A recent study to be published in the Journal of Occupational and Environmental Medicine [See Tao, Xuguang Grant, M.D., Ph.D., et al., “Is Employer-directed Medical Care Associated with Decreased Workers’ Compensation Claim Costs?” JOEM, December 8, 2017, DOI: 10.1097/JOM.0000000000001247], cautions that such conventional wisdom may be wrong, that while employer-mandated physician choice may reduce medical care costs themselves, the practice may also wipe away any such savings by increasing other claims expenses associated with higher attorney involvement on the claimant’s side.

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The Top 10 Bizarre Workers’ Comp Cases for 2017

Annual “Bizarre” List Began 30 Years Ago

Continuing a New Year’s tradition that informally began 30 years ago, when my mentor, Dr. Arthur Larson, original author of Larson’s Workers’ Compensation Law, and I would meet each January at his home on Learned Place, here in Durham, North Carolina, and informally exchange lists of bizarre cases from the previous calendar year, I submit to you my list of the Top 10 Bizarre Workers’ Compensation Cases for 2017. For the past dozen years or so, I have released the annual list in electronic format. As you may know, a few years ago, the annual list was even featured on National Public Radio’s Saturday morning show, “Wait, Wait, … Don’t Tell Me.”

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Ohio Commission Erred in Assessing Penalties Against Employer for Safety Violations

A worker, who sustained severe injuries, including a left-hand amputation and major depressive disorder, while performing routine maintenance on the employer’s conveyor belt system, is not entitled to additional compensation for his employer’s alleged violation of a specific safety requirement (“VSSR”) since the proximate cause of his injuries was the worker’s own unilateral negligence, held the Supreme Court of Ohio [State ex rel. Ohio Paperboard v. Indus. Comm’n, 2017-Ohio-9233, 2017 Ohio Lexis 2748 (Dec. 28, 2017); see Larson’s Workers’ Compensation Law, § 105.06]. The Court said the record showed that the employer had complied with the relevant VSSRs at the time of the accident. It indicated further that, in accordance with their training, maintenance workers had removed safety guards on the belt system only after shutting down the conveyor belt. Shut-off switches were located at strategic positions and the VSSRs did not apply, because the conveyor had been shut down by the workers.

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Unemployed Volunteer Firefighter Denied TD Benefits

In what some may view as insult added to injury, an unemployed New Jersey firefighter, who sustained significant injuries to her leg when she slipped and fell on ice as she and others fought a multi-alarm file, does not qualify for temporary disability benefits, held a state appellate court; she had no lost wages [see Kocanowski v. Township of Bridgewater, 2017 N.J. Super. LEXIS 171 (Dec. 11, 2017). With its decision, the Court affirmed a workers’ compensation judge’s finding that the firefighter’s volunteer work was “laudable” and entitled her to both medical treatment and permanent disability for her injuries, she did not qualify for temporary disability payments. Continue reading

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NJ High Court Strikes Down Employment Contract Clauses Waiving Third-Party Claims

Yesterday, in an eagerly awaited decision, Vitale v. Schering-Plough Corp., Case No. A-20-16 (Dec. 11, 2017), the Supreme Court of New Jersey held that a disclaimer in an employment agreement in which the employee prospectively waives third-party claims against the employer’s customers is contrary to the public policy expressed in sections 39 and 40 of the New Jersey Workers’ Compensation Act and, therefore, is void. The case, involving a security guard who worked for a security services firm and was assigned to defendant, Schering-Plough Corporation’s facility, will be returned to the trial level for reconsideration of various liability and damages issues.

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Medical Benefits Must be “Reasonable and Necessary”—Not Just Beneficial

Virginia Employer Need Not Provide Specialized “Running Blade” Prosthesis

While all but a few American jurisdictions require employers to provide medical benefits that are essentially unlimited in terms of duration and amount [see e.g., Larson’s Workers’ Compensation Law (“Larson”) § 94.01], in most states such medical care need not be provided unless it is “reasonable and necessary.” A recent decision from Virginia, Pacheco v. J.P. Masonry, Inc., 2017 Va. App. LEXIS 294 (Nov. 28, 2017), illustrates the point that while an injured worker might derive some legitimate, real benefit from a medical procedure, prescription, or device, it does not necessarily follow that the cost of that medical expense must be borne by the employer. Specifically, although medical evidence clearly showed that an injured worker—who sustained a work-related accident that resulted in a below-the-foot amputation of his left foot—might benefit from the provision of a special “running blade” prosthesis used by amputees in various athletic activities, the special prosthesis was not medically necessary under Va. Code Ann. § 65.2-603.

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Virginia Court Reiterates Objective Standard For PTSD Claims

The Virginia Workers’ Compensation Commission did not err when it found that a state trooper’s PTSD did not arise out of and in the course of his employment [Hess v. Virginia State Police, 2017 Va. App. LEXIS 280 (Nov. 14, 2017)]. While the circumstances of the fatal accident in question were undoubtedly gruesome, the test of whether or not a stress or shock was unusual could not be based upon the trooper’s subjective reaction. A supervising officer, who also was present at the investigation of the fatal vehicle incident in question testified that the crash scene, while bad, was not one of the worst that he had seen.

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