California Court: Leasing Employers and Temporary Service Employers May Not Self-Insure

Earlier this month, a California appellate court struck down a challenge by two staffing companies that had sued the state, alleging that Cal. Lab. Code § 3701.9, added in 2012 as part of Senate Bill No. 863, and which prohibits leasing employers (LEs) and temporary service employers (TSEs) from self-insuring, was unconstitutional on equal protection grounds [Kimco Staffing Servs., Inc. v. State of Cal., 2015 Cal. App. LEXIS 394 (May 8, 2015)]. Prior to the adoption of the statute by the California legislature, the two firms had participated in the California workers’ compensation self-insurance program. The firms alleged in relevant part that § 3701.9 was invalid because it singled out LEs and TSEs and prohibited them from participating in the state’s self-insurance program. The firms further alleged that § 3701.9 “treats similarly situated entities differently and arbitrarily, and irrationally distinguishes between them.”

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Kansas Court Extends Firefighter’s Rule to Bar Tort Recovery by Law Enforcement Officer

Ordinarily, workers are free to pursue civil actions against third parties whose negligence causes work-related injuries. One exception, however, is the so-called “firefighter’s rule,” adopted in a number of states, that holds that a firefighter should be precluded from recovery against an individual whose negligence created the need for the presence of the firefighter at the scene in his or her professional capacity. On Friday, a Kansas appellate court extended the doctrine to cover a law enforcement officer who sustained severe injuries in a vehicular accident as he approached the scene of an earlier wreck [see Apodaca v. Willmore, 2015 Kan. App. LEXIS 35 (May 15, 2015)]. Noting that the Kansas Supreme Court, in Calvert v. Garvey Elevators, Inc., 236 Kan. 570, 694 P.2d 433 (1985), had earlier adopted the firefighter’s rule on public policy grounds, the court held that those same grounds precluded recovery by the police officer in the instant case.

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Nevada Work Release Inmate’s Injuries Are Responsibility of Employer, Not State

Nevada, like a number of other states, provides workers’ compensation benefits for inmates who sustain injuries “while engaged in work in a prison industry or work program,” whether the program is operated by the Department of Corrections or a private employer [Nev. Rev. Stat. § 616B.028(1)]. The Supreme Court of Nevada recently held that the “prison industry or work program” concept does not, however, apply to an inmate living at a half-way house who sustained serious injuries while working at a privately-owned, full-service car wash; the car wash’s workers’ compensation insurer had full responsibility for the owed benefits [Nevada Dep’t of Corr. v. York Claims Servs., Inc., 2015 Nev. LEXIS 32 (May 7, 2015)].

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Kentucky Truck Driver’s Tort Action Against Wal-Mart Barred by Statutory Employer Rules

A truck driver, who alleged that he sustained injuries while delivering merchandise to a Wal-Mart store in Kentucky cannot proceed in his civil action against the large retailer since, under the facts of the case, Wal-Mart was the driver’s statutory employer, held a federal district court yesterday [see Settles v. Wal-Mart Stores, Inc., 2015 U.S. Dist. LEXIS 59654 (May 7, 2015)]. Construing Kentucky law, the court indicated the term “employer” included any entity that contracted or subcontracted to have work performed of a kind that is a “regular or recurrent part” of its trade or business [Ky. Rev. Stat. Ann. § 342.610(2)].

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South Carolina Bill Would Make Workers’ Comp Coverage Optional for Most Employers

A bill introduced in the South Carolina Senate on April 16th (2015 Bill Text SC S.B. 674) would make workers’ compensation coverage optional for the vast majority of the state’s employers—not just those who choose to set up written alternative injury benefit plans like those allowed pursuant to Oklahoma’s new “opt out” arrangement or the somewhat similar opt out arrangement contained in a bill currently before the Tennessee legislature. Such a law would essentially parrot the workers’ compensation scenario in Texas, which is currently the only state that does not require employers to provide comp coverage of some type for employees.

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NY Claimant Fails to Show That Claim Filing Was Delayed by Hurricane Sandy

An employee’s inability to file a timely notice of claim based on his alleged inability to meet with counsel because of the onslaught and aftermath of Hurricane Sandy was an inadequate excuse where time sheets revealed that he had regularly attended work at a nearby Bronx railway yard during the relevant time and he did not dispute that he had traveled in and around the city by car [see Gonzalez v. City of New York, 2015 N.Y. App. Div. LEXIS 3444 (Apr. 28, 2015)]. Moreover, the employee did not allege that he had been prevented from using alternative methods of public transportation to reach the attorney’s office.

The employee alleged he sustained injury in a fall from the flat bed of a railroad car in the Bronx on August 14, 2012. Hurricane Sandy struck on October 29, 2012. It was conceded that the time to file a timely notice of claim expired on November 12, 2012, and that the employee’s proceeding seeking leave to serve a late notice was not commenced until January 9, 2013. The employee’s affidavit that he could not get gasoline for a vehicle was belied by strong evidence that he indeed had—and utilized on a number of occasions—a means of transportation at an appropriate time to prepare his claim.

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Oklahoma High Court Refuses to Fast-Track Case Challenging Constitutionality of Workers’ Compensation Opt Out Law

Yesterday (April 28, 2015), the Supreme Court of Oklahoma, in a 7–2 vote, declined to assume original jurisdiction in a civil action challenging the constitutionality of the state’s new and controversial law that allows employers to “opt out” of the state-run workers’ compensation system. I discussed the case in some detail in an April 13 post. Continue reading

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Arkansas Court Approves Award of Additional Medical Expenses Related to ER Visit Six Months After Initial Injury

An Arkansas appellate court affirmed a finding by the state’s Workers’ Compensation Commission that an employee was entitled to additional medical benefits when, some six months after an ankle injury, he presented to an emergency room complaining of shortness of breath and dyspnea [see Centria, Inc. v. Bailey, 2015 Ark. App. 271, 2015 Ark. App. LEXIS 333 (Apr. 22, 2015)]. Diagnostic tests consisting of a CT chest angiogram, ECG, and chest x-ray revealed no significant findings.

The employee had suffered a severe ankle injury when a bundle of sheet metal weighing approximately 1,200 pounds fell off a transfer cart and pinned his ankle underneath the bundle. He underwent multiple rounds of surgery and received extensive treatment, not only for his broken ankle, but for infection in his lower extremity. The employer and insurer refused to pay for the additional medical treatment and diagnostic testing, contending it was not related to the compensable injury.

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Who’s “Opting Out” of Workers’ Comp—Employers or the States Themselves?

Recent Federal District Court Discusses ERISA’s Strong Preemption Provisions

As I have noted on multiple other occasions, one of the distinctive features of the workers’ compensation “opt out” scheme is the employer’s establishment of an employee benefit plan (“EBP”) that not only meets the basic requirements of the opt out legislation, but also provides some additional benefits—e.g., periodic blood pressure screening, health club discounts, and/or flu shots—in order that the plan qualify under ERISA. By adding such benefits to the state law’s core workers’ compensation provisions, the employer’s plan should qualify under ERISA. ERISA qualification is important since with such qualification comes ERISA’s strong preemption provisions. Any dispute arising out of the plan’s administration will not be arbitrable in the Oklahoma’s courts and administrative bodies.

Of course, Oklahoma’s opt out scheme is too new to have spawned jurisdictional disputes (and Tennessee’s proposed opt out legislation has stalled for the moment), so the courts have not yet been called upon to determine just how the strong ERISA preemption will interact with opt out plans. Moreover, many workers’ compensation practitioners are understandably inexperienced in maneuvering through the federal court system—opt out proponents: isn’t taking advantage of that fact part of the overall plan? Well, in any event, a recent federal district court decision, Terry v. Pepsi Bottling Group, Inc. Long-Term Disability Plan, 2015 U.S. Dist. LEXIS 48753 (E.D. Ky., Apr. 14, 2015), provides at least a beginner’s course in what sorts of disputes can be determined by the states and what sorts must be passed on to the federal system.

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Virgin Islands: Going and Coming—Is Break Taken to Run Errands a “Lunch” Break

In what Professor Larson would have referred to as an “upside-down” exclusivity case—where the employee tries to prove that her injuries were not covered by the applicable workers’ compensation law in order that she might instead pursue a tort action against the employer—a federal judge, applying Virgin Islands law, recently held that injuries the employee allegedly suffered when she slipped and fell on a puddle of liquid on her employer’s premises floor, after she had clocked out for a scheduled lunch break, nevertheless arose out of and in the course of her employment, barring her civil action against the employer [see Harris v. Kmart Corp., 2015 U.S. Dist. LEXIS 49473 (Apr. 15, 2015)]. The employee offered a novel, although unsuccessful, argument: that since she did not intend to eat lunch on her authorized break, but rather to run errands with her daughter, the going and coming rule’s “on premises, off premises” distinction did not apply. She contended she had abandoned her employment as soon as she clocked out. While she was still on the employer’s premises at the time she was injured, she argued her injuries did not arise out of and in the course of her employment. Continue reading

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