Injured Worker’s Failure to Mention Involvement in Side Business Did Not Result in Disqualification

A New York appellate court held the state’s Workers’ Compensation Board could reasonably conclude that a claimant had not made false statements or other misrepresentations for the purpose of obtaining workers’ compensation benefits where the claimant filed written forms indicating that he had ceased working for the employer—or any other employer—as of May 16, 2014, due to injuries the claimant had sustained one month earlier in a work-related vehicular accident, yet claimant’s own testimony at subsequent hearings showed that both before and after the May 2014 date, he had continued to engage in various business activities in connection with an online and retail flower business that he owned, along with his wife, and another partner [Matter of Permenter v. WRS Envtl. Servs. Inc., 2019 N.Y. App. Div. LEXIS 4295 (3d Dept., May 30, 2019)]. Claimant testified that he didn’t believe his effort with the flower business was work since it was not profitable.

Background

In April 2014, while driving a truck for the employer and stopped in traffic, claimant was struck from behind by a tractor trailer. He filed a workers’ compensation claim and represented on a claim form that he had ceased working on May 16, 2014, due to his injuries.

During the course of administrative hearings related to the claim, the claimant conceded that he was the owner of an online flower business that he and others had started in February 2012 and that he devoted time to the business following the accident. Such activities had not been disclosed by claimant in connection with his workers’ compensation claim.

Employer Claimed Violation of § 114-a

The employer and carrier sought to disqualify the claimant from receiving benefits on the grounds that he had violated N.Y. Workers’ Comp. Law § 114-a, which generally provides that if, for purposes of obtaining workers’ compensation benefits, a claimant knowingly makes a false statement or representation as to a material fact, he or she is disqualified from receiving any compensation directly attributable to such false statement or representation.

WCLJ and Board

The WCLJ concluded that there was no violation and established the claim. A panel of the Board affirmed the WCLJ’s decision, with one member dissenting. The carrier sought mandatory full Board review, and the full Board, in a split decision, upheld the WCLJ’s decision.

Claimant Freely Admitted Being Involved in Business

At the December 2014 hearing, the claimant freely acknowledged that he owned a company engaged in the flower business, but did not consider it work because it was not profitable. He provided more detail at a February 2015 hearing, stating again that he spent about two hours per day, five days per week, performing business-related tasks on the computer, such as taking orders and building a website. Claimant also conceded that he devoted the same amount of time to the business after the accident, but stated that his wife, who was also his business partner, performed the physical labor that was involved.

The claimant further testified that, in furtherance of the business, he, his wife and another partner opened a store in October 2014 and hired employees to operate it. He stated that he went to the store four or five times per week to make sure that everything was running well. He indicated that the store was also not profitable, and he produced tax returns demonstrating that the business operated at a loss during 2014.

Appellate Court Deferred to Findings of Board

Based on the foregoing, the appellate court concluded that the Board could reasonably conclude that claimant did not believe that his ownership interest in the flower business constituted work for purposes of receiving workers’ compensation benefits and that any misstatements he made with respect thereto were not knowingly made for the purpose of obtaining workers’ compensation benefits. The court deferred to the Board’s assessment of claimant’s credibility.

This entry was posted in Case comment and tagged , , , , , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *