One thing I can say for California political leadership-it knows on which side its bread is buttered. Employees (i.e. voters, who outnumber manager voters by a considerable margin) have one of the most friendly legal environments in the country as result of California political largess. But the entertainment industry, long a source of California revenue, prestige, and political donations, has usually enjoyed a privileged spot with respect to California labor laws, employment rules, and the like.
And by entertainment industry, I'm including the National Football League, and professional sports teams generally. California has three NFL teams, four NBA teams, three NHL clubs, and five Major League Baseball teams. And that doesn't even include USC with its questionable amateur athletes. Professional sports puts up a lot of ticket sales, television revenue, parking, and a much high-powered athletic talent to show up at your party, fundraiser, and film premiere. So it's perhaps not too surprising that the state recently modified its workers compensation law, one of the most generous in the nation, to cut off claims from retired athletes who did not work for California-based teams, but played some of their games in California. Specifically, because California's liberal standard allows workers to get compensation for accumulated trauma (that is, injuries that resulted from repetitive stress or impacts over a long period), approximately 4500 NFL players who played games in the state are filing claims for workers compensation under California law.
Now the state of California is not on the hook for these claims-they revert back to the individual workers compensation insurance carried by the various teams. But California law allows an avenue for injury compensation that is not available in many states, and so players who could not get compensated in their states of employment are filing in California (here are links to claims from the various pro sports leagues filed in California). Under heavy pressure from the major sports leagues, but particularly the NFL (which sees the repetitive brain injury issue looming large), the legislature and the governor passed a law closing out the ability of these players to file for compensation.
I find this highly troubling-this is not a situation where uninjured players are scamming the workers compensation system for money that is undeserved (California has a long history of this type of problem). Virtually all of these individuals are suffering the effects of athletic injuries that did not manifest themselves until years after their playing careers ended. This is precisely why states enacted workers compensation systems, and I think it's highly dishonest of the NFL, and of California political leadership, to cut off a perfectly ordinary and proper vehicle for these gentlemen to be compensated for their injuries.
UPDATE: Remember when I said that California has a history of people filing undeserved workers compensation claims? Here is a somewhat sarcastic take on a classic example.
Showing posts with label Workers compensation. Show all posts
Showing posts with label Workers compensation. Show all posts
Friday, October 25, 2013
Friday, October 4, 2013
Your Basic Workers' Compensation Bar: It’s Pretty High
Workers' compensation cases typically are not the stuff of high-end legal analysis. That’s mainly because much of the jurisprudence has been settled for years Nevertheless, it's nice to see the occasional case that lays out workers' compensation issues as clearly as this one. Moreover, the stakes on this case were very high, so there was a lot of incentive on the part of the injured party’s counsel to litigate even the most basic workers' compensation issues.
The case arose out of a tragic airplane crash that occurred in January 2006, which killed several financial advisors employed by Morgan Stanley, as well as the owner of the aircraft and a Morgan Stanley customer. The Morgan Stanley employees were returning from a client pitch in Kansas City. Although the aircraft was not owned by Morgan Stanley, one of the Morgan Stanley passengers was apparently interested in purchasing the aircraft.
The estate of one of the deceased Morgan Stanley employees filed a a wrongful death action, going after Morgan Stanley and the aircraft pilot. The trial court dismissed the case, finding it preempted by Illinois workers' compensation law and this appeal followed.
Workers' compensation law occupies a unique position in American personnel injury jurisprudence, because it specifically limits the recovery of an injured employee in exchange for strict liability against an employer. Employees who are injured at work, or pursuant to work activities, are entitled to payment, regardless of fault, under the specific terms and limitations of a state workers' compensation statute. Usually the employees receive compensation for lost wages at a specified percentage, as well as full payment for medical bills relating to their condition. Injuries that are covered by workers' compensation statutes have exclusive remedies, in that an employee injured at work can only recover (or is "barred") under the terms of the workers' compensation act.
The trade-off, of course, is that the money paid out to the employee is only a fraction of what could be recovered in a typical personal injury case. For that reason, injured employees generally look for some way to get around the workers’ compensation “bar” to individual personal injury lawsuits. That’s exactly what was happening in this case.
In Illinois, employee can sue and recover outside the limitations imposed by a workers' compensation statute if she can show that the injury was not accidental, did not arise out of employment, was not incurred during the course of employment, or was non compensable under the statute. In this case, the estate of the one of the deceased Morgan Stanley employees tried to evade the compensation limitation by claiming that the injury was not accidental, and that the accident arose out of activity by the employer that was not related to its business operations, and therefore it was outside the statue.
The court made quick work of the argument that the accident was in fact an intentional tort by the employer. The plaintiff was alleging that the employer, because it didn’t have rules in place for employees riding by private aircraft, had somehow intended (or at least was grossly negligent) for one of its employees to fly in what was supposedly an unsafe aircraft. The court noted that this particular exception to the worker’s compensation bar requires more than even aggravated negligence or being ordered to perform hazardous work – it must show an actual intent to injure the employee on the part of the employer. The plaintiff, of course had no such evidence. The plaintiff also argued that Morgan Stanley was acting in the independent and distinct role of providing air transport services, a role that was unrelated to its status as an employer. Specifically, the plaintiff alleged that Morgan Stanley’s practice of reimbursing its employees travel expenses showed that Morgan Stanley, a financial investment and consultant firm, was running a de facto transportation operation that was totally unrelated to its financial advising business. Therefore, an accident resulting from that air transport business was outside the normal employer relationship and outside the coverage of the workers' compensation statute.
As I said, the amount of money at stake here made people creative. Fortunately, it did not make the court that creative. The appellate court found that the "dual capacity doctrine" voids workers’ compensation coverage when an employer is acting in two distinct capacities, such that the second capacity confers upon the employer obligations that are independent of those imposed on the company as an employer. In fact, the doctrine requires a separate and distinct legal persona for the employer that was the ultimate source of the injury. In other words, an employer has to be acting in two separate capacities such that the second capacity confers different obligations than the employer's business--the employer has to have a separate legal persona completely independent from and unrelated to its status as an employer such that by an established standard the law recognizes the other role as a separate legal person.
That obviously was not the case where Morgan Stanley had simply agreed to reimburse its employees for transport expenses. The court also specifically determined that the fact that Morgan Stanley allowed a small group of its employees who were private pilots to fly to appointments did not constitute a secondary business activity sufficient to avoid the protections of the workers’ compensation statute.
Employers should be aware of these limitations to their workers’ compensation protection, but can draw plenty of comfort from the fact that courts view the workers’ compensation structure as sacrosanct. Any legal constructions of the law that weaken or circumvent workers’ compensation protection will continue to be limited.
The case arose out of a tragic airplane crash that occurred in January 2006, which killed several financial advisors employed by Morgan Stanley, as well as the owner of the aircraft and a Morgan Stanley customer. The Morgan Stanley employees were returning from a client pitch in Kansas City. Although the aircraft was not owned by Morgan Stanley, one of the Morgan Stanley passengers was apparently interested in purchasing the aircraft.
The estate of one of the deceased Morgan Stanley employees filed a a wrongful death action, going after Morgan Stanley and the aircraft pilot. The trial court dismissed the case, finding it preempted by Illinois workers' compensation law and this appeal followed.
Workers' compensation law occupies a unique position in American personnel injury jurisprudence, because it specifically limits the recovery of an injured employee in exchange for strict liability against an employer. Employees who are injured at work, or pursuant to work activities, are entitled to payment, regardless of fault, under the specific terms and limitations of a state workers' compensation statute. Usually the employees receive compensation for lost wages at a specified percentage, as well as full payment for medical bills relating to their condition. Injuries that are covered by workers' compensation statutes have exclusive remedies, in that an employee injured at work can only recover (or is "barred") under the terms of the workers' compensation act.
The trade-off, of course, is that the money paid out to the employee is only a fraction of what could be recovered in a typical personal injury case. For that reason, injured employees generally look for some way to get around the workers’ compensation “bar” to individual personal injury lawsuits. That’s exactly what was happening in this case.
In Illinois, employee can sue and recover outside the limitations imposed by a workers' compensation statute if she can show that the injury was not accidental, did not arise out of employment, was not incurred during the course of employment, or was non compensable under the statute. In this case, the estate of the one of the deceased Morgan Stanley employees tried to evade the compensation limitation by claiming that the injury was not accidental, and that the accident arose out of activity by the employer that was not related to its business operations, and therefore it was outside the statue.
The court made quick work of the argument that the accident was in fact an intentional tort by the employer. The plaintiff was alleging that the employer, because it didn’t have rules in place for employees riding by private aircraft, had somehow intended (or at least was grossly negligent) for one of its employees to fly in what was supposedly an unsafe aircraft. The court noted that this particular exception to the worker’s compensation bar requires more than even aggravated negligence or being ordered to perform hazardous work – it must show an actual intent to injure the employee on the part of the employer. The plaintiff, of course had no such evidence. The plaintiff also argued that Morgan Stanley was acting in the independent and distinct role of providing air transport services, a role that was unrelated to its status as an employer. Specifically, the plaintiff alleged that Morgan Stanley’s practice of reimbursing its employees travel expenses showed that Morgan Stanley, a financial investment and consultant firm, was running a de facto transportation operation that was totally unrelated to its financial advising business. Therefore, an accident resulting from that air transport business was outside the normal employer relationship and outside the coverage of the workers' compensation statute.
As I said, the amount of money at stake here made people creative. Fortunately, it did not make the court that creative. The appellate court found that the "dual capacity doctrine" voids workers’ compensation coverage when an employer is acting in two distinct capacities, such that the second capacity confers upon the employer obligations that are independent of those imposed on the company as an employer. In fact, the doctrine requires a separate and distinct legal persona for the employer that was the ultimate source of the injury. In other words, an employer has to be acting in two separate capacities such that the second capacity confers different obligations than the employer's business--the employer has to have a separate legal persona completely independent from and unrelated to its status as an employer such that by an established standard the law recognizes the other role as a separate legal person.
That obviously was not the case where Morgan Stanley had simply agreed to reimburse its employees for transport expenses. The court also specifically determined that the fact that Morgan Stanley allowed a small group of its employees who were private pilots to fly to appointments did not constitute a secondary business activity sufficient to avoid the protections of the workers’ compensation statute.
Employers should be aware of these limitations to their workers’ compensation protection, but can draw plenty of comfort from the fact that courts view the workers’ compensation structure as sacrosanct. Any legal constructions of the law that weaken or circumvent workers’ compensation protection will continue to be limited.
Tuesday, September 3, 2013
Worker’s Compensation Retaliatory Discharge: Termination vs. Layoff vs. Suspension
A recent Illinois worker’s compensation retaliation case demonstrates a subtle, but important distinction for employers, especially those that use seasonal employees, or lay off workers while keeping them subject to recall.
The facts of the case, which originated out of Illinois’s 3rd District in Peoria, are a little confusing. Plaintiff was a registered nurse working in a rehabilitation unit in a medical center. She injured her knee, which required surgery to repair the damage and resulted in her having a 20 pound lifting restriction, which ultimately became permanent. This limitation disqualified the employee from her RN position; the company HR representative then mistakenly advised the employee that she was going to be terminated within 30 days if she could not find work within the medical facility. The company ultimately issued plaintiff a letter indicating she was terminated on June 18, 2008 (yes, it took 5 years for this case to make its way to just a first level appeal) and the plaintiff henceforth acted as if that was the date she was fired. In the meantime, the company attempted to rescind its termination by notifying Plaintiff that she could return to work, but by then the plaintiff had moved and taken another position with another employer.
Plaintiff sued for retaliatory discharge, under the Illinois Worker’s Compensation Act, claiming that she was fired in retaliation for filing a worker’s compensation claim. She ultimately amended this to allege not a retaliatory discharge, but rather a retaliatory failure to recall to work. Based on plaintiff’s admissions in her pleadings that she was terminated on June 18, 2008, the trial court granted summary judgment for the employer, and the Appellate Court affirmed.
The Appellate Court’s opinion raises an interesting point of law on retaliatory discharge claims with respect to worker’s compensation. Specifically, an employee who has been fired by her employer can generally only sue for retaliatory discharge. She may not sue for failure to rehire or failure to recall, which are expressly reserved, under Illinois law, for claims by seasonal employees (failure to rehire when seasonal hiring begins) or regular employees on leave or temporary layoff (failure to recall). In other words, in Illinois, a terminated employee gets only a retaliatory discharge claim. The Appellate Court noted that it would not allow a claim for failure to rehire or recall for a terminated employee because Illinois courts will not force an ongoing employment relationship between hostile parties when it can use monetary damages to compensate the unfairly terminated employee.
The vast majority of retaliation claims under workers compensation will be for retaliatory discharges, while failure to rehire/recall will be reserved for those rare circumstances where there are seasonal employees in play, or layoffs and leaves of absences occurring and the employment relationship is ongoing. Here, the plaintiff’s failure to recognize that she could not assert a retaliatory failure to rehire/recall claim since she had admitted she was terminated, worked as an effective bar to her lawsuit.
The facts of the case, which originated out of Illinois’s 3rd District in Peoria, are a little confusing. Plaintiff was a registered nurse working in a rehabilitation unit in a medical center. She injured her knee, which required surgery to repair the damage and resulted in her having a 20 pound lifting restriction, which ultimately became permanent. This limitation disqualified the employee from her RN position; the company HR representative then mistakenly advised the employee that she was going to be terminated within 30 days if she could not find work within the medical facility. The company ultimately issued plaintiff a letter indicating she was terminated on June 18, 2008 (yes, it took 5 years for this case to make its way to just a first level appeal) and the plaintiff henceforth acted as if that was the date she was fired. In the meantime, the company attempted to rescind its termination by notifying Plaintiff that she could return to work, but by then the plaintiff had moved and taken another position with another employer.
Plaintiff sued for retaliatory discharge, under the Illinois Worker’s Compensation Act, claiming that she was fired in retaliation for filing a worker’s compensation claim. She ultimately amended this to allege not a retaliatory discharge, but rather a retaliatory failure to recall to work. Based on plaintiff’s admissions in her pleadings that she was terminated on June 18, 2008, the trial court granted summary judgment for the employer, and the Appellate Court affirmed.
The Appellate Court’s opinion raises an interesting point of law on retaliatory discharge claims with respect to worker’s compensation. Specifically, an employee who has been fired by her employer can generally only sue for retaliatory discharge. She may not sue for failure to rehire or failure to recall, which are expressly reserved, under Illinois law, for claims by seasonal employees (failure to rehire when seasonal hiring begins) or regular employees on leave or temporary layoff (failure to recall). In other words, in Illinois, a terminated employee gets only a retaliatory discharge claim. The Appellate Court noted that it would not allow a claim for failure to rehire or recall for a terminated employee because Illinois courts will not force an ongoing employment relationship between hostile parties when it can use monetary damages to compensate the unfairly terminated employee.
The vast majority of retaliation claims under workers compensation will be for retaliatory discharges, while failure to rehire/recall will be reserved for those rare circumstances where there are seasonal employees in play, or layoffs and leaves of absences occurring and the employment relationship is ongoing. Here, the plaintiff’s failure to recognize that she could not assert a retaliatory failure to rehire/recall claim since she had admitted she was terminated, worked as an effective bar to her lawsuit.
Subscribe to:
Posts (Atom)