To my beloved readers reviewing these most humble posts on your i-pads, or i-phones, or i-anythings, I am sorry, but I have some bad news about your beloved Apple.  It appears that a couple of former Apple retail employees have sued Apple, alleging that they were forced to clock out for their breaks, then wait 5-10 minutes in  line while security checked their bags for stolen goods.

Although a good and loyal employee would not begrudge his or her employer a mere 5-10 minutes, if we average 7.5 minutes per break, that’s 15 minutes per day, or 1.25 hours per week, or 62.5 hours per year (assuming a 2-week vacation).  If you’re already working the 40 hours per week, that extra 62.5 hours per year is technically overtime, so we’re looking at 93.75 unpaid regular hours per year, with interest.

Now, we don’t know if any of this is true, but this isn’t the first time (or second time; or third time; or fourth time) that Apple has made news for questionable labor practices.  Assuming it is true, this theory should affect workers’ compensation benefits as well.

After all, there may be several activities employers require of their employees which are off the clock, but would factor into benefits.  What are your employee’s average weekly wages?  Does that include overtime?  What about the overtime the employer should be paying but isn’t?

After all, unless we’re dealing with a self-insured employer, it’s the insurer or the group that’s going to be paying out more benefits than are accounted for in the premium.

There are plenty of seemingly innocent activities that might fall into this category (and no, applicants’ attorneys, I’m not going to offer any suggestions – you have to figure these out for yourselves).  Employers should be aware of these and be careful that they’re not saving money on the time-slip just to pay it back double on the workers’ compensation premium and labor violations down the road.

Your humble blogger is by no means sympathetic to these ridiculous claims – people should be able to contract as they like.  But your humble blogger can only reside in fantasy land for so many days out of the year, and must, woefully, maintain his residence at 123 Reality Road.  The law is the law, and employers need to be wary of underpaying employees; insurers need to be sure that their policy holders aren’t underreporting, directly or otherwise, the wages of their employees.

This Apple lawsuit highlights the fact that under-reporting can take many forms – just like the legal determination that an independent contractor is actually an employee, the finding that what was off-the-clock time is actually on-the-clock time can quickly inflate liability for everyone on the defense side of the room.

Some of my beloved readers know that their humble blogger is a big fan of the good Mr. Tolkein, and his masterpiece, The Lord of the Rings.  Naturally, it’s not uncommon for this humble blogger, in an effort to maintain his sanity, to amuse himself by comparing scenes from the workers’ comp world to those of the world of Middle Earth.

Well, behold, dear readers, this news: several lien claimants have filed a federal lawsuit seeking to enjoin the enforcement of the provisions of SB-863 imposing lien activation fees on liens filed prior to January 1, 2013.  This same scene was depicted in Lord of the Rings…

Just to clarify – yes, the lien claimants (Saruman) have an evil hold over the workers’ compensation system (Theoden), and Gandalf (SB-863) is desperately tries to break the lien claimants’ hold.  In fact, at one point, the lien claimants even promise to take the workers’ comp system with them.

The lawsuit argues that the $100 fee is unconstitutional under the Takings, Due Process, and Equal Protection Clauses of the United States Constitution.

One of the gripes expressed in the lawsuit is the fact that many of the liens are for a few hundred dollars or less, which makes a $100 activation fee particularly harmful.  Yeah right!  The real gripe is that now the $100 prohibits meritless liens from extorting money from the defendants.  After all, SB-863 allows for reimbursement of the lien claim under Labor Code section 4903.07 if the lien claimant makes a demand for settlement that is equal to or less than the award after a trial.

So in other words, if your lien claim has merit, and you offer to settle for the value of your lien or less, you will get the activation fee back, with interest.  If your lien claim is frivolous and your only means of recovering is by threatening scorched earth (I have had lien claimants tell me that it would cost the defense more in billables than to just pay the lien), then, really you don’t have a valid lien, and you’re just looking to have a wrongful hold over the noble people of Workers’ Compia.

Your humble blogger wasted a good portion of his time studied Political Science at the University of California, Davis.  So it is with a great personal interest that I bring you this story:

Apparently, the police officer who famously pepper-sprayed Occupy Davis protestors has filed a workers’ compensation claim, and is actually set to appear for a Mandatory Settlement Conference in Sacramento on August 13 on a psyche claim allegedly sustained on July 18, 2011.  Your humble blogger is not going to post this gentleman’s name – he’s received enough harassment and threats and this family-friendly blog is disinclined to make his private life any less private.

Now, before we all get up in arms about this police officer getting benefits from the workers’ compensation system (follow the money: from tax-payer -> UC Davis -> peppery spray police officer) after he so casually pepper-sprayed the protesting students, please recall that this isn’t a fault-based system.  Even though an investigation concluded that the officer was wrong to use pepper-spray and his employment was eventually terminated, he did go through a pretty scary and traumatic event – he and his fellow officers were surrounded by a large mob of “students”, who barred their exit from the campus quad.

Then, after hackers revealed his identity, this office was the subject of a campaign of threats and harassment.

Without commenting on the merits of using pepper spray on protestors sitting on the floor, can’t we all agree that we have seen some claimants get benefits that they shouldn’t?  Don’t we routinely see lien claimants make a proverbial killing by billing insurers for $90 tissue boxes?  Don’t we see applicants demand ramps for their vacation homes and hot tubs in their apartments?

And don’t we allow outright frauds to limp into a hearing and then skip out again to their second jobs or mixed martial arts competitions?

As the kids say now adays – hate the game, not the “playa”; which I assume to mean the that we should object to a system, and not those who participate in it.  So, by all means, hate the comp system all you want, but don’t take it out on this police officer.

Ok, so get this – injured worker is off work for a period of temporary total disability, then returns to work – full duty.  The employer high-fives the worker and says “glad you’re back!”  The worker smile and says “glad to be back!”  The self-insured employer (Or the employer’s insurance company) sends out a Notice of Offer of Regular Work.

The treating physician sees that the injured worker is back to full duty for a few months and high-gives the worker saying, you’re Permanent and Stationary!  The injured worker says “ow, careful, my shoulder still hurts a bit.”

So, the primary treating physician assigns some percentage of whole person impairment, and closes his books.

Meanwhile, the self-insured employer (or employer’s insurance company) does a rating based on the report and pays out permanent disability, but takes 15% off the top in accordance with Labor Code section 4658(d)(a)(3).

When the employer/insurer sends its brave defense attorney to get a stipulation with request for award approved, a problem arises.

The Workers’ Compensation Judge declines to approve the agreement because applicant was entitled to a full $230/week from the first day after returning to work until the P&S date.  And, since the full amount was not paid, the defendant should pay at least a 10% penalty on the $34.50 per day for all those days between returning to work and Permanent and Stationary date.

What result, dear readers?

Well, first of all, if the injury happened after January 1, 2013, the 15% bump doesn’t apply anymore – there has been so much split authority and headache in trying to apply 4658(d) that the legislature did away with it and replaced it with another incentive to return disabled workers to the assembly line: there’s no longer an obligation to make permanent disability advances if you make an offer of work.

If the injury occurred prior to January 1, 2013, the story is different, and I submit to you the following two panel opinions (shoot me an e-mail if you would like a copy):

In Fidel Quintero v. City of Sebastopol, a split panel decision issued on January 7, 2011, the employer sent the injured worker a Notice of Offer of Regular Work on October 22, 2009, and the injured worker was found permanent and stationary on February 23, 2010.  The split panel held that the employer was entitled to a 15% reduction in permanent disability advances from October 22, 2009 onward, and reasons specifically that the case “chronology indicates that the employer returned the permanently disabled employee to work at the earliest opportunity.  Therefore, the employer is entitled to the incentive offered by section 4658(d)(3)(A).”

The other panel opinion is that of Deborah Paine v. City of Sebastopol, issued on November 15, 2010, in which the injured worker returned to her regular duties on April 14, 2008, and the employer sent the injured worker a Notice of Offer of Regular Work on December 4, 2008.  The injured worker was found permanent and stationary in a PQME report dated received March 9, 2009, and the employer promptly paid permanent disability benefits at a rate of $195.50 from the day after her return to work of April 13, 2008.

The WCAB, I Paine, noted that the treating physician reports reflected that the injured worker was making significant improvement in her pain and some strides with regards to her stiffness.  In the Paine case, applicant had undergone shoulder surgery prior to her return to work.

In finding that the employer was entitled to a 15% decrease in all permanent disability benefits, the WCAB specifically cited the en banc case of Blackledge v. Bank of America (2010) 75 Cal.Comp.Cases 613, noting that it is the physician’s role in assigning whole person impairment.  As Ms. Paine’s primary treating physician “did not provide a final WPI rating for applicant’s condition,” and “a physician’s judgement, training and experience are necessary in determining the final WPI,” the Paine commissioners were “not persuaded that defendant had sufficient notice regarding the extent of permanent disability.”

But here’s an important counter to note: the employer must send a timely notice that temporary disability benefits are ending and that permanent disability benefits are being delayed.  (See Andrew Martinez v. City of Santa Rosa)  The burden is always on the defense to show that it did not unreasonably delay the permanent disability benefits/advances.

So, dear readers, if you’re looking for that 15% drop in PD advances between the date of applicant’s return to work and the date of your Notice of Offer of Regular Work, get ready for an uphill fight and be ready to prove that no advances were owing.

Happy Friday!

CIGA, the California Insurance Guarantee Association, is sometimes regarded (at least by this humble blogger) as the Angel of Death for various insurers.  Once CIGA gets involved, it’s easy to have an insurance company with 1% of the liability for a case quickly be stuck with the entire amount.

In a recent case, State Farm General Insurance Company v. Workers’ Compensation Appeals Board, the Court of Appeal held that CIGA’s efforts to shift liability to another entity were barred by res judicata.

Here’s the skinny: Applicant sustained two injuries while working as a personal assistant to the president of a company.  The two workers’ compensation insurers involved brought in the homeowners insurance of the president, arguing that some of the work was performed at the president’s home, making her a domestic employee with two employers (the company and the president).

After a whole lot of arguing over whether the injured worker was an assistant employed by the company or a domestic worker for the president, the parties settled the issue with State Farm agreeing to pay out 25% of all benefits in the future.

The WCJ approved the settlement agreement, and no one complained… until the two workers’ compensation insurers went belly up and CIGA came strolling in.

CIGA repeatedly tried to shift the cost of the entire case onto State Farm, arguing that State Farm constituted “other insurance” and that CIGA should be off the hook.

Ultimately, the Workers’ Compensation Appeals Board ruled that CIGA was not a party to the initial 2002 award, and that CIGA wasn’t attempting to change the award so much as seek its right of contribution from other insurers.

Well, State Farm appealed and found sympathy among the Appellate bench: the Court of Appeal, in reversing the WCAB, reasoned that the issues of State Farm’s liability in excess of 25% (as per the original agreement) was decided previously and not appealed by CIGA, so the doctrines of Res Judiciata and Laches bar CIGA’s recovery.  (“Right or wrong, the WCJ’s decision in 2008, and the WCABs 2009 and 2011 decisions are final, and CIGA may not invoke the jurisdiction of the WCAB or this court to review the lawfulness o those decisions.”)

Here’s the scary thing – the Court of Appeal did not reverse the WCAB’s determination that since CIGA was not a party to the stipulations entered into by the then-solvent insurers, it was not bound by it.  However, the original stipulations were entered-into in 2002… CIGA became a party in 2003.  Should CIGA have some limit on the amount of time it has to seek reconsideration?

Perhaps in the next case, State Farm’s counsel will caution its employer against admitting any facts in exchange for an agreed portion of liability, as those facts will remain even though the agreement can be washed away in the other insurer’s insolvency.

In a recent unpublished decision, the Court of Appeal held that the alleged sexual harassment endured by an employee at the hands of another employee, was not confined to workers’ compensation.

The matter is that of Jeri Elster v. Joel Fishman (UNPUBLISHED).  As alleged, Joel Fishman was a southern California attorney working in the same firm that employed Jeri Elster as a secretary.

Fishman repeatedly sent Elster pornographic materials, and made crude sexual-based jokes, even after being repeatedly asked to stop.  For some reason, Fishman also thought it appropriate to make crude references to a traumatic event in Elster’s past.

This being a family friendly blog, your humble blogger will refrain from providing any details, but, will provide a trustworthy conclusion that, if all that is alleged by Ms. Elster is true, Mr. Fishman rammed through the bounds of professionalism, trampled over the rules of gentlemanly conduct, and came to a stop just on the wrong side of basic human decency.  (Again, dear readers, if all that is alleged is true.)

Elster was eventually placed on medical leave by her doctor, and she filed a complaint with the Department of Employment and Housing.

This case has a lot of issue, of course, but of most interest to your humble blogger (and hopefully to his not-so-humble readers) is the argument that this claim should be confined to the workers’ compensation arena.  After all, Elster’s injury and need for disability leave are resulting from events occurring in the course of and arising out of employment, so shouldn’t her claim for intentional infliction of emotional distress be dealt with in the workers’ comp arena?

After all, she did file a claim (ADJ7623032) alleging injury to the digestive system and nervous system (psychiatric), among others.  The matter appears to have been resolved by Compromise and Release on July 7, 2011.

The Court of Appeal said “no.”  The reasoning?  The exclusivity rule of Workers’ Compensation is based on the compensation bargain – employees tend to get hurt once in a while, and they get benefits faster but less of them in the comp system.  “The compensation bargain does not encompass conduct that contravenes a fundamental public policy or exceeds the risks inherent in the employment relationship.”  (Should new hires get a warning? “Look out for Lester, you can reasonable expect to get sexually harassed by him.)

Because the Fair Housing and Employment Act prohibits discrimination and harassment in the workplace because of sex, the public policy is there barring the cause of action from entering the workers’ compensation arena.

But don’t let that fool you – it looks like Elster can still claim workers’ compensation benefits.  And recall, dear readers, that Carl’s Jr. had to deal with such a claim in the workers’ compensation arena as well as various other employers.

So, please, please, please let this be a lesson: don’t sexually harass your employees, don’t let your employees sexually harass other employees or their subordinates.  Let’s limit sexual harassment to new employee training videos, demonstrating what NOT to do.

What do you reckon, dear readers, is it harder to deliver mail or pizza?  A postal worker was recently sentenced to 90 days in jail, 5 years of probation, 310 hours of community service, and $157,173.12 in restitution after operating a string of pizza franchises.

Tiong C. Ong worked for the U.S. Postal Service as a tractor trailer operator when he sustained an injury to his back.  He then continued to claim he was unable to work and collected benefits, all the while operating a Dominos Pizza franchise, and participated in making pizza, taking orders, and doing deliveries.

After selling his business, he moved to Hawaii where he opened another Dominos, all the while collecting disability checks.

By the time this matter came to a close, he had wrongly received over $157,000.

How was this fraudster nabbed?

“The case came to light in January 2010, when a United States Postal Service human resources employee noticed that every time he visited the defendant’s home, he wasn’t there.”

Your humble blogger would call this diligent… but 17 years later?

In any case, perhaps we can learn something from this: without waiting 17 years, we should make sure that workers claiming to be disabled and unable to work are not self-employed or otherwise employed while cashing checks.

Perhaps in the life pension cases, it makes sense to set up quarterly checks – is the allegedly disabled worker at home during the day? During the evenings? Is there a Facebook page with a treasure-trove of information about recent activities?  Even if you’ve moved past the date to reopen and reduce the award, it’s not too late to seek criminal prosecution and the return of at least some of the money wrongly paid.

As my beloved readers are well aware, your humble blogger does not think very highly of “developing the record.”  If the matter isn’t ready to proceed to trial, then someone should object to the Declaration of Readiness to Proceed to an MSC.

However, since the Workers’ Compensation Appeals Board allows developing the record to happen from time to time, it is nice to see the effects of this practice limited.

I submit to you, for your consideration, the case of Shirley Washington v. Costco Wholesale.  Applicant erroneously filed a petition for reconsideration of a workers’ compensation Judge’s discovery order (discovery orders are generally reviewed as petitions for removal).  A prior decision by the workers’ compensation appeals board had ordered the record developed on the issues of apportionment between a specific injury and a cumulative trauma, and the applicability of a Labor Code provision to the CT claim.

In this case, applicant sought to develop the record on everything under the sun, while the defendant wanted to limit developing the record to those issues ordered by the WCAB.  (In a strange break from its nature, Costco moved for individual discovery items rather than a bulk purchase.)  When the WCJ found that the record could only be developed on those issues ordered by the WCAB, the applicant filed for reconsideration.

The WCJ recommended the petition for reconsideration be dismissed and the petition for removal be denied, and the WCAB was happy to oblige.

Applicants love “developing the record” because it gives them bite after bite at the apple, and each additional evaluation only increases the med-legal cost for the defendant. In other words, at least as far as this panel opinion holds, a grant of reconsideration or removal to develop the record is inherently limited in its scope, and not a ticket to a discovery buffet.

Good news and bad, dear readers.  So the good news is that the Court of Appeal recently issued a new opinion with respect to apportionment, reversing the Workers’ Compensation Judge and the Workers’ Compensation Appeals Board, and finding that when an AME says there’s apportionment, the vocational rehabilitation expert’s opinions take a back seat.

Unfortunately, the opinion is Unpublished, so don’t mention it before any Judge unless you want to get sanctioned!

So here’s the deal, in the case of ACME Steel v. Workers’ Compensation Appeals Board (Michael Borman), the Court of Appeal reviewed an award of total permanent disability, after the workers’ compensation Judge found that the vocational rehabilitation expert’s opinion that applicant was completely precluded from finding a job in the open labor market because of his near total hearing loss.

So, was ACME Steel’s insurer going to have to pay out 2/3^rd of applicant’s average weekly wages for the rest of his life?  What could ACME possibly offer in its defense?

Well, the Agreed Medical Evaluator found that 40% of the permanent disability should be apportioned to non-industrial causes.  Additionally, applicant had sustained a prior industrial injury (coincidentally in the form of hearing loss), and was awarded 22% disability.

The WCJ reasoned that there was no earnings loss due to the prior award, so no apportionment was implicated, and she could rely on the vocational rehabilitation expert’s opinion that applicant was totally permanently disabled.

On review, the Court of Appeal ruled that the Workers’ Compensation Judge “erred, however, by failing to address the issue of apportionment.”  Specifically, the Court of Appeal held that the reforms of SB-899 showed the clear intent of the Legislature to “charge employers only with that percentage of permanent disability directly caused by the current industrial injury.” (Brodie)

So, dear readers, apportionment is alive and well, if only spoken of in hushed and unpublished whispers.

On the bright side, no one likes being reversed, so perhaps the Commissioners and the Workers’ Compensation Judges will keep this opinion in mind when applicants’ attorneys ask them to ignore the law.  On the other hand, ACME had to shell out the dollars for not one level of appeal, but two.

So good news and bad, dear readers, good news and bad.

This past Saturday night, your humble blogger’s Facebook, text-messaging, and social media was focused on one topic: the verdict in a certain Florida trial.  Without stepping on that landmine of an issue, may I direct your still burning interest in criminal prosecution to a story of interest in the workers’ compensation community?

The California Applicants’ Attorneys Association has called for the criminal prosecution of a Sedgwick adjuster.  As far as your humble blogger can gather, the repeated denial of medical benefits, even in the face of several penalties and fines and Orders issued by a workers’ compensation Judge, led to a denial of care.  Ultimately, the applicant died as a result of an infection sustained during a surgery to treat the industrial injury.

If this should become a criminal case, we can expect a lot more facts and details to come out.  But the idea itself is a scary one – if the adjuster denies benefits of one sort or another, can he or she be criminally liable for the consequences?

What about the defense attorneys?   Perhaps the claims assistants can be charged with criminal conspiracy?

Your humble blogger held off on addressing this issue (note the article is from June) because a response from the Ventura district attorney’s office was a possibility.  As the DA has (very correctly) chosen to ignore this publicity stunt, it looks like we can all go about our daily affairs in safety… for now.

Bear in mind, dear readers, that CAAA, in making this display, had a single goal in mind – to try to scare the defense community.  There’s a monster under your bed, meanie adjusters, and he only comes out when you deny benefits!

The fact of the matter is that there are already penalties for unreasonable denial of benefits – the Audit unit can shut you down if you do too much wrong too often.  And, on top of that, there’s the monetary penalties ordered by the workers’ compensation Judges.

Note, dear readers, that there was no outrage on the part of CAAA for the physicians that exposed the applicant to an antibiotic-resistant staph infection during the shoulder surgery in the first place.  Nor is there any outrage on the part of CAAA when it came to national attention that California spinal surgery centers were maiming and crippling injured workers after sedating them with promises of quick recoveries.  (Recall, again, dear readers, it wasn’t the defense community leading the injured workers to the operating table).

The Romano case is tragic, it is heart-wrenching, and it is sad.  From a simple shoulder injury, an injured worker was paralyzed, mistreated, and ultimately died of an infection sustained while under the care of his surgeons.  Is it appropriate to compound the tragedy by seeking criminal charges against the adjuster?

Fortunately (and hopefully) the Ventura District Attorney’s Office has real criminals to focus its attention on.  Your humble blogger is equally hopeful that the same will be true of the other 57 California counties.