A bartender suffering from anxiety after a head injury violated workers compensation law in New York by selling clothing online while out on disability, but her actions did not warrant a permanent disqualification of benefits, an appeals court in New York ruled Thursday in partially reversing an earlier ruling.

The bartender, temporarily disabled following a concussion after hitting her head on a cooler in 2017 and subsequently diagnosed with anxiety, continued to work part-time for Darden Restaurant, as doctor cleared her to work light duty, according to documents in 2020 NY Slip Op 06001, filed in the Appellate Division of the Supreme Court of New York, Third Department, in Albany.

At a 2018 hearing before a workers compensation law judge, the bartender indicated that the only income she received was from her part-time work for the restaurant. The workers compensation insurer, in turn, raised the issue of her violating workers comp law based on its investigation of her social media that found her selling clothing for a multilevel marketing company called LuLaRoe while she was receiving benefits.

She then testified that she was an independent consultant for LuLaRoe and sold its clothing through Facebook. She testified that she did not make a profit from her sales, as she had to first buy more than $17,000 in merchandise to then sell online, a business she started prior to her injury. She testified that her husband helped her mail merchandise and that she “did not intend to hide the activities from the carrier,” documents state. Following the hearing, the judge ruled that there was no violation of law.

On appeal, the state Workers’ Compensation Board reversed, finding that she violated the law, imposing a mandatory penalty rescinding benefits from April 27, 2017, to Oct. 18, 2018, as well as issuing a penalty of permanent disqualification of benefits.

The appellate division, in partially reversing, ruled that “substantial evidence supports” the finding that she failed to report other work activities, as required by law, but that the “discretionary” determination to permanently disqualify her from receiving any future wage replacement benefits “may not be disproportionate to the underlying misconduct; where it has been applied, ‘the underlying deception has been deemed egregious or severe, or there was a lack of mitigating circumstances,’” the ruling states.

The division also wrote that “claimant was readily forthcoming about her activities when questioned and declined to cash benefits checks after she resumed part-time work with the employer… Based on all the circumstances presented, we do not find adequate support for the Board’s determination that claimant engaged in ‘an egregious pattern of conduct.’”