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Year in Review: 2018 workers comp legal rulings

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This past year saw a flurry of federal and state-level legal decisions with serious implications for the workers compensation and workplace safety sectors, including the ongoing legal battle over a controversial U.S. Occupational Safety and Health Administration regulation, the California Supreme Court’s preservation of the “grand bargain” in workers comp, disputes over responsibility for payments of medical marijuana for injured workers and continued litigation over injuries sustained by National Football League and National Hockey League players after decades of fierce hits on the football field and hockey ice.

Medical marijuana has its days in court: Medical marijuana has created a messy conundrum for payers in the workers compensation industry, with courts forced to navigate the complicated intersection where some states have given medical marijuana the greenlight while the federal government still considers cannabis illegal per the Controlled Substances Act. Payers are asking themselves: do we pay for medical marijuana? In June, the Maine Supreme Judicial Court answered the question, ruling that an employer does not have to pay for the medical marijuana. But later that same month, a New Jersey Division of Workers' Compensation judge ruled that the opposite is true. In October, a New Jersey lawmaker introduced a bill that would require workers compensation insurers to pay for medical marijuana — it did not leave committee.

Battle over OSHA’s electronic record-keeping rule continues: Supporters of OSHA’s electronic record-keeping rule continue to wage a fierce battle with the Trump administration to preserve the regulation, which was adopted under the Obama administration and would require employers with 250 or more employees to electronically submit their injury and illness data to OSHA. The regulation quickly triggered legal challenges by employer groups and Great American Insurance Co. and the agency released a proposal in July to amend the rule by rescinding the requirement for covered establishments to electronically submit information from OSHA forms 300 and 301 while continuing to require them to submit information from their Form 300A summaries. By then, OSHA’s actions to delay the regulation triggered a lawsuit in January by three public health organizations, which sued the U.S. Department of Labor and OSHA after submitting Freedom of Information Act requests that were denied by the agency. In December, the U.S. District Court for the District of Columbia denied the Trump administration’s motion to dismiss the public health organizations’ lawsuit, but also denied a request by the groups for a preliminary injunction barring OSHA from implementing its planned delay.

California Supreme Court preserves the “grand bargain”: Employers and other workers compensation stakeholders were relieved by a California Supreme Court ruling that firmly preserved the “grand bargain” at the heart of the comp system. In Kirk King et al. v. CompPartners Inc. et al., Mr. King alleged that a physician reviewer working for the utilization review management company determined a prescription for Klonopin to treat his anxiety and depression following a work injury was medically unnecessary and decertified the prescription without putting him on a weaning program. The state high court determined that workers compensation law provides the exclusive remedy for the employee’s injuries and pre-empts the employee’s tort claims. But the ruling also heightened attention on the duty of care owed by utilization review companies and their physicians to injured workers, namely with respect to weaning them off of long-term prescriptions.

NFL, NHL concussion fights play out in courts: An unofficial part of the playbook for some professional sports teams is that players have been seeking workers compensation damages to cover their long-term injuries from rough and tumble sports. The National Hockey League in November announced a tentative $18.9 million settlement with 318 retired players who sued the league, accusing it of failing to protect them from head injuries or warning them of the risks involved with playing. Meanwhile, a federal judge in August dismissed a retired NHL player’s lawsuit against Chubb Ltd. and two NHL teams over a technicality: lack of jurisdiction. Yet stakeholders say that could mean a tidal wave of individual lawsuits from players seeking care for head injuries they claim arose from the league’s long-time promotion of violence. All this followed the dismissal of a wrongful death lawsuit in May brought against the NHL for the death of player Derek Boogaard. As for the National Football League, a California appellate judge ruled a former Indianapolis Colts player and California resident cannot file a workers compensation claim in the state because there’s no proof he signed his contract while in California and that he only played two games there over a six-year career.

Ground rules for classifying gig workers as independents: Gig economy workers have been battling the companies they drive, deliver or perform other services for in courts throughout the Untied States, but how tightly the gig company controls their schedules and other aspects of their work is often a major factor in determining their employment status and benefits eligibility, experts say. In April, a judge ruled in favor of Chicago-based Grubhub, an online and mobile food ordering company that allows users to receive deliveries from local restaurants, in a California federal court case called Lawson v. Grubhub Inc. et al. Raef Lawson, a former Grubhub delivery driver, alleged he was an employee and should be compensated for unreimbursed expenses, but the judge ruled that since Grubhub did not control how Mr. Lawson made deliveries, his transportation, his appearance or his schedule, he was correctly classified by the company as an independent contractor. In April, the California Supreme Court put the onus on companies in the state that hire independent contractors to prove those workers are running their own enterprises to avoid complying with states laws that govern employment.

Review Commission tackles OSHA’s use of the general duty clause: The Occupational Safety and Health Review Commission, fully staffed after years of lacking a third commissioner, is tackling – and possibly curtailing, OSHA’s perceived overuse of the Occupational Safety and Health Act’s general duty clause to cite employers for failing to provide safe workplaces to their employees. OSHA’s use of the clause to issue citations against employers for heat-related hazards prompted an uncommon invitation from the review commission to file briefs in a case related to OSHA’s reliance on the clause to cite an employer for a heat stress-related fatality. Then the review commission scheduled rare oral arguments in two cases involving the use of the clause — the heat stress case and one against a health care facility for a fatal workplace violence incident. In August, the 10th U.S. Circuit Court of Appeals affirmed a general duty clause citation and $7,000 penalty against a commercial and industrial painting contractor in relation to a fatal accident, nearly a month after an administrative law judge of the review commission denied a U.S. Postal Service motion to strike an order for enterprisewide abatement of heat stress hazards.

Three’s a crowd in third-party injury lawsuits: Third-party lawsuits, often related to alleged negligence stemming from industrial accidents, are not uncommon in workers compensation claims and 2018 produced a fair share. The Pennsylvania Supreme Court ruled in November that an insurer cannot sue a third party it feels is responsible for a worker’s injury unless the worker assigns the cause of action or joins the lawsuit as a plaintiff. Also in November, the Illinois Supreme Court ruled that the statute of limitations and a previous negligence lawsuit barred a third-party lawsuit filed by a custodian who was injured when a desk fell on her. Meanwhile, the Supreme Court of Alaska in September affirmed an earlier ruling that dismissed a workers comp claim filed by an injured taxi driver who accepted a third-party settlement from the at-fault driver without approval of his employer. Days earlier, the Nebraska Supreme Court ordered an employer who lost three workers in a gas-line explosion to reimburse an engineering firm that had settled $108.9 million in third-party lawsuits related to the 2008 incident.

The Buckeye State wins big in court: The Ohio Bureau of Workers Compensation won in the courts in 2018, with judges ordering business owners to pay millions to the public entity that controls the state’s workers compensation insurance for employers. In June, the Supreme Court of Ohio ordered a temporary employment agency to pay BWC about $3.5 million in unpaid premiums it owed after closing up shop but continuing operations under the name of another temp agency. A judge in August ordered the owner of a residential construction business, who allegedly underreported his payroll by more than $3.5 million to lower his workers comp premiums, to pay BWC $255,434. In May, the BWC also won when the state Supreme Court ruled that the Industrial Commission of Ohio was within its right to modify the miscalculation of benefits owed to an injured worker 18 years after the original award, allowing the commission to collect overpayments from future benefits. Similarly on the benefits front, in April the state Supreme Court ruled that BWC has the right to subrogate an injured worker and two insurers over to payments they made regarding her work-related injury.