NAWCJ

RECENT DEVELOPMENTS IN WORKERS’ COMPENSATION AND EMPLOYERS’ LIABILITY LAW (ABRIDGED)



RECENT DEVELOPMENTS IN WORKERS’ COMPENSATION AND EMPLOYERS’ LIABILITY LAW
(ABRIDGED)

OCTOBER 2018-JANUARY 2020

By David B. Torrey, Lawrence D. McIntyre, and  Justin D. Beck*

A challenge exists in positing which court precedents each year have had the most impact on the workers’ compensation field. The effect of precedents outside of their jurisdiction of origin is necessarily limited. Still, compensation principles and laws have much in common among states and much can be learned from studying how courts of various jurisdictions have treated similar issues.

This paper, which is derived from an article I designed and co-authored for the American Bar Association, sets forth ten cases which may be considered the most significant, nationally, for 2019 and early 2020.  The full article was published in June 2020.   See David B. Torrey, Lawrence D. McIntyre & Justin D. Beck, Recent Developments in Workers’ Compensation and Employers’ Liability Law (2019 Survey Issue), 55 ABA Tort Trial & Ins. Prac. L.J. 467 (2020).

CONTENTS OF THIS ABRIDGEMENT

  1. Pa. AFL-CIO v. Commonwealth, 219 A.3d 306 (Pa. Commw. 2019).
  2. Colo. Dep’t of Labor & Emp’t v. Dami Hosp., LLC, 442 P.3d 94 (Colo. 2019).
  3. Bevan & Assocs., LPA, Inc. v. Yost, 929 F.3d 366 (6th Cir. 2019).
  4. Hernandez v. Food Mkt Corp., 282 So. 3d 1005 (Fla. Dist. Ct. App. 2019).
  5. Appeal of Panaggio, 205 A.3d 1099 (N.H. 2019).
  6. De Dios v. Indemnity Ins. Co. of N. Am., 927 N.W.2d 611 (Iowa 2019).
  7. The Hartford Ins. Grp. on Behalf of Chen v. Kamara, 199 A.3d 841 (Pa. 2018).
  8. Matter of Collins, 213 A.3d 794 (Md. Ct. Spec. App. 2019).
  9. Canosa v. Ziff et al., 2019 WL 498865 (S.D. N. Y. 2019).
  10. Rent-A-Center, Inc. v. Ellis, 827 S.E.2d 605 (W. Va. 2019).

CONSTITUTIONAL LAW – AMA GUIDES – DIRECTIVE THAT 6th EDITION OF AMA GUIDES BE USED NOT ILLICIT DELEGATIONPa. AFL-CIO v. Commonwealth, 219 A.3d 306 (Pa. Commw. 2019).

In a Pennsylvania case, an appellate court held that the legislature did not unconstitutionally delegate its lawmaking authority when it mandated that the Sixth Edition of the AMA Guides to the Evaluation of Permanent Impairment (“AMA Guides”), be used for impairment-rating evaluations (“IREs”).[1] In an earlier case, Protz v. W.C.A.B. (Derry Area School District),[2] the state supreme court had struck down Pennsylvania’s IRE scheme, finding that language in the Act requiring IREs to be performed “pursuant to the most recent edition” of the AMA Guides, unconstitutionally delegated unfettered discretion to the AMA, which could revise the Guides as much and as often as it wished.[3] In response to the Protz decision, the state legislature amended the Act in 2018 to specify that the Sixth Edition of the Guides should be used for impairment ratings.[4]

The petitioner in the 2019 case, the Pennsylvania AFL-CIO, sought a declaratory judgment that the legislature’s incorporation by reference of the Sixth Edition of the Guides still constituted an unconstitutional delegation for the same reasons that the state supreme court identified in Protz. The court rejected this argument, finding that the newly revised provision does not violate the Pennsylvania Constitution. The court explained that the legislature’s decision to mandate the Sixth Edition of the Guides—unlike the statute that was at issue in Protz—will not empower the AMA to modify Pennsylvania law by revising the Guides. Indeed, the court emphasized, “[t]he AMA’s future actions in revising the Guides, whether next month, next year, or in 10 years, will have no effect on the status of IRE determinations in Pennsylvania absent future action by the General Assembly.”[5] For this reason, the court perceived no unconstitutional delegation.

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CONSTITUTIONAL LAW – FINES ON EMPLOYER FOR UNINSURED STATUS UNCONSTITUTIONALLY EXCESSIVEColo. Dep’t of Labor & Emp’t v. Dami Hosp., LLC, 442 P.3d 94 (Colo. 2019). Also discussed here: Delivery Express, Inc. v. Washington State Dept. of Labor & Industries, 442 P.3d 637 (Wash. Ct. App. 2019).

In a Colorado case, the state supreme court held that the Eighth Amendment’s excessive fines clause applies to corporations that are fined for failing to maintain workers’ compensation insurance.[6] The employer in that case, a small motel that employed ten or fewer workers at any given time, allowed its workers’ compensation insurance coverage to lapse on multiple occasions between 2005 and 2014. During that nine-year period, the motel failed to maintain workers’ compensation insurance for a total of 1,698 days. Citing a provision in the Colorado Act which requires that an employer be fined between $250 and $500 for each day that it fails to maintain workers’ compensation insurance, the Division of Workers’ Compensation fined the motel over $840,000.[7] On appeal, the motel argued that the Division’s fine violated the Eighth Amendment’s prohibition on excessive fines.[8]

The court first considered whether the excessive fines clause applies to corporations. The court noted that some constitutional protections, like the Fifth Amendment’s privilege against self-incrimination, are “limited to the protection of individuals” and do not apply to corporations.[9] Nonetheless, the court concluded that the excessive fines clause is not such a limited protection. In this regard, the court noted that “the text of the Excessive Fines Clause does not suggest that its protections are limited to natural persons.”[10] Rather, the clause “does not include any limitation on who merits protection from the imposition of excessive fines.”[11]

Having concluded that the excessive fines clause applies to corporations, the court opted to remand the case back to the Division to apply the proper Eighth Amendment test—i.e., to consider whether the fine imposed was “grossly disproportional to the gravity of the underlying offense.”[12] In doing so, however, the court cautioned that the Division’s analysis should focus only on whether each individual, per diem fine was excessive, not whether the employer’s total liability in the aggregate was excessive.[13]

An additional case. Fines (though not constitutionality) were also implicated in a 2019 Oregon case.[14] There, the state workers’ compensation agency determined that a package delivery service, Delivery Express, Inc. (DEI), had been employing couriers who, though purportedly independent contractors, were in fact “workers” covered by the law. The agency informed DEI of its findings and directed that it pay workers’ compensation premiums on their labor. DEI, instead, reformatted its business, considered itself a freight broker, and had its independent contractor drivers agree that they were “motor carriers.” The agency, however, considered nothing to have changed and assessed premiums in the amount of $840,000.00. When penalties were added, the amount due was nearly $1,000,000.00.  DEI appealed, but the court affirmed. The applicable test of worker status showed that the couriers were indeed workers covered by the workers’ compensation laws. Applying the governing statutory test,[15]the court agreed (1) that the personal labor for delivering items was “the essence of the contract” between DEI and most of its drivers; and (2) that the drivers did not lease their vehicles to DEI – making a “leased-truck” exemption, otherwise available, not at play in the DEI operation. [16]

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CONSTITUTIONAL LAW – Prohibition on Injured-Worker Solicitation Violative of First AmendmentBevan & Assocs., LPA, Inc. v. Yost, 929 F.3d 366 (6th Cir. 2019).

The Ohio Act prohibits attorneys from directly or indirectly soliciting clients in workers’ compensation matters.[17] Furthermore, Ohio’s Bureau of Workers’ Compensation (“Bureau”) maintains information about injured claimants, including their names and mailing addresses. For years, that data could be obtained through public record requests. But, in 2006, the state legislature restricted the release of such information to journalists.[18]

A recent federal case[19] involved an Ohio workers’ compensation law firm that, following the 2006 amendments, hired a “journalistic service” to obtain public records on the firm’s behalf. For nearly a decade, the firm used “the journalist exception to gain access to the Bureau’s claimant information,” which it then used to solicit potential clients via mail.[20] When the firm learned that the state’s Attorney General was investigating the firm for violating the Act’s solicitation ban, it filed an action in federal district court seeking a declaratory judgment that the ban violates the First Amendment to the United States Constitution.[21]

The district court acknowledged that, read in isolation, the Act could be construed as a ban on all solicitation. But the court determined that it would interpret the solicitation ban as applicable “only to solicitation based on unlawfully obtained claimant information.”[22] In other words, the court upheld the law by construing it as a ban on conduct (unlawfully obtaining claimant information to engage in solicitation) rather than a ban on the solicitation itself. On appeal, however, a unanimous, three-judge panel of the United States Court of Appeals for the Sixth Circuit held that the district court’s narrow reading was untenable in light of the statute’s broad language. The court remarked that the text of the law “does not admit of any alternative interpretation aside from being a total ban on solicitation.”[23] The court further held that the provision—properly understood as a complete ban on solicitation—violates the First Amendment because “Ohio’s interest in protecting claimant privacy cannot outweigh [the firm’s constitutional] right to engage in commercial speech.”[24]

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EMPLOYER-EMPLOYEE – UNDOCUMENTED WORKER – USE OF FALSE SSNHernandez v. Food Mkt Corp., 282 So. 3d 1005 (Fla. Dist. Ct. App. 2019).

Undocumented workers are considered employees for workers’ compensation purposes in virtually all states, Florida included.[25] Yet, the Florida statute features a provision which results in a forfeiture of benefits if a worker presents a false social security number (SSN) in the course of seeking out benefits. This proviso has for several years worked to disqualify certain undocumented workers from their claims. Such was the result in a 2019 case.[26]

There, the claimant, Hernandez, was employed by defendant Food Market Corporation. She sustained a work-related injury, and was directed by her employer to “a medical care provider.” At the medical facility, she was provided with a “registration form” which included an area for the SSN to be entered. Hernandez, however, was an undocumented worker who had no SSN. She thus inscribed upon the form a false SSN in order to receive medical care.[27]

The claimant’s claim was denied, and she sought an award from the Judge of Compensation Claims. The JCC, however, agreed with employer that the claimant had used a false SSN in seeking to obtain workers’ compensation benefits – illicit, disqualifying acts under the Florida law. Under leading case law, accordingly, the JCC ordered a forfeiture of her benefits. The court affirmed. It explained as follows:

Section 440.09(4)(a), Florida Statutes, prohibits an employee from receiving workers’ compensation benefits if he or she commits any act described in section 440.105, Florida Statutes, “for the purpose of securing workers’ compensation benefits.” Section 440.105(4)(b) prohibits employees from making fraudulent, false, or misleading statements…. [That law states:] “It shall be unlawful for any person … [t]o knowingly present or cause to be presented any false, fraudulent, or misleading oral or written statement to any person as evidence of identity for the purpose of obtaining employment or filing or supporting a claim for workers’ compensation benefits.” ….[28]

And, as foreshadowed above, the court had a decade before employed this law to disallow benefits to a similarly-situated undocumented worker. This was so held in the leading case Arreola v. Admin. Concepts.[29]

The court rejected claimant’s argument that Section 440.105(4) was unconstitutional, as preempted by the federal Immigration Reform and Control Act of 1986 (IRCA). In the court’s view, nothing in that law “prohibit[s] information potentially relevant to an employee’s immigration status – that was not provided to obtain employment – from being used for any other purpose.”[30]

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MEDICAL BENEFITS – Compensability of Medical Marijuana Appeal of Panaggio, 205 A.3d 1099 (N.H. 2019). Also discussed here: Kluge v. Town of Tonawanda, 111 N.Y.S.3d 710 (N.Y. A.D. 2019); Hager v. M&K Construction, No. A-0102-18T3 (N.J. Super., filed Jan. 13, 2020).

An increasing number of states have authorized the use of marijuana for medicinal purposes.[31] For those states in which an injured worker can potentially look to his or her employer and its workers’ compensation carrier for coverage of such agents, a serious conflict seems to exist. In this regard, while the state may authorize marijuana, the federal government still considers marijuana to be illegal. Employers and carriers have struggled with the proposition that they must reimburse for medical marijuana when federal law considers the agent illicit. In 2015, an appellate court in New Mexico held that no insurmountable conflict of laws existed. In that case, the court rejected the argument that the federal Controlled Substances Act (“CSA”) trumped any requirement that the employer subsidize the costs of medical marijuana because the federal Department of Justice enforcement memos rendered the prospect of prosecution under the CSA to be speculative.[32] In a 2018 Maine case, however, the Supreme Judicial Court held that, where an employer is subject to an order that would require it to subsidize an employee’s acquisition of medical marijuana, a positive conflict does indeed exist between federal and state law, and thus the CSA preempts the Maine Medical Use of Marijuana Act (MMUMA).[33]

In a 2019 case, the Supreme Court of New Hampshire held that a carrier was not prohibited from reimbursing a claimant for the cost of purchasing medical marijuana under state law.[34] The worker in that case had sustained an injury to the lower back in 1991, and subsequently received a permanent impairment award in 1996. He had since continued to suffer ongoing pain as a result of his injury and experienced negative side effects from taking opiates. For this reason, he was approved as a patient for the state’s therapeutic cannabis program. Once purchasing medical marijuana, the claimant requested reimbursement for the same from the workers’ compensation carrier, which denied payment on the grounds that the treatment was not reasonable, necessary, or causally related to the injury.[35] A hearing officer affirmed the carrier’s denial, as did the Appeals Board. Specifically, the Board pointed to the fact that possession of marijuana remains a federal crime, and that state law did not require health insurance carriers, inclusive of workers’ compensation carriers, to reimburse any claims for therapeutic use of cannabis. The Supreme Court reversed, in part, and remanded, in part.

On appeal to the Supreme Court, the claimant had argued that, absent express statutory language to the contrary, the carrier was required to pay for reasonable medical care, including marijuana. Notably, the carrier did not challenge the Board’s finding that the cannabis was reasonable and medically necessary; instead, it argued that the clear purpose of the controlling statute was to “prevent any reimbursement of medical marijuana by any entity that would be subject under contract or law to pay.”[36] Ultimately, the court determined that, “Although the statute does not create a right to reimbursement … nor require any of the listed entities to participate in the therapeutic cannabis program, neither does it bar any of those entities from providing reimbursement.”[37] Indeed, the court noted that, to deny reimbursement under such circumstances would deny the claimant his right to medical care deemed reasonable under the state’s workers’ compensation statute.

The court was further persuaded that the Board had erred where basing its decision, in part, on the fact that possession of marijuana is illegal under federal law. The court concluded that the Board had failed to sufficiently articulate any law that supports the notion that reimbursing medical marijuana costs would expose an insurance carrier to potential criminal prosecution.[38] For this reason, the court remanded the matter to the Board for further articulation of the law which supported its legal conclusion.

An additional case. In a case filed a few months later, a New York court also addressed the issue of the compensability of medical marijuana.[39] There, the claimant was a former police officer who suffered from chronic pain who ultimately resorted to medical marijuana as a remedy. He apparently began securing medical marijuana and, at or about that time, his physician sought authorization from the carrier to treat the worker with the same. After the carrier denied the request, claimant sought a variance, that is, a “treating medical provider’s request for authorization of medical care that varies from the Medical Treatment Guidelines ….”[40] The WCLJ and Board, however, denied the variance request on the procedural grounds that a variance cannot be potentially approved “for treatment already rendered.” On appeal, the court – not commenting on whether substantive legal concerns might preclude the payment for medical marijuana – remanded. The court pointed out that the requirement that variances be for prospective use only did not rule out consideration of the same when the treatment at issue was continuing. The court stated, “the Board properly denied the variance request for medical care but only to the extent such care had already been provided…. In an instance such as here, however, where the claimant has a chronic pain condition necessitating ongoing treatment, the Board should have addressed the merits of claimant’s variance request for prospective medical marihuana treatment.” The court thus remanded to the Board “for consideration in the first instance of claimant’s variance request for prospective treatment.”[41]

And yet another case. In a January 2020 case, the New Jersey Superior Court held that an employer was responsible for medical marijuana.[42] In contrast to the New Hampshire and New York cases, this case unequivocally held that an employer and its carrier were responsible for an injured worker’s medical marijuana. There, the claimant was a construction worker injured when a dump truck deposited its load on him. He developed chronic pain. After several years, a workers’ compensation judge awarded both his claim in general and his request that employer be responsible for his medical marijuana. On appeal, the court rejected the carrier’s argument (successful in the Maine case noted above), that an insurmountable conflict existed between the CSA and the New Jersey law authorizing medical marijuana. Among other things, the court recognized the employer’s argument that it could be conceived of as aiding and abetting a criminal act, but rejected the proposition that such a theoretical violation compelled the conclusion that a conflict existed. The court declared, “a speculative argument cannot support a finding of conflict preemption.”[43]The court also rejected the carrier’s argument that it should be treated as a private health insurer, entities which are, under New Jersey law, excused from the requirement of covering the “medical use of cannabis.” Indeed, under the controlling general statute, health insurance does not include “workmen’s compensation coverage.”[44]

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THIRD-PARTY ADMINISTRATOR CANNOT BE LIABLE FOR BAD FAITH CLAIMS HANDLING De Dios v. Indemnity Ins. Co. of N. Am., 927 N.W.2d 611 (Iowa 2019).

In a 2019 case,[45] the Iowa Supreme Court held that third-party claims administrators cannot be held liable in bad faith for failing to pay workers’ compensation benefits. The worker in that case was injured in a motor vehicle accident while working. When he filed a claim for workers’ compensation benefits, his employer and its insurance carrier denied benefits, citing the coming and going rule. The Workers’ Compensation Commissioner ultimately awarded the claimant benefits, and the claimant subsequently filed a bad-faith action against his employer’s workers’ compensation carrier and its third-party administrator.

The action was removed to a federal court, which then certified the following question of first impression to the Iowa Supreme Court: “In what circumstances, if any, can an injured employee hold a third-party claims administrator liable for the tort of bad faith for failure to pay workers’ compensation benefits?”[46] The state supreme court explained that “workers’ compensation bad-faith claims are considered ‘first-party bad faith’ claims because of their statutory and regulatory genesis.”[47] But the Iowa Act, the court continued, does “not impose ‘affirmative obligations’ on third-party administrators” like it does on insurers.[48] Thus, the court could discern no justification for extending bad-faith tort liability to third parties given that third-party administrators are “not in an insurer/insured relationship with anyone,” do not “have to meet rigorous financial requirements,” and are not “under the ongoing supervision of the workers’ compensation commissioner.”[49]

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SUBROGATION – CARRIER POSSESSES NO DIRECT ACTION AGAINST THIRD-PARTY TORTFEASORThe Hartford Ins. Grp. on Behalf of Chen v. Kamara, 155 A.3d 1108 (Pa. Super. 2017), appeal granted, 170 A.3d 982 (Pa. 2017), reversed, 199 A.3d 841 (Pa. 2018).

In a Pennsylvania case, the Supreme Court held that a workers’ compensation insurance carrier could not bring a third-party action against an alleged tortfeasor on behalf of an injured employee where the employee did not independently sue the tortfeasor, did not join in the insurer’s action, and did not assign her cause of action to the insurer.[50]

The worker, Chen, was in the course of her employment when she was struck by a rental vehicle operated by Kamara and suffered injuries. The carrier for Chen’s employer, Hartford, paid benefits voluntarily and accrued a lien. Thereafter, Chen did not file a third-party action, nor did she assign her cause of action to Hartford. On the eve of expiration of the two-year statute of limitations for personal injury, Hartford sought to effectuate its subrogation rights by filing suit. Hartford captioned the complaint as follows: “The Hartford Group on behalf of Chunli Chen.”[51]

The tortfeasors advanced the defense that the insurer’s attempt to enforce its subrogation rights in a direct action was prohibited by precedent.[52] The trial court granted the preliminary objections, but the intermediate appellate court reversed and remanded for further proceedings. The Supreme Court subsequently reversed and reinstated the order of the trial court, dismissing the case.

The court was unmoved that use of the phrase in the caption “on behalf of” changed the critical analysis. It recalled the leading precedent, which “disfavor[ed] splitting causes of action….”[53] The court declared, “We opined … that preventing insurers from asserting independent actions against tortfeasors accomplished two laudable goals: (1) eliminating the prospect that the tortfeasor could be exposed to multiple suits; and (2) preserving the rights of the injured worker who retains the beneficial interest in the cause of action against the tortfeasor.”[54] The court further observed that a workers’ compensation carrier is incentivized to limit its focus of litigation against a third-party tortfeasor to the amount it is due in subrogation, and has no incentive or obligation to pursue vigorously the injured employee’s independent claims, such as those seeking compensation for pain and suffering. For these reasons, the court concluded that simply captioning a complaint as filed “on behalf of” an employee “contravenes the very jurisprudence establishing that it is the injured worker who retains the cause of action against the tortfeasor.”[55]

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COMPROMISE SETTLEMENT – INJURED WORKER COULD NOT RELEASE “INCHOATE” CLAIMSMatter of Collins, 213 A.3d 794 (Md. Ct. Spec. App. 2019).

In a Maryland case, the Court of Special Appeals held that an injured worker could not release the inchoate fatal claim rights of his spouse, and that, despite a prior compromise and release of his lifetime claim, the decedent’s wife’s claim for death benefits could stand.[56]

There, the claimant-decedent had filed a claim for workers’ compensation benefits in 2012, alleging that he had developed heart disease and hypertension as a result of his firefighting duties with the employer, a volunteer fire department. He was ultimately to enter into a compromise and release of the claim with the employer, which provided for a lump-sum payment and funding of a Medicare Set-Aside trust. Approximately two years later, the claimant died as a result of cardiac arrest secondary to heart disease.[57] Shortly thereafter, the claimant-widow filed a Dependent’s Claim for Death Benefits with the Commission, seeking dependency benefits, which was denied based upon a finding that the claimant-widow had no right to survivorship or death benefits as a result of the agreement.

The claimant-widow appealed, and the Circuit Court affirmed, granting summary judgment in favor of the employer’s insurance carriers. The claimant-widow subsequently appealed to the Court of Special Appeals, which reversed the Circuit Court. On appeal, the claimant-widow had argued that, under the Maryland Workers’ Compensation Act, a dependent’s claim for benefits is independent, and not derivative, of the worker’s claim, and that, as a result, a worker may not contract away the dependent’s death benefits claim.[58] The employer responded that the language of the release was clear and unambiguous, and plainly barred the claimant-widow from pursuing death benefits because the agreement released liability for “all other claims of whatsoever kind which might or could hereafter arise.”[59]

Ultimately, the court held that, even if the language of the release could be construed to give up a future claim by the claimant-widow for death benefits, it was ineffective to do so. The court explained that, when a covered worker suffers a compensable injury, his or her dependents’ entitlement to death benefits is inchoate, as it is not certain ever to accrue.[60] However, if the worker dies from the compensable injury and leaves a dependent, the death benefits claim becomes choate. In that situation, the employer or insurer shall pay death benefits upon a showing of total or partial dependency at the time of the accidental injury or last injurious exposure. The court further held that only the claimant-decedent had signed the prior compromise and release agreement, and that the claimant-widow was not a party to the same.[61] Accordingly, the agreement was not enforceable against her, as it could only be said to bind the parties and their privies. For all of these reasons, the court held that the claimant-widow’s claim for death benefits was not barred by the claimant-decedent’s prior compromise and release.

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PROCEEDINGS – SEXUAL HARRASSMENT CLAIM AGAINST EMPLOYER – LIMITATIONS OF ACTION – EXCLUSIVE REMEDYCanosa v. Ziff et al., 2019 WL 498865 (S.D.N.Y. 2019).

The litigation that has enveloped the controversial movie producer Harvey Weinstein and his various enterprises and associates has given rise to workers’ compensation and other employer liability issues. In an intriguing decision ruling on the defendants’ 12(b)(6) motion, a federal court ruled (1) that the victim of sexual abuse by her sometime-employer Weinstein potentially was asserting certain claims that were barred by the exclusive remedy of the New York Act; (2) that her allegation of intentional infliction of emotional distress (IIED) were not barred by the limitation of action; (3) that her allegations of negligent infliction of emotional distress were time-barred; and (4) that certain negligent supervision claims were not cognizable.[62]

In that case, a movie producer, Ms. Canosa, filed a multiple-count lawsuit against Weinstein, his business partners, and his business (TWC). Among the several counts were allegations of rape, sexual abuse, intimidation and harassment.[63] The defendants, beyond Weinstein, were implicated on allegations (among others) that they had facilitated Weinstein’s behavior. The defendants raised several defenses in their 12(b)(6) motion,[64] asserting that certain claims were barred by the exclusive remedy, that others were time-barred, and that others were otherwise non-cognizable.

As to the exclusive remedy, Weinstein’s business and its officers argued that the New York workers’ compensation law was “the exclusive remedy for work-related injuries, including those involving sexual assault ….”[65] They hence sought dismissal of the case. The court, however, ruled that pending discovery it was too early in the proceedings to ascertain whether the claims the plaintiff was making even had their basis in the employer-employee relationship. The court, denying the motion to dismiss, stated, “The Court is persuaded that, prior to discovery, Canosa does not yet have the factual tools to make a confident showing that her work for Weinstein and TWC fell outside the WCL, so as to preserve her negligence claims….”[66]

As to the limitation of actions defense, Canosa alleged that many of her claims were suppressed for a period of time due to intimidation by Weinstein. The court held, in particular, that intimidation, though reprehensible, did not fall into the category of misrepresentation of facts that would cause the victim to be unaware that she had a claim that she could file. As such, any claim would be time-barred.[67]

On the other hand, the court noted that New York law extends the statute of limitations (normally one year), to five years, for intentional torts associated with a sexual assault.[68] The court noted that for any allegations of intentional infliction of emotional distress claims, the “Continuing Violation Doctrine” would apply. If the actor who allegedly committed these violations did so over an extended period of time, then all of these allegations could be included in the claim under the doctrine even though the earliest actions on their own would have been untimely. Notably, the court also noted that the extension only applies to the person committing the intentional tort, and not those who are alleged to be vicariously liable for permitting these actions to happen.

Finally, the court held that no liability for negligent supervision could exist because the alleged acts did not take place on the company premises. An assault that took place in a hotel room rented by the company, for example, would not be a sufficient basis to support a claim for negligent supervision.[69]

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PROCEEDINGS TO SECURE COMPENSATION – ARBITRATION “DELEGATION CLAUSE” ENFORCEABLERent-A-Center, Inc. v. Ellis, 827 S.E.2d 605 (W. Va. 2019).

The West Virginia Supreme Court held that a trial court committed error in not directing the parties to arbitration in the face of the plaintiff’s retaliatory discharge/termination suit, where she had, at the outset of her employment, agreed to arbitration not only with regard to employment disputes but challenges as to the applicability of the agreement itself. The court held that the plaintiff had failed to show that her agreement to this “delegation clause,” that is, one to “arbitrate arbitrability,” was either vague or procedurally or substantively unconscionable. The trial court was directed to dismiss claimant’s civil claim for retaliation, one finding its statutory basis in the Workers’ Compensation Act.[70]

An irony existed in the case, in that the arbitration clause purported to have the parties agree to arbitrate any claims, including workers’ compensation claims. As will be seen, the employer did not seek arbitration over the underlying workers’ compensation claim, which it paid voluntarily. Yet, as noted above and below, employer did oblige the injured worker to arbitrate the retaliatory discharge claim.

Plaintiff, Ellis, worked in management for employer Rent-A-Center. She sustained an acknowledged shoulder injury and was paid benefits voluntarily for six weeks. She returned to work, but was later fired for absenteeism. She was subsequently reinstated to temporary total disability for another closed period.[71]   Ellis then sued under the anti-retaliation provision of the West Virginia workers’ compensation law.[72] Such lawsuits are civil actions,[73] brought in circuit courts and not before compensation judges.

The defendant responded by filing a motion to compel arbitration.[74] It asserted that, at time of hire, plaintiff had signed an agreement to arbitrate disputes arising over employment matters, including workers’ compensation. And, pivotally, that contract provided, in a special clause, that the parties agreed to arbitrate any issue surrounding the applicability of the arbitration agreement.[75] The trial court, however, denied the motion. It found that the agreement lacked mutuality and was unconscionable.[76]

The Supreme Court, however, reversed. The court, invoking precedents construing the Federal Arbitration Act,[77] first noted that a challenge to an agreement to arbitrate the arbitrability of a matter – that is, whether the arbitration agreement is applicable – is to be considered first, as a “gateway issue,” separately from the agreement to arbitrate the merits of a dispute.[78] Here, the court faulted the trial court opinion for not recognizing this precept.[79] Still, both parties, in the course of the motion, had addressed the issue at the trial level, and the court held that the challenge to the delegation clause had been preserved.[80] And, examining this threshold aspect of the agreement, the court rejected the proposition that the delegation clause was either vague or unconscionable.

With regard to the former, the court reviewed the agreement and found that it reflected the parties’ “clear and unmistakable intent” to delegate “state contract law questions about the validity … and enforceability of the arbitration agreement to an arbitrator.”[81] With regard to the latter, the delegation clause was not procedurally unconscionable, nor was any substantive unconscionability attendant to the same. Ellis had complained, as to the first aspect of unconscionability, that the proviso was unilaterally imposed upon her and was a contract of adhesion. The court, however, noted that such challenges to delegation clause provisos had already been rejected under West Virginia jurisprudence.[82] Meanwhile, as to the substantive unconscionability count, Ellis argued that the West Virginia Act, like most workers’ compensation laws, prohibits pre-injury waivers.[83] The court recognized this fact, but pointed out that the effect of the anti-waiver proviso was separate from the legitimacy of the delegation clause.[84] The court concluded, on this point, “the question of whether the parties’ arbitration provision violates West Virginia Code § 23-2-7 is for an arbitrator to decide, not this Court.”[85]

* David B. Torrey is a Workers’ Compensation Judge in Pittsburgh, PA, and is Adjunct Professor of Law, University of Pittsburgh School of Law (Pitt Law). Lawrence D. McIntyre (Pitt Law 2015) is a Law Clerk to Hon. David N. Wecht, Supreme Court of Pennsylvania. Justin D. Beck (Pitt Law 2017) is an Associate at Thomas, Thomas & Hafer LLP, Pittsburgh, PA. All opinions are strictly those of the authors.

[1] Pa. AFL-CIO v. Commonwealth, 219 A.3d 306, 2019 WL 5089733 (Pa. Commw. 2019); see Pa. Const. Art. 2, § 1 (“The legislative power of this Commonwealth shall be vested in a General Assembly, which shall consist of a Senate and a House of Representatives.”).

[2] Protz v. W.C.A.B. (Derry Area Sch. Dist.), 161 A.3d 827 (Pa. 2017).

[3] Id. at 835-36.

[4] 2018 Pa. Legis. Serv. Act 2018-111 § 1 (codified at 77 P.S. § 511.3) (providing that impairment evaluations shall be conducted “pursuant to the American Medical Association ‘Guides to the Evaluation of Permanent Impairment,’ 6th edition (second printing April 2009)”). See David B. Torrey & Andrew E. Greenberg, Pennsylvania Workers’ Compensation: Law & Practice, § 6:51.94 (Thomson Reuters Supp. 2019-2020).

[5] Pa. AFL-CIO, 2019 WL 5089733, at *7 (emphasis omitted).

[6] Colo. Dep’t of Labor & Emp’t v. Dami Hosp., LLC, 442 P.3d 94 (Colo. 2019).

[7] See Colo. Rev. Stat. § 8-43-409.

[8] See U.S. Const. amend. VIII (“Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.”).

[9] Dami Hosp., LLC, 442 P.3d at 99 (quoting First Nat. Bank of Bos. v. Bellotti, 435 U.S. 765, 778 n.14 (1978)).

[10] Id. at 100.

[11] Id.

[12] Id. at 101; see United States v. Bajakajian, 524 U.S. 321 (1998) (announcing the gross disproportionality standard).

[13]Id. at 103 (“When a fine is imposed on a per diem basis, with each day constituting an independent violation, the evaluation of whether a fine is excessive must be done with reference to each individual daily fine.”).

[14] Delivery Express, Inc. v. Washington State Dept. of Labor & Industries, 442 P.3d 637 (Wash. Ct. App. 2019).

[15] Wash. Rev. Code § 51.08.180.

[16] Delivery Express, 442 P.3d at 646.

[17] Ohio Rev. Code § 4123.88(A) (“No person shall directly or indirectly solicit authority, or pay or give anything of value to another person to solicit authority, or accept or receive pay or anything of value from another person for soliciting authority, from a claimant or employer to take charge of, or represent the claimant or employer in respect of, any claim or appeal which is or may be filed with the bureau or commission.”).

[18] Id. § 4123.88(D)(1) (“Upon receiving a written request made and signed by an individual whose primary occupation is as a journalist, the commission or the bureau shall disclose to the individual the address or addresses and telephone number or numbers of claimants, regardless of whether their claims are active or closed, and the dependents of those claimants.”).

[19] Bevan & Assocs., LPA, Inc. v. Yost, 929 F.3d 366 (6th Cir. 2019).

[20] Id. at 372.

[21] See U.S. Const. amend. I (providing that “Congress shall make no law abridging the freedom of speech, or of the press[.]”).

[22] Bevan & Assocs., 929 F.3d at 373.

[23] Id. at 375.

[24] Id. at 378.

[25]See David B. Torrey & Justin D. Beck, Undocumented Workers and Workers’ Compensation: Analysis and a 50-State Table (ABA WC CLE, Phoenix, AZ, March 2017), www.davetorrey.info. (Last visited Jan. 15, 2020).

[26] Hernandez v. Food Mkt Corp., 282 So.3d 1005 (Fla. Dist. Ct. App. 2019).

[27] Id. at 1006.

[28] Id.

[29] Arreola v. Admin. Concepts, 17 So.3d 792 (Fla. Ct. App. 2009).

[30] Hernandez, 282 So.3d at 1007.

[31] For a review of the states that have, in the course of 2019, considered changes to their medical marijuana laws, see NCCI Regulatory and Legislative Trends Report at 5 (July 2019), https://www.ncci.com/Articles/Documents/II_Regulatory-Legislative-Trends2019.pdf (noting that in 2019, “at least 20 states considered legislation to legalize marijuana for medical and/or recreational purposes….”). (Last visited Dec. 7, 2019).

[32] Lewis v. Am. Gen. Media, 355 P.3d 850, 858 (N.M. Ct. App. 2015).

[33] Bourgoin v. Twin Rivers Paper Co., 187 A.3d 10 (Me. 2018).

[34] Appeal of Panaggio, 205 A.3d 1099 (N.H. 2019).

[35] Id. at 1101.

[36] Id. at 1102.

[37] Id.

[38] Id. at 1105.

[39] Kluge v. Town of Tonawanda, 111 N.Y.S.3d 710 (N.Y. App. Div. 2019).

[40] Id. at 711.

[41] Id. at 711-712.

[42] Hager v. M&K Construction, No. A-0102-18T3 (N.J. Super. Ct. App. Div., filed Jan. 13, 2020).

[43] Slip op. at 24.

[44] Id. at 25.

[45] De Dios v. Indemnity Ins. Co. of N. Am., 927 N.W.2d 611 (Iowa 2019).

[46] Id. at 613.

[47] Id. at 619.

[48] Id.

[49] Id. at 620.

[50] The Hartford Ins. Grp. on Behalf of Chen v. Kamara, 155 A.3d 1108 (Pa. Super. 2017), appeal granted, 170 A.3d 982 (Pa. 2017), reversed, 199 A.3d 841 (Pa. 2018).

[51] Id. at 843.

[52] See Liberty Mutual Ins. Co. v. Domtar Paper Co., 113 A.3d 1230 (Pa. 2015).

[53] The Hartford Ins. Grp., 199 A.3d at 851 (quoting Domtar Paper, 113 A.3d at 851)).

[54] Id.

[55] Id. at 853.

[56] Matter of Collins, 213 A.3d 794 (Md. Ct. Spec. App. 2019).

[57] Id. at 799.

[58] Id. at 803-04.

[59] Id. at 804.

[60] Id. at 804-05.

[61]Id. at 806.

[62] Canosa v. Ziff et al., 2019 WL 498865 (S.D.N.Y. 2019).

[63] Id. at *1.

[64] Id.

[65] Id. at *10.

[66] Id. at *11.

[67] Id. at *8.

[68] Id. at *7.

[69] Id. at *16.

[70] Rent-A-Center, Inc. v. Ellis, 827 S.E.2d 605 (W. Va. 2019).

[71] Id. at 609.

[72] Id.

[73] Id. See W. Va. Code §§ 23-5A-1 and 23-5A-3(a).

[74] Rent-A-Center, 827 S.E.2d at 609.

[75] Id. at 609-10.

[76] Id. at 610.

[77] As to the Federal Arbitration Act (FAA), see 9 U.S.C. § 2. The court throughout pointed out that the precise delegation clause that Ellis signed had been subject to litigation in the U.S. Supreme Court case Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (2010). With regard to the rarely-treated issue of workers’ compensation and FAA preemption, see Michael C. Duff, Compulsory Arbitration: More Empty Federal Preemption of State Workers’ Comp?, TORTSOURCE, p.3 (ABA Fall 2016). See also generally Michael C. Duff, Mandatory Arbitration of Workers’ Compensation Retaliation Claims: An Evolving Trend?, Workers’ Compensation Law Prof Blog (January 11, 2020), https://lawprofessors.typepad.com/workerscomplaw/. (Last visited Jan. 14, 2020).

[78] Rent-A-Center, 827 S.E.2d at 613.

[79] Id. at 616.

[80] Id.

[81] Id. at 613-14 (citing Schumacher Homes of Circleville, Inc. v. Spencer, 787 S.E.2d 650 (W. Va. 2016)).

[82] Id. at 617 (citing Nationstar Mortg., LLC v. West, 785 S.E.2d 634 (W. Va. 2016) (in that case, involving a dispute over a mortgage, court had “found that, although the arbitration agreement very likely was a contract of adhesion, the fact that it was prepared by a party with more power, lacked an opt-out provision allowing for some choice in the matter, and was perceived to lack separate consideration did not make the agreement procedurally unconscionable”)).

[83] Id. at 619. See W. Va. Code § 23-2-7 (“No employer or employee shall exempt himself from the burden or waive the benefits of [the workers’ compensation statute] by any contract, agreement, rule or regulation, and any such contract, agreement, rule or regulation shall be pro tanto void.”).

[84] Rent-A-Center, 827 S.E.2d at 620.

[85] Id.