Category Archives: New Jersey

Does a failure to train or supervise constitute a 'foreseeable certainty'?

A new case (Cong Su v. David’s Cookies, 2009 N.J. Super Lexis 2145 (Aug. 10, 2009), serves as illustration of the original purposes of the workers’ compensation system.
The concept of ‘workers’ compensation’ embodies a historic tradeoff: a compromise between the rights of employees to sue for negligent harm suffered at the hands of a co-worker or employer balanced against the need to deliver medical and wage continuation benefits to injured workers in a timely manner and regardless of fault. The workers’ compensation system is a compromise: employees can’t sue their employers for injuries they sustain at work, and in return, employee are guaranteed medical and wage-continuation benefits regardless of fault. There is an exception to this ‘compromise’ system: an employee can sue their employer for injuries sustained in the workplace if the employee can show that the injuries were ‘intentional.’ In other words, if the employee can show that the employer’s actions were ‘substantially certain’ to place the employee in harms way where injury could result, and the injury was plainly beyond anything the Legislature intended the Workers’ Compensation Act to immunize’ the employee can sue the employer in civil court (where, presumably, a trial by jury could yield an award for pain, personal injury, and economic damages far in excess of the ‘scheduled’ loss the claimant could recover in workers’ compensation court.
It is because of this delicate compromise of rights that cases where the employee claims to have been ‘intentionally injured’ are scrutinized so carefully. Cong Su is such a case.
The claimant in Cong Su operated a biscotti machine for her employer. While operating the machine, her hand came into contact with a sharp blade causing severe injuries.
To prevent a hand from entering the area where the blade was housed, a metal guard was on the machine. The metal guard was designed to keep the workers’ hands nine inches from the metal blade.
The claimant filed a civil suit against the maker of the machine and her employer. The employer (David’s Cookies) moved to dismiss her claims, arguing that the claimant’s remedy was through the New Jersey Workers’ Compensation Act.
In the civil suit, the claimant produced an expert who opined about the safety devices on the biscotti machine. According to the claimant’s expert, the metal guard protecting the operator’s hands was insufficient: a worker could easily slip their hand under the metal guard, through a one-and-one-half inch gap and into the cutting blade. Further, petitioner’s expert testified that the claimant was illiterate, and was unable to read any warning signs or messages (also, the claimant spoke no English). Finally, it was argued that the claimant injured her hand on the first day on the job, and was inadequately trained to operate the biscotti machine.
As to ‘foreseeability,’ claimant’s expert testified that “it was not only reasonably foreseeable but substantially certain that somebody would have been seriously injured by this machine.”
Despite this opinion, the Trial court dismissed the claimant’s action against her employer, finding that her sole remedy against her employer was through workers’ compensation proceedings.
The claimant appealed this decision.
The appellate court reviewed the trial testimony, including testimony that no other worker had ever been injured by the biscotti machine.
The Appellate Court ultimately ruled to affirm the Trial court. In its decision the appellate court found:

  • The employer could assume that a rational person would not stick their hand into a running electrical machine without first turning off the power;
    The failure to “train” the employee did not arise to a level of being ‘certain’ to bring about a specific harm;
    The failure to supervise the claimant also did not amount to a ‘certainty’ that physical harm would occur;
    The failure to warn an employee about the potential danger (despite the fact that the employee was illiterate and did not speak English) was not ‘substantially certain’ to cause the employee harm; and
    No OSHA citations had ever been received in regards to the machine, which militated in favor of the employer’s uncertainty of the machine’s safety (i.e., no citations means the employer could presume the machine safe).

The workers’ compensation claim was the sole remedy for this petitioner.

New Guidance from Medicare: Best Practices for Set Aside Proposals

On September 26, 2009 Medicare issued guidance as to how Set-Aside proposals “could” be submitted to Medicare. We expect that these recommendations will now be ‘best practices’ for dealing with Set-Aside arrangements.
In July 2001 CMS issued a memo to its regional offices. It suggests that under certain circumstances parties to workers’ compensation claims should not settle those cases until after CMS has had an opportunity to review the settlement and approve the allocation to future medical expenses. The memo discusses the circumstances under which the regional offices will “pre-approve” such an allocation. It discusses pre-approval in two categories of cases:
Cases in which the workers’ compensation claimant is currently entitled to Medicare benefits.
Cases in which the injured individual has a “reasonable expectation” of Medicare entitlement within 30 months of the settlement date and the settlement is over $250,000 (Patel 2001, Question 1).
This enforcement of a previously-quiescent right to reimbursement (or set-aside) was new, and it has considerably impacted the handling of workers’ compensation claims since. As the Social Security system (and Medicare) approach the “funding gap” currently projected to be reached in 2018, we can expect that CMS will get more creative in their demands for set-aside and conditional payment reimbursement and increasingly draconian in enforcing their rights.
Medicare announced that the ‘threshold’ for reviewing cases was to be set at $25,000. Medicare refuses to provide a pre-approval of set-aside unless the lump-sum payment to the claimant exceeds $25,000.

After a case is settled, CMS wants the parties to create some form of “set-aside” arrangement in which the funds for future medical expenses that would be covered under Medicare are placed in a trust or deposited in a separate account. Medicare will begin paying medical bills for the work-related condition only when set-aside is depleted and the funds are accounted for.
The New Forms.
Medicare has issued a 38-page ‘checklist’ including sample forms that it ‘recommends’ submitters utilize. According to CMS, “cases using this or similar format can generally be processed more quickly with fewer errors – resulting in faster determinations at less cost to submitters and the government.” The ‘recommended’ submission form is divided into numbered sections to correspond to the electronic folders in which CMS scans and files documents for review. For submissions by CD-ROM, grouping and naming documents by the CMS conventions is the preferred method of delivery.

CMS recommends the following numbered sections:

Section 05 – Cover Letter;
Section 10 – Consent Form;
Section 15 – Rated Ages;
Section 20 – Life Care/Treatment Plan;
Section 25 – Court/WC Board Documents;
Section 30 – WCMSA Administration Agreement;
Section 35 – Medical Records;
Section 40 – Payment Information;
Section 50 – Supplemental – Additional Information.

We are constantly providing guidance to clients regarding Medicare obligations and liabilities. By publishing these new ‘recommendations’ we expect that service providers drafting set-aside agreements and claimant’s attorneys will be better prepared to obtain CMS approval of set-asides.
The CMS ‘sample submission’ and ‘checklist’ can be downloaded here (waring: external link to CMS, link is to a PDF).

TDB Rates rise again, despite economic realities

Why is this important?

Temporary disability wage-continuation benefits are one of the three main benefits available to injured workers under the New Jersey Workers’ Compensation Act.

Temporary disability payments of 70% of the injured workers’ wages for the year in which the injury occurred or his occupational disease became manifest, subject to the annual maximum and minimum, are payable until she is “able to return to work.” These payments continue even if the contract of hire has expired. Therefore a schoolteacher is entitled to receive benefits during the summer recess or the seasonal worker after the end of the season if she is unable to return to work.

Temporary disability payments continue if an employees’ disability is such that she can’t return to her normal job even if she is capable of performing light work and none is offered. The burden is the employer to show that light work was refused by the employee.

When an employee manifests an occupational disease years after her last employment with the respondent the rate of compensation is fixed by her wages at her last employment with that respondent. The rate of compensation is subject to the maximum and minimum rates in effect at the time of the accident or manifestation of occupational disease.

Temporary disability for a part-time employee is based upon her actual part-time wages subject to the maximum and minimum rates in effect at the time of the accident or manifestation of occupational disease. Russell v. Saddle Brook Rest. Corp., 199 N.J. Super. 186 (App. Div. 1985).

An employee who removes herself from the workforce is not entitled to temporary disability for any period after that removal. Tamecki v. Johns Manville, 125 N.J. Super. 355 (App. Div. 1973), cert. denied, 64 N.J. 495 (1974).

A penalty of 25% of the amount due for temporary disability and a reasonable counsel fee shall be imposed upon the respondent who unreasonably or negligently delays or refuses to pay temporary disability or delays the denial of a claim. A delay of 30 days or more gives rise to a rebuttable presumption of unreasonable and negligent conduct on the part of the respondent.

An award of temporary disability and/or medical treatment during the pendency of a workers’ compensation proceeding may be appealed as of right. Hodgdon v. Project Packaging, Inc., 214 N.J. Super. 352 (App. Div. 1986), cert. denied, 107 N.J. 109 (1987). Temporary disability is payable to an employee until he is “able to resume work” even if the contract of hire would have expired (in this case a school teacher during summer recess). Outland v. Monmouth-Ocean Educ. Svc. Comm’n, 154 N.J. 531 (1998).

Does a Bad Economy Mean Less Workers' Comp Claims?

Graph (c) 2009 G. Lois. All rights reserved.

It’s the number one topic of discussion in most New Jersey workers’ comp courthouses. Has the down economy resulted in less claims or more claims? There are two schools of thought: (1) with the down economy, people are more afraid to lose their jobs by filing a workers’ comp claim, so filings will be trending downward; and (2) with the down economy, more laid-off workers will be more likely to file claims. Which one of these is right? Can we expect claims to fall or increase?
First, we have to admit that there is a data problem. The Division of Workers’ Compensation only published 19 years of historic data, so there isn’t a like period of downturn (the last time unemployment crested 9% Reagan was newly-elected president in 1981). Without hard numbers to crunch (unemployment rate versus number of claims filed) we are left with a statistical analysis of the figures we do have. Even this analysis is going to be severely flawed: New Jersey has been a harbinger of the greater workforce trend of the last thirty-years: the demise of ‘blue collar jobs’ and the rise of the ‘knowledge worker.’ New Jersey’s manufacturing, construction, farm, and trade labor categories have shrunk every year for the past two decades while government (number one growth industry in terms of jobs), professional, academic, and health professions have gained workers. The drop in cl

aim petitions filed has followed this trend over the past two decades: from 53,637 new claim petitions field in 1990 to only 35,566 new formal claim petitions filed in 2007. Extrapolating from this years’ current inventory of filed claim petitions (23,000), 2009 is on pace for approximately 34,500 claims – which seems in line with last year’s filings. In other words, the gross number of filed claim petitions is likely to fall in 2009-2010, but this is more likely indicative of the general trend of job loss in high-risk industries like manufacturing and construction, rather than reflecting a trend where employees are more timid in suing their employers.

Stop Work Orders: New Weapon in Collective Labor's Arsenal?

The New York Workers’ Compensation Board has had the power to issue stop-work orders – now New jersey is drafting a rule to grant this power to the Director of the Division of Workers’ Compensation.
The ‘reform’ legislation passed in October 2008 laid the groundwork for this new power. Specifically, Section 79 of the Act allowed the Division of Workers’ Compensation the authority to issue proposed rules describing how the power to ‘stop work’ would be restrained and authorized.
The proposed rules allow for a stop-work order to be issued if the employer ‘knowingly’ violates the Workers’ Compensation Act. The stop-work provision appears to allow the issuance of the order in the following circumstances:
Where the employer had workers’ comp insurance but allowed the insurance to lapse or cancelled coverage;
Where the employer was told by the Division of Workers’ Compensation or another State agency of the need to obtain workers’ comp coverage;
Where the employer had prior instances of failing to insure;
Where the employer misrepresents the number or type of employees in order to reduce premium costs;
where the employer misrepresents thew work classifications of employees to reduce premium costs.
The stop-work order is to be issued to the particular work-site where the infraction occurred. It is not known (not set out in the proposed rules) whether or not there actually has to be a workplace injury for the Division of Workers’ Compensation to issue a stop-work order. In other words, it is unknown whether this proposed rule is meant to increase compliance with the laws regarding mandatory workers’ compensation coverage or if this proposed rule will merely become another arrow in the quiver of union forces and disgruntled employees.
New York allowed its Workers’ Comp Board the power to issue stop-work orders in May 2007. Since that time more than 1,000 stop-work orders have been issued and approximately $7 Million in penalties have been issued to New York employers.