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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.

First, some background on what is ‘permanent disability’ for the purposes getting an award in New Jersey. The first rule is that Workers’ Compensation Judges must consider impact of injury on petitioner’s ability to work in view of his limited educational and intellectual resources and not base a decision on a “range” of disability for a particular type of injury. A Judge is supposed to look at the impact of an injury in terms of ‘the whole man” – his ability to work as a ‘working unit.’ In other words, a judge may not, in her decision on the record, state “a fractured ankle is worth 15% of the foot” – a Judge should consider the particular circumstance of each claimant. This of course, is subjective.

The second rule is that an alleged disability must be shown by “demonstrable objective medical evidence.” While this sounds scientific, it is not. The courts have consistently held that “range of motion tests” and other subjective tests (relying on the judgment of the ‘tester’) are to be considered “demonstrable objective medical evidence.” However, our case law is quite clear: a judge must have at least some objective medical evidence of permanent disability – and must specifically cite tot hat objective medical evidence in her decision – in order to be upheld.

Finally, the third rule is that even if the claimant can’t show an impact on his ability to work, he is still entitled to an award of permanency. So, even if petitioner failed to establish lessening to material degree of his working ability, he can still be found to be ‘permanently disabled.’ This neatly defeats employer’s arguments in cases where the claimant is now working more hours, or at a more physically demanding position, than he was before the alleged ‘disabling incident.’ Obviously, this rule values the subjective (the claimant’s testimony about his ability to work) over the objective (the employer showing that the employee is actually working longer hours or in a more demanding job).

All of these rules (taken directly from the prevailing case law) combine to make findings as to permanency very unscientific, not to say unpredictable. The two cases decided this July are interesting because in each case the appealing party argued that the Judge of Compensation’s decision was incorrect in how the judge valued subjective testimony. In the first case we discuss (Thomas), the Judge was also affirmed, but on the grounds that the petitioner’s case was rightly thrown out of court because it was based on only subjective complaints. In the second case we talk about, the Judge’s reliance on ‘subjective’ complaints in light of contradictory objective proofs (videotape evidence) as the basis for disability was upheld.

Thomas v. Newark Public Schools Systems.

In Thomas, the Judge of Compensation decided that the claimant, a former teacher, was not eligible for benefits for her alleged pulmonary disability. In Thomas, the claimant alleged that her employment with the Newark Public Schools System from 1984 to 2000 worsened a pre-existing asthma condition. the claimant testified that she was exposed to fumes and inhaled substances during her employment. Specifically, the claimant stated that she sometimes notice fumes that smelled ‘like gasoline or a furnace smell.’ The claimant testified that the ceilings in some rooms in the school building leaked, causing the rooms yo be damp and moldy.

A teacher union inspector visited the school building about six months after the claimant;s last day of work and documented elevated levels of carbon dioxide, obstructions in front of some air vents and limited water damage. The claimant also presented the testimony of a pulmonary expert who opined that she suffered from ‘chronic occupational asthmatic bronchitis’ and obstructive pulmonary disease.

The Judge listened to the claimant, but found that her testimony was full of “self serving statements” and uncorroborated. The Judge also decided that the claimant’s medical expert relied exclusively on information provided by the claimant, and that his opinion was not based on ‘any objective medical evidence.’ The Judge noted that the claimant’s condition did not improve after she left the employment, which undermined the claim that the employment environment worsened the claimant;s condition. Finally, and most damning, the Judge stated that the claimant had presented only “subjective characterization of the workplace environment.”

The claims were dismissed.

The Appellate Division, reviewing this case, agreed with the Judge of Compensation finding that the petitioner “has done no more than offer subjective characterization of her work environment [and] failed to provide quantitative evidence concerning the level of pollution she was exposed to, the component elements of the pollution, or the duration of exposure in any measurable manner.” The case remains dismissed.

Case Two: Worth v. UPS

In the second case, the Judge of compensation discounted the surveillance videotapes made of the claimant by the respondent, and instead relied upon the claimant’s statements about his current condition in giving the claimant an award. This case is a strong contrast to the first because here the Judge of compensation found the claimant had increased disability despite the fact that the objective evidence strongly controverted the petitioner’s claims.

In Worth, the claimant testified that a leg injury sustained at work had worsened and that he was due additional compensation. The employer provided medical treatment,, including injections onto the claimant;s leg. During the trial, the claimant testified that he “could not walk up or down stairs without using a railing” could not “enter and exit trucks without the assistance of a hand bar” and stated that “he did not believe he could continue to perform his [work] duties.”

After this testimony, the employer produced a videotape which “clearly shows the petitioner climbing stairs and getting in and out of truck without the use of a handrail.” In short, the claimant exaggerated his complaints, telling the Judge his condition was worse than it actually was in order to obtain a larger award.

The Judge of Compensation issued a decision stating that although he believed the claimant was lying about how bad his condition actually was, he was still entitled to compensation based on the report of his expert physician (the claimant’s hired expert), and gave the claimant an increase over the pre-existing disabilities.

The Appellate Division, citing ‘deference’ to the findings of the Judge of Compensation, agreed with the Judge of Compensation, and did not disturb this ruling.

Conclusions.

These two decisions help form a picture of the New Jersey workers’ Compensation System: in one case, the ‘subjective’ nature of the proofs offered by the claimant were discounted by the Judge and the case dismissed. In a second case, decided just six days before, a Judge ignored the objective evidence and awarded increased compensation to a claimant who was clearly lying about his complaints under oath. In both cases, these decisions of the Judge of Compensation were then affirmed by the Appellate Division. While one of these claims was an occupational claim (and therefore, the burden of proof was on the claimant) in each case the Judge had to consider what weight, if any, to grant to a claimant’s testimony. In the first case, the Judge gave no weight to the claimant’s purely subjective and ‘self-serving’ testimony. In the second case, the Judge gave the claimant an award even though the objective proofs (the videotape evidence) directly contradicted the subjective complaints.

What this means for handling cases: the weight given to subjective evidence by a Judge of Com
pensation will vary from Judge to Judge, from vicinage to vicinage. As these cases illustrate, trial strategy, even in cases where the employer has a killer video showing the claimant working or recreating in an unimpaired manner, must consider the latitude given to the Judge of Compensation in deciding these cases.

Cases cited: Thomas v. Newark Public Schools System, A-4877-07T1 (App. Div. July 16, 2009); Worth v. United Parcel Service, A-0292-08T1 (App. Div. July 10, 2009).

The ‘Second Injury Fund’ refers to the special fund established by N.J.S.A. 34:15-95. This part of the Workers’ Compensation Act allows the Department of Labor to collects a surcharge on all workers compensation policies issued in New Jersey. The fund used to be called the “2% Fund” because the surcharge was originally set at 2%. Now the surcharge is closer to 8%. Practitioners use the terms ‘Second INjury Fund’ and ‘2% Fund’ interchangeably.

The Second injury fund was established to encourage employers to hire workers who had prior disabilities. After World War I, there were a great many former soldiers returning to employment. Many had amputated limbs, internal injuries, and other conditions. Employers did not want to hire these former soldiers because they feared that a new industrial incident, such as the loss of another limb in a machine accident, could leave the employer exposed for paying ‘total disability’ benefits to the soldiers.

So, the Second Injury Fund was established. The Fund was instructed to pay compensation for “pre-existing illness, injury, or disease” when the pre-existing disability, considered together with the effects a new accident or injury, made the employee totally disabled. For example, imagine a fact scenario where a factory hires a worker who was missing a lower leg. The employee is then injured while working for the new employer – losing his other lower limb. Under the New Jersey Law (“loss of any two limbs shall constitute total disability”) the claimant is ‘totally disabled.’

Under the current law, the employer compensates the claimant for the percentage of overall disability contributed by the employer’s accident. In this case, presume that figure to be 50%. Applying the Second Injury Fund law, the State of New Jersey’s fund then compensates the claimant for the rest of his life – starting to pay once the employer’s contribution is exhausted (i.e., the 50% award has been paid out).

The Second Injury Fund pays in only the following situations:
(1) The claimant is now totally disabled;
(2) The claimant had a measurable disability before he came tot he employment; and
(3) It was the combination of the prior disability plus the employment accident which now renders the claimant totally disabled (in other words, the Second Injury does NOT pay where the claimant is totally disabled as a result of the ‘last accident’ alone).

In the case decided June 15, 2009, the respondent argued that yes, the claimant did sustain a compensable injury at work (he hurt his neck in 1998). The respondent went on to argue that the claimants subsequent employment duties (which were off-and-on during 1998 and 1999) worsened the claimant, causing him to be permanently and totally disabled. Basically the employer was asking the Court to find that the original work accident was the ‘pre-existing disability’ and that the “subsequent work-related aggravation of the condition” due to “occupational aggravation” was the ‘final accident.’ According tot he respondent’s argument, these two separate injuries combined to make the claimant totally disabled, thereby triggering exposure (and contribution from) the Second Injury Fund.

The Judge of Compensation held that the respondent could not show ‘subsequent occupational aggravation’ and that it was the natural progression of the first, specific incident, which caused the claimant’s total disability. By ruling this way, the Judge of Compensation denied the employer the possibility of reduced exposure – because the employer could not ‘shift’ part of it’s exposure to the Second Injury Fund.

Case: Falk v. Central Jersey Mechanical, Inc., A-4467-07T1 (App. Div. June 16, 2009).

The New Jersey Appellate Court (in Selby v. New Carson Hills Limited Partnership, App. Div. 36-2-2926) reviewed a case where an injured employee sued his employer’s landlord after receiving workers’ compensation benefits. The landlord moved to enforce an indemnification clause in the lease against the employer, who already paid the injured employee workers’ compensation benefits. Under the terms of the lease, the landlord argued that the employer should “indemnify” the landlord for any recovery the injured worker won against the landlord.

In Continental Casualty Co. v. Ameritemp, Inc., the Appeals panel found that a Pennsylvania employer had to provide New Jersey workers’ compensation benefits to their employees who ‘occasionally traveled to New Jersey in the course of their employment.’ Also at issue was the payment of premiums to secure coverage in New Jersey.

Claimant “M.G.” injured his cervical spine in a work accident in 1994. He settled his case in 1996. His condition worsened, and he re-opened his claim in 2001 and then again in 2005. Each time he ‘re-opened’ his case, his disability rating increased. When he ‘re-opened’ his case in 2005, M.G. claimed that his neck condition had worsened to the point where surgery had been required in 2003 – and that the surgery left him even more disabled than he was previously.