QUALIFICATIONS ADVISORY COMMITTEE LEGISLATION On January 27, 2009, Senators Jansen, Kahn, Birkholz, Gilbert and Garcia introduced and referred to the Committee on Commerce and Tourism a bill to amend MCL 418.209. Currently, the Michigan workers’ compensation statute allows the Governor to appoint six members to the Workers’ Compensation Qualifications Advisory Committee. The Qualifications Advisory Committee is charged with reviewing the qualifications of, interviewing, and recommending for appointment to the Governor, candidates for appointment to the Workers’ Compensation Board of Magistrates and Workers’ Compensation Appellate Commission. The amendments proposed in the pending bill would increase the number of members of the Qualifications Advisory Committee from six to ten, and would make any Governor appointment to the committee subject to the advice and consent of the Senate. The bill would appear to add another check and balance to the appointment process.

EMPLOYER ORDERED TO PAY ATTORNEY FEES ON UNPAID MEDICAL BILLS The Michigan Supreme Court issued its opinion in Petersen v Magna Corp (Case No.s 136542, 136543), on July 31, 2009. In a 4-3 decision, the Court interpreted the provision in §315(1) of the Workers’ Disability Compensation Act that provides that attorney fees on medical bills may be prorated. The Court held that “employers and their insurance carriers are the only parties subject to a proration of attorney fees under §315(1).” The Court held that health care providers and allegedly injured workers were not intended to be subjects of proration of attorney fees under §315(1). In the Petersen case, the defendant employer was voluntarily paying wage loss benefits, but refused to pay for plaintiff's alleged work related medical treatment. The total amount of medical bills incurred for the medical treatment was $153,448.54. The Court held that the attorney fee on medical bills could not be prorated among the employee and/or health care providers. The Court ordered the defendant employer to pay the entire attorney fee on the bills to plaintiff’s attorney. The majority opinion was written by Marilyn Kelly. Justice Cavanaugh concurred. Justices Hathaway and Weaver concurred in the result. The three “conservative” Justices, Justices Young, Markman, and Corrigan, dissented. The decision is also notable because the “new” majority of the Supreme Court overruled a prior Supreme Court decision regarding holding that statutes are to be interpreted according to the plain language of the statute. If you have any questions or would like to discuss the implications of this case, please do not hesistate to contact us. NOTICE: This is a privileged and confidential communication. If you have received it in error or are not the intended recipient, please delete it and destroy all copies. Thank you.

In Slais v State of Michigan, Department of State Police, 2009 ACO #10, the Workers’ Compensation Appellate Commission, in an en banc opinion (with all five appellate commissioners participating), resolved a question as to whether a record of the proceedings in a vocational rehabilitation hearing must be made. The Appellate Commission in a 4-1 decision held that a hearing before a magistrate, on an appeal of a vocational rehabilitation order issued by the director or his designate, must be preserved, either by recording or by stenographic notes. Under §319 of the Workers’ Disability Compensation Act, vocational rehabilitation disputes are initially heard by the director of the Agency or one of his designates. Often, the hearings are conducted by David R. Campbell, the State’s vocational rehabilitation consultant. In the Slais case, Mr. Slais sought approval of a vocational rehabilitation plan, requiring the employer to pay for law school tuition to vocationally rehabilitate Mr. Slais. After a hearing, Mr. Campbell ruled that the employer was responsible to pay for Mr. Slais’ law school tuition. The employer appealed Mr. Campbell’s ruling to a magistrate. The magistrate affirmed Mr. Campbell’s ruling. The employer then appealed to the Appellate Commission. The employer argued that both of the hearings should have been recorded, and that the failure to record the hearings deprived the employer of due process of law. The Appellate Commission did not require that a record of the initial hearing be made and preserved. However, the Appellate Commission held that “the Workers’ Disability Compensation Act requires that in a rehabilitation hearing before a magistrate, stenographic notes or the use of recording equipment is mandatory”. Previously, in the appeal hearing before the magistrate, no new evidence was allowed and the hearing was not on the record. Without recorded testimony from the employee, vocational experts, or other witnesses at either hearing, an employer (or an employee) could not adequately challenge an adverse holding of the vocational rehabilitation consultant or magistrate on appeal. The requirement that a record be made at the magistrate hearing now affords the opportunity for a meaningful appeal of the magistrate’s decision. 01/28/09

The Michigan Legislature passed Senate Bill 1596, and it was signed into law by Governor Jennifer Granholm on January 12, 2009. The new law amends the Workers’ Disability Compensation Act regarding jurisdiction over injuries suffered by employees working outside the State of Michigan. The Michigan Supreme Court, in Karaczewski v Farbman Stein & Co 478 Mich 28 (2007), held that the Michigan Workers’ Disability Compensation Act should be strictly construed to require that an employee prove both that the contract of hire was entered into in Michigan and that the employee was a resident of Michigan at the time of injury in order for the employee to recover workers’ compensation benefits from a Michigan employer, under Michigan Workers’ Compensation Law. Senate Bill 1596 provides that the Workers’ Compensation Agency has jurisdiction over all controversies arising out of injuries suffered outside the State of Michigan, if the injured employee was employed by an employer subject to the Act, and if either the employee was a resident of Michigan at the time of injury or the contract of hire was made in Michigan. As a practical matter, employees who work for Michigan-based companies who are injured out-of-state, would normally qualify for workers’ compensation benefits under the law of the state in which they are injured. The amendment to the statute makes it easier for such employees to also qualify for Michigan statutory workers’ compensation benefits. An employee may elect to receive benefits from one or both states. However, Michigan law provides that the Michigan employer is entitled to a credit for any benefits received from another state against the benefits the employee may receive under Michigan law. 01/28/09

ILLEGAL ALIEN LEGISLATION STATUS The Michigan Court of Appeals’ opinions in Sanchez v Eagle Alloy, Inc., and Vasquez v Eagle Alloy, Inc., 254 Mich App 651, 658 NW 2nd 510, appeal granted 469 Mich 955, 671 NW 2nd 874 (2003), vacated, application denied 471 Mich 851, 684 NW 2nd 342 (2004), were finalized on July 23, 2004, when the Michigan Supreme Court vacated its previous grant of leave to appeal (in other words, deciding not to review the cases). The Court of Appeals had held that, once it was discovered that the employees were undocumented illegal aliens, they could no longer legally work and, therefore, were no longer entitled to weekly wage loss benefits. The Court reasoned that, by working without proper legal authorization, the employees were committing a crime under a Federal Law, the Immigration Reform and Control Act (IRCA), and were, therefore, barred from receiving wage loss benefits under MCL 418.361(1). MCL 418.361(1) provides that, “an employer shall not be liable for compensation . . . for such periods of time that the employee is unable to obtain or perform work because of imprisonment or commission of a crime.” On December 11, 2007, Representative Steve Tobocman and Senator Hansen Clark introduced legislation apparently intended to nullify the Court of Appeals’ decision in Sanchez and Vasquez. The bill proposed to amend §361 of the workers’ disability compensation act (MCL 418.361), adding the following language at the end of subsection (1): As used in this subsection “commission of a crime” does not include an alien’s working without employment authorization or an alien’s use of false documents to obtain employment or to seek work. Neither bill ever advanced out of committee. Representative David Agema, on February 5, 2009, introduced another bill, pertaining to illegal aliens. The bill seeks to amend MCL 418.141 and 418.230, and to add a new section, MCL 418.307. The bill provides an absolute defense to employee actions against an employer for workers’ compensation benefits or for personal injury arising out of the employer's negligence or gross negligence if the employee meets all three of the following criteria: (1) The employee is an undocumented alien who is not permitted to work in the United States under federal law; (2) The employee presented fraudulent identification to the employer; and (3) The employer did not know and had no reason to believe that the employee was not permitted to work in the United States. The bill would also require that officers or employees of the Workers’ Compensation Agency immediately report to federal authorities workers’ compensation claims filed by undocumented aliens. The bill has been referred to the Committee on Judiciary. In summary, the bill precludes illegal aliens from recovering workers’ compensation benefits or personal injury damages due to an employer’s negligence or gross negligence.