STATUTE REGARDING MICHIGAN JURISDICTION OVER OUT-OF-STATE INJURIES HELD NOT RETROACTIVE

The statute which governs the jurisdiction of the Michigan Workers’ Compensation Agency over out-of-state injuries, MCL 418.845, was amended by 2008 PA 499. It became effective January 13, 2009. The bipartisan amendment was enacted in response to the Michigan Supreme Court’s decision in Karaczewski v Farbman Stein & Co., 478 Mich 28, 732 NW2d 56 (2007). Karaczewski overruled prior case law and held that MCL 418.845 provided for Michigan jurisdiction of out-of-state injuries only if (1) the employee resided in Michigan at the time of injury and (2) the contract of hire was made in Michigan. Previous case law had not enforced the residency requirement.

Following the Supreme Court’s decision in Karaczewski, the legislature enacted 2008 PA 499, effective January 13, 2009, amending MCL 418.845. The amendment provided jurisdiction of out-of-state injuries “if the injured employee is employed by an employer subject to this act and if either the employee is a resident of this state at the time of injury or the contract of hire was made in this state” (Emphasis added.)

On May 10, 2010, the Michigan Supreme Court issued its opinion in Brewer v A. D. Transport Express, Inc. (Case# 139068, May 10, 2010). In that case, Mr. Brewer (plaintiff), a Michigan resident, sought workers’ compensation benefits under Michigan law for an injury he allegedly suffered in Ohio in 2003 while working for the defendant employer as a truck driver. The employer denied that plaintiff’s contract of hire was made in Michigan and the Magistrate found that plaintiff had failed to prove where and how he was hired. The Magistrate dismissed plaintiff’s Application for Mediation or Hearing. The Workers’ Compensation Appellate Commission affirmed, finding no facts that would allow the Magistrate to conclude that the contract of hire was made in Michigan. The Court of Appeals denied plaintiff’s application for leave to appeal. Plaintiff applied for leave to appeal to the Michigan Supreme Court. The Michigan Supreme Court agreed to hear the case on the limited issue of whether the legislative change to MCL 418.845 by 2008 PA 499, should be applied to plaintiff’s case.

The Supreme Court, in a 5-2 decision, affirmed the decision of the Workers’ Compensation Appellate Commission upholding the Magistrate’s dismissal of plaintiff’s petition for lack of jurisdiction. The Supreme Court held that the amendment of MCL 418.845 enacted by 2008 PA 499 does not apply retroactively to cases in which the claimant was injured before the effective date of the amendment. (Slip opinion at 9.) The court noted that the amendment contained no language clearly manifesting a legislative intent that it apply retroactively. Id. The court also observed that, by expanding the Workers’ Compensation Agency’s jurisdiction “to include out-of-state injuries suffered by Michigan employees whose contracts of hire were not made in Michigan, the amendment imposed a new legal burden on out-of-state employers not previously subject to” the Agency’s jurisdiction. Id., at 8-9. The court further noted that the amendment “also potentially enlarged existing rights for Michigan residents injured in other states under contracts of hire not made in Michigan.” Id., at 9.

In summary, the statutory amendment enlarging Michigan Workers’ Compensation Agency jurisdiction over out-of-state injuries, effective January 13, 2009, was held not to be retroactive to injuries occurring prior to the effective date of the amendment.

If you have any questions regarding out-of-state jurisdiction or would like to discuss this matter further, please contact us at your convenience.

05/18/10

CASE CLARIFIES PLAINTIFF'S BURDEN OF PROOF ON DISABILITY

PROOF OF LOSS OF WAGE EARNING CAPACITY

In Binkley v Alstom Power, Inc., 2009 ACO #212, the Workers’ Compensation Appellate Commission, in a two-to-one decision, clarified the ways in which plaintiff could prove loss of wage earning capacity in jobs suitable to his or her qualifications and training. In the Binkley case, there was no testimony from a vocational rehabilitation expert regarding plaintiff’s maximum wage earning capacity in jobs suitable to his qualifications and training, or whether there were still jobs plaintiff could perform post-injury in which he could earn his maximum reasonable wage at the time of injury. Further, the magistrate found that plaintiff “conducted a very limited job search following his injury. He called the Boilermakers Union on a few occasions, but realized that doing so was useless because he can no longer work as a boilermaker.” Magistrate’s decision at 13.

Plaintiff worked as journeyman boilermaker. He was highly compensated. He earned $28.00 per hour, plus fringe benefits, when he was injured on December 1, 2006. The magistrate found that he sustained a work related injury to his low back and right lower extremity and that the injury had caused a medically distinguishable condition which precluded plaintiff from performing his job as a boilermaker. Notwithstanding the absence of vocational testimony and a very limited job search by plaintiff, the magistrate found plaintiff to be disabled. The magistrate based his fact finding on “common sense.” “The magistrate found it would defy common sense to conclude the plaintiff could duplicate or exceed his boilermaker wages using his sedentary skills.” 2009 ACO #212 at 15.

In writing the majority opinion, Commissioner Donna Grit found that plaintiff’s “evidence falls short on step two of the Stokes disability analysis, which requires him to prove what jobs he is qualified and trained to perform that have the same salary range as his maximum wage earning capacity at the time of injury.” Id., at 13. Commissioner Grit went on to note that there was no statutory requirement to produce vocational testimony. However, in quoting the Stokes decision, she noted that a plaintiff “must provide some reasonable means to assess employment opportunities to which his qualifications and training might translate.” Id., citing Stokes v Chrysler LLC, 481 Mich. 266, 282 (2008).

Importantly, the magistrate had made a finding that plaintiff had developed skills while working as a boilermaker which could translate into other jobs plaintiff had not sought. The magistrate noted that plaintiff had obtained skill in reading blueprints, welding, being a working foreman, general construction knowledge, and knowledge of tools. Thus, although plaintiff may have been disabled from performing the full realm of boilermaker duties, he had other, potentially transferable skills.

The Appellate Commission reversed the magistrate’s grant of an open award of benefits, essentially finding that “common sense” was an inadequate basis on which to determine plaintiff’s inability to duplicate or exceed his boilermaker wages with his medical restrictions. The Appellate Commission held that, in order to meet his burden of proof on the issue of disability under Stokes, plaintiff would either have to provide expert testimony from a vocational rehabilitation consultant, or show that he had conducted a good faith job search, proving that there were no jobs available to him, suitable to his qualifications and training, which would have matched or exceeded his maximum reasonable wage at the time of injury.

In summary, this decision is important because it clarifies the types of proof that will satisfy plaintiff’s burden of proving loss of wage earning capacity and disability under Stokes. A mere “common sense” conclusion that the employee is too skilled, to highly compensated and too disabled to find similar paying work is inadequate. The employee must prove the actual absence of or inability to obtain (due to work related medical restrictions) jobs paying his maximum reasonable wage in his relevant job market.

If you have any questions or would like a copy of the full text of the Appellate Commission decision, please contact us.

04/30/10

MICHIGAN 2010 MAXIMUM RATE AND WEEKLY BENEFIT TABLES

MICHIGAN 2010 MAXIMUM RATE AND WEEKLY BENEFIT TABLES

The Michigan Workers' Compensation Agency has made the 2010 Maximum Rate and Weekly Benefit Tables available at the following link: http://www.michigan.gov/documents/wca/wca_2010_Rate_Book_302483_7.pdf.

Also, the Agency's updated weekly benefit rate calculation program will become available for download on or about January 8, 2010, at the following link:

http://www.michigan.gov/wca/0,1607,7-191--108224--,00.html .

If you have any questions or would like to discuss this information, please contact us at your convenience.

Thank you!

Leonard M. Hickey

Hickey Combs PLC

3358 Eagle Run Drive NE

Grand Rapids, MI 49525-7055

Direct Dial: 616/364-2555

Facsimile: 616/364-2551

Cellular: 616/550-1661

E-mail: lhickey@hickeycombs.com

Website: hickeycombs.com

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.

WORKERS' COMPENSATION MILEAGE RATE CHANGE EFFECTIVE JANUARY 1, 2010

WORKERS' COMPENSATION MILEAGE RATE CHANGE EFFECTIVE JANUARY 1, 2010

The Michigan Workers' Compensation Agency has posted the following notice on its website:

"The Department of Management and Budget has advised that effective January 1, 2010, the mileage rate will decrease to [$].50 per mile. There will be no change in the other travel reimbursement rates."

For more information, please double-click on the following link: http://www.michigan.gov/wca/0,1607,7-191--228208--,00.html.

If you have any questions or would like to discuss this information, please contact me or John Combs (616-364-2552).

Thank you!

IS LUMBAR DISC DEGENERATION REALLY DUE TO "WEAR & TEAR"

IS LUMBAR DISC DEGENERATION REALLY DUE TO “WEAR & TEAR”

A multidisciplinary, multinational research project, called the Twin Spine Study, was started in 1991. Collaborators, primarily in Canada, Finland and the United States, investigated determinants of disc degeneration, including occupational exposures, driving and whole-body vibration exposure, smoking exposure, anthropomorphic factors, heritability, and the identification of genotypes associated with disc degeneration.

The methods and findings of the Twin Spine Study project were reviewed in a recent article in The Spine Journal 9 (2009) 47-59, entitled “The Twin Spine Study: Contributions To A Changing View of Disc Degeneration.”

The results of the study were summarized in the abstract of the article as follows:

Among the most significant findings were a substantial influence of heredity on lumbar disc degeneration and the identification of the first gene forms associated with disc degeneration. Conversely, despite extraordinary discordance between twin siblings in occupational and leisure-time physical loading conditions throughout adulthood, surprisingly little effect on disc degeneration was observed. Studies on the effects of smoking on twins with the large discordance in smoking exposure demonstrated an increase in disc degeneration associated with smoking, but this effect was small. No evidence was found to suggest that exposure to whole-body vibration through motorized vehicles leads to accelerated disc degeneration in these well-controlled studies. More recent results indicate that the effect of anthropometric factors, such as body weight and muscle strength on disc degeneration, although modest, appear in this work to be greater than those of occupational physical demands. In fact, some indications were found that routine loading may actually have some benefits to the disc.

In summary, this study seems to suggest that the “wear and tear” of exertional activity, including work, has less of an influence on degenerative disc disease than heredity.

Hickey Combs PLC has been using this and similar research to the advantage of our clients in cross-examining plaintiffs’ expert medical witnesses in degenerative disc disease cases.

11/06/09

Board of Magistrates and Appellate Commission Appointments

Board of Magistrates and Appellate Commission Appointments

The following announcement was released by Workers' Compensation Agency Director, Jack Nolish, on September 14, 2009:

______________________________________________________________________________

Below is a list of appointments made by Governor Jennifer M. Granholm on September 14, 2009.

Appointments subject to disapproval by the Michigan Senate:

Workers’ Compensation Appellate Commission

Mr. Murray A. Gorchow, county of Oakland, succeeding Granner Ries for a term commencing October 1, 2009 and expiring September 30, 2013.

Mr. Granner S. Ries, county of Macomb, succeeding Martha Gasparovich who has resigned, is appointed for a term commencing September 14, 2009 and expiring September 30, 2010.

Mr. Gregory A. Przybylo, county of Ingham, is reappointed for a term expiring September 30, 2013.

Appointments NOT subject to disapproval by the Michigan Senate:

Qualifications Advisory Committee

Mr. Carlos F. Bermudez, county of Wayne, is reappointed to represent employee interests for a term expiring October 1, 2013.

Mr. Jeffery V. Stuckey, county of Ingham, is reappointed to represent employer interests for a term expiring October 1, 2013.

Chairperson of the Workers’ Compensation Appellate Commission

Pursuant to Executive Order 2003-18, MCL 445.2011, please be advised that Mr. Murray A. Gorchow is designated to serve as Chairperson of the Workers’ Compensation Appellate Commission for a term commencing October 1, 2009 and expiring at the pleasure of the Governor.

Chairperson of the Worker’s Compensation Board of Magistrates

Pursuant to Section 213 of the Worker’s Disability Compensation Act of 1969, 1969 PA 317, MCL 418.213 and Executive Order 2003-18, MCL 445.2011, please be advised that Mr. Christopher P. Ambrose, county of Ingham, succeeding Murray A. Gorchow who has resigned, is designated as Chairperson of the Worker’s Compensation Board of Magistrates for a term commencing October 1, 2009 and expiring at the pleasure of the Governor.

EMPLOYER ORDERED TO PAY ATTORNEY FEES ON UNPAID MEDICAL BILLS

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.

QUALIFICATIONS ADVISORY COMMITTEE LEGISLATION

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.

ILLEGAL ALIEN LEGISLATION STATUS

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.

NEW LAW REGARDING OUT-OF-STATE JURISDICTION

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

HEARING RECORD REQUIRED IN VOCATIONAL REHABILTIATION HEARING BEFORE A MAGISTRATE

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

Out-of State Jurisdiction: New Legislation

In a previous decision, Karaszewski v Farbman, Stein & Co., 474 Mich 1087 (2006), the Michigan Supreme Court held that, in order for an employee who is injured out-of-state to collect Michigan workers’ compensation benefits, the statute, MCL 418.845, requires that the 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 the injury.

A bill was introduced by Senator Allen on November 6, 2008, to amend MCL 418.845. The amendment would permit an employee who sustains a work related injury out of state to receive workers’ compensation benefits “if either the employee is a resident of this state at the time of injury or the contract of hire was made in this state.” The bill passed the Michigan Senate on November 13, 2008. The bill has been referred to the Committee on Labor, apparently to coordinate passage of the bill in the House of Representatives.

Reportedly, the bill was supported by both employer and employee advocates. Many Michigan employers have employees who work out of state. If an employer did not have insurance coverage for out of state work injuries, and an employee was injured out of state but did not qualify for Michigan workers’ compensation, the employee would not have access to the financial safety net and medical treatment afforded by workers’ compensation benefits. Arguably, the employer would not have the benefit of the exclusive remedy provision of the workers’ compensation statute and the employee could then sue the employer for unlimited personal injury damages, including pain and suffering.

If the amendment to MCL 418.845 passes and is signed into law, it will clarify jurisdiction for out of state injuries and nullify the holding in the Karaszewski case.

Please share this summary with others who may be interested in it.

If you have any questions or would like to discuss this further, please do not hesitate to contact us.

11/21/08

EFFICACY OF SURGERY FOR OSTEOARTHRTIS OF THE KNEE

A research article in the September 11, 2008, issue of The New England Journal of Medicine, concludes that "Arthorscopic surgery for osteoarthritis of the knee provides no additional benefit to optimized physical and medical therapy."

The article is entitled "A Randomized Trial of Arthroscopic Surgery for Osteoarthritis of the Knee." An abstract of the article can be found at the following website address: http://content.nejm.org/cgi/content/abstract/359/11/1097.

For workers' compensation purposes, the article raises a question about the reasonableness and necessity of arthroscopic knee surgery for findings of only osteoarthritis and suggests that more conservative treatment, physical and medical therapy, may be just as effective as surgery (perhaps at lower cost and shorter recovery time?).

Please share this e-mail with others who may be interested in this information.

Thank you!

Len Hickey and John Combs

9-19-08

MENTAL DISABILITY CLAIM DENIED DUE TO EMPLOYEE'S INTENTIONAL AND WILLFUL MISCONDUCT

MENTAL DISABILITY CLAIM DENIED DUE TO EMPLOYEE’S INTENTIONAL AND WILLFUL MISCONDUCT

The Michigan Supreme Court, in a 4 to 3 decision, recently held that a mental disability arising out of discipline administered for the employee’s refusal to attend an employer-mandated event constituted “intentional and willful misconduct”, barring recovery of workers’ disability compensation benefits. Brackett, v Focus Hope, Inc., ___Mich___; ___NW2d___ (Case # 135375, July 30, 2008).

MCL 418.305 provides that, “[i]f the employee is injured by reason of his intentional and willful misconduct, he shall not receive compensation under the provisions of this act.”

When plaintiff was hired by the defendant employer, she was advised that the mission of Focus Hope was to seek racial equality and reconciliation. Plaintiff was advised that attendance at the annual Martin Luther King, Jr., Birthday Celebration, was mandatory. Plaintiff advised her supervisor that she would not attend the King Day event because it was being held in a city (Dearborn) where she and her family had had bad experiences as African Americans and because she believed the history of race relations in that city was not in keeping with Dr. King’s aspirations.

Following the event, plaintiff was docked for two days’ pay and, later, some of her job responsibilities were taken away. Plaintiff subsequently met with the Chief Executive Officer (CEO). The CEO expressed her disappointment in plaintiff and said that plaintiff did not deserve to receive a paycheck from Focus Hope. When plaintiff asked if she was being fired, the CEO shrugged her shoulders and let plaintiff out of the office. The CEO testified that she remained calm and that she did not yell or threaten to fire plaintiff. Plaintiff alleged that the CEO’s comments traumatized her. Plaintiff left work and never returned. Plaintiff’s psychologist opined that plaintiff suffered a major depression precipitated by work events and that she was unable to work.

At trial, the magistrate awarded plaintiff benefits, rejecting the defense argument that plaintiff’s misconduct barred her recovery of benefits under MCL 418.305. The Workers’ Compensation Appellate Commission and Court of Appeals affirmed the magistrate’s award of benefits. The Supreme Court reversed the judgment of the Court of Appeals, denying benefits.

The Michigan Supreme Court cited its prior decision in Daniel v Dep’t of Corrections 468 Mich 34; 658 NW2nd 144 (2003). The Court held that the plaintiff’s refusal to attend the King Day event constituted intentional and willful misconduct. Because plaintiff's alleged mental disability flowed directly from the discipline for her misconduct, the Court held that plaintiff’s injury arose out of her intentional and willful misconduct, barring her recovery of benefits.

WHAT THE STOKES DECISION MEANS TO EMPLOYERS

WHAT THE STOKES DECISION MEANS TO EMPLOYERS

By: Leonard M. Hickey, Hickey Combs PLC

On June 12, 2008, the Michigan Supreme Court issued its opinion in Stokes v Chrysler LLC. In a 4 to 3 decision, the Court provided clarification and guidance (mostly to lawyers) on what was required to prove disability under its prior decision in Sington v Chrysler Corp., 467 Mich 144; 648 NW2d 624 (2002), and the threshold of proof required of the plaintiff.

Stokes does not change the definition of disability.

It is important to keep in mind that Stokes does not change the definition of disability. The definition of disability was established in Sington v Chrysler Corp. In Sington, the court held that an employee’s disability is not measured against a single job, but is measured against the universe of jobs which are suitable to the employee’s qualifications and training, and which would pay the employee’s maximum reasonable wage.

The Supreme Court read the prior opinions of the Workers’ Compensation Appellate Commission and Court of Appeals as holding that all the employee had to prove was inability to do the job by which he or she was injured, thereby shifting the burden of proof to the employer to show that the employee was not disabled by proving the existence of jobs suitable to the employee’s qualifications and training, within the employee’s medical restrictions, which would pay as much or more than the employee was earning at the time of the injury. The Supreme Court held that was an improper shifting of the burden of proof from the employee to the employer.

The prior appellate opinions also held that the employer was not entitled to conduct any “discovery” to determine the extent and nature of the employee’s qualifications and training. Specifically, the employer was denied the opportunity to have the employee undergo a vocational assessment and transferable skills analysis by a qualified vocational rehabilitation counselor.

The Supreme Court disagreed with the prior appellate opinions. The court held that the employee’s burden of proof is to show more than just inability to perform the job he was performing at the time of injury. The court stated it this way:

The claimant must simply demonstrate in light of his injury that there are no reasonable employment options for avoiding a diminution in wages. If there are such options, a claimant’s wage earning capacity has obviously not been “limited” and he is not entitled to benefits; if there are not such options,then the claimant’s wage-earning capacity has equally obviously been limited, and he is entitled to benefits.

Slip opinion at 24 (emphasis in original).

The following excerpt from the conclusion in the Court’s opinion succinctly outlines its holding:

The claimant bears the burden of proving a disability by a preponderance of the evidence under MCL 418.301(4), and the burden of persuasion never shifts to the employer. The claimant must show more than a mere inability to perform a previous job. Rather, to establish a disability, the claimant must prove a work related injury and that such injury caused a reduction of his maximum wage earning capacity in work suitable to the claimant’s qualifications and training. To establish the latter element, the claimant must follow these steps:

1. The claimant must disclose all of his qualifications and training;

2. The claimant must consider other jobs that pay his maximum pre-injury wage to which the claimant’s qualifications and training translate;

3. The claimant must show that the work-related injury prevents him from performing any of the jobs identified as within his qualifications and training; and

4. If the claimant is capable of performing some or all of those jobs, the claimant must show that he cannot obtain any of these jobs.

If the claimant establishes all of these factors, then he has made a prima facie showing of disability satisfying MCL 418.301(4), and the burden of producing competing evidence then shifts to the employer. The employer is entitled to discovery before the hearing to enable the employer to meet this production burden. While the precise sequence of the presentation of proofs is not rigid, all these steps must be followed.

Slip Opinion at 31-32.

Practical application:

Most people strive to find the highest paying jobs within their relevant, geographic labor market. Therefore, there is a very high likelihood that a claimant in a workers’ compensation case is earning the highest level of wages and benefits at the time of injury that he or she has in his or her work life. In other words, the job of injury represents the employee’s maximum reasonable wage earning capacity under Sington. In those cases, it will be the job of injury that will be the benchmark against which wage loss is measured under Sington. In cases where the job of injury is the highest paying the employee has had, and the employee is medically disabled from performing that job due to a work related injury, the vocational assessment, transferable skills analysis, and job search are unlikely to find available jobs, suitable to the employee’s qualifications and training, within the employee’s medical restrictions, which will pay as much or more than the employee earned at the job of injury. In those cases, the employer may choose not to exercise its rights under Stokes to obtain a vocational assessment and transferable skills analysis. Many times, the cost of the involvement of the vocational rehabilitation expert may outweigh the benefits.

Another type of employee where there may be limited benefit to exercising the employers right under Stokes to conduct a vocational assessment, transferable skills and job search is the employee is known to have a low level of qualifications, training, education, and transferable job skills. This type of employee may be characterized by failure to obtain a high school diploma or GED and a work history involving only unskilled, common labor.

One type of employee where an employer may want to take advantage of the opportunity under Stokes to obtain a vocational assessment, transferable skills analysis, and job search, is the employee who is known to be working below his or her qualifications, training, education and/or experience. Often times, these employee’s are identified by reviewing their employment applications and resumes. Those documents may reveal that the employee has a history of educational attainment, higher skilled jobs, higher paying jobs, and/or jobs involving supervisory or leadership roles. Perhaps they are working in a less skilled and lower paying job because of a workforce reduction, economic conditions, relocation, family circumstances, etc. In those cases, the potential benefit of involving the services of a vocational expert may outweigh the cost.

One benefit of the Stokes decision to employers is that it imposes an affirmative obligation on the employee to disclose information which may not have been requested or included on a job application or resume. Stokes imposes a burden on the employee to demonstrate his or her qualifications and training. The court interprets “qualifications and training” broadly, to include education, job history, job experience, military service and training, vocational training, job related licenses, certifications and registrations, aptitudes, and talents. Disclosure of that information by the employee in the course of workers’ compensation litigation should help the employer make a decision on whether to incur the cost of a vocational assessment, transferable skills analysis, and job search.

Stokes empowers employers and their attorneys to pose written questions (interrogatories) to employees, specifically requesting the qualifications and training information noted above. Stokes empowers Magistrate’s to order employee’s to answer the questions and provide the relevant information to employers. An employee’s meaningful responses to interrogatories requesting information about qualifications and training, may also permit the employer, its claims person, and its lawyer, to make a more informed judgment about the benefits versus cost of obtaining a vocational expert to conduct a vocational assessment and transferable skills analysis. The written interrogatory answers also afford the opportunity for the employer to provide a vocational expert with preliminary information which could assist the vocational expert in deciding whether a further vocational assessment is warranted or may provide sufficient information for the vocational expert to conduct an initial vocational assessment and transferable skills analysis. Meaningful interrogatory answers could provide a more cost effective way to develop information about an employee’s transferable skills and job openings for which they might qualify.

Standard Form Interrogatories

The Executive Committee of the State Bar of Michigan Workers’ Compensation Section, the Director of the Workers’ Compensation Agency, and the Board of Magistrates are preparing a standard form of draft interrogatories (questions) to be submitted to plaintiff employees in litigated workers’ compensation claims. It is contemplated that the interrogatories will be printed on an official Agency form. The interrogatories are being developed with input from vocational rehabilitation professionals. The purpose of the interrogatories is to elicit from plaintiff employees information regarding their qualifications and training. Theoretically, the plaintiff employee’s answers to the interrogatories could be submitted to a vocational rehabilitation professional to determine whether further vocational assessment and job search are likely to be fruitful.

Other observations:

The following are some additional observations about the Supreme Court’s recent decision in Stokes v Chrysler LLC:

· Employees have the burden of proof; it is not the employer’s burden of proof to show that an employee can work.

· Employees do not have to use a vocational consultant to prove disability.

· Employee’s can meet their burden of proving disability by proving that they went out and looked for jobs, applied for jobs, and could not obtain jobs within their qualifications and training, which would pay them as much or more than their maximum wage earning capacity, because of their work related medical restrictions.

· Employers can do discovery and obtain interrogatory answers before deciding whether involvement of a vocational expert or a formal vocational assessment are warranted.

· Employers can have vocational experts review interrogatory answers to recommend whether further vocational assessment, transferable skills analysis, and/or job search is warranted.

· For employees with low qualifications and training, there may be no benefit to a vocational assessment.

Types of employee’s where Stokes may help to disprove disability:

The following are categories of employee’s where a vocational assessment, transferable skills analysis and/or job search may be beneficial in disproving disability:

· Underemployed employee’s who are working below their qualifications and training;

· Employee’s working in professional fields;

· Employee’s with management or supervisory experience;

· Employee’s with situation-specific (e.g., allergies) or person-specific (e.g., psychological claims involving a particular supervisor) disabilities; and

· Part-time, low wage earning employees.

Things to remember about Stokes:

· It does not change or create a new definition of disability;

· It increases the employee’s burden of proof;

· It requires employee’s to disclose all qualifications and training;

· It permits the employer to engage in discovery to obtain additional information about the employee’s qualifications and training;

· It permits the employer to undertake a vocational assessment.

· The employer can undertake a cost versus benefit analysis in deciding whether to involve a vocational expert.

STOKES v CHRYSLER - PROOF OF DISABILITY - DECIDED BY MICHIGAN SUPREME COURT

STOKES v CHRYSLER - PROOF OF DISABILITY - DECIDED BY MICHIGAN SUPREME COURT

The Michigan Supreme Court released its decision in Stokes v Chrysler LLC on June 12, 2008 (Case No. 132648). In a 4-3 decision, the court reversed the decision of the Court of Appeals (Stokes v Daimler Chrysler Corp., 272 Mich App 571 (2006)). The Court of Appeals had held that, once an employee had proved inability, due to a work related injury and impairment, to perform jobs the employee had previously performed, the employee had satisfied his burden to prove a baseline case of compensability and the burden then shifted to the employer to show that the employee was not disabled by proving that there were other jobs suitable to the employee’s training and qualifications which paid the maximum wages that the employee had previously earned.

The Supreme Court held that an employee must show more than a mere inability to perform a previous job in order to shift the burden of proof to the employer. The Court held that the employee must prove that he is disabled from all jobs he is qualified to perform within the same salary or pay range as his maximum earning capacity at the time of injury. The employer would then have the opportunity to prove the existence of jobs paying the employee’s maximum wage within his qualifications and training, and prove that the employee is not disabled.

The Court also required the employee to disclose all of his education, experience, skills, training and qualifications, whether or not relevant to the job the claimant was performing at the time of the injury. The Court, in overruling the Court of Appeals, held that the employer has the right to “discovery” regarding the employee’s transferable skills. The Court held that an employer had the right to retain a vocational expert to interview the employee and perform a transferable skills analysis.

In summary, the Court clarified what the employee has to prove, and what information the employer has access to, in determining whether an employee is disabled within the meaning of the Court’s prior decision in Sington v Chrysler Corp, 467 Mich 144; 648 NW2d 624 (2002). It is important to remember that an employee only needs to prove inability to perform jobs within his or her maximum salary or pay range.STOKES v CHRYSLER - PROOF OF DISABILITY - DECIDED BY MICHIGAN SUPREME COURT

The Michigan Supreme Court released its decision in Stokes v Chrysler LLC on June 12, 2008 (Case No. 132648). In a 4-3 decision, the court reversed the decision of the Court of Appeals (Stokes v Daimler Chrysler Corp., 272 Mich App 571 (2006)). The Court of Appeals had held that, once an employee had proved inability, due to a work related injury and impairment, to perform jobs the employee had previously performed, the employee had satisfied his burden to prove a baseline case of compensability and the burden then shifted to the employer to show that the employee was not disabled by proving that there were other jobs suitable to the employee’s training and qualifications which paid the maximum wages that the employee had previously earned.

The Supreme Court held that an employee must show more than a mere inability to perform a previous job in order to shift the burden of proof to the employer. The Court held that the employee must prove that he is disabled from all jobs he is qualified to perform within the same salary or pay range as his maximum earning capacity at the time of injury. The employer would then have the opportunity to prove the existence of jobs paying the employee’s maximum wage within his qualifications and training, and prove that the employee is not disabled.

The Court also required the employee to disclose all of his education, experience, skills, training and qualifications, whether or not relevant to the job the claimant was performing at the time of the injury. The Court, in overruling the Court of Appeals, held that the employer has the right to “discovery” regarding the employee’s transferable skills. The Court held that an employer had the right to retain a vocational expert to interview the employee and perform a transferable skills analysis.

In summary, the Court clarified what the employee has to prove, and what information the employer has access to, in determining whether an employee is disabled within the meaning of the Court’s prior decision in Sington v Chrysler Corp, 467 Mich 144; 648 NW2d 624 (2002). It is important to remember that an employee only needs to prove inability to perform jobs within his or her maximum salary or pay range.

NEW BILL PROTECTS ILLEGAL ALLIENS' RIGHT TO WORKERS' COMPENSATION

NEW BILL PROTECTS ILLEGAL ALIENS’ RIGHT TO WORKERS’ COMPENSATION

On December 11, 2007, majority floor leader, Steve Tobocman (D-Detroit) and Senator Hansen Clarke (D-Detroit) introduced legislation apparently intended to nullify the Court of Appeals’ decision in Sanchez v Eagle Alloy, Inc., 254 Mich App 651, 658 NW2d 510, appeal granted, 469 Mich 955, 671 NW2d 874 (2003), vacated, application denied, 471 Mich 851, 684 NW2d 342 (2004)

The bill proposes 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."

In Sanchez, the Michigan Court of Appeals held that, once it was discovered that the employee was an undocumented, illegal alien, and the employer could no longer employ him, he was no longer entitled to weekly wage loss benefits. The Court reasoned that, by working without proper legal authorization, the employee was committing a crime under a federal law, the Immigration Reform and Control Act (IRCA), and was, therefore, barred from receiving wage loss benefits under MCL 418.361(1). Although initially granting leave to appeal the decision of the Court of Appeals, the Michigan Supreme Court later vacated the grant of leave to appeal, leaving the opinion of the Court of Appeals as the binding precedent on the illegal alien issue.

The press release issued by the sponsoring legislators seems to include a misunderstanding that “all workers in Michigan . . . pay into the workers’ compensation fund” and have their wages taxed to provide workers’ compensation coverage. There is no state operated workers’ compensation fund in Michigan. Workers’ compensation coverage in Michigan is funded by employers, not employees.

We shall follow the progress of this bill and keep you apprised of any significant developments.

1-4-08

SEASONAL EMPLOYEES - No benefits payable in the off season?

PATHOLOGICAL CHANGE - MICHIGAN SUPREME COURT REFINES ITS PRIOR HOLDING IN RAKESTRAW

Pathological Change - Michigan Supreme Court Refines Its Prior Holding in Rakestraw

The Michigan Supreme Court (MSC) recently issued an order in the case of Fahr v General Motors Corp. (Case No. 133500, June 22, 2007), holding that the Workers' Compensation Appellate Commission (WCAC) had misinterpreted the MSC's decision in Rakestraw v General Dynamics Land Systems, Inc., 469 Mich 220 (2003).

In Rakestraw, the MSC had held that, in order for a worker to recover workers' compensation benefits for a pre-existing condition, the worker must show that the work caused an injury that is "medically distinguishable" from the progression of the underlying pre-existing condition.

In its decision in Fahr, the WCAC asserted that Rakestraw does not require a "pathological change" in a pre-existing condition in order for a plaintiff to establish that a work-related personal injury has occurred. The MSC held that the WCAC had misinterpreted Rakestraw. The MSC held that a "medically distinguishable" injury cannot be proved "by merely showing a worsening of symptoms."

The MSC offered some guidelines on proving a pathological change in the underlying pre-existing condition. The court stated that, "[a]lthough a medical expert need not use the phrase 'change in pathology,' there must be record evidence from which a legitimate inference may be drawn that the plaintiff's underlying condition has pathologically changed as a result of a work event or work activity in order to meet the legal test for a personal injury under MCL 418.301(1) and Rakestraw.

SIGNIFICANCE

This decision seems to reverse a line of WCAC cases which had been viewed as diluting the original intent of Rakestraw by only requiring a worker to show a change in symptoms, not pathology, in order to prove a new work injury. In Rakestraw, the MSC had used the phrase "medically distinguishable". This order clarifies that the court meant a "pathological change", not just a symptomatic change, in condition for a pre-existing condition to be compensable.

6/27/07

Michigan S. Ct. Limits Ability of Out-of-State Workers to Collect Benefits From Michigan Employers

The Michigan Supreme Court, in a 4-1-2 decision in Karaczewski v Farbman Stein & Co., (Case No. 129825, May 23, 2007), overruled Boyd v W G Wade Shows, 443 Mich 515; 505 NW2d 544 (1993), in holding that "a Florida resident who was injured in a Florida workplace accident may [not] recover workers' compensation benefits in Michigan merely because he was hired in Michigan.” The majority opinion was written by Justice Corrigan. The four member majority applied the ruling retroactively. Justice Weaver concurred in overruling Wade, but dissented on applying the ruling retroactively. Justices Kelly and Cavanaugh dissented.

This decision gives relief to Michigan employers with out-of-state employees whose only connection with Michigan was the contract of hire.

5-24-07

OBESITY INCREASES WORKERS' COMPENSATION COSTS

In a recent study by the Duke University Medical Center, it was "found that obese workers filed twice the number of workers' compensation claims, had seven times higher medical costs from those claims and lost 13 times more days of work from work injury or work illness than did nonobese workers."

To review the Duke University article and obtain further details, please double-click on this link:

www.dukemednews.org/news/article.php?id=10044

4-26-07

Symptomatic Aggravation Revisited by Michigan Supreme Court

The Michigan Supreme Court (MSC), in an Order, dated April 4, 2007, by a 5-2 majority, reversed the decision of the Michigan Court of Appeals (COA), awarding benefits to the plaintiff employee in the case of Hileman v Trailer Equipment, Inc, (No. 132850, April 4, 2007). The MSC cited its prior decision in Rakestraw v General Dynamics Land Systems, 469 Mich 220, 231 (2003).

The MSC held that, where plaintiff's surgery was occasioned solely by a non-occupational injury, and even though plaintiff's disabling symptoms were worsened by work activity, the magistrate correctly found that work-relationship was not proven after the date of surgery, and affirmed the magistrate's closed award of benefits.

This order suggests that the MSC may not agree with appellate decisions interpreting Rakestraw, which hold that, where employees have pre-existing injuries or medical conditions, mere changes in symptoms from work-related injuries or exposures are sufficient to meet plaintiff’s burden of proving a “medically distinguishable condition” to be awarded workers’ compensation benefits. The details of the Hileman case are summarized below.

Plaintiff began working for defendant Trailer Equipment in November 2000. On July 4, 2001, plaintiff fell from an all terrain vehicle (ATV), in a non-occupational incident, struck his head and fractured his odontoid. He was treated and placed in a halo to immobilize his neck for several months before being released to return to work. Plaintiff testified that he was feeling fine.

In January 2002, defendant transferred plaintiff to a "switcher job" where plaintiff used a semi tractor to move 30 to 50 trailers per day. Plaintiff testified that these activities "jarred" his neck and he developed neck pain and numbness in his right arm within a couple weeks.

In March 2002, plaintiff sought medical treatment and was placed on restricted work. Plaintiff's neck symptoms increased, and he was taken off work on March 25, 2002. He subsequently applied for worker's compensation benefits.

Plaintiff's treating physical medicine and rehabilitation specialist testified that plaintiff's complaints of neck pain stemmed from the change in his work activities in January 2002 and that the source of plaintiff's pain was "mechanical neck pain from cervical spondylosis."

An independent medical examiner testified that plaintiff's pathology related to the non-occupational ATV injury, the odontoid fracture. The independent examiner testified that surgical fusion of the odontoid fracture was totally independent of the presence or intensity of symptoms.

Plaintiff underwent fusion surgery to stabilize the site of the odontoid fracture on January 9, 2003. His worker's compensation trial occurred in February 2003. Plaintiff was still wearing a cervical collar, and complained of ongoing right arm pain and loss of some feeling in his right leg and arm since the surgery.

The magistrate granted plaintiff a closed award of benefits from his last day of work to the trial date. However, the magistrate held that plaintiff had failed to establish that the need for the fusion surgery was related to his work activities. The magistrate found that the need for surgery was instead "solely related to" the non-occupational ATV injury and, therefore, that any symptoms that plaintiff experienced as a result of the surgery were not work related.

The Workers' Compensation Appellate Commission (WCAC) affirmed the magistrate's finding of a work-related injury as a result of the job duties as a switcher. However, the WCAC reversed the magistrate on closing off the period of disability and instead found that plaintiff's work-related disability continued. The WCAC reasoned that there was no testimony distinguishing between the symptoms (and disability) plaintiff suffered before and after the fusion surgery.

The COA, in an unpublished decision, (No. 265641, 11/21/06), affirmed the WCAC.

The MSC reversed the COA. It held that the COA erred in affirming the decision of the WCAC by equating the plaintiff's testimony about his continuing symptoms with evidence of an ongoing work-related disability. The MSC noted that the magistrate found, and the WCAC agreed, that the plaintiff's surgery was solely occasioned by a non-occupational condition, and that plaintiff's disabling symptoms, although worsened by work activity, were the result of that non-occupational condition. The MSC found that the magistrate correctly held that the work-relationship was not proven by the plaintiff after the date of the surgery, and the WCAC erred as a matter of law in holding otherwise. Rakestraw v General Dynamics Land Systems, Inc, 469 Mich 220,231 (2003).

04-20-07

RAKESTRAW DOES NOT APPLY TO PRIOR WORK RELATED INJURIES

In a recent published decision, Simpson v Borbolla Construction & Concrete Supply, Inc. (Case No. 264106, January 25, 2007), the Michigan Court of Appeals departed from prior Workers’ Compensation Appellate Commission (WCAC) Decisions and held that Rakestraw v Gen Dynamics Land Sys, Inc, 469 Mich 220; 666 NW2d 199 (2003), does not apply to a situation where the pre-existing medical condition is work related.

Mr. Simpson was an iron worker. In 1979, he suffered a work related fracture of the lunate bone of his left wrist. The fracture went untreated and his left wrist progressively worsened.

Mr. Simpson worked for Borbolla for one day on October 23, 2000. His job involved inserting reinforcing rods into concrete, and required him to, among other things, carry heavy bundles of rods. Mr. Simpson testified that the work bothered his left wrist, but that he was able to finish the one-day job. Mr. Simpson did not work after that.

Medical experts testified that Mr. Simpson suffered from necrosis (death of tissue) of the left wrist lunate bone due to the work related fracture in 1979. One expert testified that continuing use of the wrist after the fracture increased the rate of bone deterioration to the point the condition precluded Mr. Simpson from performing most tasks of an iron worker.

In Rakestraw, the Michigan Supreme Court held that, where an employee has a pre-existing condition which she/he claims was injured or aggravated by a subsequent work related injury, the employee must prove that the new injury or condition is “medically distinguishable” from the pre-existing condition in order for it to be compensable.

In Simpson, the magistrate and WCAC held that the employee had proven a “medically distinguishable” injury as a result of the one day of work with Borbolla. The Court of Appeals affirmed the decision of the WCAC, but for a different reason. It held that the facts in Mr. Simpson’s case were distinguishable from the facts in Rakestraw in that, in Rakestraw, the pre-existing condition was not due to a work related injury. In Mr. Simpson’s case, the prior injury was work related. Therefore, the Court held that Rakestraw’s requirement that the employee prove a “medically distinguishable” injury did not apply in Simpson. The Court of Appeals in Simpson observed, “[t]he significance of the pre-existing condition in Rakestraw was not so much that it was pre-existing, but rather that it was not work-related.” (Simpson, Slip Opinion at 5).

Thus, it appears that, in cases where the employee claims a re-injury or aggravation of a pre-existing injury or condition, if the pre-existing injury or condition was work related (with the current employer or a different employer), Rakestraw does not apply and the employee does not need to prove a new, “medically distinguishable”, injury or condition. In some cases, Simpson may make it easier for employees to prove work related injuries or conditions.

1-29-07

2007 MAGISTRATE APPOINTMENTS

January 26, 2007

Granholm Makes Appointments, Reappointments to Worker's Compensation

Board of Magistrates

LANSING - Governor Jennifer M. Granholm today announced the following

appointments and reappointments to the Worker's Compensation Board of

Magistrates:

William A. Baillargeon of Saugatuck. Mr. Baillargeon served as a senior

trial specialist with the Law Offices of Paula J. Martin prior to his

appointment to the board for a term which expires January 26, 2011. He

succeeds John M. Wierzbicki whose term has expired.

David B. Merwin of Muskegon. Mr. Merwin served as counsel to Williams,

Hughes & Cook PLLC law firm prior to his appointment to the board for a

term which expires January 26, 2011. He succeeds Paul H. Reinhardt whose

term has expired.

Christopher P. Ambrose of East Lansing, reappointed for a term expiring

January 26, 2011.

Jennifer L. Crawford of Twin Lake, reappointed for a term expiring

January 26, 2011.

Lee A. Decker of Brighton, reappointed for a term expiring January 26,

2011.

Murray A. Gorchow of West Bloomfield, reappointed for a term expiring

January 26, 2011.

Valencia L. Jarvis of Southfield, reappointed for a term expiring

January 26, 2011.

Rosemary K. Wolock of Royal Oak, reappointed for a term expiring January

26, 2011.

The Worker's Compensation Board of Magistrates functions within the

Department of Labor and Economic Growth. Magistrates are responsible

for conducting hearings in disputes that arise under the Worker's

Disability Compensation Act of 1969 and hear cases related to worker's

compensation claims.

These appointments and reappointments are subject to Section 6 of

Article V of the Michigan State Constitution of 1963. They stand

confirmed unless disapproved by the Michigan Senate within 60 days.

TRAVELING EMPLOYEE DOCTRINE – REVERSED BY MICHIGAN SUPREME COURT ON 12/29/06

A previous update reported the Court of Appeals' re adoption of the "traveling employee" doctrine in the case of Bowman v R L Coolsaet Construction Co (please see discussion under the heading “ESTABLISHMENT OF ‘TRAVELING EMPLOYEE’ DOCTRINE”, below). The employer applied for leave to appeal to the Michigan Supreme Court, seeking to overturn the Court of Appeals decision that the employee's injuries were compensable.

In an order, dated 12/29/06, the Michigan Supreme Court, in lieu of granting leave to appeal, reversed the Court of Appeals decision. The Court held as follows:

"The Court of Appeals erred by adopting the 'traveling employee' doctrine under the circumstances of this case. Here, the employee was traveling from his worksite to his home for the time being at the time of his injury. The general rule, that injuries sustained by an employee while going to or coming from work are not compensable, is applicable even when an employee's residence is temporary because of a particular job assignment."

The Court remanded the case to the Court of Appeals to address the remaining arguments of the intervening plaintiff, Auto Club Insurance Associates.

In summary, the Michigan Supreme Court held that, on the specific facts of this case, the "traveling employee" doctrine was improperly adopted by the Court of Appeals. That suggests that the Supreme Court may not object to adoption of the doctrine in a future case, if it is done within the proper factual context. 1-15-07

2007 MAXIMUM COMPENSATION RATE

The state average weekly wage for 2007 has been determined to be $803.17.  The 2007 maximum weekly benefit is based on 90% of the state average weekly wage and is, therefore, $723.00.

2007 RATE TABLE BOOK

The 2007 weekly compensation rate table book is available as a ".pdf" document at the following link:  www.michigan.gov/documents/wca/wca_2007_Rate_Book_181097_7.pdf.  To our knowledge, the 2007 rate calculation program is not yet available for download.

1982-2007 MAXIMUM RATE CHART

*Discontinued fringe benefits may not be used to raise the weekly benefits above this amount. Attorney fees may not be based on a benefit rate higher than this amount.

STOKES v DAIMLERCHRYSLER

COURT OF APPEALS AFFIRMS AWARD OF BENEFITS IN STOKES v DAIMLERCHRYSLER, BUT CLARIFIES THE LAW (10-26-06)

In a 2-1 decision, the Court of Appeals, on remand from the Supreme Court, affirmed the Workers’ Compensation Appellate Commission’s majority result, affirming the magistrate’s grant of an open award of benefits. However, the Court of Appeals disagreed with and reversed several of the holdings of the WCAC majority.

1. The Court of Appeals held that the WCAC erred in limiting the definition of work “suitable to [the employee’s] qualifications and training” to actual jobs which plaintiff had performed in the past (i.e., the equivalent of the employee’s “resume”). In quoting Sington v Chrysler Corp, 467 Mich 144, 159; 648 NW2d 624 (2002), the Court held that “a finding of disability requires a determination that there is a limitation in an employee’s “overall, or in other words, maximum, wage earning capacity in all jobs suitable to an injured employee’s qualifications and training.” (Emphasis added.) The Court found that Sington “takes a broad view of an injured employee’s ‘qualifications and training,’ which is not limited to the jobs on the employee’s resume, but, rather, includes any jobs the injured employee could actually perform upon hiring.” Slip opinion at 10.

2. However, the Court held that, where an employee presents proofs which consist of the equivalent of the employee’s resume, and evidence of a work-related injury causing the disability, an employee makes a prima facie case of disability, unless the employer shows that, contrary to the employee’s proofs, there are real jobs, within the employee’s qualifications and training that pay the maximum wage. Slip opinion at 10-11.

3. The Court held that the WCAC erred to the extent that it held as a matter of law a transferable skills analysis is irrelevant in evaluating the employee’s qualifications and training. The Court stated that “[a] transferable skills analysis may yield credible testimony that there is actual employment that the employee’s qualifications and training makes the employee capable of performing upon hiring, although the employee has never performed it before. Slip opinion at 11.

4. However, the Court also held that “Sington did not intend to make a transferable skills analysis, (or non-transferable skills analysis), a necessary part of the employee’s proofs.” Slip opinion at 11.

5. The Court held that it was error for the WCAC to conclude that the magistrate had no authority to order the employee to provide discovery to the employer in this case. Relying on Bogetta v Burroughs Corp, 368 Mich 600; 118 NW2d 980 (1962), the Court held that the statute gives magistrates limited power to grant discovery “necessary to a proper inquiry into the facts.” “It does not automatically follow that [an employer] is entitled to have its vocational expert interview plaintiff. What form of discovery is necessary to enable [an employer] to investigate an employee’s qualifications and training and prepare a proper defense under Sington is a matter for the magistrate’s discretion.” Slip opinion at 13. “While an interview will no doubt be appropriate in some cases, in the instant case, [the employer] had sufficient information in the form of prior testimony, a long-term work history with [the employer], and considerable medical information, to narrow the focus of the additional information so that it could be sought by interrogatory if necessary before trial, or obtained at trial . . ..” Slip opinion at 14-15.

ESTABLISHMENT OF “TRAVELING EMPLOYEE” DOCTRINE

In a recent decision, the Michigan Court of Appeals established the “traveling employee” doctrine as an exception to the general rule that injuries sustained by an employee while traveling to or from work are not compensable. Bowman v R.L. Coolsaet Construction Company, ____Mich App _____; _______ NW2d _______ (2006). Mr. Bowman was a journeyman pipefitter. He was assigned to work at a job located 200 miles from his home. Because of the distance, he arranged for temporary living arrangements in his trailer at a KOA Campground near the worksite. On one day, heavy rains forced work at the jobsite to cease early. As Mr. Bowman was driving his truck back to his trailer at the campground, he ran a stop sign and struck another vehicle. As a result, he sustained serious injuries, rendering him a paraplegic.

The magistrate denied benefits on the basis that, under MCL 418.301(3), injuries sustained while going to or coming from work are not compensable. In a 2-1 decision, the Workers’ Compensation Appellate Commission affirmed the magistrate’s decision, declining to hold that Mr. Bowman was entitled to recover benefits under the “traveling employee” doctrine.

The Court of Appeals reversed the magistrate and the Appellate Commission, adopting the “traveling employee” doctrine as an exception to the general rule that injuries sustained while going to or coming from work are not compensable. The Court of Appeals had previously adopted the “traveling employee” doctrine in the case of Eversman v Concrete Cutting & Breaking, 224 Mich App 221; 568 NW2nd 387 (1997), rev’d 463 Mich 86 (2000). However, the Michigan Supreme Court reversed the Court of Appeals’ decision on other grounds. The Court of Appeals re-adopted the “traveling employee” doctrine in the Bowman case.

The “traveling employee” doctrine provides that employees who are traveling on a business trip are considered to be continuously within the scope of their employment for the duration of the business trip, except when a distinct departure on a personal errand is shown or when engaged in an activity, the major purpose of which is social or recreational (MCL 418.301 (3)).

INJURY TO EMPLOYEE WHILE RELOCATING FAMILY

In an unpublished Court of Appeals decision, Beus v Broad, Vogt & Conant, Inc., (case #258995, 8/3/06), the Court of Appeals, in a 2-1 decision, denied benefits to an employee who was injured and killed in a car accident while transporting his family to their new home in Mexico.

Plaintiff, a resident of Michigan, was hired by the Broad group to fill a position in Mexico. The Broad group agreed to pay for certain relocation expenses incurred by Mr. Beus and his family. After accepting the job offer, Mr. Beus left his family in Michigan and moved to Mexico. Once his children finished the school year, the family’s home in Michigan was sold and Mr. Beus’ wife and four children temporarily relocated to plaintiff’s parent’s home in Arizona. On a later date, Mr. Beus flew from Mexico to Arizona. He met with a potential client and performed other business related activities. The next day, Mr. Beus and his family drove from Arizona to Mexico. They stayed overnight at a motel in Mexico on the way to their home in a different city in Mexico. The following morning, Mr. Beus’ vehicle was involved in an accident. Mr. Beus sustained injuries, from which he later died.

The magistrate denied benefits on the basis that the major purpose of relocating plaintiff’s family to Mexico was social or recreational under MCL 418.301(3).

On appeal, the Workers’ Compensation Appellate Commission reversed, finding that Mr. Beus was on a “business trip”. The Appellate Commission noted that Mr. Beus had returned to Arizona for two business related purposes: (1) making a sales call on a potential client; and (2) traveling, at his employer’s expense, to his Mexico residence with his family. Therefore, the Appellate Commission concluded that Mr. Beus’ injuries and death arose out of and in the course of his employment and awarded benefits.

The Court of Appeals reversed the Appellate Commission’s decision and reinstated the magistrate’s denial of benefits. The Court of Appeals agreed with the magistrate that the “major purpose” of the activity in which Mr. Beus was engaged at the time of the injury had shifted from a business purpose to a social or recreational purpose.

MORE STRINGENT CAUSATION REQUIREMENT IN REMOTE DEATH CASES

In it’s recent decision in Paige v City of Sterling Heights, the Michigan Supreme Court overruled its prior decision in Haggerman v Gencorp Automotive, regarding its interpretation of the phrase “the proximate cause” in the statutory provision regarding the compensability of an employee’s death when it occurs sometime after the occupational injury.

In the Paige case, the employee was employed as a firefighter. He suffered a heart attack while performing firefighting duties on the job. However, he survived the heart attack, but was medically limited from returning to work as a firefighter. A magistrate granted an open award of benefits. The employee lived another nine years. He sustained a second heart attack and died five months later in his sleep. The employee’s minor child filed a claim for workers’ compensation death dependency benefits pursuant to MCL 418.375(2), which provides that, if the work related injury was “the proximate cause” of the death, death dependency benefits are payable to surviving dependents.

The case was eventually tried, and the magistrate awarded death dependency benefits to the surviving child. The Appellate Commission affirmed the magistrate’s decision. It relied upon the definition of “the proximate cause” in the Haggerman case. In Haggerman, the Supreme Court had construed the phrase “the proximate cause” to mean “a substantial factor” in causing the event. The employer appealed to the Court of Appeals. The Court of Appeals declined to review the case. The Michigan Supreme Court agreed to review the case. The Court overruled its construction of the phrase “the proximate cause” in the Haggerman case, and adopted its construction of the phrase from a case it had more recently decided, construing the same phrase in the Governmental Tort Liability Act, Robinson v Detroit. In Robinson, the Court had construed the phrase “the proximate cause” more narrowly to mean “the one most immediate, efficient, and direct cause”. Accordingly, the Supreme Court vacated the decision of the Appellate Commission and remanded the case for reconsideration.

In summary, the Court’s ruling in Paige will hold surviving dependents of employees who die sometime after a work related injury to a more stringent causation standard in order to recover workers’ compensation death dependency benefits. Employee’s dependents will have to prove that the work injury was “the one most immediate, efficient, and direct cause” of death in order to receive benefits.

JOB INTERNS

Are They Employers or Volunteers for Purposes of Workers' Compensation?

Many employers utilize the services of job interns. During the school year and during semester breaks, many students seek and obtain interning opportunities. Some of the internships are occupation-specific and provide students with an introduction to jobs in which they may eventually seek employment. Other internships are not occupation-specific and merely provide students (usually high school students) with experience in the working world.

From an employer’s perspective, offering internships provides exposure to future hire candidates, no or low cost workers, and the opportunity to provide a public service. Some interns are paid by the employer for their efforts. Others are unpaid and view the experience as an opportunity to enhance future opportunities for employment in their chosen field.

In deciding whether to offer an internship, one question an employer might ask is: what is my legal responsibility to the intern if he or she is injured in the course of his or her internship? Is she or he an employee or a volunteer for purposes of workers’ compensation?

The Michigan Workers’ Disability Compensation Act (WDCA) offers some, but not complete guidance on the question. MCL 418.111 states that “every employee . . . shall be subject to the provisions of this act.” MCL 418.161(1) defines “employee” in two different subsections. In subsection (l), the statute defines "employee" as, “[e]very person in the service of another, under any contract of hire, express or implied”. Subsection (n) provides that an “employee” includes:

[e]very person performing service in the course of the trade, business, profession, or occupation of an employer at the time of the injury, if the person in relation to the service does not maintain a separate business, does not hold himself or herself out to and render service to the public, and is not an employer subject to this act.

The above-cited provisions of the WDCA require that a person be an “employee” in order for the employer to be liable to pay workers’ compensation benefits for an on-the-job injury or health condition. The statute seems to exclude volunteers and gratuitous employees from coverage under the workers’ compensation law.

The Michigan Supreme Court has addressed the question of whether a member of a ski patrol, who was providing ski patrol services to a ski resort on a weekend, was an employee for purposes of workers’ compensation when he was injured. In Hoste v Shanty Creek Management, Inc., 459 Mich 561; 592 NW2d 360 (1999), the Supreme Court held that a member of the National Ski Patrol was not an employee under the WDCA and, therefore, was not entitled to workers’ compensation for injuries he sustained while performing ski patrol duties.

Shanty Creek did not pay Mr. Hoste wages for the ski patrol services that he provided. However, in return for the ski patrol services, the resort provided Mr. Hoste with free lift tickets, family skiing privileges, complimentary hot beverages, and meal and merchandise discounts. Mr. Hoste never claimed any of the benefits as wages on his income tax returns.

The Supreme Court found that there was no contract of hire between Shanty Creek and Mr. Hoste and, therefore, he was not an employee for purposes of workers’ compensation. The Court found that he was a “gratuitous worker,” assisting another with a view toward furthering his own interests.

In Coleman v Western Mich. Univ., 125 Mich App 35; 336 NW2d 224 (1983), the Michigan Court of Appeals found that a student athlete was not an employee of the University for purposes of workers’ compensation.

The Workers’ Compensation Appellate Commission has addressed the question of whether a person injured while performing community service as a part of a criminal sentence is an employee of the governmental entity for which the service is being performed. In Kempher v 14A Dist. Ct., 1992 Mich ACO #197 (1992), the Appellate Commission held that the person performing community service was not an employee and, consequently, was not entitled to workers’ compensation benefits for an injury sustained while performing community service.

In a more recent case, Simmons v Branch County, 2005 Mich ACO #50 (2005), Mr. Simmons was incarcerated in the Branch County Jail. He qualified to become a trustee by virtue of demonstrating outstanding behavior while in jail and by being a minimum security risk. He voluntarily elected to become a trustee. As a trustee, Mr. Simmons performed work activities. For each month of work, he was given 3 days off his sentence. While performing work activities, he sustained an injury to his eye. He applied for workers’ compensation benefits. Mr. Simmons argued that, although he did not receive monetary pay, he received “real, palpable and substantial consideration” for the work duties that he performed in being accorded a reduction in his sentence in exchange for the work that he performed.

In a unanimous decision, the 3-member panel of the Appellate Commission denied workers’ compensation benefits, finding that Mr. Simmons was not an employee of Branch County and that no contract of hire existed between Mr. Simmons and the County. In citing a prior decision, Yearling v Allegan County, 2004 Mich ACO #189 (2004), the Appellate Commission noted that “[i]t is not mere service to the public entity which controls, but the performance of such service under an employment contract . . ..” The Appellate Commission noted that the relationship between a prisoner and the jail is a “custodial one.”

A recent unpublished decision of the Michigan Court of Appeals, MacArthur v Ramsey Havenwyck, Inc. (Michigan Court of Appeals case # 262600, 2005), addressed the question of whether an unpaid intern was entitled to workers’ compensation benefits for an injury sustained during the course of her internship. Unpublished decisions of the Court of Appeals are not accorded precedential status. However, they provide guidance on how one panel of three Court of Appeals Judges views an issue.

Ms. MacArthur was an employee of the hospital owned by defendant, Ramsey Havenwyck, Inc., and was working toward a Masters Degree in psychology. In order to receive the Masters Degree, she had to complete an internship. She was given permission to complete an internship with the hospital’s Impulse Control Unit. After normal working hours at the hospital, Ms. MacArthur counseled two young men at the residential unit located across the street from the hospital. Later, she alleged that one of the young men had assaulted her. Ms. MacArthur did not file a claim for workers’ compensation benefits. Rather, she filed a lawsuit against the hospital, alleging negligence. The hospital sought to have the case dismissed on the basis that Ms. MacArthur was an employee, subject to the Exclusive Remedy Provision of the WDCA. MCL 418.131(1) provides that:

The right of recovery of benefits as provided in [the WDCA] shall be the employee’s exclusive remedy against the employer for a personal injury or occupational disease.

The Court of Appeals held that Ms. MacArthur’s internship qualified as a contract for hire for purposes of the WDCA. In relying upon Betts v Ann Arbor Public Schools, 403 Mich 507, 513, 515; 271 NW2d 498 (1978), the Court of Appeals held that, “[a] contract for hire for purposes of the WDCA may be established where there is an exchange of services for training or college credits toward graduation.” The Court of Appeals distinguished the Supreme Court’s decision in Hoste by noting that “the internship relationship was one of mutual benefit because [the hospital] accepted [Ms. MacArthur’s] counseling services for which it normally would have made payment for performance.”

It is important to note that, oftentimes, the question of whether someone is an employee for purposes of workers’ compensation arises not because the employee has filed a workers’ compensation claim, but because they have filed a personal injury lawsuit against the employee and the employer is seeking to establish that the person was an employee in order to gain the protection of the Exclusive Remedy Provision of the WDCA.

These cases suggest that employers who utilize interns should consider whether they are employees or volunteers. If they are employees, the employer must have workers’ compensation coverage for them. If they are volunteers, employers are not protected by the Exclusive Remedy Provision of the WDCA and should have liability insurance coverage.

Factors which tend to establish an employment relationship with an intern include a contract for hire, and pay or other compensation for the intern’s services. Factors which tend to establish that an intern is a volunteer include the absence of a contract for hire, the absence of pay or other compensation, and the intern’s work as a gratuitous worker, assisting the employer with a view toward furthering the intern’s own interests.

The opinions contained in this article do not constitute legal advice. If you have a question regarding the legal status of an intern or other volunteer, please consult with a qualified workers’ compensation lawyer.

BIOGRAPHICAL INFORMATION

Len Hickey is a partner in the Grand Rapids law firm of Hickey Combs PLC, which specializes in providing legal counsel and defense to employers, insurers, and claims administrators in workers’ disability compensation matters. Mr. Hickey can be contacted at 616/364-2555, lhickey@hickeycombs.com, and at 3358 Eagle Run Drive, N.E., Suite 100, Grand Rapids, MI 49525-7055.

WORKERS' COMPENSATION RETALIATION CLAIM DISMISSED

In the unpublished Michigan Court of Appeals decision in Hephner v M&S Manufacturing (12-13-05), the Court affirmed the trial court's grant of summary disposition on the employee's lawsuit against the employer. The employee sought damages for allegedly being fired in retaliation for filing a workers' compensation claim. The employee had been terminated pursuant to the employer's neutral policy of automatically terminating all employees after 12 months of continuous medical leave, as provided in the employer's employee handbook. The employee claimed that the policy was a pretext for firing seriously injured workers. The Court found that the employee had failed to provide any evidence of a causal connection between his filing for workers' compensation benefits and his termination. The Court also found that there was no evidence that the filing of the workers' compensation claim played a role in the employer's decision to terminate the employee's employment.

The employee also argued that a "do not hire" note placed in his personnel file when he was terminated constituted retaliation for filing a workers' compensation claim. The Court found that the employee had failed to present any evidence showing a causal connection between the "do not rehire" note and the workers' compensation claim. Also, because the empoyee had not yet been released to work and in fact never asked to be rehired, the Court held that no injury had yet occurred and the claim was not ripe for review.

SUMMARY: Neutral employment policies, if applied uniformly without exceptions, will not be held to be workers' compensation retaliation.

12-13-05

2006 AVERAGE WEEKLY WAGE AND RATE CHART

The 2006 Michigan State Average Weekly Wage is $784.31. The Michigan maximum weekly compensation rate for 2006 is $706.00 (up $17 from last year's max rate of $689.00).

The Michigan rate chart, updated to include 2006 information is attached.

Year/ State Average Weekly Wage (SAWW)/ 90% of SAWW (Maximum Benefit)/ 2/3 of SAWW*/ 50% of SAWW (Minimum Benefit for Death Cases)/ "25% of SAWW

(Minimum Benefit for

Specific Loss and P&T)"

2006 $790.54 $712.00 $527.03 $395.27 $197.64

2005 $765.12 $689.00 $510.08 $382.56 $191.28

2004 $744.49 $671.00 $496.33 $372.25 $186.12

2003 $724.96 $653.00 $483.31 $362.48 $181.24

2002 $715.11 $644.00 $476.74 $357.56 $178.78

2001 $714.46 $644.00 $476.31 $357.23 $178.62

2000 $678.23 $611.00 $452.15 $339.12 $169.56

1999 $644.06 $580.00 $429.37 $322.03 $161.02

1998 $614.10 $553.00 $409.40 $307.05 $153.53

1997 $591.18 $533.00 $394.12 $295.59 $147.80

1996 $581.39 $524.00 $387.59 $290.70 $145.35

1995 $554.22 $499.00 $369.48 $277.11 $138.56

1994 $527.29 $475.00 $351.53 $263.65 $131.82

1993 $506.80 $457.00 $337.87 $253.40 $126.70

1992 $489.01 $441.00 $326.01 $244.51 $122.25

1991 $477.40 $430.00 $318.27 $238.70 $119.35

1990 $474.22 $427.00 $316.15 $237.11 $118.56

1989 $454.15 $409.00 $302.77 $227.08 $113.54

1988 $440.77 $397.00 $293.85 $220.39 $110.19

1987 $433.91 $391.00 $289.27 $216.96 $108.48

1986 $414.70 $374.00 $276.47 $207.35 $103.68

1985 $397.48 $358.00 $264.99 $198.74 $99.37

1984 $370.65 $334.00 $247.10 $185.33 $92.66

1983 $358.89 $324.00 $239.26 $179.45 $89.72

1982 $340.45 $307.00 $226.97 $170.23 $85.11

*Discontinued fringe benefits may not be used to raise the weekly benefit above this amount.

*Attorney fees may not be based on a benefit rate higher than this amount.

WORKERS' COMPENSATION BENEFITS NOT PAYABLE TO RETIRED EMPLOYEE

In Campbell v General Motors Corporation, ___ Mich App ___ (2005), the Michigan Court of Appeals held that a retired employee was not entitled to workers’ compensation wage loss benefits under MCL 418.373 (the “retiree provision”).

The employee started working for General Motors in 1964. He began to experience shoulder pain in 1995. He treated at the plant clinic, but continued working, without restrictions, until the plant closed on October 4, 1999. Rather than being laid off, the employee was placed in General Motors’ “jobs bank,” which was created pursuant to a union demand during contract negotiations to avoid layoffs. While in the jobs bank, the employee was required to report to a specific location to await placement in an available job involving manual labor. The employee received full pay and benefits during his time in the jobs bank, although he did not perform any work and the employees in the jobs bank would play cards or watch television. If a job became available, the employee was obligated to accept it. The employee took a regular, non-disability, retirement on August 1, 2000. Prior to that time, he was not placed into a job through the jobs bank.

Shortly after taking his retirement, the employee filed an Application for Hearing, seeking workers’ compensation benefits due to shoulder and knee injuries.

§373 of the Workers’ Disability Compensation Act (MCL 418.373) provides that an employee who terminates active employment and receives a non-disability pension or retirement benefits paid by or on behalf of an employer from whom weekly wage loss benefits are sought, is presumed not to have a loss of earnings or earning capacity as the result of a compensable injury or disease.

The question in the Campbell case was whether the employee had retired from “active employment”. The Court of Appeals characterized plaintiff’s assignment to the jobs bank as “active employment” even though the nature of plaintiff’s work had changed. Therefore, the court reversed the Magistrate’s award of benefits, and remanded the case for application of the §373 retiree presumption.

MULTIPLE LATE PAYMENT PENALTIES DENIED

The Michigan Court of Appeals, in Tew v Hillside Tool & Manufacturing Company, ___ Mich App ___ (2005), on remand from the Michigan Supreme Court, upheld the decision of the magistrate and the Workers’ Compensation Appellate Commission to award only one $1,500.00 late payment penalty for multiple late payments of medical expenses. Plaintiff had multiple bills from multiple health care providers for treatment regarding multiple parts of his body. He sought a $1,500.00 penalty for the late payment of each bill.

The Court of Appeals’ Decision was consistent with a previous Michigan Supreme Court case, Townsend v M-R Products, Inc., 436 Mich 496; 461 NW2d 696 (1990).

10/17/05

REIMBURSEMENT OF MEDICAL BILLS TO THIRD-PARTY PAYORS

In Conley v Suburban Mobility Authority for Regional Transportation, 2005 ACO# 84, the Workers’ Compensation Appellate Commission held that, before a third-party medical bill payor could obtain reimbursement in workers’ compensation from the employer, it had to prove that the employer had received notice of the employee’s intent to treat with the provider pursuant to MCL 418.315(1).

Blue Cross Blue Shield had paid medical bills on behalf of plaintiff. It filed an Application for Mediation or Hearing, Form C, requesting reimbursement from the employer for medical bills that it had paid. Plaintiff had not given proper notice to the employer of the intent to treat with the providers whose bills Blue Cross Blue Shield had paid. Therefore, the employer had not had an opportunity to object to the treatment under §315(1). The employer was not even apprised of plaintiff’s treatment until after the fact. The Appellate Commission held that Blue Cross Blue Shield was not entitled to reimbursement.

ARE EMPLOYERS/INSURERS LIABLE TO PAY ATTORNEY FEES ON UNPAID MEDICAL BILLS?

In a recent Workers’ Compensation Appellate Commission decision, Beattie v Wells Aluminum Corp, 2005 ACO #157, the Workers’ Compensation Appellate Commission provided guidance on when an employer/insurer may be responsible to pay an attorney fee on unpaid medical expenses. The Appellate Commission held that the Magistrate retains the discretionary power to make an award of attorney fees where the employer/insurer wrongly withheld payment of “reasonable and necessary” medical benefits and treatment. The Appellate Commission relied upon a prior Court of Appeals decision, Boyce v Grand Rapids Asphalt Paving, 117 Mich. App 546 (1982), which stated that, “where the employer or its insurance carrier is guilty of a breach of the statutory duty to provide medical care or to pay for medical care in a timely fashion, than the employer or its carrier, and not the employee, should bear the burden of the attorney fees.”

Thus, the plaintiff/employee must prove that the medical expenses were reasonable and necessary, that the employer had appropriate notice that they were due, and that the employer was guilty of a breach of its duty to provide or pay for medical care in a timely fashion in order for plaintiff’s attorney to recover attorney fees on unpaid medical bills.

07/15/05

GOODWILL JOB HELD TO BE REASONABLE EMPLOYMENT, NOT VOCATIONAL REHABILITATION

Goodwill Job Held to Be Reasonable Employment, Not Vocational Rehabilitation

Magistrate Donna Grit (assigned to the Grand Rapids hearing site) recently issued a decision, Adams v Spartan Stores, wherein she held that a job at Goodwill Industries was "reasonable employment" (light duty work), not vocational rehabilitation.

Spartan Stores initally accomodated the employee's restrictions and brought him back to work in light duty ("reasonable employment") for approximately eight months. After that, Spartan no longer had light duty work available for the employee. Because the employee's restrictions were permanent, the union contract prohibited him from staying in the light duty job. The employee was unable to find work elsewhere. Spartan assigned the employee to work at Goodwill Industries. Magistrate Grit observed that, although one of the things that Goodwill Industries does is provide vocational rehabilitation services, in this case it did not. In this case, Goodwill, for a fee (paid by the employer) placed the injured employee in a job that fit the employee's restrictions. Magistrate Grit held that the job at Goodwill was "reasonable employment", not vocational rehabilitation.

APPLICATION: Magistrate Grit's decision provides employers who are unable to provide light duty work to their injured workers with the option to arrange for light duty work through Goodwill or a similar agency. The employee has a legal obligation to accept a "bona fide offer of reasonable employment". Because such a job is not vocational rehabilitation, the employee's non-cooperation with the job or refusal to perform it need not be litigated in the cumbersome vocational rehabilitation hearing process. Rather, the employer may merely discontinue paying wage loss benefits (unless the employer is under a prior order to pay) and file a notice of dispute.

Please note, however, that Magistrate Grit's decision is not precedential and it may be subject to review on appeal. Before taking any action on this new case, we recommend that you confer with qualifed workers' compensation defense counsel. 2/18/05

SURVEILLANCE DOES NOT VIOLATE STALKING STATUTE

In a 5-2 decision, the Michigan Supreme Court, in the case of Nastal v Henderson & Associates Investigations, Inc. (12505) held that surveillance by licensed private investigators, that contributed to the goal of obtaining information as permitted by the Private Detective License Act, is “conduct that serves a legitimate purpose and, therefore, does not violate the Michigan Civil Stalking Statute”, MCL 600.2954.

The subject of the surveillance had filed a personal injury lawsuit arising out of a motor vehicle accident. The insurer for the defendant in the personal injury action retained a licensed private investigations firm, Henderson & Associates Investigations, Inc., requesting a background check, activities check, and surveillance of the plaintiff. Even though the first effort at surveillance was discovered by the plaintiff, additional surveillance was conducted. The Supreme Court held that, notwithstanding the fact that surveillance continued after plaintiff had discovered it, plaintiff failed to establish a genuine issue of material fact that the conduct of the private investigators ever ceased serving “a legitimate purpose”, exempting it from the stalking statute. Thus, the Supreme Court ruled that the Circuit Court should enter summary disposition in favor of the defendant private investigators, dismissing the lawsuit against them.

MEDICAID REIMBURSEMENT

In late November 2004, the Medicaid statute was amended by house bill 5414. The bill imposes a requirement on employees who are receiving or who have received Medicaid assistance to provide notice to the Department of Social Services when filing a workers’ disability compensation claim. The notice requirement applies to the employee and to his or her legal counsel. The statute provides that the Department of Social Services or the Medicaid contracted health plan may file a legal action against the employee or his or her legal counsel, or both, to recover medical expenses paid by Medicaid. The amendment also provides that the Attorney General shall recover any cost or attorney fees associated with a recovery from the employee, legal counsel, or both.

Interestingly, the amendment provides that the Department of Social Services has “first priority against the proceeds of the net recovery”. That “first priority” seems to conflict with Friend of the Court and Medicare priorities.

The amendment provides that, if the employee recovers less against the proceeds of the net recovery than the medical expenses paid by Medicaid, the Department of Social Services (or Medicaid contracted health plan) and the employee shall share equally in the proceeds of the net recovery.

RAKESTRAW INTERPRETED: COMPENSABILITY OF SYMPTOMATIC AGGRAVATION

In Rakestraw v General Dynamics Land Systems, Inc., 469 Mich 220 (2003), the Michigan Supreme Court addressed the question of whether a symptomatic aggravation of a preexisting condition constituted an “injury” for purposes of workers’ compensation. The Court held that, in order for a symptomatic aggravation of a preexisting condition to be compensable, the employee must prove that a “medically distinguishable” injury resulted from the employment activity or exposure.

The Michigan Workers’ Compensation Appellate Commission, in Hale v Borgess Medical Center, 2004 ACO #266, utilized a Michigan Supreme Court decision that had been decided three years before Rakestraw, Connaway v Welded Construction Company, 462 Mich 691 (2000), to provide “some insight into what the Court considered to be evidence of ‘aggravation’ as opposed to a ‘recurrence’ of a preexisting condition”. Hale, p.6.

The Appellate Commission found Connaway instructive in interpreting the term “medically distinguishable” condition. The Appellate Commission observed as follows:

Pain alone is not conclusive evidence. However, an injury producing continuing pain, subjectively dissimilar from her pre-injury condition, and causing impaired performance of pre-injury activities can constitute an “independent contribution” to the “final condition”, thus resulting in a “medically distinguishable” condition.

This new standard for determining what is “medically distinguishable” appears to rely entirely upon the employee’s subjective report of whether his or her pain is different than it was prior to the work-related injury (or activity) and upon the employee’s personal and subjective assessment of whether his or her performance of pre-injury activities has been impaired by the work injury (or activities). The Appellate Commission’s interpretation of Rakestraw seems to neutralize the requirement that the employee show a “medically distinguishable” injury or condition.

ILLEGAL ALIEN CASES UPDATE: The Michigan Supreme Court's 07/23/04 Order

As you may recall, the Michigan Court of Appeals, in Sanchez v Eagle Alloy Inc, and Vazquez v Eagle Alloy Inc, held that, once it was discovered that the employees were undocumented, illegal aliens, they 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 November 7, 2003, the Michigan Supreme Court granted leave to appeal to review the decision of the court of appeals. The Supreme Court received and considered the parties' briefs and heard their oral arguments. Then, somewhat surprisingly, the Supreme Court issued an order on July 23, 2004, vacating their prior grant of leave to appeal (in other words, deciding not to decide the case). The Court's reason was that "the Court is no longer persuaded the questions presented should be reviewed by this Court."

The legal effect of the Supreme Court's order is to leave the opinion of the Court Appeals as the binding precedent on the illegal alien issue.

HERNIAS

HERNIAS

The Workers' Compensation Appellate Commission recently decided a new case regarding occupational hernias. The case is Barcewski v Yellow Freight System, Inc., 2004 ACO #64.

The issue in the case was whether the Magistrate erred in awarding benefits for a hernia where there was a 53-day gap between the onset of the hernia and the employee reporting it to his supervisor.

Although the Magistrate decided the case, awarding benefits, pursuant to the hernia provision in the occupational disease chapter of the act, MCL 418.401(2)(b), the Appellate Commission affirmed the award of benefits, but did so under the single event injury provision of the act, Chapter 3, MCL 418.301(1). In essence, the Appellate Commission held that, where a hernia results from a specific event of injury (as opposed to repetitive trauma or exposure), it is compensable under Chapter 3 and the timeliness and notice requirements of Chapter 4 (MCL 418.401(2)(b)) do not apply. The Appellate Commission held that, where an employee sustains a specific event hernia under Chapter 3, the employee need not comply with the Chapter 4 requirement that a hernia be recent in origin and promptly reported.

This decision seems to largely neutralize the statutory recency and notice requirements by providing an alternate way to recover for a hernia under Chapter 3.

LOSS OF OVERTIME DUE TO INJURY IS COMPENSABLE

LOSS OF OVERTIME DUE TO INJURY IS COMPENSABLE

In Voss v Amsted Industries, Inc, 2004 ACO #35, the Workers' Compensation Appellate Commission held that, where plaintiff's inability to perform overtime work was not due to a general reduction in overtime for all employees, but due to injury-related restrictions, the employee was entitled to receive weekly partial wage loss benefits to compensate him for the loss of overtime.

The case suggests, however, that if the lack of overtime resulted from a general reduction in overtime for all similarly situated employees, an argument may exist under Sington that the loss of overtime is not compensable because the wage loss would not be due to the injury. The Appellate Commission would distinguish the previous Court of Appeals decision in Kurz v Michigan Wheel Corporation, 236 Mich App 508 (1999), on the basis that it was decided under the now discredited Haske definition of disability.

03/29/04

BACK INJURY CAUSED BY TURNING TO PICK UP DINNER PAIL MAY BE COMPENSABLE

After the employee parked his vehicle in the employer's parking lot, he opened the vehicle's door, put one leg out of the door, placed his foot on the ground, and turned to the right to pick up his "dinner pail". As he twisted back towards the open door, he felt a snap in his back. Pain immediately ran down his left leg and up his back. Later, an MRI showed a disc herniation and disc bulging in his low back. The Magistrate denied benefits, finding that the circumstances of the employee's employment neither caused nor aggravated an injury nor increased the risk of injury. The Magistrate also held that the case did not fall within the "going to and coming from work" presumption of compensability in MCL 418.301(3). The Workers' Compensation Appellate Commission affirmed the Magistrate's denial of benefits.

In Ruthruff v Tower Holding Corporation, _____ Mich App _____; ______NW2d_____ (March 18, 2004), the Michigan Court of Appeals reversed the Appellate Commission and remanded the case to the Magistrate for further fact finding.

The Court of Appeals held that the Appellate Commission incorrectly applied the law in declining to apply the statutory presumption that an injury is compensable when it occurs when the employee is coming to or going from work.

The Court of Appeals remanded the case to the Magistrate, directing the Magistrate to reopen the record and obtain evidence "regarding the need of plaintiff to bring a lunch to work". If the employee was not required to bring a lunch, then the risk was of a personal nature and the employee's injury was not compensable. However, if the employee was required to bring a lunch, there could be a sufficient employment cause of the risk which caused the employee's injury.

SOCIAL OR RECREATIONAL EXCLUSION

In an unpublished decision, dated 02/24/04, Turner v Monday Staffing, the Michigan Court of Appeals recently interpreted the social or recreational exclusion contained in MCL 418.301(3). The employee injured himself during his lunchbreak. He had been playing basketball and injured himself when he turned to check the clock to confirm the time to see whether he could continue playing basketball. The Magistrate granted a closed award of benefits. The Workers' Compensation Appellate Commission reversed the Magistrate, denying benefits. The Court of Appeals affirmed the Workers' Compensation Appellate Commission, holding that it properly concluded that the major purpose of the basketball game, the employee's activity at the moment of injury, was social or recreational and therefore, plaintiff was not entitled to workers' compensation benefits.

03/04/04

MEDICARE AMENDMENTS

Some commentators have suggested that recent amendments to the Medicare as Secondary Payor Act has increased the power of Medicare to recover from the various parties to a workers’ compensation claim amounts paid by Medicare for the employee’s medical treatment. The amendments are the subject of debate and will likely require further guidance from the Centers for Medicare and Medicaid Services. See, for example, 42 USCS §1395y(b)(2)(B).

USE OF INTERROGATORIES TO OBTAIN INFORMATION REGARDING QUALIFICATIONS AND TRAINING

In Nessel v Schenck Pegasus Corp., 2003 Mich ACO 272, the Workers’ Compensation Appellate Commission held that workers’ compensation magistrates have broad discretion to determine, on a case-by-case basis, whether an employer can submit written questions (interrogatories) to an employee, seeking information regarding the employee’s prior qualifications and training, including education and job history. The Appellate Commission acknowledged that under the Michigan Supreme Court’s decision in Sington v Chrysler Corp., 467 Mich 144 (2002), information regarding an employee’s qualifications and training could be relevant on the issue of disability.

In a footnote, the Appellate Commission also noted that, under the proper circumstances, evaluation by a vocational expert may be appropriate in order to fully explore the legal elements required by Sington.

CREDIT AGAINST WAGE LOSS FOR SELF-EMPLOYMENT EARNINGS

In Gordon v Henry Ford Health System, an unpublished decision of the Michigan Court of Appeals (COA case #244596, 11/18/03), the Court held that the employer was entitled to credit against wage loss benefits it was paying for a work-related disability for the employee’s subsequent self-employment earnings where she actively participated in the operation of her business. The employee was receiving wage loss benefits from the employer for a work-related injury. Subsequently, she became the owner/operator of two group homes. The Court found that the homes were not merely an investment from which plaintiff derived passive income. Rather, the employee actively participated in the operation of the business. Therefore, the Court held that the employer was entitled to reduce the employee’s wage loss benefits for the employee’s self-employment earnings.

TOTAL AND PERMANENT DISABILITY: CORRECTED VERSUS UNCORRECTED STANDARD.

In a 2-1 decision, dated November 6, 2003, the Michigan Court of Appeals, Cain v Waste Management, Inc., (COA case #242104) noted a distinction between subparts (g) and (b) of the statutory provision regarding total and permanent disability, MCL 418.361(3). In an earlier decision, the Michigan Supreme Court interpreted subpart (g) of MCL 418.361(3). It held that, under that provision, loss of industrial use of a limb for purposes of determining “permanent and total loss of industrial use” was to be determined using a “corrected” (i.e., measured with the help of prosthetics) standard to examine whether a limb could support industrial use.

On remand, the Court of Appeals affirmed the Workers’ Compensation Appellate Commission in finding that, under a different subsection, subpart (b) (MCL 418.361(3)(b)), loss of industrial use of a limb is to be determined without regard to whether the limb could be made functional in industry with the help of a prosthetic or brace. In other words, the Court of Appeals held that, although subpart (g) (MCL 418.361(3)(g)) employs a corrected standard for determining loss of industrial use of a limb, subpart (b) (MCL 418.361(3)(b)) does not use a corrected standard and determines loss of industrial use without regard to enhancement of a limb’s function by use of a prosthetic or brace.

ARE DISCONTINUED FRINGE BENEFITS TO BE ADDED TO THE CASH AVERAGE WEEKLY WAGE TO DETERMINE PARTIAL WAGE LOSS BENEFITS?

The Michigan Supreme Court, in a 5-2 decision, Schmaltz v Troy Metal Concepts, Inc., issued on December 23, 2003, held that, where plaintiff’s average weekly wage on the date of injury was greater than two-thirds of the state average weekly wage, the employee’s discontinued fringe benefits were not to be added to the average weekly wage calculation for purposes of determining partial wage loss in subsequent employment where the partial wage loss benefit was less than two-thirds of the state average weekly wage. The Court held that the average weekly wage that is used to establish benefit entitlement is determined at the time of injury and may not be subsequently recalculated, even where the partial benefit rate is less than two-thirds of the state average weekly wage. The Supreme Court adopted the Workers’ Compensation Appellate Commission’s analysis in Karczewski v General Motors Corp., 1994 Mich ACO 613 (1995).

RAKESTRAW v GENERAL DYNAMICS LAND SYSTEMS (MICHIGAN SUPREME COURT, 07/30/03)

IS SYMPTOMATIC AGGRAVATION COMPENSABLE?

Rakestraw v General Dynamics Land Systems (Michigan Supreme Court, 07/30/03)

(For more information on recent developments and upcoming events in workers’ compensation, please access the Hickey Combs PLC website at hickeycombs.com)

On July 30, 2003, the Michigan Supreme Court decided Rakestraw v General Dynamics Land Systems, Inc., ___ Mich ___, ___NW2d ___ (Docket No. 120996). In a four-to-three decision, the Court held that a claimant attempting to establish a compensable, work-related injury must prove that the injury is medically distinquishable from a preexisting nonwork-related condition in order to establish the existence of a “personal injury” under §301(1). When Mr. Rakestraw began working for General Dynamics in 1996, he had a preexisting neck condition (a herniated cervical disc that required surgeries in December 1991 and April 1992) that was asymptomatic. According to Mr. Rakestraw, his work for General Dynamics caused his neck pain to return and increase.

Can a work-related aggravation or worsening of a preexisting condition be compensable?

Yes, if the employee is able to establish that the injury was medically distinquishable from the preexisting condition.

Does the employee need to prove a change or worsening in the underlying pathology to establish compensability?

It is unclear whether Rakestraw requires a plaintiff to show a change or worsening in the underlying pathology. In her dissenting opinion, Justice Kelly acknowledges that the majority opinion holds that pain alone is insufficient to establish an injury (Justice Kelly, Dissenting, Slip Opinion p.2).

Does Rakestraw apply to preexisting work-related injuries or conditions; i.e., can it be argued under Rakestraw that a mere symptomatic aggravation of a preexisting work-related condition is not compensable?

The facts in Rakestraw deal only with a preexisting nonwork-related condition. However, it is conceivable that Rakestraw might be applied to a work-related condition from a prior employment or to a different injury date under prior coverage for the same employer.

HOW TO USE RAKESTRAW

Rakestraw can be used, in good faith, to deny or terminate benefits where the following exist:

- A preexisting, non-occupational condition;

- Becomes symptomatic or symptomatically worse;

- Due to a work injury or exposure; and

- The employee has failed to demonstrate a “medically distinquishable” injury.

The following additional factors increase the likelihood that an employer will prevail under Rakestraw:

- The employee did not sustain a specific event of injury or trauma, but merely claimed the onset or worsening of symptoms of a preexisting condition while performing regular work activities; and

- The employee was a short-term employee

- There is no evidence that the underlying pathology was worsened.

This information is provided as a service to our clients and other interested persons. It is not intended to be legal advice. Before applying this information to a specific fact situation, please contact Hickey Combs PLC or another qualified workers’ compensation attorney. Thank you! HICKEY COMBS PLC

LEGALLY ENFORCEABLE BONA FIDE OFFERS OF REASONABLE EMPLOYMENT

Legally Enforceable Bona Fide Offers of Reasonable Employment

· Reasonable Employment – MCL 418.301(9) and MCL 418.401(7):

[W]ork that is within the employee’s capacity to perform that poses no clear and proximate threat to that employee’s health and safety, and that is within a reasonable distance from that employee’s residence. The employee’s capacity to perform shall not be limited to work suitable to his or her qualifications and training.

· Taylor v Schoolcraft College (Michigan Court of Appeals, unpublished, 1/3/03)

The Court of Appeals in a 2-1 decision, held that a light duty job offer, stating that the job would be within a certain physician’s restrictions, did not meet the requisite specificity for a bona fide offer of reasonable employment where the doctor’s restrictions were not specifically stated in the body of the job offer letter, did not accompany the letter, and plaintiff was never informed of the nature of the restrictions. The employee had no factual basis on which to evaluate the reasonableness of the position with her doctor or attorney.

· Tatroe v Tower Holding Corp, 2003 ACO # 56

The Appellate Commission held that a job pool arrangement where an employee is placed in assignments on day-to-day basis was not a bona fide offer of reasonable employment as it lacked specificity as to which jobs the employee would be expected to perform and there was no guarantee that a specific job would be available on any given day.

Legally Enforceable Bona Fide Offers of Reasonable Employment

· Guidelines for Bona Fide Offers of Reasonable Employment

o In writing

o Consider sending the job offer certified return receipt mail as well as regular mail

o The job offer should contain the following information:

- Date and time of return to work

- Person to whom the employee is to report

- The anticipated work schedule

- The rate of pay

- A statement that the job falls within the employee’s medical restrictions (include the actual restrictions and the name of the physician who authored them or attach the restriction slip to the letter)

- The title and a description of the job that the employee will be performing (reference and attach a job description or “essential functions” of the job)

o A reasonable time should be permitted between communicating the offer and the anticipated return to work date

o Consider including in the letter a statement that it is expected that the employee will comply with the physician’s restrictions and that, if there is any question about whether the job duties are within the restrictions, the employee will immediately bring it to the attention of the employer.

At the outset of the return to work, it is recommended that the employee sign a statement, agreeing to abide by the specific restrictions outlined by the physician and to communicate immediately with the employer if the employee has any concern that the job duties are inconsistent with the restrictions.

HOW AGGRESSIVE CAN YOU BE WITH SINGTON

HOW AGGRESSIVE CAN YOU BE WITH SINGTON?

A Change in the Definition of Disability – Sington v Chrysler Corporation

· The statute – MCL 418.301(4) and MCL 418.401(1):

As used in this chapter, “disability” means a limitation of an employee’s wage earning capacity in work suitable to his or her qualifications and training resulting from a personal injury or work-related disease. The establishment of disability does not create a presumption of wage loss.

· Prior interpretation: Haske v Transport Leasing, Inc.

In its 1997 decision in Haske, the Michigan Supreme Court held that “an employee proves a disability where he can no longer perform a job suitable to his qualifications and training as a result of his injury”.(Emphasis added)

In Haske the Court focused on what an employee could not do. If there was only one job suitable to the employee’s qualifications and training that the employee could not perform, but 99 that the employee could perform, he or she was considered to be disabled.

· Mr. Sington’s case

o Hired in 1971

o For the last 15 year of his employment, he worked as a “floater” performing various production jobs

o June 1994 – occupational injury to left shoulder, accepted as compensable

o Left shoulder surgery and eventual return to work as a floater, with restrictions of no work reaching over shoulder level

o August 1996 to November 1996 – off work for a non-occupational right shoulder injury and surgery

o November 1996 – returned to work as a floater, with new work restrictions, honored by Chrysler

o Mr. Sington’s average weekly wage stayed the same both before and after both of his shoulder surgeries

o March 1997 – Mr. Sington went off work for a non-work related medical condition (a stroke) and received sickness and accident benefits and a permanent and total disability pension

o Workers’ compensation benefits were not paid

· The Court’s Decision

The Supreme Court reversed the Court of Appeals’ award of workers’ compensation benefits and remanded the case to the Workers’ Compensation Appellate Commission to reconsider it in light of the Court’s new definition of disability.

· The “New” Definition of Disability

The Supreme Court defined disability as follows:

A person suffers a disability if an injury covered under the WDCA results in a reduction of that person’s maximum reasonable wage earning ability in work suitable to that person’s qualifications and training. (Emphasis added.)

The Court’s focus was no longer on what an employee could not do, but on what an employee could still do.

Test: Is there at least one job, available at the employer or in the relevant labor market, which is within the employee’s restrictions and suitable to the employee’s qualifications and training, which pays as much as or more than the employee’s job at the time of the injury?

Issues:

o How are the wages determined at the time of the injury for comparison with the employee’s “maximum reasonable wage earning ability”?

o Do the other jobs suitable to the employee’s qualifications and training have to be available?

Utilizing Sington to the Employer’s Advantage

· Types of Cases to Which Sington Might Apply

o People working below qualifications and training

o People in very low paying or part-time jobs

o White collar employees: Professionals, accountants, doctors, nurses, lawyers, managers, sales people, etc.

o Stress reaction to a single supervisor

o Stress reaction to an isolated incident of employment

o Dermatitis or allergic reaction cases, resulting in restriction regarding only one exposure

o Plant closings where all employees work up to the closing day, generating maximum reasonable wages within their qualifications and training

· Practical Application

o Establish the broadest qualifications and training to increase the pool of jobs suitable to the employee’s qualifications and training

· Application for employment

· Resume

· Interview

· Education

· Training

· Job history, including employer, duration of employment, jobs, hours, rates of pay, etc.

· Licenses

· Certificates of completion or competency

o Avoid calling post injury work:

· Light duty

· Favored work

· Accommodated work

o How to establish available work that pays as much or more than the job being performed at the time of the injury

· Other jobs at the employer of injury

· Classified ads

· Placement agencies

· Recruiters

· Temporary agencies

· Vocational evaluation and labor market survey

Strategies For More Aggressive Use of Sington

· Bases for Disputing and Litigating Cases to Facilitate Resolution

· “DeMinimus” Restrictions May Mean No Disability

· Is “Residual Wage Earning Capacity” Back a la Sobotka & Braddock?

o First apply Sington to determine whether the employee is disabled

o If the employee is disabled, then apply MCL 418.361(1):

- “While the incapacity for work resulting from a personal injury is partial, the employer shall pay, or cause to be paid to the injured employee weekly compensation equal to 80% of the difference between the injured employee’s after-tax average weekly wage before the personal injury and the after-tax average weekly wage which the injured employee is able to earn after the personal injury, but not more than the maximum weekly rate of compensation, as determined under section 355.” (Emphasis added.)

o Kocevski v Triam Automotive, 2002 ACO #310, Leonard v Wayne State University, 2003 ACO #4, Kallas v Eagle Alloy, Inc, 2003 ACO #51, held that the magistrate may find that the employee retains a post-injury ability to earn, reducing the weekly wage loss benefit, where the employer can prove that there are

- Real jobs in the real world,

- Which pay less than the employee’s maximum reasonable wage earning capacity,

- Which are reasonably available to the employee (do not need bona fide offer of reasonable employment?),

- Which the employee can perform (within the employee’s restrictions and suitable to the employee’s qualifications and training), and

- That there are factors other than the residual effects of the injury that cause continued unemployment (e.g., lack of application, refusal of job, or other work avoidance)

o Does Sweatt v Dep’t of Corrections, ___Mich___ (5/13/03), limit the use of MCL 418.361(1) to cases where the employee is working?

- “[T]his provision only addresses those situations in which the employee still has a wage-earning capacity, but a reduced wage-earning capacity. That is, it only addresses those situations in which the employee is employed, but earning less money than before the work-related injury.” Slip opinion at 14 (emphasis added).

RAKESTRAW APPLIES TO PREEXISTING WORK-RELATED CONDITIONS AS WELL AS PREEXISTING NON WORK-RELATED CONDITIONS

In Zanskas v National Staff Management, Inc., 2003 ACO #224, the Michigan Workers' Compensation Appellate Commission recently held that the Supreme Court's analysis of compensable aggravation in Rakestraw applies not only to alleged occupational aggravations of preexisting non-occupational conditions, but also to claims of work-related aggravations of a preexisting work-related condition. Zanskas, id, at 8.