Firm Newsletters

As of December 15, 2019, the Colorado Department of Labor and Employment (CDLE) has a new rule in place clarifying that companies may cap but not take away employees’ earned, unused vacation pay. The viability of “use-it-or-lose-it” vacation policies under the Colorado Wage Claim Act (the “Act”) has been in flux for years, with the latest conflict stemming from a 2019 Colorado Court of Appeals decision upholding a policy under which employees forfeited vacation pay in some circumstances (e.g., if they resigned without providing two weeks’ notice). The CDLE’s new rule (7 CCR 1103-7, Rule 2.15) rejects the Court of Appeals’ holding and clarifies that an employer may have a policy limiting how vacation pay accrues but may not diminish earned vacation days other than through an employee’s actual use of vacation time.

Colorado employers with conditional vacation payout policies should immediately address the application under the new rule.  If needed, consultation should be made with an employment law attorney to address a companies’ needs.  Companies should address the difference between having vacation policies and general “paid-time off” policies.  The new rule is not applicable to the latter type of policies.  Therefore, companies with vacation only policies should address the potential implications of wage exposure to employees under the new rule.  For example, upon termination, under the new rule, an employee with unused vacation time is now entitled to wages for that unused time.  Conversion over to general “paid-time off” policies may be better suited to avoid this type of liability.

As always, if you have any questions regarding employment or workers’ compensation insurance laws, please contact us.

In 2019, Colorado earned the top spot for the highest percentage of employees who work from home, according to Flex.Jobs  https://www.flexjobs.com/blog/post/infographic-which-states–have-most-full-time-telecommuters.  While telecommuting is not realistic for every company, many jobs have at least some component that employees can do flexibly even if a job requires an employee to be onsite for specific hours.  Perhaps the employee reconciles call logs or works on quarterly reports on a Sunday afternoon.  The question then arises, “What is an employer’s liability for injuries occurring at an employee’s home or when traveling between the home and work?”  A compensable injury is one which “arises out of” and “in the course of” the employment.   An injury “arises out of” of a work-related activity if it is “sufficiently interrelated to the conditions and the circumstances under which the employee usually performs his job functions that the activity may reasonably be characterized as an incident of employment, even though the activity itself is not a strict obligation of employment and does not confer a strict benefit on the employer.” City of Boulder v. Streeb, 706 P.2d 786 (Colo. 1985). For example, in Schwindt v. Red Roof Delivery Inc., W.C. No. 4-009-534 (September 14, 1992), the Claimant, a restaurant manager, was injured when she fell down a stairway in her home at approximately 4:30 a.m., sustaining significant injuries.  The Claimant had been working on schedules for the employer, and was authorized, but not required, to do so at home.  The Claimant was performing this work in her living room, but began to fall asleep, so she gathered her materials to go to an office adjoining her bedroom.  Just prior to approaching the stairway, the Claimant closed a door.  The resultant reduced lighting impeded the Claimant’s visibility. Claimant lost her step in the hallway and fell down the stairs.  The Claimant testified she “probably” would have taken a shower and returned to scheduling had the fall not occurred.  The ALJ concluded the injury was compensable.  He found the Claimant’s work demands permitted her to complete administrative work at home, and that, at the time of the fall, the Claimant “would have been asleep in bed” had she not been working on the schedules.  The Respondents made several arguments on appeal, including that the connection between the fall and the Claimant’s employment was too remote, and that the Claimant’s act of closing the door severed the causal connection.  The Panel rejected the Respondents’ arguments, holding there was a sufficient nexus between the conditions of employment and the injury.  The Panel reasoned, the claimant “need only have been acting in a manner consistent with, or incidental to, the employment” to establish compensability.

Similarly, in Bates v. Coors Brewing Co., W. C. No. 4-348-224, 1998 WL 872454, (Nov. 13, 1998), the Claimant worked as a plant manager for the employer. On May 14, 1997, the Claimant left the employer’s plant in her personal vehicle to travel home, where she was going review work-related material she was taking on a business trip the following day. On her way home, the Claimant was injured in a motor vehicle accident.  The ALJ found the claim compensable, holding the Claimant’s travel home on this occasion was in pursuit of the employer’s business and conferred a benefit to the employer beyond her own presence at work.  On appeal, Respondents contended that the facts of this case did not fall within the travel status exception because the Claimant was not required to work at home and was not required to bring her personal vehicle to work. The Panel rejected Respondents’ arguments, holding an injury does not have to be the result of a mandatory employment activity to be compensable. University of Denver v. Nemeth, 127 Colo. 385, 257 P.2d 423 (1953);  Rather, it is sufficient if the injury arises out of a risk which is reasonably incidental to the conditions and circumstances of the particular employment.  This includes discretionary or “optional” activities on the part of the employee which are devoid of any duty component.

The case Roe v. Alpine Plumbing & Heating, Inc., W.C. No. 3-766-435, 1987 WL59197, (July 20, 19987), had similar facts, but a contrary result.  In Roe, the Claimant who was employed by Respondent as a plumber, was injured in an automobile accident.  The Claimant testified that the accident occurred while he was “driving up to the job” near Boulder. As a result of a previous injury, the Claimant was performing light-duty work for the Respondent.   The Claimant’s duties included working on plans at his home. However, the ALJ found that the Claimant was “allowed to work at home for his own convenience” and that “the Claimant’s home was not an alternative job site.” Consequently, the ALJ concluded that the Claimant was not within the course and scope of his employment at the time of the accident.

Finally, in Sedgwick CMS v. Valcourt-Williams, in a 12-2 decision, the District Court of Appeals of Florida, reversed an ALJ’s decision awarding worker’s compensation  benefits to an at home worker.  During working hours on  April 27, 2016, Valcourt-Williams, a workers’ compensation claims adjuster, reached for a cup of coffee in her kitchen and tripped over one of her dogs, fell and sustained injuries to her knee, hip and shoulder.  She filed a worker’s compensation claim, which the employer denied, contending her injuries did not arise out of employment.  The ALJ held the Claimant’s injuries were compensable because the work from home arrangement meant the employer “imported the work environment into the claimant’s home”.  On appeal, the District Court held the Claimant’s non-employment life—her dog, her kitchen, reaching for her coffee cup—caused the accident, not her employment.  The court, however, said their decision would not “immunize” employers from workers’ compensation claims in work-at-home arrangements.  Two judges issued dissenting opinions.  One dissenter said it was “expected that employees who work from home will take periodic breaks and may suffer compensable injuries from falls from a variety of causes”.   The second dissenter argued that workplace injury from a neutral risk has been “undoubtedly compensable” and that the majority erred in their decision.  The judge found that tripping over the dog was “no different than if the claimant had slipped on a liquid substance on the floor” and was consistent with a decade of case law holding that a trip and fall in the workplace is compensable.

The trend to allow employees to work from home raises many wrinkles in the event of  injury, including applicability of the “dual purpose doctrine”, travel status, and obvious problems with proof.  In certain factual situations, the dual purpose doctrine has been applied to cover injuries sustained while the claimant is traveling between home and the job site. One such instance exists when the nature of the claimant’s employment is such that “it can genuinely and not fictitiously be said that the home has become part of the employment premises.” In those circumstances “travel between two parts of the employer’s premises is in the course of employment.” 1 Larson’s Workers’ Compensation Law, § 16.10[1]. Larson adds the following at § 16.10[2]:  When reliance is placed upon the status of the home as a place of employment generally, instead of or in addition to the existence of a specific work assignment at the end of the particular homeward trip, three principal indicia may be looked for: the quantity and regularity of work performed at home; the continuing presence of work equipment at home; and special circumstances of the particular employment that make it necessary, and not merely personally convenient, to work at home.

The reported cases  suggest compensability of injuries suffered by an employee permitted to work from home are highly fact specific.  If you have questions about the compensability of such an injury, or any injury, contact us.

Having litigated several “assault” cases, nothing ceases to amaze this author more than the vast number of unfortunate ways people find themselves in the most bizarre and unforeseeable situations. Courts across the United States adjudicating assault-based cases in the workers’ compensation context are faced with determining whether the events leading to the assault arose out of an injured workers’ employment or whether the event was purely personal in nature. Here are some of the more inexplicable events that could give rise to a claim — you decide whether these claims would be compensable.

In 2007, an individual was feeding a bear at the Great Bear Adventure in northern Montana. It was undisputed that the individual had smoked pot prior to entering the bear cage with food. The manager of the park had told the individual not to feed the bear as the food was being tapered due to hibernation. When the individual entered the enclosure, he was mauled by the bear.  Although the employer argued that the individual was outside the scope of the employment, the Montana appellate court found that the bear was “an equal opportunity mauler” who attacked regardless of the marijuana use. As noted by the decision, the use of drugs (which the court admonished at best) had no bearing on the actual animal attack.

More traumatically, in August 2018, police were called to a construction scene in Wisconsin. The police discovered that a co-worker allegedly attacked and killed another co-worker with a circular saw. The co-worker was arrested at the scene. A subsequent investigation documented that the co-worker assailant had told other crew members during the day of the attack that other crew members were teasing him about a one-night stand he had had the evening before.  The legal question, other than the criminal liability of the assailant, is whether the decedent’s estate/dependents would be entitled to workers’ compensation death benefits? Was the attack work related, or did it arise out of a direct personal dispute between the assailant and decedent? Based upon the facts of this case, you be the judge.

Although the case above could be on the border of compensability depending on the facts, a more clear-cut assault occurred in January 2018 in South Carolina. During that event, the manager of a fast food restaurant got into a heated verbal altercation with an employee over shift scheduling. When the manager told the employee to “stop being a crybaby,” the employee wrapped up the argument by throwing a hot, “loaded burrito” at the manager. According to the manager, melted cheese stuck onto the manager’s left side and leg. Apparently, the manager recovered from the hot cheese injuries, but could a mental impairment injury also be included in this type of event?

Finally, imagine yourself working as a fast food drive through employee. It’s a typical day of serving food and drinks, handing the items to customers through an open window. Now imagine serving a soft-drink, and, while the window is open, the customer throws a three-and-a-half-foot alligator through the window at you. In 2016, that is exactly what happened to a fast food employee in Florida. The customer was later apprehended and claimed that he threw the alligator into the restaurant as a funny prank. While it is unclear whether the employee sustained any physical injuries, the assault by semi-aquatic reptile exemplifies what a neutral force assault is in terms of workers’ compensation liability for injuries arising out of employment.

The above cases raise unique issues concerning assaults, whether by an animal, a co-employee, or a random person who just happened to pick up an alligator from the side of the road prior to getting lunch, that can be tricky and fact dependent.  When you need help untangling the facts and details surrounding a claim, please contact us.

As we recently celebrated the 4^th of July with family and friends, we must not lose sight of the Founding Fathers and formation of the Constitution. Interestingly, John Hancock was the only one to sign on July 4, 1776, while the others signed at a later date. We are fortunate that the Founding Fathers drafted the Constitution to incorporate a judicial system that allows people the opportunity to be heard as that luxury does not exist in many other places in the world. Often, the higher courts will have to decide issues from the lower courts to interpret a statute, applicability of the law, admissibility of evidence, etc. The workers’ compensation laws are subject to the same scrutiny as any other law or statute.

The Workers’ Compensation Act and system was created to provide a quick and efficient resolution to injured workers and the ability through the administrative courts to avoid the long delays that could ensue in the trial courts. Ironically, workers’ compensation claims can be tied up in litigation much longer than the trial courts which was not the intent of the legislature. While the hope and intent are clear, due to the many nuances and different interpretation of the workers’ compensation laws, there will continue to be disputes that arise.

While different in each state, workers’ compensation medical benefits are subject to a fee schedule set by the legislature. By statute, a medical provider could not collect payment for medical expenses beyond those paid by the plaintiff’s workers’ compensation insurer. The intent (hopefully) is to have a level playing field and no disputes over what fee is to be charged to avoid any delay to the injured worker for medical care.

Plain and simple, the cost for a medical benefit under a workers’ compensation claim is subject to a set fee by the legislature regardless of what the provider may charge outside of the system for the same service. This also, for policy reasons, provides some relief to the carriers given the volume of workers’ compensation claims. They will not be burdened with extreme medical costs providing medical benefits to claimants as medical providers are limited to the amounts under the fee schedule.

With that said, in May of this year the Colorado Court of Appeals rendered an opinion that focused on the admissibility of past medical expenses when the claimant/plaintiff is injured on the job and sues the third-party tortfeasor. The Court considered whether “billed” medical expenses versus what was actually “paid” were to be considered by the court and jury in awarding damages to a claimant/plaintiff. Before trial, the defendant had extinguished the insurer’s subrogation interest in the amounts paid by paying off the insurer’s claim for those damages.

The case was brought before the Court based on claimant/plaintiff’s appeal that the trial court erred in excluding evidence of the amounts “billed” by his medical providers and only admitted the amounts “paid” by the carrier for his medical care and treatment. The Court was to determine whether billed versus paid medical benefits were permitted in a third-party lawsuit.

The Court held:

• The collateral source rule barred admissibility of the medical expenses paid by the workers’ compensation carrier.
• The plaintiff could present evidence at trial of the higher i.e. “billed” medical expenses by the providers.

Briefly, claimant worked for United Airlines (“United”) and was struck by an employee of Delta Airlines (“Delta”) at Denver International Airport – both were driving similar luggage tug vehicles. Claimant’s injuries were in the course and scope of employment, therefore, admitted and his indemnity and medical benefits were paid by his employer pursuant to statute.

Claimant’s employer sought reimbursement and sued Delta and its at-fault driver. Claimant sued the same defendants to recover for his personal injuries related to his work injury. United’s claim against Delta was settled for $328,799.16 and the case was dismissed with prejudice leaving only claimant and Delta as parties. Delta admitted liability but disputed claimant’s claimed damages so the case went to trial. At the first trial, claimant was awarded $1.5 million but a new trial was granted due to misconduct by claimant’s attorney.

At the second trial (which interestingly was a bench trial), plaintiff was not allowed to provide evidence of the higher “billed” amounts from the providers for medical expenses but only the amounts actually “paid” by the employer. The plaintiff was awarded $259,176 in damages of which $194,426 was for economic damages. The court subsequently entered an order to set-off claimant’s economic damages by the amount defendant had paid to settle the workers’ compensation claim. Plaintiff argued this was not fair since his award for economic damages was reduced to zero.

The injured worker appealed. In its decision, the Court ruled that the collateral source rule applied to workers’ compensation benefits. The collateral source rule, or collateral source doctrine, is an American case law evidentiary rule that prohibits the admission of evidence that the plaintiff or victim has received compensation from some source other than the damages sought against the defendant. In Colorado, the first component requires a trial court to set off tort verdicts by the amount of certain collateral source payments received by the plaintiff unless the payments were made because of a contract entered into and paid for on the plaintiff’s behalf. § 13-21-111.6, C.R.S. 2018. The second component bars evidence of a plaintiff’s receipt or entitlement to benefits received from a collateral source, most often an insurance company, “because such evidence could lead the fact-finder to improperly reduce the plaintiff’s damages award on the grounds that the plaintiff already recovered his loss from the collateral source. Wal-Mart Stores, Inc. v. Crossgrove, 276 P.3d 562 (Colo. 2012).

The Court noted that “even though claimant did not personally pay premiums toward his workers’ compensation insurance, he gave consideration for the same in the form of his employment services.” Van Waters & Rogers, Inc. v. Keelan, 840 P.2d 1070, 1074 (Colo. 1992). The same holds true to the defendant, who did not contribute in any way to the premiums paid to him and, therefore, the benefits paid were wholly collateral to the defendant. Therefore, the collateral source rule applies, and the defendant may be responsible for plaintiff’s damages regardless of what was paid by the workers’ compensation carrier. “The Court rationalized this will prevent a wrongdoer from reaping the benefits of a contract to which he is not a party.” The National Law Review, Colorado Court of Appeals Permits Evidence of Billed Workers’ Compensation Benefits at Trial.

In further reasoning of its decision, the Court acknowledged the workers’ compensation statute provides that amounts billed in excess of the statutory fee schedule are “unlawful, void, and unforceable.” This statutory language effectively prevents the plaintiff, as a matter of law, from having any legal obligation to pay such billed amounts. The Court cited a decision from the Colorado Supreme Court that stated, “the fact a bill is uncollectable does not render it entirely irrelevant to the reasonable value of the medical services provided.” Volunteers of America v. Gardenswartz, 242 P.3d 1080 (Colo. 2010).

There was a dissenting opinion issued by the Court which identifies the effect this ruling will have for claims in the future. “To allow injured workers to pursue expenses against the defendant in excess of what workers’ compensation already paid for his/her injuries contravenes the intent and purpose of the Workers’ Compensation Act. In part, this now affords the injured worker a windfall which the Act was not designed to do.” The dissenting opinion also makes note that the court is in the position of enforcing unenforceable contracts since the billed amounts are void and unenforceable based on the fee schedule specific to workers’ compensation claims.

The opinion of the Court has certainly created a stir as it now essentially creates a windfall in favor of the injured worker and settlement with workers’ compensation carriers before trial essentially meaningless.

We will wait to see if the Court’s decision is brought before the Colorado Supreme Court for further review and determination of this now complicated, and to be highly debated, topic.