A Painful Step in Addressing the Opioid Epidemic: An Overview of the 2016 CDC Guidelines

The growing epidemic of chronic opioid use and addiction, and its consequences, permeates theopiod American medical and legal landscape.  Since the spike in the use of ubiquitous pain medications in the late 1990s, there has been little actual oversight in the health care industry to regulate the prescription of these highly addicting drugs.  In March 2016, the Center for Disease Control (CDC) released new guidelines concerning opioid pain prescriptions. The guidelines have caused some backlash from physicians, who believe the government is now overreaching into the patient-physician relationship, and shifting from its historical role of approving the use of opioids at the regulatory level. Aside from the finger pointing amongst stakeholders in the health care industry, from the government, to big pharma, to the physicians who continue to administer, to the legal system, the fact is there is plenty of blame to go around for the cause of the epidemic. The response to the guidelines reflects the fundamental agreement that more oversight and education is needed at all levels.  The CDC’s new guidelines are a broadened approach with the goal of addressing the epidemic from the top down.

 

The authors of the guidelines, which were an amalgam of health care professionals, cited a jaw dropping statistic. In 2012, health care providers wrote 259 million prescriptions for opioid medications. That is one prescription for every adult in the U.S. The increase in prescriptions were found in the areas of family practice, general practice, and internal medicine. From 1999 through 2014, more than 165,000 people died from opioid related deaths in the U.S. The authors pointed out that contemporary studies evidenced that opioids have adverse long term affects including significant physical impairment and distress. The authors stated that, “this disorder is manifested by specific criteria such as an unsuccessful effort to cut down or control use resulting in social problems and a failure to fulfill major role obligations at work, school, or home.” In other words, continued prescription of opioid medications can be a contributing factor in an injured worker not returning to the work place.

 

The substance of the CDC guidelines can be broken into three general categories:

(1) when to start or continue administration of opioids for chronic pain symptoms;

(2) how practitioners should select a particular drug, the dosage, and when to discontinue that specific dosage; and

(3) how to mitigate the potential for addiction from start to finish.

The guidelines are not intended to apply for cancer and end-of-life palliative care. Rather, the guidelines are intended to apply to primary providers, including those who work in out-patient clinical settings.

 

The guidelines emphasize the benefits of non-opioid treatments. For lower back pain, exercise therapy and non-steroid anti-inflammatories are recommended. As an alternative to opioids, cognitive behavioral therapy is recommended to mitigate disability and catastrophic thinking. If, and when, opioids are utilized in a treatment program, the physician should continue prescriptions if “meaningful improvement” in pain and function outweighs the risk of continued use. The guidelines recommend that the patients demonstrate a 30% improvement in pain scores and function to justify continued opioid use. In other words, opioids must be used as a method to improve function rather than as a “band-aid” approach to sustain the status-quo condition.

 

During the continuation process, the physician should actively manage the patient’s case by reviewing any history of controlled substances and utilize their state’s prescription drug monitoring program periodically, while performing, at a minimum, annual urine tests. In Colorado, for example, the Workers’ Compensation Medical Treatment Guidelines (MTG), Rule 17 Exhibit 9, have independent criteria for treating chronic pain in workers’ compensation case. The MTG emphasizes similar recommendations for active case management, including urine screens.  Additionally, the Department of Regulatory Agencies, in connection with several state medical boards, released an “Open Letter to the General Public on the Quad-Regulator Joint Policy for Prescribing and Dispensing Opioids” on October 15, 2014. While the policy does not draw a bright line rule of managing opioid cases in Colorado, the letter does outline the boards’ recognition that “decreasing opioid misuse and abuse in Colorado should be addressed by collaborative and constructive policies aimed at improving the prescriber education and practice, decreasing diversion, and establishing the same guidelines for all opioid prescribers and dispensers.”  The board also emphasized documenting improved functions, the use of the PDMP (Prescription Drug Monitoring Program), and random drug screening based upon the provider’s clinical judgment.

 

The CDC guidelines are important to workers’ compensation treatment and claims. The guidelines suggest that long term opioid use can be counterproductive in workers’ compensation. How these guidelines will be used by workers’ compensation physicians, in order to return injured workers’ back to work, has yet to be known. But the guidelines can be used in an effort to mitigate risk for future exposure in the litigation process. From a legal perspective, the guidelines, though not binding on any physician, are a peer reviewed document by both experts in the field and industry stakeholders. In this author’s opinion, the guidelines itself meet the threshold evidentiary requirement in Colorado as an admissible, reliable medical document. For more information, please feel contact us with specific case-related questions. As a resource, the CDC guidelines can be found here. A copy of the Colorado joint letter on prescribing and dispensing opioids can be found by following the link located here.

 

The EEOC’s New Wellness Program Rule

On May 16, 2016, the Equal Employment Opportunity Commission US-EEOC-Seal.svg(EEOC) released its own final regulations regarding employer wellness programs.  This was in direct response to the two recent court decisions – EEOC v. Flambeau, Inc. and Seff v. Broward County.  In its recently issued regulations, which you can access HERE and HERE

The EEOC has set forth its final position on how the Americans with Disabilities Act (ADA) and Title II of the Genetic Information and Discrimination Act (GINA) apply to employer wellness programs that request the health information of employees and/or their spouses.  While most provisions of the final ADA rule and final GINA rule are identical to their respective proposed rules, there are some key differences, which we explain below in Q&A format below.

  1. Does the ADA’s safe harbor provision apply to employer wellness programs?

No.  The ADA’s safe harbor provision states that the ADA “shall not be construed to prohibit or restrict . . . a person or organization covered by this chapter from establishing, sponsoring, observing or administering the terms of a bona fide benefit plan that are based on underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with State law.”  42 U.S.C. § 12201(c).

The Commission made no secret about its opinion that Seff and Flambeau were “wrongly decided” (including by appealing the Flambeau decision to the Seventh Circuit).  Despite case law to the contrary and pending appeals, the Commission reaffirmed its position in the final ADA rule that “the safe harbor provision does not apply to an employer’s decision to offer rewards or impose penalties in connection with wellness programs that include disability-related inquiries or medical examinations.”  Rather, the safe harbor provision only applies “to the practices of the insurance industry with respect to the use of sound actuarial data to make determinations about insurability and the establishment of rates.”  An employer’s use of a wellness program to make employees healthier and reduce the costs of health care is not the type of underwriting or risk classification that is protected by the safe harbor provision. See 29 C.F.R. § 1630.14(d)(6).

  1. What wellness programs are subject to these final rules?

Any wellness program that includes disability-related inquiries and/or medical exams is subject to the rule.  This includes wellness programs: (a) offered only to employees enrolled in an employer-sponsored group health plan; (b) offered to all employees regardless of enrollment in the employer-sponsored group health plan; and (c) offered as a benefit of employment by employers that do not sponsor group health plans/insurance.

  1. Do the final rules provide additional clarification as to what makes a wellness program “voluntary”?

Yes.  The Commission has held steadfast in its decision to apply the “30 percent rule” for incentives set under HIPAA and the Affordable Care Act to participatory wellness programs that inquire as to employee disabilities or require employees to undergo medical examinations.  In doing so, the final rule limits the size of the incentives offered by these programs to 30% of the employee’s total cost of coverage.  Many commenters wanted the Commission to adopt an “affordability standard” to protect low-income workers from incentives that prove to be large enough to render health insurance coverage unaffordable.  The Commission declined to adopt this standard however, because in its view, “this rule promotes the ADA’s interest in ensuring that incentive limits are not so high as to make participation in a wellness program involuntary.”

Additionally, in the rule’s preamble specific to 29 C.F.R. § 1630.14(d)(2)(ii), the Commission clarifies that it is of the opinion that the ADA prohibits “the outright denial of access to a benefit available by virtue of employment”, but does not prohibit “an employer from denying an incentive that is within the [30% limit] . . . nor does it prohibit requiring an employee to pay more for insurance that is more comprehensive.”  The Commission likely included this comment to further emphasize its disagreement with the Flambeau and Seff decisions – the Commission has concluded that an employer discriminates against an employee in violation of the ADA, 42 U.S.C. § 12112(d)(4), when it “denies access to a health plan because the employee does not answer disability-related inquiries or undergo medical examinations.”

The final rule explaining the notice requirement, 29 C.F.R. § 1630.14(d)(2)(iv), also clarifies that it applies to “all wellness programs that ask employees to respond to disability-related inquiries and/o undergo medical examinations.”

  1. What types of incentives may be offered to employees and how can employers calculate incentive limits?

In addition to financial incentives, employers are permitted to offer in-kind incentives (e.g., employee recognition, parking spot use, relaxed dress code) and de minimis incentives to employees, despite any difficulties in valuing these incentives.

The final ADA rule, 29 C.F.R. § 1630.14(d)(3), also explains how employers can calculate incentive limits in four situations: (a) where participation in a wellness program depends on enrollment in a particular health plan; (b) where wellness program participation does not depend on employee’s enrollment in an employer-offered single group health plan; (c) where wellness program participation does not depend on employee’s enrollment in any of employee’s group health plans; and (d) where an employer does not offer a group health plan or insurance.

  1. How do these rules relate to other federal discrimination laws?

Employers should pay special attention to interpretative guidance following the final ADA rule.  In it, the Commission states:

“[E]ven though an employer’s wellness program might comply with the incentive limits set out in [29 C.F.R. § 1630.14(d)(3)], the employer would violate federal nondiscrimination statutes if that program discriminates on the basis of race, sex (including pregnancy, gender identity, transgender status, and sexual orientation), color, religion, national origin, or age.  Additionally, if a wellness program requirement (such as a particular blood pressure or glucose level or body mass index) disproportionately affects individuals on the basis of some protected characteristic, an employer may be able to avoid a disparate impact claim by offering and providing a reasonable alternative standard.”

This appears to place the additional burden on the employer to examine all wellness program incentives and requirements for potential disparate impact.  The extent to which an employer must understand specific medical characteristics of every protected class on its employee roster is unknown.

  1. What changes did the Commission make in the final GINA rule?

There are four changes of note, all of which were added to the final GINA rules to clarify and/or enhance the proposed rules.

  • The final GINA rule extends the prohibition on offering inducements for information from the children of employees to all children (minor children and those 18 years of age or older).
  • Every provision of the final GINA rule now applies to all employer-sponsored wellness programs requesting genetic information.
  • There is no longer a different inducement limit threshold for employee spouses. The final GINA rule uses the “30 percent rule” when an employee and the employee’s spouse are given the opportunity to enroll in the employer-sponsored wellness program.  The final rule provides examples of how to calculate incentive limits where this is the case.  See 29 C.F.R. 1635.8(b)(2)(iii)(A)-(D).
  • Employers may not condition an employee’s or an employee’s spouse’s participation in a wellness program or their eligibility for offered incentives on the employee, the employee’s spouse, or a covered dependent agreeing to the sale, exchange, sharing, transfer, or other disclosure of genetic information or waiving GINA’s confidentiality protections.

Take Away

The final rules apply proactively – thus, are only applicable to wellness programs as of the first date of the plan beginning January 1, 2017 or thereafter.  In the meantime, we await the Seventh Circuit’s decision in the EEOC’s appeal of Flambeau regarding whether the ADA safe harbor provision applies to employer wellness programs.  Given the EEOC’s position that the provision does not apply and the growing number of courts that think otherwise, it is looking like the ultimate decision will be made by the U.S. Supreme Court.

COLORADO SUPREME COURT CLARIFIES THE FIREFIGHTER CANCER STATUTE

BACKGROUND

In 2007 the Colorado Legislature enacted a firefighter cancer presumption statute at Section 8-41-209, C.R.S.  The statute created a presumption that certain cancers were caused by work as a firefighter if the individual diagnosed with the cancer worked in the capacity for at least five years. firefighter For the cancer to be deemed a compensable occupational disease, the firefighter would have had to undergo physical examination upon becoming a firefighter that failed to reveal the cancer at that time. The presumption could be rebutted if the firefighter’s employer or insurer could show by a preponderance of medical evidence that the condition did not occur on the job.

This statute is similar to other presumption statutes that sprung up across the country in the wake of firefighters’ and other first responders’ actions during the 9/11 terrorist attacks.  The general premise behind the presumption is that firefighters are exposed to known carcinogens to a greater extent than other occupations and that development of cancer is a known effect caused by exposures to these carcinogens.

A series of cases had been litigated before different ALJs involving varying cancers and exposures wherein employers tried to overcome the presumption of compensability.  The ALJs, the ICAO and the Colorado Court of Appeals in a series of decisions essentially interpreted the presumption statute as being an irrebuttable presumption, requiring the employer to show an alternative cause for claimant’s cancer. The practical effect of this interpretation was to make the presumption statute similar to a strict liability statute. This is due to the fact that it is impossible to demonstrate that an individual’s cancer was in fact caused by something other than work as a firefighter.

THE ZUKOWSKI CASE

Mr. Zukowski began working as a firefighter for the town of Castle Rock in 2000. He underwent a physical examination at the time with his personal physician where there were some concerns raised over moles on his skin. Mr. Zukowski also worked part-time doing construction outdoors and eventually started his own business building decks and furniture. Mr. Zukowski spent a lot of time outdoors running, hiking and cycling when he was not working.

In 2002 Mr. Zukowski had five moles removed and biopsied. In 2008 he developed a mole on his right calf and ultimately in 2011 Mr. Zukowski was diagnosed with melanoma on his right outer calf at the same site where a mole that developed several years earlier. He had several surgeries to remove the mole and returned to full duty work, but made a claim for medical and temporary disability benefits under the presumption statute.  At hearing the parties stipulated that Mr. Zukowski was entitled to the presumption so the only issue is whether the employer overcame the presumption. The employer presented evidence regarding Mr. Zukowski’s known risk factors for developing melanoma including exposure to the sun and a history of abnormal mole growth. The ALJ found that Castle Rock’s burden in trying to overcome the presumption was to prove by medical evidence that claimant’s cancer came from a specific cause not occurring on the job.

On appeal to the ICAO, the ICAO essentially agreed with the ALJ. Castle Rock appealed the ICAO’s decision to the Colorado Court of Appeals, arguing that the ALJ misapplied the presumption when the ALJ determined that risk factor evidence was insufficient to rebut the presumption. The Court of Appeals agreed with the town of Castle Rock, looking at cases from other jurisdictions with a similar presumption statute and concluding that employer may overcome the presumption with specific risk evidence demonstrating that the particular cancer was probably caused by a source outside of work.

The Colorado Supreme Court granted certiorari in Zukowski along with a companion case involving a similar issue.  The Colorado Supreme Court agreed that Castle Rock was not required to establish an alternate cause for the cancer to overcome the presumption. The Colorado Supreme Court further held that in presenting risk factor evidence, which demonstrates the cancer was more probably caused by something other than work, can rebut the presumption.

AFTERMATH OF ZUKOWSKI

The aftermath of the Zukowski decision is not known yet.  I have tried cancer cases similar to Zukowski, where multiple potential employers were liable for the cancer and ultimately won for my client, but only because the last employer in claimant’s employment history was found liable.  I authored an amicus brief for the Colorado Self-Insured Association in Zukowski, so I have a pretty good idea of where these cancer cases are going.

Before Zukowski, firefighter cancer cases were very simple for claimant to prove. Claimant would appear with a doctor who would testify that the firefighter’s particular cancer fell within the types enumerated in the statute. The doctor would offer their opinion that since claimant worked for five years as a firefighter, claimant’s cancer was presumed caused by that work.  There was no amount of alternate risk evidence that would overcome the presumption as interpreted before Zukowski.

After Zukowski, litigating a firefighter cancer case will be much more involved when there are other risk factors to explain the cancer. Further, every risk factor relative to a particular cancer will have to be explored. For instance, the case I tried involved prostate cancer. Claimant had a significant family history of prostate cancer and was clearly predisposed to developing prostate cancer. Further, expert testimony was presented that prostate cancer is not something one would expect to see from exposure to carcinogens as a firefighter. Is predisposition to developing cancer a risk factor after Zukowski? It is certainly not as clear a risk factor as is exposure to sun and developing melanoma, where the cause-effect relationship is clear. Therefore, I believe these cases will become cancer and fact specific.

BOTTOM LINE

Further clarification through litigated cases is required to flesh out the presumption statute. For instance, in my prostate cancer case, claimant had his prostate removed and returned to work as a firefighter. If claimant develops another type of cancer is that an entirely separate claim? If claimant’s prostate cancer spread to a different organ after the prostate was removed, is that a new claim or continuation of the same claim? Is there a medical basis to prove that the cancer has recurred in a different organ or that it is an entirely new instance of cancer?  These questions arising out of the firefighter cancer presumption statute are all still unanswered.

 

Sexual Orientation Discrimination: EEOC Initiates its Next Title VII Challenge

A new era of discrimination lawsuits is upon employers nationwide.  Last month, the U.S. Equal Employment Opportunity Commission (“EEOC”) filed its first lawsuits alleging sexual orientation discrimination under Title VII against employers in Pennsylvania and Maryland.  The lawsuits are the latest step by the Commission to confirm its view that “sex” discrimination under Title VII encompasses discrimination based on sexual orientation. As with most discrimination cases filed by the EEOC, it seeks compensatory and punitive damages, as well as injunctive relief in both lawsuits.

Furthermore, with these lawsuits currently pending, the EEOC has also recently issued guidance on gender identity and sexual orientation discrimination.

What You Should Know About EEOC and the Enforcement Protections for LGBT Workers and

Addressing Sexual Orientation and Gender Identity Discrimination in Federal Civilian Employment

This guidance is all stemming from last year’s EEOC decision in Baldwin v. Department of Transportation where the Commission held for the first time that a claim of discrimination, on the basis of sexual orientation, necessarily involved sex-based considerations under Title VII because sexual orientation discrimination: (1) inevitably involves treating employees differently because of their sex; (2) is associational discrimination on the basis of sex; and (3) necessarily involves discrimination based on gender stereotypes, including employer beliefs about the person to whom the employee should be attracted.

As such, with the filing of the two recent lawsuits in Pennsylvania and Maryland, the EEOC is seeking to have two separate courts agree with its guidance on sex-based considerations. In the first challenge, the Commission alleges that a Pennsylvania-based health care company subjected a gay male employee to harassment because of his sexual orientation.  The lawsuit alleges that employee’s manager repeatedly referred to him using various anti-gay epithets and made other highly offensive comments about his sexuality and sex life.  The employee complained to the clinic director, but the director allegedly refused to take any action to stop the harassment.  The employee eventually quit.

In the second challenge, the EEOC alleges that a lesbian employee at a recycling company was harassed by her supervisor because of her sexual orientation.  The supervisor purportedly made comments about the employee’s sexual orientation and appearance on a weekly basis.  The employee purportedly complained to the general manager and called the company’s hotline about the harassment.  She was fired just a few days after she raised complaints.

Take Away: Plaintiff firms are taking notice and it is expected that sexual orientation based discrimination suits will increase over the next year or so, particularly pending the outcome of the recent lawsuits.  Consequently, employers should prepare for the EEOC to continue its focus on investigating sexual orientation and gender identity claims and should address these types of discrimination in training materials and handbooks.  In the end, employers should treat any such complaints of discrimination just as it would for other Title VII based discrimination complaint raised internally.

Legislative Mid-Session Update 2016

The 2016 legislative session is half over. The deadline for introduction of bills has come and gone; however, late bill introduction is very common. This is a brief summary of some of the introduced legislation of interest to clients:

Workers Compensation

Right now there are no pending bills regarding workers’ compensation. It is anticipated that there will be a bill introduced regarding first responders and compensability of posttraumatic stress disorder. A joint bill arising from discussions between Pinnacol Assurance, WCEA and CSIA is also a possibility, along with a bill from Pinnacol Assurance to allow it to establish a separate corporate entity that could write policies outside of Colorado.

Other Bills of Interest 

Senate Bill 16–056

This bill broadens the protections of the state whistleblower laws by including state employees disclosing information that is not subject to public inspection under the Colorado Open Records Act, when the disclosure is made to state entities that are designated as whistleblower review agencies. This bill is in the Judiciary Committee.

Senate Bill 16–070

This bill prohibits an employer from requiring any person, as a condition of employment, to become or remain a member of a labor organization, or to pay dues, fees or other assessments to a labor organization or to a charity organization or other third-party in lieu of a labor organization. Further, any such agreement violates these prohibited activities and are deemed void. This bill was originally assigned to the Business, Labor & Technology committee. After several amendments, the bill passed out of Senate and was sent to the House where it is assigned to State, Veterans & Military Affairs and will likely die.

House Bill 16-1002

In 2009 a bill passed known as the Parental Involvement in K-12 Education Act. This allowed an employee subject to the Family Medical Leave Act to take leave from work to attend various academic activities with, or for, the employee’s child. The leave was limited to 6 hours per month and 18 hours in any academic year. The employer was allowed to restrict the use of the leave in cases of emergency for the employer, or where the employment situation could endanger a person’s health or safety if the employee were absent. Further, the leave was limited to 3 hour increments at any time and required the employee to submit written verification from the school of the activity. The bill had a sunset provision repealing it effective September 1, 2015. This bill re-creates the 2009 bill with a couple of changes. It expands the type of academic activities to include attendance with school counselors. It also requires school districts and charter schools to post information about this statute on their websites. This bill was assigned to the Education committee in the House and eventually passed through the House without amendment. When introduced into the Senate it was assigned to State, Veterans & Military Affairs where it was postponed indefinitely.

House Bill 16 – 1078

This bill concerns whistleblowing protection for public employees not employed directly by the state. The bill prohibits county, municipality or local education providers from imposing disciplinary action against an employee for statements made by the employee about the local government that the employee believes shows a violation of state or federal law, a local ordinance or resolution, or a local education policy provider regarding waste, misuse of public funds, fraud, abuse of authority, mismanagement or danger to the health or safety of students, employees or the public. The bill would allow the employee to file a written complaint with the Office of Administrative Courts alleging some form of disciplinary action that the employee believes violates the whistleblower protection and would allow the employee to seek injunctive relief and damages. If the employee loses at the administrative hearing level, the employee would still have the ability to file a civil suit District Court. This bill was introduced and assigned to the local government committee in the House where an amended version was referred to appropriations. As there will be a fiscal note attached to the bill and given the Office of Administrative Courts involvement, the bill stands virtually no chance of passing.

House Bill 16 1114

This bill eliminates current employment verification standards requiring an employer to attest that it verified the legal work status of an employee and has not knowingly hired an unauthorized alien. It additionally eliminates the requirement for an employer in Colorado to submit documentation to the director of the Division of Labor in the Department of Labor and Employment that demonstrates the employer complied with federal employment verification requirements. This bill was assigned to Business Affairs and Labor where no activity has been taken and it will likely die.

House Bill 16 – 1154

This bill purports to clarify the definition of “employer” to only include a person that possesses the authority to control an employee’s terms and conditions of employment and has the ability to actually exercise that authority directly. The bill eliminates a franchisor from being considered an employer of a franchisee’s direct employees unless the franchisor has control over those employees. This bill was assigned to Local Government where no activity has been taken and it will likely die.

House Bill 16 – 1202

Current law requires employers to examine the legal work status of any newly hired employee within 20 days by using paper-based forms for identification. This bill would require employers to participate in the Federal e-verification program to determine work eligibility for newly hired employees. It then requires the employer to maintain documentation of this practice and submit it to the director of the Department of Labor and Employment. If an employer fails to do this it would be subject to a fine of up to $5000 for the first offense and up to $25,000 for the second offense, along with suspension of the employer’s business license for up to 6 months for continued offenses. This bill was assigned to the State, Veterans & Military Affairs where it was postponed indefinitely and will likely die.

History of Workers’ Compensation, Part III, Emergence of the Modern-Day System

This is the final piece of a three-part series surveying the history of workers’ compensation. Prior to 1911, an individual residing in the United States, regardless of their state residency, who suffered a workplace injury could only recover damages by utilizing traditional tort based law. In other words, an injured worker would need to sue their employer and claim the employer’s negligence or intentional conduct caused the subsequent injury. The employer could raise defenses such as contributory negligence or assumption of risk to bar the receipt of monetary damages. This system was often cumbersome, time-consuming, unpredictable, and expensive for both the employer and employee.

In 1911, the State of Wisconsin passed the first statutory law specifically addressing workers’ compensation entitlement benefits. The goal ofWisconsinAct the act was to create an efficient system to adjudicate claims while reducing legal hurdles for the injured worker thus creating a predictable system where the employer could foresee limited monetary risks. The Wisconsin system created a “no-fault” legal system in which the injured worker would no longer need to prove that the employer engaged in some type of culpable negligent or intentional conduct. According to the Wisconsin Department of Workforce Development, “the intent of the law was to require an employer to promptly and accurately compensate a worker for any injury suffered on the job, regardless of the existence of any fault or whose it might be.” The legislation provided for wage loss benefits, cost of medical treatment, disability payments, and payment for vocational rehabilitation training.

The legislation also eliminated an injured workers’ right to seek damages historically available through the tort system. As discussed in part two of the series, by 1911 the general public had become more concerned about the deplorable and often unsafe working conditions in factories across the nation. The Wisconsin Workers’ Compensation Act barred the injured worker from pursuing non-economic damages awarded by juries, including pain and suffering and loss and enjoyment of life. Similar to today’s ubiquitous state-based worker’s compensation acts, the Wisconsin Act enumerated the specific type of damages an injured worker could receive, thereby duly preventing the injured worker from requesting a jury to adjudicate damages. The judge adjudicating workers’ compensation claims, as a finder of fact, could not award benefits beyond the provided benefits in each respective act. The Wisconsin Act, while providing for specific benefits and shifting liability to the employer under the no-fault system, also provided employer’s with protection by limiting the scope of damages and removing the question of damages from unpredictable juries.

In the decade following the Wisconsin Act, nearly every state in the union promulgated some form of a workers’ compensation act. Mississippi was the last state to pass an act, but did so by 1948. Interestingly, as Gregory Guyton points out in his “Brief History of Workers’ Compensation,” the medical profession did not receive the worker’s compensation system with open arms. Medical professionals generally viewed worker’s compensation as a form of socialized medicine. According to Guyton, when the Social Security disability insurance act was created in the 1930s, disability based medicine expanded becoming lucrative for medical professionals. On the heels of the respective disability acts, the American Medical Association published the first guides to the evaluation of permanent impairment in order to develop a method to provide compensation evaluations. In Colorado, the legislature has decided to continue using the third edition of the AMA Guides to permanent impairment. The guide is currently available in six editions.

Given the volume of claims in any one state for benefits, each state may elect to create administrative agencies to adjudicate workers’ compensation claims. Colorado, for example created the Office of Administrative Courts in 1976 to hear an array of limited subject matter cases, including workers’ compensation. Prior to that time, the District Court handled worker’s compensation claims. Any individual working in workers’ compensation is familiar with the respective administrative system and ministering the claims. As the American workforce changes in age, and disability laws, including the ADA, become more pervasive in the work environment, there are open questions as to whether disability acts or managed health care administered by the federal government will substitute various aspects of workers’ compensation. For now, the workers’ compensation model most are familiar with will remain stable, subject to changes made by each respective legislation.

Personnel Files in Colorado: Who owns the file and what privacy interests are involved?

This is a question that I repeatedly see throughout the year and it comes in a variety of contexts. Often times, personnel-file-28116_960_720employers who may have recently terminated an employee, are suddenly posed with a request from that former employee for his/her personnel file. Sometimes, within a workers’ compensation or other employment related claim, the worker is seeking copies of the personnel file in an effort to bolster his or her claims. Additionally, employers receive requests from plaintiffs or third-parties seeking copies of personnel files concerning witnesses or company representatives. Consequently, employers are often placed in a decision whether or not to disclose this information and if there are any privacy issues with disclosing the information.

While the Colorado Supreme Court and Court of Appeals have not definitively addressed this issue head on, there is support for the conclusion that personnel files are property belonging to the employers and not the employees. In Corbetta v. Albertson’s Inc., it was the first time the Colorado Supreme Court addressed the issues of personnel files and privacy interests. The case involved a suit by a customer of Albertson’s alleging a variety of claims arising out of the plaintiff cracking several teeth on a pebble in a spinach salad she purchased. As part of discovery, plaintiff requested the entire employment files of the store manager, all assistant managers and all deli employees. Albertsons objected to the disclosure of these files invoking a right to privacy argument of the employees. The trial court ordered production of the files and concluded that while the personnel files were the property of Albertsons, disclosure was appropriate under the circumstances.

The Supreme Court overturned the trial court’s decision noting primarily that it did not appropriately balance the privacy interests involved and make appropriate factual findings and conclusions in addressing those privacy interests. However, the Supreme Court, in this decision, did not overturn the conclusion of the trial court that the personnel files were the property of the company. Accordingly, employers can rely on this decision for the conclusion that personal files are company property and not the property of the specific employee. Furthermore, while the Supreme Court did provide a right to privacy balancing test for determination of whether a personal file can be disclosed, the Court later in In re District Court, Cty and County of Denver revised this test, which now is the current law.

The case of In re District Court, Cty and County of Denver involved a former client of a law firm suing for legal malpractice and breach of fiduciary duties. As part of discovery, the former client requested financial information of the law firm members. The Supreme Court determined that when discovery requests implicate right to privacy interests:

  • The requesting party must first prove that the information requested is relevant to the subject of the action;
  • If shown relevant, then the party opposing the request must show that it has a reasonable expectation that the requested information or materials is confidential and will not be disclosed;
  • If the trial court finds that there is a legitimate expectation of privacy in the materials, the burden then shifts back to the requesting party to prove either that disclosure serves a compelling state interest or that there is a compelling need for the information AND that the information is not available from other sources.

There are other issues that implicate personnel files. First, employers are not required to give employees access to their personnel records. Access to personnel files and the information they contain should be restricted. Only authorized employees, supervisors or managers should be permitted to access personnel records on a “need to know” basis. Second, records regarding confidential, sensitive information unrelated to job performance, such as regarding citizenship, garnishments and any medical condition that could cause someone else to conclude the employee has a communicable disease (e.g., HIV), should be maintained in separate, confidential files. For example, if an employee suffers a workers’ compensation claim, it is highly recommended that a separate file be created to avoid confidential and private information being contained within his or her personnel file, such as medical reports.

Take Away

Personnel files are the property of the employers and thus, it is recommended that outside the scope of litigation, any such request for disclosure be denied. When requests are made as part of litigation or insurance claims, it is imperative that the right to privacy issue be properly considered and that the litigants requesting the information properly meet their burdens before a trial court.

SUBROGATION – SALE OF THE LIEN

BACKGROUND

Colorado’s workers’ compensation subrogation statute, located at S 8–41–203, C.R.S., is poorly worded and has become more complex through legislative revisions over the years. At its heart, the statute allows payment of compensation under the Colorado Workers’ Compensation Act to operate as an assignment of a cause of action against another person or entity “not in the same employ” whose negligence or wrong produced injury or death for which benefits are paid. The right of subrogation applies to all compensation including medical, hospital, dental, funeral and other benefits. The assigned and subrogated case includes the right to recover future benefits. It extends to money collected from the third party that produced injury for all economic damages, physical impairment and disfigurement. The assigned and subrogated cause of action does not extend to money collected for non-economic damages awarded to the injured worker for pain and suffering, inconvenience, emotional stress or impairment of quality of life.

People familiar with workers’ compensation subrogation are aware of judicial apportionment between the injured worker and the carrier. Further, the carrier is responsible for any prorated share of fees and costs the injured worker incurred in obtaining a settlement or judgment from the third-party, should the carrier elect to not pursue the matter on its own. This can lead to significant uncertainty for the carrier in trying to determine whether to pursue the third-party on its own or come to an agreement with the injured worker for a percentage of gross or net recovery. In most circumstances the workers’ compensation case is open and moving forward while the third-party case is pending, whether filed or not. What to do with the third-party case is a complicated, multifaceted decision-making process; however, at least in some circumstances, the decision can be simplified by selling the recovery rights (although not technically a lien, I will refer to it as a lien in this article) to the defendant in the third-party case.

LIEN SALE EXAMPLE

I recently had a case where sale of the lien made sense. The injured worker’s claim had been closed by settlement. Therefore, the total amount of potential recovery was known. The case involved a car accident where the injured worker was hurt in a rear-end collision. The total amount of insurance to cover the loss and liability of the negligent driver was also clear. The injured worker was pursuing the negligent driver in the third-party case and the workers’ compensation carrier elected to not bring its own cause of action. In settlement discussions in the third party case, it was clear that the negligent driver’s carrier would offer little or nothing to settle the case despite clear liability. The third-party carrier was willing to go to trial over causation of injuries that were largely compensated under the workers’ compensation system. Given these circumstances, I spoke directly to counsel for the injured worker to try to broker a deal on a percentage of potential recovery. We could not come to an agreeable percentage. I advised counsel for the injured worker that I was in discussions with the negligent driver’s carrier to have it buy my carrier’s lien. Since I could not come to an agreement with the injured worker’s attorney, I simply sold my client’s subrogation lien to the defendant in the third-party case. This guaranteed recovery for my client. The third-party case went to trial and the injured worker recovered no damages. The defendant in the third-party case submitted trial briefs asserting some set-off against potential damages based on the lien it purchased. The trial court held off any determination of a set-off. In the workers’ compensation case we had paid approximately $100,000, split evenly between medical and indemnity benefits. We sold the lien for $30,000. At issue before the trial court in the trial briefs was the value of the purchased lien. Was the purchased lien worth $100,000 set-off against billed medical, lost wages and permanent impairment claimed as damages in the third-party case? In the alternative, was the lien worth $30,000 as some undivided lump sum that can be set-off against all awarded damages? It is clear why the trial judge elected to not answer these questions, but let the jury come back with a decision on damages. The trial judge would have a difficult time figuring out what the defendant purchased from the workers’ compensation carrier and what it was worth. The jury saved the trial judge that headache since they found liability, but no damages. Regardless of the trial judge’s ultimate conclusion, my client’s had successfully recouped 30% of their lien and halted their exposure for on-going litigation expenses.

RAMIFICATIONS OF THE SALE

Counsel for the injured worker tried mightily to argue that respondents should reimburse the injured worker out of the $30,000 sale proceeds to account for its share of attorney fees and costs in the unsuccessful attempt to recover against third-party. Counsel for the injured worker was unsuccessful in all of his attempts. There was simply no legal basis to require the workers’ compensation carrier to pay for a share of unsuccessful litigation by the injured worker. That stated there is an appeal to the argument that it is unfair for the workers’ compensation carrier that did not actively participate in the negligent third-party case, to derive benefit from selling its lien without paying for the work done in the third-party case, even though it was unsuccessful.

BOTTOM LINE

Sale of the workers’ compensation lien is a viable option of recovery for respondents holding a subrogation lien; nevertheless, sale of the lien should only be done in certain circumstances. Sale of the lien when the workers’ compensation case is still open would not be recommended. Sale of the lien, for practical purposes, reduces any amount that could be used to settle the third-party case. This makes it more likely that that case will go to trial where the lien value will be used against the injured worker. This is not a good position for the workers’ compensation carrier. The workers’ compensation carrier still has obligations to claimant under the workers compensation system and in an open workers’ compensation case it should probably not sell its lien to the defendant in the third party case.

As a result of the lien sale in my specific case, there are rumblings in the claimant/plaintiff bar that they may try legislatively to prevent the sale of liens generated from workers’ compensation cases. As of now, no such legislation has been introduced.

We always recommend discussing this legal strategy with your counsel prior to embarking on this path. Whether the sale of a subrogation lien is viable depends largely on the specific facts of each case.

The History of Workers’ Compensation Part II: The Rise of Workers’ Compensation Coverage

This second segment, of the three part series on the history of workers’ compensation law, briefly summarizes how the industrial revolution fueled the workers’ compensation system. The first resemblances of workers’ compensation insurance coverage primarily arose because of increased revolutionized industrial practices and socialist schisms in European political ideals. Around the 1860s, the industrial revolution was beginning to take hold in Europe; the American Industrial Revolution area would steam forward in the later part of the 1800s. Industrial imperial countries, specifically Germany, wrestled with growing the economics of their respective country while continuing to expand their empires. To achieve these goals, political leaders were required to balance the progressive social worker-centered ideals and traditional conservative business goals.

 

Observers credit Chancellor Otto von Bismarck of Germany as establishing Otto_von_Bismarckthe benchmark standards for workers’ rights in Germany in the early 1870s. Gregory Guyton explained that, although Bismarck was not a benevolent leader, the legislation passed under his tenure resulted from a compromise between traditional views on industry and the increasing pressures from the growing Marxist movement.  Bismarck spearheaded the Employer’s Liability Law of 1871 extending legal protection to workers in specific labor areas including mines and railroads. In 1884, Germany adopted the Workers’ Accident Insurance Act. It provided pensions to those unable to work because of non-occupational causes. The subsequent Public Aid Act provided disability benefits for workers unable to work as a result of an on-the-job injury.

 

By virtue of creating a monetary distribution system for injured workers, Otto von Bismarck’s movement also created immunity for employers from civil lawsuits. This was a divergent political and legal shift from the ideals of the popular socialist political camp. Hence, the early workers’ compensation laws contained the exclusivity of remedies similar to what can be found in today’s statutes. Alan Pierce, Workers’ Compensation in the United States: The First 100 Years (Lexis Nexis 2011).

 

As the industrial revolution grew in America in the 1880s, so did public awareness of the unsafe work conditions faced by the daily laborer. In 1906, a socialist political activist, Upton Sinclair, published the graphic novel expose’ The Jungle. The novel, which followed a family of immigrants working the Chicago slaughter houses and exposed the horrific working conditions, gained ubiquitous attention amongst progressives. In the wake of The Jungle, the U.S. Congress passed several federal laws aimed to protect the public working class and general consumers, including the Food and Drug Act of 1906.

 

Still, little was done in terms of workers’ compensation insurance coverage in America. Common law tort liability in civil courts was the only remedy available to a worker injured in the course of employment. The American legal system posed challenges to immigrant workers such as procedural and language barriers. An employer could still raise the defense of assumption of risk or contributory negligence as a bar to any momentary recovery an injured worker could be entitled to. In his article, Guyton points out that the federal Congress acted by passing laws such as the Employer’s Liability Act in 1906 and 1907. The Acts respectively mitigated the harsh contributory negligence laws.

 

Following this Congressional intervention into an otherwise laissez-faire American capitalism culture, several states including New York and Massachusetts attempted to pass state based workers’ compensation reform laws. These reformations ultimately failed. However, President, later Supreme Court Justice, Howard Taft acted upon entering office. Taft signed into law the Employer’s Liability Act of 1908. The purpose of the act was to protect railroad workers’ engaged in interstate commerce. Each state developed independent commissions on how to address the liability for an injury. Private agreements between employers and workers lead to contractual obligations for employers to pay medical expenses for on the job injuries while workers’ waived their right to sue in civil tort. It was in this climate that the workers’ compensation system based in state law arose in 1911, which will be the subject of the next article.

The Ongoing Dilemma of Intermittent FMLA Leave

Intermittent FMLA leave is a giant thorn in the side of human resource professionals Familyacross the country. The struggle is that not all intermittent leave requests are equal. Here’s a look at some of the most common scenarios, and how to handle them. The FMLA allows employers some flexibility in granting different kinds of intermittent leave. Employees are entitled to take it for serious health conditions, either their own or those of immediate family members. The law also allows use of intermittent leave for child care after the birth or placement of an adopted child, but only if the employer agrees to it. It’s the company’s call. It’s not always simple, however. If the mother develops complications from childbirth, or the infant is born premature and suffers from health problems, the “serious health condition” qualifier would likely kick in. As always, it pays to know the medical details before making a decision.

Eligibility Is Not Automatic

Companies can successfully dispute bogus employee claims to FMLA eligibility. Consider this real-life example:

A female employee in Maine said she suffered from a chronic condition that made it difficult to make it to work on time. After she racked up a number of late arrivals – and refused an offer to work on another shift – she was fired. She sued, saying her tardiness should have been considered intermittent leave. Her medical condition caused her lateness, she claimed, so each instance should have counted as a block of FMLA leave. Problem was, she’d never been out of work for medical treatment, or on account of a flare-up of her condition. The only time it affected her was when it was time to go to work.

The Court denied her claim for FMLA eligibility and indicated that intermittent leave is granted when an employee needs to miss work for a specific period of time, such as a doctor’s appointment or when a condition suddenly becomes incapacitating. That wasn’t the case here, the judge said – and giving the employee FMLA protection would simply have given the woman a blanket excuse to break company rules.
Cite: Brown v. Eastern Maine Medical Center.

Designating Leave Retroactively
In order to maximize workers’ using up their allotted FMLA leave, employers can sometimes classify an absence retroactively. For example, an employee’s out on two weeks of vacation, but she spends the second week in a hospital recovering from pneumonia. Her employer doesn’t learn of the hospital stay until she returns to work. But she tells her supervisor about it, who then informs HR. Within two days, HR contacts the woman and says, “That week you were in the hospital should be covered by the FMLA. Here’s the paperwork.” The key here is that the company acted quickly – within two days of being notified of the qualifying leave. The tactic’s perfectly legal, and it could make a difference in the impact FMLA leave time could have on the firm’s overall operation. It’s also an excellent example of the key role managers play in helping companies deal with the negative effects of FMLA.

Using Employees’ Paid Time Off
Employers should never tell workers they can’t take FMLA leave until they’ve used up all their vacation, sick and other paid time off (PTO). Instead, companies can require employees to use their accrued PTO concurrently with their intermittent leave time. Employers can also count workers’ comp or short-term disability leave as part of their FMLA time – but in that case, employees can’t be asked to use their accrued PTO.

The Transfer Position
Companies can temporarily transfer an employee on intermittent leave, to minimize the effect of that person’s absence on the overall operation. The temporary position doesn’t need to be equivalent to the original job – but the pay and benefits must remain the same. And, of course, the employee must be given his old job – or its equivalent – when the intermittent leave period’s over.

There is one large restriction – the move can’t be made if the transfer “adversely affects” the individual. An example would be if the new position would lengthen or increase the cost of the employee’s commute. This would adversely affect the employee. Instead, such transfers need to be handled in such a way as to avoid looking like the employer is trying to discourage the employee from taking intermittent leave – or worse yet, is being punished for having done so.

Cooperation
Although FMLA is certainly an employee-friendly statute, employers do have some rights when it comes to scheduling intermittent leave. For instance, employees are required to consult with their employers about setting up medical treatments on a schedule that minimizes impact on operations. Of course, the arrangement has to be approved by the healthcare provider. But if an employee fails to consult with HR before scheduling treatment, the law allows employers to require the worker to go back to the provider and discuss alternate arrangements.

The Firing Question
Yes, companies can fire an employee who’s on intermittent FMLA leave. Despite the fears of many employers, FMLA doesn’t confer some kind of special dispensation for workers who exercise their leave rights. Obviously, workers can’t be fired for taking leave, but employers can layoff, discipline and terminate those employees who violate company policies or perform poorly. When an employee on FMLA leave is terminated, the DOL decrees that the burden’s on the employer to prove the worker would have been laid off, disciplined or terminated regardless of the leave request or usage.

Reductions in Force
When an employer has a valid reason for reducing its workforce, the company can lay off an employee on FMLA leave – as long as the firm can prove the person would have been let go regardless of the leave. However, companies again should be prepared not only to prove the business necessity of the move, but to show an objective, nondiscriminatory plan for choosing which employees would be laid off.

Misconduct or Poor Performance
Employees on FMLA leave – of any type – are just as responsible for following performance and behavior rules as those not on leave. However, companies that fire an employee out on FMLA will be under increased pressure to prove that the decision was based on factors other than the worker’s absence. As such, courts might well pose employers a key question: Why didn’t you fire this person before he/she took leave? This is not an easy answer to explain before a jury if liability is threatened at trial. The good news is that a number of courts have upheld employers’ rights to fire employees on FMLA leave, even when the employee’s problems were first discovered when the employee went off the job. Nevertheless, companies should move cautiously if they are to terminate an employee currently out on leave due to misconduct or poor performance existing prior to the leave, but discovered after the leave begins.