What is an Employee?

Recent posts have focused on outcomes from the 2018 Florida legislative session. The passage of CS/CS/HB 227 is discussed in I'm Just a Bill - PTSD in Florida (March 2018). The reform regarding opioids and the state's prescription drug monitoring program (PDMP) is discussed in Florida's 2018 Session - Opioids (March 2018). Admittedly, the 2018 session did not include significant workers' compensation reform. But, these two bills have notable workers' compensation implications. 

And, they are not alone. House Bill 7087 (HB7087) could have workers' compensation implications as well. It is worthy of discussion. This is a taxation bill filed in February 2018. On March 5, 2018, the House passed the bill and it was sent to the Senate, "in messages." The Senate read the bill three times, the last on March 11, 2018. Afterward, an amendment was proposed, and adopted. The Senate sent the amended bill back to the House, which passed it. The bill was then "enrolled" (meaning it will be presented to the Governor). Some news coverage of the process was critical that the new statute sections created by the last-minute amendment "didn't go through the full committee process."

The amendment creates "Chapter 451, Florida Statutes, consisting of sections 451.01 and 451.02. It defines terms like “household services” and “marketplace contractor” and “marketplace platform.” The implications for workers' compensation may not be immediately clear, but these "platforms" are computer applications (apps). As Uber and Grubhub are apps that connect drivers to customers, so do other apps ("marketplace platforms") connect customers to workers that perform tasks around the home. 

According to the amendment, these tasks include:

(a) Furniture assembly; (b) Interior painting; (c) Television mounting; (d) Local moving help, such as packing, lifting, loading, and rearranging household items, but excluding transporting items; (e) Hanging pictures, mirrors, curtains, blinds, and shelves; (f) Home cleaning; (g) Installation of in-home technology that does not require a hardwired electrical connection; or (h) Installing or replacing door hardware. 

The amendment clarifies that such services "do not include services that require licensure under chapter 489 (construction and other contracting).. 

So, a customer can use an app (“marketplace platform”) to summon someone (“marketplace contractor”) to perform tasks (“household services”). But the reason this is of interest to the workers' compensation community is that such help (“marketplace contractor”) shall not be considered an employee of the app (“marketplace platform”).

The new law provides that 

a marketplace contractor must be treated as an independent contractor, and not as an employee, of the marketplace platform for all purposes under state and local laws, regulations, and ordinances, including, but not limited to, chapters 440 and 443 . . .

as long as certain "conditions" are satisfied. The conditions are focused on the extent to which the “marketplace platform” exerts control over the worker (“marketplace contractor”). These include the platform not "unilaterally" setting hours the contractor "must be available" for work, not prohibiting the contractor from using other such platforms to seek jobs, and not restricting the "contractor from engaging in any other occupation or business." Furthermore, a written agreement between the platform and the contractor must specify the "contractor is an independent contractor." And, the contractor must be responsible for "all or substantially all" of the expenses associated with performing the services, and be responsible for his or her own income taxes.

The new statute compels that satisfaction of these criteria means that the contractor is an independent contractor and not an employee. However, the converse is not necessarily true under the new law. That is, failure to satisfy these statutory conditions does not mean that the contractor is instead necessarily an "employee." In other words, the "contractor" or "platform" may still rely on other criteria or statutory definitions to establish that the contractor is not an employee, e.g. Section 440.02(15)(d), F.S. 

Further, the customers who need “household services” and seek them through the "marketplace platform and marketplace contractors" are required to "comply with chapter 440 in the same manner as if they had not connected through the marketplace platform." The use of the platform provides no special treatment for the customer/homeowner. 

The new law's provisions apply to such app relationships prospectively (after the law becomes effective July 1, 2018). But, it specifically also "applies to services performed by a marketplace contractor before July 1, 2018, if the conditions set forth in subsection (1) were satisfied when the services were performed" (the requirements discussed above).

Finally, there are specific exclusions regarding services performed for the state, counties, cities, etc., and for services performed for "religious, charitable, educational, or other organization(s)." These services are excluded to the extent they are otherwise addressed in the Federal Unemployment Tax Act.

There has been significant discussion of the "gig economy," in which work is performed as needed or on a "project" basis. See The Gig Economy, Can it be Socialized (March 2018). That economy has existed for years with independent contractors being recognized in various statutory constructs across America. Disruptive technology has not created the "gig economy," but merely facilitated it. And, with the aid of technology, this market segment has gained notoriety, attention, and growth. Some have predicted that the government would struggle to keep pace with such changes. See Salim Ismail and a Life-Changing Seminar in Orlando (May 2015). 

The issue with independent contractors is reasonably simple to understand. An independent contractor is someone operating her or his own business, doing work for various clients, and being responsible for her or his own tools, taxes, and work. The application of the concept has become muddled over the years as some employers and employees have sought to misuse the classification of independent contractors for the purpose of avoiding tax liability, the burdens of workers' compensation, and other costs. See Misclassification - What it is (January 2015). In response, some states have sought to tighten the definitions of independent contractors. Florida's statutory constraints are quite specific. See Section 440.02(15)(d), F.S.

The debate regarding classification in this context is not isolated to Florida nor to home repair. There has been a significant debate regarding worker status, as well as numerous court decisions involving various "apps." A Kansas court concluded that one company's workers were employees, while a District of Columbia court later concluded the same company's workers were not employees. In fairness, the two courts were considering different statutes. 

A Florida court has concluded that Uber drivers are independent contractors. Reportedly, "New York, Texas, and Georgia" have reached similar conclusions. However, the same report notes California has labeled Uber workers "employees" instead. A Federal judge in California very recently reached a different conclusion regarding workers at a food delivery service, Grubhub. Some have asked me how California could treat Uber (rides for people) and Grubhub (rides for food) differently. No, the answer is not the character of the cargo! The difference is in how the company that owns the app interacts with the workers.

This should lead the reader to some pointed questions. Some might perceive inconsistency and wonder who is "right" or "wrong." That is not a helpful way to approach this issue. All of these decisions may be "right." Of course, it is equally possible that each is "wrong." This is possible because the determination of classification is dependent upon both the applicable law and the individual facts of the case. 

A determination that some description of a worker is or is not an "employee" must be made by applying a particular law. Thus, it is possible that a person might be an "employee" as that is defined for purposes of collective bargaining, but is an "independent contractor" for the purposes of the Internal Revenue Code. It is as possible that either of these federal laws might lead to a different result on the classification question than some state laws might reach. It is notable that there are many definitions included in various laws, and they may not always be consistent. 

This is illustrated by the newly passed Florida "independent contractor" parameters of Section 451.02 F.S. and the broader provisions already in place in Section 440.02(15)(d), F.S.  A worker who might not be deemed an "independent contractor" under chapter 440 might nonetheless be one under the more abbreviated chapter 451, but only because her or his work is associated with a qualifying “marketplace platform.” This is similar to how two workers might be treated differently because one is a "first responder." See I'm Just a Bill - PTSD in Florida (March 2018).

Furthermore, these questions are not necessarily fully answered by the law. The law prescribes considerations and requirements. However, the facts may be very different from one situation to the next. Just because one "app" is seen as creating an "employee" relationship (such as Uber in California), that does not mean another "app" would be seen identically as another "app" in the same state (Grubhub in California). The distinction, according to the judge in the Grubhub decision, is the extent to which the "app," or more aptly the company that owns it, exerts control over the worker. The less control, the more likely a conclusion the worker is an independent contractor, and the more control may be persuasive of being an "employee."

The implications of all of this are broad. Independent contractors do not qualify for workers' compensation or unemployment compensation. The independent contractor does not have income tax or social security "withheld," but is responsible for making those payments her or himself. Contractors do not enjoy benefits like insurance, pensions, or paid holidays. Contractors are not assured a "minimum wage" under the Fair Labor Standards Act (FLSA). As a result, it may be cheaper to obtain services from an independent contractor than it is to "employ" someone to do the same tasks. When companies can find ways to lower expenses, they may find it is easier to compete for work, or easier to profit.

But, it is important to remember that "apps" and disruptive technology did not create either independent contractors or the "gig economy." Technology seems to be facilitating and nurturing both. These technology tools are shifting perceptions and performance of work. As a result, there are likely to be further discussions of adjusting laws to accommodate the realities that result. That may be to extend the applicability of workers' compensation, provide a substitute for workers' compensation (see The Gig Economy, Can it be Socialized (March 2018), or accept the societal burden of injury and illness through social programs instead of workers' compensation (see Someone has to Pay (May 2016). 

Regardless, the new statute in Florida illustrates the efforts that are likely to be repeated as jurisdictions struggle with the economic realities and changes of the twenty-first century. But is it really change? Some will see such language as Section 451.02 as change, while others will see efforts like this as instead reaffirming the status quo. A Florida Senator asked about the new statute sections passing as a bill amendment, without committee consideration, responded to the Tampa Times that the amendment doesn't "change anything." Instead, the Senator explained, it merely reaffirms how workers affiliated with these “marketplace platforms” are characterized. 

Florida's 2018 Session - Opioids

The Florida legislative process can sometimes be difficult to follow. It seems a subject of persistent curiosity and questions. In I'm Just a Bill (March 2018), I recently provided some explanation of the way bills are named and the manner in which those bills and names evolve over the course of a session. That post documents the passage of amendments to Section 112.1815 F.S., and benefits regarding post-traumatic stress disorder (PTSD) for "first responders" in workers' compensation.

2018 saw legislation introduced regarding other issues of arguably broader impact for Florida workers' compensation. In fact, a search for "workers' compensation" on the Florida House of Representatives website returned 74 bills in the 2018 session containing those words. Many of these ended their path with "indefinitely postponed and withdrawn from consideration." They were filed, but they did not make it to fruition. About 3,000 bills are filed each session; this year about 200 of those were passed.

Perhaps the broadest workers' compensation bill in the 2018 session was House Bill 7009. Filed in November, this proposal was significantly similar to reform legislation debated in 2017. The 2017 session was discussed in The 2017 Session is Ending - What will be the Final Word (May 2017). HB 7009 passed the House, was sent to the Senate, referred to committee, and moved no further. 

But, The PTSD bill is not the only bill with workers' compensation implications that passed. Committee Substitute (CS) for Committee Substitute for House Bill 21 (CS/CS/HB21) has also been ordered "enrolled" (meaning it will be presented to the Governor for consideration). This bill includes multiple actions regarding the prescribing of opioids and other drugs in Florida. It will affect medicine in Florida, and medicine will affect workers' compensation. 

Opioids are a serious problem in Florida. U.S. News and the Associated Press recently reported that 16 Floridians each day die from the "opioid crisis." The report compares that to the tragic shooting death of 17 people at Douglas High School on February 14, 2018. At 16 per day, we have lost 432 Floridians to drugs since February 13, 2018, a stark comparison. Sixteen more will die today, and another 16 tomorrow. By the end of 2018, "Florida's opioid crisis" is projected to claim 5,840 lives. Worse, U.S. News modified that 16 with "at least"; the death toll may be higher. The impact on those who use these substances is notable, but it affects those dependent upon and close to them as well. 

Regular readers here will know that drugs are not a new topic. There are at least 30 posts in which I have addressed opioids, prescription drug monitoring programs (PDMP), pill mills, formularies and more (each listed as links at the end of this post). Medication and drugs are simply not a new problem. And, the issues directly impact workers' compensation. 

What is new in the effort to address "Florida's opioid crisis," in CS/CS/HB21? This broad bill amends Section 456.44, F.S. and Section 456.44, F.S. and Section 893.03, F.S. and Section 893.04, F.S. and Section 893.055, F.S. and more. 

in Section 456.44, F.S. Prescribers will be required "to complete a board-approved 2-hour continuing education course on prescribing controlled substances offered by a statewide professional association of physicians." This will be required for each biennial license renewal. Education shall include "current standards for prescribing controlled substances, particularly opiates, alternatives to these standards, nonpharmacological therapies, prescribing emergency opioid antagonists, and the risks of opioid addiction." furthermore, a set of "rules establishing guidelines for prescribing controlled substances for acute pain" shall be adopted. 

As a general rule "a prescription for a Schedule II opioid . . . for the treatment of acute pain must not exceed a 3-day supply." But, a 7-day supply is allowed if "medically necessary" for "an acute medical condition," but only if the prescriber documents the condition and the "lack of alternative treatment options that justify deviation." In this event, the prescription must state "ACUTE PAIN EXCEPTION." 

With any "prescription for a Schedule II opioid . . .for the treatment of pain related to a traumatic injury with an Injury Severity Score of 9 or higher, the prescriber must concurrently prescribe an emergency opioid antagonist." Perhaps the best known is Naloxone, but there are several available. Thus, some population will leave the pharmacy with both an opioid and an overdose medication, "just in case."

CS/CS/HB21 similarly amends Section 456.44, F.S. for dispensing related to a surgical procedure. Schedule II opioids are limited to a 3-day supply, and the 7-day exception in Section 456.44, F.S. Other Scheduled II (non-opioid) and Schedule III are limited to a 14-day supply. 

Unless the patient is "known to the pharmacist," the "pharmacist must require the person purchasing, receiving, or otherwise acquiring the controlled substance to present valid photographic identification," which was "issued by a state or the Federal Government." If someone lacks identification, the pharmacist must instead "verify the validity of the prescription and the identity of the patient with the prescriber." Long-term care facilities, assisted living,facilities and hospitals are exempt from this requirement. 

CS/CS/HB21 amends Section 893.03, F.S., which lists the substances included in the various schedules. Under this provision, Schedule II would be amended to include Dihydroetorphine, Oripavine, Remifentanil, Tapentadol, Thiafentanil, Lisdexamfetamine, and Dronabinol. That last one may be of some interest as it is an oral product containing synthetic THC (medical cannabis). The amendments also add three substances to Schedule III, and 15 to Schedule IV.

CS/CS/HB21 amends Section 893.04, F.S. This section has provided constraints on how medical providers may prescribe. That has included "written or oral" prescriptions. This change will add "or electronic" to the available methods. A response to the Florida "pill mill" issue led the legislature to restrict narcotic prescriptions to the written form several years ago. Under the new law, the Schedule II prescription limitation to "written" will remain, but will also now include "or electronic." 

CS/CS/HB21 amends Section 893.055, F.S., Florida's Prescription Drug Monitoring Program (PDMP). Dispensers (pharmacy) will remain responsible for reporting prescriptions for "each controlled substance dispensed." The data provided will include the name of the person that picks up the medication "and type and issuer of the identification provided." The law empowers Florida to "enter into one or more reciprocal agreements or contracts to share prescription drug monitoring information with other states, districts, or territories," but only if those other jurisdiction's programs are "compatible (as statutorily defined) with the Florida program."

And, the amendments to Section 893.055, F.S., will now require that the database (PDMP) is consulted "before prescribing or dispensing a controlled substance for a patient age 16 or older," subject to some exceptions (the system is not operational, cannot be accessed due to power or technology failure, etc.). If the PDMP is not consulted, then the prescriber or dispenser must

document the reason he or she did not consult the system in the patient's medical record or prescription record, and shall not prescribe or dispense greater than a 3-day supply of a controlled substance to the patient.

For failing to consult the PDMP before prescribing or dispensing, without such an exception, a "prescriber or dispenser" can be issued "a nondisciplinary citation" upon a first offense, and "subsequent offense is subject to disciplinary action."

The performance of the PDMP must be reported annually to the Governor, Senate, and House. This will include outcomes such as "the rate of inappropriate use of controlled substances" and reduction in quantity "obtained by individuals attempting to engage in fraud and deceit." And, a "direct support" non-profit corporation may be created to assist with raising and investing funds for the benefit of the PDMP effort.

CS/CS/HB21 is 160 pages long, and the foregoing is merely an overview of the highlights. Those involved in the authorization or provision of medical care will want to read the bill itself. Of course, as mentioned elsewhere on this blog, the "checks and balances" we learned in school apply. Whether the foregoing becomes our law is now up to the Governor. The Governor may sign the bill into law or allow it to become law without signature, or could veto the bill.

Update, March 19, 2018 - Gov. Scott signs opioid bill.

Prior posts on the subjects of pill mills, opioids, formularies and PDMPs:

2018 Legislative Proposal on Limiting Opioids 10/15/17

The Hot Seat, Opioids, Marijuana, and More 09/26/17

Does Farr's Law Bring us Good News 07/09/17

Hopelessness and the American Middle Class 04/25/17

PDMP Success and Doctor Shopping 04/18/17

PDMP and Opioids in Ohio 03/23/17

A Comp Fraud Drug Dealer Kills 02/19/17

Oxycodone and Pill Mills Again 02/05/17

Like a Broken (Drug Death) Record 01/22/17

Maine Makes Opioid Changes 01/10/17

A Florida Formulary? 12/27/16

Life Expectancy Changes 11/06/16

If not, What is the Point? 10/09/16

Opioid Guidelines from the CDC - Finally 03/17/16

What will the Next 30 Years Teach Us? 01/05/16

What Worthwhile can you do in 11.2 Minutes? 12/20/15

Prescription Cost Control 09/23/15

E-Forcse and Kasper Cousins with a Cause

"Medical Marijuana" 01/28/15

Florida has a Large Percentage of Medicare's Top Prescribers 12/22/14

Zohydro Update, A Year Later 10/08/14

Unintended Consequences 09/18/14

I am Learning More, Does that Mean I Understand More? 06/30/14

Zohydro or Pot, A Study in Federalism 04/30/14

Zohydro - More Opposition 03/26/14

It's Deja Vu All Over Again 03/05/14

Zohydro in the News Again 12/12/13

Zohydro and Closed Formularies 12/09/13

More Powerful Opioids Approved 11/13/13

Dying to me don't sound like all that much fun 10/16/13

I'm Just a Bill - PTSD in Florida

Schoolhouse Rock taught a generation about the process for laws to be made or changed. I can probably still sing most of "I'm Just a Bill" which played over and over during the Saturday morning cartoon parade of my youth (sorry millennials, Xers, etc., you missed a great American institution that was Saturday cartoons). But, out of respect, I will spare you my singing. 

There has been much written about first responders and post-traumatic stress disorder. That subject became a focus of the 2018 Florida legislative session. Bob Wilson's Cluttered Desk outlined some thoughts regarding the proposed bill in late February. The legislative process is difficult to watch sometimes, and often difficult to follow. Bills are introduced and then routed through hearings in various subcommittees and committees. Those meetings are important as they provide the public with opportunities to speak on the record directly to Florida Senators and Representatives about bills, questions, criticisms, and ideas. Committee meetings are a great part of our participatory process. 

What would become "committee substitute for a committee substitute for Senate Bill 376" began its life last fall as simply Senate Bill (SB) 376. The committee substitute (CS) indicates that the bill was amended significantly along the way. The first time was in January during the hearing in the Senate Banking and Insurance Committee. It then stopped being just SB 376 and became CS/SB 376. In late February, it was heard in the Senate Appropriations Committee, was significantly amended again, and became CS/CS/SB 376. (two "CS" meaning two significant amendments). 

A similar bill was filed in the Florida House of Representatives last fall, House Bill (HB) 227. It likewise was referred to various House committees for hearing. The bill language was changed in January by the Oversight, Transparency, and Administration Subcommittee, making it CS/HB 227. In mid-February, it was changed again in the Government Operations and Technology Appropriations Subcommittee and became CS/CS/HB 227. And in late February it was changed yet again by the Governmental Accountability Committee, becoming CS/CS/CS/HB 227.

In Florida, that is a reasonably illustrative progression. Each chamber has a bill, and over time the language is changed and refined through the actions of various committees. By the time most bills finish the committee process, there is a "CS" added to the name. If the committee process in a chamber concludes with favorable votes, the bill moves to a chamber (House or Senate) "floor" and is "placed on calendar," meaning that it will be called up and discussed, and usually voted upon (sometimes it will be "tabled" or "temporarily postponed"). 

The House calendar included CS/CS/CS/HB 227 for reading on February 27, 2018 (first reading), then March 2, 2018 (second reading). The Senate calendar included CS/CS/SB 376 on February 28, 2018 (first reading), March 2, 2018 (second reading) and March 3, 2018 (third reading). Thus, the Senate concluded its work (three readings) on the bill first, and sent it to the House (in what is referred to as "messages"). On March 5, 2018, the House took the matter up "on the floor" and voted to "table" CS/CS/CS/HB 227 and to instead vote on CS/CS/SB 376, passing it. With both chambers thus passing the bill in its final form (CS/CS/SB 376), it was then "ordered enrolled" meaning that it would be sent to the Governor for his consideration (a process of "checks and balances" most of us will remember from high school perhaps). 

And, with all of the debate and discussion of the proposal to make Florida a mental/mental state, the bill will be presented to the Governor at some point in the coming days. The Governor is presented with many bills each legislative session, and may either: veto the bill, sign the law, or allow the bill to become law without a signature. For those of us who only remember the discussion of the U.S. Presidential veto from high school, Florida is distinct in this manner. There is no "allow it to become law without a signature" in our federal government. An interesting distinction and trivia. 

So, where does this long (the House and Senate bills were filed last October) process leave Florida workers' compensation? Well, the bill will not change the Florida workers' compensation law, Chapter 440, F.S. The bill instead amends Section 112.1815, F.S. That statute creates "special provisions for employment-related accidents and injuries." That law already defines "first responder," and deals with topics including smallpox, the effects of entitlement to social security, and the burden of proof for occupational disease. All of its "special provisions" are for "first responders."

The enrolled (meaning it will be sent to the Governor) bill, CS/CS/SB 376, says that "posttraumatic (sic) stress disorder (PTSD), as described in the Diagnostic and Statistical Manual of Mental Disorders" (a resource adopted by and used by mental health professionals) when a first responder suffers from it, "is a compensable occupational disease" for the purposes of workers' compensation in Florida, so long as some criteria are met. 

First, the PTSD must result from the "first responder acting within the course of his or her employment as provided in s. 440.091." Second, PTSD must be diagnosed "by a licensed psychiatrist who is an authorized treating physician as provided in chapter 440." Third, the PTSD "must be demonstrated by clear and convincing medical evidence." And, fourth, PTSD must be due to "one of the following events":

a. Seeing for oneself a deceased minor; 

b. Directly witnessing the death of a minor; 

c. Directly witnessing an injury to a minor who subsequently died before or upon arrival at a hospital emergency department; 

d. Participating in the physical treatment of an injured minor who subsequently died before or upon arrival at a hospital emergency department; 

e. Manually transporting an injured minor who subsequently 48 died before or upon arrival at a hospital emergency department; 

f. Seeing for oneself a decedent whose death involved grievous bodily harm of a nature that shocks the conscience; 

g. Directly witnessing a death, including suicide, that involved grievous bodily harm of a nature that shocks the conscience; 

h. Directly witnessing a homicide regardless of whether the homicide was criminal or excusable, including murder, mass killing as defined in 28 U.S.C. s. 530C, manslaughter, self-defense, misadventure, and negligence;

i. Directly witnessing an injury, including an attempted suicide, to a person who subsequently died before or upon arrival at a hospital emergency department if the person was injured by grievous bodily harm of a nature that shocks the conscience; 

j. Participating in the physical treatment of an injury, including an attempted suicide, to a person who subsequently died before or upon arrival at a hospital emergency department if the person was injured by grievous bodily harm of a nature that shocks the conscience; or 

k. Manually transporting a person who was injured, including by attempted suicide, and subsequently died before or upon arrival at a hospital emergency department if the person was injured by grievous bodily harm of a nature that shocks the conscience.

Those who have read Bob Wilson's Cluttered Desk and its analysis of an earlier version of the bill will likely conclude that the bill that has been enrolled (meaning it will be sent to the Governor) is notably different from the bill version analyzed by Mr. Wilson. And, that evolution of bill language, as discussed above, is a common part and parcel of the legislative process. 

There may be those who disagree with this change to Florida law, and as likely those who agree. It is possible that some will say CS/CS/SB 376 goes "too far" and others may lament "it doesn't go far enough." But, for everyone, the introduction of an idea and its evolution in the Florida legislative process should be of interest.

This bill aptly demonstrates the path and process of bills that travel the "filed" to "enrolled" journey in Florida. It illustrates the committee process, amendment process, and one possible conclusion (a great many bills start that journey, but fail somewhere along the path). And now, the waiting begins as the Governor considers the many 2018 enrolled bills. News sources report that the Governor will sign the bill, so that seems likely.

Is Pain Enough in Montana

WorkCompCentral recently published Public School Employee Can't Get Benefits for Alleged Injuries From Attack by Student. The headline drew me in, suggesting that somehow a violent personal attack is not compensable in Montana. But, this decision rendered in January does not hold that attacks are not compensable. As an aside, Montana workers' compensation was in the news in February also with a decision highlighted by Bob Wilson on his Cluttered Desk. 

The public school case is TG v. Montana Schools Group Insurance, 2018 MTWCC 1. Procedurally, the case came to the Workers' Compensation Court on a motion for "summary judgment," that is that the employer filed seeking a decision that it was entitled to win the claim as a matter of law, and without any hearing. If there are material issues of fact (e.g. did the attack happen or not, etc.) then summary judgment is not appropriate. But when the facts are not disputed, this process can lead to expedited resolutions for either party in litigation. 

This case involved "an aide at high school" who was struck and pinched by "a special needs student." This resulted in bruises, but the aid "did not seek or require medical treatment." TG was already under the care of a doctor for a pre-existing fibromyalgia and later complained to this physician about the student's actions and the resulting bruises. That physician diagnosed post-traumatic stress disorder, and that TG "aggravated her preexisting anxiety, depression, and pseudoseizures, resulting in her inability to work."

As the case proceeded, one physician noted that TG "has taken medical leave off work right now because she feels that she is unable to deal with that environment." Another detailed one of the student attacks and noted that TG "does still have to work in the same classroom with him." This doctor opined that TG was unable to work because of "psychological conditions," diagnosing post-traumatic stress, and relating it to the work events. 

The workers' compensation court focused upon the definition of "injury" in Montana, Section 39-71-407(3)(a), MCA, which requires a showing of "injury" by "objective medical findings." Furthermore, "entitlement to benefits" is required to be 

established by objective medical findings that contain sufficient factual and historical information concerning the relationship of the worker’s condition to the original injury, Section 39-71-407(10), MCA.

That is not dissimilar to the standard that Florida uses. See Section 440.09, Fla. Stat. In Montana, the objective "medical findings" are defined specifically, however: 

including range of motion, atrophy, muscle strength, muscle spasm, or other diagnostic evidence, substantiated by clinical findings. Section 39-71-116(22), MCA.

The court focused on the fact that TG did not seek care "for her bruising" and that she "does not contend . . . any . . . was necessary." It explained that a bruise "can serve as objective medical finding," but noted that none of the physicians with whom she treated "in the months following the attacks" saw or diagnosed such bruising. The only evidence of bruising was apparently TG's own testimony. It reiterated that "minor wounds" that require no medical care, caused no restrictions or caused no residual problems of disability, and which are "not substantiated by objective medical findings, are not compensable injuries" under Montana law.

Furthermore, upon TG's first visit to her treating doctor for the pre-existing fibromyalgia, after the attacks, the doctor noted her condition as "unchanged from her previous visit." Though he opined there was a "recent exacerbation" of pain, the doctor "did not substantiate his diagnosis with any objective medical findings." The court noted that the bruising had resolved, and thus the diagnosis of "exacerbation" was "based entirely on TG's subjective complaints of increased pain in her neck and arm." The court detailed how these facts did not substantiate a compensable exacerbation under Montana's definitions discussed above. 

The court next turned to the claims of psychiatric injury. Montana is not a jurisdiction that recognizes mental injury as compensable in the absence of physical injury. That is currently the law in Florida, but a bill to provide psychiatric care to some Florida employees recently passed and will be considered by the Governor. In some part, Florida may soon provide benefits for "mental-mental claims."

In Montana, psychiatric injury or symptoms must relate to a compensable physical injury. The court in TG concluded that "there is no medical evidence" that connects the diagnoses of "anxiety, depression, seizure-like activity, or PTSD" to the bruising or or increased pain that TG described, and "which she attributes to the attacks." Therefore, the court concluded her psychiatric complaints were "mental-mental conditions" and not compensable. 

The court's decision reminds us that medical evidence is critical to a workers' compensation claim. The existence of bruising TG alleged was not sufficient but might have been if TG had visited a physician immediately so that those were witnessed by the medical providers. 

A second point one might derive from the outcome regards the selection of a physician. Physicians are generally focused on diagnosing issues. They seek to understand symptoms, relate them to anatomy and physiology, and provide treatment with goals of correcting maladies or at least alleviating symptoms. That is what medical school teaches. Without experience or training in workers' compensation, a physician may not understand the legal parameters or importance of statutory requirements such as "objective medical findings." Those are not taught in medical school, and a physician's specific workers' compensation knowledge may be important.

The headline may grab attention. But, the outcome is not as simple as Employee Can't Get Benefits for Alleged Injuries From Attack by Student. Possibly an employee can get such benefits if injury is documented and evidence supports compensability. The outcome in TG might be better described instead as "did not prove entitlement to benefits for alleged injuries." And, that reiterates the importance of the burden of proof. See If You Are Not Perry Mason, Bring Evidence (May 2013) and Settlements are Contracts (March 2018).

The Gig Economy - Can it be Socialized?

The "gig economy" is said to be "coming." A great many recognize that it is instead perhaps already here, but that it is growing. This has implications for workers, employers, and society. But first, a little background.

Workers' compensation was envisioned in the age of an agrarian economy evolving through the industrial revolution. Manufacturing was becoming the main economic "driver." By the 1850s there was recognition of the effects of this transition, and by the 1870s there was a drive for some alternative to torts, first in Germany, then England. The United States would see attempts at socialism at the turn of the century, but the first successful workers' compensation laws would come in 1911. An excellent overall history was published by the Iowa Orthopedic Journal. 

Workers' compensation is not today what it was in 1911. There has been an evolution that has legislatively expanded the scope and breadth. The concepts of "repetitive trauma" and "occupational disease" are among those expansions, as are benefits for psychiatric injury. Initially, most state programs were not mandatory, but have since evolved to some level of forced participation. Texas remains an exception with its voluntary "opt in" law, and recently the market has watched as Oklahoma attempted an "opt out" alternative. Say what you will about workers' compensation, there is seemingly never a dull moment. 

Since workers' compensation became a part of our national fabric, the nation itself has changed as well. In the 1970s automation and robotics began to change manufacturing. There was also a transition beginning that would see the American service sector expand and manufacturing decline. There are a multitude of factors that contributed to that shift, but it is important to note that the results of change were traumatic to a great many workers. 

Change and transition are challenging at best and sometimes downright scary. By 1990 we had witnessed significant economic changes to manufacturing. Automation was part of that, as was a trend toward shifting manufacturing jobs to foreign shores where labor was cheaper. Despite those effects, manufacturing still employed more Americans in 1990 "than any other sector in 36 states," according to The Washington Post. But, by 2014 that employment had "plummeted" and manufacturing remained the "dominant industry in only seven states."

Evolution continued. The "dot.com" revolution of the 1990s promised to change our world. Technology was deployed in new ways, and communication became instantaneous. Initially, some saw it primarily as a tool for rapid sharing of bad jokes, but we evolved to depend upon the Internet. 

The initial promise of that technology expansion was still fresh on our minds when the "bubble burst" in the 1990s. There has been much written as to the "how" and the "why" of both the bubble itself and the burst. But, it changed our world. Many web companies started, expanded, and then went bust. The advent of information technology has begun to change our world. Technology disrupted our communication and interactions. Social media, like the juggernaut MySpace, began to influence our habits and interactions. 

The first decade of the Twenty-First Century brought more change. This began the "gig employment" disruption. It brought us companies like Uber, Airbnb, and Grubhub. That era also brought us innovations and expansion to social media with the likes of Facebook, Twitter, and more. Our integration into the technological age changed the way we both communicate and consume. 

And yet, through these innovations, evolutions, and changes, workers' compensation has remained persistent. In some states, its structure has been more stable than in others. There have been various statutory changes in definition, burdens of proof, and benefits. But, workers' compensation, as a socialistic change to the common law, has endured.

Today, we find ourselves amid yet another "technology" revolution. That is a bit ironic because it was in fact technology that drove all of our other economic "revolutions." We now face the change that will be driven by the disruption of robotics and artificial intelligence. Their influence will be layered on the results of the Internet revolution and the "gig economy." More than a few doubt that workers' compensation, as it currently exists, is prepared for those challenges. 

Robotics and artificial intelligence will affect the demand for workers. Some see employees shifting to different employment as a result, and others predict large populations of unemployed. Some prognosticates predict an increasing shift from traditional employment to more independent contractors in a "gig economy," fed by the influence of these technology changes. 

There may therefore be more workers whose injuries or illnesses are not born by employer organizations. Under the laws of most states, "gig workers" and "sole proprietors" are often not required to procure workers' compensation coverage. If independent contracting, or "gig" work expands, society will struggle with who will be responsible for those injury-related costs because, after all, Someone has to Pay (May 2016). And, some contend that those responsibility issues are already at a critical point, even if the "gig" economy expands no further.  

Whether the gig economy is "coming" or "here" may be debated. But regardless, some question whether and how the costs associated with this disruption can be socialized. Injuries do not stop because one is a sole proprietor instead of an "employee."  The occurrence and cost of injury and illness exist, regardless of labels. Ultimately, the payers of these costs are likely to be taxpayers and consumers. Whether through tax dollars or otherwise included in the cost of the products and services they consume, they will likely be the Ultimate Payer (May 2016). 

Some suggest that the solution to this socialization issue is rather simple. A great many states allow very small employers to avoid participation in workers' compensation. In Florida, participation is only required if there are "four or more employees are employed by the same employer." Section 440.02(17)(a), Fla. Stat. That section was perceived as affording too much leeway in some industries and was amended in 1990 and again in 1991 (an example of the expansion of workers' compensation), and now requires coverage for all workers in the construction industry.  

National Public Radio (NPR) recently published a thoughtful article: The Future Of Benefits: A New York Program Might Provide A Model. This analysis notes that "government policies are slow to adapt" to change, but argues that New York launched a program in 2000 that could provide a road map for socializing the cost of workplace injuries that fall without the current parameters of traditional workers' compensation, through independent contractor relationships and entrepreneurial work. 

The New York Black Car Fund has a nearly 20-year history of providing some medical, disability, and death benefits to drivers who are injured while working. NPR contends that it may well be "a model for how benefits might function in the future." It currently "covers about 125,000 drivers," including "contractors for Uber, Lyft or more traditional taxi or limousine services." It provides a measure of benefits, but not the benefits of workers' compensation. The Black Car is "funded by a 2.5 percent consumer surcharge on each ride." Thus, a "tax" is being imposed on the consumer of services. 

NPR reports that Congress is working to encourage states to implement "new ways of delivering benefits for freelance workers." Their proposal is to provide "seed money" for cities, states, and nonprofits to devise a methodology for a socialized safety net for this "gig economy." The motivation is clear. For each injury that is not covered by some form of insurance, there are likely to be costs that require payment. Some will be paid by workers, but others by taxpayers. Thus, there is a perceived need for some new socialistic process for workers in this new "gig economy" paradigm. 

But, is the solution proposed by NPR, a benefit program that provides less for those in the "gig economy," a real solution? In America, should equal protection under the law really provide disparate solutions for different groups of people? As workers' compensation has evolved, that has occurred. Some occupations enjoy far greater workers' compensation protection than others, under the color of law. Yes, state workers' compensation laws discriminate in favor of some at the expense of others. 

Is America a place where laws should create disparate classifications of workers, with some receiving more access to benefits than others? If costs are to be socialized, does it make sense to have the Black Car plan, or would it make as much sense to simply require that all those drivers and "gig" workers must be included in workers' compensation? Why does NPR advocate relegating these "gig" workers to second-class status, providing them "some" relief but not the protections of our century-old workers' compensation?

If these "gig" workers or independent contractors have no coverage, then their treatment and disability costs will fall upon them or upon the taxpayer. But, if they were all required to procure and pay for workers' compensation, then the costs associated with their individual work risks would become part of the cost of the services that they deliver. Either socialize cost. But, workers' compensation already exists in 50 states. Perhaps a better solution than the NPR two-class system would be state laws that simply require all workers to be insured for work injuries? 

Of course, like the failed Obamacare mandate experiment, this would require states to enforce that "mandatory" coverage. Despite Obamacare mandating health coverage for all Americans, many remained uninsured despite it. Kaiser estimates that four years into implementation, 28 million Americans remained without health insurance despite that mandate. 

As the economy continues to evolve, the cost of injury and illness will remain. America adopted socialism and workers' compensation a century ago to pay these costs. America must now come to grips with how to socialize the costs of those who are not "employees," because the indicators are the "gig" is here to stay. Should they pay for their own injuries, be forced to participate in workers' comp, have their own second-class Comp substitute, or be the responsibility of the taxpayer? 

Update 03.21.18 - This post drew some response from the Fund. A follow-up post was written to address the further information and corrections it provided. That is The Gig Economy Post - Redux (March 2018). 

Settlements are Contracts

I recently ran across a 1997 decision from the Florida First District Court. It provides clarity on settlements that may benefit many. The case is Long Term Management, Inc. v. University Nursing Care Center, Inc., 704 So.2d 669 (Fla. 1st DCA 1997).

This case is an involved dispute regarding a contract between two parties. It is interesting in the context of workers' compensation because many contracts are entered every day in workers' compensation. Parties engaged in litigation or dispute reach agreements for the delivery of various benefits and/or the dismissal of various claims. 

Those agreements and resolutions may be of issues currently pled, or the entire case, of present benefit entitlement, past benefit entitlement, or of all benefit entitlement. Various states have come to adopt interesting characterizations for such agreements. In Florida, we have "stipulations" for specific benefits or dismissals and "settlements" for agreements that close all benefit entitlement. 

For many years, Florida's statute did not allow settlement of entitlement to medical benefits except in a very narrow set of exceptional circumstances. When that statute changed, and medical care could be settled more freely, practitioners began dividing "settlement" here with adjectives like "medical open" and "medical closed." Other states have adopted similarly descriptive characterizations, one state refers to settlements as "full and final settlements." That has always seemed curious, leading me to want to ask how any other kind of "settlement" would not be oxymoronic. Some states do not allow settlement of future medical, leading them to far less interaction with Medicare and the federal government. 

In Long Term Management, the trial court entered an order enforcing a settlement. The Court's analysis is interesting for two reasons. The first involves the making of a contract for the resolution of litigation. The litigation there began in 1994 and was not a personal injury or workers' compensation claim. It began with a contract for various services, and the allegedly "pretextual" or “bogus” termination of that contract. As that litigation progressed, the parties later reached another contract (settlement) to resolve their differences. 

The assigned trial judge entered various orders, including a temporary injunction (an order preventing a party from taking action it might otherwise). The case is fairly complex in that regard, with various claims and counter-claims involved. It is fair to say that the parties had multiple disagreements about the terms and conditions of that original contract for services. 

In 1996, another party was added to the case, and a hearing was scheduled regarding another injunction. The trial judge scheduled a hearing. As often happens, the lawyers found themselves waiting their turn on the day of the hearing and took that time to discuss their client's differences and disagreements. That opportunity to talk was apparently productive. When their turn came, they told the trial judge they had "reached a settlement," but that it was “subject to writing it down.” 

The attorneys made representations to the court regarding what each would or would not do, and who owed money to whom. There were to be releases signed by all parties “identical in language and reciprocal.” The attorneys parted that day with a consensus that one party would prepare a written agreement and provide to opposing counsel. That was not the end, however. 

The parties thereafter did not sign a written agreement. They could not seem to agree upon what they had agreed upon in those discussions. A motion to enforce the agreement was soon filed. The party seeking enforcement claimed that the attorney's statements in court were enforceable and “[e]xecution of a settlement document was not made a condition precedent to the settlement on the record but rather is a mere procedural formality which both parties are obliged to perform.” In other words, the absence of a writing to memorialize what was said, they argued, should not prevent enforcement. The other party argued that there was no settlement until the written document was prepared, agreed to, and signed. 

The Court held a hearing on the motion to enforce the settlement. There was disagreement regarding whether the attorney's statements in court had covered all the outstanding issues; one issue in particular was notably contested, the disposition of a disputed $150,000. The Court did not deny enforcement, nor grant it. Instead, the Court concluded settlement was a possibility and announced it would take testimony regarding that $150.000 which was seemingly the remaining "bone of contention." 

One party concluded that the trial judge had departed from the role of adjudication at that stage and was instead then participating in negotiations; at least one party thought the judge was morphing into a mediator. A motion to disqualify the judge was filed, and the court was recessed for consideration of the motion. When the judge returned to the courtroom, "he presented a substitute judge, and advised the proceedings would be conducted by the substitute judge." This process of disqualifying a trial judge was recently addressed in Disqualification Lessons from Pennsylvania (February 2018) and The Sleuthing Judge (October 2017) 

The new judge proceeded with hearing testimony regarding the $150,000 and other settlement terms, and within a few days, enforced the settlement. The basis for that holding was the announcement of an agreement made in court back on the day the parties had that opportunity to discuss things as they waited. The enforcement order was appealed and the First District Court clarified some legal points important to settlements. 

Critically, the Court reminded that settlements are contracts, and are interpreted and construed using contract law. Further, oral agreements are "fully enforceable." Despite the fact that a written memorialization will be completed, a verbal stipulation on the record "is an effective and enforceable settlement." However, to be enforceable, "a settlement agreement must be sufficiently specific and mutually agreeable as to every essential element.” In noting these points, the Court cited various prior cases (stare decisis (April 2017)) that are omitted here. 

The Court in Long Term Management acknowledged that the parties used the word “settlement” with the trial judge. However, their other statements supported that "the parties intended the agreement would not be binding until reduced to writing and properly executed." The discussion on the record supported that there remained negotiations to finalize details. Thus, there was not "a clear understanding that the agreement was final and enforceable" at the time of the hearing. 

There was no "settlement" in fact, though they used that word. It is the facts, not the label that control the outcome. Essentially, the parties had reached a broad agreement, but the details were to be written, exchanged and discussed, and eventually, the final agreement was to be signed. The appellate court therefore did not enforce the general agreement that was enunciated on the record. 

The second reason that this analysis is of interest is the subject of "burden of proof." In the law, one party always has the burden of proving their case. In criminal law, that is familiar to anyone that has ever watched a television courtroom drama. Defendants are "innocent until proven guilty." The defendant comes to court innocent and leaves innocent unless the government proves that they are guilty. The "burden of proof" is on the government.

Similarly, the moving party (the party that wants relief from the court) in a civil proceeding has to prove they are entitled to relief. That might be an order directing another party to do something, to stop doing something, or an award of damages or workers' compensation benefits. The party seeking the relief must prove they are entitled to that relief. 

The same applies when the relief sought is an order, such as the one in this case, concluding something (that the parties had a settlement agreement). Thus, the party that believed there was a settlement (Uniform Nursing Care Center or UNCC) "was required to demonstrate a meeting of the minds," meaning prove that there was a settlement (enforceable contract). Thus, the reason that Long Term Management (not the moving party) prevailed in this case may be (1) that there was no settlement reached that morning while waiting for the judge. Or, it may simply be (2) that UNCC failed to provide sufficient evidence to prove that there was. 

That may seem like a subtle and perhaps hypertechnical distinction. But it is important for parties to remember the burden of proof. It is not the role of the trial court to find the truth, to investigate, or to sleuth (see The Sleuthing Judge (October 2017). It is the judge's role to hear the evidence that is presented. Then the judge applies the law that the parties raise to the evidence that the parties present. And the result is a decision. It may be a decision on perfect proof, or possibly a decision on imperfect or failed proof. 

A great many struggle with that process. They are convinced that courts should find truth and assure justice. But, to do so, a judge would necessarily have to take a side in litigation. And, when a judge does so, then the judge abandons the role of the adjudicator and embarks on the path of an advocate. At least one party in this case believed that happened, causing them to seek disqualification of the original judge. Everyone should remember that as much as a party might appreciate the trial judge interceding on their behalf, they would undoubtedly be upset if the judge did so to help the other party or parties against them. 

Several sound lessons from this analysis. Settlements are contracts. Contracts can be verbal. Judges should remain impartial. Evidence is critical. And, the burden of proof may be the most operative element in any decision. A worthwhile analysis by the court and a sound lesson for us all.

Iowa Court Upholds "Reasonable"

Iowa Court of Appeals recently rendered an interesting decision in Nestle USA v. Connell, Case No. 17-0267 (February 7, 2018). Of course, every case has a point, resolving that dispute, and the rights of the parties to a case will be affected. However, studying the outcome of cases also has the benefit of a better educated and prepared community. And it is from Iowa, recently named the "best place to live" by U.S. News. Well, perhaps.

This case involved a significant hand injury, which occurred when an employee was attempting to un-jam an industrial machine in a production facility. A somewhat amazing fact noted by the appellate court is that the employee himself "was forced to manually take apart the machine to get his hand out," though he was able to summon others to assist, he orchestrated the response to his accident. After "several surgeries," the hand was seriously damaged and he was ultimately also diagnosed "with neck pain, post-traumatic stress disorder (PTSD), and depression."

There was litigation regarding some of those conditions, but the employer voluntarily provided "a mechanical prosthetic device that allowed him to manipulate his thumb and index finger." This device could only be used by the worker "for three to four hours a day," and was described as an "unwieldy hand." The worker said that the use of it "caused him emotional distress," and he avoided public places as he felt he was "being regarded as a Frankenstein figure with a visibly damaged hand.” 

To alleviate those feelings, the worker additionally sought a "passive prosthetic left hand 'that looked like a natural hand.'” The case was heard by a deputy commissioner who "ordered the payment of permanent total disability benefits as well as payment for a passive prosthetic hand." That decision was appealed to the Workers' Compensation Commissioner who reversed the "award of a passive prosthetic hand. The Commissioner concluded that the award of a second prosthesis was not supported by the statute. 

Next, the claim was reviewed by the district court, which in Iowa is the court of "general jurisdiction" for trials and disputes. It is the court in which a personal injury case such as this would originate if it were not for the statutory administrative process that is workers' compensation. The district court reversed the Commissioner regarding the prosthetic hand, concluding that the injured worker was not limited to a single prosthetic, but was instead entitled to what was "reasonable." And, the matter proceeded to the Iowa Court of Appeal, which authored this opinion. 

   

The appeals court cited Iowa Code section 85.27, which "obligates an employer 'to furnish reasonable services and supplies to treat an injured employee.'” It also requires the employer to provide "reasonably necessary transportation expenses" for obtaining medical care, an issue recently discussed in An Illustrative Story (February 2018). Thus, the Iowa Code requires providing prostheses generally. However, the statute also limits this to "one set of permanent prosthetic devices." The appeals court noted that the Commissioner's decision  "did not focus on the 'reasonable and necessary' language" but instead "on the 'one set' language."

The employer argued that only one prosthetic was appropriate and that the "one set" language ("set" being seemingly plural, as "one prosthetic" would be singular) was intended to provide multiple apparatus (a "set") only when a worker suffered multiple amputations and thus needed more than one prosthetic. The employer contended that this interpretation is clear from the statute. 

The appeals court explained that its burden was to decide "whether we would reach the same result as the district court," and that it had recently "repeatedly declined to give deference to the commissioner’s interpretations." The appeals court affirmed the district court and rejected the commissioner’s interpretation. It concluded that "for all practical purposes, the passive hand and the mechanical hand were a single device, to be used interchangeably in a twenty-four hour day." The two devices were in fact one device as the worker used only one at a time. The passive hand was "simply an extension of the mechanical prosthetic hand." The court cited precedent in which it had previously concluded that an accessible van conversion was (similarly?) "merely an extension of" the worker's wheelchair. 

This decision is an illustration of a court interpreting two provisions or phrases within a single statute. It bears some similarity to the decision of the Florida Supreme Court in Murray v. Mariner, 994 So.2d 1051, 1057–58 (Fla.2008). There, the Court perceived conflict between the word "reasonable," applied to attorney fees, and the plain statutory language limiting fees to a formula calculation. The Florida Court found the "reasonable" more persuasive than the limitation. 

Similarly, the Iowa court here found the "'reasonable and necessary' language" more persuasive than the seemingly limiting language of "one set." There will be those who will question the logic of two devices are in effect only one device. That explanation is perhaps a little harder to accept than the simpler "reasonable and necessary" argument. And, simpler still, some might argue that the court could as easily have concluded that the two prosthetics in this case were in fact "one set of permanent prosthetic devices" as provided in the statute. That, of course, would require recognition that sometimes a "set" is needed because of multiple losses/needs, and sometimes a "set" is needed simply because of multiple needs (a mechanical device and a less functional but more aesthetically pleasing device). 

The court's analysis is interesting reading. It is also a good illustration of the challenges presented when statutes and codes present language that might be conflicting. When such conflict is perceived, courts will provide interpretation. And, if that interpretation differs from the legislature's then it is up to the legislature to change the law.