State News : Arkansas

    On December 3, 2025, an Arkansas Court of Appeals issued an opinion that further bolstered the supreme reign of the Arkansas Workers’ Compensation Commission (more commonly referred to as the “Full Commission”) as the deferential trier of fact and arbiter of credibility. One of the most noteworthy quirks of Arkansas workers’ compensation law is that Arkansas appellate courts and the Arkansas Supreme Court afford near-complete deference to the Full Commission’s credibility assessment of witnesses while completely disregarding the credibility determinations rendered by Administrative Law Judges that have had the opportunity to personally observe witnesses and their demeanor while testifying on the stand. The Full Commission is tasked with reviewing the decisions rendered by ALJs along with the evidentiary record of a claim once an ALJ’s decision has been appealed, but their review of the record is limited to transcripts of testimony, evidentiary exhibits, and briefs submitted by legal counsel for both parties. However, despite never getting to personally observe witnesses and their demeanor as they testify, it is well settled in Arkansas workers’ compensation law that the reviewing Court of Appeals or Arkansas Supreme Court will “give no weight to the ALJ’s findings whatsoever” and will instead defer to the credibility assessments and findings of facts rendered by the Full Commission even though it is the ALJ that presides over a claim for months (potentially even years), makes rulings on the admissibility of evidence, and personally observes claimants and other witnesses as they testify under direct and cross-examination. Dardanelle Pub. Sch. v. Ewton, 2025 Ark. App. 575, at 7, 728 S.W.3d 401, 405 (citing Clark v. Peabody Testing Serv., 265 Ark. 489, 579 S.W.2d 360 (1979)). 

    In the case in point, Claimant Andrea Ewton was employed as a substitute custodian for Dardanelle Intermediate School and was on the clock when she walked from the school’s office to her car and injured her knee and ankle when she stepped down from a curb in the parking lot. At issue was whether she was performing employment services when she went to her car or whether she had gone to her car for a personal errand (specifically to retrieve her water bottle). Mere hours after Ewton’s fall, she spoke on the phone with a claim supervisor and reported that she had gone to her car that morning to retrieve a water bottle when she slipped off a curb injuring her knee and ankle. In the recorded transcript of that call, Ewton was specifically asked if she had gone to her car for any purpose other than retrieving her water bottle, and she responded, “No ma’am”. The school nurse that iced Claimant’s injuries immediately after the accident also testified that Ewton told her she had been walking to her car to get a drink when she slipped off the curb. These reports made by Claimant immediately after her accident are noteworthy because she eventually changed her story and testified at the hearing in front of the ALJ that she had gone to her car to retrieve a set of keys that she needed to open school buildings. Ewton had also testified during her deposition that she went to her car to retrieve a set of keys; however, during her deposition, she testified that the school nurse had given her the wrong set of keys earlier that morning. In contrast, she testified in front of the ALJ that the school’s secretary had given her the wrong set of keys that morning (perhaps after she and her attorney realized that the school nurse only had keys that could open the nurse’s office rather than the various school buildings that Ewton needed to access that day). 

    After observing the demeanor of Ewton, the school nurse and the secretary while they testified, in addition to reviewing the Claimant’s deposition transcript and the transcript of her recorded statement made on the same day of her accident, the ALJ ruled that Ewton had failed to prove she suffered a compensable injury to her knee and ankle because she was not performing employment services at the time of her fall. In his opinion, the ALJ specifically found that Ewton did not provide credible testimony when she testified that she had gone to her car that morning to retrieve a set of keys to one of the school’s buildings. His credibility determination was based on Ewton’s inconsistent narratives regarding why she went to her car that morning as well as other instances of doubtful credibility in the record such as her testimony at the hearing that she hadn’t worked since her accident which was contradicted by Claimant’s unemployment application wherein she reported working for a nursing and rehabilitation facility for a period of four months after her accident at the school. 

    In spite of the ALJ’s personal observations of the witnesses throughout their testimony as well as his thorough opinion which cited to numerous inconsistencies in the evidentiary record in support of his credibility assessments, the Full Commission reversed his denial of the claim and found that Ewton had met her burden of proof in establishing that she was performing employment services at the time of her fall. The Full Commission noted in its decision that it specifically found Ewton’s testimony to be credible when she testified at the hearing that she had gone to her car to retrieve a set of keys rather than only going to her car for a bottle of water. Respondents appealed the Full Commission’s decision to the Court of Appeals arguing that Claimant had failed to prove she sustained a compensable injury within the scope of her employment because she provided inconsistent statements regarding her purpose for going to her car. However, the Court of Appeals abided by long-standing precedent in deferring to the Full Commission’s credibility determination and stating that Arkansas courts will affirm the Commission’s decisions when the issue on appeal comes down to the Commission’s assessment of the credibility of witnesses.  

    Given that the Court of Appeals is bound by the Arkansas Workers’ Compensation Act and decades of case law which designate the Commission as the ultimate factfinder, the Court of Appeals’ decision to affirm the Full Commission is certainly not surprising to those who are familiar with workers’ compensation law in the natural state. Ultimately, it is up to the Arkansas legislature to amend the law if they believe that the ALJs who have the opportunity to personally observe the demeanor of witnesses and to comb through extensive evidence should be given deference when making credibility determinations and other valuable findings of fact over the administrative and judicial bodies who are charged with reviewing the evidentiary record from transcripts and records alone. 

For employers and their workers compensation insurance carriers, the denial of a claim for permanent total disability (PTD) benefits prompts a major sigh of relief. However, it’s important to manage expectations by keeping in mind that a claimant may be allowed to relitigate the issue of whether they’re entitled to PTD benefits if the claimant proves that their physical condition has changed since their initial claim for PTD was denied.

This issue was considered in MHM Support Servs. v. Miller, 2025 Ark. App. 546, where Claimant Tammy Miller filed a claim alleging permanent and total disability due to compensable injuries she sustained in January 2016 despite a previous ruling denying that Miller was entitled to PTD benefits as a result of her compensable injuries. Respondents argued that the issue had already been decided and could not be adjudicated for a second time based on the legal doctrine known as res judicata which bars relitigation of a judicial or administrative determination unless there is a change following the Order. However, the presiding Administrative Law Judge, Full Commission, and Court of Appeals disagreed with Respondents, finding that Miller’s second claim for PTD benefits was not barred by res judicata because she proved that her physical condition had changed after the Commission made its first ruling denying PTD benefits in August 2021.

In an Opinion filed on November 12, 2025, the Arkansas Court of Appeals affirmed the ALJ’s and Full Commission’s award of PTD benefits reasoning that she presented objective evidence supporting several new conditions and injuries that she was diagnosed with after her first claim for PTD benefits was denied in August of 2021. The Court of Appeals also relied heavily on the ruling made by an ALJ in June of 2022 finding that Miller had entered into a second healing period a few months after her first PTD claim was denied when she began to suffer complications from the surgery she previously had to repair her compensable hip injury including a partial torn tendon and pelvic floor dysfunction that her surgeon attributed to the hip injury. Given that Respondents did not appeal the ALJ’s Opinion awarding Miller TTD benefits for her second healing period, the Court found no merit in Respondents’ argument that Miller had failed to establish a change in her condition sufficient to warrant a second adjudication for PTD benefits, and instead considered the ALJ’s Opinion to be clear evidence that Miller’s physical condition had changed following the Commission’s initial PTD determination. 

The Arkansas Court of Appeals recently dealt a blow to what’s known as the “Shipper Transport defense” when it found that a claimant was not barred from receiving workers compensation benefits for a torn bicep tendon even though he lied about having preexisting neck, back and shoulder issues on his post-offer/pre-placement health questionnaire which may have led to him being placed in a position which the employer likely would not have placed him in if they had been given an accurate medical history. Int'l Paper Co. v. Steward, 2024 Ark. App. 465, 700 S.W.3d 204. In 1979, the Arkansas Supreme Court established the Shippers Transport defense when it held that a workers compensation claimant would be barred from receiving workers compensation benefits if Respondents proved (1) that the employee knowingly and willfully made a false representation as to his/her physical condition, (2) that the employer relied upon the employee’s false representation, with such reliance playing a substantial factor in the hiring of the employee, and (3) that there was a causal connection between the false representation and the claimant’s injury.  Shippers Transp. of Ga. v. Stepp, 265 Ark. 365, 369, 578 S.W.2d 232, 234 (1979). In affirming the Full Commission’s and Administrative Law Judge’s narrow interpretation of Shippers Transport, the Arkansas Court of Appeals found that the Respondent Employer failed to satisfy the second prong of the test in establishing that they relied on the claimant’s false misrepresentations in hiring the claimant because the claimant had already been hired when he filled out the health questionnaire and lied about his preexisting conditions. Int'l Paper Co., 2024 Ark. App. 465 at 11.

Although the rationale behind the rulings of the Commission, Administrative Law Judge and Court of Appeals was fairly straightforward, it leaves employers beholden to the representations of newly hired workers regarding their physical limitations and preexisting injuries. At first glance, an Arkansas employer may want to avoid the dilemma that International Paper Company found itself in by having a job applicant fill out a health questionnaire before any employment offer is made so that the employer can figure out whether they have any open jobs that are suitable for the applicant’s physical condition while still being able to fall back on the Shippers Transport defense in case the applicant lies about their medical conditions. However, the Americans with Disabilities Act prohibits employers from asking a job applicant if they are disabled, asking about the severity or nature of any impairment, or having the applicant fill out a medical questionnaire before the employer makes a job offer. This leaves Arkansas employers in a legal Catch-22 because on one hand they are barred under federal law from asking applicants about their physical condition prior to making a job offer, and on the other hand, they are required to prove that they relied on the claimant's pre-offer misrepresentations about their physical condition in deciding to hire the claimant to successfully assert the Shippers Transport defense.

As suggested by Arkansas Workers Compensation Commissioner Michael Mayton in his dissenting opinion, “[t]he rule of law in the Shippers Transport case should be expanded beyond the actual moment of hiring to encompass the entire hiring process, including job placement.” Ronald Steward, Emp., Claimant v. International Paper Co., Emp., Respondent & Sedgwick Claims Mgmt. Servs. Inc., Carrier/TPA, Respondent, No. H109777 (Ark. Work. Comp. Com., May 2, 2023), at *13. Employers like International Paper Company should be able to rely on the representations of new employees completing post-offer medical questionnaires and undergoing medical examinations in determining which job most safely suits those employees’ medical conditions and physical restrictions without worrying that they’ll be stuck footing the bill for an aggravation of a preexisting injury that could have been avoided if the employee was honest about their medical history in the first place. 

Unfortunately, we do not know how the current Arkansas Supreme Court would have applied the Shippers Transport defense to the facts of this case because the case was not appealed after the Court of Appeals issued its opinion affirming the award of benefits to the claimant. Therefore, Arkansas employers should ensure that they ask one of the few questions allowed under the Americans with Disabilities Act during the interview process, which is whether the applicant can perform the specific duties of a job with or without reasonable accommodation. Arkansas courts have not yet considered whether an employer would satisfy the second prong of the Shippers Transport test if they proved that they relied on the claimant’s dishonest answer to the foregoing question in hiring the claimant. However, employers would undoubtedly have a better chance of successfully asserting the Shippers Transport defense in the above scenario than if they continued to only have new employees fill out post-offer health questionnaires or undergo medical examinations where the employee will be able to lie about their preexisting health condition and physical restrictions without the risk of being barred from receiving workers compensation benefits. When inquiring about the applicant’s ability to perform job duties though, it’s imperative that employers avoid asking if the applicant is disabled or probing further by asking about the nature or severity of that applicant’s disability because such questions would leave the employer at risk of being sued for violating the applicant’s civil rights by discriminating against them in the hiring process on the basis of their disability. 

On May 1, 2025, the Chief Administrative Law Judge of the Arkansas Workers’ Compensation Commission (“AWCC” or the “Commission”) held that the federal Airline Deregulation Act (“ADA”) preempts the AWCC’s authority to regulate reimbursement rates for air ambulance services provided to injured workers. Claimant Timothy Johnson, Emp., Respondent Ark. Dept. of Corr., Emp., Respondent Public Employee Claims Div., Carrier, Intervenor Survival Flight, Inc., No. H303158 (Ark. Work. Comp. Com., May 1, 2025). The ruling reversed an Order issued by a former Administrator of the AWCC’s Medical Cost Containment Division (“MCCD”) which compelled the Arkansas Public Employee Claims Division (“PECD”) to pay an air ambulance provider, Survival Flight, nearly double the amount that PECD had initially paid Survival Flight for the air ambulance services they provided to a state employee.  

Pursuant to A.C.A. §11-9-517 and Rule 30, the MCCD was established to implement a medical cost containment program. One of the MCCD’s primary functions is to review and resolve disputes regarding bills between carriers and providers. The AWCC’s Official Fee Schedule lists the maximum allowable payment for the majority of medical services provided to treat injured workers; however, in instances where the AWCC has not specified the maximum allowable fee for a medical service, the MCCD is responsible for determining what constitutes a reasonable reimbursement rate. For administrative review of disputed bills for air ambulance services, which are not addressed in the AWCC’s Official Fee Schedule, the MCCD has historically determined reasonable ambulance rates by conducting annual surveys of the rates charged by Arkansas emergency medical services (“EMS”) providers for individual procedure codes and determining the average charged for each code which constitutes the reasonable allowable amount.

At issue in this case was Survival Flight’s bill for the air ambulance services provided to the claimant after a compensable work accident. Because PECD’s bill review company had advised PECD to only pay 3x the Medicare reimbursement rate for the air ambulance services provided rather than the $44,130.66 that Survival Flight had charged them, Survival Flight asked the MCCD to perform an administrative review of the disputed bill and to determine the reasonable payable amount for the air ambulance services they had provided. After reviewing the amounts charged for each procedure code that was listed in Survival Flight’s bill and comparing those amounts with the average amounts charged by Arkansas EMS providers for the same procedure codes, the MCCD’s Administrator ruled that it was reasonable for PECD to be required to pay an additional $22,188.17 on top of the $21,273.00  they had already paid to Survival Flight for its ambulance services. When PECD filed an appeal of the Administrator’s Order, Judge Fine carefully considered the statutory preemption language in the ADA and opinions filed by the U.S. Supreme Court and the Eighth Circuit Court of Appeals in which they repeatedly found that state laws and state causes of action which attempted to regulate or otherwise impose limitations upon prices charged by air carriers for air transportation services were preempted under the ADA  because they effectively attempted to undo federal deregulation that Congress had enacted to promote efficiency, innovation, and low prices in the airline industry. After reviewing the law and the MCCD Administrator’s Order, Judge Fine ultimately found that the authority of the AWCC and MCCD to regulate the allowable rates for air ambulance services is preempted by the Airline Deregulation Act and therefore reversed the MCCD’s Administrative Review Order that attempted to compel PECD to pay an additional $22,188.17 to Survival Flight. 

An Arkansas Court of Appeals recently made an important distinction between the causation evidence required to establish a natural consequence of a compensable injury/illness as opposed to the evidence required to establish that a claimant’s primary compensable illness/injury was the major cause of the permanent impairment resulting from the compensable consequence. Booneville Hum. Dev. Ctr. v. Foster v. Foster, 2024 Ark. App. 618. 

In Booneville v. Foster, the Court found substantial evidence supported the Full Commission’s determination that the claimant’s atrial fibrillation was a natural consequence of his compensable COVID-19 illness based on Foster’s testimony that he had not been diagnosed with atrial fibrillation before contracting COVID-19 along with a medical report from Foster’s family physician which stated he had a complicated course of COVID-19 that resulted in a deterioration of his health including diastolic heart failure, respiratory failure and atrial fibrillation among other complications. However, the Court did not find substantial evidence supporting the Commission’s finding that Foster was entitled to a 10% impairment rating for his atrial fibrillation because no additional evidence was proffered to establish that Foster’s COVID-19 illness was the major cause of his atrial fibrillation as opposed to other potential causes such as his preexisting history of hypertension and obesity. Therefore, the Court reversed the Commission’s 10% permanent impairment award and held that “evidence of a causal connection between Foster's COVID-19 illness and his atrial fibrillation [did] not automatically resolve the issue of Foster's entitlement to permanent benefits for atrial fibrillation.” Id. at 10. 

On November 6, 2024, the Arkansas Court of Appeals ruled that the Arkansas Workers’ Compensation Commission does not have authority under Ark. Code Ann. §11-9-511(a) to compel a claimant to undergo a Functional Capacity Evaluation (“FCE”) at the sole request of respondents when work restrictions and impairment ratings had already been provided by the claimant’s treating physician at the time the claimant was released at maximum medical improvement (“MMI”). Leaf Home Solutions v. Kunkel, 2024 Ark. App. 547. 

In Leaf Home Solutions, the respondents filed a Motion to Compel with the presiding Administrative Law Judge (“ALJ”) requesting that he use his authority under A.C.A. §11-9-511(a) to compel the claimant to submit to a post-operative FCE which respondents argued was reasonable and necessary to objectively assess and validate physical restrictions and impairment ratings provided by Claimant’s treating physician. The ALJ reviewed the limited medical records and ultimately determined he would need to gather more information regarding the Claimant’s physical restrictions and impairment because he felt that Claimant’s treating physician failed to sufficiently explain the basis for the assigned impairment ratings, and that such ratings were therefore conclusory. In his Order compelling the claimant to submit to the FCE, the ALJ stated it was well settled that the Commission could require a claimant “to submit to such examinations as may be necessary to assist the trier of fact in determining the extent of a claimant's permanent impairment as well as his entitlement to wage-loss disability benefits.” Id. at 4.

Claimant appealed the ALJ’s Order, which the Commission reversed and vacated upon finding that A.C.A. §11-9-511(a) does not grant the Commission authority to compel a claimant to undergo an FCE at the sole request of respondents. In its Opinion affirming the Commission’s decision, the Arkansas Court of Appeals applied a strict construction analysis and found: (1) that the ALJ exceeded his authority under A.C.A. §11-9-511(a) when he ordered the claimant to submit to an FCE that had neither been recommended nor requested by the Claimant’s treating physician, the ALJ or the Commission; and, (2) that an FCE performed by a functional testing center does not constitute the type of physician-performed medical examination or medical treatment contemplated in §511. Further, after reviewing the two cases, North Hills Surgery Center v. Otis, 2021 Ark. App. 468, 638 S.W.3d 323, and Eldridge v. Pace Industries, LLC, 2021 Ark. App. 245, 625 S.W.3d 734, which the ALJ had cited in arguing that FCE’s are commonly used to assess permanent impairment and physical restrictions where medical evidence is conclusory, the Court of Appeals rejected the ALJ’s interpretation and stated that both cases were distinguishable because the parties were not disputing the necessity of an FCE in either case.