The Attachment to the Labor Market Defense for PPD Claimants After the 2017 Reforms
Although the April 2017 amendment to the Workers’ Compensation Law has eliminated the need for some permanently partially disabled (PPD) claimants to demonstrate ongoing attachment the labor market, we submit that this does not mean that carriers are without means to seek a suspension of benefits following classification. Recall that WCL Section 15(3)(w) was amended to read, in pertinent part, as follows:
Compensation under this paragraph shall be payable during a continuance of such permanent partial disability,without the necessity for the claimant who is entitled to benefits at the time of classification to demonstrate ongoing attachment to the labor market
The curious situation created by this amendment is that although the claimant still must maintain an attachment to the labor market following classification with a permanent partial disability, the claimant no longer needs to prove it. Although the claimant’s burden to demonstrate attachment has been lifted, this does not prevent the carrier from arguing that the claimant has voluntarily withdrawn from the labor market.
Before the 2017 amendment to Section 15(3)(w), the Board repeatedly stated in its decisions addressing requests to reopen claims post-classification that “attachment to the labor market and voluntary withdrawal from the labor market are two different legal concepts,”Combined Life Insurance Co., WCB Case No. 806012674 (decided 4/9/15). Attachment to the labor market is an ongoing issue, which the claimant must continually maintain and prove to be entitled to benefits. Voluntary withdrawal from the labor market applies to a specific point in time and must be proven by substantial evidence. Curtis v. Dale Pipery Corp., 295 A.D.2d 836 (3d Dep’t 2002). For example, if a claimant quits employment for reasons unrelated to the injury or refuses a light-duty job offer within that claimant’s work restrictions made in good faith, that claimant has voluntarily withdrawn from the labor market, and must prove attachment thereafter to maintain an entitlement to benefits. Moreover, if a claimant does not look for work, or otherwise fails to maintain an attachment to the labor market, that claimant can be found voluntarily withdrawn from the labor market. German v. Target Corp. 77 A.D.3d 1126 (3d Dept. 2010);see also, Buffalo Bd. Of Education, 2013 WL 1007427 (WCB Case No. 80208789, decided March 6, 2013).
The amendment to Section 15(3)(w) makes no reference to the voluntary withdrawal defense. This defense should still be available to carriers even after classification. A condition precedent to a finding of voluntary withdrawal is a prior attachment to the labor market. If the carrier can submit sufficient evidence that the claimant is no longer engaged in the activity that gave rise to the claimant’s earlier attachment to the labor market (e.g., the claimant is no longer employed, or going to school, or retraining, or looking for work) then the carrier could argue that the claimant had voluntarily withdrawn from the labor market.
We submit therefore that carriers should: (1) pursue the attachment to the labor market defense vigorously before and at the time of classification and (2) argue for a finding of voluntary withdrawal from the labor market after classification if the carrier can show that the claimant ceased those activities which previously proved the claimant’s attachment to the labor market at the time of classification.
We believe that the proof required to argue this will be like that required by numerous Board Panel decisions concerning the reopening of a claim following classification with a PPD. Such proof typically consisted of copies of questionnaires sent to the claimant asking if the claimant was looking for work, offers of vocational services, job leads sent to the claimant, and the results of follow up on those leads. Similar evidence used in reopening those claims will prove useful in pursuing the voluntary withdrawal defense following the 2017 amendment to Section 15(3)(w).
If you have any questions or need assistance concerning defense of a post-PPD claim, please do not hesitate to contact any one ofour attorneys.
Appellate Division Decision Clarifies Issues Concerning Attachment to the Labor Market Defense
On 5/4/17, the Appellate Division, Third Department, decided McKinney v. United States Roofing Corporation,which contains several holdings clarifying issues commonly seen at hearings concerning labor market attachment and lost time awards. This decision is of interest given the contradictory Board Panel decisions on the attachment to labor market defense and the recent 2017 amendments to the Workers’ Compensation Law eliminating the need for permanently partially disabled claimants entitled to benefits at the time of classification to produce proof of labor market attachment.
TheMcKinney decision confirms that a total disability opinion does not shield the claimant from a suspension of awards when the Board rejects that total disability opinion and finds the claimant to have a partial disability. This is not a new concept. The Appellate Division previously addressed this issue in both Testani v. Aramark Services, 306 A.D.2d 709 (3d Dep’t 2003) andBrowne v. Medford Multi-Care, 89 A.D.3d 1173 (3d Dep’t 2011). Nevertheless, the decision inMcKinney reinforces prior rulings on this issue by holding that when the Board rejects a total disability opinion and awards benefits of a partial disability rate, there is an implicit finding that the claimant must produce evidence of the attachment to labor market.
Second, the McKinney decision affirms that the labor market attachment defense is merely a subset of the requirement that awards to a claimant are not appropriate where there is no causal connection between the claimant's reduction in earnings and the claimant's work injury. Even though the 2017 amendments to the Workers' Compensation Law eliminated the need for permanently partially disabled claimants entitled to benefits at the time of their classification to produce proof of labor market attachment, there is no bar against carriers arguing that the same claimants are not eligible for awards if they are self-limiting their earnings, or if there is no causal connection between the reduction in earnings in the work injury for any reason other than failure to prove labor market attachment. Nor do we believe that the 2017 change in the law prevents carriers from arguing that the claimant hasvoluntarily withdrawn from the labor market as we have previously discussed in our article above.
Finally, theMcKinney decision resolves, somewhat, the question of when indemnity awards should be suspended where the claimant is found not attached to labor market. InMcKinney, the Court agreed with the Board’s suspension of the claimant's benefits prior to the hearing at which the claimant was scheduled to testify on the labor market attachment issue based on the claimant's failure to produce proof of labor market attachment prior to that hearing.
Appellate Division Rules That Section 25-a Applies to Death Claims Resulting from Claim Already Transferred to SFCC Prior to 1/1/14
On 5/4/17 the Appellate Division, Third Department decided Misquitta v. Getty Petroleum. This case holds that the Special Fund for Reopened Cases under WCL §25-a is liable for death claims resulting from injuries from a claim that had already been transferred to it before the January 1, 2014 cutoff date for §25-a transfers, even when the death claim itself was not made until after that date.
This case involved a 1985 injury established for a myocardial infarction with a permanent total disability classification. Liability for the claim transferred to the Special Funds Conservation Committee (SFCC) under WCL §25-a in 2000. The claimant died due to coronary artery disease on May 2, 2014 and his wife brought a claim for death benefits against the Special Funds. The SFCC argued it was not responsible for the death claim because it was filed after the January 1, 2014 §25-a cutoff. The employer and original carrier were brought into the litigation but they argued that the SFCC was responsible for any liability on the death claim based on the 2000 §25-a transfer. The WCLJ found in the employer and original carrier’s favor and a Board Panel affirmed on appeal. Special Funds appealed to the Appellate Division, Third Department which affirmed, holding Special Funds liable for the death claim regardless of its date of filing, because Special Funds was already the liable carrier for the underlying workers’ compensation claim based on the 2000 §25-a transfer.
The employer and original workers’ compensation carrier also argued that the January 1, 2014 cutoff for §25-a transfers was unconstitutional based on the American Economy Insurance Company v. State of New York case. 139 A.D.3d 138 (1st Dep't 2016). That decision is currently pending on appeal to the New York State’s highest appellate court, the Court of Appeals. The Appellate Division did not address the merits of the American Economy issue because it ruled in favor of the employer and original carrier based on different legal grounds.
Misquitta establishes that the Special Fund will be liable for a compensable death claim regardless of the date of filing if liability for the original workers’ compensation claim which led to the death transferred to the Fund under §25-a before the January 1, 2014 cutoff date.
H&W Obtains Favorable Decision on Drug Weaning from Board Panel, Reversing WCLJ
Earlier this month in Toys R Us, N.Y.W.C.B. 80801667 (5/11/17), the Board directed the claimant's treating physician to develop a program to wean the claimant from Fentora, Kadian, Parafon, and Rozerem in accordance with recommendations set forth in the carrier's IME report and the Non-Acute Pain Medical Treatment Guidelines (NAP-MTGs). This decision modified the finding of the WCLJ, who refused to make any changes to the claimant's treating physician's prescription regimen due to the claimant's extreme pain. This case was litigated and argued by our partner,Melanie Wojcik.
This case serves as a reminder that the Board will enforce its Medical Treatment Guidelines, especially with respect to opioid weaning. The claimant in this case showed no functional improvement by following the treating physician's opioid-based treatment plan, which had a morphine equivalent dose (MED) of approximately 150 mg. The carrier's IME opined that the claimant's "current medical regimen is not consistent with the medical treatment guidelines." The IME set forth his recommendations for weaning of the opioid medications.
Despite a factual inaccuracy in the IME report, the Board found that the IME's report was "most consistent" with the NAP-MTGs and that the claimant should be weaned from his medication regimen based on the recommendations in the IME report.
Opioid weaning decisions such as this one can help employers and carriers in reducing long-term liability in their cases and reduce the medical costs of claims in anticipation of settlement.
Hamberger & Weiss - Buffalo Office
700 Main Place Tower
350 Main Street
Buffalo, NY 14202
Hamberger & Weiss - Rochester Office
1 South Washington Street
Rochester, NY 14614