Kentucky Law Review

ALJ: Hays appointed as Workers Comp Administrative Law Judge

Governor Beshear Appoints Administrative Law Judge
Governor Steve Beshear has appointed Edward D. Hays as an Administrative Law Judge in the Department of Workers Claims.

WORKERS COMP: Doug Gott and Caroline Clark appointed ALJ for Workers Comp

FRANKFORT, Ky. – Kentucky Gov. Steve Beshear has appointed the following as administrative law judges in the Department of Workers Claims:

Douglas W. Gott, of Bowling Green, is a workers compensation attorney in private practice. He received his bachelor’s degree from Western Kentucky University and earned his law degree from the University of Kentucky. He replaces Sheila Lowther, who has resigned. Gott shall serve for the remainder of the unexpired term ending December 31, 2011. This appointment is effective June 21, 2008.
 
Caroline Clark, of Louisville, has served as commissioner of the Kentucky Public Service Commission since August 2007. She previously was an associate with Landrum and Shouse law offices. Clark earned her bachelor’s degree from Centre College and her law degree from the University of Kentucky. She replaces Andrew Manno, whose term is ending. Clark shall serve for a term expiring July 14, 2012. This appointment is effective July 15, 2008.

The governor has also reappointed Richard M. Joiner, of Madisonville. Joiner has served as an administrative law judge since 2001. He earned his bachelor’s degree from the University of Michigan and received his law degree from the University of Kentucky. His new term expires July 14, 2012. This appointment is effective July 15, 2008.

Administrative law judges in the Department of Workers Claims conduct hearings, supervise the presentation of evidence and render final decisions, orders or awards on cases presented before them.

WORKERS COMP: ALJ opening

The Workers Compensation Nominating Commission is now accepting resumes for positions as Administrative Law Judge (ALJ) for the Kentucky Office of Workers Claims. These are full-time positions and appointees shall not hold any other public office or maintain any private practice.

Applicants for the Administrative Law Judge positions must be licensed attorneys and must have five (5) years experience in the Commonwealth in the practice of workers compensation law or a related field and extensive knowledge of workers compensation law (KRS 342.230(3)). The salary to be paid is that of a Circuit Court Judge.

APPLICATIONS MUST BE RECEIVED ON OR BEFORE FRIDAY, MAY 9, 2008, by noon (EST). Interested parties are required to send one original resume and seven copies, along with a cover letter containing an e-mail address, to the attention of Brenda Majcher, Nominating Commission Clerk, Office of Workers Claims, Prevention Park, 657 Chamberlin Avenue, Frankfort, Kentucky 40601. Questions may be directed to Mrs. Majcher at (502) 564-5550.

WORKERS COMP: Florida law limiting attorney fees in Worker Comp. cases to be heard by Fla. Sup. Ct. and may set precedent

Thanks to Lawreader for highlighting this interesting story from Florida regarding the concerns on how state legislation regulating the claimant's attorneys fees but not regulating how much the insurer/employer pays their lawyers in attorneys fees might be violative of equal protection.

Florida law limiting attorney fees in Worker Comp. cases to be heard by Fla. Sup. Ct. and may set precedent

“By severely limiting the fees available to a claimant’s counsel ... and imposing no limits on fees paid by an employer/carrier to defend a claim, the statute denies equal protection to injured employees.”  (click on headline for rest of story)

WORKERS COMP: Vacancy Announcement for Executive Director at Ky Office of Workers Claims

The Workers' Compensation Nominating Commission is now accepting applications to make nominations for the position of Executive Director for the Kentucky Office of Workers' Claims.  This is a full-time position and the appointee shall not hold any other public office. 

Applicants for the Executive Director position must have demonstrated extensive knowledge and experience in the area of workers' compensation, public administration, and administrative law (KRS 342.228(1)(2)).  The salary to be paid shall not be less than the salary of a member of the Workers Compensation Board. 

RESUMES MUST BE RECEIVED ON OR BEFORE NOON, WEDNESDAY, JANUARY 23, 2008.   

Interested parties are required to send one original resume and seven copies along with a cover letter containing an e-mail address to the attention of Brenda Majcher, Nominating Commission Clerk, Office of Workers' Claims, Prevention Park, 657 Chamberlin Avenue, Frankfort, Kentucky  40601.  Questions may be directed to Mrs. Majcher at (502)564-5550.  Those serving on the Workers Compensation Nominating Commission are as follows:

Office of Workers' Claims
657 Chamberlin Ave
Frankfort, KY  40601
(502) 564-5550 ext. 4439

WORKERS COMP: "Settlement reached with leaders of failed AIK Comp"

Settlement reached with leaders of failed AIK Comp COURIER JOURNAL

A proposed settlement with the former officers and trustees of AIK Comp, a self-insured workers' compensation fund, includes a $5 million insurance payment, the Kentucky Office of Insurance said today.

Workers Compensation Board Vacance Announcement

The Workers' Compensation Nominating Commission is now accepting applications to make nomination for one (1) position for Workers' Compensation Board Member. The Board position term will expire January 4, 2012. This is a full-time position and the appointee shall not hold any other public office.

Applicants for the Workers' Compensation Board Member position must be licensed attorneys and must have the qualifications required of an Appeals Court Judge, except for residence in a district, and shall receive the same salary and be subject to the same standards of conduct.

APPLICATIONS MUST BE RECEIVED ON OR BEFORE Noon, October 19, 2007. Interested parties are required to send one original resume and seven copies, along with a cover letter containing an e-mail address, to the attention of Brenda Majcher, Nominating Commission Clerk, Kentucky Office of Workers' Claims, Prevention Park, 657 Chamberlin Avenue, Frankfort, KY 40601. Questions may be directed to Mrs. Majcher at (502)564-5550, Ext. 4439.

Those serving on the Workers' Compensation Nominating Commission are as follows:

Charles Baird, Chairman Pikeville, KY
Dave Disponett . Lawrenceburg, KY
Hon. Cathy M. Jackson  Ft. Mitchell, KY
Brockton Edwards Louisville, KY
Hon. James Fogle   Louisville, KY
Charles McCoy Owenton, KY
Hon. Phillip Wheeler, Jr. Pikeville, KY

Workers Compensation: McDonald's Trial Highlights How an Employer Might Use or Abuse the "Exclusive Remedy" Provisions as a defense

Lawyers in the "know" on the relationship of "exclusive remedy" provisions, "intentional conduct", and tort liability established by Kentucky's Workers Compensation Act were probably disturbed by this bit of cross-examination in the Strip Search Hoax lawsuit against McDonald's being tried in Bullitt County.

Disturbed to the extent of how a law designed to protect injured workers could possibly be manipulated by an employer to deprive a claimant of the full protection of the laws!

The story  found in the Courier-Journal was entitled Testimony could hurt McDonald's.  Although the story by Andrew Wolfson contains excerpts of excellent cross-examination by Kirsten Daniel on behalf of the injured Plaintiff Ogburn showing how there is always "more to the story", there was one bit of cross-examination which should have been a wake-up call to those who are considering changes to the workers compensation laws and the need for it to achieve its purpose and PROTECT the injured workers by plugging a possible hole in the system. Here is an extract of that cross-examination:

Area supervisor Jacque Heck, who was in charge of the Mount Washington store and several others, acknowledged on cross-examination that a manager altered Ogborn's time records to show that she was working at the time of her ordeal.

After initially claiming she didn't know why anyone at the company would do that, she conceded that one of McDonald's defenses is that Ogborn was on duty and cannot sue because her damages would be covered by worker's compensation.

"Louise wasn't working when she was stripped, spanked and sexually assaulted, was she?" one of Ogborn's lawyers, Kirsten Daniel, asked Heck.

"No, ma'am," she answered.

Obviously this is only one witness's testimony which may or may not be an accurate acknowledgement of the existence of a fact involving the actual altering of records, since a few questions and answers does not paint a complete picture of the defense or the evidence.  However, it is nonetheless a damning acknowledgement to the extent that employers do know the workers compensation laws and the advantages and disadvantages of the benefits to the employer. 

Whether or not any employee was "on the clock" at the time of an incident is a critical and technical component of any analysis as to potential remedies for an injury.  For example, the "exclusive remedy" provisions of the Workers Compensation Act can be used by both employers and third parties to lock a claimant into a single source of recovery under the Workers Compensation Act for some or all of the injuries' consequences and damages.

What is noteworthy from these few questions are the implications and recognition that the potential harm that can be perpetrated on an employee by those in the know with an employer who might alter the evidence to deprive the employee of a remedy.

The Workers Compensation Act is designed to protect workers injured on the job and not workers off the job.  To get these workers compensation protections, the workers give up rights to sue an employer or fellow worker for negligence in return for some compensation for their injuries regardless of negligence.  Most would agree that workers compensation benefits are totally inadequate to make a worker whole following an injury, but the legislature nearly a century ago struck a balance between employer and employee to afford these protections.  Making sure that balance is checked is important.

The Workers Compensation Act does NOT deprive a worker OFF the job who is injured by the employer from suing the employer just like any other person or customer of the establishment.  Nor does it deprive the worker from suing third parties (those who are not also employed by the employer) for injuries.  For example, the worker is driving a company car and is injured in a car wreck caused by another's negligence can sue this third party for damages not covered under workers compensation.  In this example, the employer's medicals and wages are handled through workers compensation, but those damages which are not paid by workers compensation (excess wages, some medicals, and pain, suffering, anguish and inconvenience) could be recoverable from this negligent third party motorist.

Again, this post does not claim the statement by Jacque Heck is true or not true or go any further on how it relates to the trial, but simply addresses a potential for abuse exists in workers compensation law, and recognition that this legal nuance is apparently not a stranger  in the house of the employer.

For what it is worth, this is not the only area for potential abuse in depriving a worker of compensation and bringing them within the forced umbrella of protection of the Workers Compensation Act.  Eg.,

• Kentucky Workers Compensation: "Bad Law and Bad Faith Lead to a Bad Situation for Kentucky's Workers"
• SCOKY Decision: "Regular and Recurrent" workers compensation case regarding subcontrator liabiity
• Tort Reform: Workers' comp left amputee tough choice
• The face of tort reform, past, present and future can be found in Workers Compensation.

SCOKY Decision: "Regular and Recurrent" workers compensation case regarding subcontrator liabiity

Court clarifies workers' comp law
State ruling involves subcontracted jobs
By Bill Wolfe, Courier-Journal

When James David Rehm of Louisville died in 2002 of cancer caused by asbestos, it appeared that his lawsuit against various work sites where he may have been exposed to the harmful substance might never get a full hearing.

The claims against the 16 companies were considered to be prohibited under the Kentucky Workers' Compensation Act -- though none had ever directly employed Rehm.

But a unanimous Kentucky Supreme Court ruling last week opened the door for the Rehm family to continue legal action against seven of the companies and, perhaps more significantly, aimed to clarify for workers and businesses which cases fall under the workers' comp exemption and which can be considered in court.

• Click here for entire story
• Click here for full text of Supreme Court decision

Kentucky Workers Compensation: "Bad Law and Bad Faith Lead to a Bad Situation for Kentucky's Workers"

Here's a post by Covington Attorney Kash Stilz from Roush and Stilz Law Firm addressing Kentucky Workers Compensation law - its history, its purpose, and its deficiencies in not protecting the injured workers:

Kentucky Workers Compensation: Bad Law and Bad Faith Lead to a Bad Situation for Kentucky's Workers

Introduction

As a comp practitioner, I am keenly aware why other trial lawyers and injury victims are fighting “tort reform” legislation currently being pushed by those that seek to avoid answering for their behavior that causes injury or loss. We lost the tort reform battle 91 years ago and the effects of that loss continue to echo today. In 1916, Kentucky enacted its first set of workers’ compensation statutes. Since its enactment the Kentucky Workers’ Compensation Act (the “Act”) has undergone seven major revisions culminating in the hit that income benefits took in the 1996, 2000, and 2002 revisions.

Recently, we’ve seen an increased assault on another benefit provided by the Act; the medical benefits in K.R.S. §342.020. Several insurance companies that provide comp coverage to employers in the Commonwealth have discovered that the Act creates an uneven bargaining position that significantly affects a workers right to the medical benefits. Specifically, insurance companies are increasingly making the lump sum payment of permanent income benefits contingent on waiver of the injured worker’s right to past, present and future medical benefits. (Under the Act, the judge that decides comp claims cannot award lump sum payments – the judge can only award weekly installment payments).

Even more disturbing, the insurance companies usually offer only a nominal amount for the waiver, in a “take-it-or-leave-it” fashion. If the injured worker chooses not to waive medical coverage, the insurance company will only pay the income benefit in weekly installments. While that may not seem to be a major concern, consider that the income benefits available under the Act are only a fraction of weekly wages earned by the worker before the work injury. In a typical case in Kentucky it is not unusual for an injured worker to be in significant debt, or significantly behind on bills, at the conclusion of a claim. Obviously, a lump sum payment of income benefits is much more of a benefit to the injured worker in most cases. Insurance companies have increasingly used this circumstance to their advantage. And the advantage to the insurance company is clear. Closing the injured workers claim out in its entirety takes the claim off the books and makes a better bottom line. In any other setting this is known as an “unfair claims settlement practice.” In the realm of workers’ comp, however, this behavior seems to be encouraged by law.

Problems Associated With Waiving Medical Coverage Provided By The Act

It’s important to understand that the workers’ comp system is, in practice, not voluntary. K.R.S. §342.690 mandates when a worker is injured in the Commonwealth the exclusive recourse available for the injuries suffered is through the Act. There are some narrow exceptions (a topic for another day).

Because the injured worker has to seek compensation under the Act, access to health care is limited to the coverage provided by the employer’s comp insurance company. Private health insurance and government coverage normally exclude medical expenses due to work related injuries. Waiving the right to medical coverage under the Act in most circumstances means the injured worker is responsible for payment of the medical expenses directly (and at full cost, not the cost mandated by the Act or at rates negotiated by insurance companies). In the event future surgery or other expensive medical treatment is necessary, a waiver of medical benefits can prove catastrophic.

The Act Promotes The Insurance Companies Behavior

The Act creates the situation where an injured worker might think it advisable to waive his or her right to medical coverage “in exchange for” lump sum payment. The situation involves the difficulties associated with procuring approval for treatment, and the lack of recourse available to the injured worker when the insurance company demands lump sum payment conditioned on waiver of medical benefits.

As an initial matter, the insurance company has a hand in every stage of the injured workers treatment. At the beginning of a claim the insurance company can deny the injured worker all benefits because hearings on most issues in Kentucky do not occur for several months. K.R.S. §342.020 mandates, briefly, that the employer pay for all “reasonable and necessary” medical expenses associated with the work injury. What is “reasonable and necessary” is quite often open to debate between the workers treating doctor and the doctor hired by the insurance company to review the claim. If the insurance company has a doctor that supports its position to deny coverage, the insurance company will deny coverage.

The Act also significantly hamstrings an injured workers accessibility to counsel in claims solely for medical benefits. K.R.S. §342.320 dictates what and when counsel may charge a fee for services. A fee may only be charged 1) in the original claim or upon reopening, 2) for income benefits recovered (i.e., contingent), and 3) subject to a cap of $12,000.00. This situation is perfectly fine when an injured worker is fighting for medical coverage and income benefits. However, the Act allows an insurance company to contest the payment of medical treatment (theoretically) every time medical treatment is prescribed. Unless the injured worker has an original claim for income benefits or has suffered a worsening of condition (thus allowing for an increase in income benefits) an attorney that decides to represent the injured worker does so for free (unless the workers treating doctor agrees to hire the attorney to pursue medical expenses already incurred). This is in contrast to attorneys representing employers and insurance companies who are allowed to charge an hourly fee under the Act.

The insurance company is also prominently involved in the care received by the injured worker in some circumstances. Under the “managed care” system, an injured worker is forced to choose from a predetermined (by the comp insurance company) list of doctors, unless the worker continues to treat with the doctor that provided initial emergency care for the injury. This significantly restricts the workers ability to choose a medical care provider. 

Even in the absence of managed care it is not uncommon for a carrier to recruit the services of nurses who attend the worker’s doctor appointments and interact with the doctor directly. I’ve been told by insurance adjusters that the apparent benefit of these individuals is to “expedite approval of treatment.” The experience I’ve had with these individuals, however, is quite the opposite. Often the involvement of these individuals results in a displeased doctor who now has better things to do than deal with the injured worker, and ultimately interruption in treatment.         

Finally, the Act’s “unfair claims settlement practice” provision has little practical effect on how insurance companies handle claims, and certainly doesn’t deter the insurance company from demanding waiver of medical benefits for lump sum payment of income benefits. The provision provides for nothing more than a slap-on-the-wrist and has yet, to my knowledge, been applied in the circumstance discussed here. Because judges can’t award lump sum income benefits, insurance companies don’t feel they have to pay them. It’s been stated that one of the Act’s primary purposes is to expedite the handling of claims. Instead, by sanctioning the behavior of insurance companies in this instance the Act promotes the filing and litigation of claims.

Conclusion

The goal of this brief article was to demonstrate that the Act needs to be changed to deal with the very real attack that is occurring on an injured workers right to medical coverage. When the General Assembly first enacted this “social legislation” it was intended to “place the burden for injuries received at work upon the industry in which the injury was suffered.” Robinson v. Lytle, 124 S.W.2d 78 (Ky. 1939). Instead, it has created an avenue for the industry to shift the burden on the injured worker through an uneven bargaining position.

The next time the General Assembly meets to revise the Act, it would be doing the injured worker in the Commonwealth a lot of good by changing the Act to 1) allow for the award of lump sum payment of permanent income benefits, 2) allow for an injured worker to seek attorney’s fees and costs from insurance companies if successful in prosecuting the coverage of medical treatment alone, and 3) putting some teeth into the unfair claims settlement practice provisions of the Act.

By Kash Stilz, Covington, Kentucky, Attorney at Law