KEEP CALM CALL MVP AND 2014 MVP LAW SEMINAR GLOBAL RELEASES: EMPLOYMENT ISSUES IN WORKERS COMPENSATION.
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1 2014 MVP LAW SEMINAR GLOBAL RELEASES: EMPLOYMENT ISSUES IN WORKERS COMPENSATION KEEP CALM AND CALL MVP DALLAS JULY 17TH KANSAS CITY AUGUST 7TH ST. LOUIS SEPTEMBER 25TH
2 THE IMPACT OF A WORKERS COMPENSATION CLAIM ON YOUR EMPLOYMENT DECISIONS I. RETALIATORY DISCHARGE CLAIMS: Kansas A. Kansas recognizes a tort for discharge in retaliation for the exercise of rights provided under the Kansas Workers Compensation Act. Murphy v. City of Topeka, 630 P.2d 186 (Kan. Ct. App. 1981). B. A Plaintiff can recover by proving that [her] discharge was based on, because of, motivated by, or due to the employer's intent to retaliate. However, she does not need to show that retaliation was the employer's sole motive or reason for the termination. Foster v. Alliedsignal, Inc. 293 F.3d 1187, 1192 (10th Cir. 2002). C. In order to prevail on a retaliatory discharge claim, a plaintiff need not provide direct proof of retaliatory intent. They may prove their claim based on circumstantial rather than direct evidence. Chaparro v. IBP, Inc., 873 F.Supp. 1465, 1472 (D. Kan.1995), aff'd, 104 F.3d 367 (10th Cir.1996) (unpublished table decision). D. Kansas courts have adopted the McDonnell Douglas burden-shifting framework for analyzing retaliatory discharge cases. At the first stage, a plaintiff makes out a prima facie case raising a rebuttable presumption of retaliatory intent by showing that: 1. he or she filed a claim for workers' compensation benefits, or sustained an injury for which he might assert a future claim for such benefits; 2. that the employer had knowledge of plaintiff's compensation claim, or the fact that he had sustained a work-related injury for which the plaintiff might file a future claim for benefits; 3. that the employer terminated the plaintiff's employment; and 4. that a causal connection existed between the protected activity or injury, and the termination E. Once a plaintiff establishes a prima facie case, the burden shifts to the defendant to articulate a legitimate, non-retaliatory justification for the discharge. Bausman v. Interstate Brands Corp., 252 F.3d 1111, 1116 (10th Cir. 2001). F. If the employer meets this burden, the burden shifts back to the plaintiff to show by clear and convincing evidence that he or she was terminated in retaliation for exercising rights under the Workers' Compensation Act. Bausman.
3 II. RETALIATORY DISCHARGE CLAIMS: Missouri A. Employers in Missouri face increased liability under new causation standard established by the Missouri Supreme Court on April 15, 2014 in Templemire v. W & M Welding, --- S.W.3d ---, 2014 WL (Mo. 2014). B. R.S.Mo No employer or agent shall discharge or in any way discriminate against any employee for exercising any of his rights under this chapter. Any employee who has been discharged or discriminated against shall have a civil action for damages against his employer. C. Missouri Standard under Templemire 1. Employees need only prove that the filing of a workers compensation claim was a contributing factor to the employee s discharge, termination, or discipline rather than the sole, exclusive factor, outlined in previous Missouri Supreme Court decisions. D. Facts of Templemire 1. Templemire was an employee assigned to light duty as a result of a workrelated injury to his foot. 2. He took a break at work, and was discovered by his supervisor. He told his supervisor that he needed to take a break due to his injured foot. 3. The supervisor then terminated Templemire, effective immediately. 4. The parties exchanged words, and Templemire asked his supervisor if he was sure the employer wanted to fire him, because [he] was going to go home and call workman s comp. 5. The employer s stated reason for terminating Templemire was insubordination. 6. After being discharged, Templemire called the insurance adjuster assigned to his workers compensation claim, who then contacted the supervisor. 7. The adjuster s notes from her conversation with the supervisor indicated that she informed him that the claimant s work restrictions required him to take a break. The supervisor then informed the adjuster that he believed that the claimant was milking his injury and that the claimant can sue him for whatever he reason he wanted because he paid his premiums and attorneys to handle those issues.
4 8. Templemire sued, alleging he was fired in retaliation for filing a work s compensation claim. 9. At trial, Templemire presented evidence of the employer s statements to the adjuster. E. Outcome of Templemire 1. To make a case based on a workers compensation retaliatory discharge, an employee must demonstrate that his or her filing of a claim was a contributing factor to the adverse employment action. 2. Causes arising out of R.S.Mo should apply the contributing factor language. 3. Employee suffered prejudice from submission of the exclusive cause language as opposed to the contributing factor language, and thus, employee was entitled to a new trial. F. Implications for Employers 1. No longer sufficient for an employer to have some other reasonable motive behind the discharge or discipline of an employee. 2. Focus shifted to whether employee s work injury or filing of a workers compensation claim was a factor in the employer s decision. 3. Keep accurate and detailed records outlining why discipline is being taken against an employee. 4. Be consistent in progressive disciplinary actions against all employees. 5. Expect for all actions to be reviewed in a proceeding for retaliation. 6. Strive to make the reasons for their disciplinary actions transparent and fair so that they will be upheld if reviewed by a neutral third party. 7. *Third-Party Administrators: TPAs are an extension of an employer and can be deemed as agents of the employer. Therefore, they could be held liable for the employer s acts and could be included in a wrongful termination award. G. Implications for Insurers and Insured-Insurer Privilege in Missouri 1. Adjusters must be aware of potential discovery disputes that are likely to arise in these types of claims.
5 2. Missouri recognizes an insured/insurer privilege in which statements made by an insured to an insurance adjuster fall under the protection of the attorneyclient privilege. See State ex rel. Cain v. Barker, 540 S.W.2d 50, 53 (Mo. 1976), limited by Brantley v. Sears Roebuck & Co., 959 S.W.2d 927 (Mo. Ct. App. 1998). 3. Brantley outlines that this privilege does not extend to relationships covering casualty loss, rather than the liability insurance relationship. 4. Templemire demonstrates that this privilege will not necessarily extend to an adjuster s notes in a retaliatory discharge proceeding. a. In determining whether adjuster notes are subject to discovery, the court will evaluate whether the document would be used in determining whether to settle, contest, or otherwise dispose of a claim. Crow v. Crawford & Co., 259 S.W.3d 104, 122 (Mo. Ct. App. 2008). b. Statements made by injured employee to the adjuster or insured are probably discoverable pursuant to R.S.Mo , which provides that no statement in writing made or given by an injured employee shall be admissible in evidence unless a copy is given to the employee or their attorney within thirty days after written request for it by the injured employee, his dependents, or his attorney. 5. Adjusters notes may be subpoenaed and used against an employer at trial. 6. Adjusters must: a. Be conscious of the information they include in their notes. b. Include information useful for determining whether to settle, contest, or otherwise dispose of a claim. i. Draft notes so that it is clear that notes were made in anticipation of litigation. This could protect notes under work product privilege. c. Do not include material or information that is likely to implicate the employer in later proceedings. d. Retain counsel in order to protect the claim. i. Copy counsel on all communications so that communications will be protected by attorney-client privilege. H. Insured-Insurer Privilege in Kansas 1. K.S.A provides: Ordinarily a party may not discover documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative, including the other party s attorney, consultant, surety, indemnitor, insurer or agent.
6 a. Kansas Courts have held that the initial investigation of a potential claim, made by an insurance company prior to the commencement of litigation, and not requested by or made under the guidance of counsel, is made in the ordinary course of business of the insurance company and not in anticipation of litigation or for trial. See Henry Enterprises, Inc. v. Smith, 592 P.2d 915, 921 (Kan. 1979); Indep. Mfg. Co., Inc. v. McGraw-Edison Co., 637 P.2d 431, 435 (Kan. Ct. App. 1981). i. Therefore, an adjustor s claim notes regarding the initial investigation could be subject to discovery. b. However, if the investigation of a claim is performed under the direction of an attorney then the adjustor s file will likely be treated as attorney work product and thus immune from discovery. See Heany v. Nibbelink, 932 P.2d 1046, 1050 (Kan. Ct. App. 1997). III. NOTICE OF ACCIDENT Employer has a policy of reporting work-related accidents immediately. Terri is a factory worker who earns $800 per week. She misses work on a regular basis. Before the employer can terminate her for attendance policy violations, Terri files a claim for workers compensation benefits claiming repetitive gripping and other hand-intensive activities caused injury to her upper extremities. She also says her back hurts. The Employer has a policy that the employee must immediately report all work-related accidents and injuries. A. What is the Kansas law regarding reporting of a work-related accident? B. What action can or should the employer take regarding Terri s employment? C. What will be the Date of Accident for the Workers Compensation Claim? IV. TEMPORARY TOTAL, FMLA, LIGHT DUTY AND TERMINATION Employer sends Terri to the Occupational Clinic. Terri is unhappy with the treatment she receives. She subsequently hires an attorney. Employer agrees to send Terri to an orthopedic surgeon. The surgeon issues temporary restrictions while sending Terri to physical therapy. Employer offers accommodated, light duty work. Claimant shows up to work but complains constantly about the assignment, now claiming that her back hurts more. She also leaves work early on a regular basis. She has exhausted all FMLA leave. A. Should the employer terminate Terri? B. What are the consequences of termination relative to:
7 1. ADA? 2. Lawsuit Exposure? 3. The Workers Compensation claim regarding: *Temporary Total Disability and Work Disability Exposure V. THE UNRELATED HEALTH CONDITION Terri now has neck complaints which she has not yet brought into the Workers Compensation claim. She has surgery under her health insurance. She is temporarily restricted from working. Treatment for the hands, wrists and back are put on hold. A. Does the Employer terminate Terri? B. What would the impact of termination be on Terri s Health Insurance? C. What would the impact of termination be on the Workers Compensation Claim? *Temporary Total Disability and Permanent Partial Disability D. What should the Employer do to fill Terri s position while she is off work? VI. TREATMENT ISSUES Terri finishes treatment for her neck and is placed on restrictions from returning to her normal job. She then wants to return to the orthopedic surgeon for treatment to her upper extremities and back. A. Does the Employer have to authorize treatment? B. Does the Employer offer accommodated work? C. Does the Employer owe Temporary Total Disability? VII. GLOBAL SETTLEMENTS Terri undergoes surgery for her hands and wrists. She is restricted from performing her old job. She still has back complaints but nothing objective can be found. She decides she will apply for Social Security Disability. A. Can the Employer attempt to resolve the Workers Compensation Claim and her employment issues at the same time? B. Would receipt of Social Security Disability benefits or a Workers Compensation Award have an effect on the other?
8 C. What is the Employer s obligation regarding Future Medical in the Workers Compensation Claim? D. Is a Medicare Set Aside required? E. What potential litigation can the Employer anticipate if a global settlement cannot be reached? F. What issues must the workers compensation attorney consider when he crossexamines Terri regarding her ability to perform work and daily activities? G. Oubre v. Entergy Operations, Inc., 522 U.S. 422 (1998) In exchange for receipt of severance pay under an employment termination agreement, Oubre signed a release of all claims against her employment. The release failed to comply with requirements of the ADEA. It did not (1) give Oubre time to consider her options, (2) give her seven days to change her mind, or (3) make specific reference to ADEA claims. 1. What Oubre tells us: a. An Employment Release can be drafted and agreed to between employer and employee. b. This agreement is separate and apart from any worker s compensation settlement payment and agreement. c. A severance payment is sufficient consideration for the release. d. A Release must include consideration for closure of potential employment claims. e. It is a good idea to have separate consideration for ADEA claims. f. The Release must be drafted correctly by law to be effective. i. Because Entergy s release did not comply with the requirements of the ADEA, the release did not bar Oubre s claim, even though she kept the severance pay. Disclaimer and warning: This information was published by McAnany, Van Cleave & Phillips, P.A., and is to be used only for general informational purposes and should not be construed as legal advice or legal opinion on any specific facts or circumstances. This is not inclusive of all exceptions and requirements which may apply to any individual claim. It is imperative to promptly obtain legal advice to determine the rights, obligations and options of a specific situation.
9 Kansas City 10 E. Cambridge Circle Dr. Suite 300 Kansas City, KS ph Kansas City 2700 Bi-State Drive Suite 400 Kansas City, MO ph St. Louis 505 N. 7th St. Suite 2100 St. Louis, MO ph Omaha Bedford Ave. Suite 101 Omaha, NE ph Springfield 4650 S. National Ave. Suite D-2 Springfield, MO ph Tulsa 2021 S. Lewis Suite 225 Tulsa, OK ph
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