The first decision of 2018 involves a permanent total disability claim heard by Judge Thronson. This is the first decision we have seen from Judge Thronson following a hearing. There were a number of issues presented at hearing and the Department found in Claimant’s favor on all of them.

The first issue was whether the work injury was a major contributing cause of Claimant’s condition. Frankly, this part of the opinion is difficult to understand. The opinion starts by stating the Insurer argued that Claimant could not prove that the accident, and not some other unrelated medical condition, was responsible for her condition. There is then some discussion of cervical stenosis and the Department of Labor states the injury need only be a major contributing cause, not the major contributing cause. Despite that, the Department then states that Dr. Cederberg, the IME doctor, provided the medical opinion that the work injury was a major contributing cause to the disability. If the IME doctor relates the injury to work, it is not at all clear why it would have been an issue at hearing. Regardless, the Department found the injury was a major contributing cause of the condition complained of.

The next question was whether Claimant was permanently and totally disabled. Claimant had a $691.00 per week comp rate. She was 61 years old with a high school diploma, and her vocational expert, Tom Audet, testified she would be unable to work within her restrictions and make at least her workers’ compensation rate. The Employer and Insurer did not have their own expert at the hearing. The Department of Labor accepted Audet’s testimony that Claimant was in the odd-lot category. The most interesting part of this opinion was in the Department’s analysis of whether Claimant conducted a good faith job search. Claimant looked for 26 jobs between December of 2014 and May of 2015. It appears she did not make any other job search and the hearing was in August of 2017. If that is correct, Claimant would have gone more than two (2) years without looking for work. The Department held that “no case law in South Dakota specifies that a job search need be made in any particular timeframe.” What constitutes a reasonable job search depends on the facts, but it’s curious that the Department of Labor found the job search to be reasonable as it focused only on the 26 job contacts over a five-month period and did not make any mention that Claimant failed to look for work for more than two (2) years, or attempt to address why the Department was not concerned with this seemingly relevant fact. The Employer and Insurer’s lack of an expert may have been the determining factor here as there was no evidence that a job search would have made a difference.

The final claim was that Claimant refused medical care, and thus, aggravated her condition. Claimant was prescribed a second round of physical therapy but did not proceed forward with it. The IME doctor indicated the failure to complete the second round of physical therapy aggravated Claimant’s shoulder. The Department of Labor stated the evidence was insufficient to establish that the physical therapy would have helped Claimant’s condition as the first round of physical therapy did not provide much benefit. Moreover, the Department of Labor did not find Claimant at fault for failing to attend physical therapy as Claimant had difficulties in obtaining authorization from the Insurer on getting therapy. The Department stated, “Claimant cannot be penalized for failing to attend physical therapy sessions which are not available to her.”

If you have questions regarding this decision or any other South Dakota questions, please contact the Boyce Law Firm at 605-336-2424 or contact Charles Larson at calarson@boycelaw.com

I hope this finds you doing well. I have received many inquiries over the last couple of weeks on when temporary disability benefits are owed. I think that the confusion comes from the mislabeling of the benefits. There is a difference between TTD and TPD benefits, even though the amount may be the same. TTD is paid when the employee is ordered completely off of work. If there is a compensable claim, benefits are owed regardless of other factors. For instance, if the employee is ordered completely off work, and is unable to work because he is in jail, you’d still owe TTD benefits. The reason for this is that the standard for whether any benefit is owed is whether the work injury is and remains a major contributing cause to the benefit sought. If the employee is ordered completely off work, the employee being in jail makes no difference as he couldn’t work whether he is in jail or not as the doctor has taken him off of work.

The analysis changes once employee has been released to work by the doctor, even if the employee has not actually returned to work. Let’s take our employee who is in jail. When he was ordered completely off of work, his incarceration did not matter as he wouldn’t be able to work even if he was a law- abiding citizen. Once he is released to work, you would ask whether the work injury is and remains a major contributing cause to his inability to work. If the employer could accommodate the restrictions, you would stop paying benefits because the reason the employee cannot work is not related to his work injury, but, instead, from the fact that he is incarcerated. However, let’s say the employer cannot accommodate the restrictions when the employee is released to work, then what? You would still pay TPD in that situation because whether he is in jail or not makes no difference as he would not be working anyway. You would continue paying benefits until the employee is released to work full duty, receives an impairment, or the employer is able to accommodate the restrictions.

If confused, just ask yourself whether the work injury is a major contributing cause to the inability to work. If the employee is ordered off of work by the doctor because of the work injury, the answer is yes and you would owe TTD benefits. If the employee has been released to work but is not working, ask yourself “Why isn’t he working? Is it related to his injury?”

TTD and TPD are often interchanged, however the distinction is important because TPD benefits have defenses available. Always look to the doctor’s restrictions – not whether the employee is actually working. The proper question does not begin with the work status. Instead, the proper question is whether the employee has been released to work. If you have questions on this or any other issue, please contact Boyce Law Firm at 605-336-2424.

By now, those of you reading this blog know that in order for an injury to be compensable in South Dakota, the injury must arise out of and be in the course of the employment. Pretty straight forward, right?

Not so much.

While South Dakota adopts the “coming and going rule, establishing that an employee is not covered for purposes of workers’ compensation while coming from and going to work, the law has also established a ‘gray area’ regarding what is, and what is not. covered. Three seminole cases in South Dakota address this topic: Norton v. Deuel Sch. Dist. 2004 S.D 6; Fair v. Nash Finch Co., 2007 S.D. 16; and Terveen v. South Dakota Dept. of Transp. 2015 S.D. 10. These cases make it clear that a fact investigation into a workers’ compensation claim must include an analysis of minute details of the claim.

In Norton, the SD Supreme Court found that personal activities involving self-care, such as eating, resting, smoking, or using bathroom facilities should be considered in the course of employment. In Fair, the Court found that an employee’s deviation from work duties does not ‘automatically constitute departures from employment, but may … be found insubstantial.’” Fair was injured while she was exiting Family Thrift after a brief deviation from her usual direct route to her vehicle. The Court found that while it was reasonable to expect employees to exit the premises after work, it was also reasonable to expect Fair to engage in personal shopping after her shift had ended. Thus, the Court found that mere fact that an employee deviates from their work does not preclude a finding that the injuries are compensable.

Insubstantial deviations have been defined as those “largely the kind of momentary diversions which, if undertaken by an inside employee working under fixed time and place limitations, would be compensable under the personal comfort doctrine.” Arthur Larson, Larson Workers’ Compensation § 17.06[3] (2014). If someone engaged in an act for personal comfort, they do not leave the course of employment unless the extent of the departure is so great that an intent to abandon the job temporarily can be inferred. Id. at §21. In Terveen, the Court adopted the majority rule around the nation, finding that an employee who has made a personal side-trip has to ‘get back on the beam’ before being deemed to have resumed the business trip. Id. § 17.03[5]. Additionally, the Court noted that the deviation cannot be substantial.

Now you are probably wondering, what information you need to find out during an investigation. Some information you need to know will include finding out what the employee was doing at the time of the injury; did the employer authorize, expressly or impliedly, that running personal errands was acceptable; was the employee on their typical route home, did they get lost, or, perhaps, were they stopping for food? These cases are very fact specific so be sure to take the time to gather all the facts you need to make a determination.

As always, we are here and happy to help. Give us a call anytime.

 

Have you ever had a Claimant allege that he or she is entitled to permanent total disability benefits and move to a new community before any determination can be made? If so, you are probably wondering whether to use the community where the Claimant was injured or the new community when determining potential job opportunities that would allow the Claimant to get back into the workforce. The job search question gets more difficult when the Claimant moves from a populated area to a rural area with less work opportunities.

The short answer is that you use the Claimant’s current community when determining potential available jobs the Claimant could perform.  In Reede v. State Dept. of Transp., 2000 S.D. 157, 620 N.W.2d 372, the claimant lived and worked in the Black Hills at the time she was injured. After her injury, the claimant did not seek additional employment, instead choosing to home school her daughter. Prior to hearing, the claimant moved several times, either to follow her family or to find work, and she eventually followed her sister to Montana, where she lived with her sister. The claimant was able to show that, while in Montana, she unsuccessfully attempted to obtain employment. The main question for the Court was whether the claimant’s Montana residence should be used for the purposes of determining whether there was available employment within her community such that she could secure more than sporadic employment. The Court held that, because the Department of Labor had found that the claimant’s move was not specifically intended to withdraw herself from the workforce or to aid in obtaining benefits, but instead was a good faith move based on financial necessity, the Montana residence should be used as the claimant’s “community” for the purposes of determining her eligibility for workers compensation benefits.

So, unless there is a showing that the Claimant moved for purposes of withdrawing from the workforce in order to obtain aid in obtaining benefits, you must look to the Claimant’s current community when determining whether jobs are available. As always, if you have any questions, please don’t hesitate to contact us.

The issue of independent contractor versus employer has been litigated in South Dakota. There is a presumption that the worker was an employee and it is the employer’s burden to establish the worker is an independent contractor. The Department of Labor and the South Dakota Supreme Court have provided a set of factors to consider when determining whether a worker is an independent contractor or an employee.

The following factors have been used by the Department of Labor as considerations when determining whether a worker is an independent contractor or employee:

1. The extent of control which, by the agreement, the master may exercise over the details of the work;

1. One must look at whether the employer has the ability to hire, fire, and lay off the worker. It is also important how much control the master has over the workers’ functions.

2. Whether the one employee is engaged in a distinct occupation or business.

1. Here it is important to see whether the worker operated a separate business or under a separate trade name. It is also important whether the worker worked solely for this master, on a full time basis.

3. The kind of occupation with reference to, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision.

4. The skill required for that particular occupation.

5. Whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work;

1. Here, “when the employer furnishes valuable equipment, the relationship is almost invariably that of employment.” SeeLarson on Worker’s Compensation §44.43(a).

6. The length of time for which the person is employed.

7. The method of payment, whether by the job or by the hour.

8. Whether the work is part of the regular business of the employer.

9. Whether the parties believe they are creating the relationship of master and servant.

The South Dakota Supreme Court has essentially adopted these factors although it has grouped certain factors into a two-part test. InEgemo v. Flores, 470 NW2d 817 (SD 1991) the employer argued the servant was an independent contractor. The court noted there was an important distinction as an independent contractor is not covered by workers’ compensation. The court stated there is a two factor test: (1) whether the individual has been and will continue to be free from control or direction over the performance of the services, both under contract or service and fact, and (2) whether the individual is customarily engaged in an independently established trade, occupation, profession or business.

In evaluating the “right of control test” the important considerations include direct evidence of the right of control, the method of payment, furnishing major items of equipment, and the right to terminate the employment relationship at will and without liability. In Egemo, the court noted the employer did not exercise control or supervision over the method or manner in which the servant completed his task. Furthermore, the master did not direct the hours of work, breaks, or even the days off. The court also noted the servant did not withhold any amounts for income tax, social security, or unemployment insurance. The employer also filed a Form 1099 as a non-employee compensation form. The court noted the servant was required to supply all of his own tools, and his own maintenance and transportation to the work sites. Furthermore, the employment relationship could not be terminated without liability.

The significant considerations in the test of “independently established trade” are that:

The requirement that the employee’s occupation be independently established and that he be customarily engaged and it calls for an enterprise created and existing separate and apart from the relationship with the particular employer; an enterprise that will survive the determination of that relationship. The individual must have a proprietary interest in the enterprise to the extent that he can operate without hindrance from any other individual.

However, it is not skill alone which determines whether an individual is established in a trade or business, but whether that individual by reason of such skill engages himself in an economic enterprise such that he bears the risk of his own unemployment. Whether or not he is unemployed is solely a function of market forces and a demand for skills, not the response of his master to similar economic realities.

The South Dakota legislature has also addressed this issue and stated the difference between an employer and an independent contractor in SDCL 61-1-11. That statute states “service performed by an individual for wages is employment subject to this title unless and until it is shown to the satisfaction of the Department of Labor that: (1) the individual has and will continue to be free from control or direction over the performance of the service, both under his contract of service and in fact; and (2) the individual is customarily engaged in an independently established trade, occupation, profession, or business. The South Dakota legislature defined employee in SDCL 62-1-3 for the purposes of worker’s compensation. The definition is roughly the same as that set forth above.

The moment all of you have been waiting for….
The fifth prong of the five-part test provides: The employee must actually pursue the reasonable program of rehabilitation.
This part likely seems pretty self-explanatory, and, frankly, it is. If the Claimant can satisfy all of the other elements of the retraining benefits test, then he/she needs to actually pursue the reasonable program of rehabilitation in order to receive the benefits. How the retraining benefits work is that the Claimant is given their workers’ compensation indemnity benefit payment during the period of time that they are in the rehabilitation program. Accordingly, it seems quite clear that they need to actually pursue that program. SDCL 62–4–5.1 specifically allows rehabilitation benefits while a claimant is “engaged in a program of rehabilitation which is reasonably necessary to restore the employee to suitable, substantial and gainful employment.” This statute allows rehabilitation benefits while the claimant is engaged in a “program” of rehabilitation, not simply a “period” of rehabilitation. Chiolis v. Lage Development Co., 512 N.W.2d 158, 160 (SD 1994).
The rehabilitation program may be a two-year program or a four-year program, depending on what is determined to be a “reasonable means of rehabilitation” and a four-year program although more rare, can be reasonable in certain situations. See A. Larson, The Law of Worker’s Compensation § 61.22 (1992). The fifth part of the rehabilitation test is not complicated, but it is necessary in order for the Claimant to be entitled to the benefits. A Claimant cannot simply find a suitable rehabilitation program and receive the rehabilitation benefits without actually pursuing the program.
I imagine that all of you will undergo a brief grieving process now that this 5-part series is over, but rest assured that we will continue to provide everyone with up-to-date information on the changes you need to know about in South Dakota workers’ compensation and employment law. Until next time.