Two 5th Circuit rulings recently addressed damages in claim brought under the Age Discrimination and Employment Act (ADEA) and the Fair Labor Standards Act (FLSA).  In Vaughan v. Anderson Regional Medical Center, 5th U.S. Circuit Court of Appeals, No. 16-6-1-4, a three-judge panel found that the plaintiff was not entitled to any damages for pain and suffering as a result of her termination for alleged age discrimination.  The Court held that the 1977 amendments to the FLSA did not expand the damages available under the ADEA.  The damages provisions of the ADEA, which was adopted in 1967, were borrowed from the FLSA. The 1977 FLSA amendments said employers who violate the law’s retaliation provisions “shall be liable for such legal or equitable relief as may be appropriate.”

The 5th Circuit held that pain-and-suffering damages are not available under the ADEA in Dean v. Am. Sec. Insurance Co.  The only other circuit to rule on this issue has been the 7th Circuit, mirroring the 5th Circuit.  No other federal appeals court has considered the issue.

However, in Pineda v. JTCH Apartments, LLC, 5th U.S. Circuit Court of Appeals, No. 15-10932, a three-judge panel ruled that workers suing for retaliation under the federal wage-and-hour law may recoup emotional damages, and ordered a new trial for the plaintiff.  In doing so, the 5th Circuit upheld a jury verdict of over $5,000 awarded to the Plaintiff for his employer’s failure to pay overtime when he worked at the apartment complex in exchange for discounted rent.  The Plaintiff claimed that the incident led to marital issues and anxiety, and that the jury should be instructed on damages for emotional harm.  The Court agreed, following the 7th Circuit ruling in 1990 in Travis v. Gary Community Mental Health Center and the 2004 ruling by the 6th Circuit in Moore v. Freeman, which are the only two other appeals courts to address the issue.  Although the age bias law does closely track the FLSA, the court found that the age bias law includes additional language that the court said distinguishes the two laws regarding damages.

In March 2016, the United States Government Accountability Office (GAO) published a report titled: Workplace Safety and Health and Additional Efforts Needed to Help Protect Health Care Workers from Workplace Violence. The study noted that OSHA provides enforcement for the private sector in 24 states and the District of Columbia; that the states provide enforcement under OSHA-approved state plans for the private sector and the state and local public sector in 21 states; and, the state provides enforcement under an OSHA-approved state plan for state and local public sectors, and OSHA provides enforcement for the private sector in 5 states. These statistics were important in evaluating the issues, which was written to address the statistics evidencing that private-sector health care workers who are employed by in-patient facilities, such as hospitals, experienced workplace-violence related injuries requiring days off from work at a rate of almost five (5) times higher than those in the private-sector according to the Department of Labor. The GAO identified three areas OSHA could improve upon to help change the tides of workplace violence and resulting safety issues. A copy of the report can be found here: http://www.gao.gov/assets/680/675858.pdf

As many of you know, OSHA does not require employers to implement workplace prevention programs, but it does provide voluntary guidelines, and OSHA can still cite employers for failing to provide a workplace free from serious hazards. In light of the findings by the GAO, OSHA has decided to hold a meeting for the public, including employers and employees, to provide comments regarding how to best address the workplace violence issue. The meeting will be held from 9 a.m. to 5 p.m. ET, Jan. 10 at the U.S. Department of Labor, Great Hall, 200 Constitution Ave., NW, Washington, DC 20210. To register, go to https://projects.erg.com/conferences/osha/register-osha-workplace-violence-meeting.html. Although OSHA does not require the implementation of prevention programs, adopting specific policies and procedures for your organization can certainly set you up to be more successful from an operational standpoint. If you need assistance in drafting any such policies, contact our office and we will be happy to assist.

As you may know, in order to receive reimbursement from Medicare, Medicaid, or private insurance companies, E&M coding, or evaluation and management coding, to support medical billing is required. Importantly, the current system was designed for use by primary care and group health plans, which often times fail to align with the needs of workers’ compensation providers. Due to the misalignment, many factors used in assessing a patient for purposes of workers’ compensation treatment do not fit squarely into the billing guidelines for E&M coding. The result is the inability of workers’ compensation physicians to properly bill for medical care in workers’ compensation patients. Though this misalignment of billing practices may seem like a small problem, given that national workers’ compensation medical benefits paid in 2015 amounted to over $31.5 billion[1], it is clear that an inadequacy or misalignment in billing practices may have a large effect across the country.

Another issue related to this is the belief physicians involved in workers’ compensation matters feel that they are not adequately compensated for the time and expertise involved in assessing problems of medical causation, minimizing disability, and assessing patient’s disability. While these metrics are of little importance in the general health care setting, they clearly provide the groundwork for the workers’ compensation system.  Therefore, ensuring compensation commensurate with high quality care has come to the forefront of discussions nationally. . As it stands, the current system of coding published by the Center for Medicaid and Medicare Services does not address the many of the tasks required of workers’ compensation providers, while requiring many procedures which have no place in a workers’ compensation setting.

The solution to this problem, as proposed by the American College of Occupational and Environmental Medicine in its 2016 Guidance Statement involves (1) the adoption of new ground rules for documenting E&M encounters, emphasizing those tasks vital to proper workers’ compensation care, (2) the recognition of codes for consultation in workers’ compensation care, (3) the use of management codes with alternative ground rules for workers’ compensation care, and (4) for the development of coding for services with no codes under the current system, but which have been determined to be vital to workers’ compensation care. In support of their proposed changes, ACOEM cites to Washington State’s program, Centers of Occupational Health and Education (COHE), which was designed to test the resultant effect on disabilities in the state under a system financially incentivizing health care providers to engage in one or more of four specific occupational medicine best practices: (1) prompt submission of the report of accident form, (2) calls from the health care provider to the employer in circumstances when an employee is to be taken off work, (3) the health care provider is required to see the injured worker every 2 weeks, filling out an activity prescription form for each visit, and (4) performing a disability assessment if an injured worker has not returned to work within 4 weeks. The results of the program showed a reduction in disability time as well as a reduction in overall claim costs, even after the increased cost of medical services was taken into account.[2] Though not specifically related to opioids, the ACOEM proposal envisions a substantial reduction in opioid use, which has become a national epidemic.

The changes proposed by the ACOEM have not gone into effect.  Nonetheless, the proposal points out the distinct differences between general health care services versus medical care in workers’ compensation. The model in Washington highlights what other states are doing to reduce disability and overall claims cost in the workers’ compensation arena in future.

[1] Sengupta I, Baldwin ML. Workers’ Compensation: Benefits, Coverage, and Costs, 2013. Washington, DC National Academy of Social Insurance; August 2015. Available at: https://www.nasi.org/sites/default/files/research/NASI_Work_Comp_Year_ 2015.pdf. Accessed December 14, 2016.

[2] Wickizer TM, Franklin G, Fulton-Kehoe D, et al. Improving quality, preventing disability and reducing costs in workers’ compensation healthcare: a population-based intervention study. Med Care. 2011;49:1105-1111.

On December 1, 2016, The Department of Labor filed a motion for an expedited briefing of its appeal of a federal judge’s decision to place an injunction on the federal overtime rule, halting its enforcement.  In addition to the Department of Labor, the appeal was brought Labor Secretary Thomas Perez, Wage and Hour Administrator David Weil, and Assistant Administrator Mary Zeigler.

This motion for expedited briefing does not change what employers should be doing at this point.  The injunction was put into place on November 22, 2016, which means that the enforcement of the new rules was put on hold.  This injunction remains in place unless the court grants a motion for an expedited hearing or a motion for a stay of the injunction.  If granted, a motion for stay would make the new rule take effect – at least for a short period of time.

Although there is currently an appeal, the appellate process is time-consuming. Short of an expedited hearing, the process could take several months before it is heard by the court.  There are certainly questions surrounding the future of the rule and its support with President-elect Trump taking office January 20, 2017. Absent an expedited hearing, the court will not have heard the matter by the time the President-elect is sworn into office.

How this effects individual employers can vary, so we encourage you to call our office to discuss this matter further if you have any questions.   We will monitor these changes and keep you apprised of any new developments.

In James “Jake” Mordhorst v. Dakota Truck Underwriters and Risk Administration Services, 2016 S.D. 70, the South Dakota Supreme Court heard an appeal arising out of the Circuit Court’s granting of Risk Administration Services’ (“Insurer”) motion to dismiss Jake Mordhorst’s allegations of bad faith denial of workers’ compensation benefits. In the underlying workers’ compensation claim, Mordhorst was injured when a sofa fell off the back of a delivery truck, striking him on the head and shoulders. Mordhorst was diagnosed with a herniated disk in his back. After obtaining an IME report from Dr. Segal indicating that Mordhorst only suffered from a strain, RAS terminated Mordhorst’s workers’ compensation claim. At hearing, the Department ruled in favor of Mordhorst.

Mordhorst then brought an action in Circuit Court, seeking punitive damages for Insurer’s bad faith denial of workers’ compensation benefits. Insurer moved for dismissal, arguing that Mordhorst failed to state a cause of action upon which relief could be granted, and the Circuit Court granted the motion, finding that Insurer had a reasonable basis for denying Mordhorst’s workers’ compensation benefits because they relied on the opinion of a qualified expert.

On appeal, the Supreme Court disagreed that the lawsuit should have been dismissed, asserting that the proper question before the Circuit Court was whether Mordhorst asserted facts that, if true, establish the necessary elements of a bad faith action. The Court recited the two elements a claimant must prove to succeed in a claim of bad faith denial: (1) an absence of a reasonable basis for denial of policy benefits and (2) the insurer’s knowledge of the lack of a reasonable basis for denial. Related to element one, the Supreme Court indicated that Mordhorst’s assertion that his medical records exhibited objective findings substantiating his complaints could provide a reasonable basis for the jury to conclude that Dr. Segal’s report was not reasonable. Furthermore, the Supreme Court rejected the notion that it is ever unreasonable for an insurer to act in accordance with an opinion given by an IME.

Although the Supreme Court did reiterate that the purpose of its decision was not to determine whether Dr. Segal’s report was biased or Insurer’s reliance thereon was unreasonable, but rather to determine whether the facts as alleged would be sufficient to support such a finding. The implications of this decision regarding the duties potentially imposed on insurer’s causes concern, and we will stay apprised of this case as it unfolds on remand to the Circuit Court.

A federal judge has blocked the recently revised Department of Labor (DOL) overtime and salary rules from taking effect. The rules were originally intended to take effect on December 1, 2016. However, a coalition of states and business groups filed for an injunction to prevent the changes from being enacted, arguing that when the DOL establishes a new minimum salary test, it overstepped its authority.   The coalition argues that that the new minimum salary test of $47,476 and the indexing mechanism — the portion of the law that automatically raises the minimum salary threshold over time, should not be enforced. A federal judge heard arguments from attorneys representing the states in State of Nevada, et al. v. United States Department of Labor, et al. on November 16th.  Six days later, the judge issued a ruling on November 22nd, 2016.

There is now a nationwide injunction preventing the DOL rules from taking effect until further notice by the court. The injunction blocks the new salary test as well as the indexing component of the rule changes that purports to increase the salary threshold over time. Keep in mind that despite this injunction, employers must continue to abide by the prior rules still in force, including those requiring a salary test of $455 per week.

Anyone who has ever been employed has experienced workplace conflict. The conflict referred to need not be related to job performance but can include personal behaviors or idiosyncrasies. Ranging from the petty to the most severe, conflict exists in every workplace setting. Some conflict within an organization is healthy – legitimate differing views on how things should be done can provide a more efficient organization. When the conflict becomes personal and emotional, however, any benefit obtained is lost, and the organization’s unity and productivity can suffer. Worse yet, legal action may follow, resulting in an expensive resolution. Early recognition of unhealthy conflict is not any more complicated than keeping a finger on the pulse of what is going on in the organization, communicating with the supervisors and employees, and using a little common sense. Understanding the best manner in which to address unhealthy conflict is vital, which is the intent and focus of this article.

Most disputes can best be handled internally within the organization, many of which need not involve those in the HR level. Common sense and a willingness to objectively listen is often all that is required of a supervisor to informally resolve many workplace issues and keep the proverbial molehill from becoming a mountain. Unless otherwise required by your own internal policy, disputes rise to the HR level anytime employees are threatening to quit, a supervisor is the subject of, or party to, the dispute, or when the dispute is of such a serious nature that morale and functionality of the organization is affected. Resolution by HR can sometimes be achieved by simply gathering information from the parties involved in a calm and objective manner, and crafting a resolution based on each party’s interests and concerns.

Certain workplace disputes, however, require assistance from a trained mediator. Those disputes would include claims of harassment, discrimination, abusive situations, if HR is not otherwise trained to handle the situation or generically those situations HR does not feel comfortable handling. For those not familiar, mediation is a voluntary process that promotes communication between the parties in order to encourage settlement of the dispute in a manner of the parties choosing. For disputes falling in to this category a trained mediator:

  • can assist in the fact gathering process;
  • is trained to identify and frame the issues for resolution; and
  • can assist the parties in brainstorming possible options for amicable resolution of the dispute.While not always successful, mediation has proven to be a cost effective way to resolve disputes short of the legal process. There are many reasons for the success, not the least of which is the parties have an opportunity to have their version heard by a neutral third party. Furthermore, the parties, rather than a judge or jury, control the outcome of the dispute. Getting someone outside the organization involved is often a good thing if for no other reason than an objective and neutral party can see the dispute from a different perspective.