Sporadic Lost Time, the Seven Day Waiting Period, and Rule 1.1

The Maine Workers’ Compensation Board recently addressed a case involving the time for payment of benefits, the statutory waiting period and the application of Rule 1.1, emphasizing the need to pay close attention to broken periods of lost time.

39-A MRSA § 205(2) provides:

2. Time for payment. The first payment of compensation for incapacity under section 212 or 213 is due and payable within 14 days after the employer has notice or knowledge of the injury or death, on which date all compensation then accrued must be paid. Subsequent incapacity payments must be made weekly and in a timely fashion. . . .

39-A MRSA § 204 imposes a seven-day waiting period before incapacity benefits are payable: 

§204. Waiting period; when compensation payable
Compensation for incapacity to work is not payable for the first seven days of incapacity, except that firefighters must receive compensation from the date of incapacity. In case incapacity continues for more than fourteen days, compensation is allowed from the date of incapacity.

The so-called “fourteen-day rule," per WCB Rule, c. 1 § 1, provides: 

§ 1. Claims for Incapacity and Death Benefits  

1. Within fourteen days of notice or knowledge of a claim for incapacity or death benefits for a work-related injury, the employer or insurer will:

A. Accept the claim and file a Memorandum of Payment checking "Accepted"; or
B. Pay without prejudice and file a Memorandum of Payment checking "Voluntary Payment Pending Investigation"; or
C. Deny the claim and file a Notice of Controversy.

For cases where the employee does not lose consecutive days from work, the methodology recommended by the Workers’ Compensation Board’s Monitoring Audit and Enforcement Unit is to file a Memorandum of Payment (MOP) or Notice of Controversy (NOC) “on the sixth day after ‘day 8.’” In other words, once an employee has missed eight nonconsecutive days of work, a MOP or NOC should be filed with the Board on the sixth day thereafter.

In Bendtson v. Penobscot Bay Medical Center, WCB No.: 16-004591 (October 18, 2017), the Employee in Bendtson worked as a certified nursing assistant (CNA). She was hurt lifting a resident on March 1, 2016. She was provided with a transitional work assignment from March 1, 2016, to April 1, 2016. She called out before her scheduled shift on March 1 as she claimed she was in too much pain to work. She called out again before her next scheduled shift on March 4, 2016. On March 8, 2016, she was assessed with modified work capacity. Over the next two weeks, she worked several light-duty shifts but also called out twice due to her back. On March 22, 2016, the employee checked herself into a facility for unrelated treatment, but was discharged March 28, 2016. On that date, she told her Employer that she was unable to work on account of neck/upper back pain.

In sum, the employee called out or was taken out of work by a medical provider on seven nonconsecutive days (March 1, 4, 5, 6, 7, 13, and 18). The NOC was required to be filed six days after “day 8.” In this case, “day 8” did not occur until after March 28. The administrative law judge (ALJ) noted, “whether there was a fourteen-day violation depends on how much time [the Employee] was out of work due to her work injury, whether this exceeded the statutory seven-day waiting period, and when the Employer had ‘notice or knowledge of a claim for incapacity.’”

The Board found that the filing of a NOC on April 1 (well within fourteen days of March 28) was timely.

The Board also reminded us that the event which triggers an employer’s obligation to act (under Rule 1.1) is its notice or knowledge of a “claim for incapacity or death benefits for a work-related injury.” An employer’s knowledge of lost time is insufficient to trigger the rule—the employer must have knowledge of a claim for incapacity benefits. The ALJ found it significant that the Employer had notice of the claimed injury and that the Employee had lost several days of work but that this did not constitute knowledge of a “claim for incapacity benefits” which triggered an employer’s obligation to file a NOC. Because the seven-day waiting period had not yet expired, the Employer had no obligation to pay benefits. The Employer would not have been able to file a MOP, either accepting the claim or as a voluntary payment without prejudice, because it was not yet obligated to make any payment. Therefore, two of the three actions that an employer must choose under Rule 1.1 were unavailable to the Employer until March 28, 2016, when the employee told the Employer she was unable to work due to neck and upper back pain.

Ultimately, because the employee’s sporadic days out of work did not exceed the seven-day waiting period until March 28, 2016, and because the Employer had no notice or knowledge of a claim for incapacity until then, the filing of a NOC on April 1, 2016, was timely and there was no fourteen-day violation.

Appellate Division Revisits Res Judicata and Permanent Impairment in the Wake of Bailey v. City Of Lewiston

In Somers v. S.D. Warren Co., WCB App. Div. No. 17-38 (November 13, 2017), the Employee appealed a decision granting S.D. Warren’s Petition for Review and request to discontinue payments due to the expiration of the 520-week durational limit on incapacity benefits.

In a 2008 decree, the administrative law judge (ALJ) found the Employee’s knee condition resulted in 7% whole-body permanent impairment. The ALJ specifically declined to award any permanent impairment for the Employee’s adjustment disorder, a psychological sequela of the knee injury because, according to the § 312 Independent Medical Examiner, she did not sustain any permanent impairment due to that condition.

Litigation was commenced when S.D. Warren filed a Petition for Review seeking to terminate benefits based on the 520-week durational limit (under § 213 of the Maine Workers' Compensation Act, compensation for partial incapacity is payable for a maximum of 520 weeks, except in cases where an employee’s whole-person permanent impairment exceeds a given percentage [set by the Board]). On the other hand, the Employee argued that a “change in circumstances” since the prior decree—a worsening in her right knee and psychological conditions—justified reevaluation of her permanent impairment rating.

The ALJ found the Employee failed to establish a medical change in circumstances sufficient to overcome the res judicata effect of the 2008 decree. Thus, the ALJ found the impairment rating remained at 7%. The Employee filed a Motion for Further Findings of Fact and Conclusions of Law. In response, the ALJ did not alter the outcome, but issued an amended decree finding that any change in the Employee’s psychological condition was a change in degree, rather than kind.

On appeal, the Employee argued that the ALJ erred in finding that she failed to prove a change in circumstances necessary to overcome the res judicata effect of a 2008 decision establishing permanent impairment (valid decisions of the Workers’ Compensation Board are subject to the rules of res judicata and are no longer subject to collateral attack after they become final. This point becomes particularly important, as explained below).

Before a decision was issued, the Law Court issued its decision in Bailey v. City of Lewiston, 2017 ME 160. In Bailey, the Law Court has held that permanent impairment and maximum medical improvement are not subject to reconsideration, even in the face of changed medical circumstances. The Appellate Division offered its interpretation of a seemingly unclear point in the wake of Bailey. Namely, exactly what happens when an employee seeks to increase permanent impairment after a decree establishing permanency. To be clear, Bailey addressed whether a downward revision of permanent impairment was possible. The Employee argued that the Bailey decision should be limited in its application to that set of facts. The Appellate Division disagreed:

"We disagree with this contention. The issue in Bailey, as framed by the Court, was whether the Workers’ Compensation Act allows the Board to revise a previously established impairment rating. It answered that question in the negative without distinguishing between upward and downward revisions. Therefore, pursuant to Bailey, the ALJ did not err when declining to revise the 7% impairment rating assigned to [the Employee’s] knee in the 2008 decree."

The Employee also argued that the Board should have increased her whole body impairment rating to account for added impairment related to her psychological sequela. However, in 2008 the ALJ had essentially found 0% psychological impairment and that figure cannot now be adjusted upward based on changed circumstances. 

The ALJ granted S.D. Warren’s Petition for Review and allowed it to cease paying partial incapacity benefits. 

Time will tell whether the case is appealed to the Law Court.

Maine Supreme Court to Address "Tolling"of Statute of Limitations in Successive Injury Case

On November 14, 2017, the Maine Supreme Court will hear oral argument in the case of Flanagin v. Maine Department of Inland Fisheries & Wildlife. This case deals with the concept of “tolling” of the statute of limitations. Under Maine law, “the limitations period for a claim is tolled if payments made by the employer or insurer or a subsequent injury were made with ‘contemporaneous notice’ that the payments ‘were for treatment that was in part necessitated by’ the earlier injury.” Leighton v. S.D. Warren Co., 2005 ME 111. The “contemporaneous notice” issue arises from a concern that an employer may not have exclusive control, through its claim handling practices, over the assignment of dates of injury to a claim that may eventually have an impact upon the tolling or application of the statute of limitations in successive injury cases. 

Leighton held that an employer bears the burden of establishing the date of latest payment for the original injury, “but that the burden shifts to the employee to establish that the statute of limitations has been tolled through contemporaneous notice.” As the Appellate Division stated, “[i]t is through this explicit burden-shifting mechanism that an employer’s exclusive ability to assign incapacity or medical payments to a date of injury can be questioned and tested.” In Leighton, the Law Court noted that an employee could satisfy this burden by:

for example, submitting medical records that attribute the onset of new symptoms at least in part to the prior injury, along with evidence that the insurer or employer had been made aware of the contents of the records at the time payments were made. Or, the employee could submit proof that he or she had asserted a belief to the employer at the time payments were being made that the older injury is at least in part responsible for the later incapacity.

Turning to the facts of Flanagin, on July 31, 2014, the Appellate Division of the Workers’ Compensation Board found the employee entitled to workers’ compensation benefits on account of an injury sustained in 1975 while working for the Department of Inland Fisheries and Wildlife (the “Department”). It rejected the Department’s contention that the ALJ erred in finding it had “contemporaneous notice” within the limitations period sufficient to toll the statute of limitations on a 1975 injury. The Appellate Division found the Department had contemporaneous notice within the 10-year statute of limitations and that payments made on a 1979 injury were related to a 1975 injury.

The Appellate Division found that the Law Court cases, taken together, “endorse as sufficient a relatively low threshold to meet the employee’s burden to establish the causative relationship.” Therefore, “the employee must show that the earlier injury ‘contributed in some part’ to the later incapacity or need for medical treatment, or that medical treatment after the later injury was ‘in part necessitated by’ the earlier injury. An employee may also, alternatively, demonstrate that he or she informed the employer that the earlier injury was still in play at the time of the payments. This is not the same standard as may be required to establish medical causation in a contested workers’ compensation claim. Instead, it is a “somewhat lower ‘connection’ standard that is unique to the circumstances inherent in determining whether the employer’s unilateral assignment of dates of injury in successive injury cases is, or is not, correct.”

With respect to the 1975 injury at issue, the Appellate Division found “the [ALJ] raised the legal bar to a height not required by [Law Court precedent.]” According to the Appellate Division, a 1989 report conveyed the necessary information to the Department to meet the employee’s burden with respect to the 1975 injury and was sufficient to establish contemporaneous notice as a matter of law. As the Appellate Division pointed out, the 1989 report did “more than merely recite the history of [the employee’s] low-back problems, but it indicates that the employee reported to the physician in 1989 that the 1975 injury was his “major back injury” and that he still had the same complaints of low-back pain and left leg pain in 1989 that he had in 1975.

In other words, the doctor’s clinical examination demonstrated that the then-current diagnosis of chronic low-back pain started with the 1975 injury and remained unchanged over the years despite two surgical procedures. The Appellate Division found this was “sufficient to establish a ‘partial attribution’ or contribution in part of the 1975 injury to then-current symptomology.” As well, the report also sufficiently demonstrated that the later-in-time treatment was partially necessitated by the earlier injury. In addition, the Appellate Division also found that the 1989 report satisfied the alternative manner of providing contemporaneous notice: assertion of a belief by the employee at the time payments were being made and within the 10-year window that the older injury was in part responsible for the later incapacity and treatment.

On remand, the ALJ found the employee had proven that the Department had been put on notice that medical treatment for a 1979 work injury implicated the 1975 injury.

The Department appealed to the Law Court, arguing that the Appellate Division erred by determining that there was a tolling of the applicable statute of limitations and upholding an award of benefits that includes incapacity for a date of injury barred by the statute of limitations.

This is one of several workers’ compensation cases the Law Court has accepted for appellate review this year.

Appellate Division to Revisit (for a Second Time) the Issue of Refusal of Suitable Work in St. Louis V. Acadia Hospital

In St. Louis v. Acadia Hospital Corp., WCB No. 10002460 (April 14, 2017), the Maine Workers’ Compensation Board issued a decision dated March 4, 2015, finding the Employee had not refused an offer of suitable work and awarded partial incapacity benefits reduced by an imputed earning capacity of $300.00/week. The Employer appealed to the Appellate Division. A decision issued January 12, 2017, St. Louis v. Acadia Hospital Corp., App. Div. 17-3 (January 12, 2017), ordered that the case be remanded for a more complete analysis of whether the Employee unreasonably refused a bona fide offer of reasonable employment within the meaning of 39-A M.R.S.A. § 214(1)(A). 

The Employee worked as a certified nursing assistant (CNA) at Acadia Hospital. She was injured January 29, 2010. On account of this injury, the Employee experiences post-concussive headaches and an anxiety disorder with features of post-traumatic stress disorder. Because of her symptoms, she stopped working for the Employer August 6, 2013. She began a work search in February 2014 and found a part-time cashier position beginning February 10, 2014. The Employer sent the Employee a job offer on February 6, 2014, offering full-time work as a telephone operator and receptionist with a provision that the Employee would not be working in a patient care area or asked to be involved in restraining patients. This position paid approximately $12.00 per hour, while her position as a cashier paid $8.00 per hour. The Employee declined the offer because she had already accepted a new job as a cashier. The Employee testified that she was also concerned that, despite assurances, she still may have contact with patients through incidental activities like eating lunch. The Employer presented testimony from a human resources representative that the position offered was in a secured area inaccessible to patients and that the Employee was not required to take breaks or eat meals in areas with patients.

The Employee saw Drs. Carlyle Voss and Karyn Woelflein for independent medical examinations (39-A M.R.S.A. § 312). Dr. Voss found she, “could manage the basic duties of [a telephone] operator” and “could do similar work in another setting where there is low risk for being assaulted[,]” but “would be at significant risk to have symptoms escalate which could cause impairment that would preclude any type of work if she returned to work at Acadia or in another setting where there is increased risk for assaults.” Dr. Woelflein stated, “it would be imprudent for [her] to return to work at Acadia.”

The Employee argued that her refusal of the job offer was reasonable because she had already found work within her restrictions at a new employer and that the offered position was beyond her medical limitations. The Employer argued that the offer was reasonable as it was made only a few days after she began working for a new employer, paid higher, and was within her medical limitations. The Employer argued that § 214(1)(A) barred an award of partial incapacity benefits.

On the issue of refusal of suitable work, the Employer bears the burden of persuasion. In general, if an injured worker “receives a bona fide offer of reasonable employment” and the employee “refuses that employment without good and reasonable cause,” that employee is barred from receiving incapacity benefits under the Workers' Compensation Act “during the period of the refusal.” 39-A M.R.S.A. § 214(1)(A). The term, “reasonable employment” means “any work that is within the employee's capacity to perform that poses no clear and proximate threat to the employee's health and safety and that is within a reasonable distance from that employee's residence.” 39-A M.R.S.A. § 214(5).

When applying § 214, an administrative law judge (ALJ) “is required to undertake a two-part analysis, reviewing both the employer's actions in making the job offer and the employee's actions in declining that offer.” Thompson v. Claw Island Foods, Inc., 1998 ME 101, ¶ 7. When evaluating an employee's decision to decline a job offer, an ALJ must determine first whether the offer was a “bona fide offer of reasonable employment.” Id. The factors to consider include “whether the work falls within the employee's work capacity, whether it poses a threat to the employee's health and safety, and whether it is within a reasonable distance of the employee's residence.” Id. ¶ 8. Second, an ALJ must determine whether the employee refused that offer without “good and reasonable cause.” Id. ¶ 16. The reasonableness of the refusal is a broad inquiry; an ALJ “must consider all facts relevant to the employee's decision to decline the job offer.” Id. The Law Court has provided some guidance to this inquiry with a five factor test that is “not intended to be exhaustive or conclusive” but “represent[s] a sound general framework for decision making when the employee has refused an offer of reasonable employment:” (1) the timing of the offer, (2) if the employee has moved, the reasons for moving, (3) the diligence of the employee in trying to return to work, (4) whether the employee has actually returned to work with some other employer and, (5) whether the effort, risk, sacrifice or expense is such that a reasonable person would not accept the offer. Id. at ¶¶ 18, 19. 

Among other things, the ALJ found the position offered pays significantly higher than the work the Employee found on her own, but would have required her to abandon the cashier's position shortly after committing to it. Further, the ALJ found significant the medical opinions of Dr. Voss and Dr. Woelflein, which bear on her ability to return to work for the Employer. The ALJ found the Employer had not met its burden to prove that the Employee refused the offered job without good and reasonable cause. The Board granted the Employee’s Petitions for Award, in part, with an ongoing award of partial incapacity benefits reduced by an imputed earning capacity of $300.00/week. The matter is on appeal once again before the Appellate Division. 

Refusal of suitable work has generated a lot of decisions from the Appellate Division to date. This is due to the very fact-specific nature of these cases, particularly when it comes to the multifactor tests used in assessing a refusal defense. In this case, the binding medical evidence and the fact that the employee had already secured work before the offer was made were significant factors for the ALJ.

Workers’ Compensation Board Appellate Division to Review Decision Dealing with Burden of Production and Proof Under the § 327 Death Presumption

Continuing with the case of Flaherty v. City of Portland, WCB Nos. 05032057 & 11036148 (June 22, 2017) from the previous post, the Board found the § 327 death presumption applied to the claims filed by Mrs. Flaherty under the traditional (non-occupational) Act. The Board found this presumption shifts the burden of proof to the Employer to demonstrate the nonexistence of the presumed fact. In other words, the Employer must demonstrate, on a more likely than not basis, that the decedent’s cancer did not arise out of or in the course of his employment.

The issue of burden-shifting under the § 327 presumption has been addressed quite a bit in recent times. In LaValle v. Town of Bridgton, Me. WCB App. Div. No. 15-13 (April 10, 2015), the ALJ applied § 327 by shifting the burden of proof to the employer to negate the facts established by the presumption. The Appellate Division affirmed. In Estate of Sullwold v. Salvation Army, 2015 ME 4, the Law Court addressed the application of § 327 and held that the Appellate Division in Estate of Sullwold, Me. WCB. App. Div. No. 13-3 (November 8, 2013), did not erroneously shift the burden of persuasion to the employer, but appropriately applied the standard articulated by the Law Court long ago in Toomey v. City of Portland, under which once an employer produces evidence sufficient to overcome the presumption of work-relatedness, the presumption disappears and the estate must then meet its burden of proof to prevail. However, in a footnote to the decision, the Law Court declined to reach the issue of whether the Appellate Division’s interpretation of § 327 is correct. In LaValle, the Appellate Division relied on Estate of Sullwold, Me. WCB. App. Div. No. 13-3, and held that to defeat the presumption, an employer must prove it is more probable than not that the injury did not arise out of and in the course of employment. In LaValle, rather than merely placing a burden of production on the employer, the Appellate Division placed on the employer the burden of proving the nonexistence of a presumed fact, making for a rather unclear decision in light of the Law Court’s ruling in Estate of Sullwold, 2015 ME 4.

In any event, the Employer was tasked with the burden of proving that the death was not related to employment. In order to rebut the presumption, the Employer presented evidence from Dr. Harbison, a toxicologist. Dr. Harbison was critical of Dr. Oliver's conclusions regarding the causal connection between Mr. Flaherty's work and his cancer. Dr. Harbison found: 

1. There is insufficient scientific evidence supporting the proposition that firefighters are exposed to levels of benzene that are harmful; and 
2. There is inadequate scientific evidence to support the proposition that benzene causes myelofibrosis. 

The Board was not persuaded by Dr. Harbison's analysis that it is more probable than not that Mr. Flaherty's myelofibrosis was not related to his employment as a firefighter because, among other things, his findings regarding exposure and causation were based on a paradigm of proof inconsistent with the applicable “more probable than not” standard traditionally used in Maine workers’ compensation cases. 

The Petitions for Award – Occupational Disease Law filed by Ms. Flaherty in her role as personal representative and as widow were denied insofar as those petitions allege claims under the Occupational Disease provision of the Act. Those petitions were granted, however, with respect to the claims made under the traditional worker's compensation Act. The employer was ordered to pay 500 weeks of benefits under § 215.

Workers’ Compensation Board Appellate Division to Review Decision Dealing with Application and Scope of § 327 Death Presumption

In Flaherty v. City of Portland, WCB Nos. 05032057 & 11036148 (June 22, 2017), Timothy Flaherty worked for years as a Portland firefighter. He was diagnosed with myelofibrosis, a rare cancer/disease of the bone marrow in August 2004. Mr. Flaherty retired from the fire department on February 28, 2005. He died from myelofibrosis on August 30, 2011.

Pending before the Board were two Petitions for Award – Occupational Disease Law, filed by Theresa Flaherty. The first petition was filed in Ms. Flaherty’s role as personal representative of the estate of Timothy Flaherty. The second petition was filed in her role as a dependent of Timothy Flaherty. Mrs. Flaherty alternatively claimed entitlement to incapacity and death benefits under the “traditional” (non-occupational) provisions of the Maine Workers’ Compensation Act. 

The petitions alleged that Mr. Flaherty's cancer was caused by occupational exposure related to his work as a firefighter. Mrs. Flaherty claimed entitlement to the benefit of the death presumption set forth in § 327 of the Act. The “death presumption” provides:

In any claim for compensation, when the employee has been killed or is physically or mentally unable to testify, there is a rebuttable presumption that the employee received a personal injury arising out of and in the course of employment, that sufficient notice of the injury has been given and that the injury or death was not occasioned by the willful intention of the employee to injure or kill the employee or another. 39-A MRSA § 327. 

Among other things, the employer argued the presumption did not apply because Mr. Flaherty was not unable to testify during the period between his cancer diagnosis and date of death. However, the Board found Mr. Flaherty had no reason to file a claim or otherwise testify concerning his potential exposure until it was discovered that there was a potential causal connection between his cancer and the conditions of his employment. Thus, Mr. Flaherty was “unable to testify” as of the date that potential connection was discovered (June 2012). The Employer also argued that the presumption was inapplicable because Mr. Flaherty was not killed, nor did he die, during the course of his employment. However, the Board found nothing in the language of § 327 that limits the presumption to the period of employment. In addition, § 327 has often been applied to cases where the employee has left employment. 

The Board noted, “[w]hether the presumption arises is determined based on the evidence actually presented and ‘testimony which, within reasonable limits, may be conceived as potentially forthcoming from the employee were the employee available as a witness.’ Therefore, the presumption is properly invoked if the evidence presented to the hearing officer, combined with any facts to which Sullwold may reasonably have testified if he were alive, could rationally result in an award of compensation.” Sullwold v. Salvation Army, 2015 ME 4, ¶ 9, (citing Toomey v. City of Portland, 391 A.2d 325 (Me. 1978)). In this case, the Board found that, if alive, Mr. Flaherty could have provided testimony concerning the nature and scope of his exposure to benzene. The Board found that such testimony, in combination with expert testimony in the record, could rationally result in an award of compensation. Thus, it is presumed that Mr. Flaherty received a “personal injury arising out of and in the course of his employment, and that sufficient notice has been given....” 39-A MRSA § 327.

The Board found Mr. Flaherty suffered a work-related injury in the nature of myelofibrosis as of February 28, 2005. The Petitions for Award – Occupational Disease Law filed by Ms. Flaherty in her role as personal representative and as widow were denied insofar as those petitions alleged claims under the Occupational Disease provision of the Act. Those petitions were granted, however, with respect to the claims made under the traditional Worker's Compensation Act. The employer was ordered to pay 500 weeks of benefits under § 215. 

The case is on appeal before the Workers’ Compensation Board Appellate Division. Among other things, at issue on appeal is the applicability of the death presumption, the burdens of production and proof under the presumption and the interplay between the Occupational Disease provisions in the Act and the traditional Act provisions.