State: NJ Drug Test Gave Employer Good Enough Reason for Termination:

A grocery store did not commit disability discrimination when it fired a manager with Parkinson’s disease for using a painkiller without a prescription, a New Jersey appellate court ruled.

Case: Martin v. Quick Chek Corp., No. A-2637-10T2, 1/18/12, unpublished.

Facts: Erik Martin, a store manager for Quick Chek Corp., was diagnosed with Parkinson’s disease in 2000. He told his supervising district leader, Joan Ferry, about his diagnosis and she advised him to keep his illness “hush, hush.”

Martin never mentioned his illness to other human resources personnel, and missed work in 2004 and 2006 because of two mini-strokes. In 2007, he took a two-week leave of absence for depression, and returned to work without repercussions.

In 2008, Martin requested and received a demotion because his medical condition and lack of an assistant manager prevented him from satisfying his work obligations.

On March 17, 2008, he injured his back at work. Martin’s doctor told him to take a Darvocet pill, that had previously been prescribed to Martin’s mother-in-law. Martin visited the doctor the following day, at which time he was prescribed Percocet to manage his pain.

Because Martin had suffered a work-related injury, Quick Chek gave Martin a drug test, and the testing facility learned that he took Darvocet without a prescription. Quick Chek terminated Martin for taking Darvocet without a prescription.

Martin sued Quick Chek for wrongful termination and disability discrimination, under New Jersey’s Law Against Discrimination (NJLAD).

Robert Grayczek, vice president of Quick Chek’s human resources department, testified that he did not learn about Martin’s Parkinson’s diagnosis until after Martin’s termination.

Procedural History: The trial court granted Quick Chek’s motion for summary judgment, and denied Martin’s request for the court to reconsider its grant of summary judgment.

The trial judge, Judge Rochelle Gizinski, stated in an oral opinion that Martin did not produce any evidence that Quick Chek applied the store’s drug-testing policy selectively, or that Quick Chek would have ignored his positive drug test if human resources was aware of his Parkinson’s diagnosis.

Martin appealed.

Analysis: At the Appellate Division of the Superior Court of New Jersey, Martin challenged several portions of the trial court’s rulings.

First, Martin argued that the trial court should have compelled Quick Chek to allow Martin to access Grayczek’s work notebook, which contained handwritten notes. The appellate court rejected this argument, concluding that the notebook had confidential personnel information about other employees, and that the trial judge acted within her discretion by denying access to the notebook.

Next, Martin argued that genuine issues of material fact existed, and that summary judgment was inappropriate. He contended that there were two factual inconsistencies that were disputes of material facts.

“Martin initially indicated by way of admission of undisputed facts that he told Ferry about his Parkinson’s disease diagnosis in early 2000 and was subsequently promoted in the summer of 2000 at Ferry’s recommendation,” the court wrote. “At his motion for reconsideration, however, he argued that he told Ferry of his Parkinson’s disease after his promotion (in 2000).”

The appellate court determined that the trial court could not and should not consider evidence provided for the first time at a motion for reconsideration, and that it was irrelevant as to when Ferry first became aware of Martin’s illness.

Martin contended that a second factual dispute existed about whether his demotion involved a pay cut, and pointed out for the first time during the motion for reconsideration that his pay had been reduced. The court determined that the trial judge did not have to consider this evidence, because Martin raised it for the first time during a motion for reconsideration.

Lastly, Martin contended that other material issues of fact existed about whether his termination was discriminatory.

The trial judge had concluded that Martin had established a prima facie discrimination case, but the employer had rebutted this by showing a nondiscriminatory reason (a positive drug test) for termination.

“Unquestionably, the company’s drug policy was enforced in a harsh fashion against Martin,” the court wrote. “The company relied completely on the assessment of the testing company that Martin ‘failed’ the drug test. Quick Chek operates in such a way as to delegate total discretion to interpret the drug test results to the testing company. Once deemed to have failed the drug test, an employee is terminated without exception with no apparent right of appeal. In Vargo v. National Exchange Carriers Assn., we held that a company need not investigate possible legal reasons for a positive drug test before taking action with regard to a prospective employee; nor should such a duty exist with respect to existing employees. NJLAD is not offended by a private company’s lack of compassion in these circumstances.”

Source: WorkCompCentral

State: AK Property Owners Liable for Contractor’s Work Comp Claim:

The owners of a mixed-use property are liable for the workers’ compensation claim of an uninsured contractor, the Supreme Court of Alaska concluded.

Case: Trudell v. Hibbert, No. S-13608, 2/17/12, published.

Facts: Lawrence Trudell, an employee of Phillips Construction Co., was injured while climbing a ladder down from the roof of a building he was working on. The injury occurred on June 13, 2006, at a building in Kenai, Alaska.

At that time, Phillips lacked workers’ compensation insurance, even though it was a contractor that was licensed by the state of Alaska. Brent and Debra Hibbert, a married couple, owned the building. They resided in the building, and also used it to run their business, AAA Alaska Cab.

Trudell filed a workers’ compensation claim against Phillips and the Hibberts, contending that AAA Alaska Cab was a “project owner” and that Phillips was a “subcontractor.” Phillips filed for bankruptcy, and the Hibberts argued that they were not a “project owner.”

Under Alaska law, a contractor’s employee can hold a “project owner” liable for workers’ compensation benefits, if the contractor is uninsured.

Procedural History: After a bench trial, the Superior Court of Alaska ruled that the Hibberts were not “project owners” or employers. As a result, the Hibberts were not liable for workers’ compensation benefits. The Hibberts filed a motion seeking attorney fees, and were awarded fees and costs totaling $16,081.

Trudell appealed.

Analysis: At the Supreme Court of Alaska, Trudell argued that the Hibberts were “project owners,” and that the Legislature intended to define “project owner” in a broad manner to cover “any business that engages contractors for business purposes.”

The Hibberts responded that they were not project owners, and argued that Trudell’s argument would unnecessarily expand the definition of “project owners.”

“Like the appellant in Anderson v. Alyeska Pipeline Serv. Co., the Hibberts assert that broadly construing ‘project owner’ would have ‘dire consequences,’ exposing many small businesses to potential liability for workers’ compensation,” the court explained.

The high court noted that the trial court had included the “usual business rule” in its analysis of “project owners.” This rule states that a party is a “project owner” if it has “contracted out its usual work to others.” Because the Hibberts did not contract out their usual work to Phillips, the trial court concluded that the Hibberts were not project owners.

The high court disagreed with the trial court’s analysis.

“We conclude that it was error to incorporate the usual business rule into the definition of ‘project owner’ in AS 23.30.045(f)(2),” the state Supreme Court wrote. “Even if the statutory language is ambiguous, the legislative history demonstrates the intent to cover many more situations than are covered by the usual business rule.”

The trial court should have considered whether Phillips’ work benefited the Hibberts’ business, or their personal interests. If Phillips’ work benefited the Hibberts’ business, then they would have up-the-ladder liability under Alaska law.

The court analyzed the facts, and concluded that the Hibberts hired Phillips to improve office space used by the taxi company. This meant that the Hibberts were project owners under the law, and are liable for Trudell’s claim.

“Trudell’s situation is one that the Legislature hoped to prevent when it enacted the project owner amendments,” the high court concluded. “The problem with uninsured contractors and their attempts to require employees to become independent contractors to avoid workers’ compensation liability was discussed in hearings in both houses. The Legislature intended that someone in the contracting chain would have workers’ compensation insurance; the legislation was limited to businesses, and for the most part businesses are required to carry workers’ compensation coverage.”

While the majority concluded that the Hibberts were project owners, Justice Craig Stowers dissented. He agreed with the legal test used by the state Supreme Court, but contended that the court should have remanded the case back to the trial court, to give the trial court a chance to apply that test.

Stowers argued that the majority’s decision to analyze the factual evidence and decide the case on its own meant that the high court was taking on the role of the trial court.

“Notably the court does not determine that the Superior Court’s factual findings were clearly erroneous, nor could it in my opinion,” he wrote. “Rather, the court proceeds to review and weigh the facts, emphasizing its own findings as described above. But this is not the Supreme Court’s proper function.”

Source: WorkCompCentral

State: OK Bills Target Noncompliance by Employers, Comp Fraud:

By Bill Kidd, Central Bureau Chief

Oklahoma lawmakers are taking aim at employers who don’t carry required workers’ compensation coverage – and at anyone engaged in workers’ compensation fraud – with proposals to raise penalties and to increase regulators’ resources.

Senate Bill 1878 by Sen. Harry Coates, R-Seminole, a construction firm owner, would increase the maximum penalty the state labor commissioner can assess for failing to carry workers’ compensation from $250 per employee to $500 per employee for a first offense – and $1,000 per employee for employers in “hazardous industries,” as identified by the labor commissioner.

An additional $100 per employee would be assessed for each month (up to 36 months) the employer was not in compliance. The total penalty would be doubled for subsequent offenses.

The commissioner would be allowed to negotiate with employers to mitigate the penalties.

The legislation also provides that an individual who reports an employer who has failed to obtain coverage may be awarded, at the discretion of the commissioner, up to 25% (with a cap of $10,000) from a penalty assessed against the employer. The bill has been referred to the Senate Judiciary Committee.

Rep. Charles Key, R-Oklahoma City, has filed similar legislation as House Bill 2317. The penalty bills have proposed effective dates of Nov. 1.

Coates told WorkCompCentral on Tuesday that the legislation is intended to “put a little teeth” into the requirements that businesses carry workers’ compensation coverage.

Currently, the law provides “a very minimal penalty,” Coates said, which may encourage employers not to comply.

The senator explained that he wants to cause businesses to “think twice about violating the law.”

However, Labor Commissioner Mark Costello raised concern about the adequacy of the current fine structure after an Aug. 4 accident at a Kremlin grain elevator in which two 17-year-old workers each lost a leg. Costello reported that Zaloudek Grain Co. had not carried workers’ compensation insurance for five months prior to the accident, although the company was required to have the coverage.

Zaloudek contends that it had — or believed it had — a workers’ compensation policy in force with CompSource Oklahoma at the time of the accident. CompSource contends the policy had been canceled months earlier. Zaloudek is suing CompSource in an Oklahoma County district court.

Under current state law, the Oklahoma Department of Labor is limited to a fine of $75 per employee if a business without coverage comes into compliance within 30 days after the department learns the business isn’t complying.

Zaloudek Grain obtained coverage five days after the accident, Costello said, so the maximum fine he could impose on the company was $750, based on the company’s two injured teenage workers and eight other employees.

Costello told WorkCompCentral in September the low penalty “borders on the ridiculous” and indicated the fine structure provided “practically no economic incentive” for businesses to comply with the requirement for coverage.

In an email to WorkCompCentral on Tuesday, Costello noted that he has “expressed my frustration with the existing penalty structure…and believe stronger penalties proposed by Sen. Coates and Rep. Key should remove the economic incentive to avoid providing workers’ compensation coverage.”

Workers injured on the job “should have full knowledge of their medical care and lost wages will be covered through workers’ compensation insurance,” the commissioner said.

The department assessed $323,607.52 in workers’ compensation–related penalties in fiscal year 2011.

Meanwhile, bills aimed at workers’ compensation fraud are working their way through the legislative process.

SB 1060 by Sen. Bill Brown, R-Broken Arrow, would amend existing law to require that an insurer with “reason to believe that a person or entity” is committing insurance fraud is to immediately notify the Workers’ Compensation  Fraud Unit of the Attorney General’s Office, as well as the Anti-Fraud Unit of the Insurance Department.

Current law requires notice to the department, but not the attorney general. SB 1060 has been referred to the Senate Retirement and Insurance Committee. If passed, the bill would take effect immediately.

SB 1174 by Sen. Dan Newberry, R-Tulsa, would authorize the attorney general to contract for “investigative or legal services to carry out the responsibilities given to the Workers’ Compensation Fraud Unit.”

The bill, which would take effect Nov. 1, is being reviewed by the Senate Judiciary Committee and the Appropriations Committee.

SB 1321 by Sen. Rick Brinkley, R-Owasso, would authorize the attorney general to contract with retired police officers for investigative services related to the fraud unit’s duties.

The Senate Judiciary Committee has recommended that SB 1321 pass. The bill would take effect on Nov. 1.

Lt. Gov. Todd Lamb (R), in a report to lawmakers earlier this year, recommended beefing up the fraud unit, and suggested it could be done by contracting for services rather than adding new state employee positions.

SB 1246 by Sen. Brian Bingman, R-Salpulpa, also has been sent to the Judiciary Committee.

The legislation provides that if a claimant in a workers’ compensation case  is charged with workers’ compensation fraud, “any pending workers’ compensation proceeding shall be stayed until the final disposition of the criminal case.” SB 1246 would take effect on Nov. 1.

The 2012 session is to adjourn by May 25.

Source: WorkCompCentral

State: OK OSHA Issues Fines to Grain Facility Where 2 Teenagers Lost Legs:

The Occupational Safety and Health Administration announced Friday it has issued an Oklahoma grain-handling facility four serious safety citations, with fines totaling $21,500, following an accident on Aug. 4 in which two 17-year-old workers each lost a leg.

OSHA reported the teenagers working for Zaloudek Grain Co. in Kremlin both suffered leg amputations when they became caught in an allegedly inadequately guarded conveyor auger while cleaning out a grain flat storage structure.

The citations from OSHA’s inspection included allegedly failing to affix or secure the machine guard over the moving conveyor auger, to ensure the storage structure’s exit was free and unobstructed, to provide exit signs from the storage structure and to provide training for workers assigned to enter grain structures.

In September, OSHA’s Oklahoma City area office opened a separate safety inspection of the Kremlin facility under the agency’s regional emphasis program for grain-handling facilities that resulted in five serious citations.

The alleged violations for those citations included allegedly failing to provide training on the use of a forklift, to develop and implement an emergency action plan and hazard communication program, to develop and implement a housekeeping program to reduce the accumulation of combustible dust in grain structures, and to ensure precautions were taken prior to employees entering grain bins.

OSHA issued citations, with fines totaling $12,500, for those alleged violations on Dec. 20. Zaloudek Grain has contested those citations.

The company had 15 days to contest the latest citations.

Zaloudek Grain has paid a $750 fine assessed by the Oklahoma Department of Labor for not having workers’ compensation insurance at the time of the accident, but is suing CompSource Oklahoma, its current insurer, claiming it had or should have had coverage at the time of the accident.

CompSource contends it sent notice in February 2011 to the company warning that the policy would be canceled if audit information requested by the insurance company was not received.

The parents of Bryce Gannon and Tyler Zander, the injured teenagers, have filed separate lawsuits against Zaloudek Grain in Garfield County district court, seeking damages in excess of $75,000 each.

OSHA noted that it has fined grain operators in Wisconsin, Illinois, Colorado, South Dakota, Ohio, Oklahoma and Nebraska following preventable fatalities and injuries in grain storage bins.

In addition to enforcement actions, OSHA sent a notification letter last year to 13,000 grain elevator operators warning them of the need to take proper safety precautions.

Source:  OSHA, WorkCompCentral

State: FL DEA: Oxycodone Buys Down Significantly After ‘Pill Mill’ Crackdown:

By Michael Whiteley, Eastern Bureau Chief

Florida’s crackdown on “pill mills” cut physicians’ purchases of the opioid painkiller oxycodone by 97% during 2011 and appears to have driven the business to Georgia, Kentucky and Tennessee, according to a report issued last week by the U.S. Drug Enforcement Administration (DEA).

Leaders of the Florida House on Monday credited the passage of House Bill 7095 with drastically reducing the purchase of the painkiller by physicians last year and reducing its overall purchase by pharmacies by 14%. The law took effect on July 1.

Oxycodone is marketed under the brand name OxyContin.

House leaders posted a link to the DEA’s findings on the House website on Monday. The agency said HB 7095, signed into law by Gov. Rick Scott on June 3, appears to be working.

HB 7095 banned physicians from dispensing drugs on Schedules II and III of the DEA’s controlled substances list except in very limited circumstances and mandated creation of a state prescription drug-monitoring program (PDMP).

“Florida was previously the nation’s capital for prescription drug abuse, but thanks to critical reform measures spearheaded by the Florida Legislature, prescription drug abuse continues to fall,” House Health and Human Services Committee Chairman Robert Schenck, R-Spring Hill, said in the House news release.

The DEA said the number of doctors appearing on its national list of the top 100 U.S. physicians ranked by the volume of oxycodone they purchase dropped from 90 in 2010 to only 13 in 2011.

The 2011 list of oxycodone-purchasing doctors, published through the agency’s Automation of Reports and Consolidated Orders System (ARCOS), showed 21 doctors listed in the top 100 now practice in Georgia, and another 11 practice in Tennessee.

The DEA reported “notable increases” in doctors purchasing oxycodone in Georgia, Kentucky and Tennessee.

The DEA said monthly purchases of oxycodone by Florida pharmacies increased slightly during January, February and March of 2011, while HB 7095 was being debated, and then began to drop significantly.

The DEA said the statistics contradict predictions that the crackdown on Florida doctors and pain clinics would drive more business to pharmacies.

Pharmacy purchases of oxycodone declined by 14% in July 2011 – the month the ban took effect – when compared to purchases for the same month in 2010, according to the DEA.

Comparing monthly purchases between the two years, the DEA said purchases declined by 13% in August 2011, 22% in September 2011, 25% in October 2011 and by 29% in both November and December.

In addition to banning doctors from dispensing drugs on Schedules II and III of the DEA’s controlled substances list, except as samples and during periods following surgeries, HB 7095 required doctors to resell their remaining inventories to wholesalers or turn them over to the Florida Department of Law Enforcement.

The law also required the Florida Department of Health to launch the PDMP last fall.

Pharmacies are required to supply the PDMP database with the names and other information of all persons receiving controlled substances, the dates the drugs were purchased, the quantities purchased, and information on prescribing physicians.

In addition, the bill toughened licensing standards for Florida pain clinics and required drug wholesalers to assess monthly orders from individual pharmacies for more than 5,000 unit doses of any one controlled substance to determine whether the purchase is reasonable based on the pharmacy’s location and the population it serves.

Drug wholesalers are required to report pharmacies receiving unusual quantities of controlled substances to the state Health Department.

Michael Jackson, executive director of the Florida Pharmacy Association, could not be reached for comment on Monday but said in a previous interview wholesalers are limiting their shipments of oxycodone and other painkillers to Florida pharmacies.

He said some pharmacies, in turn, are refusing to fill prescriptions when they don’t know the patient or prescribing physician.
Schenck’s committee played a pivotal role in drafting HB 7095.

It also is the next stop this session for House Bill 511, which could cap the price of repackaged drugs – those primarily dispensed by physicians – at the average wholesale price (AWP) established by the original manufacturer, plus a $4.18 dispensing fee.

The price-cap bill passed the Florida House and Senate unanimously in 2010 but was vetoed by former Gov. Charlie Crist. A similar bill cleared the Florida Senate in 2011 but died in a House-Senate budget conference committee, which approved HB 7095 in its place.

Source: WorkCompCentral

State: OH No Benefits for Estate of Obese Smoker Who Died Walking to Work:

An Ohio appellate court upheld the denial of death benefits to the estate of a morbidly obese woman who died of a heart attack after having to walk a block from an off-site parking lot to her workplace, because her normal parking space adjacent to the building was blocked by a construction vehicle.

Case: Davis et al. v. Ryan et al., No. 11AP-198, 01/31/2012.

Facts: Deborah A. Davis worked in a clerical position for the Ohio Education Association. On Nov. 21, 2005, she drove to work and came upon a construction truck blocking access to the handicap parking spot where she normally parked. She parked her car in another parking lot one block south of her workplace.

A co-worker encountered Davis walking to work and offered to ask the driver of the truck to move it. Davis then returned to her car. When the co-worker arrived to tell her the truck had been moved, she found Davis unresponsive.

At the time of her death, Davis stood 5 foot 4 inches and weighed 317 pounds. She smoked two packs of cigarettes per day and suffered from a multitude of health problems, including systemic hypertension, reactive airway disease, high cholesterol, diabetes, and obstructive sleep apnea. Davis had also undergone double coronary bypass surgery one year prior to her death.

Her treating cardiologist testified that Davis was a “poster child for heart disease,” and “was at risk for having a heart attack at any point.”

Procedural History: Davis’ husband, as administrator of her estate, filed a workers’ compensation claim for death benefits, asserting Davis’ death was due to overexertion based on her attempt to walk to work from the off-site parking lot.

The Bureau of Workers’ Compensation denied his application. He appealed to the Franklin County Court of Common Pleas. That court granted summary judgment in favor of the bureau, concluding Davis’ death was caused by natural deterioration from her pre-existing physical conditions.

Ruling: The appellate court reasoned that Davis’ widower had failed to establish a sufficient causal link between her waking and her death. They court explained that “expert testimony regarding causation must be expressed in terms of probability, not possibility,” and noted Davis’ doctor repeatedly answered “no” when asked whether he could conclude, within a degree of medical probability, that the act of walking would trigger a heart attack.

Source: WorkCompCentral