Alabama Litigation Review : North Alabama Personal Injury Lawyer & Attorney : Jeff Blackwell : Hornsby, Watson, Hornsby, Blackwell & McKown Law Firm : Commercial Litigation, Workers' Compensation : Huntsville, Decatur, Athens

What is a true independent contractor?  How is an independent contractor different from a regular employee?  In some situations, the answer of whether one is independent versus an employee, is obvious.  In other situations, the answer is not always clear.

What is clear is that some employers are misclassifying workers to avoid important laws related to safety, fair wages, taxes and workplace injuries.  A recent article addressed this disturbing trend by some employers.  A separate study in 2010 which surveyed several states, noted that:

Employers increasingly misclassify their employees as independent contractors, denying them the protection of workplace laws, robbing unemployment insurance and workers compensation funds of billions of much-needed dollars, and reducing federal, state and local tax withholding and revenues.

On a state and national level, this issue is a serious one affecting both workers and businesses that are trying to follow the law.  On an individual basis, I frequently receive calls from people who were injured on the job but then denied workers' compensation benefits on the basis of being an "independent contractor."  The key question for these injured people is whether or not Alabama's workers compensation laws provide them needed benefits for a serious injury.

How do Alabama's laws providing workers compensation benefits examine this issue?  This is how our courts have reviewed this issue:

In determining whether an individual is an independent contractor or whether an employer-employee relationship exists, the court looks to the reserved right of control rather than the actual exercise of control.

If the right of control extends no further than directing what is to be ultimately accomplished, an employer-employee relationship is not established; however, if an individual retains the right to direct the manner in which the task is to be done or if that individual does in fact dictate the manner of operation, then an employer-employee relationship is established.

This is a case-by-case issue.  An important point to remember is that - just because the company said you were an "independent contractor" does not make it so.  Regardless of how they titled your work, if the company had the right to control the manner in which you did the job, then you may be considered an employee entitled to workers compensation benefits.  In a case earlier this year, the Alabama Court of Civil Appeals listed several factors to consider in determining the issue of a retained right of control.  They are:

1. direct evidence demonstrating a right or an exercise of control
2. the method of payment for services
3. whether equipment is furnished
4. whether the other party has the right to terminate the employment

Again, these are just factors to consider.  No single one of them, just by itself, would determine the issue. In today's world where many employers are misclassifying workers to avoid legal requirements, it is important that you don't just accept the company's word for it and fail to get the workers compensation benefits you need for a serious injury or disability.

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If you want to understand the brick wall facing injured workers seeking medical treatment in some states just read the recent article published in the ABA Journal.  The title says it all --

Insult to Injury:  Texas Workers' Comp System Denies, Delays Medical Help

The article begins by telling the story of a Deputy Sheriff who faced a nightmare of denials and delays in his medical care after being shot while in the line of duty.  Those issues included the carrier even claiming the emergency helicopter ride to the hospital for life-saving care was not necessary.

This is not acceptable.  The article paints a picture of Texas where the system may be at its worst.  However, these problems are not unique to Texas.  They occur in Alabama as well.  In the last few years, they have progressively worsened.

The primary purpose of workers' compensation laws is to rehabilitate injured workers so they may return to gainful employment if possible.  More and more, we are losing our focus on this purpose.  I hear it from my clients daily - "I want to work.  I have to get medical treatment."  Yet, they are often frustrated by a system that seems to work against providing medical care.

Clearly, the workers compensation carriers are cutting their costs at the expense of those with serious injuries.  Yet, I would not call this a cost "saving" measure.  Instead, it is a cost "shifting" measure.  The reality is, workers compensation carriers are shifting the costs from themselves to the rest of us.  Medical costs for work-related injuries should be paid out of the large premiums collected by carriers.  Instead, when legitimate claims are denied or delayed, others shoulder those costs.  As taxpayers, we often pay those costs through programs such are Medicare or Medicaid.  On another level, families sometimes become overburdened by the costs of getting basic care and the loss of income while out of work.

The article quotes a recently retired Texas official who spent his career handling workers compensation issues and best expressed the carrier misconduct that frustrates injured workers and the medical system so greatly.  According to this official:

Sometimes they just create a controversy as to whether they owe on a claim.

What are some of the common actions taken by carriers to create a bad reason for denying care?  What practices are used to wrongfully deny or delay medical treatment to injured workers?  Here are a few:

1. Claim A Pre-Existing Problem.  I have written about this issue previously.  Don't simply accept such a denial if you were able to do your job before suffering a work-related injury.  It is not necessary that you have been in perfect health before that injury.
2. Bury The Doctor in Paperwork.  Doctors should spend most of their time treating patients not completing forms.  I have seen far too many cases where the doctor eventually became frustrated and simply gave up because of the level of paperwork required for a claim to get approved.  If your doctor has talked to you about your injury and the need for medical care, then he has most likely put those opinions in your medical records.  That should be sufficient.
3. Use The "Utilization Review" Process.  Alabama law has an administrative review process that was created to evaluate medical issues that are unclear for a variety of legitimate reasons.  Yet, carriers often use the review process as a means to delay or deny legitimate care.  How is this process abused?  Sometimes, the carrier will use it to place extra paperwork burdens on the treating doctor.  Sometimes, the carrier will pay another medical provider for a negative opinion about the requested medical care.  This is called "peer review."  However, it is really just a negative report purchased from someone who never examined you, may not have seen all your records, and may not even be the right type of specialist for your injury.  You don't have to accept the delays or denials of this process.  Instead, you can seek a remedy in court in Alabama.
4. Employ A Bad Case Nurse To Work The System.  Let me start by saying that there are plenty of good nurses that try to help injured workers navigate a difficult medical system.  The bad ones gather information to use against you, try to manipulate the doctors, and work to slow the process.  Good or bad, they all approach with a smile and promises of help.  Since you cannot tell the difference, my advice is to act with caution.  Be friendly but do not provide personal information.  Don't discuss your family, job history, finances, or other health issues and injuries.  Keep your discussions to scheduling your next appointment and making sure the treatment requested by the doctor is getting approved quickly.
5. Require Multiple Opinions.  Alabama law does give the workers compensation carrier some rights to get a second medical opinion.  However, some carriers abuse this limited right by requiring you to get multiple opinions until the carrier gets one it likes.  Another way some carriers abuse this right is by using it as a means to switch your care from a doctor you may like to one more favorable to the carrier.  The carrier cannot legitimately do that and you should not accept it.

Too often employees suffering significant injuries are left without proper medical care because of carrier misconduct.  That is not acceptable.  That is why it is so important to stay alert to these issues that benefit the bad carriers at the expense of everyone else.

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In Alabama, if you are injured on the job then you are entitled to workers' compensation benefits from your employer.  Each state has some form of workers' compensation system.  As a result, the benefits provided to injured workers can vary from state to state.  Although some large employers are self-insured, most purchase insurance coverage to cover the benefits required by a state's workers' compensation system.

An injured employee can obtain workers' compensation benefits regardless of fault.  However, Alabama law also allows the injured worker to pursue a legal claim against another party who may have caused the injury.  Here is an example -- You are a delivery driver.  You are on the job, driving the company truck, when another driver runs a red light and crashes into your vehicle.  You are hurt.  Under Alabama's workers' compensation system, your employer must provide you medical care and may also have to pay you certain disability benefits set out in the law.  Wait, the collision was really caused by the other driver.  If so, then you can pursue a claim against that other driver.  The workers' compensation system does not provide full compensation for all your damages.  However, you can pursue a claim against the other driver for all your damages.  These cases are commonly referred to as third-party claims by attorneys.

One issue in the scenario I just mentioned where you are hurt on the job due to the fault of another is that the workers' compensation carrier has a lien against your recovery from the responsible person.  That is, if your employer or its insurance company paid benefits for medical treatment or disability, they are entitled to get their money back if you successfully recover damages from the responsible party.  This is a complicated issue and it is important that the lawyer handling such a case have a full understanding of this area of the law.  Although complex, here are several quick tips to consider when handling this type of case:

1. Verify the claimed lien. -- In every case, I ask the insurance carrier for a print-out of all payments.  I often find that the print-out lists administrative and investigation expenses incurred by the carrier.  The carrier's lien only applies to actual expenses for medical or disability payments.  By reviewing the actual payments which comprise the claimed lien you can often eliminate amounts that should not be collected.  Many attorneys simply accept the carrier's statement as to the total lien amount without reviewing all the payments.  You can often save your client considerable money just by performing this simple task.
2. Bring the workers' compensation adjuster to the trial of your other case. -- When I go to trial in a third party case, I typically present the claims adjuster as a witness.  Since the insurance carrier often has a considerable lien, they should not mind sending a representative to trial.  I have found, however, that the carrier is rarely asked to send its adjuster to trial.  I cannot understand why many lawyers would not do this.  I have spoken with jurors after several of these trials and they have all indicated that having an adjuster testify to the significant amount of money spent to treat your client's injuries as well as the fact that they have a lien, has a great impact.  This witness, if handled correctly, can have a tremendous impact in validating the extent of your client's serious injuries.
3. Keep the workers' compensation carrier informed as to all difficulties and problems with your other case so that they will be in a position to negotiate with you in an effort to reduce the lien. -- Too many attorneys ignore this issue until there is a settlement in their third-party case.  Then, they call the adjuster handling the claim expecting to negotiate a reduction in the lien.  Whenever I have a third-party case, I periodically call the adjuster to talk about any difficulties with the case.  If you truly have a difficult third-party case where you might need to compromise in order to settle, don't you think the carrier might be in a better position to also compromise its lien if you have informed them of the issues along the way?
4. Seek discovery of any contracts between your employer and the other party if they had any prior relationship.  -- This is a great issue.  Many third-party cases arise out of construction work or work in an industrial setting.  In order to do this work, your client's employer will often enter into a contract with another business.  If that other business (or one of its employees) caused the injury, make sure you get a copy of the contract.  I have found that these contracts sometimes contain clauses where one party agrees to waive any claims against the other or against any money paid by the other.  Sometimes, these waiver clauses specifically waive liens.  If so, you can argue that there is no lien.  I have successfully argued this on a prior occasion before a trial court in Alabama.  One warning here, however, is that Alabama's Supreme Court has not addressed these clauses, including the issue of whether an employer can waive the lien of its insurance carrier.  This is an interesting issue for appeal.

The issues surrounding liens are often complex.  Too many attorneys either don't understand the issues or don't take the time to deal with them.  However, they are very important issues to consider when handling a claim.  Dealing with these issues correctly can often save your injured client significant money.

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While sitting in court on a recent workers' compensation case, I started to think about all the reasons someone calls an attorney after suffering a significant work-related injury.  For me, former clients are often the best source of referrals.  However, I'm not talking about why the caller chose a particular attorney.  Set aside referrals and marketing for a moment.

I am talking about why the injured person even decided to consult an attorney at all.  Sometimes, the injured person feels they need some general legal advice in light of their situation.  That's often a good idea.  A significant injury presents many issues that can be helped by competent advice.  Most personal injury attorneys will provide a free consultation.

Aside from general advice, what are some of the most frequent problems encountered by injured workers that lead them to call an attorney?  I can think of many common problems that lead to such a call.  Here is a list of a few of the most frequent reasons I hear:

1. The Preexisting Condition Denial -- The insurance carrier denied my workers' compensation claim because I have a preexisting condition.
2. The No Settlement Unless You Close Medical Benefits Refusal -- The insurance carrier refuses to discuss my claim or negotiate any settlement with me unless I give up all rights to medical care for my injuries.
3. The Company Doctor is a Bad Doctor Problem -- The insurance carrier has provided me with a doctor.  However, he won't treat my injuries; won't listen to me, etc..  If the provided doctor wants to care for me, then the carrier won't approve his treatment; denied his request for specific treatment; tried to make me change doctors, etc..
4. The My Case is Only Worth That Shock -- The insurance carrier has provided an offer.  However, it is extremely small and the carrier has insisted it is all I am entitled to receive under Alabama law.
5. The You Did Not Give Us Proper Notice So We Don't Accept Your Claim Excuse -- The insurance carrier claims I did not provide notice of my accident as Alabama law requires and refuses to do anything.

I have written previously about the impact of preexisting conditions on a workers' compensation claim.  That excuse, like the others, is often not a reason to deny or refuse a claim.  For example, in Alabama, you cannot be forced by the carrier simply to give up your rights to medical treatment.  While some attorneys routinely let their clients give up medical rights, I typically do not.  The security of getting treatment for a significant injury is too important simply to give away.  At least, that's how I feel about the issue.

As for problems with the authorized physician or "sticker shock" over a low offer that the carrier insists is all you are entitled to receive, those are common and complicated issues.  You do have to seek care with the doctor chosen by the carrier.  However, there are legal avenues you can take to change or challenge the situation where you cannot get good medical care.  Alabama law provides some methods to change doctors or get a panel of alternative doctors.  Also, you can seek court intervention if the carrier is simply refusing to approve recommended care from a doctor who is trying to help you. 

As for low settlement offer shock, Alabama law does provide only limited benefits based on certain calculation methods.  While I am sure some may disagree with me, I believe that Alabama law fails to provide sufficient benefits.  That is why it is so important to understand how benefits should be calculated so that you can obtain what the law does allow.  However, the carrier will often use the lowest method of calculating benefits.  In many cases, the benefits really owed can be very different.  As an example, in many cases, you are entitled to be compensated based on your vocational disability (the impact of the injury on the number or amount of jobs you can now no longer perform).  Yet, carriers will typically only offer injured workers a settlement calculated upon the usually much, much lower number assigned as a physical impairment rating.  If you don't understand how calculations based on a vocational disability or impairment rating are determined, you are not alone.  Many attorneys don't have a good grasp of these terms or the methods of calculating benefits.  You can bet that the claims adjusters working for the insurance carrier do understand them and will often offer the lowest method of calculating benefits.  So, you better seek advice from someone who fully understands the calculations as well.

Notice of your accident can also be a complicated issue.  The requirement of notice can be met in a variety of ways.  It is not always the clear bar to a claim that the carrier would lead you to believe.

These issues can be complex.  They are too complex to discuss together in detail in this one post.  You should not simply accept a denial without consulting a professional in this complicated area of law. 

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With a few workers' compensation carriers, the pattern of simply denying most claims on the ground that the injured person suffered a "preexisting" problem must be habit.  It's as if these carriers had a form letter where nothing changes but the dates and names.  I am convinced that these carriers simply take most of their claims and either ignore them indefinitely asserting they are under "investigation" or simply deny them outright on some general claim that the condition was "preexisting."  Unfortunately, I am afraid that many severely injured workers accept the excuse given by these carriers.  Some of these workers never get the medical care they need and never return fully to work.  Others may get the care.  However, someone else (like us as taxpayers) picks up the tab that should have been paid by the insurance carrier.

Before I go too far, I'm not bashing all workers' compensation carriers.  I am impressed with adjustors who respond quickly with necessary medical care to help the injured worker.  The pattern of taking most claims and simply ignoring them is one followed by the same few carriers rather than an industry-wide practice.

Don't just accept a denial of your claim by a carrier asserting that you have a "preexisting" condition.  The meaning of this term under Alabama's Workers' Compensation Act is very different than what you might think.  The term "preexisting" typically means something that existed before the event at issue.  Under the normal definition, if you hurt your back in an accident, but had suffered prior back problems, then you would have a preexisting back condition.  Indeed, a recent government report indicates that 129 million Americans have a preexisting health condition as the term is typically defined.

However, the term has a very different meaning under our workers' compensation laws.  Let's again think about the person who hurts their back at work but may have experienced some back problems prior to the work-related injury.  Under Alabama's workers' compensation laws, the prior back problems are not considered a preexisting problem that would prevent the worker from obtaining benefits if the worker was able to perform fully his job at the time of his injury.  The issue is not whether you suffered a prior medical problem, but rather, whether you suffered problems performing your job at the time of injury.  This is what Alabama's courts have to say about the issue of preexisting conditions impacting a claim for workers' compensation benefits:

the law presumes that there is no preexisting injury or infirmity when the employee is able to fully perform his or her job duties in a normal manner prior to the subject injury.

This means that workers' compensation benefits are not limited to only those people in perfect health prior to their injuries.  It means that the focus of workers' compensation benefits is, and should be, on a person's ability to work and how an injury impacts that ability.  If a prior condition did not keep you from performing fully your job, then you should receive full benefits for any current injury.  However, even if you had a prior condition that kept you from performing your job fully when injured, you may still be entitled to some benefits for any increased disability.

In my practice, I see client after client who deserves better than a form letter simply denying their claim because they had some physical problem in the past.  Each time I see one of these clients, I am reminded of a man who contacted me a number of years ago after suffering a severe back injury at work.  He received one of those standard denial letters.  In truth, he had suffered some back issues from time to time prior to his work injury.  What sticks with me about that case is seeing the defense counsel try to explain at trial how my client suffered a preexisting back condition when his wage records showed that he routinely worked not just the normal 40 hours a week but often 60 to 70 hours a week doing heavy manual labor for the employer.

If you are hurt on the job in Alabama, it is important to remember a couple things:

1. Legally, you do NOT have a preexisting condition if you were fully able to perform your particular job at the time of your injury.
2. In Alabama, workers' compensation benefits are NOT limited to those in perfect health prior to their injury.
   

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The old saying "bad facts make bad results" is certainly true in the case of M&J Materials, Inc. v. Isbell, just released by The Alabama Court of Civil Appeals.  These bad facts simply provided our appellate courts another opportunity to express their general distaste for retaliatory discharge suits.

First, a little background is important.  As many people know, Alabama is generally an "at will" employment state.  That means your boss can fire you for a good reason, bad reason, or even no reason at all.  Of course, the "at will" doctrine is subject to Federal discrimination laws and collective bargaining agreements by unions.  Federal laws and unions aside, state law exceptions to the "at will" doctrine in Alabama are few and far between.  Or, is it closer to "slim and none" when exceptions are considered under Alabama law?

Alabama's Workers' Compensation Act does provide one exception to the "at will" doctrine.  The Act says:

No employee shall be terminated by an employer solely because the employee has instituted or maintained any action against the employer to recover workers' compensation benefits under this chapter or solely because the employee has filed a written notice of violation of a safety rule pursuant to subdivision (c)(4) of Section 25-5-11.

Ala. Code §25-5-11.1.  In looking at this statue, our Courts have focused their attention largely on the word "solely."

Now, back to the recently released case of M&J Materials.  In this case, the employee injured his wrist at work.  He made a claim for workers' compensation benefits.  Then, he was fired.  What was the reason provided for his termination?  Apparently, the employee decided to bring his handgun to work.  In an effort to argue the offered reason for the termination was simply a pretext to fire him for his workers' compensation claim, the employee claimed that his co-workers were also bringing their guns to work.  Whether this was a common practice or not, the company had a clear written rule against bringing guns to work and there was no evidence that the management personnel who fired the injured worker knew anything about other co-workers also bringing their guns to the plant.

All in all, these bad facts gave our appellate courts another opportunity both to deny a retaliatory discharge claim and express just how difficult it will be to even present these claims to a jury.  Employers don't simply admit firing employees because they have been hurt on the job.  Of course, they typically offer some other rationale for terminating the employee.  If you are an injured worker, how do you prove the employer's stated reason for firing you was simply an excuse to terminate you because you had sought workers' compensation benefits?  It is clearly not enough to present some facts simply calling the stated reason into question.

Here is the tremendous hurdle an injured worker faces simply to get his claim to the jury:

An employer's stated basis for a discharge is sufficient as a matter of law when the underlying facts surrounding the stated basis for the discharge are undisputed and there is no substantial evidence indicating

(a) that the stated basis has been applied in a discriminatory manner to employees who have filed workers' compensation claims;

(b) that the stated basis conflicts with express company policy on grounds for discharge, OR,

(c) that the employer has disavowed the stated reason or has otherwise acknowledged its pretextual status.

These cases are very difficult legally.  From the very beginning, it is essential that any attorney considering such a claim carefully screen the case, thoroughly investigate all the facts and diligently gather all the evidence in order to meet the high legal burden placed upon these claims in Alabama.

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It's a scenario repeated frequently by callers to our office.  First, the caller tells us that he suffered a work-related accident and injury.  Then, the caller tells us that the workers' compensation carrier has simply denied his claim on the basis he had a "pre-existing" injury or condition.  Often, these denials involve some prior injury that occurred years ago or some prior condition that did not prevent the person from working his current job.

How does Alabama's Workers' Compensation Act treat the issue of "pre-existing" conditions?  Although I learned long ago that every case presents unique facts and issues, here are two general principles in Alabama:

1. A pre-existing condition that did NOT affect the employee's work performance before the disabling injury is generally NOT considered a pre-existing condition under Alabama's Workers' Compensation Act.
2. An employee is not prevented from collecting workers' compensation benefits even though the worker has a pre-existing condition, if the employment aggravates, accelerates, or combines with, a latent disease or infirmity to produce disability.

Alabama's workers' compensation laws are complex with different issues and standards for different types of injuries.  The Act treats accidental injuries, repetitive trauma injuries, and occupational diseases, differently in many ways.  However, these two principles are important to keep in mind.

If the insurance carrier claims your condition is "pre-existing" there are several things you can do.  First, don't simply accept a denial if you were previously able to work your job.  Second, if your claim has progressed to a lawsuit, then your attorney can and should seek discovery on this issue.  Your employer often possesses numerous documents that would support your case.  These documents can include time sheets and work calendars which can be used to show you worked a full schedule.  They can include performance reviews and production reports which can be used to show your work performance was excellent.  Witnesses such as co-workers can also testify that you fully performed your job prior to the injury.  In my practice, I typically depose my client's supervisor in an effort to get an admission on this topic.

Alabama's workers' compensation laws are not intended to protect just those few who enjoyed perfect health prior to their work-related injury.  Instead, our laws were intended to protect all workers by providing necessary medical care and a base level of benefits.  As a result, if you were able to perform your job prior to suffering a work-related injury, don't simply accept a blanket denial of your claim.

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On December 7, the U.S. Supreme Court denied a petition seeking to reverse the 6th Circuit decision in Cassens Transport Co. v. Brown.  That 6th Circuit decision allowed several injured workers to pursue Federal Racketeer Influenced and Corrupt Organizations Act (RICO) claims against their employer and its workers' compensation adjustor.

RICO makes it a Federal crime to engage in interstate commerce through a pattern of "racketeering activity."  Racketeering activity includes such wrongful conduct as witness tampering, mail fraud and wire fraud.  RICO also allows individuals injured by such activity to sue for damages.  In Cassens, the plaintiffs were injured workers who had submitted workers' compensation claims.  They alleged that their employer and its workers' compensation adjustor had then engaged in false or fraudulent communications in an effort to obtain false medical opinions that would be used wrongly to deny their claims.

What is the significance of this 6th Federal Circuit decision?  The 6th Circuit does not geographically include Alabama.  However, in Alabama, the employer and its workers' compensation carrier control the medical process.  They pick the physician who can provide medical care.  They then often employ case nurses who attend appointments and meet privately with that physician to discuss the patient.  They can also review requests for medical care by the physician through an administrative process that is largely one-sided in their favor.  The pressure on the chosen physician by the carrier is often enormous.

I continue to believe that most people in this process are truly motivated by a desire to help injured workers receive the medical care they need to recover.  We all benefit when workers obtain complete medical care.  Yet, a small minority of those involved in the system don't share this goal.  In my practice, I have seen first-hand the additional damage these "bad apples" can inflict on an already injured worker and his family.  Recently, in one case, I discovered that a case nurse falsely told the treating physician that my client was addicted to drugs.  In another recent case, the physician received false employment information which implied that my client was refusing to seek employment.

Alabama's Workers' Compensation Act justly protects employers and their insurance carriers from liability due to simple errors or oversights.  However, intentional misconduct should not be protected.  I am hopeful that this new decision will halt some of the worst practices in our system.

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