Worker’s Compensation

Employee Quits and Then Slips: Covered Under Workers’ Comp or Not?Is an employee who quits her job then injures herself before she gets out the door still covered by workers’ comp? In a recent Tennessee case of first impression, the court ruled that after an employee says “I quit,” the employee remains employed for a “reasonable period of time” to “effectuate the termination of her employment.” Injuries occurring within that reasonable length of time are covered under workers’ comp.

The Facts

Melissa Duck worked as a clerk at a convenience store. When she clocked in for work one day, her immediate supervisor, Jason Stanford, was defrosting and cleaning an ice cream freezer. Mr. Stanford asked Ms. Duck to work the cash register while he finished cleaning the freezer. Ms. Duck said she did not want to run the cash register. Mr. Stanford then asked if she would like to instead clean the ice cream freezer while he operated the cash register. Ms. Duck refused to do that as well.

Ms. Duck then began gathering her personal belongings. Mr. Stanford asked if she was leaving, and she replied “yes.” Then, Mr. Stanford asked if she was quitting, and she responded “yes!” As she was leaving, Ms. Duck slipped and fell in a puddle of water on the floor next to the ice cream freezer that she had just refused to clean. She felt pain in her lower back, left arm, and her shoulder, and she did not report to work again.

About two months later, she filed a workers’ comp claim. The company’s insurer denied the claim because the injury did not occur during the course and scope of her employment (since she had quit before she was injured). Ms. Duck pursued the claim and the Court of Workers’ Compensation Claims ruled in her favor, finding that she remained in the course and scope of employment “for a reasonable period of time to exit the premises of her employment.” The employer appealed, and the Workers’ Compensation Appeals Board ruled for the company, holding that the injury did not arise in the course and scope of employment because the employment relationship ended before the fall.

The Tennessee Supreme Court’s “Reasonable Time” Approach

Ms. Duck appealed to the Tennessee Supreme Court, and her persistence paid off. The Tennessee Supreme Court’s Special Workers’ Compensation Appeals Panel held that:

“an employee whose employment is terminated remains covered by the Workers’ Compensation statutes for a reasonable period of time for the employee to effectuate the termination of employment, such as by gathering belongings and exiting the workplace.”

In this case, Ms. Duck remained covered by workers’ comp while she was leaving the worksite (1) “because the injury occurred within a reasonable time after termination of her employment” and (2) “because walking to the door of the convenience store to exit the workplace was a normal incident of the employment relation.” The appellate panel recognized in making its decision that this case “involves facts that are arguably not sympathetic to the claimant.”

In adopting this “reasonable time” approach, Tennessee joined a majority of jurisdictions that follow a similar rule (including Alabama, Florida, and Georgia). Some jurisdictions (for example, Nevada) have an “immediate termination approach,” which means that an employee’s workers’ comp coverage “terminates immediately when an employee quits or is fired.” This immediate termination approach is the minority rule, however.

Takeaways

If you have an employee who gets injured while he or she is in the process of quitting, check your state law. In most jurisdictions, including Tennessee, just because an employee quits does not mean that she loses her workers’ compensation rights.

Employers should take safeguards, if possible, to make sure that separated employees leave the premises safely after they have resigned or have been discharged. Otherwise, you may end up paying for an employee’s workers’ comp claim, even after an employee (no matter how disrespectfully) has quit. On balance, that might be better than having to deal with the former employee’s tort claim . . . just sayin’.

In case you didn’t know, Oregon enacted the “Fair Work Week” law, making it the first state to legally restrict the scheduling practices of employers in the service sector. The highlights include:

  • an obligatory rest period for employees between shifts,
  • written work schedules in advance of shifts, and
  • additional pay for employees if employers want to deviate from the written work schedule.

Ahead of Schedule? What Oregon’s Fair Work Week Bill Means to the Retail, Hospitality, and Food Service IndustriesThe obligations for covered Oregon employers are extensive and onerous. Oregon employers would be well served to begin taking steps to ensure they are prepared to comply well before the effective dates (primarily in July 2018).

Which Employers Are Affected?

The law applies to retail, hospitality, and food service establishments in Oregon that employ 500 or more employees worldwide. In calculating the number of employees, a chain or integrated enterprise is considered one employer. If a separate entity controls the operation of another entity, the entities could collectively be considered an integrated enterprise. The factors to consider in this analysis are the interrelationship between the operations of multiple entities, shared common management, centralized control over labor, and common financial control. Oregon’s Commissioner of the Bureau of Labor and Industries is to adopt further rules outlining when and under what circumstances separate entities constitute a single integrated enterprise.

Which Employees Are Covered?

Oregon employees covered under the law must not only be one of at least 500 employees worldwide but also engaged in providing services relating to retail trade, hotels, motels, or food services, as those terms are defined in the 2012 North American Industry Classification System. However, the law excludes salaried employees, workers supplied by a leasing company, and employees of a business that provides services to or on behalf of the employer.

What Are the Key Provisions?

  1. Work Schedule Estimate: At the time of hire, an employer must provide a new employee with a written, good-faith estimate of the employee’s work schedule. The estimate must (a) include the expected monthly median number of hours, (b) explain that the employee may elect to be on a voluntary standby list, (c) indicate whether an employee who is not on the standby list can expect on-call shifts, and (d) set forth an objective standard for on-call shifts.
  2. Standby List: An employer may maintain a standby list of employees who may be asked to work additional hours. The employee must agree in writing to be on the standby list, and the employer must notify the employee in writing of the standby procedures. The employer’s notification must include (a) that the list is voluntary, (b) how an employee can get off the list, (c) how an employer will offer additional hours, (d) how the employee accepts additional hours, and (e) that the employee is not required to accept the additional hours.
  3. Advanced Work Schedule: An employer must provide a written work schedule at least seven days before the first day of work scheduled (beginning July 1, 2020, this advance notice period expands to 14 days.) The work schedule must be posted in a conspicuous and accessible location and written in the language the employer uses to communicate with its employees. If an employer subsequently changes the work schedule, the change must be timely and the employee can decline the change.
  4. Right to Rest: Unless an employee agrees, an employee generally gets a 10-hour break between shifts.
  5. Compensation for Schedule Changes: If an employer changes a work schedule (without the required advanced notice) and the change either (a) adds more than 30 minutes to a shift, (b) alters the date, start time, or end time with no loss in hours, or (c) constitutes an additional shift, then the employee gets an additional 1 hour of pay at the regular rate (over and above wages earned). If an employer changes a work schedule (without the required advanced notice) and reduces or cancels an employee’s scheduled hours, then the employee gets 1.5 times the regular pay rate for each hour scheduled but not worked. Likewise, an employee scheduled for an on-call shift but not asked to perform work gets 1.5 times the regular pay rate for each hour scheduled but not worked.

What Additional Rights Do Employees Have?

The law also contains anti-retaliation provisions and provides employees with a private right of action. Employers are expressly prohibited from interfering with an employee’s rights protected under the law and from retaliating or discriminating against an employee for asking about the law. Also, an employer may not retaliate against an employee who either (a) chooses not to be on the standby list, (b) requests removal from the standby list, or (c) declines to work additional hours as a result of being on the standby list. An employer is subject to a civil penalty (not to exceed $2,000) for coercing an employee into being added to the standby list, with each violation constituting a separate offense.

If You Are a Retail, Hospitality, or Food Service Employer, What Should You Do?

As of today, Oregon is the only state to have enacted this kind of scheduling law. Therefore, so long as you are not a qualifying “employer” with a business establishment in Oregon, there is no need to take any immediate action. However, if you are covered under the law or anticipate entering the Oregon market, you should begin preparing. The first step is to determine whether your business is a qualifying “employer” and is, thus, affected by this law.

The passage of Oregon’s Fair Work Week law – coupled with the recent passage of similar citywide legislation – suggests that you can expect more restrictions on the scheduling practices of retail, hospitality, and food service businesses in the coming years. Apart from the economic effects resulting from the discontinuation of on-call scheduling, the penalties for violating such laws (if Oregon’s law is any example) could be significant. Therefore, employers should keep an eye on this apparent legislative trend and should not hesitate to seek out legal counsel if they believe they might be affected.

Close Up Of Businessman With InjuryWorkers’ compensation laws are supposed to take the guess work out of employee injuries. If an employee is hurt at work, the statute governs, you pay the benefits and move on—right? Well, if you have employees in Alabama, some of the predictability of the workers’ compensation scheme is in question. In Clower v. CVS Caremark Corporation, Jefferson County Circuit Judge Pat Ballard ruled that two provisions of the law violate the U.S. and the Alabama Constitutions. To make matters even more interesting, because the Alabama Workers’ Compensation Act has a nonseverability clause, that means Judge Ballard finds the entire law unconstitutional.

The Offending Provisions

The provisions at issue are Ala. Code 25-5-68, which sets a weekly $220 cap on permanent partial disability benefits (PPD), and Ala. Code 25-5-90(a), which caps attorney’s fees at 15% of the compensation awarded or paid in workers’ compensation proceedings. If you want the specifics of why Judge Ballard found that these provisions violated the federal and state constitutions, read the opinion—which includes a history of the workers’ compensation law. Suffice it to say, he concluded there was a constitutional violation and that potentially throws the entire Alabama workers’ compensation world into a spin.

If this becomes the law in Alabama, this decision will change everything about employee injuries. Judge Ballard noted that he was “not blind to the magnitude nor the consequence” of the holding. The impacts that he mentioned included:

  • Medical providers will no longer be able to bill claims to workers’ compensation insurers, employers and self-insurance funds.
  • Insurers will not be able to sell workers’ compensation insurance policies or collect premiums.
  • Self-insurance funds will continue only on claims that pre-date this decision.
  • Employees injured at work will have to file tort claims for on-the-job injuries—and get no benefits while they await a verdict.

What Should We Do Now?

Judge Ballard has stayed the ruling for 120 days, so it will not go into effect at least until early September—assuming the legislature or an appeals court takes no action. The Alabama Legislature is at the end of the legislative session, so it is unlikely to be addressed in this session. We can expect an expedited appeal and a number of organizations (including insurance carriers) weighing in on the subject with amicus curiae (“friend of the court”) briefs. Once appealed, the case is likely to be stayed pending the outcome of that appeal (so there will be more than the 120-day respite).

For the law nerds out there: This decision is not binding on any court until affirmed by an appellate court, so for now it only impacts the parties in the Clower case. No other court has to follow it. Undoubtedly, some judges will jump on this bandwagon and others will reject it. Employers in Jefferson County, Alabama may see some interesting results in the next few months.

In the meantime, what can you do to get ready for a potential workers’ comp apocalypse? Frankly, not much. However, here are some ideas:

  • Talk with your workers’ compensation carrier. This could have a huge impact on their business, and they should be all over it. Make sure they know you want them to keep you updated.
  • Look at short-term disability coverage and whether you need some or more of it. If this ruling becomes the law of the state, you could end up with injured employees who no longer get comp benefits, and they will be looking for other sources of replacement income (which you probably want them to have). It might be good to think about that impact and how you would handle it.

Otherwise, we will all just have to wait and see.