Section 28 of the MA Workers’ Comp Statute: Serious and Willful Employer Misconduct

Episode Notes

Transcript

Workers Comp Matters: Section 28 of the MA Workers’ Comp Statute: Serious and Willful Employer Misconduct – 8/15/2015

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Alan Pierce: Welcome to Workers Comp Matters here on the Legal Talk Network. This is attorney Alan Pierce, I’m with the law firm of Pierce Pierce & Napolitano in Salem, Massachusetts where we represent injured workers and disputed workers compensation claims. I’m here today with attorney Martin Buzz Schneider from the law offices of Martin Schneider, PC. Buzz practices workers comp law also in the come off of Massachusetts and his firm primarily represents insurers and self-insurers and companies in the defense of workers’ compensation claims. On today’s show, we’re going to discuss an area that we haven’t discussed on Workers Comp Matters before, and that is the liability of an employer for misconduct that rises beyond simple negligence or carelessness, but a type of intentional misconduct or serious and willful misconduct that might expose that employer to additional financial liabilities other than the mere payment of workers’ compensation benefits by its insurer in cases where there is that degree of culpability or negligence. Before we get started, we would like to thank our sponsors, Case Pacer, practice management software dedicated to the busy trial attorney. To learn more, go to CasePacer.com. And also to PINow; find a local private investigator anywhere in the United States. Visit PINow.com to learn more. Buzz, welcome to Workers Comp Matters.

Martin Buzz Schneider: Thanks for having me on.

Alan Pierce: Let’s start at the beginning and set the scene for us. Workers’ compensation has been part of the legal landscape for pretty much a hundred or more years throughout Massachusetts and the rest of the country. As part of the requirement to obtain workers’ compensation benefits and provide workers’ compensation coverage, the employer gets something in return. Could you describe what that sort of bargain is? The sort of quid pro quo between workers’ comp?

Martin Buzz Schneider: In Massachusetts and many states, the employers have signed to a statutory scheme of benefits for employees that are injured in the course and scope of their employment. No negligence is required to be eligible for workers’ compensation, as we all know. And in exchange, the employer has the exclusive remedy that is the injured workers are unable to sue and tort directly, in most cases, an employer for on the job injuries. There are exceptions, but that is really the general scheme of workers’ compensation.

Alan Pierce: And if we were really approach this topic on a more broad level, we could be talking about exceptions to the exclusive remedy provisions of the workers’ comp. And in a sense, we are going to talk about it a little more narrowly in this edition, and that is the particular liability for an employer for a degree of misconduct that is just more than simple negligence or carelessness. Every state, every jurisdiction that has a type of workers’ comp law, probably has provisions similar to but in other ways different than what we have in Massachusetts. However, in Massachusetts we have what’s known as Section 28 about workers’ comp statute. Our statute is chapter 152 of the general laws, and Section 28 is commonly referred to as the double compensation section. So let’s visit that and explain what it is, because it is similar and parallel to many other states.

Martin Buzz Schneider: It’s probably helpful to go back to the beginning. Our statute was enacted in 1911, and I think within a year, the legislature recognized that an injured worker is going to give up their common law tort rights against the employer in this type of relationship. So there’s no civil action, if you will, for pain and suffering if an employer acts negligently causing an injury. So in recognition of that and the fact that injuries can be caused by the willful and reckless conduct of an employer, our legislature here in Massachusetts enacted Section 28, which indicates that if an employer acts with serious and willful misconduct – either the employer or somebody regularly entrusted with the power of superintendence over an injured worker, that compensation would be doubled. That is weekly indemnity benefits and medical benefits, would be doubled, and that doubling benefit would be paid directly by the employer to the insurer. In other words, the insurer would subrogate to the employer for that doubling factor of Section 28.

Alan Pierce: Let me see if I can get this straight. My client is injured under circumstances, and we’ll talk about what those circumstances are with some case examples in a minute. But circumstances by which it is found that the employer engaged in the degree of serious and willful misconduct. So the injured worker’s been getting $700 a week in weekly workers’ compensation benefits, and the insurance company has paid $22,000 in medical benefits and the injured workers is still collecting $700 each and every week because it’s a serious long term disability. A finding is made of double compensation. Who pays my client? What does that company pay my client and then how does that company get compensated?

Martin Buzz Schneider: In Massachusetts, by statute and by case decision, the doubling benefit will be paid first by the insurer. The insurer is the primary payer under our statute of the Section 28 benefit. We have subrogation language in our Section 28 statute that allows the insurer to subrogate and collect that Section 28 benefit directly from the employer. And that was the original drafters of that section and we know from recent case law in the Sliski’s Case that was done to protect an injured worker from an employer that either becomes bankrupt, defunct runs away after a Section 28 verdict, and an employee is left with the inability to collect the doubling benefits. So the primary payer in our state is the insurer who has to subrogate against the employer for the return of the money.

Alan Pierce: So if the employer is no longer either financially viable or even around, the insurer gets stuck paying for the employer’s financial obligation?

Martin Buzz Schneider: That’s correct, and in Massachusetts in CNA v. Sliski’s Case, I believe it was, that actually took place where the insurer attempted to argue because of the penalty feel, if you will, of a Section 28 decision or final finding that if the employer is no longer available to pay that back, that the punitive nature of Section 28 really is gone and the insurer should be alleviated from paying the benefit. Our Supreme Judicial Court said no, that the primary payer by statute is the insurer, regardless of whether the employer is still in existence.

Alan Pierce: So in my example, after a Section 28 award, the $22,000 in medical benefits have been paid to doctors and hospitals, the insurer would kind of check for that exact amount payable to my client?

Martin Buzz Schneider: That’s correct.

Alan Pierce: And all of the weekly checks of $700 a week or whatever number of months or years would be totalled up and he would get a check for that retroactive amount?

Martin Buzz Schneider: For that retroactive amount and for ongoing benefits as well.

Alan Pierce: So the $700 would turn into $1400 a week.

Martin Buzz Schneider: That’s correct.

Alan Pierce: Now we both know from our experience that the key language and the language that fosters the most litigation and causes the most controversy is the language of serious and willful misconduct. Let’s break that down, I think we all know what misconduct is and serious is; it’s also pretty commonly understood. I think the real word of those three, serious, willful misconduct, is willful. Give us an example of the type of case that would fit that category.

Martin Buzz Schneider: Historically, in Massachusetts, the case that many of us look to is Armstrong’s Case, and it’s really a wonderful example of Section 28. And in Armstrong’s Case, there were workers surrounding a building and there was construction on the upper floors of the building. And the employees warned their supervisor – somebody with the power of superintendence over them – that because of the failure to place structural nets around the construction, that the workers were exposed to a significant hazard or risk of injury. And in Armstrong’s Case, the workers were told either you go back to work or you can quit for the day and you won’t be working here any longer. And unfortunately, we know what happened next. There was an accident where a tool fell off one of the upper floors of the building, striking and seriously injuring a worker on the floors below. So we have actual knowledge of the dangerous condition with a strong likelihood that serious harm or death would result and you have an employer basically turning a blind eye and actually admonishing the employees for speaking up. That’s a very good example of what we’re dealing with here with Section 28.

Alan Pierce: I think other courts have described the term as willful and wanton misconduct, or conduct that is quasi criminal in nature, which gives arise to situations where the employer may have actually violated the law. The most common law that deals with workers’ safety is the OSHA regulations and safety rules. What is the effect of OSHA coming in after a serious injury finding there were deficiencies in the safety protocols employed by the employer, give citations to the employer for serious misconduct that cause the injury? Is that conclusive evidence of serious willful misconduct that would support a double compensation claim?

Martin Buzz Schneider: In Massachusetts, an OSHA violation is some evidence of serious and willful misconduct, but it is certainly not issued determinative if we’re dealing with the accident that was being investigated. Certainly, if there’s an OSHA investigation and a violation enacts in it one, and subsequently the same type of injury occurs at some point later after that first injury, that’s really the most dramatic of a Section 28 case where OSHA has identified a serious condition and it’s not corrected.

Alan Pierce: And there could be other violations of law. I know, Buzz, you’ve handled and defended a very interesting, tragic, and in many ways sad case involved a young man; somebody fourteen or fifteen years old. That was the country club case with the golf cart. Give us a little idea of how the facts of that case, a they related to Section 28 and violation of law, was important.

Martin Buzz Schneider: In that case, Alan, that you’re referring to, involved the child labor laws. And in Massachusetts, the violation of a child labor law is really prima facie evidence of a violation of Section 28. And in the case that you’re referring to, a young man unfortunately did not have his driver’s license; I believe he was fifteen and a half years old. He was operating a golf cart and drove the golf cart to a building location where there was an incline and it appeared that the cart was in forward mode instead of reverse and he struck the building and was fatally injured. The case really centered around whether or not a minor could operate a golf cart on a private way and whether that was a violation of the child labor law. So there were many layers to that case but clearly, it sends a signal to employers in Massachusetts. And I’m sure similar jurisdictions have statutory provisions protecting underage workers. And that’s really you have a strict liability standard within Section 28.

Alan Pierce: And I think one of the issues, if I remember correctly, he was allowed to work; presumably he had the proper permits to work at age fifteen. The child labor laws I think spoke about the operation of a motor vehicle and the question is whether the golf cart qualified as a motor vehicle as defined in the statutes. That issue made its way up through the appellate courts, did it not?

Martin Buzz Schneider: It did. In Massachusetts, one of the child labor law subparts indicates that a minor can not operate a motor vehicle of any kind. That was a central issue in our litigation at the appellate level and it was determined that a golf cart was a motor vehicle of any kind, even though it was used on private property. That was really a break from past decisions from our appeals court in S.J.E. that indicated that an ATV vehicle or a snowmobile were not motor vehicles in insurance cases. So they tied the minor using a golf cart and said that the motor vehicle provision would cover that and that would really be a strict liability Section 28 violation.

Alan Pierce: I think this is a good time to take a break. We will be right back after a few words with attorney Martin Schneider. And we’ll finish our discussion regarding double compensation benefits for serious misconduct.

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Alan Pierce: Welcome back to Workers Comp Matters, this is Alan Pierce. I’m here with Martin Schneider, we’re talking about double compensation seriously willful misconduct cases. Buzz and his firm of attorneys have been very adapted defending these claims and these are oftentimes very difficult claims to defend. I can tell you from the perspective of the injured workers’ attorney, they are also difficult because we have a very high burden of proof. We have a very high standard of negligence that we have to prove. Basically intentional misconduct by an employer. Buzz was involved in another recent case that I think illustrates the difficulties and issues in these types of cases. Why don’t you fill us in on that, Buzz?

Martin Buzz Schneider: I think at the beginning of our conversation, we were discussing what types of cases reach the level of serious and wilful misconduct and I’m asked that question quite often. It’s really the “oh my god test” that we’ve all heard in law school, something that really shocks your conscience. An example that I always recall does involve an OSHA investigation. It involved a manufacturing plant and this plant conducted spray booth activities. They were spraying parts and doing this on a regular basis with seven or eight workers. Unfortunately, this manufacturer did not provide static electricity grounded clothing or boots for their workers. And unfortunately, a spark of static electricity ignited in the spray booth and somebody was seriously burnt. An OSHA investigation ensued and it was quite a significant find to the employer for multiple violations involved the spray booth. Fast forward a year later and the violations required the employer to buy static preventable buckets to pour the paint, clothing to prevent static electricity sparks to the workers – which were all purchased and used for about a month or two. And then the employer determined that it slowed the work process down to use the static electricity buckets and the employer clothing was not distributed. And unfortunately, a year later, there was a similar static electricity spark fire and somebody was seriously injured. That’s really a case that illustrates what Section 28 willful want and reckless conduct is with actual knowledge of an employer of a dangerous condition. And really could support – and many of the early cases indicate that – would support a criminal conviction for manslaughter of somebody died.

Alan Pierce: And we all know that we are in business, unfortunately, because accidents happen. If employers and insurers want to control and limit their expense exposure and cost, the easy way isn’t to wait until the accident happens. The best way for everybody involved is to prevent that accident from happening. Unfortunately, accidents do happen, always will happen, they’ll happen as a result of our clients’ own negligence, no negligence, fellow workers negligence or carelessness, as well as the employer. Buzz I want to thank you for sharing your views regarding these types of serious and willful misconduct cases. I think this will lead into another discussion on other aspects of exception to the exclusive remedy rule. So on behalf of Workers Comp Matters and Legal Talk Network, this is Alan Pierce saying thank you. Listen again and go out and make it a day that matters.

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