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Determination of Independent Contractor Status
: The Colorado Supreme Court recently rendered an opinion in ICAO v. Softrock Geological Services
, 12SC501 (Colo. 2014) (nsfop
). The Colorado Supreme Court considered the question of whether an individual was an employee or independent contractor for purposes of the Colorado Employment Securities Act (CESA). Section 8-70-115(1)(b), C.R.S. states that a person is only an independent contractor if the employer can show that (1) the person is free from control and direction in the performance of services and (2) the person is customarily engaged in an independent trade, occupation, profession or business related to the service performed. The second requirement is met by considering the totality of the circumstances rather than be based on a document that lists the 9 factors contained under Section 8-70-115(1)(c), C.R.S.Section 8-70-115(1)(b), C.R.S. states that an employer attempting to show an individual is an independent contractor can do so by showing (1) the person is free from control and direction in the performance of services and (2) the person is customarily engaged in an independent trade, occupation, profession or business related to the service performed. In the alternative, the employer can show a written document signed by both parties that establish limits on the relationship between the parties. The 9 requirements are exactly the same as those contained under the Workers’ Compensation Act:
(A) Require the individual to work exclusively for the person for whom services are performed; except that the individual may choose to work exclusively for such person for a finite period of time specified in the document;
(B) Establish a quality standard for the individual; except that the person may provide plans and specifications regarding the work but cannot oversee the actual work or instruct the individual as to how the work will be performed;
(C) Pay a salary or at an hourly rate instead of at a fixed or contract rate;
(D) Terminate the work of the service provider during the contract period unless such service provider violates the terms of the contract or fails to produce a result that meets the specifications of the contract;
(E) Provide more than minimal training for the individual;
(F) Provide tools or benefits to the individual; except that materials and equipment may be supplied;
(G) Dictate the time of performance; except that a completion schedule and a range of negotiated and mutually agreeable work hours may be established;
(H) Pay the service provider personally instead of making checks payable to the trade or business name of such service provider; and
(I) Combine the business operations of the person for whom service is provided in any way with the business operations of the service provider instead of maintaining all such operations separately and distinctly.
These are relevant factors for the fact finder to consider, but they are not rigid ‘check box’ requirements. The law applicable to the determination whether an individual is an independent contractor is similar in the workers’ compensation system and the unemployment insurance system. ICAO has relied on cases construing the unemployment insurance statutes on multiple occasions while considering independent contractor status. For example, in Abbott v. Sangre De Cristo Hospice, W. C. No. 4-525-702 (2/26/03) the Panel relied on Carpet Exchange and Long View Systems to conclude as a matter of law that one job is insufficient to constitute customary engagement in an independent trade or business. More recently see Allen v. America’s Best Carpet Cleaning Service, W.C. No. 4-776-542 (ICAO 12/1/09).
Occupational Disease Injury: In Western States Fire Protection/API Group and ACE American Insurance v. ICAO and Olsen, W.C. No. 4-891-495 (Colo. App. March 27, 2014) (nsfop), the Colorado Court of Appeals upheld a ruling in favor of Claimant concerning an occupational disease to the back from prolonged exposure to sitting in his work truck. The Claimant had complained of pain in the back due to his truck seat beginning the month after first driving the truck, eventually filing a claim after a particularly long commute. Respondents argued that compensability for an occupational disease due to exposure to the seat was not appropriate because the Claimant had equal exposure to a similar hazard, driving outside of work. Respondents also argued that the Claimant had not demonstrated that the seat was defective. However, the Court of Appeals agreed with the ALJ that the Respondents had not produced any evidence of an equal hazard outside of work which may have contributed to Claimant’s back pain, nor did any authority exist which required the Claimant to prove the seat was defective in order to establish an appropriate mechanism of injury for an occupational disease.
Previous Infractions of Safety Rule Do Not Prove Willful Violation: In Nightingale v. Lowes Home Improvement Warehouse, Inc. (W.C. 4-912-834-01, April 3, 2014) the issue was whether Claimant’s benefits should be reduced for violation of a safety rule; specifically, failure to wear a safety harness. C.R.S. §8-42-112(1) provides for a 50% reduction in benefits if there is a willful violation of a safety rule. The term “willful” denotes deliberate intent. It is respondents’ burden to prove that the violation was willful. However, respondents are not required to present direct evidence concerning a claimant’s state of mind or prove that a claimant had the rule “in mind”. Instead, willfulness may be inferred from evidence that the claimant knew the rule and the prohibited act. Bennett Properties Co. v. Industrial Commission, 165 Colo. 135, 437 P.2d 548 (1968). In this case, the ALJ found that there was no credible evidence showing willfulness, despite the testimony of another employee stating that he saw the Claimant wearing the harness and subsequently seeing the Claimant fall on the floor, no longer wearing the harness. The fact that there was testimony, including from Claimant himself, that he had a previous infraction for violating the same safety rule, did not provide an inference that he had willfully violated the safety rule and had unlatched the safety harness. Respondents, therefore, did not meet their burden and were not permitted to take the safety rule violation offset.
Retroactive Pay Included in AWW: C.R.S. §8-42-102(3) grants an Administrative Law Judge (ALJ) substantial discretion to calculate average weekly wage (AWW) if the statutorily prescribed methods will not “fairly compute” it. Because of this statutory discretion, there can be no interference with an Order unless there has been a clear abuse of that discretion by the ALJ. Pizza Hut v. ICAO, 18 P.3d 867 (Colo. App. 2001). In a recent case, Briseno v. Boise Paper Holdings, LLC (W.C. 4-901-980-01, March 18, 2014) the ALJ held that retroactive pay and retroactive overtime were included in calculating AWW, because the evidence presented by Respondents was not clear as to how those payments fluctuated or why they appeared on wage records. The review panel could not say that there had been an abuse of the discretion or that the ALJ’s opinion was not supported by substantial evidence and therefore allowed the AWW calculation to include the retroactive pay.
Orders Inconsistent with Medical Treatment Guidelines are Permissible: Madrid v. Trinet Group, Inc. (W.C. 4-851-315-03, April 1, 2014) addressed this issue. In Rule 17-(C), “the Division recognizes that reasonable medical practice may include deviations from these Guidelines, as individual cases dictate.” These types of cases refer providers to the preauthorization procedure of Rule 16. Since preauthorization procedure disputes require eventual adjudication through the Office of Administrative Courts, the Court held that it is apparent that an ALJ has some discretion to approve medical treatment which deviates from the Guidelines. Therefore, the Guidelines are not mandatory where there is a reasonable deviation by a provider.
Judge is Not Recusable for Bias Based on Facts and Circumstances of the Case: InMcCormick v. Exempla Healthcare (W.C. 4-594-683-07, April 1, 2014), Respondents asserted that the ALJ formed an improper adverse inference that unconsciously tainted his opinions, and that he erred by re-issuing an Order without addressing the alleged appearance of impropriety. Respondents argued that its due process rights were violated when the ALJ failed to recuse himself after conducting an in camera review of the adjuster file and the employer file on the Claimant. The Court held that an in camera review does not disqualify an ALJ because ALJs and trial court judges routinely conduct in camera reviews of evidence alleged to be protected from discovery by privilege, in order to determine whether such evidence is discoverable. Sheid v. Hewlett Packard, 26 P.2d 396 (Colo. App. 1991). A judge is not recusable for bias that is based on the facts and circumstances of the case, even where the court is exceedingly ill disposed toward a party. Watson v. Cal-Three, LLC, 254 P.3d 1189, 1192 (Colo. App. 2011). The Court held in this matter that the ALJ is not precluded from reviewing the personnel files in camera merely because a PALJ previously ruled that such files were irrelevant. While orders of a Prehearing Administrative Law Judge [PALJ orders are binding per C.R.S. §8-43-207.5(3)], the statute does not confer exclusive jurisdiction to a PALJ to resolve disputes on evidentiary matters. Rather, an ALJ may consider and rule on a party’s request to reconsider a PALJ’s discovery ruling.
Failure to Plead Penalties with Specificity: In Salad v. JBS USA and Zurich American Insurance, W.C. No. 4-886-842 (ICAO, March 27, 2014), the ICAO upheld an ALJ’s Order striking the Claimant’s Application for Hearing endorsing penalties for fraud on the basis that the Claimant failed to plead the penalty with sufficient specificity. The general penalties statute under which Claimant pled penalties, C.R.S. §8-43-304(4), requires that a party “shall state with specificity” the grounds for the penalty. Here, the Claimant did not identify the specific statute, rule, or order which was allegedly violated by the error or Respondents, other than an insufficiently supported general penalty. Additionally, the Claimant did not identify any material facts in dispute in his response to Respondents’ Motion for Summary Judgment.
Placement of Burden of Proof for Overcoming the DIME: The recent ICAO decisionSimpson v. Safeworks and Insurance Company of the State of Pennsylvania, W.C. No. 4-877-091 (ICAO, January 23, 2014), involved determination of which party bore the burden of proof to overcome the DIME where the DIME physician’s opinion concerning MMI was originally conflicting. The Claimant was originally placed at MMI by the authorized treating physician and underwent a DIME, which agreed with the original date of MMI. However, additional medical opinion caused the DIME to waver on MMI during a subsequent deposition and the DIME physician thereafter issued an addendum opinion definitively opining that the Claimant was not at MMI. The ALJ determined that the addendum DIME opinion was the ultimate medical opinion on MMI and placed the burden upon Respondents to overcome the DIME at hearing, which they failed to do. ICAO upheld the ALJ’s opinion, stating that it was established law that it is within the ALJ’s authority to determine the DIME’s true opinion where prior conflicting opinion exists. Therefore, the Court held that placing the burden to overcome the DIME by clear and convincing evidence upon Respondents was appropriate because the DIME’s ultimate conclusion was judicially determined to be against Respondents.
Causation and Overcoming the DIME: The ALJ’s opinion that Respondents successfully overcame the DIME on the issue of causation of permanent impairment was upheld in Solis v. Schwartz’s Krautburger and Kitchen and Truck Insurance Exchange, W.C. No. 4-800-423 and 4-795-922 (ICAO, March 18, 2014). The Claimant had two admitted work injuries, one to her right hand and a subsequent injury to her low back and neck. The Claimant underwent unauthorized lumbar surgery. After extensive medical treatment and involvement of the DIME, the Claimant was eventually placed at MMI and given permanent impairment by the DIME for both the right hand and back condition. However, Respondents introduced medical evidence at hearing indicating that the back injury was preexisting and unrelated to the work injury and therefore the rating for specific disorders of the spine given by the DIME for lumbar impairment was inappropriate. The ALJ agreed and held that Respondents had overcome the DIME as to impairment of the back by clear and convincing evidence. Upon appeal, the Claimant contended that a rating for specific disorders of the spine was not precluded simply because the lumbar surgery was unauthorized. The ICAO upheld the ALJ’s opinion, however, noting that the medical guidelines require that causation be determined for purposes of rendering an impairment rating, and that a rating for specific disorders of the spine must be supported by a compensable injury. Here, the Respondents had established that the spinal condition which necessitated surgery was unrelated to the work injury and therefore any consequent permanent impairment was likewise unrelated.
Statute of Limitations to Bring Claim: In Taylor v. Summit County, W.C. No. 4-897-476 (ICAO, March 18, 2014), ICAO upheld the ALJ’s Order finding that the Claimant was not time-barred by the statute of limitations to file her workers’ claim for compensation (WCC). Under C.R.S. §8-43-103(2), a claimant who sustains a work-related injury must file a WCC within two years of the date of injury, excepting certain circumstances. In this instance, the Claimant sustained an injury to her hip in January of 2010 but remained on full duty, later complaining of continued pain in the hip and seeking additional treatment in January of 2011, when she received work restrictions. The Claimant did not file a WCC until September of 2012. The ICAO held that the criteria under City of Boulder v. Payne, 426 P.2d 194 (Colo. 1967), applied in this instance. The Colorado Supreme Court held in Boulder that the statute of limitations does not begin to run until the claimant, as a reasonable person, knows or should have known the nature, seriousness, and “probable compensable character” of the injury, where “compensable” means entitlement to payment of compensation benefits. Applying these criteria, the ICAO held that the statute did not begin to run until the Claimant received work restrictions in January of 2011, thus placing her within the statute of limitations at the time she filed her WCC.
Compensability: The ICAO upheld the ALJ’s Order denying workers’ compensation benefits to Claimant in Wilcox v. JHCI Holdings and Zurich American Insurance Company, W.C. No. 4-884-343 (ICAO, January 23, 2014). The Claimant indicated that she sustained a work-related injury to her right shoulder on February 17, 2012 after closing the door to a trailer. However, evidence at hearing indicated that the Claimant had a preexisting condition which had previously been surgically addressed. Additionally, the Claimant’s testimony revealed numerous inconsistencies in reporting of the injury to both the employer and her providers. ICAO upheld the ALJ’s opinion on the basis that it was supported by substantial evidence in the record.
Issue Preclusion Does Not Apply to Different Burden of Proof: This issue was addressed in Madrid v. Trinet Group, Inc. (W.C. 4-851-315-03, April 1, 2014). The Court of Appeals has held that issue preclusion does not apply where the burdens of proof differ. In this case, the DIME physician’s determination regarding the existence of a compensable injury had no standing in the face of a prior decision on this issue, because they were both subject to a preponderance of evidence standard. However, the DIME physician’s opinion concerning a particular component of Claimant’s impairment must be overcome by clear and convincing evidence. Qual-Med v. ICAO, 961 P.2d 590 (Colo. App. 1998). Therefore, this issue was not precluded from being reviewed.
Attorney’s Fees for Endorsing Unripe Issues May Only be Assessed on Represented Parties: C.R.S. §8-43-211(2)(d) allows a party to be awarded attorney’s fees for the endorsement of unripe issues by another party. However, the Court held in Barrera v. ABM Industries (W.C. 4-865-048-03, March 28, 2014) that the awarding of attorney’s fees may only be assessed to represented parties, not pro se claimants.