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Last Reviewed / Modified On 27 Apr 2017.

Texas Workers' Compensation Claim Handling Guidelines

Contents [hide]

DEFINITIONS

Employer

The employer is an individual or corporate entity that makes a contract of hire, employs one or more employees and has workers’ compensation insurance coverage. Tex. Lab. Code § 401.011(18). A private employer in Texas is not required to obtain workers’ compensation coverage. Public employers, like municipalities, counties, state agencies and public school districts, must obtain workers’ compensation coverage. Tex. Lab. Code § 406.002. A few private employers are required to have workers’ compensation insurance coverage. Independent contractors, contractors, and other subcontractors as well as their employees working on a building or construction project for a governmental entity must have workers’ compensation. Tex. Lab. Code § 406.096.

Generally, all employees of an employer with workers’ compensation coverage are covered by the workers’ compensation policy. One exception to uniform coverage is sole proprietors, partners, or corporate executive officers of a business may elect to specifically exclude these employees from their workers’ compensation coverage. Tex. Lab. Code § 406.096.

Exclusive Remedy Provision

Recovery of workers’ compensation benefits is the exclusive remedy of an employee covered by workers’ compensation insurance coverage or a legal beneficiary against the employer or agent of the employer for work-related injuries. A covered employee may not sue an employer for negligence. An exception to the exclusive remedy provision is a death claim of an employee, where the spouse and children of the decedent may sue the employer for gross negligence and exemplary damages, in addition to possibly receiving workers’ compensation death benefits. Tex. Lab. Code § 408.001. Another exception to the exclusive remedy doctrine is an intentional injury to the employee by the employer.

Borrowed Servant

The borrowed servant doctrine allows an employee of one employer to become the employee of another employer, or special employer, when the special employer exercises a right of control over the manner in which the employee performs the job. Exxon Corp. v. Perez, 842 S.W. 2d 629 (Texas 1992). The written agreement between two employers is not necessarily conclusive. A number of factors will be evaluated when considering the right of control, like the nature of the business, control of the details of the work, supply of tools, the duration of the employment, withholding of payroll taxes, and method of payment to the employee (by the job or by the hour).

Staff Leasing Act

The Staff Leasing Act provides that both the licensed, staff leasing employer (license holder) and the client company are co-employers. If the license holder elects to provide workers’ compensation insurance coverage for its employees then both the license holder and the client company are protected by the exclusive remedy provision. Tex. Lab. Code § 91.001.

Temporary Service Company

A temporary employee company provides employees to client companies for special assignments. The Staff Leasing Act does not apply to temporary employees. Thus, the clear, expected result, like with the Staff Leasing Act, where the coverage status of the license holder will determine the workers’ compensation protection of the client customer, does not apply to temporary employees. With temporary employees, the right of control analysis will be applied and the employer may be both the temporary company and the client company. Wingfoot Enterprises v. Alvarado, 111 S.W.3d 134 (Tex. 2003); Garza v. Exel Logistics, Inc., 161 S.W.3d 473 (Tex. 2005).

OCIP

In Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433 (Tex. 2009), the Texas Supreme Court found that the premises owner that provided workers’ compensation with an owner-controlled insurance program (OCIP) was protected by the exclusive remedy provision as well as all of the contractors who share with the coverage at the job site. So, an employee of a contractor or sub-contractor covered by the OCIP could not sue a premise owner or any other subcontractor for negligence. Workers’ compensation benefits would be the exclusive remedy for any injury.

Non-Subscriber Employers

Texas law does not require a private employer to obtain workers’ compensation insurance for its employees. An employer who elects to not obtain workers’ compensation insurance for its employees is called a non-subscriber. Many employers in Texas are non-subscribers. Some of these employers elect to obtain an occupational injury plan to provide medical benefits and wage replacement for work related injuries. ERISA preempts any state regulations and “bad faith” claims arising from these plans. A non-subscriber employer is not protected by the exclusive remedy provision. The injured employee of a non-subscriber may sue the employer for negligence, whether the employer provides occupational injury benefits or not. The employer may not assert a defense for contributory negligence, assumption of the risk or negligence caused by a fellow employee. The employer may assert defenses of intoxication and intentional injury. Tex. Lab. Code § 406.033. Many employers have enforceable agreements requiring the use of arbitration to adjudicate the negligence claims of injured employees.

Employee

“Employee” means a person in the service of another under a contract of hire, whether express or implied, or oral or written. “Employee” includes:

(1) an employee employed in the usual course and scope of the employer’s business who is directed by the employer temporarily to perform services outside the usual course and scope of the employer’s business; and

(2) a person, other than an independent contractor or the employee of an independent contractor, who is engaged in construction, remodeling, or repair work for the employer at the premises of the employer.

“Employee” does not include:

(1) a master of or a seaman on a vessel engaged in interstate or foreign commerce; or

(2) a person whose employment is not in the usual course and scope of the employer’s business.

Tex. Lab. Code § 401.012. Other persons excluded as an employee by the Texas Workers’ Compensation Act are domestic servants, farm and ranch employees, and federal employees. Tex. Lab. Code § 406.091.

Independent Contractors

An independent contractor is not the employee of the person or entity that hired the independent contractor. An independent contractor contracts with an employer to do a particular piece of work. “Independent contractor” means a person who contracts to perform work or provide a service for the benefit of another and who ordinarily:

(A) acts as the employer of any employee of the contractor by paying wages, directing activities, and performing other similar functions characteristic of an employer-employee relationship;

(B) is free to determine the manner in which the work or service is performed, including the hours of labor of or method of payment to any employee;

(C) is required to furnish or to have employees, if any, furnish necessary tools, supplies, or materials to perform the work or service; and

(D) possesses the skills required for the specific work or service.

Tex. Lab. Code § 406.121(2).

An "owner operator" is a specific type of independent contractor per the Texas Workers”’ Compensation Act. An “owner operator” is a person who provides transportation services under contract for a motor carrier. Tex. Lab. Code § 406.121(4). An owner operator and the owner operator's employees are not employees of a motor carrier for the purposes ’f this subtitle if the owner operator has entered into a written agreement with the motor carrier that evidences a relationship in which the owner operator assumes the responsibilities of an employer for the performance of work. Tex. Lab. Code § 406.122.

JURISDICTION

As a general rule, the Texas Workers’ Compensation Act applies to all injuries which occur within the State of Texas regardless of the contract for hire. For an injury that occurred outside of Texas, the injured worker may seek Texas workers’ compensation benefits if (1) the injury would be compensable if it had occurred in Texas; and (2) the employee has significant contacts with this state or the employment is principally located in Texas. Tex. Lab. Code § 406.071. An employee has significant contacts with Texas if the employee was hired or recruited in Texas and the employee: (1) was injured not later than one year after the date of hire; or (2) has worked in Texas for at least 10 working days during the 12 months preceding the date of injury. The principal location of a person’s employment is where: (1) the employer has a place of business at or from which the employee regularly works; or (2) the employee resides and spends a substantial part of the employee’s working time. Tex. Lab. Code § 406.072. An employer and employee may agree to the principal location of a person’s employment if the employee’s work requires the employee to regularly travel to other states. Tex. Lab. Code § 406.073. However, an agreement may not be reached on significant contacts. Thus, an employee recruited in Texas, hired in another state, who works as little as 10 days per year in Texas, may seek workers’ compensation benefits in Texas for an injury occurring in another state. Appeals Panel Decision No. 130073.

REPORTING REQUIREMENTS

The injured worker or a person acting on behalf of the injured worker is obligated to report an injury within the course and scope of employment to a manager or supervisor of the employer not later than 30 days of the injury. If the injury is an occupational disease, then the report must be not later than 30 days of when the injured worker knew or should have known of the injury. Tex. Lab. Code § 409.001.

The Texas Workers’ Compensation Act provides for exceptions to the reporting requirement. The exceptions are: the employer had actual notice of the injury; the employee has good cause for failing to report the injury; or the workers’ compensation carrier accepts the liability of the claim. Tex. Lab. Code § 409.002. The notice to the employer must be timely and adequate. Reporting the injury to the employer within the 30-day period is called "timely notice." The injured worker has the burden to prove that timely notice of a work related injury was given to the employer. Appeals Panel Decision No. 991691. Whether timely and adequate notice of a work related injury was given to the employer present questions of fact for a Hearing Officer or trier of fact to decide. Appeals Panel Decision No. 012669. When an injured worker presents evidence that a supervisor was timely notified of the claimed injury within 30 days after the date of the injury, but the supervisor offers testimony that the notice was not timely given, whether the notice was timely becomes a question of fact for the HO to resolve. Appeals Panel Decision No. 94751.

The test for determining whether or not an injured worker had good cause for failing to timely report an injury is that of ordinary prudence; that is, whether the injured worker acted as an ordinarily prudent person would have under the same or similar circumstances. Good cause must continue until the time notice of the injury is given. Appeals Panel Decision No. 950428. Reasons or excuses commonly recognized as "good cause" include the injured worker's belief that the injury is trivial, mistake as to the cause of the injury, reliance on the representations of the employer or insurance carrier, being under age, and physical or mental incapacity. Advice of third persons and ignorance of the law are frequently held not to constitute "good cause." Appeals Panel Decision No. 010852. The determination as to whether or not good cause exists is a question of fact for the HO to resolve. Appeals Panel Decision No. 001376.

Generally, an injured worker has one year to file a claim for compensation with the Division unless good cause exists or the employer or IC does not contest the claim. Tex. Lab. Code § 409.003; Tex. Lab. Code § 409.004; 28 TEX. ADMIN. CODE §122.2; 28 TEX. ADMIN. CODE § 122.100. Generally, in a death benefits case, legal beneficiaries have one year to file a claim for death benefits unless good cause exists or the legal beneficiary is a minor or legally incompetent. Tex. Lab. Code § 409.007; 28 TEX. ADMIN. CODE § 122.100.

If an injured worker or legal beneficiary fails to file a claim within one year and no exception applies, the employer and insurance carrier will be relieved from liability. Tex. Lab. Code § 409.004; Tex. Lab. Code § 409.007. 28 TEX. ADMIN. CODE § 122.2(c) lists the requirements to be included in a claim for a specific injury or an occupational disease, while 28 TEX. ADMIN. CODE § 122.100 (b) and (c) list requirements for a death benefits claim. Information provided in a claim may be amended at any time until the Division has disposed of the claim. Appeals Panel Decision No. 950881.

COMPENSABILITY

General Compensability

Generally, an insurance carrier is liable for compensation of an injured employee, regardless of fault or another’s negligence, if the injury arises out of an in the course and scope of employment. Tex. Lab. Code § 406.031. “Course and scope of employment” is defined as an activity of any kind or character that has to do with an originated in the word, business, trade or profession of the employer and that is performed by an employee while engaged in or about the furtherance of the affairs or business of the employer. Tex. Lab. Code § 401.011(12). The injured employee has the burden of proof to show that he sustained a compensable injury in the course and scope of his employment. See Appeals Panel Decision Nos. 013018 and 090554.

An “injury” is defined as damage or harm to the physical structure of the body and a disease or infection naturally resulting from the damage or harm, and includes an occupational disease. Tex. Lab. Code § 401.011(26). The injured worker’s employment need on be a cause of the injury, even if other causes of the injury also exist. Tex. Workers’ Comp. Ins. Fund v. Simon, 980 S.W.2d 730, 736 (Tex.App.―San Antonio 1998, no pet.).

Types of Injuries

Repetitive trauma injuries

A repetitive trauma injury is defined as “damage or harm to the physical structure of the body occurring as the result of repetitious, physically traumatic activities that occur over time and arise out of and in the course and scope of employment.” Tex. Lab. Code § 401.011(36). To recover for an occupational disease of this type, one must not only prove that repetitious, physically traumatic activities occurred on the job, but also must prove that a causal link existed between these activities on the job and one's incapacity; that is, the disease must be inherent in that type of employment as compared with employment generally. See Appeals Panel Decision Nos. 010147 and 021416, citing Davis v. Employer's Insurance of Wausau, 694 S.W.2d 105, 107 (Tex.App.—Houston [14th Dist.] 1985, writ ref'd n.r.e.). Proof of causation must be established to a reasonable medical probability by expert medical evidence where the subject is so complex that the fact-finder lacks the ability from common knowledge to find a causation connection. See Appeals Panel Decision No. 110108.

Appeals Panel Decision No. 070284-s determined that ordinary walking, standing, or sitting do not generally establish a repetitive trauma injury. For example, an uncomfortable chair does not validate the alleged repetitive trauma injury. However, accidental injuries sustained as a result of walking or standing, such as a specific incident, are generally compensable. To establish a repetitive trauma injury, evidence should show the duration, frequency and nature of the alleged activities. See Appeals Panel Decision No. 012844.

Heart attacks

A heart attack is a compensable injury only if: (1) the attack can be identified as occurring at a definite time and place, and caused by a specific event occurring in the course and scope of employment; (2) the preponderance of the medical evidence indicates the employee’s work rather than the natural progression of a pre-existing heart condition or disease was a substantial contributing factor; and (3) the attack was not triggered solely by emotional or mental stress factors, unless it was precipitated by a sudden stimulus. Tex. Lab. Code § 408.008. Medical evidence is required to determine whether the employee’s work was a substantial contributing factor to a heart attack injury. Poplin v. Amerisure Ins. Co., No. 01-13-00102-CV, 2013 WL 5885101, *6 (Tex.App.―Houston [1st Dist.] October 31, 2013, no pet.). If more than one contributing factor for a heart attack exists, the pre-existing condition must be compared to the employee’s work activities and the work must be the greater factor. Transcontinental Ins. Co. v. Smith, 135 S.W.3d 831 (Tex.App.―San Antonio 2004, no pet.).

Mental Trauma Injuries

Mental trauma injuries may be compensable depending on their cause. Tex. Lab. Code § 408.006(a). The Texas Supreme Court has interpreted the definition of the “physical structure of the body” to include the entire body, including interdependent functions such as chemical and mechanical processes. See Bailey v. American General Ins. Co., 279 S.W.2d 315 (Tex. 1955). However, a mental or emotional injury that arises principally from a legitimate personnel action, including a transfer, promotion, demotion or termination, is not a compensable injury. Tex. Lab. Code § 408.006(b). Psychological reactions to the circumstances of the employee’s injury or workers’ compensation claim are not compensable. Tex. Employer’s Ins. Ass’n v. Wilson, 522 S.W.2d 192 (Tex. 1975). Depression that results from the stress of the workers’ compensation system or financial difficulties is not compensable. See Appeals Panel Decision Nos. 030056, 032953. A mental trauma injury cannot be claimed as a repetitive activity causing an occupational disease, but rather, must be tied to a definite time, place and cause. See Appeals Panel Decision Nos. 94785 and 060176. Conditions such as depression or psychological disorders are not compensable if they relate to events which occurred after the compensable injury. See Appeals Panel Decision Nos. 992149 and 030056.

Ordinary Diseases of Life

Ordinary diseases of life are not compensable injures based on the rationale that the employer should not be responsible for conditions which are the result of the claimant’s exposure to conditions which affect the general population and do not have their origin in some specific work-related exposure or harm. The defense is based on the statutory definition of occupational disease which can be found at Tex. Lab. Code § 401.011(34). The definition of occupational disease necessarily excludes “an ordinary disease of life to which the general public is exposed outside of employment, unless that disease is an incident to a compensable injury or occupational disease.” This exclusion of ordinary disease of life is necessary to prevent a carrier from being liable for all conditions which an employee may contract while employed.

A successful defense of ordinary disease of life will normally focus on the fact that there is a causal link between the activity on the job and the resulting condition and that the condition is inherent in that particular type of employment as compared with employment generally. The employee is normally required to establish the causal link by reasonable medical probability, so a successful defense must likewise almost always be based on medical evidence. Proof of causation must be established to a reasonable medical probability by expert medical evidence where the subject is so complex that the fact-finder lacks the ability from common knowledge to find a causation connection. See Appeals Panel Decision No. 110108. Neck and back problems resulting from repetitive driving, sitting, bending or riding are normally placed in the category of ordinary diseases of life. See Appeals Panel Decision No. 950071. Excessive amounts of walking are typically not compensable unless a specific incidence of injury can be pinpointed. If the risk was one that the employee would have encountered irrespective of her employment, the resulting injury is likely not compensable. Appeals Panel Decision No. 030033.

EXCLUSIONS AND DEFENSES

The Texas Workers’ Compensation Act and corresponding Texas Department of Insurance - Division of Workers’ Compensation (DWC) Rules provide the foundation for each of the possible defenses in a workers’ compensation matter. Some of these defenses are defined by the Act and Rules, while others have their origins in certain sections of the Acts or Rules while being fully defined by decisions of the DWC Appeals Panel and prior Texas workers’ compensation case law. All defenses, including those found at Tex. Lab. Code § 406.032, should be specifically identified by the carrier in any denial of the workers’ compensation claim, and should be raised as a separate issued to be determined by the Hearing Officer at any Contested Case Hearing. Forms and notices the carrier must complete and file to dispute compensability, medical conditions, and indemnity benefits may be found on the DWC website under the tab for “Resources.” The requirements for the content of a denial of benefits are found at Tex. Lab. Code § 409.022 28 Texas Administrative Code Sections 124.2 and 124.3 .

Burden of Proof

The insurance carrier bears the burden of proving that any statutory exception to a compensable injury applies. When sufficient evidence of an exception is raised, the burden then shifts back to the employee to prove the exception does not apply. Id. The statutory exceptions include an employee injured in a state of intoxication, an employee willfully attempting to injure himself or unlawfully attempting to injury another, an employee injured by a purely personal reason by a third person, voluntary participation in an off-duty activity (with exceptions), an injury arising from an act of God, or an employee injured by horseplay. Tex. Lab. Code § 406.032. See, however, the shifting presumptions with regard to evidence of an injured employee’s intoxication described below. The defenses to compensability must be raised by the carrier at the administrative level, or otherwise the defenses are waived. See ESIS, Inc. v. Johnson, 908 S.W.2d 554 (Tex. App. – Fort Worth 1995, writ denied) (carrier deemed to have waived intoxication defense); see Appeals Panel Decision No. 962472 (carrier failed to raise the personal animosity exception at the Contested Case Hearing).

Deadlines

If the carrier intends to deny the compensability of a claim, the claim should be denied by the 15th day after the carrier receives notice of the claim. Tex. Lab. Code § 409.021; 28 TEX. ADMIN. CODE §124.3. The carrier may still deny compensability of the claim until the 60th day after receiving notice of the claim, but must initiate payment of benefits after the 15th day if the claim is not denied at that time. Id. Once the dispute of compensability is filed with the DWC, the carrier is not liable for further benefits until a determination has been made by the DWC finding the injury compensable. Failure to pay benefits and to dispute the claim within 15 days constitutes an administrative violation. Tex. Lab. Code § 409.021(a-1 and Tex. Lab. Code § 409.021(e). Failure to dispute the claim on or before the 60th day after the carrier receives notice of the claim is a waiver by the carrier of any dispute of compensability. Tex. Lab. Code § 409.021(c). The exception to this waiver rule is if the carrier can prove newly discovered evidence was found which could not reasonably have been discovered earlier, which is a high burden of proof. Tex. Lab. Code § 409.021(d); see Appeals Panel Decision No. 002920 (requiring a showing of due diligence in obtaining the new evidence and due diligence in contesting compensability once new evidence was discovered). A carrier seeking to rely on the newly-discovered evidence rule to deny compensability after 60 days is required to continue paying all benefits until the DWC Rules that the exception does apply. 28 TEX. ADMIN. CODE §124.3(c)(2). After the 60-day deadline, the carrier may still narrowly assert that there was no injury at all (as opposed to asserting the lack of a compensable injury). See Cont’l Cas. Ins. Co. v. Williamson, 971 S.W.2d 108 (Tex. App.―Tyler 1998, no pet.); see Zurich American Ins. Co. v. Gill, 173 S.W.3d 878 (Tex.App.―Fort Worth 2005, pet. denied). Furthermore, any dispute regarding coverage for the claim does not fall within this statutory deadline because the deadline only covers disputes of compensability, not coverage. Tex. Lab. Code § 409.021(c).

A carrier cannot waive the right to dispute the extent of the compensable injury. State Office of Risk Mgmt. v. Lawton, 295 S.W.3d 646 (Tex. 2009). Once a compensable injury has been accepted, the carrier may deny that the compensable injury extends to or includes a specific diagnosis or medical condition even after 60 days from notice of the claim.

The employer may contest the compensability of an employee’s injury if the carrier accepts liability for the payment of benefits. Tex. Lab. Code § 409.011(b)(4); see Appeals Panel Decision No. 032473. An employer does not have a deadline to contest compensability of a claim, but must use reasonable diligence in its investigation.

Although the statutory deadline for the carrier to deny compensability of an injury runs from the date that written notice was received of the claim, the determination of “written notice” has been liberalized by the DWC Rules. Any communication, even unwritten, which fairly informs the carrier of the employee’s name, date of injury, employer, and information of a work-related injury would trigger the carrier’s obligation to create a written record, and thus start the clock for any denial. 28 TEX. ADMIN. CODE §124.1(a) and (d); see Appeals Panel Decision No. 032668.

Outside Course and Scope of Employment

       

If the injury is sustained outside the course and scope of employment, by definition the injury is not compensable. Tex. Lab. Code § 406.031. The DWC relies upon precedent set by their Appeals Panel for interpretation of the doctrines and application of this definition. Several common examples are set forth below.

Travel

The definition of “course and scope of employment” expressly excludes transportation to and from the place of employment, unless it is part of the contract of employment or paid by the employer, the employer controls the means of transportation, or the employee is directed to go from one place to another in his/her employment. Tex. Lab. Code § 401.011(12)(A). Travel to and from work is generally not compensable. See Leordeanu v. American Protection Ins. Co., 330 S.W.3d 239 (Tex. 2010). Even if the employee is travelling to further the affairs of his/her employer, the travel is outside the course and scope of employment if the travel also furthers personal affairs, unless the travel would have occurred without the personal affairs or the travel would not have occurred without the business affairs. Tex. Lab. Code § 401.011(12)(B).

If the employer’s work requires that an employee travel away from the usual premises, the employee is considered to be in the course and scope of her employment from the time the employee leaves the employer’s premises until she returns, per the continuous coverage doctrine. See Appeals Panel Decision No. 121951. The continuous coverage theory was detailed by the Appeals Panel in Appeal No. 950973. The employee in that case was out of town overnight for business but traveled to a third city for dinner and was injured during that trip. The Appeals Panel noted that if the employee had been injured on his way to a nearby restaurant in the overnight city, that he would have sustained a compensable injury under the continuous coverage theory. In this case, the Appeals Panel focused on the distance involved and the aspect of personal pleasure which took the case out of the continuous coverage exception. The Appeals Panel further noted in Appeals Panel Decision No. 100495 that injuries sustained during “minimal deviations” from the course and scope of employment are not compensable when off the premises of the employer.

Special Mission

Despite the statutory language excluding injuries during travel outside the course and scope of employment, the Appeals Panel has carved an exception for travel on special missions for the employer. If the employee’s travel is for the benefit of the employer, an injury may be compensable. An employee killed in an accident which arose while he was driving a customer’s car between home and work for the employer’s benefit of diagnosing a problem with the car was compensable. An employee who died in an accident while in a company car talking on a cell phone about company business also sustained a compensable injury. See Appeals Panel Decision No. 031900-s.

Deviation from Course and Scope

An injured employee who was outside the course and scope of his employment would not have a compensable injury, but a factual analysis must first ensure if the employee simply deviated from an activity that was otherwise within the course and scope of his employment at the time of his injury. An injury would not normally be compensable if it occurred after the employee was terminated, but if the terminated employee was still acting in furtherance of the employer’s interest at the time of the injury, he may still be entitled to compensation. Appeals Panel Decision No. 000538. A terminated employee who was injured when he tripped after returning to the building to use the rest room, however, was not within the course and scope of his employment. The Appeals Panel has denied a claim for food poisoning on an out-of-town business trip because the employee was not exposed to any greater risk than any other member of the public, and there was no casual connection between the condition and the employment. Appeals Panel Decision No. 94961.

Idiopathic Injuries

Cases involving idiopathic origins were discussed in Appeals Panel Decision No. 051610-s. The employee sustained a back injury during a sneeze while driving a fork lift. The Appeals Panel denied compensability based on the fact that no instrumentality of the employer was involved and that nothing at the work site contributed to the injury. On the other hand, the employee in Appeal No. 051610-s was found to have sustained a compensable injury when her idiopathic fall resulted in contact with the floor. The Appeals Panel brushed aside the carrier’s argument that an idiopathic fall to the floor should not be compensable because the employer’s floor is not a hazard peculiar to employment. Instead, the Panel made the broad statement that a fall which is caused by an unexplained reason and results in the claimant striking the floor is necessarily compensable because the floor is an instrumentality of the employer.

Personal Comfort and Convenience Doctrine

The personal comfort and convenience doctrine is normally applied to issues such as thirst, hunger, smoking etc., which are all activities involving a brief personal need. Injuries during such tasks are usually compensable depending upon the facts. In Appeal No. 960846, the Appeals Panel limited the personal comfort and convenience doctrine when the employee is assisting others. An on-the-clock employee had traveled to the employer’s parking lot to assist a friend in jump-starting his car, at which time he fell and received a fatal blow to the head. The Appeals Panel rendered a decision that the death was not compensable. The Appeals Panel held that when an employee uses his break to attend to personal business chores or errands, even with the permission of the employer, there is a likely deviation from employment. The Appeals Panel stated that this case involved a purely personal mission which was not associated with the employee’s employment.

In Appeal Panel Decision No. 961113, the Appeals Panel further expounded on the personal comfort and convenience doctrine by holding that an employee who broke a tooth while eating candy from an office candy bowl was probably not compensably injured because of a pre-existing tooth condition. Without the presence of the pre-existing tooth condition, the Appeals Panel considered the tooth injury compensable. Injuries during an on-site lunch may be compensable under the personal comfort and convenience doctrine, while travel off premises for lunch normally causes those lunches (and the corresponding travel) out of the course and scope of employment.

Lack of Injury

Likewise, if the employee does not actually sustain damage or harm to the physical structure of his body, no injury has occurred. Tex. Lab. Code § 401.011(26). Pain alone is not a compensable injury. Nat’l Union Fire Ins. Co. of Pittsburgh v. Janes, 687 S.W.2d 822 (Tex.App.―El Paso 1985, writ ref’d n.r.e.); see Appeals Panel Decision No. 92058. The carrier may therefore assert that the claimant has no objective or clinical indication of physical harm or damage to her body. See Appeals Panel Decision No. 032608.

Intoxication

The intoxication defense is based on Tex. Lab. Code § 406.032(1)(A) of the Texas Workers’ Compensation Act which holds that a carrier is not liable if the injury occurred while an employee was in a state of intoxication. It is of significance that a separate causation requirement is not present in this section of the Act. Therefore, an employee’s state of intoxication at the time of injury is an absolute defense regardless of whether the intoxication was a producing cause of the injury.

Intoxication is defined to include an alcohol concentration qualifying as criminally intoxicated, or not having the normal use of mental or physical faculties resulting from the voluntary introduction into the body of prohibited substances (including alcohol, controlled substances, drugs, glue or paint). Tex. Lab. Code § 401.013(a) . Prescription medications and substances inhaled or absorbed incidental to the employee’s work are excluded. Tex. Lab. Code § 401.013(b) . If a blood test or urinalysis exposes the prohibited substances, it raises a rebuttable presumption that the person is intoxicated and does not have the normal use of her mental or physical faculties. Tex. Lab. Code § 401.013(c) . If the employee tests at or above the legal limit for alcohol concentration at the time of the claimed injury, the employee is intoxicated as a matter of law (currently 0.08 g/ml). See Appeals Panel Decision No. 042113. The employee can still try to contest the accuracy of the test or the impact of other factors or medical conditions on the test results. See Appeals Panel Decision Nos. 022407 and 011341. Drug intoxication cases are determined exclusively using an examination of whether the employee has lost the normal use of his or her faculties. See Appeals Panel Decision No. 91006.

Probative evidence that an injury occurred while the employee was intoxicated rebuts the presumption that the employee was sober and within the course and scope of his employment. March v. Victoria Lloyds Ins. Co., 773 S.W.2d 785, 790-791 (Tex. App. – Fort Worth 1989, writ denied). When faced with such evidence, the burden then shifts to the employee to prove that he was not intoxicated at the time of his injury. Id.; see Appeals Panel Decision No. 071008. A positive drug test result is sufficient to show intoxication and shift the burden of proof to the employee to prove she was not intoxicated. Appeals Panel Decision No. 091309. Under the statute, even if a person has less than the requisite criminal level of intoxication, the defense can otherwise be asserted that the employee did not have the normal use of her mental or physical faculties. See Appeals Panel Decision No. 982483. This burden is usually established with the opinion of an expert such as a toxicologist based on positive test results and metabolism rates. Evidence may also be considered from credible witnesses regarding the employee’s mental and physical faculties at the time of the accident. An objective comparison should be made between the employee’s mental and physical faculties at the time of the injury and a non-intoxicated person’s normal use of their faculties, not a comparison with the employee’s normal use of her faculties.

Willful or Unlawful Injury

An employee’s willful attempt to injure himself or to unlawfully injure another raises an intentional injury defense for the carrier. These exceptions to liability are found at Tex. Lab. Code § 406.032(1)(B). These exceptions relieve the carrier of liability for compensation if the claimant is injured as a part of an intentional injury. The investigation and ultimate proof of these intentional injuries necessarily focus heavily on the state of mind of the employee, and thus, the defense is difficult to prove. Proof can be obtained through testimony of co-workers or the employee’s own recorded statement.

An injury sustained during an employee’s willful attempt to injure another person is not in the course and scope of employment, unless the injury results from a dispute arising out of the work or a manner of performing it and the employee’s actions are done in a reasonable attempt to prevent interference with the work or in reasonable self-defense. For cases in which an employee was injured while fighting, the results usually hinge upon whether the employee started the fight or whether personal animosity was involved. See Appeals Panel Decision Nos. 962472 and 992275. A finding of suicide is not compensable because it results from an employee’s willful intent to injure himself.

Personal Injury by Third Person

A carrier may defend against liability for an injury which arose out of an act of a third person intended to injure the employee because of a personal reason which was not directed at the employee as an employee or because of the employment. Tex. Lab. Code § 406.032(1)C). This exception is sometimes known as the personal animosity doctrine. The general rule regarding intentional injuries and assaults is that an injury does not arise out of one’s employment if the assault is not connected with the employment or if the assailant is attacking the victim for personal reasons. See Appeals Panel Decision No. 981553. The personal nature of the attack will be weighed against the employment aspect. If the conditions of employment worsen or are factors contributing to the event that causes the injury, the injury is compensable. Nasser v. Security Insurance Company, 724 S.W.2d 17 (Tex. 1987).

The Appeals Panel determined that an assault and injury which results from a controversy concerning interference with an employee’s work is covered, as well as an injury which results from an assault over the manner in which the work is ultimately done. Appeals Panel Decision No. 92288 distinguished the personal animosity exception which applies to injuries resulting solely from disputes which are transplanted into the work place from the employee’s private life. When conditions of employment are factors in a catastrophic combination, the resulting injury does arise out of the employment. One who injures another solely from anger, hatred, revenge or vindictiveness not growing out of or incident to employment, results in an injury which is to be contributed to the voluntary act of the assailant and not as an incident to the employment. See Appeals Panel Decision No. 952202 (racially motivated attack by a stranger).

Once the carrier raises the personal animosity exception through sufficient evidence, the burden is then shifted to the employee to prove by a preponderance of the evidence that the exception does not apply and that the injury instead arose in the course and scope of employment. The personal animosity exception should be raised by the carrier as a separate issue to be resolved at any Contested Case Hearing, or otherwise, it may be waived. See Appeals Panel Decision No. 962472.

Voluntary, Off-Duty Activity

“An insurance carrier is not liable for compensation if: (1) the injury…(D) arose out of voluntary participation in an off-duty recreational, social, or athletic activity that did not constitute part of the employee’s work-related duties, unless the activity is a reasonable expectancy of or is expressly or impliedly required by the employment.” Tex. Lab. Code § 406.032(1)D). This statutory defense is based on the rationale that an employer should not be liable for activities which are only remotely concerned with the affairs of the employer. The key factor in determining whether an injury which occurred while participating in an off-duty recreational, social or athletic activity is compensable is the nexus with the employer’s business. Same or similar activities may produce different results in different cases based on which affairs of the employer, if any, are being advanced by the employee’s participation in the activities. Because of this factor, the cases seem to be extremely fact specific and guiding principles are difficult to generalize from these cases.

Even if the employer may require a state of physical fitness, an injury during participation in a fitness program which the employee has chosen will not generally be compensable. The Appeals Panel has found injuries to be compensable during athletic activities on the employer’s premises during employer-provided breaks if the employer derives benefit from having the employee stay on the premises during breaks. See Appeals Panel Decision Nos. 93484. Injuries during participation in recreational or social activities must be a reasonable expectancy of employment by the employer, not just by the employee’s subjective expectation. See Appeals Panel Decision No. 981313.

Act of God

The Texas Legislature while drafting the 1989 Act realized that employers should not be held liable for injuries caused by an act of God. This defense is codified at Tex. Lab. Code § 406.032(1)E) and excuses liability for an injury which “arose out of an act of God, unless the employment exposes the employee to a greater risk of injury from an act of God than ordinarily applies to the general public.” When the cause of the injury is an act of God, it is irrelevant whether the employee was furthering the affairs of the employer at the time of the incident. The “general public” includes those who were subject to the same hazard in the general locality where the claimant was working. Appeals Panel Decision No. 950034.

Injuries or death from lightening strikes can be an act of God if the employee was exposed to a greater risk of injury from a lightning strike than the general public. Appeals Panel Decision No. 950020. An employee struck by lightning after he was placed in an open field near metal was deemed compensable, whereas an employee struck by lightning while simply driving his employer’s truck in severe weather was not. Appeals Panel Decision Nos. 950020 and 950034, respectively. The Act of God defense cannot be used to excuse conditions which the employer has an opportunity to correct, such as ice on the employer’s sidewalk. The act of God defense relates to an accident due to natural causes without human intervention which no amount of foresight, pain or care, reasonably exercised could have prevented.

Horseplay

The horseplay defense is intended to protect the carrier from liability for injuries which occur as a result of employees who are behaving in a manner which is completely inconsistent with a proper business environment. The exception is explicit in Tex. Lab. Code § 406.032(2) and holds that a carrier is not liable for compensation if the employee’s horseplay was a producing cause of the injury. It is important to note that the employee’s horseplay must be a producing cause of injury. An employee who is a bystander and is injured by another employee’s horseplay may sustain compensable injuries as a result of the other employee’s horseplay. The horseplay only has to be a producing cause of the injury.

Horseplay can be considered the producing cause of an injury where there was an unbroken chain of events showing: (1) that horseplay was a producing cause; (2) that the horseplay did not cease before the injury; (3) that the injured party did participate in the horseplay; and (4) that the horseplay was an active and not an outside force causing the injury. See Appeals Panel Decision No. 91029. An employee injured while observing horseplay or who was a victim of horseplay, but who was not participating herself, has been deemed a compensable injury. See Appeals Panel Decision Nos. 92536. Speeding while driving is not horseplay per se, but speeding may be considered in any analysis of whether an accident was caused by horseplay. See Appeals Panel Decision No. 94621.

Notice Defenses

The term “notice defenses” entails both a failure to timely notify the employer of the injury and also a failure to timely file the notice of injury and claim for compensation form with the Commission. Both of these defenses are statutorily based defenses. The employee’s duty to notify the employer of an injury within 30 days of when the employee knew or should have known of the injury, and the carrier’s defense based thereon, are contained in Tex. Lab. Code § 409.001 and 409.002, respectively. The employee’s duty to timely file a claim for compensation within one year and the carrier’s defense based thereon are contained in Texas Labor Code Sections 409.003 and 409.004, respectively. Pursuant to the statute, both potential carrier defenses are subject to good cause exceptions. The principles underlying this good cause exception are substantially similar.

For occupational diseases, the date for the start of the thirty (30) day period for giving notice of injury to the employer runs from the date which the claimant knew or should have known that the disease may be related to the employment. An employer must not only be notified of an injury, but must be fully notified of the fact that the injury is work-related. The notice must also indicate a new work-related injury, and not merely complaints of continuing problems from a prior injury. Typically in Texas, the DWC will give a high level of deference to the employee in finding facts to support the employee’s notice of injury to his employer. Employers have been deemed to have received notice of an injury after receiving a doctor’s bill stating an injury occurred at work, and when an employee had even stated he was fine after being hit on the head by an object. The injury can be reported to any person in a supervisory or management position. See Appeals Panel Decision Nos. 94028 and 010226. The DWC resolves separate issues regarding the actual date of injury, whether the employee gave timely notice of the injury to the employer, whether the employee timely filed a claim for compensation, and whether the injury is compensable, therefore all four of these issues can be added at the administrative hearing if applicable.

If the compensability of a claim has been denied within 60 days and the injured employee fails to file a claim for compensation with the DWC within one year, the carrier is relieved of liability. See Tex. Lab. Code § 409.003 and 409.004. However, if the employer failed to file a report of the injury, the one-year limitation for the employee to file a claim is tolled if the employer had been given proper notice of the injury or had knowledge of the injury. See Tex. Lab. Code § 409.008; see Appeals Panel Decision No. 002758. A mailing presumption does not apply, therefore the employee’s claim for compensation must be received during business hours within one year of the date of injury. See Appeals Panel Decision No. 951704. Bad advice from an attorney or ignorance of the law does not excuse this deadline. The employee can avoid the carrier’s notice defenses by establishing good cause for failing to timely provide notice. See Tex. Lab. Code § 409.002 and 409.004. The evaluation for good cause is based on a test of ordinary prudence, and includes excuses such as the employee’s belief the injury was trivial, genuine belief the claim had already been filed, or assurances from the employer or carrier that they were taking care of the claim. See Appeals Panel Decision No. 941246.

Election of Remedies

The carrier maintains a common-law defense against paying compensation for an injured employee if the employee elects to pursue benefits in another jurisdiction, and has received such benefits. See Tex. Mut. Ins. Co. v. Sonic Systems Intern., Inc., 214 S.W.3d 469 (Tex.App.―Houston [14th Dist.] 2006, pet. denied). Likewise, if the injured employee elected to receive benefits under a personal insurance plan rather than receiving workers’ compensation benefits, the employee has elected his benefits elsewhere and waived his workers’ compensation benefits. See Smith v. Home Indem. Co., 683 SW2d 559 (Tex.App.―Fort Worth 1985, no writ). The affirmative defense from the carrier must prove that the employee successfully exercised an informed choice between two or more remedies or rights which are so inconsistent as to constitute manifest injustice if the employee received both remedies. Townsend v. Employer’s Mut. Cas. Co., 817 S.W.2d 401 (Tex.App.―Fort Worth 1991, no writ).

BENEFITS

Calculation of Average Weekly Wage

Average Weekly Wage

Generally, average weekly wage (AWW) is determined by taking the gross wages of an employee that has worked for an employer for at least 13 consecutive weeks prior to injury and dividing the sum of the wages paid immediately preceding the date of injury by 13. Tex. Lab. Code § 408.041(a). If the AWW cannot be determined or if the employee has not worked for the employer for 13 consecutive weeks prior to injury then the employee’s AWW is either the usual wage that the employer pays a similar employee for similar services or if a similar employee does not exist, the usual wage paid in that vicinity for the same or similar services. Tex. Lab. Code § 408.041(b)(1-2). Determination as to whether employees, services, or employment is the same or similar to the injured employee must include consideration of the training and experience of the employees, the nature of the work, and the number of hours normally worked. Tex. Lab. Code § 408.046. The injured employee has the burden of proof to demonstrate what his AWW should be. See Appeals Panel Decision No. 080741.

Post-Injury Earnings

Lost wages are the difference between the employee’s gross AWW and the employee’s gross post-injury earnings (PIE). 28 TEX. ADMIN. CODE § 129.2(b). If the employee’s PIE equals or exceeds the employee’s AWW, the employee has no lost wages and is not entitled to income benefits. See id. PIE shall include all pecuniary wages paid to the employee after the date of injury including light duty wages, employee contributions to benefits such as health insurance, wages offered as part of a bona fide job offer, the value of any full days of accrued sick or annual leave the employee voluntarily uses, the value of partial days of accrued sick or annual leave the employee voluntarily uses, and money paid to the employee by the employer for salary continuation. 28 TEX. ADMIN. CODE § 129.2(c).

Types of Disability Income Benefits

Temporary Income Benefits

An employee is entitled to temporary income benefits (TIBs) if the employee has a disability and has not attained maximum medical improvement (MMI). Tex. Lab. Code § 408.101(a). Disability is defined by the Texas Labor Code as the inability because of a compensable injury to obtain and retain employment at wages equivalent to the preinjury wage. Tex. Lab. Code § 401.011(16). MMI is defined as the earliest date after which, based on reasonable medical probability, further material recovery from or lasting improvement to an injury can no longer reasonably be anticipated, the expiration of 104 weeks from the date on which income benefits began to accrue, or the date determined by the Commissioner of the Division of Workers’ Compensation (DWC) following spinal surgery. Tex. Lab. Code § 401.011(30).

Typically, an injured employee’s TIBs check is equal to 70% of the amount computed by subtracting the employee’s weekly earnings after the injury from the employee’s AWW. Tex. Lab. Code § 408.103(a)(1). The injured employee has the burden to prove that disability exists which means the employee must show that the compensable injury is a cause of his reduced wages. See Appeals Panel Decision No. 032579. The employee does not need to prove that the compensable injury is the sole cause of the reduced wages but rather must only prove that the compensable injury is one of the causes. See Appeals Panel Decision No. 032851. If a dispute regarding disability exists, the period in dispute begins the day after the date of injury and continues through the date of the CCH unless the dates of disability have been previously stipulated.

The Carrier has several defenses to contesting an injured employee’s entitlement to disability. A DWC-73, work status report, which lists non-compensable conditions as the basis for restrictions at work is insufficient to establish disability. See Appeals Panel Decision No. 121927. Employees terminated for good cause may preclude a finding of disability. See Appeals Panel Decision Nos. 032971, 992019, and 991737. Employees cannot have disability for any period of time that they are incarcerated. See Appeals Panel Decision No. 023069. A Carrier may also deem the wages offered in a bona fide offer of employment that matches the requirements of 28 TEX. ADMIN. CODE § 129.6 as PIE which would cease disability. 28 TEX. ADMIN. CODE § 129.6(g). DWC-73s which indicate a full-duty release to return to work without restrictions are also often relied upon by the Carrier to terminate disability.

Impairment Income Benefits

An employee’s entitlement to impairment income benefits (IIBs) begins on the day after the date the employee reaches MMI and ends on the earlier of the date of expiration of a period computed at the rate of three weeks for each percentage point of impairment or the date of the employee’s death. Tex. Lab. Code § 408.121(a). Thus, if an injured employee had an impairment rating of 5%, he would be entitled to 15 weeks of IIBs. The Carrier shall being to pay IIBs not later than the fifth day after the date on which the Carrier receives the doctor’s report certifying MMI and assessing an impairment rating. Tex. Lab. Code § 408.121(b).

If a finding of impairment by a doctor selected by the injured employee is contested by the Carrier then either a designated doctor or a doctor selected by the Carrier must be able to confirm the objective clinical or laboratory finding on which the impairment is based. Tex. Lab. Code § 408.122. Impairment income benefits are based on the impairment ratings assigned by doctors to injured employees. An impairment rating is defined as the percentage of permanent impairment of the whole body resulting from a compensable injury. Tex. Lab. Code § 401.011(24). Doctors in Texas are required to assess an injured employee’s impairment rating using the AMA Guides to the Evaluation of Permanent Impairment 4th Edition for injuries occurring on or after October 15, 2001. 28 Tex. Admin. Code § 130.1(c)(2)(B).

A Carrier or injured employee must dispute a valid impairment rating within 90 days of receiving said impairment rating by verifiable means or else the impairment rating will become final. Tex. Lab. Code § 408.123(e). The Carrier or injured employee may dispute the impairment rating after 90 days if compelling medical evidence exists of a significant error by the certifying doctor in applying the appropriate AMA Guides or in calculating the impairment rating, a clearly mistaken diagnosis or previously undiagnosed medical condition is present, or improper or inadequate treatment of the injury before the date of certification renders the certification invalid. Tex. Lab. Code § 408.123(f).

A doctor may invalidate range of motion findings in consideration of an impairment rating based upon observation, positive Waddell signs, and self-limitation. See Appeals Panel Decision Nos. 090539 and 072011. A doctor that invalidates range of motion findings based upon observation must then assign a 0% impairment rating. See Appeals Panel Decision No. 110219. The failure to rate the entire compensable injury constitutes compelling medical evidence of a significant error by the certifying doctor in calculating impairment rating. See Appeals Panel Decision Nos. 111227 and 120245. Additionally, the Appeals Panel has invalidated an impairment rating in Decision No. 061569-s holding that in calculating an impairment rating for upper extremities, the upper extremity impairments are first combined using the combined values chart found within the AMA Guides before being converted to the whole person impairment rating. See Appeals Panel Decision No. 061569-s.

Supplemental Income Benefits

An injured employee is not entitled to supplemental income benefits (SIBs) until the expiration of the impairment income benefit period. 28 Tex. Admin. Code § 130.102(a). An injured employee must have an impairment rating of 15% or greater, have not returned to work and returned to work earning less than 80% of their AWW, have not elected to commute a portion of their IIBs, and comply with other legal requirements to be eligible to receive SIBs. Tex. Lab. Code § 408.142(a). The Commissioner has adopted compliance standards for SIBs that require each recipient to demonstrate an active effort to obtain employment based on active participation in a vocational rehabilitation program, active participation in work searches conducted through the DWC, or active work search efforts documented by a certain number of job applications dependent upon the employee’s county of residence. Tex. Lab. Code § 408.1415(a).

After the Division has made a determination of entitlement or non-entitlement for SIBs for the first quarter, the Carrier shall make determinations for subsequent quarters consistent with the provisions contained in statute. 28 Tex. Admin. Code § 130.104(a). An injured employee claiming entitlement to SIBs must send the Carrier an application for SIBs. 28 Tex. Admin. Code § 130.104(b). An injured employee that does not timely file an application with the Carrier shall not receive SIBs for that quarter. 28 Tex. Admin. Code § 130.105(a). A Carrier disputing SIBs must send its dispute to the employee within 10 days of the date the application was received by the Carrier and include the reasons for the denial. 28 Tex. Admin. Code § 130.108(d). Failure to do so tolls the claimant’s deadline to file for the next quarter. Id.

With one minor exception, an injured employee that is not entitled to SIBs for a period of four consecutive quarters, or one year, permanently loses entitlement to such benefits. 28 Tex. Admin. Code § 130.106(a). The exception being that an injured employee that is terminated or discharged within 12 months of losing entitlement will become re-entitled to SIBs if the employer discharged the injured employee with the intent to deprive them of SIBs. 28 Tex. Admin. Code § 130.109. The employee may also lose entitlement to SIBs for earning at least 80% of their AWW for at least 90 days. Tex. Lab. Code § 408.146(a).

An injured worker may also attempt to collect SIBs by contending a complete inability to work. Even if the worker’s total inability to work is so obvious as to be irrefutable, the work must still present evidence of a narrative explaining their inability to work as a requirement for SIBs. See Appeals Panel Decision No. 061662. A recitation of medical conditions and treatment followed by a conclusive statement that the employee is unable to work is insufficient for establishing that the employee is unable to work. See Appeals Panel Decision No. 080850. An injured worker must meet the minimum weekly job search requirement for each and every week of the qualifying period. See Appeals Panel Decision No. 100429-s.

Lifetime Income Benefits

Lifetime income benefits (LIBs) shall be paid until the death of the employee for total and permanent loss of sight in both eyes, loss of both feet at or above the ankle, loss of both hands at or above the wrist, loss of one foot and loss of one hand, an injury to the spine that results in permanent and complete paralysis of both arms, both legs, or one arm and one leg, a physically traumatic injury to the brain resulting in incurable insanity or imbecility, or third degree burns that cover at least 40% of the body and require grafting or burns covering either both hands or one hand and the face. Tex. Lab. Code § 408.161(a). The amount of LIBs is equal to 75% of the employee’s AWW. Tex. Lab. Code § 408.161(c). The Carrier may pay the benefits through an annuity if approved by the Commissioner. Tex. Lab. Code § 408.161(d).

A worker that can perform essential motor movements of the hands, despite not being able to perform precise motor movements, is not entitled to LIBs. See Appeals Panel Decision No. 060389. The DWC retains continuing authority to reopen the issue of continued entitlement to LIBs based on evidence of substantial change in the worker’s condition. See Appeals Panel Decision No. 020432. An injury to other body parts that limits the use of one or more of the statutory body parts is insufficient; the injury to the body part may be direct or indirect but the injury must extend to and impair the statutory body part. See Insurance Co. of State of Pennsylvania v. Muro, 347 S.W.3d 268 (Tex. 2011).

Death Income Benefits

A Carrier shall pay death benefits to the legal beneficiary if a compensable injury to the employee results in death. Tex. Lab. Code § 408.181(a). Typically, death benefits are equal to 75% of the employee’s AWW. Tex. Lab. Code § 408.181(b).

If there is an eligible child or grandchild and an eligible spouse, half of the death benefits will be paid to the eligible spouse and half in equal shares to the eligible children. Tex. Lab. Code § 408.182(a). If there are no children and solely a spouse, the benefits shall be paid to the spouse. Tex. Lab. Code § 408.182(b). If there is no eligible spouse, child, and/or grandchild, the death benefits shall be paid in equal shares to surviving dependents of the deceased employee who are parents, stepparents, siblings, or grandparents of the deceased. Tex. Lab. Code § 408.182(d). Further, §408.186(a) states that if the employee’s death results from a compensable injury, the Carrier shall pay to the person who incurred liability for the costs of burial the lesser of the actual costs incurred for reasonable burial expenses or $6,000.

Entitlement to death benefits begins on the day after the date of an employee’s death. Tex. Lab. Code Ann. §408.183(a). An eligible spouse is entitled to death benefits for the remainder of her life, or if she re-marries then only for another 104 weeks. Tex. Lab. Code Ann. §408.183(b). A child eligible for death benefits is entitled to benefits until the age of 18. Tex. Lab. Code Ann. §408.183(c). A child that at age 18 enrolls as a full-time student in an accredited education institution is entitled to receive or continue to receive benefits until the child dies, reaches the age of 25, or stops being enrolled as a full-time student for the second consecutive semester. Tex. Lab. Code Ann. §408.183(d).

Bona Fide Job Offers

An employer may offer an employee a modified duty position that is within the employee’s work abilities as determined by a DWC-73 from either a treating doctor or designated doctor. 28 TEX. ADMIN. CODE § 129.6(b). The offer shall be made in writing and include a copy of the DWC-73 it relies upon. 28 TEX. ADMIN. CODE § 129.6(c). The offer shall also include the employee’s work location, the employee’s schedule, the employee’s wages, a description of the physical and time requirements the position entails, and a statement that the employer will only assign tasks consistent with the employee’s physical abilities, knowledge, and skills and will provide training if necessary. 28 TEX. ADMIN. CODE § 129.6(c)(1—5).

The offer must be at a geographically accessible location, be consistent with the employee’s work abilities, and be communicated in writing to be deemed a bona fide offer. 28 TEX. ADMIN. CODE § 129.6(d). A Carrier may deem the wages offered in the bona fide offer as PIE and use them to offset or neutralize an injured employee’s entitlement to disability. 28 TEX. ADMIN. CODE § 129.6(g).

After a bona fide offer is issued, it does not become void simply because the injured worker is taken off-work completely by another doctor. See Appeals Panel Decision No. 022989. Even if a supposed bona fide offer does not meet the requirements of the statute, the employee must still avail himself to light duty work available or else be determined not to have disability due to the fact that his inability to earn his preinjury wage is not due to the compensable injury. See Appeals Panel Decision Nos. 012646 and 051779.

Return to Work with Loss of Earnings

An injured worker may also return to work and earn light duty wages while still injured without accepting a bona fide offer. An injured worker is still entitled to earn TIBs even if they earn light duty wages. Any light duty wages earned by the employee would count as PIE and could be applied towards his AWW in lowering his TIBs check. The Carrier would take the gross PIE and subtract them from the employee’s AWW, then multiply that amount by 70% to determine the worker’s new TIBs rate. As stated above, even if a supposed bona fide offer does not meet the requirements of the statute, the employee must still avail himself to light duty work available or else be determined not to have disability due to the fact that his inability to earn his preinjury wage is not due to the compensable injury. See Appeals Panel Decision Nos. 012646 and 051779.

Administrative Penalties

An administrative violation is defined as a violation of the Texas Labor Code, a rule adopted within, or an order or decision from the Commissioner that is subject to penalties and sanctions. Tex. Lab. Code § 401.011(2). A Carrier commits an administrative violation by making a misrepresentation to a party, terminating or reducing benefits without substantiating evidence, failing to tender benefits promptly, failing to handle a claim promptly and fairly, and failing to comply with other noted rules in a similar fashion. Tex. Lab. Code Ann. §415.002(a). The Carrier must also deny pre-authorizations in the manner accorded by the DWC. Tex. Lab. Code Ann. §415.0035(a).

A sanction is a penalty or other punitive action or remedy imposed by the Commissioner for an act or omission in violation of a rule, order, or decision. Tex. Lab. Code § 401.011(39). An administrative sanction shall not exceed $25,000 per day per occurrence. Tex. Lab. Code Ann. §415.021(a). In assessing an administrative penalty, the Commissioner shall consider the seriousness of the violation, the history and extent of previous violations, the demonstrated good faith of the violator, the penalty necessary to deter future violations, and all other matters that require justice. Tex. Lab. Code Ann. §415.021(c).

Interest

An order to pay income or death benefits accrued but unpaid must include interest on the amount of compensation due. Tex. Lab. Code Ann. §408.064(a). The accrued but unpaid compensation shall be paid in a lump sum. Tex. Lab. Code Ann. §408.064(b). The interest is computed at the rate published by the DWC using the treasury constant maturity rate for one-year treasury bills and is currently 3.64%. Tex. Lab. Code Ann. §401.023.

Attorney’s Fees

An attorney’s fee for representing a claimant must be approved by the Commissioner or the court the attorney is before. Tex. Lab. Code § 408.221(a). The Commissioner or court considers the time and labor required, the novelty and difficulty of the question involved, the skill required to perform the services properly, the fee customarily charged, the amount in controversy, the benefits the attorney is responsible for securing, and the experience and ability of the attorney in approving attorney’s fees. Tex. Lab. Code § 408.221(d). Except as otherwise provided, an employee’s attorney’s fee may not exceed 25% of the employee’s recovery. Tex. Lab. Code § 408.221(i). Attorney’s fees for defending a Carrier must also be approved by the DWC or court to be reasonable and necessary. Tex. Lab. Code Ann. §408.222(a).

Medical Benefits

An employee that sustains a compensable injury is entitled to all health care reasonably required by the nature of the injury as and when needed. Tex. Lab. Code Ann. §408.021(a). The employee is specifically entitled to health care that cures or relieves the effects naturally resulting from the compensable injury, promotes recovery, or enhances the ability of the employ to return to employment. See Tex. Lab. Code Ann. §408.021(a). Certain treatment or procedures may even be pre-authorized as medically reasonable and necessary but may still be denied by the Carrier because they are not part of the accepted compensable injury. Except in an emergency, all health care must be approved or recommended by the employee’s treating doctor. Tex. Lab. Code Ann. §408.021(c).

An injured worker is entitled to their choice of treating doctor from the list of DWC-approved doctors. Tex. Lab. Code Ann. §408.022(a). The first doctor providing health care to the employee will be considered the employee’s initial choice of treating doctor. See id. If the employee is dissatisfied, the employee may notify the division in writing and request authority for an alternate doctor. Tex. Lab. Code Ann. §408.022(b). The DWC looks at certain criteria to determine if a change is necessary including whether treatment by the current doctor is medically inappropriate, the doctor’s professional reputation, whether the employee is receiving appropriate medical care, and whether a conflict exists between the employee and the doctor. Tex. Lab. Code Ann. §408.022(c). A change of doctor may not be made to secure a new impairment rating or medical report. Tex. Lab. Code Ann. §408.022(d).

With good cause, the Carrier may dispute the order regarding to change treating doctors to an alternate doctor within 10 days after receiving the order. 28 TEX. ADMIN. CODE § 126.9(g).

Refusal of Medical Treatment

Compensation may not be reduced or suspended solely for abandonment of medical treatment without reasonable notice to the employee and an opportunity to be heard. Tex. Lab. Code Ann. §502.067(b). The Appeals Panel has made similar findings. An employee that abandons medical treatment is typically not dispositive of anything but may trigger an inquiry about whether MMI has been reached. See Appeals Panel Decision No. 001587. However, no statute or rule exists that a worker’s disability is to be automatically terminated based solely on the abandonment of medical treatment. See Appeals Panel Decision No. 051731.

SUBROGATION

Subrogation occurs in the context of workers’ compensation claims when a claimant sustains a compensable workers’ compensation injury, which is caused either entirely or partly by a third-party. Subrogation prevents the clamant from receiving a double recovery because the workers’ compensation carrier that originally paid benefits will recover from the third-party claim. The Texas Supreme Court also recognized the primary purpose for enacting the workers’ compensation carriers’ subrogation rights was to reduce the burden of insurance to the employer and to the public. Texas Mutual Insurance Co. v. Ledbetter, 251 S.W.3d 31 (Tex. 2008); Aggregates, Inc. v. Great American Ins. Co., 408 S.W.2d 922, 924 (Tex. 1966). The current workers’ compensation statute also permits a carrier’s right of subrogation, and in fact, provides greater protection to the carrier, allowing a greater recovery by reducing the claimant’s attorney’s fee for the carrier’s recovery. TEX. LAB. CODE § 417.001.

Frequently, a carrier will retain its own counsel to intervene in a lawsuit filed by the injured worker and file suit before the injured worker files suit. However, a carrier is not required to intervene in the third-party action to secure its subrogation right against a settlement or judgment. Travelers Ins. Co. v. Seidel, 705 S.W.2d 278, 281 (Tex. App.—San Antonio 1986, writ dism’d). The carrier’s right of recovery is created when benefits are paid; therefore, the claimant, who received the benefits, is obligated to protect the carrier’s interest. A plea of intervention by the carrier is a plea of convenience, so that the carrier actively participates in the third-party lawsuit, but an intervention is not a plea of necessity. Autry v. Dearman, 933 S.W.2d 182 (Tex. App.—Houston [14th Dist.], 1996, writ denied).

The carrier is entitled to the “first monies” received in settlement with or judgment against a third-party tort-feasor. Argonaut Insurance Company v. Baker, 87 S.W.3d 526 (Tex. 2002); Serrano, 962 S.W.2d 536, (Tex. 1998). The net amount recovered by a claimant in a third-party action shall be used to reimburse the insurance carrier for benefits, including medical benefits, that have been paid for the compensable injury. Plaintiff’s attorneys have attempted to limit the carrier’s recovery by arguing that the carrier, in order to make a recovery of its workers’ compensation lien, must prove that the medical expenses “were reasonable and necessary.” In Texas Workers’ Compensation Insurance Fund v. Serrano, 962 S.W.2d 536, (Tex. 1998), the Supreme Court ruled that the carrier’s right of recovery was created by the payment of the benefit; therefore, the carrier does not need to prove anything more than the benefits were paid to the injured worker or to his healthcare provider for his medical treatment.

Any recovery beyond the amount owed to the carrier under the subrogation lien is treated as an advance against future benefits paid by the carrier. Thus, if an injured worker recovers an amount beyond that is owed to the carrier for the lien, the carrier needs not make future payments to the worker, for medical or indemnity benefits, until the excess monies are exhausted. Tex. Lab. Code Ann. §417.002(b).

As a general rule, the claimant’s attorney may recover a fee for the workers’ compensation carrier’s recovery in three situations: (1) the carrier has an attorney but does not actively participate in representing the carrier’s interest in obtaining a recovery; (2) the claimant’s attorney represents the workers’ compensation carrier as well as the claimant; and (3) the carrier’s attorney does actively participate in representing the carrier’s interest in obtaining a recovery. If the carrier’s attorney does not actively participate in pursuing the carrier’s interest, the court may apportion as much as one-third of the carrier’s recovery, which is the statutory maximum, to the claimant’s attorney as a fee for his services. Tex. Lab. Code Ann. §417.003(a)(1) If the carrier’s counsel actively participates and an agreement cannot be reached regarding the claimant’s attorney’s fee, the court will determine the amount of the fee, up to the statutory maximum of one-third, of the monies recovered by the carrier to the claimant’s attorney at the conclusion of a third-party action. The attorneys’ fees do not factor the future benefits saved the carrier due to the excess recovery/advance. “For purposes of determining . . . attorneys’ fees . . . only the amount recovered . . . may be considered”. Tex. Lab. Code Ann. §417.003(d)

ADJUDICATION PROCESS

The Texas Department of Insurance – Division of Workers’ Compensation (DWC) has a three tier hearing process: 1) Benefit Review Conference, 2) Benefit Contested Case Hearing, 3) Appeal to DWC’s Appeal Panel. The current Texas Workers’ Compensation Statute requires DWC’s staff to resolve disputes between carriers, claimants and, health care providers. (Codified in the TEXAS LABOR CODE Chapters 401-506). The statute is focused on expediting the workers’ compensation claims adjudication process. Although the jury system in district court is still a viable option for all parties, all DWC administrative proceedings must first be exhausted prior to filing a lawsuit at a courthouse.

Benefit Review Conference

The Benefit Review Conference (BRC) is the first proceeding in resolving an issue in a workers’ compensation claim. (Tex. Lab. Code Ann. §§ 410.021-410.034). Either a claimant, carrier, employer, or medical provider may request a BRC. Tex. Lab. Code Ann. §§ 410.023. Prior to requesting a BRC, the party requesting the BRC must attempt to resolve the dispute and document that effort. Form DWC-45 is to be completed, along with any supporting documentation, to request a BRC. The DWC is required to schedule the BRC within 40 days of the DWC’s receipt of the BRC request; however, there is little or no recourse if the DWC fails to set a BRC or refuses to set a BRC. 28 TEX. ADMIN. CODE §141.1(h). If DWC determines that the setting of a BRC can be expedited, the BRC may be set with 20 days. 28 TEX. ADMIN. CODE §141.1(h). The BRC will be conducted at a DWC Field Office not more than 75 miles from the injured workers’ residence

The carrier is required to request a BRC by completing form DWC-45, “Requesting for Setting a Benefit Review Conference.” Once represented, a claimant who is not represented by an attorney may obtain a BRC by simply contacting the local DWC field office by telephone.

When a carrier files a DWC-45, requesting a BRC, the carrier needs to address all the issues that will be discussed at the BRC. The DWC Rules permit a Benefit Review Officer to refuse the parties from discussing issues that are not included in the DWC-45; however, most Benefit Review Officers will permit other issues to be discussed to potentially avoid another BRC. The claimant, on the other hand, does not need to file any special forms. If a claimant sets a BRC, the carrier’s representative needs to be prepared to discuss any possible issue.

BRCs are usually set for forty-five minute periods. The purpose of the BRC is to attempt to resolve, informally, all pending issues without having to move forward to a Contested Case Hearing. The carrier’s representative and claimant are required to attend. There will also be present a Benefit Review Officer (“BRO”) who presides over the BRC. The employer is given notice of the BRC but the employer is not required to attend, as is the carrier and claimant. If the claimant is not represented by an attorney, then an ombudsman typically assists the claimant with the discussion of the issues.

Benefit Review Officer

The presiding officers for all administrative hearings are DWC employees. The presiding officer at the BRC is a Benefit Review Officer (BRO). A BRO must be an employee of the commission and be trained in the principles and procedures of dispute mediation. Tex. Lab. Code Ann. §§ 410.022(b). The DWC is charged under this section with maintaining an educational and training program for BROs. A BRO is not required to be a licensed adjuster or attorney.

Ombudsman

The Office of Injured Employee Council (OIEC) is a separate, independent state agency but works in conjunction with DWC. OIEC is charged with providing assistant to workers’ compensation claimants; advocate on behalf of injured employees as a class regarding rulemaking by DWC; assist injured employees with contacting appropriate boards for complaints against health care providers; and to assist injured employees with referral to social services, including financial assistant, rehabilitation, and work placement. Tex. Lab. Code § 404.101. An ombudsman, who is an employee of DWC, is charged with assisting injured workers and persons claiming death benefits to obtain those benefits. Tex. Lab. Code § 404.151.The ombudsman is required to:

1.       meet with or otherwise provide information to injured workers;

2.       investigate complaints;

3.       communicate with employers, insurance carriers, and health care providers on behalf of injured workers;

4.       assist unrepresented claimants, employers and other parties to enable those persons to protect their rights in the workers’ compensation system; and

5.       meet with an unrepresented claimant privately for a minimum of 15 minutes prior to any informal or formal hearing.

Persons hired as ombudsmen are required to demonstrate satisfactory knowledge of the Workers’ Compensation Statutes and Rules, demonstrate experience in handling and resolving problems for the general public, possess strong interpersonal skills and have at least one year of demonstrated experience in the field of workers’ compensation. The ombudsman program also includes continuing education requirements as determined by the OEIC.

The practical role of the ombudsman is often limited because some BROs conduct the hearing and advise the parties of the strength and weaknesses of their documents, arguments and theories. The ombudsman, at a BRC, generally advises a claimant of the various avenues for further investigation, like requesting medical opinions from a claimant’s treating physician, responding to interrogatories, assisting with the exchange of documentary evidence and the identity of persons with knowledge of relevant facts. An ombudsman will assist with completing motions, request subpoenas and gathering documents for exhibits, including communicating with treating doctors to provide opinions.

PURPOSE OF THE BRC

The purpose of a BRC is to provide a non-adversarial, informal dispute resolution proceeding designed to:

1.       explain the rights of the prospective parties and procedures necessary to protect those rights;

2.       discuss the facts of the claim, review available information to evaluate the claim and discuss the disputed issues; and

3.       mediate and attempt to resolve the disputed issue by agreement.

Although a CCH may be scheduled within sixty days of the BRC, either party or the BRO may request another, second BRC and may make suggestions to the parties to obtain additional information; however only 2 BRCs are permitted on any topic. Tex. Lab. Code § 410.026(b). A BRO may issue an interlocutory order for the payment of all or part of medical benefits or income benefits. Tex. Lab. Code § 410.032. As a practical matter, an interlocutory order is generally limited to rare or unusual circumstances but still occur.

PREPARATION FOR A BRC

If an unrepresented claimant has requested a BRC, the carrier’s representative needs to be prepared to discuss every possible issue. To this end, the claims adjuster should provide a complete copy of the file, including any adjuster’s notes and pay sheets to the carrier’s representative at the BRC. This way, the carrier’s representative has virtually all of the information regarding the claim available at the BRC. 28 TEX. ADMIN. CODE § 141.4 requires that the parties exchange all pertinent information within 14 days of the BRC, or not later than five days before an expedited BRC. “Pertinent information” is generally defined as all information relevant to the resolution of the disputed issue or issues to be addressed at the BRC, including but not limited to:

1.       information relating to the employee’s wages;

2.       information relating to the employee’s medical condition;

3.       the names of the witnesses who will attend the conference.

28 TEX. ADMIN. CODE § 141.4(a). If either party attending a BRC exchange documents at the BRC and not in advance of the BRC, a BRO may reschedule a BRC if the pertinent information has not been submitted timely. Tex. Lab. Code § 410.026.

DESCRIPTION OF THE BRC

A BRC is an informal gathering, and, as such, the BRO may not take testimony. Tex. Lab. Code § 410.026. Moreover, the BRO is not permitted to make a formal record of the proceeding. However, the BRO may direct questions to an employee, employer or representative of the insurance carrier to clarify issues in dispute. Importantly, since evidence is not presented at a BRC, common law or statutory rules of evidence or procedure are not applicable. Tex. Lab. Code § 410.027(b). Generally, most BRC’s are scheduled for 45 minutes, although many disputes require substantially more time.

At the beginning of the BRC, the BRO is required to identify the case and introduce the parties. 28 TEX. ADMIN. CODE § 141.5©. Next, the BRO typically informs the parties of their rights and responsibilities under Texas Workers’ Compensation statute and explains the purpose of the BRC. The BRO will allow each party an opportunity to state its position with regard to the disputed issues. Typically, the party requesting the BRC is asked to proceed first. The BRO may ask questions of the parties, encourage discussion of the disputed issues and answer the parties’ questions. 28 TEX. ADMIN. CODE §141.5(d). A BRO may also caucus individually with each party and encourage the parties to resolve the dispute by agreement.

If the parties are able to resolve the issues in dispute, a “Benefit Dispute Agreement” is prepared by the BRO. Tex. Lab. Code § 410.029(b). If the issues in dispute are not resolved, however, the BRO, near the conclusion of the BRC, shall identify each unresolved issue and summarize each party’s position concerning each issue. Tex. Lab. Code § 410.031.

BRC AGREEMENTS

If the parties can agree to all or some of the issues at the BRC, the statute requires the BRO to prepare a written agreement. The agreement states the issues in dispute and describes the resolution. Each party, their representative and the BRO are required to sign the “Benefit Dispute Agreement” form, DWC-24. The agreement signed by the parties and the BRO are binding. An insurance carrier may be relieved of the binding nature of the agreement if the DWC or a court finds fraud, newly discovered evidence or other good and sufficient cause to relieve the carrier of the effects of the agreement. If a claimant is represented by an attorney, the same standard is applied to set aside the agreement. If a claimant is not represented by an attorney, the agreement can be set aside by a finding of “good cause.” Tex. Lab. Code § 410.030(b).

BRO’S REPORT

If the disputes have not been entirely settled at the BRC, and the issues are being set for a BRC, the BRO is required to prepare a written report, detailing each issue that has not been resolved at the conference. Tex. Lab. Code § 410.031. This report should be prepared no later than the fifth day after the close of the BRC. 28 TEX. ADMIN. CODE § 141.7(c). The BRO’s report includes:

(1) a statement of each resolved issue;

(2) a statement of each issue raised but not resolved;

(3) a statement of the position of the parties regarding each unresolved issue;

(4) a statement of the procedures required to request a contested case hearing or arbitration and a complete explanation of the differences in those proceedings and the rights of the parties to subsequent review of the determinations made in those proceedings; and

(5) the date of the contested case hearing scheduled.

Tex. Lab. Code § 410.031(b). This report is typically the first exhibit introduced by the Hearing Officer at the CCH. It is used as the statement of issues that establishes the scope of the evidence and testimony at the CCH.

Venue

The BRC and CCH are conducted at the local DWC field offices. Presently, there are 21 different field offices throughout the state. [DWC field offices are located in Abilene, Amarillo, Austin, Beaumont, Corpus Christi, Dallas, Denton, El Paso, Fort Worth, Houston (two field offices), Laredo, Lubbock, Lufkin, Midland/Odessa, San Angelo, San Antonio, Tyler, Waco, Weslaco, and Wichita Falls]. Unless good cause exists, the BRC and CCH generally take place at the field office within 75 miles of the claimant’s residence at the time of injury. Tex. Lab. Code § 410.005. If the claimant lives within 75 miles of multiple field offices, the BRC or CCH will be scheduled at the nearest field office. For claimants that have moved out of State, the BRC and CCH are typically conducted at the field office closest to the claimant at the time of the injury unless other arrangements are made. For example, an out-of-state claimant who has retained an attorney in Fort Worth would likely be able to have the BRC in Fort Worth.

Benefit Contested Case Hearing

General

A Benefit Contested Case Hearing (CCH) is an administrative trial before a Hearing Officer employed by DWC. The Hearing Officer makes findings of facts and conclusions of law and decides the disputed issues after considering the evidence. The Hearing Officer prepares a written report of the findings, which is called a Decision and Order.

Hearing Officer's Authority

If the parties do not mutually agree to arbitration, a CCH will take place upon completion of the BRC. Tex. Lab. Code § 410.151. A Hearing Officer conducts the CCH. Tex. Lab. Code § 410.152. A Hearing Officer must be licensed to practice law. Tex. Lab. Code § 410.152. The Hearing Officer is authorized to issue subpoenas, rule on motions, issue orders, direct parties to appear at pre hearing conferences in order to resolve evidentiary or procedural issues, establish time limits for conducting a hearing, administer all oaths, rule on the admissibility of evidence, determine the relevancy, materiality, weight and credibility of evidence, request additional evidence, take official notice of the law of Texas or other jurisdictions, examine parties and witnesses, recess, postpone or dismiss a hearing, and take any other action necessary to facilitate the orderly conduct and disposition of the hearing. See 28 Tex. Admin. Code § 142.2. It should be noted that the parties are prohibited from having ex parte communication with a Hearing Officer regarding any fact, issue, law or rule relating to a CCH, unless the communication is in written form and distributed to all of the parties. Tex. Lab. Code § 410.167. However, this rule does not preclude ex parte communications with respect to procedural matters. Id.

       

Including Additional Issues at the CCH

The issues listed as being unresolved by the BRO in his written report—which is occasionally referred to as the "Statement of Disputes"—are the only ones to be discussed at the CCH. Tex. Lab. Code § 410.151(b). Additional issues, other than those addressed in the report, may be discussed at a CCH only if:

(1)       both parties consent; or

(2)       if there is good cause for not raising the issue at the BRC.

28 Tex. Admin. Code § 142.7(c) indicates that a party may respond to a BRO's report within twenty days of receiving it. This is a factor frequently considered by Hearing Officers in determining whether good cause exists for including additional issues. For example, after a BRC report is prepared, the carrier's representative, if wishing to have additional issues included, should send a letter to the Hearing Officer (with a copy of the letter being forwarded to the claimant or the claimant's representative), addressing the specific issue or issues that were not included in the report. 28 Tex. Admin. Code § 142.4, 142.7(c).

Continuance

Tex. Lab. Code § 410.155 permits a party to move for a continuance if there is good cause. However, the DWC has implemented a procedure whereby the parties at the BRC agree to a specific date for the CCH. Hearing officers generally will not find good cause for scheduling conflicts.

For a carrier disputing compensability and not paying benefits, a continuance will rarely be granted. In addition to establishing good cause, a movant orally requesting a continuance during a hearing must demonstrate that the continuance "will not prejudice the rights of the other party" and that the movant has exercised due diligence. 28 Tex. Admin. Code § 142.10(c)(3). Since an "abuse of discretion" standard is used by the Appeals Panel in reviewing a Hearing Officer's denial of a continuance, the Appeals Panel will rarely reverse the Hearing Officer's decision. However, in Appeals Panel Decision No. 130073, the Appeals Panel reversed a Hearing Officer who denied a continuance to a claimant who decided, at the CCH, to request a designated doctor examination on the extent of injury.

Record of CCH

The Hearing Officer is required to electronically record the hearing, including all arguments and testimony. Tex. Lab. Code § 410.164. If a tape is damaged or the tape recorder malfunctions, upon appeal, the Hearing Officer will have to reconstruct the record, including ordering all witnesses at the initial CCH to testify again. Appeals Panel Decision No. 121650. After the conclusion of the CCH, the DWC will provide a copy of the CCH testimony on a DVD and a court reporter can be retained to transcribe the testimony given at the CCH. Either party may, however, request that the proceeding be transcribed by a court reporter. Tex. Lab. Code § 410.164(b). The court reporter's transcript will become the "official record" of the CCH. The party requesting that a court reporter transcribe the CCH is required to bear the cost for the court reporter’s services. It should be noted that the original transcription of the CCH testimony should be provided to the DWC with a copy purchased by the party requesting the court reporter's presence. 28 Tex. Admin. Code § 142.14(c).

Discovery

Exchange of Exhibits and Witnesses

The CCH is to be held not later than sixty (60) days from the date of the BRC. 28 Tex. Admin. Code § 142.6(a). As such, with less than sixty days transpiring between the BRC and the CCH, discovery is often greatly limited.

The first aspect of "discovery" is the initial exchange of information. Tex. Lab. Code § 410.160 requires that the parties exchange all medical records, medical reports, witness statements, photographs, and other documents that the parties intend to offer into evidence at the CCH, plus identify the name and the address of any witness known to the parties to have knowledge of relevant facts. The DWC Rules require that this exchange be completed within fifteen (15) days after the BRC. 28 Tex. Admin. Code § 142.13(c). The Appeals Panel has construed this requirement to mean that documentation that was exchanged at a BRC need not be exchanged again within these fifteen days after the BRC. If a party fails to exchange the documents within fifteen days after the BRC or when the documentary evidence becomes available, the documents themselves are to be excluded from evidence unless good cause for the failure to exchange is found by the Hearing Officer. Tex. Lab. Code § 410.161. If a Hearing Officer admits an exhibit that was not exchanged within these fifteen (15) days and does not expressly find good cause for doing so, the admission of the exhibit constitutes reversible error. In determining whether a party has good cause for exchanging evidence after the 15-day period, the HO must apply a two-prong test. First, the HO must consider whether the party exercised due diligence in obtaining the evidence. Appeals Panel Decision No. 042996. Second, the HO must determine whether, after obtaining the evidence, the party promptly provided the evidence to the other party. Appeals Panel Decision No. 001090. Whether good cause exists is a question of fact for the HO to decide. 28 Tex. Admin. Code § 142.13; Appeals Panel Decision No. 000291.

Interrogatories

Interrogatories may be forwarded to the other party. Tex. Lab. Code § 410.159. The interrogatories must be presented no later than twenty days before the CCH, unless otherwise agreed. 28 Tex. Admin. Code § 142.13(d). Answers to the interrogatories must be returned no later than five days after a party receives the interrogatories themselves. Id. The interrogatories are twelve separate questions predetermined by the DWC, with an additional four questions to be drafted by the carrier's representative. 28 Tex. Admin. Code § 142.19. The DWC has promulgated a similar set of interrogatories for claimants to send to carriers.

Unlike the discovery process implemented under the Texas Rules of Civil Procedure in district court, the only sanction available under the discovery rules for failure to timely respond to an interrogatory is exclusion of a witness or exhibit. Tex. Lab. Code § 410.161. The exclusion of evidence for failing to answer the interrogatories is rarely affirmed by the Appeals Panel. The injured employee received interrogatories from the insurance carrier and objected to the form of the question. The insurance carrier did not file a motion to compel. At the CCH, the insurance carrier objected to all of the injured employee’s testimony and timely exchanged exhibits based on the injured employee’s refusal to answer the interrogatories. The Hearing Officer sustained the insurance carrier’s objection and excluded the evidence and injured employee’s testimony. The Appeals Panel reversed the Hearing Officer’s decision citing Tex. Lab. Code § 410.158, which states that “discovery . . . may not seek information that may readily be derived from documentary evidence described in Tex. Lab. Code § 410.160. Answers to discovery . . . need not duplicate information that may readily be derived from documentary evidence . . .” Tex. Lab. Code § 410.158(b). The Appeals Panel remanded the case for the Hearing Officer to admit and consider all exhibits which were properly and timely exchanged and to allow the injured employee to testify. Appeals Panel Decision No. 002932-s.

Depositions

Depositions are permitted, but only after the Hearing Officer finds good cause for such an allowance; however, a hearing officer is limited to allow a healthcare providers to be deposed on written questions only. Tex. Lab. Code § 410.158. The claimant, other parties or witnesses (other than the aforementioned healthcare providers) may be deposed orally or on written questions; however, Hearing Officers have rarely found good cause for taking these depositions. On the other hand, good cause for obtaining information from healthcare providers by deposition on written questions is routinely granted. This is due to the fact that clarification frequently needs to be obtained from these providers regarding issues concerning their credentials, qualifications and opinions.

Other Forms of Discovery

Since the Texas Rules of Evidence do not apply to the admissibility of evidence at the CCH, other types of informal discovery are permitted. For example, recorded statements, if signed by the witness (preferably before a notary public) are admissible. Tex. Lab. Code § 410.165. Hearsay documents are also admitted; therefore, affidavits of custodians of records establishing the elements for the business record exception to the hearsay rule are not needed. Additionally, if a witness favorable to a particular party has "skeletons in the closet," a party would be permitted to admit a transcription or tape recording of that testimony, without an opportunity for the opposing party to cross-examine the witness.

The Hearing Officer may also grant subpoenas for documents or other tangible things to be presented or for witnesses to appear at the CCH. 28 Tex. Admin. Code § 142.12. In cases in which disability is in dispute, records from the Texas Employment Commission may provide relevant information refuting disability. If the Hearing Officer issues a subpoena for Texas Employment Commission records, the carrier's representative must also send an authorization to the claimant, which the latter must sign. A subpoena need not be served by a certified process server or law enforcement officer. 28 Tex. Admin. Code § 142.12. 28 Tex. Admin. Code § 142.12(e) permits a person at least 18 years of age, other than a party, to serve a subpoena.

Evidence

As discussed above, conformity with the Texas Rules of Evidence is not necessary in a CCH. Tex. Lab. Code § 410.165. The Hearing Officer is the sole judge of the relevance and materiality of the evidence offered and the weight and credibility to be given to any evidence. Id. In fact, only three objections should be considered by a Hearing Officer:

(1)       the document has not been exchanged;

(2)       the witness' identity has not been exchanged; and

(3)        the exhibit or testimony is immaterial and/or irrelevant.

Description of CCH

Some Hearing Officers may initially discuss the issues off the record and consider any preliminary motions. Some remain on the record at all times. Hearing Officers will require the parties to exchange exhibits and consider objections at the beginning of the CCH. Each party is asked to exchange an exhibit list. Before getting on the record, the Hearing Officer frequently asks for stipulations, clarifies issues, and entertains pre trial motions, including invoking "the rule." Once on the record, the Hearing Officer will briefly describe the nature of the hearing, disclose to unrepresented claimants that the Hearing Officer does not represent the claimant, and then state the issues in dispute and stipulations. The injured employee, who usually bears the burden of proof, will be permitted to make the first opening statement. The carrier's representative may make an opening statement after the conclusion of the claimant's opening statement or reserve the carrier's opening statement until the beginning of its case-in-chief. After the opening statements, the claimant is permitted to call any witnesses and introduce any documentary evidence as an exhibit. Then, after the claimant rests, the carrier's representative is permitted to call its witnesses and introduce its exhibits. Afterwards, the claimant is provided an opportunity for rebuttal. The parties are then permitted a closing statement. Most CCH's are completed within two hours; however, where numerous witnesses testify, a CCH may last longer.

A CCH is much shorter than a trial since there is neither voir dire nor a jury charge to discuss. Also, there are few pre trial motions or objections to testimony or exhibits. Moreover, the admissibility of written statements saves a considerable amount of time, since the statement is included as an exhibit and generally not read into the record.

After the conclusion of the evidence, the Hearing Officer may leave the record open and request from the parties or witnesses additional evidence.28 Tex. Admin. Code § 142.2(10). This procedure is commonplace when clarification is needed from a designated doctor with regard to maximum medical improvement or impairment rating opinions.

If a party fails to attend a scheduled CCH, that party commits a Class C administrative violation, which carries a penalty not to exceed $1,000. Tex. Lab. Code § 410.156(b). However, undoubtedly the more punitive “sanction” to which the absent party is exposed is that the Hearing Officer is permitted to conduct the CCH without the party and ultimately rule on the issues in dispute in that party's absence. The Hearing Officer, however, must conduct a "show cause” hearing to determine if the absent party can demonstrate good cause for failing to attend the CCH. If the absent party fails to establish good cause but appears at the rescheduled CCH, the absent party may still present evidence at the “show cause” hearing.

Decision and Order of Hearing Officer

After the record is closed, the Hearing Officer shall issue a written decision. 28 Tex. Admin. Code § 142.16. Importantly, the Hearing Officer shall not disclose his ruling at the conclusion of the testimony. Since the Hearing Officer is required to review and study all the exhibits introduced into evidence, it would be an error for the Hearing Officer to make a ruling immediately upon the conclusion of the evidence.

The decision and order of the Hearing Officer shall include findings of fact and conclusions of law and shall contain the latter’s specific determination of whether benefits are due. The Hearing Officer is required to file its decision with the Division of Hearings within ten days after the close of the hearing. The Division of Hearings, within seven days of its receipt of the decision and order, shall mail a copy to the claimant, carrier and employer. 28 Tex. Admin. Code § 142.16. After the decision and order have been distributed to the parties, the Hearing Officer may not reconsider the decision or reopen the CCH.

APPEALS PANEL

Effect of Hearing Officer's Decision and Order

The decision of the Hearing Officer is final in the absence of a timely appeal by a party to the Appeals Panel. Moreover, during the pendency of this appeal, the decision of the Hearing Officer is binding. Tex. Lab. Code § 410.169. If the decision of the Hearing Officer has not been appealed, it becomes final on the 16th day after the date on which it was received from the Division of Hearings. 28 Tex. Admin. Code § 142.16(f). Failure by the carrier to pay benefits in accordance with the final order within twenty days of the date on which it becomes final is a an administrative violation. Thus, since the effect of the order is binding, whether or not the decision and order of the Hearing Officer is appealed, the carrier would be required to begin payment of benefits in accordance with the decision and order of the Hearing Officer within twenty days of the date on which the order was received by the Division of Hearings. Tex. Lab. Code § 410.208.

General Information

The Appeals Panel, which consists of three appeals judges, shall conduct the administrative appeals proceeding. Tex. Lab. Code § 410.201. The appeals judges must be licensed to practice law in Texas, and they are not permitted to conduct BRC's or CCH's. Additional exhibits and testimony are not permitted to be presented to the appeals panel. Also, the parties may not appeal an issue unless it was ruled upon by the Hearing Officer. Tex. Lab. Code § 410.203.

Description of the Appeals Proceeding

Deadline

A party dissatisfied with the decision of the Hearing Officer is permitted to file a written request for appeal not later than fifteen business days after that party receives the decision and order. Tex. Lab. Code § 410.202. Workers' compensation carriers generally "receive" the decision and order of the Hearing Officer on the date stated on the cover letter from the Division of Hearings, since the Division places a copy of the decision and order in the box of the carrier's Austin representative, which is located at the DWC control office in Travis County. It should be noted that the date on which the carrier's attorney or adjuster receives the appeals panel decision is not the date from which the appeal deadline runs. The claimant, however, is presumed to receive the decision and order of the Hearing Officer within five days of the date on which it was mailed to the claimant or the claimant's representative. 28 TEX. ADMIN. CODE § 102.4(f).

Request for Review

The party appealing the decision of the Hearing Officer must file a written request for review, stating the specific issues being appealed and the factual and legal rationale for the error of the Hearing Officer. Tex. Lab. Code § 410.202. Any issue not requested to be reviewed by the appeals panel will become final. 28 Tex. Admin. Code § 142.16(f). Thus, a party should exercise extreme care in preparing a Request for Review to the Appeals Panel, since the factual findings and conclusions of law not appealed to the Appeals Panel will become absolute. Indeed, a district court does not have jurisdiction over any issue found by the Hearing Officer that is not included in the Request for Review to the Appeals Panel. Tex. Lab. Code § Tex. Lab. Code § 410.302.

Response Brief

The other party shall respond to the appellant's request for review to the appeals panel. 28 Tex. Admin. Code § 143.4. The response must be filed in the Commission's central office in Austin no later than fifteen days after the appellant's request was received by the respondent. Id. The response may be mailed on or before the 15th day after the appellant’s request for review is received; however, either the Commission's central office or the other party must receive the Response to the Request for Review not later than the 20th day after the date of the Commission’s receipt of the appellant's request. Id. Importantly, failure to file a timely response only affects the respondent by resulting in the exclusion of the reply brief from the Appeals Panel's review and consideration.

Appeals Panel Decision

The Appeals Panel is required to consider the record made of the CCH, including all exhibits and testimony, the written Request for Review, and the Response to the Request for Review filed by the appellee. The appeals panel may affirm the decision of the Hearing Officer, reverse the decision of the Hearing Officer or render a new decision, or reverse and remand the case for further consideration and evidentiary development by the Hearing Officer. Tex. Lab. Code § 410.203. The Appeals Panel, however, may only remand the decision of the Hearing Officer one time. Id. Thus, after the Appeals Panel has remanded an issue for further clarification, the Appeals Panel, on subsequent appeal, must only affirm or reverse.

Finally, the appeals panel shall issue its written decision within thirty days of its receipt of the request for review by the appellant. Tex. Lab. Code § 410.204(a). Less than 5% of the Appeals Panel Decision results in a reversal of the Hearing Officer’s decision.

Finality of the Appeals Panel Decision

If the Appeals Panel does not issue a written decision by the 45th day after the Request for Review was filed by the appellant, the Hearing Officer's decision becomes final and constitutes the decision of the Appeals Panel. 28 Tex. Admin. Code § 143.5(b). However, for the purposes of seeking judicial review, the date on which the Appeals Panel's decision is filed with the Division of Hearings, the aggrieved party has forty days to file a petition in district court. Id. To seek judicial review, by filing suit in district court, the petition must be filed no later than the 45th day after the date on which the decision of the Appeals Panel was filed. The decision of the Appeals Panel still remains binding during the pendency of the appeal in district court. Tex. Lab. Code § 410.205(b).

ARBITRATION

The Texas Workers' Compensation Statute has several provisions regarding arbitration. See Tex. Lab. Code Ann. §§ 410.101 - 410.121. It should be noted that if the parties agree to submit their dispute to arbitration after the BRC, the decision of the arbitrator is final and may not be appealed. Tex. Lab. Code § 410.104(c). However, a court of competent jurisdiction may vacate the arbitrator's award, on a finding that the award was procured by corruption, fraud, or misrepresentation; the decision of the arbitrator was capricious; or the award was not within the jurisdiction of the Commission. See Tex. Lab. Code § 410.121. No arbitrations has been pursued since 2005. Considering the difficulty in overturning an arbitrator's award and the high probability that the arbitrator's award will become final, very few parties elect to submit disputed issues to arbitration.

JUDICIAL REVIEW

General Information

A party may seek judicial review by filing suit not later than the 45th day after the date on which the decision of the appeals panel was filed with the DWC Division of Hearings. Tex. Lab. Code § 410.252(a).

The petition must be filed in the county in which the employee resided at the time of the injury or, in the case of an occupational disease claim, in the county in which the employee resided on the date disability began. Tex. Lab. Code § 410.252(b). The Texas Workers’ Compensation Act is silent as to the proper venue for an out-of-state claimant who is seeking workers' compensation benefits in Texas. Based upon the strict construction of the statute, however, a suit appealing the Appeals Panel decision regarding an out-of-state claimant should be filed in the claimant's county of residence when the disability first arose, even if that county is in another state. See id.

A copy of the petition should be filed "simultaneously" with the district court, the DWC appeals clerk, and the opposing party. Tex. Lab. Code § 410.253. This provision can be satisfied by including a certificate of service and "simultaneously" mailing a copy of the petition to DWC, opposing party and the district clerk.

Intervention by the Attorney General's Office

DWC may intervene in any judicial proceeding appealed to district court. Tex. Lab. Code § 410.254. The attorney general's office, as the state's attorney, may also file an intervention in order to support the appeals panel decision.

Limitation of Issues

The scope of a trial in district court is limited to the issues decided by the Appeals Panel and timely appealed to the court. Thus, a party may appeal one part of the Appeals Panel decision and accept other parts as final. As such, the pleadings must specifically set forth the specific determination of the appeals panel that the party is appealing. Tex. Lab. Code § 410.302.

Burden of Proof

The party appealing the decision to district court has the burden of proof by a preponderance of the evidence. Thus, if the appeals panel found that the claimant had an injury in the course and scope of employment, the carrier would have the burden at court to prove that the claimant did not in fact suffer such an injury by a preponderance of the evidence. Id.

Evidence in District Court

Appeals Panel Decision Is Considered

The fact finder, whether a jury or the trial court, is to be informed of the Appeals Panel decision on each disputed issue. Tex. Lab. Code § 410.304. The court is to "inform the jury in the court's instructions, charge, or questions to the jury of the commission appeals panel decision on each disputed issue…that is submitted to the jury." Further, the actual decision and order of the appeals panel may be admissible. ESIS, Inc. v. Johnson, 908 S.W.2d 554, (Tex. App.—Fort Worth, Sept. 27, 1995, no pub.). The Fort Worth Court of Appeals, in Johnson, ruled that the Commission's records were admissible, and thus, the actual decision of the appeals panel, as part of the DWC's file, is admissible. See also Tex. Lab. Code § 410.306(b). Even though the Texas Supreme Court has ruled that the fact finder is not required to accord any particular weight to the appeals panel decision in Texas Workers' Compensation Commission v. Garcia, 893 S.W.2d 504, 520 (Tex. 1995), the Beaumont Court of Appeals found that instructing the jury that the decision has no weight is error. Liberty Mutual Insurance Co. v. Camacho, 228 S.W.3d 453 (Tex. App. – Beaumont 2007, pet. denied).

Judicial Review Regarding Issues of Compensability or Entitlement to Income Benefits

If a party is disputing the amount of income benefits paid or whether a claim is compensable, the evidence is generally not limited. Tex. Lab. Code § 410.306(a); Garcia, 893 S.W.2d at 530. Thus, a witness who does not testify at the CCH, or exhibits that were not introduced at the CCH, although the witness or exhibits may have been available at the time of the CCH, may be part of the evidence in district court. As such, with the exception of the change of the burden of proof and the court's instruction to the jury regarding the appeals panel decision, the district court trial is a "modified trial de novo." Garcia, 893 S.W.3d at 530.

Judicial Review Regarding Impairment Rating

If a party is disputing the date on which maximum medical improvement was certified or the value of the whole body impairment rating, the evidence in district court shall be limited to the evidence presented at the CCH. Tex. Lab. Code § 410.306(c); Garcia, 893 S.W.3d at 529. Therefore, when a carrier is preparing for a CCH regarding the date of maximum medical improvement and the whole body impairment rating, special care should be taken in preserving evidence in anticipation of a subsequent trial on the matter. For example, in order for the opinion of an expert to be introduced in district court, the expert must be qualified. See Tex. R. Civ. Evid. 702. Generally, DWC will not require evidence demonstrating the competency or qualifications of an expert since any medical report signed by a doctor is admissible. Tex. Lab. Code § 410.165(b). However, in order to anticipate the possibility of a claimant's appeal of the CCH and appeals panel decisions to the district court, the carrier should present all of the evidence necessary to demonstrate the competency of any experts whose testimony supports the carrier's contentions. Therefore, with regard to a CCH involving the impairment rating or maximum medical improvement date, the carrier should present "courthouse-ready" evidence (i.e., evidence that complies with the Texas Rules of Evidence and Civil Procedure).

The evidence regarding the extent of the impairment may not be limited to the evidence presented at the CCH, however, if the court, after a hearing, finds that there is a substantial change of condition to the claimant. Tex. Lab. Code § 410.307. If the parties are not able to stipulate as to whether or not the claimant's condition is substantially changed, the court is required to request the designated doctor who was appointed by the DWC to verify the substantial change of condition, if any. Tex. Lab. Code § 410.307. The finding of a designated doctor shall be presumed to be correct, and the court shall base its finding regarding the substantial change of condition on the medical evidence presented by the designated doctor, “unless the preponderance of the other medical evidence is to the contrary.” Tex. Lab. Code § 410.307. It should be noted that whether there is, in fact, a substantial change of condition is a question of law and, thus, is not to be presented to the jury. Tex. Lab. Code § 410.307(b) (e).

Suit to Enforce

If a workers' compensation carrier refuses or fails to comply with the final order and decision of the DWC, a claimant may bring suit in the county of his residence or in the county in which the injury occurred in order to enforce the award. Tex. Lab. Code § 410.208. In addition to the judgment, the claimant would be entitled to a “penalty equal to 12% of the amount of benefits recovered in the judgment and interest, with reasonable attorney’s fees for the prosecution and collection of the claim.” Tex. Lab. Code § 410.208. Also, a person who fails to comply with the Commission's order and decision within twenty days of the date the decision becomes final commits an administrative violation.

Settlement

The statute permits a court to approve a settlement made by the parties after judicial review of the appeals panel decision is sought, “and before the court enters judgment.” Tex. Lab. Code § 410.256. A settlement, however, may not provide for:

(1)       payment of any benefits in lump sum; or

(2)       the limitation or termination of a claimant's right to medical benefits. Tex. Lab. Code § 410.256.

If the parties attempt to settle the claim in violation of the TWCA, the settlement would likely be void and subject the carrier to an administrative penalty. Settlement permitted but creative settlements are needed to comply with the statutory mandate. Generally, the parties are only permitted to try the case or non suit the issue appealed to the district court.

Attorneys’ Fees

If the insurance carrier seeks judicial review of an Appeals Panel decision regarding compensability or eligibility for income or death benefits, and the carrier fails to overturn the Appeals Panel decision, the carrier is liable for the claimant’s attorneys’ reasonable and necessary fees and expenses. Tex. Lab. Code § 408.221(c). The fees awarded to claimant’s attorneys has been substantial.

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