LOUISIANA WORKERS' COMPENSATION CLAIM HANDLING GUIDELINES
- 1 DEFINITIONS
- 2 EXCLUSIVE REMEDY
3 JURISDICTION AND PRESCRIPTION
- 3.1 General Principles of Jurisdiction
- 3.2 Extraterritorial Coverage
- 3.3 Mutually Exclusive Jurisdiction With Certain Federal Laws
- 3.4 Notice of Injury
- 3.5 Statute of Limitations
- 4 COMPENSABILITY
- 5 EXCLUSIONS AND DEFENSES
- 6.1 Calculation of Average Weekly Wage
- 6.2 Total Disability
- 6.3 Partial Disability
- 6.4 Amputation or Loss of Use
- 6.5 Disfigurement/Scarring
- 6.6 Loss of Sight
- 6.7 Loss of Hearing
- 6.8 Penalties
- 6.9 Interest
- 6.10 Costs
- 6.11 Counsel Fees
- 6.12 Death Benefits
- 6.13 Medical Benefits
- 7 SUBROGATION AND CREDITS
- 8 ATTORNEYS
- 9 CLAIMS PROFESSIONALS
10 LITIGATION AND APPEAL
- 10.1 Workers’ Compensation Judge Proceedings
- 10.2 Workers’ Compensation – Appeals
- 11 SETTLEMENT
- 12 INSURANCE
Louisiana’s workers’ compensation act has no numerical requirement before an employer is required to provide workers’ compensation benefits to employees. However, there must be an enterprise (either a business or non-profit service enterprise). Thus, a home owner is not covered as an “employer” under the act for services rendered by individuals related to the operation of the house (such as house cleaners or repairmen) R.S. 23:1035 (B). The employment relationship requires a voluntary engagement by the employer of an employee and the voluntary acceptance of the employment by the employee. There is also a recognition that some remuneration must be paid for the services and that the services are related to a business pursuit. A general guide for determining the presence of an employment relationship is provided in the analysis of the right to control. The four primary evidentiary factors considered in deciding the above are: 1. Selection and engagement; 2. Payment of wages; 3. Power of dismissal; 4. Power of control. The appellate courts have utilized this test. In so doing, the courts have reasoned that none of the factors is controlling, that the totality of the circumstances must be considered. A business enterprise is only obligated to pay workers’ compensation benefits to those individuals who are considered to be “employees” under the statutory provisions of the workers’ compensation act or the interpretation of these statutes by the courts.
The employer may be more than one business enterprise. The importance of this fact is the possibility that your insured may have the right to seek contribution from another party to pay benefits or your insured may have an obligation to pay all of the benefits (indemnification). In a contribution claim one party is seeking to share the cost of compensation with another party (usually contribution is in equal shares). Whereas indemnification involves the claim of one party for 100% repayment of any benefits it may have paid on behalf of an employee.
1. Partnerships and Joint Ventures – The Louisiana Civil Code defines a partnership as a combination of two or more persons (may be corporate entities or even other partnerships) for the purpose of conducting any business and sharing the losses and profits in accordance with the terms of the partnership agreement. There is no statutory provision in the workers’ compensation act dealing with the partnership as an employer. The courts have addressed this issue and established the recovery rights of an employee. An employee of a partnership would first seek workers’ compensation benefits from the “partnership” and only if the assets of the partnership are insufficient would the individual partners be called upon to pay the benefits (to the extent of their stated interest in the partnership). A Joint Venture is the same as a partnership but is usually created for a specific project and would end upon completion of the project.
2. Joint Employers - Businesses may join together to hire an individual to perform services that benefit both enterprises and share the wage expense in any proportion that they believe is appropriate. For example, retail stores in a mall may agree to hire a security guard and pay his wages in proportion to the size of their store. This employment relationship is recognized in the workers’ compensation act.
a. In case any employee for whose injury or death payments are due is, at the time of the injury, employed and paid jointly by two or more employers subject to the provisions of this Chapter, such employers shall contribute to such payments in proportion to their several wage liabilities to the employee; but nothing in this Section shall prevent any arrangement between the employers for different distribution, as between themselves, of the ultimate burden of such payments...
Although the statute is clear in its statement that the joint employers are only obligated to contribute to the workers’ compensation benefits in proportion to their contribution to the wages of the employee, the jurisprudence has generally held each employer solidarily liable to the employee (i.e. obligated to pay the entire amount owed). However, the jurisprudence has recognized the right of the individual employers to seek contribution from the other joint employer to reimburse them to the extent (percentage) that the other joint employer was paying wages to the employee.
The “statutory employer” in Louisiana’s workers’ compensation act is referred to as the “principal”. A “principal” is anyone who performs some work or engaged in some business enterprise and enters into a contract with another (person or business enterprise) to do all of the project or a part of the business enterprise. The most familiar example of a statutory employer is the general contractor on a construction project.
Two-Contract Theory - The general contractor enters into contracts with numerous sub-contractors to complete the construction project. This general contractor or “principal” becomes the employer of all workers performing work on that construction project. He is referred to as a “statutory employer” because his status as an “employer” of these workers is only under the statutory provisions of the workers’ compensation act. This statutory employer becomes obligated to pay any workers’ compensation benefits that may be owed to an injured worker regardless of how far down the ladder of sub-contractors the relationship may go till you reach the direct employer of the injured worker. Although the direct employer is obligated to pay workers’ compensation benefits to his employee, the statutory employer is also obligated to pay these benefits (solidary obligation).
However, should the statutory employer be required to pay the benefits he will have the right of indemnification from the direct employer. The general contractor under Louisiana jurisprudence and by statute is recognized as a statutory employer without any requirement of a contractual agreement between the general contractor and the sub-contractors. The status of statutory employer is given to the principal (contractor) because he stands in the middle of two contracts. On one side is the contract between the principal and another party to do a particular work (e.g. the owner of the land where the building is to be built) and on the other side is the contract between the principal and a contractor to do a part of that project. The status of “statutory employer” on any project is not reserved to the general contractor alone. There may be several sub-contractors of the general who also enter into sub-contracts to do part of their work, thereby placing themselves in the position of statutory employer to all employees of their sub-contractors.
Principal Without a Two-Contract Defense - A principal who is doing work through a contractor but is not in the middle of two contracts can not use the two-contract theory to defend against a tort action if one of the contractor’s employee’s is injured.
The Requirement of a Written Agreement - A principal who is not a contractor may become a statutory employer if the work being done by a contractor is essential to the principal’s trade, business or occupation AND the principal and the contractor have entered into a contract in which the principal has agreed to be a statutory employer of the contractor’s employees. For example, ABC, Inc. may decide to retool its machinery at its plant and hire a contractor to perform this major project. The work is essential to its business and it prefers the risk of workers’ compensation liability if the contractor has an injured worker at the plant than the risk of being sued in tort. ABC, Inc., therefore, enters into an agreement with the contractor to be considered the statutory employer of any employees of the contractor. Absent this written agreement the principal (ABC, Inc.) will not be a statutory employer of the contractor’s employees.
Suggested Contract Language
X(as principal) and Y(as contractor) mutually agree that it is their intention to recognizeXas the statutory employer of the contractor’s employees (whether direct employees or statutory employees of the contractor) when any of the contractor’s employees are doing work and/or providing service under this agreement.
Presumption of Statutory Employment - With the written agreement, however, there is a presumption that a statutory employment relationship exists. A worker who is injured and seeks to assert a tort suit against a principal who has the benefit of the presumption can rebut the presumption by presenting evidence to show that the work he was doing was NOT part of the principal's trade, business or occupation. The test for determining what is the principal's trade, business or occupation is whether the work is "an integral part of or essential to the ability of the principal to generate that individual principal's goods, products or services."
Sub-Contractor’s Liability to Statutory Employer – Should the statutory employer be required to pay benefits to a sub-contractor’s employee the sub-contractor will owe indemnification to the statutory employer La. Rev. Stat. 23:1061.
Presumption of employee status - The first step in the analysis of this issue is to recognize that the act begins with a presumption that someone performing services for another is an employee. It should be noted that this presumption only applies to services rendered to a business enterprise. Thus, the cleaning services provided by an individual for a home is not services rendered for a business enterprise and would not be covered by the workers’ compensation act. Likewise the person who cuts the grass for a homeowner would not be an employee under the workers’ compensation law.
A person rendering service for another in any trades businesses or occupations covered by this Chapter is presumed to be an employee under this Chapter
The jurisprudence has placed the burden of proof on the business enterprise to show no employment relationship existed. An alleged employer can rebut this presumption by either (i) establishing that the services were not "pursuant to any trade, business, or occupation (e.g., construction of one's private residence);" or (ii) establishing that "the individual was performing services but was doing so as an independent contractor." Absent such evidence the injured party will be presumed to be an employee.
Individuals NOT considered “employees” – There are a group of individuals who are providing services for a business enterprise, are paid wages for the services but are not covered as employees under the Louisiana Workers’ Compensation Act. These excluded employees have been removed from coverage by specific statutory provisions:
* By written agreement an officer of a corporation who owns at least 10% of stock or a partner in a partnership or sole proprietor "with respect to such sole proprietorship" (§1035);
* Employees of contractors with the state or other political subdivision or public board or commission shall not be considered employees of the state or public body (§1034);
* Sheriff's deputies, except for the Parish of Orleans (§1034);
* Employee of a private household as to the owner of the home (§1035 B);
* Employees of Railroads (§1037);
* Real estate salesmen (§1047);
* Crew of crop dusting operators as to the farmer (§1045).
* Musicians and performers who are rendering services pursuant to a performance contract. [Acts 2001 No. 1100 effective 8/15/01]
* Landman operating under the auspices of an independent or lead broker landman who is engaged primarily in negotiations for acquisitions or divestiture of mineral rights or negotiating business agreements that provide for the exploration for or development of minerals. [Acts 2001 No. 318 effective 8/15/01]
A business may require additional workers to complete a project or need the skills of a particular worker to do a particular job. Under such circumstances the business may “borrow” an employee from the direct employer of a worker. The direct employer is referred to as the general employer and the borrowing employer is called the special employer. The statutory provisions below outline the factors necessary for such an employment relationship and the respective obligations of the general and special employers. The special employer is frequently seen in cases involving labor pools or the leasing of employees from employee leasing companies (general employer).
C.In the case of any employee for whose injury or death payments are due and who is, at the time of the injury, employed by a borrowing employer in this Section referred to as a "special employer", and is under the control and direction of the special employer in the performance of the work, both the special employer and the immediate employer, referred to in this Section as a "general employer", shall be liable jointly and in solido to pay benefits as provided under this Chapter. As between the special and general employers, each shall have the right to seek contribution from the other for any payments made on behalf of the employee unless there is a contract between them expressing a different method of sharing the liability. Where compensation is claimed from, or proceedings are taken against, the special employer, then, in the application of this Chapter, reference to the special employer shall be substituted for reference to the employer, except that the amount of compensation shall be calculated with reference to the earnings of the employee under the general employer by whom he is immediately employed. The special and the general employers shall be entitled to the exclusive remedy protections provided in R.S. 23:1032.
Although an individual may be performing services for a business, they may not be regarded as employees but are instead “independent contractors”:
(7) "Independent contractor" means any person who renders service, other than manual labor, for a specified recompense for a specified result either as a unit or as a whole, under the control of his principal as to results of his work only, and not as to the means by which such result is accomplished, and are expressly excluded from the provisions of this Chapter "unless a substantial part of the work time of an independent contractor is spent in manual labor by him in carrying out the terms of the contract, in which case the independent contractor is expressly covered by the provisions of this Chapter".
The independent contractor is excluded from the provisions of the workers’ compensation act “unless a substantial part of the work time of an independent contractor is spent in manual labor by him in carrying out the terms of the contract, in which case the independent contractor is expressly covered by the provisions of this Chapter.” The courts historically have been liberal in their interpretation of manual labor. However, more recent cases suggest a move away from the liberal interpretation of manual labor. For example, in Mullen v. R.A.M. Enterprises, 2002-1157 (La. App. 1st Cir. 03/28/03), 844 So2d 376 the court held that a delivery person was not spending the substantial part of the work time in manual labor as the bulk of the worker's time was spent driving his truck and delivering small, letter sized packages, and those acts were not manual labor as defined by law. Similarly, an owner/operator truck driver was regarded as not spending the majority of his work time in manual labor Guillory v. Overland Express Company, 01-419 (La. App. 3d Cir. 10/03/01), 796 So2d 887. Also a newspaper deliverer was considered as an independent contractor who did not engage in manual labor a majority of the work time as she did a great deal of paper work as part of her job Whitlow v. Shreveport Times, 2002-1215 (La. App. 3d Cir. 04/23/03), 843 So2d 665.
An example of an independent contractor would be the CPA performing accounting services for a business. Even if there is manual labor involved the courts will consider whether the work being done is part of the trade, business or occupation of the party for whom the work is being done. For example, a restaurant may have their air conditioner repaired by an individual who is performing manual labor but the work he is doing is not part of the regular business of a restaurant. Thus, the repairman would not be regarded as the employee of the restaurant even though he is performing services for the restaurant and his work is regarded as manual labor. The issue becomes more difficult when you consider the repairs performed by the same repairman when he is called by the owner of an apartment complex. The owner of the apartment complex is in the business of keeping the apartments in proper order. Thus, the repairman may be considered an employee of the apartment complex when he is doing work on the apartment. The factors that the courts have considered in deciding whether there is a principal/independent contractor relationship as opposed to an employer/employee relationship are as follows:
1. The degree of supervision and control actually exercised by principal over the work;
2. Whether the work can be terminated at any time by either party;
3. Whether the worker renders service for a specific price to be paid for a specified result either as a unit or a whole;
4. The manner in which the worker is carried on the payroll of the principal;
5. Whether a person performs work for a principal on a continuing and exclusive basis.
6. The source of the materials and equipment to be used by the worker;
7. Whether the worker performing the services is an integral part of the principal’s business or whether he is independent of the principal’s business;
An independent contractor who is performing manual labor will be able to claim workers’ compensation benefits from the principal (the business for whom he is performing services) if he was doing manual labor at the time of the accident and was doing work that is part of the trade, business and occupation of the principal. However the principal may require the independent contractor to agree to provide his own workers’ compensation coverage §1063(B) and will be able to seek indemnification from the independent contractor for any benefits paid to him if the independent contractor elected not to be covered for workers’ compensation in his insurance policy.
At the turn of the 20th Century when the various state legislatures created the employer liability laws (later called “workers’ compensation laws) there was considerable resistance from the employers including constitutional challenges to the idea of placing liability for wages and medical benefits on the employer who may not have been at fault or the injury was due to the negligence of the employee who was injured. The constitutionality of this no fault system was upheld primarily due to the inclusion in all workers’ compensation acts of the concept of the worker having no right to sue the employer for pain and suffering and the full extent of the employee’s wage loss. This was referred to as the “exclusive remedy” – that the employee’s exclusive remedy is under the workers’ compensation law. This ‘exclusive remedy” has evolved since the passage of the original acts through statute and case law to include an exception for injuries caused by the employer that are “intentional acts”.
General Rule §1032
La. Rev. Stat. 23:1032 Exclusiveness of rights and remedies; employer’s liability to prosecution under other laws
A. (1)(a) Except for intentional acts provided for in Subsection B, the rights and remedies herein granted to an employee or his dependent on account of an injury, or compensable sickness or disease for which he is entitled to compensation under this Chapter, shall be exclusive of all other rights, remedies, and claims for damages, including but not limited to punitive or exemplary damages, unless such rights, remedies and damages are created by a statute whether now existing or created in the future expressly establishing same as available to such employee, his personal representatives, dependents, or relations, against his employer, or any principal or any officer, director, stockholder, partner, or employee of such employer or principal, for said injury, or compensable sickness or disease.
(b) This exclusive remedy is exclusive of all claims, including any claims that might arise against his employer, or any principal or any officer, director, stockholder, partner, or employee of such employer or principal under any dual capacity theory or doctrine.
(2) For purposes of this Section, the word "principal" shall be defined as any person who undertakes to execute any work which is a part of his trade, business, or occupation in which he was engaged at the time of the injury, or which he had contracted to perform and contracts with any person for the execution thereof.
B. Nothing in this Chapter shall affect the liability of the employer, or any officer, director, stockholder, partner, or employee of such employer or principal to a fine or penalty under any other statute or the liability, civil or criminal, resulting from an intentional act.
C. The immunity from civil liability provided by this Section shall not extend to:
1. Any officer, director, stockholder, partner, or employee of such employer or principal who is not engaged at the time of the injury in the normal course and scope of his employment; and
2. To the liability of any partner in a partnership which has been formed for the purpose of evading any of the provisions of this Section.
[Amended by Acts 1976, No. 147 §1; Acts 1989, No. 454,§2 eff. Jan. 1, 1990; Acts 1995, No. 432, §1, eff. June 17, 1995]
Section 1032 of the Louisiana workers' compensation law provides for the exclusive remedy of workers' compensation to employees and the exception for intentional acts.
La. R.S. § 23:1032(B) provides:
Nothing in this Chapter shall affect the liability of the employer, or any officer, director, stockholder, partner, or employee of such employer or principal to a fine or penalty under any other statute or the liability, civil or criminal, resulting from an intentional act.
1. The intentional act exception was part of Act 147 of 1976. In its original draft, the bill contained an exception to the exclusive remedy provided by the Workers' Compensation Act for liability resulting from an "intentional or deliberate act." During House and Senate debate, versions which would have expanded the exception to include "gross negligence" as well as intent were rejected. In the final version, the lang¬uage referred only to "intentional acts" and not to "gross negligence" or "deliberate acts."
Meaning of "Intentional" Act Under Louisiana Law
1. "Intentional" means that the defendant either desired to bring about the physical results of his act or believed they were substantially certain to follow from what he did.
2. The above language generally appears in petitions asserting intentional tort. If the petition contains the so-called Bazley language, then the petition is well pleaded for purposes of intentional tort (and cannot be dismissed by an exception of no cause of action).
Burden of Proof
1. Plaintiff must prove
a. a specific intent on the part of defendant to cause harm to plaintiff; or
b. that the conduct of defendant was such that the law will impute intent without reference to the subjective state of mind of the defendant.
2. The requisite intent need not be malicious. There does not have to be intent to inflict any actual damage or to inflict the degree of damage that actually resulted from the conduct. The Supreme Court has held that defendant is responsible for full damages resulting from intent to cause offensive consequences. (Intentional tort can result form intended act during horseplay among employees that caused unintended result.)
3. Obviously, if plaintiff proves defendant's subjective intent to harm, he will prevail, but this virtually never happens in cases not involving traditional intentional torts such as assault and battery. It virtually never happens outside traditional tort cases because employees rarely intend to actually hurt another and if one did, it would require an admission by defendant of intent to harm.
4. To prevail under the second prong of the Bazley test, plaintiff must show a strong link between the defendant's conduct and plaintiff's injury. The conduct must be definite and identifiable. Setting in motion an activity or process that will likely or probably result in harm is not sufficient.
5. Substantially certain means "virtually sure," "nearly inevitable."
Tapia v. Schwegmann Giant Supermarkets, 590 So.2d 806 (La. App. 4th Cir. 1991); Gallant v. Transcontinental Drill¬ing Co., 471 So.2d 858 (La. App. 2d Cir. 1985); Kirkland v. Keller, 453 So.2d 667 (La. App. 5th Cir. 1984).
The Louisiana Workers’ Compensation Act, La. Rev. Stat. §23:1021 et seq. does not comprehensively state what is assumed to be the obvious that the Act has jurisdiction for accidents to workers who are injured working in Louisiana. States can generally apply their workers’ compensation laws to accidents within their state territory without fear of overreaching constitutional bounds even if the only interest the state has in the claim is that the accident occurred within its state borders. It is well-established and generally accepted that claims for workers’ compensation benefits under the Louisiana Workers’ Compensation Act can be asserted against employers and their workers’ compensation insurers, but not third party administrators or other parties with whom the employer or insurer may have contracted. Also, since the exclusive remedy provision states that workers’ compensation is the exclusive remedy of an employee against his employer resulting from injuries or compensable conditions, La. Rev. Stat. §1032 (including workers’ compensation insurers of such employers), such immunity from tort suit can logically only be extended only to those who are amenable to a suit for workers’ compensation benefits (i.e., the employer and its insurer).
The following provisions under the Louisiana Workers’ Compensation law more or less define, either by express language or implication, jurisdiction under the Act consistent with the overview provided above.
La. Rev. Stat. §23:1031, Employee’s right of action; joint employers, extent of liability; borrowed employees:
A. If an employee not otherwise eliminated from the benefits of this Chapter receives personal injury by accident arising out of and in the course of his employment, his employer shall pay compensation in the amounts, on the conditions, and to the person or persons hereinafter designated.
La. Rev. Stat. §23:1032, Exclusiveness of rights and remedies; employer's liability to prosecution under other laws:
A.(1)(a) Except for intentional acts provided for in Subsection B, the rights and remedies herein granted to an employee or his dependent on account of an injury, or compensable sickness or disease for which he is entitled to compensation under this Chapter, shall be exclusive of all other rights, remedies, and claims for damages, including but not limited to punitive or exemplary damages, unless such rights, remedies, and damages are created by a statute, whether now existing or created in the future, expressly establishing same as available to such employee, his personal representatives, dependents, or relations, as against his employer, or any principal or any officer, director, stockholder, partner, or employee of such employer or principal, for said injury, or compensable sickness or disease.
La. Rev. Stat. §23:1034.2, Reimbursement schedule:
F.(1) Should a dispute arise between a health care provider and the employee, employer, or workers' compensation insurer, either party may submit the dispute to the office in the same manner and subject to the same procedures as established for dispute resolution of claims for workers' compensation benefits. Note that this provision enables a healthcare provider to directly file a claim against the employer or insurer for fees or additional fees for services. Likewise, it implies that an injured employee can sue, and can only sue, the employer and insurer for workers’ compensation benefits under the Act.
Note that this provision enables a healthcare provider to directly file a claim against the employer or insurer for fees or additional fees for services. Likewise, it implies that an injured employee can sue, and can only sue, the employer and insurer for workers’ compensation benefits under the Act.
La. Rev. Stat. §23:1035, Employees covered:
A. The provisions of this Chapter shall also apply to every person performing services arising out of and incidental to his employment in the course of his own trade, business, or occupation, or in the course of his employer's trade, business, or occupation, except that the bona fide president, vice president, secretary, or treasurer of a corporation who owns not less than ten percent of the stock therein, or a partner with respect to a partnership employing him, or a member of a limited liability company as defined in R.S. 12:1301(A)(13) who owns not less than a ten percent membership interest therein, or a sole proprietor with respect to such sole proprietorship may by written agreement with his insurer or group self-insurance fund elect not to be covered by the provisions of this Chapter. Such election shall not be limited, but shall apply to all trades, businesses, or occupations conducted by said corporation, partnership, limited liability company, or sole proprietorship. Such an election shall be binding upon the employing corporation, partnership, limited liability company, and sole proprietor and the surviving spouse, relatives, personal representative, heirs, or dependents of the officer, partner, member, or sole proprietor so electing. No salary or compensation received by any such bona fide corporate officer, partner, member, or sole proprietor so electing shall be used in computing the premium rate for workers' compensation insurance.
La. Rev. Stat. §23:1162 entitled “Contents of insurance contract; enforcement by employee; subrogation of insurer”
A. No policy of insurance against liability arising under this Chapter shall be issued unless it contains the agreement of the insurer that it will promptly pay to the person entitled to compensation all installments of the compensation that may be awarded or agreed upon, and that this obligation shall not be affected by any default of the insured after the injury, or by any default in the giving of any notice required by such policy, or otherwise. This agreement shall be construed to be a direct obligation by the insurer to the person entitled to compensation, enforceable in his name. No policy of insurance against liability under this Chapter shall be made unless the policy covers the entire liability of the employer; provided, that as to the question of the liability as between the employer and the insurer the terms of the insurance contract shall govern, and provide, further, that a contract of indemnity may be issued to an employer qualified as a self-insured under this Chapter, by which contract an insurer may undertake to indemnify such employer against loss or losses arising with respect to his obligations under this Chapter in excess of a stated or determinable amount.
Should there be any remaining doubt, Louisiana also has a Direct Action statute that allows an injured worker to file a claim for workers’ compensation benefits against the compensation carrier. See, La. R.S. 22:1269.
Note that the Louisiana Act totally excepts and/or conditionally excepts from coverage various types of employees including but not limited to employees of private residential householders, farm workers, volunteer fire fighters, crew of airplanes engaged in crop dusting, real estate brokers or salesmen, land men, and sheriff’s deputies (except Orleans Parish criminal deputy sheriffs), but all of these exceptions are statute specific and must be specifically reviewed along with the interpretative caselaw in order to make an informed determination of coverage in a particular factual setting.
La. Rev. Stat. §23:1310 entitled “Initial filing of claim with office of workers' compensation administration” lists those who have standing to file a claim under the Louisiana Workers’ Compensation Act.
A. If, at any time after notification to the office of the occurrence of death or injury resulting in excess of seven days lost time, a bona fide dispute occurs, the employee or his dependent or the employer or insurer may file a claim with the state office, or the district office where the hearing will be held, on a form to be provided by the director.
The Louisiana Workers’ Compensation Act is administered through the Louisiana Department of Labor, Office of Workers’ Compensation. The current hearing officer system was promulgated in the 1988 legislative session. Jurisdiction over workers’ compensation claims was originally vested in the state district court system, and following a constitutional amendment which became effective November 7, 1990, the law establishing the Office of Workers’ Compensation with the jurisdictional authority over workers’ compensation matters under the Act became effective November 7, 1990.
In accordance with La. Rev. Stat. §23:1310.3F and exceptions noted therein:
…the workers’ compensation judge shall be vested with original, exclusive jurisdiction over all claims or disputes arising out of this Chapter, including, but not limited to workers’ compensation insurance coverage disputes, group self-insurance indemnity contract disputes, employer demands for recovery of overpayment of benefits, the determination and recognition of employer credits as provided for in this Chapter, and cross-claims between employers or workers’ compensation insurers or self-insurance group funds for indemnification or contribution, concursus proceedings pursuant to Louisiana Code of Civil Procedure Articles 4651 et seq. concerning entitlement to workers’ compensation benefits, payment for medical treatment, or attorneys’ fees arising out of an injury subject to this Chapter.
As will be the case whenever a court of limited jurisdiction is established, a period of litigation is necessary to determine whether the unavoidable gray area issues fall within or outside that limited jurisdiction. The Louisiana OWC Hearing Judge system was no different. Following is a list of issues that have been determined covered and not covered (as indicated) within the limited jurisdiction of the OWC and hearing judges.
1. The hearing judges have jurisdiction to determine workers’ compensation insurance coverage. La. Rev. Stat. §23:1162 entitled “Contents of insurance contracts; enforcement by employee; subrogation of insurer” establishes “a direct obligation by the insurer to the person entitled to compensation, enforceable in his name.” Also, insurance policies must cover the entire obligation of the employer to the injured employee. The OWC hearing judge does have jurisdiction to determine the coverage issue if a workers’ compensation insurer denies coverage.
Other collateral insurance disputes are considered outside the limited jurisdiction of the workers’ compensation judges such as an employer’s claim against its insurance agent for failing to secure workers’ compensation insurance.
2. The OWC hearing judges do not have jurisdiction to hear issues of constitutionality of the workers’ compensation law.
3. The hearing judges do have jurisdiction to determine cross claims between employers or workers’ compensation insurers for indemnification or contribution and to determine which of two workers’ compensation insurers is responsible for payments of benefits. TIG Insurance Co. v. LWCC, 2004-2608 (La. App. 1st Cir. 6/10/05), 417 So.2d 26.
4. It has been held that the Louisiana hearing judges do not have jurisdiction to pierce the corporate veil of a corporate entity in order to allow recovery of workers’ compensation benefits. Covington v. A-Able Roofing, Inc., 95-1126 (La. App. 3rd Cir. 3/6/96), 670 So.2d 611.
5. The OWC hearing judges have jurisdiction to determine overpayments of the employer/carrier to the claimant employee and to determine employer credits for third party settlements entered by the employee which caused or increased the employer/carrier’s obligation to pay compensation benefits.
7. The OWC hearing judges have jurisdiction to assess the costs against the party who brings proceedings not based on reasonable grounds (i.e., frivolous claims), but there is no specific legislative authority granting the hearing judges authority for imposing full sanctions established by the Code of Civil Procedure for frivolous pleadings.
8. Specifically, third party administrators are not amendable to a suit under the Louisiana Workers’ Compensation Act for benefits. Hale v. F.A. Richard and Assoc., 756 So.2d 1261 (La. App. 2nd Cir. 2000). Baugh v. Parish Government Risk Management Agency, 715 So.2d 645 (La. App. 2nd Cir. 1998); Jefferson Parish Clerk of Court Health Insurance Trust Fund through Mouledoux v. Fidelity and Deposit Company Maryland, 73 So.2d 1238 (La. App. 5th Cir. 1996). (Holding that a TPA is a disclosed agent and cannot be liable in the place of the insurer.)
9. Although a wrongful discharge provision is contained within the Louisiana Workers’ Compensation Act at La. Rev. Stat. 23:1361 which penalizes a employer for terminating employment in response to an employee filing a workers’ compensation claim, the claim for retaliatory discharge is not a matter which comes under the exclusive jurisdiction of the worker’s compensation judges and is therefore litigated in the state district court system. Sampson v. Wendy’s Management, Inc., 593 So.2d 336 (La. 1992).
La. Rev. Stat. §23:1035.1 entitled “Extraterritorial coverage,” provides as follows:
(1) If an employee, while working outside their territorial limits of this states, suffers
an injury on account of which he, or in the event of his death, his dependants would have been entitled to the benefits provided by this Chapter had such injury occurred within the state, such employee, or in the event of his death resulting from such injury, his dependants, shall be entitled to the benefits provided by this Chapter, provided that at the time of such injury
(a) his employment is principally localized in this state, or
(b) he is working under a contract of hire made in this state
(2) The payment or award of benefits under the workers' compensation law of another state, territory, province, or foreign nation to an employee or his dependents otherwise entitled on account of such injury or death to the benefits of this Chapter shall not be a bar to a claim for benefits under this act; provided that claim under this act is filed within the time limits set forth in R.S. 23:1209. If compensation is paid or awarded under this act:
(a) The medical and related benefits furnished or paid for by the employer under such other worker's compensation law on account of such injury or death shall be credited against the medical and related benefits to which the employee would have been entitled under this act had claim been made solely under this act;
(b) The total amount of all income benefits paid or awarded the employee under such other worker's compensation law shall be credited against the total amount of income benefits which would have been due the employee under this act, had the claim been made solely under this act;
(c) The total amount of death benefits paid or awarded under such other worker's compensation law shall be credited against the total amount of death benefits due under this act.
(3) "Workers' compensation law" includes "occupational disease law".
(4) Notwithstanding the above, an employee may elect as his exclusive state workers' compensation remedy the provisions of Louisiana's workers' compensation law provided all the following items occur:
(a) This election is clearly stated in a written employment contract signed by the employee prior to the occurrence of an accident or occupational disease as defined in this Chapter.
(b) Louisiana's workers' compensation law has jurisdiction over the accident or occupational disease under its conflict of laws or extraterritorial law.
(c) The employee was domiciled in the state of Louisiana at the time of the accident or the injurious exposure to conditions causing an occupational disease.
The Louisiana Workers’ Compensation Act has jurisdiction over all accidents occurring in the State of Louisiana. However, for an accident occurring outside the territory of Louisiana, personal jurisdiction cannot be presumed over the defendant employers. In Hallaron v. Jacobs Engineering Group, Inc., 2002-903 (La. App. 5th Cir. 2/11/03), 839 So.2d 952, the employers did not have sufficient minimum contacts with the State of Louisiana under the two-part International Shoe test, personal jurisdiction was not established over those employers. It is notable that Hallaron’s accident did not occur in Louisiana nor was he working under a contract of hire made in Louisiana.
There is not a lot of caselaw elaborating on what is meant by “principally localized” for purposes of §1035.1(1)(a). A claimant failed in establishing jurisdiction under the Louisiana Workers’ Compensation Act over his claim where the accident did not occur in Louisiana and he did not establish an employment contract in Louisiana, but argued that since he lived in Louisiana and kept the company truck at his residence that his employment was principally localized in this state. See Johnson v. Sheldon Trucking Service, 597 So.2d 499 (La. App. 1st Cir. 1992), rev’d and remanded for evidence on the issue, 599 So.2d 1089 (La. 1992). “Principally localized” would suggest that the majority of claimant’s work time is spent in Louisiana otherwise, logically, the employment would be principally localized elsewhere. However, there is no case that says “principally localized” means a majority of the work time, but a small percentage of the work time is not going to be considered sufficient. See, Petticrew v. Abacus Capital Corp., 07-405 (La. App. 5th Cir. 12/11/07); 974 So.2d 692.
There has been significant litigation regarding what constitutes a contract of hire and in particular whether a contract of hire can be confected in Louisiana via phone calls. Indeed it can. In Harvey v. BE&J Construction, 3,0825 (La. App. 2nd Cir. 8/19/98), 716 So.2d 514, the court held that the contract of employment was made in Louisiana when the offer of employment was accepted at decedent’s home in Louisiana by phone. The court in Welch v. The Travelers’ Insurance Company, 225 So.2d 63 (La. 1st Cir. 1969), rev’d, 227 So.2d 594 (La. 1969) entered a similar holding. Likewise, where an employee was notified by phone at his home in Louisiana to come to Dallas, Texas for job orientation and following orientation he immediately began his duties as a truck driver at which time he suffered a stroke while driving a tractor in New Jersey, subject matter jurisdiction was deemed to exist over the claim noting that the intent of the parties is paramount in determining the state of hire and factors to consider in determining intent included domicile of the parties, the nature of the work to be done, and the place where the employment was initiated. Lakvold v. Stevens Transport, 95-0866 (La. App. 1st Cir. 12/15/95), 665 So.2d 828. As expected, the outcomes of the contract of hire decisions are case specific, but the overriding factor in reaching a determination seems to be the place the contract for hire was confected. Basically, if claimant had a reasonable basis to conclude that he had a job and was notified he had a job while in Louisiana through phone calls, letters, completed forms or otherwise, then the courts will consider the employee to have been hired in Louisiana. On the other hand, if it was necessary for the employee to complete the employment process through completion of forms, physicals, drug tests, and/or interviews in another state, then his contract of hire will have been made in the other state even if the initial contact was through phone calls or letters directed to the employee in Louisiana. Petticrew v. Abacus Capital Corp., 07-405 (La. App. 5th Cir. 12/11/07); 974 So.2d 692.
As we have seen, the Louisiana Act does not set up mutually exclusive jurisdiction with respect to other states’ workers’ compensation laws, but does not provide for concurrent jurisdiction with the Federal Longshore and Harbor Workers’ Compensation Act or Jones Act remedies in accordance with La. Rev. Stat. §23:1035.2 entitled “Claims covered by certain federal laws” as follows:
No compensation shall be payable in respect to the disability or death of any employee covered by the Federal Employer's Liability Act, the Longshoremen's and Harbor Worker's Compensation Act, or any of its extensions, or the Jones Act.
The Louisiana Workers’ Compensation Act does have a notice requirement placed upon the employee, but it is a great example of the pitfalls of reading the statute only without considering the interpretive caselaw. La. Rev. Stat. 23:1301 entitled “Notice as prerequisite to institution of proceedings” provides as follows:
No proceeding under this Chapter for compensation shall be maintained unless notice of the injury has been given to the employer within thirty days after the date of the injury or death. This notice may be given or made by any person claiming to be entitled to compensation or by anyone on his behalf.
This provision has rarely been applied against the employee. The caselaw requires that the employer show that the failure of the employee to provide notice prejudiced it. The employee can also avoid the application of the strict time requirement for notice if the employee has failed to post “at some convenient and conspicuous point in his place of business” in compliance with Section 1302 and upon failure to properly post notice by the employer, the employer’s time for giving notice is extended to one year from the date of injury. Quite non coincidentally that extension of one year coincides exactly with the primary prescriptive (limitations) period of one year under La. Rev. Stat. 23:1209.
The Louisiana law of “prescription” is quite similar in application and substance to the common law doctrine of “statute of limitations.” The prescriptive period for filing claims under the Louisiana Workers’ Compensation law is governed by LRS 23:1209 and it is generally accepted that there are separate prescription provisions governing claims for weekly compensation benefits (“indemnity”) and medical benefits.
Also, the Louisiana law of prescription is different for traumatic injury and occupational disease claims with traumatic injury claims governed by Section 1209 and occupational disease claims governed by LRS 23:1031.1(e).
Section 1209 entitled “Prescription: timeliness of filing; dismissal from one of prosecution”; provides:
A.(1) In case of personal injury, including death resulting therefrom, all claims for payments shall be forever barred unless within one year after the accident or death the parties have agreed upon the payments to be made under this Chapter, or unless within one year after the accident a formal claim has been filed as provided in Subsection B of this Section and in this Chapter.
(2) Where such payments have been made in any case, the limitation shall not take effect until the expiration of one year from the time of making the last payment, except that in cases of benefits payable pursuant to R.S. 23:1221(3) this limitation shall not take effect until three years from the time of making the last payment of benefits pursuant to R.S. 23:1221(1), (2), (3), or (4).
(3) When the injury does not result at the time of or develop immediately after the accident, the limitation shall not take effect until expiration of one year from the time the injury develops, but in all such cases the claim for payment shall be forever barred unless the proceedings have been begun within three years from the date of the accident.
(4) However, in all cases described in Paragraph (3) of this Subsection, where the proceedings have begun after two years from the date of the work accident but within three years from the date of the work accident, the employee may be entitled to temporary total disability benefits for a period not to exceed six months and the payment of such temporary total disability benefits in accordance with this Paragraph only shall not operate to toll or interrupt prescription as to any other benefit as provided in R.S. 23:1221.
B. Any claim may be filed with the director, office of workers’ compensation, by delivery or by mail addressed to the office of workers’ compensation. The filing of such claims shall be deemed timely when the claim is mailed on or before the prescription date of the claim. If the claim is received by mail on the first legal day following the expiration of the due date, there shall be a rebuttable presumption that the claim was timely filed. In all cases where the presumption does not apply, the timeliness of the mailing shall be shown only by an official United States postmark or by official receipt or certificate from the United States Postal Service made at the time of mailing which indicates the date thereof.
C. All claims for medical benefits payable pursuant to R.S. 23:1203 shall be forever barred unless within one year after the accident or death the parties have agreed upon the payments to be made under this Chapter, or unless within one year after the accident a formal claim has been filed with the office as provided in this Chapter. Where such payments have been made in any case, this limitation shall not take effect until the expiration of three years from the time of making the last payment of medical benefits.
D. When a petition for compensation has been initiated as provided in R.S. 23:1310.3, unless the claimant shall in good faith request a hearing and final determination thereon within five years from the date the petition is initiated, that claim shall be barred as the basis of any claim for compensation under the Worker’s Compensation Act and shall be dismissed by the office for want of prosecution, which action shall operate as a final adjudication of the right to claim compensation thereunder.
1. For claims arising out of an accident, §23:1209A is the governing provision:
1. An employee who has received no compensation must assert his claim for benefits within one year of the accident or lose all claims.
2. If the injury is a developmental type disability following an accident, the employee who has received no compensation benefits must assert his claim one year from the development of the condition causing the disability but no later than three years from the date of the accident.
3. Recent amendment extends the time limit for filing a claim for developmental injuries effective August 1, 2012. For claims filed more than two years from the date of the accident but less than three years, the employee would be entitled to TTD benefits not to exceed six months.
4. If any disability benefits were paid, employee will have three years from the date of last payment of any type of benefits to assert a claim for SEB. The employee's continuing right to SEB is governed by §1221(3)(d)(i) which provides that SEB terminates at the end of any two-year period commencing after termination of temporary total disability, unless during the two-year period, supplemental earnings benefits have been payable during at least thirteen consecutive weeks.
5. Note that prescription on medical benefits and compensation benefits under the statute are treated separately. The case law generally provides that the payment of medical expenses does not interrupt prescription on the claim for weekly compensation benefits. Devillier v. Hartford Accident and Indemnity Co., 219 So.2d 338 (La. App. 1st Cir. 1969); Rowley v. Lumberman's Mutual Casualty Co., 247 So.2d 1135 (La. App. 4th Cir. 1977); Young v. American Marine Corp., 458 So.2d 549 (La. App. 4th Cir. 1984). The rationale for these decisions is that the courts wanted to encourage an employer to readily provide medical expenses to employees without fear of prejudicing the defense of prescription as to a later claim for compensation benefits.
6. Note also that the Louisiana courts consider "wages paid in lieu of compensation" to be payments of compensation for pur-poses of tolling prescription on the compensation claim. The test for determining whether wages were paid in lieu of compensation is whether the wages were actually earned by the employee. Generally, if an employee actually performed some work, even if in pain, then wages will be considered earned and not paid in lieu of compensation. If, on the other hand, the employee received pay while at home recovering, then the payment of such wages will be considered unearned and in lieu of compensation, and toll prescription on the compensation claim.
Benefits such as sick leave and vacation pay should be con-sidered earned where these have legitimately accrued through past services rendered by the employee as a general benefit pursuant to company policy and applicable to all employees. If so, such payments should not be considered as made in lieu of compensation and should not toll prescription. Ebbs v. Kelly Services, 520 So.2d 1320 (La. App. 4th Cir. 1988); Lester v. Rebel Crane and Service Co., 394 So.2d 1230 (La. 1981); Blanchard v. Liberty Mutual Insurance Company, 280 So.2d 592 (La. App. 3d Cir. 1973). Accordingly, the use of earned vacation, short or long term disability payments and sick time should not be considered “wages in lieu of compensation.”
7. Section 1209.B provides that claims may be filed by delivery or by mail. This Section also provides that there will be a rebuttable presumption that the claim was filed timely if it is received on the first legal day following the expiration of the due date. In all cases where the presumption does not apply, the timeliness of the mailing shall be shown only by an official United States postmark or by official receipt or certificate from the United States Postal Service made at the time of mailing which indicates the date thereof
8. Courts have held that for purposes of prescription, the "developmental injury" is deemed sufficiently developed to begin the running of prescription whenever the disability prohibits the worker from substantially performing the duties of the employment. Palmer v. Carter Federal Credit Union, 397 So.2d 50 (La. App. 2d Cir. 1981). However, in Sevin v. Schwegmann Giant Supermarkets, 94-1859 (La. 4/10/95) 652 So.2d 1323 (La. 1995), the Supreme Court held that "the time the injury develops" is interpreted to mean the date the disability develops, and is usually the time when it becomes clear that the worker can no longer perform his/her employment duties in a satisfactory manner. The "developing injury" rule has been applied not only when the injury does not manifest itself immediately, but also when the employee, after an accident in which injury is immediately apparent, continues to attempt employment duties until he or she is finally disabled from doing so.
Claims based upon occupational disease: §23:1031.1E. provides:
E. All claims for disability arising from an occupational disease are barred unless the employee files a claim with the OWC within one year of the date that:
(1). The disease manifested itself.
(2). The employee is disabled from working as a result of the disease.
(3). The employee knows or has reasonable grounds to believe that the disease is occupationally related.
2. Note that employee's mere knowledge of the disease is not sufficient to trigger the running of the prescriptive period. Crump v. Hartford Accident and Indemnity Company, 367 So.2d 300 (La. 1979).
The events which start the prescriptive period to run (manifestation, knowledge, disability) have been construed by the courts in the conjunctive rather than the disjunctive and the existence of all three such events are necessary to commence the running of the prescriptive period. Thornell v. Payne and Keller, Inc., 442 So.2d 536 (La. 1983), writ denied, 445 So.2d 1231 (La. 1984); Naquin v. Johns-Manville Sales Corp., 456 So.2d 665 (La. App. 5th Cir. 1984); Austin v. Howard Discount Stores, Inc. and Continental Insurance Co., 569 So.2d 659 (La. App. 2d Cir. 1990).
If an employee making an occupational disease claim “shall have willfully and falsely represented himself as not having previously suffered from such disease,” his claim is barred under Section 23:1031.1G
The time limitation for filing claims for occupational diseases or death is extended by six months if the employer fails to post a notice at “some convenient and conspicuous point about the place of business.” §1031.I
1. Timeliness (Non-Occupational Disease Death Claim)
2. Cause of Action
The following provision is not considered a prescriptive or preemptive period by the caselaw. The following provision is best described as a legislatively imposed threshold on causation.
a. §23:1231 A. provides:
For injury causing death within two years after the last treatment resulting from the accident, there shall be paid to the legal dependent of the employee, actually and wholly dependent upon his earnings for support at the time of the accident and death, a weekly sum as provided in the Subpart.
b. The injury at work must still be the cause of death regardless of how long after injury the death occurs.
c. Preclusion of §1231 A. ties existence of cause of action to length of time between death and “last treatment resulting from the accident” and not the length of time between death and occurrence of the accident (as was the case with provision before August 21,1992 amendment)
3. Death Claims Caused By Occupational Disease
d. §23:1031.1 F. provides:
All claims for death arising from an occupational disease are barred unless the dependent or depen¬dents as set out herein file a claim as provided in this Chapter within one year of the date of death of such employee or within one year of the date the claimant has reasonable grounds to believe that the death resulted from an occupational disease
e. The time limitation for filing claims for occupational diseases or death is extended by six months if the employer fails to post a notice at “some convenient and conspicuous point about the place of business.” §1031.1
Prescription-Medical Claims: §23:1209(C)
All claims for medical benefits pay¬able pursuant to R.S. 23:1203 shall be forever barred unless within one year after the accident or death the parties have agreed upon the payments to be made under this Chapter, or unless within one year after the accident a formal claim has been filed with the office as provided in this Chapter. Where such payments have been made in any case, this limitation shall not take effect until the expira¬tion of three years from the time of making the last payment of medical benefits.
1. The payment of compensation benefits or wages in lieu of compensation benefits does interrupt prescription on the medical claim according to the First and Fifth Circuit Courts of Appeal Levantino v Domengeaux and Wright, PLC, 593 So2d 721 (La App 1st Cir. 1991); Manuel v River Parish Disposal, Inc., 96-CA-302 (La App 5th Cir 10/1/96) 683 So2d 791. There is also a Third Circuit decision Ancelet v Moreno's Air Conditioning, Inc., 331 So2d 127 (La App 3d Cir 1976) asserting this proposition, however, it is a decision that was rendered prior to the 1985 amendment to section 1209 and may not be followed by the current justices of the Third Circuit. The Fourth Circuit has declared its belief that the amendment to section 1209 makes it clear that medical and indemnity benefits have separate prescriptive periods Rapp v City of New Orleans,95-1638 (La App 4th Cir 9/18/96) 681 So2d 433.
2. A ten-year prescriptive period governs claims for medical benefits arising between April 1, 1985 through January 1, 1986. Lester v. Southern Casualty Insurance Company, 466 So.2d 25 (La. 1985).
3. A one-year prescriptive period governs claims for medical benefits between December 14, 1964 through April 1, 1985. Brown v. Travelers Insurance Company, 169 So.2d 540 (La. 1964).
a. Hopefully, no further claims will arise out of acci¬dents occurring on the cut-off dates of January 1, 1986 and April 1, 1985.
There must be an employment relationship between the injured worker and the employer, as defined in section 1.1-1.4 above. Generally, the employee’s accident and resulting injury must arise out of and occur during the course and scope of his employment with the employer.
The employment relationship requires a voluntary engagement by the employer of an employee and the voluntary acceptance of the employment by the employee. There is also a recognition that some remuneration must be paid for the services and that the services are related to a business pursuit. A business enterprise is only obligated to pay workers’ compensation benefits to those individuals who are considered to be “employees” under the statutory provisions of the workers’ compensation act or the interpretation of these statutes by the courts.
“Accident” means an unexpected or unforeseen actual, identifiable, precipitous event happening suddenly or violently, with or without human fault, and directly producing at the time objective findings of an injury which is more than simply a gradual deterioration or progressive degeneration. LSA R.S. 23:1021(1)
“Injury” and “personal injuries” include only injuries by violence to the physical structure of the body and such disease or infections as naturally result therefrom. These terms shall in no case be construed to include any other form of disease or derangement, however caused or contracted. § 1021(8) (a).An unwitnessed accident can be compensable under Louisiana law. A worker’s testimony alone may be sufficient to discharge the burden of proving a work related accident, provided two elements are satisfied: (1) no other evidence discredits or casts serious doubt upon the worker’s version of the incident, and (2) the worker’s testimony is corroborated by the circumstances following the alleged incident. Bruno v Harbert International, Inc. 593 So.2d 357 (La. 1992). See also, Williams v. Ravare Masonry Co., 00-00329-CA (La. App. 3d Cir. 10/04/00), 774 So.2d 254. However, the converse is true. If the claimant’s story Is suspicious and contains inconsistencies, or if there is evidence which casts doubt on his testimony, he does not meet his burden of proof. See Stein Mart and Royal & Sunalliance v. Prejean, 01-718 (La. App. 3d Cir. 10/31/01), 798 So.2d 1230 and Wilson v. Wal-Mart Stores, Inc., 01-624 (La. App. 3d Cir. 10/31/01), 799 So2d 805.
A. Injury compensable if it arises out of and in the course and scope of employment.
1. "Arising out of employment" looks at the source of the risk. Kern v. Southport Mill, 141 So. 19 (La. 1932). It requires that the injury be the result of some risk greater for this employee than for one not so employed.
2. "Course and scope" looks at the time, place and activity.
B. Arising Out Of
Louisiana courts have struggled with defining the term “arising out of” employment . The Courts have moved between two definitions often based upon the results they wish to achieve.
1. Increased risk doctrine allows compensability if the injury was caused by an increased risk to which the employee was subjected to as a result of his/her employment as compared to the general public. If the job did not increase the risk, then no compensation would be awarded.
2. Positional risk doctrine allows compensability even though source of risk is not necessarily work-related. It is based upon the theory that the employer’s business placed the employee in the “position of risk” at the time.
a. Common risk (i.e., lightning or storm).
b. Idiopathic fall.
C. Course and Scope
1. Time:- Accidents occurring at work place during lunch or breaks held to be compensable. Carrodine v. Regis Corp, 2010 – 529, (La App. 3d Cir 11/3/10), 52 So3d 181. Accidents while on smoke break on employer’s premises compensable. Compare with Smith v. Orleans Management Corp. 242 So 2d 288, where the court held a claim for injury by employee left during lunch was not compensable when the reason for leaving the employer’s premises was personal. Accidents occurring at work place just before or after work period held to be compensable. Glory v. Zuppardo's Economical Supermarket, Inc., 532 So.2d 933 (La. App. 5th Cir. 1988) (picking up paycheck). Personal pursuits allowed by employer (shopping, working on car) held compensable.
2. Place:- Near work site - Threshold doctrine allows for compensability when injury occurs adjacent to employer's premises in a hazardous area (i.e., railroad tracks, parking lot, stairwell, and elevator). See Robinson v. Brown, 35,430-WCA (La. App. 2d Cir. 12/19/01), 803 So. 2d 396.
3. Activity:-Travel to and From Work:-The general rule states this is not compensable. However, there are many exceptions.
a. If accident happens on employer’s premises;
b. If employee on mission of employer except where the employee deviates from the employer’s mission. Timmons v. Silman, 99-3264 (La. 5/15/00), 761 So. 2d 507
c. If employer interested himself in the travel (i.e., company car, paid time during travel, reimbursed expenses, etc.);Phillips v. Epco Carbon Dioxide Products, Inc., 35,740-WCA (La. App. 2d Cir. 2/27/02), 810 So.2d 1171. Robert v. Lecompte, 2002-569 (La. App. 3d Cir. 10/30/02), 829 So. 2d 1200.
i) Employee doing work for employer where employer’s consent could be fairly implied;
ii) If employee hurt while traveling to and from one work site to another;
iii) if operation of vehicle was the performance of one of duties of employment of the employee.
4. While Working Out of Town:- The “Comfort Doctrine” provides compensability for accidents while employee is out of town for work, but occur during personal time.Robinson v. Simmons Co., 99-1319 (La. App. 4th Cir. 3/22/00), 762 So.2d 112, writ denied 2000-1122 (La. 6/2/00).
5. During Social Events:- Accidents occurring during social activities are held to be compensable if employer requires participation or derives substantial direct benefits from activity. See Jackson v. American Ins. Co., 391 So.2d 1339, reversed, 404 So.2d 218 (La 1981).
6. The Mundy decision :- making a round peg square.
Q: When is an accident, occurring on the employer's premises just prior to punching in, not compensable under the Worker's Compensation Act?
A: When the employee wants to sue the employer in tort.
Mundy v. DHHR, 593 So.2d 346 (La 1992). The employee was assaulted by a stranger while on the employer's premises riding an elevator up to her work site. The employee was scheduled to begin work at 11:15 p.m. The attack occurred at 11:20 p.m., but before the employee reached her work site. Employer argued that they were immune from tort suit by the exclusive remedy provision of the Act. Although the appellate court had no problem finding that the attack occurred during the course and scope of employment, the Supreme Court reversed. The court noted that the employee had not officially started work yet. Furthermore, the threshold doctrine did not apply because the risk was neutral and not employment related, as the general public, and not just employees, used that elevator.
1. Horseplay :- Section 1031(C) excludes injuries sustained at work hen the employee is engaged in horseplay at time of injury.
2. Personal disputes :- Section 1031(D) excludes injuries sustained at work when injury arose out of dispute with another person or employee over matters unrelated to work.
There are different types of accidents and injuries that may or may not be compensable under the Louisiana Workers’ Compensation Act. The statute was amended in 1989 to overrule the long standing history of cases finding an accident under the cumulative trauma rule, where the employee sustained cumulative traumas over years of employment. The idea was to preclude the repetitive trauma claims that typically stemmed from the degenerative, progressive process. Since the 1989 amendment, some courts have applied Section 1021(1) strictly and require a specific identifiable event. Other courts have given a liberal interpretation and have found an accident without a true, specific event.
There are other types of injuries that come into play, namely heart or cardiovascular incidents, mental/psychological injuries and occupational diseases.
A. Court did not find “accident,” specific event required.
In these cases, the courts strictly interpreted 1021(1) and found that plaintiff failed to meet burden of proof. No reporting of an accident and generalized complaints of pain while at work not enough. Smith v. UNR Home Products, 607 So.2d 898 (La. App. 2nd Cir. l992), rev’d on other grounds, 614 So.2d 54 (La. 1993). Acceleration of arthritic condition from everyday job duties insufficient. Jones v. AT&T, 28059 (La. App. 2nd Cir. 2/28/96), 669 So.2d 696.
Repetitive micro traumas aggravated employee’s degenerative condition, but not “accident,” Qualls v. Stone Container Corp., 29,794 (La. App. 2nd Cir. 9/24/97), 699 So.2d 1137. See also Matthews v. Taylor Temporary, Inc., 97-l7l8 (La. App. 4 Cir. 2/11/98), 707 So.2d 1021. A continuation of longstanding discomfort is not an “accident.” Coats v American Telephone & Telegraph Co., 95-2670 (La. 10/25/96), 681 So.2d 1243. In Ardoin v. Firestone Polymers, LLC, 2010-0245 (La. 1/19/11), the Louisiana Supreme Court overturned trial court and 3rd Circuit and found no accident because the claimant did not report the alleged accident for 18 months. In Bernard v. Petro Stopping Centers, et al, 2007 0387 (La. App. 1 Cir. 11/2/07), no accident found due to claimant giving inconsistent dates of the accident and inconsistent facts of the accident.
B. Accident found, even when there was a question as to whether a specific “event” was identified.
In these cases, the courts took more liberal approach in finding that an “accident” occurred. The court interpreted the statutory change to mean that “accident” now includes a weakened condition which collapsed due to a precipitous event, but does not include a weakened condition that gradually degenerates over time. The court reviewed the facts and identified a moment in time when the employee noted back pain and numbness in her leg while she was pushing her chair closer to the assembly line. Rice v. AT&T, 615 So.2d 358 (La. App. 2d Cir. 1993). The First Circuit awarded benefits to an employee who allegedly suffered from flat feet due to her obesity. She noticed pain in her feet while standing by the copy machine at work. Dyson v. State Employees Group Benefits Program, 610 So.2d 953 (La. App. 1st Cir. 1992). [See also, Robin v. Schwegmann Giant Supermarkets, 646 So.2d 1030 (La. App 1st Cir. 1994), writ not considered, 651 So.2d 259 (La. 1995), writ denied on reconsideration, 653 So.2d 554 (La. 1995)]. Some courts relax the burden even more when they want a desired result. In Borel v. Dynamic Offshore Contractors, 626 So.2d 565 (La. App. 3d Cir. 1993), cert, denied, 630 So.2d 801 (La. 1993), the Third Circuit reversed and awarded benefits, noting that the claimant did identify a particular day in which he believed he had an “accident:”
Even though Borel could only offer conjecture that it was his lifting of the pipe at the end of the day which injured him, we find that the close proximity of the onset of pain and stiffness satisfied the analysis utilized in Rice, supra. Furthermore, considering the repeated heavy physical labor which Borel was required to perform, in light of Dynamic’s knowledge that he had a back defect as recorded in his pre-employment physical, we further find that he proved that he was involved in a compensable work-accident as enunciated in Dyson, supra.
In McCall v. Wal-Mart Stores, 2002-1343 (La. App. 3d Cir. 3/5/03), 846 So. 2d 832, although the employee was unable to identify specifically what movement she was making, she was able to state what time the injury occurred. The mechanics of the injury was supplied by one of the treating physicians who rendered the opinion that the claimant moved to the right and bent forward. The court held that the claimant’s injury was compensable even though she was unable to point to a “sudden, actual, identifiable, precipitous event” that caused the back pain. In Begue v. Crossover, Inc. & LWCC, 2003-0267 (La. App. 1st Cir. 11/21/03), 868 So. 2d 100, the court found an “accident” since the employee began experiencing a tingling sensation in his fingers,then experienced pain in his hands, and a day later in his shoulders and back. The Court of Appeal held that while it was true that the employee did not suffer an “accident” on a particular date, he was able to clearly identify specific events at work that led first to the onset of the symptoms and subsequently to the increase in the symptoms as he attempted to continue his work. The event that triggered an aggravation in the employee’s pre-existing condition constituted an “accident” under Section 23:1021(1). In Maddox v. Texas Gas Transmission Corp., 07-0906 (La. App. 3rd Cir 12/5/07), an “accident” was found even though back problems were initially reported as non-work related. Only after finding out he needed surgery and with prompting from his doctor did he relate problems to work two months later. In Ebare v. Cubic Applications, Inc., 08-1095 (La. App. 3 Cir. 3/4/09), “accident” found even though it was not reported to employer and employee worked full duty for one month after the alleged accident.
*The Balloon Analogy
A useful analogy to illustrate the difference between accident and cumulative trauma is the sudden release of air from a balloon when it is struck by a pin (accident) as opposed to the slow release of air over time due to a leak (cumulative trauma).
D. Subsequent Accidents
1. If an employee has an accident after the original job injury and this second accident aggravates the original condition the courts have held the employer responsible for the increased disability. This was clearly stated by the Louisiana Supreme Court in Stewart v. Hospitals Affiliates International, Inc. of Baton Rouge, 404 So.2d 944 (La 1981)
When a work related injury is subsequently exacerbated, the aggravation is regarded as a development of the initial accident even though it occurs away from the employer's premises after employment has terminated. Id. at 945.
2. However, if the subsequent accident has created a new injury the courts will regard the subsequent accident as having intervened and broken the chain of causation from the original job accident and the employer would not be responsible for the subsequent disability Allstate Ins. Co v. Theriot, 362 So.2d 1214 (La. App. 4th Cir. 1978), rev’d on other grounds, 376 So.2d 950 (La. 1979); See also, Employers Mutual Liability Insurance Company of Wisconsin v. Dixon, 425 So.2d 885 (La. App. 4th Cir. 1983).
E. Cardiovascular/Heart Related Accidents
Although the early case law required unusual physical stress before accepting as compensable a heart attack [Wright v Louisiana Ice & Utilities Co.,138 So. 450 (La. App. 1st Cir. 1931); Siscoe v Cooley, 9 So.2d 313 (La. App. 2d Cir. 1942)], jurisprudence later evolved to accept heart attacks as compensable without any showing of unusual physical or emotional stress Guidry v. Sline Industrial Painters, 418 So.2d 626 (La. 1982); Nix v. City of Houma, 488 So.2d 184 (La. 1986); Reid v. Gamb, Inc., 509 So.2d 995 (La. 1987); Carruthers v. PPG Industries, Inc., 551 So.2d 1282 (La. 1989). Prior to codification, simply having the heart attack while at work was sufficient, notwithstanding the cause.
2. The 1989 Codification
Section 1021(8) (e) provides that a heart-related injury shall not be considered compensable unless it is demonstrated by clear and convincing evidence that:
a. The physical work stress was extraordinary and unusual in comparison to the stress or exertion experienced by the average employee in that occupation.
b. The physical work stress or exertion, and not some other source of stress or preexisting condition, was the predominant and major cause of the heart-related injury.
In City of Oakdale v. Smith, 2000-1792 (La. App. 3d Cir. 5/02/01), 788 So.2d 507, the court found that the physical stress involved in a high speed chase was extraordinary. In Gooden v. B.E. & K. Construction, 33,457 (La. App. 2d Cir. 6/23/00), 764 So.2d 1206, the claimant was required to work 12-14 hour days, and had to work in temperatures exceeding 115 degrees, but doctor found that the claimant’s risk factors were the predominant cause (55 years old, did not exercise, smoked two packs of cigarettes a day, had high cholesterol, his father died at a young age of heart disease, had symptoms of angina for one year prior to this heart attack, with one coronary artery completely blocked and another with significant blockage). See also, Costin v. LaSalle Testers and LWCC, 32,632 (La. App. 2d Cir. 3/1/00), 754 So.2d 401, writ denied, 2000-0879 (La. 5/5/00), 761 So.2d 552, where the immediate physical stress preceding the heart attack was unusual, but not the predominant cause.
3. Injuries to another body part and subsequent heart attack
Claimants who allege that their job injuries to other body parts caused their subsequent heart attack or stroke still need to meet criteria. See Hatcherson v. Diebold, Inc., 00-3263 (La. 5/15/01), 784 So.2d 1284, where immobility from job back injury allegedly caused heart attack. The court noted that the claimant’s job was not physically stressful. Thus, the requirement of extraordinary physical stress was absent and the lack of physical activity due to the job accident would not substitute for the need for such physical stress
The Louisiana Supreme Court has upheld the constitutionality of this higher standard of proof in Charles v. The Travelers Insurance Co., 627 So.2d 1366 (La 1993). However, in a footnote, the court suggested that the absence of a compensation remedy may give rise to a tort claim against the employer. This new tort remedy was recognized by the Fifth Circuit Court of Appeal in Ellis v. Normal Life of Louisiana, No. 93-CA-1009 (La. App. 5th Cir. 5/31/94), 638 So.2d 422.
F. Cardiovascular Injury Due to Trauma
The provisions of R.S. 23:1021(8)(e), i.e., clear and convincing evidence and unusual physical stress, do not apply if heart attack is a result of physical trauma. In Corbello v. Coastal Chemical Company & LWCC, 2002-1241 (La. App. 3d Cir. 3503), 839 So. 2d 1152, plaintiff, a truck driver, was involved in an on the job motor vehicle accident. Over one month post accident, after returning to regular duty, plaintiff died of a heart attack while on the job. The court held that plaintiff’s heart attack was caused by physical trauma to his chest in the motor vehicle accident and, therefore, R.S. 23:1021(8)(e) did not apply.
G. Mental/Psychological Injuries
1.Physical/Mental:- R.S. 23:1021(8)(c) and (d)
a. This classification is intended to cover mental conditions that are the result of an employee's emotional response to their job accident. Most common diagnosis is "major depression" due to pain. This classification would also include the "post-traumatic stress disorders" in which the employee has developed severe personality problems because of their emotional response to a severe traumatic event at work.
b. In recognition of the fact that these claims are easy to fake, the legislature required that they be proven by: (1) clear and convincing evidence, (2) diagnosed by a licensed psychiatrist or psychologist, and (3) that they meet the criteria established in the most current edition of the Diagnostic Statistical Manual (DSM) of the American Psychiatric Association.
Bethley v. Keller Construction, 2001-1085 (La. App. 1st Cir. 12/20/02) 836 So.2d 397. A widow’s claim for death benefits for the suicide of her husband who was previously severely injured in a work accident was denied benefits even though the widow offered the testimony of a psychologist who related the suicide to depression from the job accident based solely on an interview with the widow post-accident.
2. Mental/Mental :-R.S. 23:1021(8)(b)
a. This classification of mental injuries is intended to cover mental conditions that occur without a precipitating physical injury. Although mental disabilities resulting from long-term stress are NOT compensable under the Louisiana Workers' Compensation Law, the law does recognize the compensability of mental injuries that result from sudden, unexpected, and extraordinary stress related to the employment R.S. 23:1021(8)(b). Sparks v. Tulane Medical Center, 546 So.2d 138 (La. 1989); Williams v. RTA, 546 So.2d 150 (La. 1989).
b. These conditions require the same level of proof as established for physical/mental injuries.
c.The stress must be extraordinary.This is an objective test. See Tranchant v. Environmental Monitoring Services, Inc., 00-CA-1160 (La. App. 5th Cir. 12/13/00), 777 So2d 516. In Partin v. Merchants & Farmers Bank, 01-C-1560 (La. 03/11/02), 810 So.2d 1118, the Louisiana Supreme Court held that a demotion for unsatisfactory performance did not create extraordinary stress no matter how unfair the personnel action. In Tavella v. Save-A-Center, 2003-0458 (La. App. 1st Cir. 12/31/03), 868 So. 2d 752, the Court of Appeal held that the employee failed to prove extraordinary stress by clear and convincing evidence. It was noted that the determinate factor was not the employee’s subjective reaction to the incident, rather, the issue of legal causation is controlled by the reasonability of the claimant’s reaction. The event at issue involved a privately expressed managerial response to the possibility of sexual encounters between two employees. Ultimately, it was believed that this incident would not cause extraordinary stress or a mental injury under an objective analysis.
d. This objective standard applies even if claimant aggravated a pre-existing mental condition. Aucoin v. Dow Chemical Company, 98-CA-1912 (La. App. 1st Cir. 9/24/99), 745 So.2d 682, writ denied, 1999-3600 (La. 2/18/00), 754 So.2d 968=.
e. The stress must be sudden and unusual. A meeting over job performance is not unusual. “All employees are subject to workplace rules and violations of such rules may produce unpleasant consequences.” Montgomery v. Louisiana, DOTD, 2001-0453 (La. App. 3rd Cir. 10/03/01), 797 So.2d 177.
G. Occupational Diseases
Accident or Occupational Disease?
There are cases in which a disease process is caused by a specific event but the exact date of the event or "accident" cannot be identified. For example, a firefighter who is exposed to hepatitis while providing medical assistance to various people over an extended time period may not be able to identify the particular event which caused the disease but there was such an event. Price v. City of New Orleans, 95-1851 (La. App. 4th Cir. 3/27/96), 672 So.2d 1045; See also Landry v. Physicians Practice Management, Columbia/HCA, 00-1298 (La. App. 3d Cir. 4/4/01), 783 So.2d 619 (a nurse employed by several physicians developed mononucleosis as a result of exposure to one of several patients).
These and similar cases would fall within the occupational disease law due to the problem of identifying an "accident" date and also because there is a need to distinguish between diseases one acquires at work because of the nature of the work from those diseases that one may have acquired at work but is not "peculiar" to the employment (e.g., exposure to flu virus).
1. Occupational Diseases—LSA R.S. 23:1031.1
Legislative Recognition of Occupational Disease Claims. The original Workers' Compensation Law did not recognize injuries that were not the result of an "accident" even if the condition was clearly work related. Occupational diseases first were accepted as compensable in Louisiana through a legislative amendment to the Louisiana Workers' Compensation Law in 1952. However, this law limited the claims to a specific list of diseases (e.g., silicosis).
Stucky v City of Alexandria, 81 So.2d 46 (La App 2d Cir 1955). A watchman at a zoo who claimed to have contracted "parrot's fever" (psittacosis) was not able to recover under the occupational disease law because it was not among the listed occupational diseases.
a. Legislative Expansion of Occupational Disease Claims
In 1975 the legislature amended the occupational disease act by removing the requirement that the disease fit the specific listing and substituting instead a broad definition of occupational disease.
However, under this more liberal definition was included the requirement that the disease be one that is "characteristic of and peculiar to” their job. La. R.S. 23:1031.1 Occupational Disease
b. An occupational disease means only that disease or illness which is due to causes and conditions characteristic of and peculiar to the particular trade, occupation, process, or employment in which the employee is exposed to such disease.
• Asbestosis - Hawkins v Johns-Manville Corporation, 418 So.2d 725 (La. App. 4th Cir. 1982). Manufactured asbestos shingles.
• Silicosis - Schouest v J. Ray McDermott & Co., Inc., 411 So.2d 1042 (La. 1982). Painter/sandblaster.
• Bullous emphysema - Zeringue v Fireman's Fund American Insurance Company, 271 So.2d 613 (La. App. 1st Cir. 1972). Worked for lumber company, exposed to toxic substances used to paint wood products.
• Bronchial asthma - Hebert v Lake Charles American Press, 427 So.2d 916 (La. App. 3d Cir. 1983). Machine operator exposed to chemicals in printing.
• Myelogenous leukemia - Stutes v Koch Services, Inc., 94-782 (La. App. 3d Cir. 12/7/94), 649 So.2d 987, writ denied, 95-0846 (La. 5/5/95), 654 So.2d 335. Truck driver exposed to Benzene when gauging, sampling and testing oil.
• Dermatitis - Oliveaux v Riverside Nursing Home 29,419 (La. App. 2d Cir. 4/2/97), 691 So.2d 340. Kitchen assistant, allergic reaction to latex gloves.
c. Cumulative Trauma as Occupational Disease
i) The occupational disease law also expresses a legislative exclusion of cumulative trauma disorders (e.g., "degenerative disc disease, spinal stenosis, arthritis of any type" La. R.S. 23:1031.1 B. The one exception to this limitation is the recognition of "work-related carpal tunnel syndrome" (La. R.S. 23:1031.1 B).
ii)Carpal tunnel syndrome (CTS) - This condition may be compensable as an "accident" if there is an identifiable event that preceded the onset of symptoms. Smith v Tudor Construction, 25,783 (La. App. 2d Cir. 5/4/94), 637 So.2d 666. Without the identification of an "accident", the Legislature specifically has excluded from the compensation system any conditions that are the result of "gradual deterioration or progressive degeneration". La .Rev. Stat. 23:1021(1). See e.g., Balsamo v Jones, 28,885 (La. App. 2d Cir. 12/11/96), 685 So.2d 1140.
Injury is compensable if it arises out of and in the course and scope of employment.
1. "Arising out of employment" looks at the source of the risk. Kern v. Southport Mill, 141 So. 19 (La. 1932). It requires that the injury be the result of some risk greater for this employee than for one not so employed.
2. "Course and scope" looks at the time, place and activity.
Louisiana courts have struggled with defining the term “arising out of” employment. The Courts have moved between two definitions often based upon the results they wish to achieve.
Increased risk doctrine allows compensability if the injury was caused by an increased risk to which the employee was subjected to as a result of his/her employment as compared to the general public. If the job did not increase the risk, then no compensation would be awarded.
Positional risk doctrine allows compensability even though source of risk is not necessarily work-related. It is based upon the theory that the employer’s business placed the employee in the “position of risk” at the time.
a. Common risk (i.e., lightning or storm).
b. Idiopathic fall.
Dore v. Sydran Food Services II, L.P., d/b/a Burger King and LWCC, No. 01-728 (La. App. 3d Cir. 10/31/01), 799 So2d 825. Claimant suffered rib injury after sneezing at work. She tried to tie it to work activities by alleging working “in an environment of spices, cooking odors and cleaning solvent.” Claim denied when medical records documented that she had pre-existing problems with her rib, and had a cold.
a. Accidents occurring at work place during lunch or breaks held to be compensable. Carrodine v. Regis Corp, 2010 – 529, (La App. 3d Cir 11/3/10), 52 So3d 181. Accidents while on smoke break on employer’s premises compensable. Compare with Smith v. Orleans Management Corp. 242 So 2d 288 where the court held a claim for injury by employee left during lunch was not compensable when the reason for leaving the employer’s premises was personal.
b. Accidents occurring at work place just before or after work period held to be compensable. Glory v. Zuppardo's Economical Supermarket, Inc., 532 So.2d 933 (La. App. 5th Cir. 1988) (picking up paycheck).
c. Personal pursuits allowed by employer (shopping, working on car)
a. Near work site - Threshold doctrine allows for compensability when injury occurs adjacent to employer's premises in a hazardous area (i.e., railroad tracks, parking lot, stairwell, and elevator).
a. Travel to and From Work- The general rule states this is not compensable. However, there are many exceptions.
(1) If accident happens on employer’s premises;
(2) If employee on mission of employer except where the employee deviates from the employer’s mission. Timmons v. Silman, 99-3264 (La. 5/15/00), 761 So. 2d 507. The court ruled that employee, who while on a mission to have a postage meter filled decided to do her personal banking, was not in the course and scope. Employee was 18 blocks in the opposite direction of her employer’s mission.
(3) If employer interested himself in the travel (i.e., company car, paid time during travel, reimbursed expenses, etc.);
Phillips v. Epco Carbon Dioxide Products, Inc., 35,740-WCA (La. App. 2d Cir. 2/27/02), 810 So.2d 1171. If the employer interests himself in the employee’s travel, either by providing a company car or paying a travel allowance, then any accident occurring during the commute to and from work is compensable.
(4) Employee doing work for employer where employer’s consent could be fairly implied;
(5) If employee hurt while traveling to and from one work site to another;
(6) Required travel risk through an area adjacent to place of employment (Threshold Doctrine);
(7) If operation of vehicle was the performance of one of duties of employment of the employee.
b.Guest Passenger Cases. There have been some unusual decisions rendered when the employee is NOT seeking compensation but is asserting a tort claim. Hill v. West American Ins. Co., Nos. 93-915, 93-932 (La. App. 3d Cir. 5/19/94) 635 So.2d 1165. Employee, guest passenger, injured in auto accident while he and co-employee drove from job site in a remote area to get lunch. Court permitted employee to sue the employer's auto liability insurer. Similarly, in Dupre v. Exxon Pipeline Company, No. 93-1528 (La. App. 3d Cir. 6/1/94) 638 So.2d 1118, the court permitted the employee of an Exxon sub-contractor to sue Exxon in tort for injuries received in an auto in which the employee was a guest passenger in a truck being driven by an Exxon employee. The employee had completed the work at a remote job site and was being transported to the Exxon office where he had his personal vehicle parked. The court held that he was not in the course of employment because he had finished the job duties.
c. While Working Out of Town
The “Comfort Doctrine” provides compensability for accidents while employee is out of town for work, but occur during personal time
Robinson v. Simmons Co., 99-1319 (La. App. 4th Cir. 3/22/00), 762 So.2d 112, writ denied 2000-1122 (La. 6/2/00). Decedent was headed to Wisconsin on a sales trip. His body was found shot in Chicago and his car was found later in Gary, Indiana. Employer argued that he should have gone straight to Wisconsin and that any stop in Chicago was a personal deviation to the business trip. The reason for the shooting was unknown. The court found that the death was compensable, and noted that the traveling salesman cases are to be construed liberally.
d. During Social Events
Accidents occurring during social activities are held to be compensable if employer requires participation or derives substantial direct benefits from activity. See Jackson v. American Ins. Co., 391 So.2d 1339, reversed, 404 So.2d 218 (La 1981).
If an employee has an accident after the original job injury and this second accident aggravates the original condition the courts have held the employer responsible for the increased disability. This was clearly stated by the Louisiana Supreme Court in Stewart v. Hospitals Affiliates International, Inc. of Baton Rouge, 404 So.2d 944 (La 1981)
"When a work related injury is subsequently exacerbated, the aggravation is regarded as a development of the initial accident even though it occurs away from the employer's premises after employment has terminated." Id. at 945.
However, if the subsequent accident has created a new injury the courts will regard the subsequent accident as having intervened and broken the chain of causation from the original job accident and the employer would not be responsible for the subsequent disability Allstate Ins. Co v. Theriot, 362 So.2d 1214 (La. App. 4th Cir. 1978), rev’d on other grounds, 376 So.2d 950 (La. 1979); See also, Employers Mutual Liability Insurance Company of Wisconsin v. Dixon, 425 So.2d 885 (La. App. 4th Cir. 1983).
Section 1031(C) excludes injuries sustained at work when the employee is engaged in horseplay at time of injury.
Section 1031(D) excludes injuries sustained at work when injury arose out of dispute with another person or employee over matters unrelated to work.
Jackson v. Quikrete Products, Inc., 2001-CA-1181 (La. App. 4th Cir. 04/17/02), 816 So.2d 338. If the argument between two co-employees initially arose out of employment matters, but escalated to a personal dispute, any injuries as a result of the fight are considered as arising out of the employment, and thus compensable.
A. The burden of proving intoxication remains with the employer/insurer, but the following presumptions apply to assist in the proof of intoxication:
a. If the employee's blood alcohol level at the time of the accident was 0.05 percent or less by weight, it is presumed the employee was not intoxicated. §1081(3)(a).
b. If the employee's blood alcohol level at the time of the accident was in excess of 0.05 percent but less than 0.08 percent by weight, then there is no presump¬tion as to intoxication, but the level may be considered with other competent evidence in determining intoxication. §1081 (3)(b)].
c. If at the time of the accident the employee's blood alcohol level was 0.08 percent or more by weight, it is presumed that the employee was intoxicated. §1081(3)(c).
d. The provisions of this Section shall not be construed as limiting the introduction of any other competent evidence bearing upon the question of whether the employee was under the influence of alcoholic beverages or any illegal or controlled substance. §1081(6).
e. Evidence of on or off the job use of non-prescribed controlled substances (i.e. illegal drugs) will trigger the presumption of intoxication. §1081(5).
f. Employers have the right to administer drug and alcohol testing immediately after the job accident. If an employee refuses to submit to drug and alcohol testing immediately after an alleged job accident, it is presumed that the employee was intoxicated at the time of the accident. §1081(7)(a) and (b).
g. The employer can establish the use of illegal drugs by introducing the results of an employer-administered urine test pursuant to a written and promulgated substance abuse rule or policy established by the employer. §1081(8).
h. Once the employer has met the burden of proving intoxication, it is presumed that the accident was caused by the intoxication. The burden of proof then shifts to the employee to prove that the intoxication was not a contribu-ting cause of the accident. §1081(12).
B. Drug programs and testing procedures must comply with the Office of Workers’ Compensation's drug testing rules and presumably, the Louisiana Drug Testing Statute, La.Rev. Stat. 49:1001, et seq. §1081(9).
C. Be aware that if the intoxication results from activities which were in pursuit of the employer's interest or in which the employer procured the intoxicating beverage or substance and encouraged its use during work hours, the employer cannot avail itself of the intoxication defense.§1081(1)(b).
D. Even if an employee is found to be intoxicated under this Section, the employer is still responsible for reasonable medical care following the accident until the employee is stabilized and ready for discharge from the acute care facility. At that time, the employer's responsibility for medical payments and weekly compensation ends. §1081(13).
E. The amendments provide some protection to employers against actions for defamation, libel, slander or damage to reputation if drug/alcohol programs and testing are conducted in accordance with the compensation act, and its adopted rules and regulations. §1081(11)(a)-(c).
A. Denies compensation for an injury caused "to the initial physical aggressor in an unprovoked physical altercation, unless excessive force was used in retaliation against the initial aggressor."
B. "Wilful intent to injure" - can be used to deny benefits for self-inflicted injuries. Post-accident suicides can sometimes be defended under this section. However, the courts are likely to find the depression from job injury caused suicide.
RULE: Death not compensable unless the decedent at the time of the suicide was motivated by an "uncontrollable impulse or a delirium of frenzy, without conscious volition to produce death."
Rule based on assumption that conscious volition to commit suicide is an intervening cause which breaks the chain of causation from the original job injury.
The Louisiana Worker’s Compensation Act provides a series of different methods to calculate an Average Weekly Wage (AWW), depending upon the method of wage payments, e.g., hourly, monthly, annually or piecework. R.S. 23:1021(12)
The AWW is calculated as of date of accident, not date of disability. The compensation rate is 66 2/3% of the AWW, subject to the maximum and minimum compensation rates in effect for the date of that accident. There are no cost of living increases.
If the AWW falls below the minimum compensation rate, the compensation rate for that employee is the employee’s actual AWW.
For occupational disease claims, the date of accident is the date of the employee’s last employment with the employer from whom benefits are claims or the date of his last injurious exposure to conditions in his employment, whichever date occurs later. R.S. 23:1021(g)
For employees paid by the hour, average the hours in the four (4) full weeks prior to accident, and multiply by the hourly rate. Full time employees are given a presumption of a forty (40) hour a week average, unless they choose to work less hours at their own discretion. Separate any overtime hours, and multiply these hours by the overtime rate.
If the hourly employee also earns tips or a bonus, separate these earnings and use the calculation method found in R.S. 23:1021 (12)(d) “other wages.” Determine the gross earnings in the twenty six (26) weeks prior to the accident, then divide the number of weeks worked during that timeframe.
For part time hourly workers, average the earnings in the four (4) full weeks prior to the accident. If an employee has another job in addition to the part time employment, average the hours from all employment, not to exceed forty (40) hours, and multiply these hours times the wage rate of employment where the accident occurred.
The AWW for employees paid a monthly salary is equal to the monthly salary times twelve (12) divided by fifty two (52).
No fringe benefits or other compensation are to be included in calculating the AWW unless they are taxable as income to the employee.
Louisiana is a “wage loss state.” Entitlement to benefits is based upon a wage loss attributable to the injury. The four (4) types of benefits are: (1) temporary total; (2) permanent total; (3) supplemental earnings benefits; and, (4) permanent partial.
Temporary Total Disability (TTD) is defined as the inability to engage in any employment of self-employment of any nature. A person will be entitled to TTD until regular treatment is not needed. Employee must prove TTD by “clear and convincing” evidence unaided by any presumption of disability. The first week of TTD is not owed or payable unless the disability lasts for fourteen (14) days. The employee receives his full compensation rate for any week of TTD.
Permanent Total Disability (PTD) is the inability to engage in any employment or self-employment of any nature on a permanent basis. PTD is payable for the entire period of disability with no cap to the number of weeks. PTD must be proven by “clear and convincing” evidence, with no presumption of disability and without the benefits of any odd-lot.
Prior to a judge finding an employee PTD, a judge must determine whether there is a reasonable probability that, with appropriate training or education, the employee maybe rehabilitated to achieve suitable gainful employment.
Supplemental Earnings Benefits (SEB) is payable when an employee has a disability that prevents him from earning at least 90% of his AWW. It is payable for 520 weeks, with a credit for each week of TTD paid. This obligation is triggered not by an impairment rating, but rather by an assignment of work restrictions by the doctor.
The assignment of an impairment rating is not a prerequisite for entitlement to SEB. This only comes in to play in cases of amputation or loss of use in payment of PPD benefits. Due to credits for payment of TTD or SEB against any PPD obligation, it is rare that any impairment rating needs to be assigned in Louisiana cases.
La. R.S. 23:1226 establishes vocational rehabilitation as a benefit for the claimant. Prior to the amendment, vocational rehabilitation was used merely as a tool by the employer to measure post-accident wage earning capacity.
Now viewed as a benefit, the employer must provide the requisite level of vocational services to meet its obligations under the Act. The employer, however, gets to select the vocational counselor of its choice to provide the services.
The case of Livings v. Langston Cos., 96-636 (La. App. 3rd Cir. 1996) 685 So.2d 405, sets forth the proper procedures for providing vocational rehabilitation. The services must include at a minimum a full vocational evaluation, with a review of medical records, testing of the claimant for skills and educational level, along with a complete social, educational and work history to establish any transferable skills. The counselor must also conduct an information session with the claimant to develop a mutually agreed rehabilitation plan, and to provide any interview skills or resume drafting or further training. The emphasis for the plan should be on return to work.
If an employee returns to work at wages less than 90% of the AWW, SEB benefits are payable at a rate equal to 2/3 of the difference between the AWW and the new wage, but not in excess of the maximum compensation payable for the year of injury.
Once the rehabilitation plan has been established the case of Banks v. Industrial Roofing & Sheet Metal Works, Inc., 96-2840 (La. 7/01/97), 696 So.2d 551 establishes the burden of proof for the employer to establish wage earning capacity prior to reducing or terminating benefits. The employer must establish: (1) The existence of a suitable job within the claimant’s physical capabilities and with the claimant’s or employer’s community or reasonable geographic region; (2) the amount of wages this particular claimant can be expected to earn in that job; (3) an actual position available for that particular job at the time the claimant received notification of the job’s existence.
Some appellate circuits require approval by the doctor first before presenting the opportunity to the claimant. This delay causes much difficulty in getting the hob opportunity to the claimant while the position is still open.
If the employer of injury offers an alternative or modified position to the claimant within the doctors’ restrictions, the employer would not have to offer full vocational services.
If a claimant fails to cooperate with the vocational expert, the employer may reduce benefits by 50% during the time the claimant fails to cooperate.
Permanent Partial Disability (PPD) is paid for loss of use of any body part listed in the Schedule. The award of weeks listed in the Schedule provides for compensation based on a presumed disability and is paid even if the employee has returned to work. Any percentage of loss will establish a claim under the Schedule provided the loss is established under the most current edition of the AMA Guidelines. The award is equal to the percentage loss times the number of weeks in the Schedule times the full compensation rate.
The employer gets a credit for any week of TTD or SEB paid against its PPD obligation. Since the employee usually is entitled to greater benefits under SEB, it is rare for any PPD to be owed.
Under the Schedule, the claimant may qualify for an aware of scarring not to exceed 100 weeks of benefits at the full time compensation rate. The award for scarring s not limited to any bodily region, but, the more visible the scar, the higher the award may be. The employer is entitled to a weekly credit for any benefits paid to the claimant under TTD, SEB, or PTD against any award for scarring.
Section 1221(4)(i) provides for an award of 100 weeks for loss of an eye. A percentage of the award is appropriate for partial loss, determined on the basis of the claimant’s eyesight without the use of corrective lenses, including both glasses and contact lenses. If loss of the eye results in a wage loss, then the claimant may be entitled to SEB or PTD.
Until recently, hearing loss caused by long-term exposure was not recognized as compensable under the Worker’s Compensation Act. As such, employers were exposited to tort liability for such claims. The recent case of Arrant v. Graphic Packaging International, Inc., No. 48, 197-CA (La. App 2nd Cir. 9-25-13) held that noise-induced hearing loss is an occupational disease to be covered under the Louisiana Worker’s Compensation Act, and thus employers are entitled to tort immunity under the exclusive remedy provision of the Act.
This would entitle a claimant to SEB or PTD benefits, if the loss of hearing resulted in a wage loss. If there is no wage loss, the claimant may be entitled to up to 100 weeks, or a percentage thereof, if the permanent hearing loss is solely due to a single traumatic accident under Section 1221(4)(p) of the Schedule.
As an occupational disease, the claimant would be entitled to medical treatment, including the provision of any necessary hearing aids.
A judge may assess penalties against an employer for non-payment of benefits due, later payment of benefits, improper rate of payments and/or improper reduction or termination of benefits. If the employer reasonably controverted benefits, then no penalties are due. Penalties may apply to indemnity and medical benefits.
Penalties are in the amount of 12% of benefits owed or $50.00 per day until paid, whichever is greater. The $50.00 per day penalty is not to exceed $2,000.00.
If an employer is found to be arbitrary and capricious in terminating benefits, they shall be subject to the payment of a penalty not to exceed $8,000.00amd a reasonable attorney fee for prosecution of the claim
A separate penalty may be assessed for each infraction, but the maximum amount which may be imposed at a hearing is $8,000.00, regardless of the number of infractions.
If a healthcare provider prevails on a claim for payment of his fee, penalties and attorney fees may be awarded directly to the healthcare provider.
The penalties for the late payment of a final judgment is 24% penalties or $100.00 per day until paid, whichever is greater. The $100.00 per day penalty is not to exceed $3,000.00
There is also a $250.00 penalty and an award of attorney fees for failure to provide medical reports of the employer’s examining physician.
The 2013 amendments provide a Safe Harbor for decisions made by the employer on claims accepted by the employer as compensable. If the employer properly follows the Safe Harbor provisions of Section 1201.1, and timely files and serves a 1002 form, the employer may avoid assessment of penalties even if the judge subsequently finds that the employer’s decision on payment of benefits was incorrect.
The Safe Harbor provisions are only available to employers who comply with the specific requirements in Section 1201.1(A); and timely request a preliminary determination hearing in the answer filed by employer in response to a Disputed Claim for Compensation filed by the claimant.
The employer may also avoid assessment of penalties for failure to authorize medical treatment if employer follows all protocols for Utilization Review and properly and timely files a 1010 form disputing the request for medical treatment.
A judge may award judicial interest on any unpaid benefits retroactive to the date benefits were due. The rate is established as of the date of judicial demand, and at a rate established each year by the State
A judge may award legal costs to the winning party for expert witness fees, deposition costs and fees, and the costs for providing copies of medical records for any testimony, transcripts and/or records used at trial.
If the employer is found to be arbitrary and capricious at trial, the court may award reasonable attorney fees for the prosecution of the claimant, and assess these costs against the employer. This amount may not exceed 20% of the recovery.
R.S. 23:1231 establishes a priority among claimants for death benefits. The first priority is to wholly dependents. Only after all wholly dependents are taken care of can benefits be allocated to partial dependents (assuming the maximum has not been exhausted). Within each group of wholly and partially dependents, the priority of preferred recipients in order of preference are: widow, child, parents, siblings and other dependents. Dependency is based on support given by decedent in the year prior to his accident or death. Except for wife and children, dependents receive benefits until no longer dependent or for life.
Claim may be asserted if death occurs within 2 years from the last medical treatment resulting from the accident R.S. 23:1231. Injury at work must be the cause of the death. Claims must be filed within one year of death R.S. 23:1209. A minor at time of death has one year from date of majority (18 years old).
Where death results from an injury or occupational disease under the Act, weekly compensation benefits and burial expenses are provided. The Act caps reimbursement of funeral/burial expenses at $8,500.00.
Surviving spouse who lived with decedent at time of accident and death is presumed wholly dependent. Spouse and child not living with decedent at time of accident or death are not presumed to be dependents. They must prove dependency. The courts found that self-serving testimony alone is insufficient to meet the burden of proving dependency.
Payments to spouse continue until the death or remarriage of spouse. A payment of 2 years lump sum is due to the spouse upon remarriage calculated as 32.5% of AWW subject to the maximum compensation rate.
The Courts had previously included paramour or concubine as "other dependent" member of family. Unlike spouse, their benefits do not terminate upon marriage (although it could be argued that they are no longer dependents). In 2012, Section 1253 was amended to disqualify a concubine of the deceased, along with any children of the concubine who were not related to the deceased by blood or adoption, from receiving death benefits.
Children under the Act include all biological living and posthumous children, whether legitimate or illegitimate, and adopted children. Only those children living in the same household as decedent at the time of accident and time of death get the presumption of dependency. All others must prove actual dependency. A child, living with decedent at the time of accident and death, under age of 18 (or over 18 if physically or mentally incapacitated from earning) is presumed wholly dependent - or until age of 23 if enrolled and attending as a full-time student in any accredited educational institution is also conclusively presumed to be dependent.
The courts have held that the unfulfilled legal or moral obligation to support a minor child was not sufficient to establish dependency, rather dependency was a question of fact. American Interstate Insurance Company v. Forsythe, 38,283 (La. App. 2d Cir. 4/7/04), 870 So2d 498. In 2012, Section 1241 was amended to include children with a valid child support order as conclusively presumed to be dependent, regardless of whether the deceased was actually paying the support.
A parent or sibling of a decedent can be considered as an “other dependent” if they can prove actual dependency, and if employer is not already paying maximum benefits to claimants in a higher priority.
If employee leaves no legal dependents entitled to benefits under any state or federal compensation system, employer would pay one lump sum of $75,000 to any surviving children (of the deceased) over the age of majority, to be divided equally among them.
If there are no dependents and no non-dependent children, then the sum of $75,000 is owed to each surviving parent of the deceased, in a lump sum.
Total benefit amount available to all dependents is 65% of AWW at time of accident. 32.5% of AWW for one dependent; 46.25% of AWW for 2 dependents; 65% of AWW for 3 or more dependents. 2008 amendment provides that payments to dependents shall be computed, and then divided equally among them.
The employee is entitled to choose one treating physician in each field or specialty appropriate for the injury. The employer may compel employee to attend a Second Medical Opinion (SMO) exam with a physician of their choice. Failure to attend the SMO exam could result in suspension of indemnity benefits until claimant cooperates with the exam.
Bills for approved treatment must be paid within 60 days or be subject to penalty. If the medical provider sends the bill electronically, the time limit for payment is reduced to 30 days.
The employer shall furnish all necessary medical expenses, including drugs, supplies, hospital care, medical and surgical treatment R.S. 23:1203(A). Medical necessity is defined in Utilization Rule § 2717 C 3 as: (1) consistent with the diagnosis and treatment of a condition or complaint; (2) consistent with the standards of good medical practice; (3) not solely for the convenience of the patient, family, hospital or physician; and (4) furnished in the most appropriate and least intensive type of medical care setting required by the patient's condition.
Louisiana has established its own Medical Treatment Guidelines. Requests for medical treatment which do not comply with the published Medical Treatment Guidelines will not be approved unless the claimant can prove that a variance is appropriate under the circumstances. The OWC Medical Director reviews all requests for medical treatment that have been denied authorization by the employer to determine whether the request is in compliance with the Medical Treatment Guidelines. Claimants or their medical providers must initiate the review process with the submission of a Form 1010. Employers must establish a procedure to review and respond to the Form 1010 within 5 days of receipt. If an employee or medical provider disagrees with the decision of the employer, they must submit a Form 1009 prompting the review by the OWC Medical Director.
Payment of all fees for medical treatment is limited to the Medical Reimbursement Fee Schedule.
Claimants are entitled to travel expenses incurred to obtain medical treatment according to the mileage rate published annually by the State for state employee
The Louisiana Workers’ Compensation Act preserves the right of an injured employee, and any person obligated to pay compensation, to seek tort damages against a third person. La. R.S. 23:23:1101(A) and (B). A third person is a person who (1) is not immune from tort liability and (2) has a legal liability to pay damages for the employee’s compensable injury sickness or disease. La. R.S. 23:1101(A).
The term “third person” includes any party that causes injury to an employee at the time of the employee’s accident or at any time thereafter provided that the employer or insurer is obligated to pay workers’ compensation benefits because the injury caused by the third person aggravated the employee’s job injury. La. R.S. 23:1101(C).
If the employer or insurer is a party in a suit against a third party, any damages recovered against the third party are apportioned so that the claim of the employer or insurer for reimbursement of compensation actually paid takes precedence over the claim of the injured employee. If the damages are not sufficient or are only sufficient to reimburse the employer or insurer for compensation actually paid, then damages are assessed solely in the employer or insurer’s favor. La. R.S. 23:1103(A)(1). The claim of the employer or insurer is satisfied from the first dollar of the judgment without regard to how the damages have been itemized or classified by the trier of fact.
If damages awarded in a third party suit exceed the amount of the employer or insurer’s workers’ compensation lien, the employer or insurer is entitled to a credit against its future compensation obligation in the amount of the plaintiff’s net recovery (plaintiff’s recovery after attorney’s fees and costs are deducted), discounted at 6%. The employer or insurer is not entitled to reimbursement or credit if it was aware that plaintiff filed a third party suit and it failed to intervene.
When the employer or its insurer asserts its lien through intervention, it is responsible for a portion of the reasonable legal fees and costs incurred by plaintiff in recovering the employer or insurer’s lien. Reasonable fees shall not exceed one third of the intervenor’s recovery for prejudgment payments or prejudgment damages. The employer or insurer is not responsible for attorney’s fees attributable to the employer or insurer’s credit against its future compensation obligation. La. R.S. 23:1103(2)(C). Costs include taxable court costs and fees of experts retained by the employee. The pro rata share of the intervenor’s costs is based on the intervenor’s recovery of prejudgment payments or prejudgment damages.
La. R.S. 23:1225 provides for the following offsets and credits against an employer’s obligation to pay workers’ compensation benefits:
(1) The offset for the receipt of social security disability benefits, which is only available in limited situations;
(2) The credit for the receipt of unemployment benefits; and
(3) The credit for the receipt of other workers’ compensation benefits or disability benefits funded by an employer.
(1.) Social Security Offset
The Social Security Offset is only available when the employee is permanently and totally disabled.
The Social Security Offset is not available in cases that arose before September 8, 1978.
The employer or its insurer must make judicial demand for the social security offset. The employer or its insurer may not take the social security offset unilaterally.
The amount of the offset is determined by the Social Security Administration and can be obtained by filing a LDOL-WC-1004, Request for Social Security Benefits Information, with the Office of Workers’ Compensation.
(2) Credit for the Receipt of Unemployment
Temporary Total Disability Benefits, Permanent Total Disability Benefits or Supplemental Earnings Benefits are not payable for any week in which the employee receives unemployment benefits. The employee may receive permanent and partial disability benefits as well as unemployment benefits.
The unemployment benefits credit is week to week. The employee is not entitled to TTD, PTD, or SEB for any week in which the employee receives unemployment benefits, even if the amount that the employee receives in unemployment is less than the amount that the employee otherwise would have received in compensation benefits.
(3.) Credit for the Receipt of Other Workers’ Compensation and Employer Funded Disability Plans
Benefits may be reduced to the extent of any other workers’ compensation benefits received.
Benefits may also be reduced to the extent that the employee receives benefits under disability plans in proportion funded by the employer. This credit is equal to the full amount of the employer-funded disability benefits to which the employee is entitled, before the disability insurer takes any credit for the receipt of workers’ compensation benefits. LSA-R.S. 23:1225(C)(d)(3). If a conflict exists between 1225 and an insurance contract, the statute controls. LSA-R.S. 23:1225(C)(d)(4).
Benefits may not be reduced under LSA-R.S. 23:1225(C)(3) for the receipt of social security old age retirement benefits and for the receipt of social security disability benefits.(The offset/credit for the receipt of social security disability benefits is only allowed if the claimant is permanently and totally disabled.
Deductions/credits are also provided in LSA-R.S. 23:1223
When compensation has been paid for TTD under 1221(1); PTD under 1221(2); or PPD under 1221(3), the number of weeks paid shall be deducted from the number of weeks of compensation allowed for PPD under 1221(4) or for death benefits.
When compensation has been paid for TTD under 1221(1); PTD under 1221(2); or PPD under 1221(4), the number of weeks paid shall be deducted from the number of weeks of compensation allowed for SEB under 1221(3) or for death benefits.
This credit is taken on a week for week basis.
Medical Expense Offset LSA-R.S.23:1212
Payment of a medical bill by another party(i.e., a health insurer) extinguishes the employee’s claim against the employer for payment of that medical bill. This rule is subject to the following exceptions.
1. A direct payment by the employee, or a relative of friend of the employee does not extinguish the employer’s obligation to pay the medical bill.
2. A payment by Medicaid or other state medical assistance program does not extinguish the employer’s obligation to pay the medical bill.
3. If the employee or the employee’s spouse pays some percentage of the health insurance premium, then the offset only applies in the same percentage that the employee’s employer or the employee’s spouse’s employer paid the health insurance premiums.
Under LSA-R.S. 23:1206 a credit is allowed for the voluntary payment of benefits which were not due. Payments owed under a judgment or court order are not subject to this credit. The credit does not apply to payment of wages in lieu of compensation which were unearned wages, payment of medical expenses which were not owed.
The credit can be used even if the payment was made due to the error of the employer.
The credit only applies to future benefits and cannot be used for past benefits.
In order to obtain reimbursement of the credit, the court favors reduction in future benefits instead of a suspension of benefits.
The credit is a dollar for dollar credit.
Louisiana offers no special certification process for attorneys practicing in the field of workers’ compensation.
Louisiana does not provide or require specific licensing for adjusters handling workers’ compensation claims.
LSA-R.S. 23:1161.1 provides that any insurer, authorized or unauthorized, domestic, foreign, or alien, who issues a policy for workers’ compensation coverage in the state of Louisiana shall either establish and maintain a claims office within the state or retain a licensed claims adjuster. That office or adjuster shall maintain files on workers’ compensation claims and the office or adjuster shall be authorized by the insurer to issue checks and settle claims, and seek controversion on behalf of the insurer concerning the claims then handle.
The Office of Workers’ Compensation Administration was established to administer the provisions of the Louisiana Workers’ Compensation Act. The Director of the Office of Workers’ Compensation (OWC) is responsible for the administrative functioning of the OWC, and he has the authority to adopt reasonable rules and regulations, including rules of procedure before the Workers’ Compensation Judges. La. R.S. 23:1310.1. The OWCP has published the “Workers’ Compensation Hearing Rules,” which govern the procedure for administering compensation claims in the OWC. These Rules provide that the Louisiana Code of Civil Procedure shall govern any procedural issue not specifically addressed within the Rules.
Effective January 1, 1990, Louisiana modified its Constitution to establish exclusive jurisdiction for claims under the Louisiana Workers’ Compensation Act. Hence, all claims arising after the above date are heard by a Workers’ Compensation Judge, in one of the ten established compensation districts in the state. The OWC has original, exclusive jurisdiction over all claims or disputes arising out of the Louisiana Workers’ Compensation Act, including but not limited to workers’ compensation insurance coverage disputes, group self-insurance indemnity contract disputes, employer demands for recovery of benefit overpayments, the determination and recognition of employer credits, cross-claims between employers, and workers’ compensation insurers or self-insurance group funds for indemnification or contribution.
The appointment of Workers’ Compensation Judges is by the Secretary of Labor. They are full time employees of the OWC and cannot maintain an outside practice.
The only qualification to be a Workers’ Compensation Judge is that the person be an attorney in good standing in the State of Louisiana. They are subject to the Code of Judicial Conduct, Civil Service Rules, Louisiana Code of Governmental Ethics, and the Louisiana State Bar Association Code of Professional Conduct.
Proceedings before a Workers’ Compensation Judge generally are governed by the Rules found in Title 40 of the Louisiana Revised Statutes, Part I – Workers’ Compensation Administration. As with most workers’ compensation statutes, these Rules provide the procedures for the holding of trials, time frames for taking certain actions, and other matters concerning the efficient administration of claims.
The Louisiana Workers’ Compensation Act provides for voluntary mediation between the parties. Mediations are conducted by Mediators, who are employees of the OWC. A mediation may be scheduled, either with an OWC Mediator or a private mediator, by the mutual agreement of the parties or on order by the Workers’ Compensation Judge.
All claims under the Louisiana Workers’ Compensation Law are initiated by the filing of a Disputed Claim for Compensation form (Form 1008). When the Form 1008 is served on the employer and/or carrier, the OWC provides an Answer form to be completed. However, because the Rules promulgated by the OWC do not contain specific form requirements for Answers, the Louisiana Code of Civil Procedure is applicable. The Louisiana Code of Civil Procedure provides that the Answer shall admit or deny the allegations of the petition, state in short and concise terms the material facts upon which the defenses are based, set forth all affirmative defenses, and contain a prayer for relief sought. Thus, as a practical matter, the Answer takes the form of Answers typically filed in tort lawsuits. A defendant must file an Answer within 15 days of service of the Petition or Form 1008 (usually by certified mail). A defendant may request a maximum extension of 10 days in which to respond. La. R.S. 23:1316.
The injured worker is known as a “claimant” under the Louisiana Workers’ Compensation Act. In the event of the death of the injured worker, the “claimant” will be the dependent(s) claiming entitlement to benefits under the Louisiana Workers’ Compensation Act. La. R.S. 23:1020.
In Louisiana, the employer typically is the defendant and must be properly identified on the Form 1008. The employer’s workers’ compensation carrier also may be a defendant in a workers’ compensation claim, but the insurance carrier must be named specifically as a defendant. Third-party administrators are not considered a proper party defendant in Louisiana workers’ compensation claims.
Louisiana allows for full discovery in workers’ compensation claims, including the taking of depositions and propounding Requests for Admission, Interrogatories, and Requests for Production of Documents, and discovery generally is governed by the Louisiana Code of Civil Procedure. See La. Code Civ. Proc. arts. 1437, et seq.; Workers’ Compensation Rules §§ 5915, et seq. Additionally, parties may request the issuance of subpoenas from the OWC. Workers’ Compensation Rule §5909, et seq.
Typically, the only witnesses to testify at the trial are the claimant, a representative of the employer, a representative of the carrier (usually to address issues concerning alleged arbitrary and capricious conduct), and any fact or impeachment witnesses. Testimony from physicians or other experts typically is by deposition, although these experts may be called to testify live at the trial if appropriate. The record at the trial usually is closed at the end of the trial, and the Workers’ Compensation Judges rarely are willing to keep the record open for post-trial depositions.
The Louisiana Workers’ Compensation Act and Rules implementing same provide Workers’ Compensation Judges with the authority to issue subpoenas for the personal appearances of witnesses and for the production of records, but only upon request of one of the parties
At the conclusion of the trial, the Workers’ Compensation Judge will render an “order, decision, or award as is proper, just, and equitable in the matter.” La. R.S. 23:1310.5(A)(1). The reasons for judgment issued by the Workers’ Compensation Judge are not controlling and are not considered part of the “Judgment.” A Judgment is not considered final unless it adjudicates all of the issues in dispute. The OWC is required to serve a copy of the order, decision, or award on each party by certified mail. La. R.S. 23:1310.5(A)(2).
The State of Louisiana has five Circuit Courts of Appeal. The Courts of Appeal have appellate jurisdiction over workers’ compensation claims. Appeals from decisions of the Workers’ Compensation Judges are filed in the Circuit Court of Appeal that has jurisdiction over the workers’ compensation district rendering the decision. La. R.S. 23:1310.5(A)(2). Proceedings before the Louisiana Courts of Appeal are governed by the Louisiana Code of Civil Procedure, Section 2081et seq. Prior to the full adjudication of the claim, a party may seek an interlocutory review by the appropriate Louisiana Court of Appeal by filing a Supervisory Writ. Consideration of a Supervisory Writ is discretionary.
After the full and final adjudication of a claim, a party may file a timely appeal in one of two ways: (1) a suspensive appeal must be filed with 30 days, and this requires obtaining an appeal bond or (2) a devolutive appeal must be filed within 60 days, which requires that the judgment be paid while the appeal is considered. A copy of the Notice of Appeal must be filed with the Director, OWC, who is responsible for preparing the record for the appellate court.
In reviewing a Judgment of a Workers’ Compensation Judge, the Louisiana Courts of Appeal are guided by the same standard of review as in any other civil matter. When there is evidence before the Workers Compensation Judge which, upon its reasonable evaluation of credibility, furnishes a reasonable factual basis for the trial court’s finding, on review, the Louisiana Courts of Appeal should not disturb the factual findings in the absence of manifest error. The Louisiana Courts of Appeal must give great weight to factual conclusions of the Workers’ Compensation Judge. Where there is a conflict in the testimony, reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed upon review. The “manifest error” standard also has been noted as being the “clearly wrong” standard by some courts. However, when there are legal errors made by the Workers’ Compensation Judge, the Louisiana Courts of Appeal are not bound by the “manifest error” or “clearly wrong” standards, and they will make their own independent de novo review of the record and determine a preponderance of the evidence.
Parties do not have a right of appeal to the Louisiana Supreme Court. Rather, a party seeking review by the Louisiana Supreme Court must file a Writ of Certiorari. Consideration of a Writ of Certiorari is discretionary with the Louisiana Supreme Court.
In Louisiana, mediation of workers’ compensation matters are not mandatory under any statute, but are encouraged and at times can be Ordered by the OWJ Judge presiding over the case. Since Mediation is not mandatory in every case, the employee and/or employer can request mediation prior to trial through any of the Office of Workers’ Compensation mediators. The Office of Workers’ Compensation does have trained workers’ compensation mediators assigned to each OWC district around the State of Louisiana. If the parties agree, the employer and their employee can request that the OWC mediator schedule a mediation at a convenient date and time for all parties to discuss all issues including any issues in the present litigation or the workers’ compensation claim as a whole. A mediation can be scheduled with the Office of Workers’ Compensation even if a workers’ compensation claim is not presently in litigation with the Office of Workers’ Compensation. The reason for allowing mediations prior to litigation and/or prior to trial is to allow the parties to meet and attempt to resolve any issues including claims on a full and final basis. Any mediation that occurs with an OWC mediator at the Office of Workers’ Compensation districts around the state are informal mediation conferences and any information cannot be shared or used at trial unless agreed upon by all parties.
The mediation process is outlined under the Louisiana Workers’ Compensation Act pursuant to La. R. S. 23:1310.3. Specifically, under La. R.S. 23:1310.3D(1) Upon joint request of the parties, or upon order of the presiding workers’ compensation judge, all parties shall engage in services of the following:
(a) A Louisiana Workforce Commission Office of Compensation Administration mediator and such mediation shall be held in the district office in which the selected mediator is assigned.
(b) A private mediator and such mediation shall be held at a location mutually agreeable to parties. It is important to note that pursuant to Revised Statute 23:1310.3E, if a party does fail to appear at a mediation conference ordered by the judge or requested by the parties after proper notice, the workers’ compensation judge upon request of a party may fine the delinquent party an amount not to exceed $500.00. In addition, the judge can also assess costs and reasonable attorney’s fees incurred by any other party in connection with the conference.
Under the Louisiana Workers’ Compensation Act, the parties are allowed to settle any portion the employee’s workers’ compensation claim including any and all claims for past and future indemnity benefits and medical benefits. From a practical standpoint, an employer and carrier should keep in mind that when seeking a full and final settlement of the medical and indemnity portion of the claim, the employer and carrier should confirm the employee’s Medicare and Social Security Disability status so as to make sure to comply with any requirements for a Medicare Set Aside. It should also be noted that if it is determined that at Medicare Set Aside is needed, the employer and carrier have other options to settle a claim including settlement of just the indemnity portion of the claim or settling the indemnity and medical portion including any Medicare Set Aside with clauses in the settlement agreements to allow for the MSA to be approved by CMS and the employer and carrier to have the ability to leave future medical benefits open if CMS approves an amount the previously agreed upon Medicare Set Aside. Based on the above, the employer and carrier should again confirm the claimant’s Social Security and Medicare status when considering settlement of the medical portion of an employee’s claim for future medical benefits.
Settlements in Louisiana are all voluntary and are outlined under La. R. S. 23:1271 et seq., and are required to be approved by a workers’ compensation judge and are divided into two types of settlements:
A. Compromise settlement; B. Lump sum settlement.
Most of the settlements entered into in the State of Louisiana are deemed compromise settlement agreements. Compromise Settlement agreements are settlements in which the parties reach a certain amount in an effort to compromise and settle any and all claims that the claimant has for workers’ compensation medical and/or indemnity benefits. From a practical standpoint, a compromise settlement will involve any and all claims that are disputed and/or settled on a compensable basis, and will also involve claims wherein the claimant has not been declared permanently and totally disabled under the Louisiana Workers Compensation Act. Overall, settlements are favored and the employee and employer have the right to settle all portions of an employee’s claim for benefits including any and all claims for future medical care.
A lump sum settlement is outlined in La. R. S. 23:1274. A lump sum settlement is generally agreed to between the parties when a claimant has been judicially declared permanently and totally disabled under the Workers’ Compensation Act. The reason for this is that La. R.S. 23:1274 requires that any lump sum settlement of the indemnity portion of an employee’s claim for benefits must be for an amount that is not discounted greater than 8% per annum value of the remaining benefits due to the claimant’s life expectancy. Thus, from a practical standpoint, lump sum settlements are generally only entered into once a claimant has been judicially declared permanently and totally disabled and the Court has previously issued an Order/Judgment entitling the claimant to lifetime benefits. Under this scenario, the employer must be aware to confirm whether the employee has in fact been judicially declared permanently and totally disabled before settling a workers’ compensation claim. The reason for this is that again, any such settlement of the indemnity portion of the claim if the claimant has been declared permanently and totally disabled and/or the settlement is deemed a lump sum settlement must include sufficient amounts to cover the remaining indemnity exposure that is discounted at a rate no greater than 8%.
The reason the employer must be careful in settling a lump sum settlement is that La. R.S. 23:1274B states that if a lump sum settlement is made without the approval of the workers’ compensation judge or for future indemnity at a discount greater than 8%, even if approved by the judge, the employer shall be liable for a penalty of compensation at one and a half times the fixed rate. Thus, this statute outlines a significant penalty of a total of one and a half times the compensation the claimant would be entitled to using an 8% discount rate with credit for the amount the claimant received in the settlement agreement.
The procedure for having a settlement agreement approved by the workers’ compensation judge differs on the representation of the employee. Specifically, if an employee is represented by an attorney, the parties can agree to have settlement documents completed, outlining the terms and conditions of the settlement agreement and the employee’s understanding of the finality of the settlement agreement. The settlement documents can then be presented to the workers’ compensation judge for judicial approval. Once the judge signs the settlement documents, the settlement agreement is now a judgment and the employee is entitled to any settlement proceeds within 30 days of the date of approval of the settlement agreement by the workers’ compensation judge.
If the employee is not represented by an attorney, the Workers’ Compensation Act requires that the employee attend a settlement conference with an Office of Workers’ Compensation Judge who must review the terms and conditions of the settlement agreement with the employee and upon a finding that the employee understands the rights and consequences of entering the settlement agreement and finding that the settlement provides justice for all parties, the judge shall then Order that the settlement is approved.
Once either a represented or non-represented settlement has been approved by the Workers’ Compensation judge, any such settlement shall not be set aside or modified except for fraud or misrepresentation made by any party.
The Employer and Carrier should be aware that under La. R. S. 23:1201G, if a Judgment obtained via settlement agreement is not paid within the 30 days of date of approval of the settlement agreement, the employer can be assessed with a penalty of 24% of the judgment or $100.00 per day together with reasonable attorney’s fees for each day after it remains unpaid, whichever is greater. From a practical standpoint, employers and carriers should maintain contact with any attorney assigned to have any settlement approved to make sure that the employer/carrier is aware of the date of approval of the settlement and also to make sure that any settlement funds that need to be produced to the plaintiff and/or the attorney have been properly obtained in a timely manner to avoid any potential penalty under La. R.S. 23:1201G.
The Louisiana Workers’ Compensation Act was amended in 1988 to require mandatory workers’ compensation insurance or approved self-insurance programs for employers in the State of Louisiana with penalties against non-complying employers. Overall, in Louisiana, an employer is required to secure compensation coverage/insurance to its employers in one of many ways under Revised Statute 23:1168. La.Rev.Stat. 23:1168 states:
An employer shall secure compensation to his employees in one of the following ways:
(1) By insuring and keeping insured the payment of such compensation with any stock corporation, mutual association, or other concern authorized to transact the business of workers’ compensation insurance in this state. When an insurer issues a policy to provide workers’ compensation benefits pursuant to the provisions of the Workers’ Compensations Act, the insurer shall file, or cause to be filed, with the director a notice in such form and detail as the director may prescribe by rule and regulation. The notice shall contain the name, address, and principal occupation of the employer, the number, effective date, and expiration date of the policy and such other information as may be required by the director. The notice shall be filed by the insurer within thirty days after the effective date of the policy.
(2) By entering into an agreement with a group self-insurance fund as provided for in R.S. 23:1191 et seq.
(3) By entering into an agreement with an interlocal risk management agency as provided for in R.S. 33:1341 et seq.
(4) By using any combination of life, accident, health, property, casualty or other insurance policies offered:
(a) By any stock corporation, mutual association or other concern authorized to transact the business of insurance in this state;
(b) By any group of individual, unincorporated alien insurers with assets held in trust for the benefit of its United States policyholders in a sum not less than one hundred million dollars and which is authorized to transact insurance in at least one state; or
(c) By any other insurer which has been approved by the commissioner of insurance, and has capital and surplus, or the equivalent thereof, of at least ten million dollars and its financial condition, as evidenced by its most recent annual statement, conforms substantially to the same standards of solvency which would be required if such insurer were licensed in this state.
(5) By furnishing satisfactory proof to the director of the employer’s financial ability to pay such compensation. The director, pursuant to rules adopted by the office for an individual self-insured or own risk carrier, shall require that an employer:
(a) Deposit with the director securities or a surety bond in an amount determined by the director which would be at least an average of the yearly claims for the last three years.
(b) Provide proof of excess coverage with such terms and conditions as is commensurate with their ability to pay the benefits required by the provisions of the Workers’ Compensation Act.
B.(1) The director may waive the requirements of R.S. 23:1168(A)(3)(b)(i) and (ii) if he finds any company able to pay benefits, and that the requirements of these provisions are unnecessary. He shall establish rules which set standards for such waiver.
(2) The director shall waive the requirements of R.S. 23:1168(A)(3)(a) and (b) if any employer that is a municipality or other political subdivision of the state is able to demonstrate financial responsibility and ability to pay benefits by the filing of annual reports including statements of financial condition and summary loss data detailing past claims experience.
C. Any employer that knowingly provides false information to the director for purposes of becoming self-insured or own risk carrier or a group pool association shall be subject to the perjury laws of this state
Amended by Acts 2010, No. 794, eff. Aug. 15, 2010.
In accordance with La. R.S. 23:1168, an employer who wishes to secure compensation via insurance is required to obtain coverage from an authorized insurer before seeking coverage from an unauthorized insurer. Coverage with the unauthorized insurer is only permitted if the agreeing insurance contract between the unauthorized insurer and agreeing insurer provides that in the event of insolvency if the unauthorized insurer any of the insurance proceeds owing with respect to such risk shall be payable by the assuming insurer to the insured obtain solvency against the insurer. The reason for this is that this protects an employee from an insurer’s insolvency. Further, insurance can also be secured by combining policies of life, accident, health, property, casualty and other insurance policies also known as aggregate insurance. In addition, foreign employers who seek at Certificate of Authority to do business in the State of Louisiana are required to submit to the Secretary of State a Certificate of Compliance from the Office of Workers’ Compensation verifying that the foreign employer has secured compensation for its employees as required by law.
Overall, pursuant to La. R.S. 23:1168, an employer is required to secure the ability to provide compensation to its injured employees through either some type of policy of insurance or other satisfactory proof of the employer’s financial ability to pay compensation benefits owed to an injured employee.
Employers in the State of Louisiana can seek to comply with La. R.S. 23:1168 through either group or individual self insurance. Specifically, employers are allowed to participate in a group self insurance fund or individual self insurance. Regarding a group self insurance fund, five or more employers who are members of the same trade or professional association and have a minimum combined net worth of $500,000.00 may enter into a group self insurance fund agreement to pool their liabilities for workers’ compensation. It should be noted that these arrangements are not subject to the provisions of the insurance code and do not participate in the Louisiana Guaranty Association. However, insolvency of the re-insurer for a self insured fund may qualify for recovery under Louisiana Insurance Guaranty Association.
In order to qualify as a valid group self insurance fund, the fund must deposit with the insurance commissioner a $100,000.00 bond or other security and must have excess insurance in the amount of at least $2 million dollars. In addition, the group self insurance funds are under the administrative control of the Commissioner of Insurance who has the authority to examine the affairs of any fund and to revoke the Certificate of Authority of any fund which the Commissioner determines is not in compliance with the law.
For individual self insurance, all other employers seeking to be self insured are required to comply with the provisions of La.Rev.Stat 23:1168(3). As noted in this part of the statute, such self insured employer must enter into an agreement with an interlocal risk management agency as outlined in La.R.S. 33:1341 et seq. In addition, an employer whose application for self insurance is favorably considered will also be required to deposit a Bond of Security which must be at least $100,000.00 or the average loss is incurred over the most recent three year period multiplied by 110% or the total amount of unpaid reserves at the time of application multiplied by 110%. The self insurer will be classified by the Office of Workers’ Compensation according to the net worth and each individual self insurer is required to file annual statements of financial condition with the Office of Workers’ Compensation.
The penalties for failure to secure workers’ compensation insurance are outlined in La. R.S. 23:1170. As noted below, La. R.S. 23:1170 outlines that if an employer fails to secure compensation under Revised Statute 23:1168, it shall be liable for a civil penalty of not more than $250.00 per employee for the first offense and a civil penalty for not more than $500.00 per employee for a second or subsequent offense. However, the maximum civil penalty for a first offense shall not exceed $10,000.00 for all related series of violations. The penalties for failure to secure compensation insurance shall be assessed and collected by the Financial and Compliance Office of the Office of Workers’ Compensation. In addition, La. Revised Statute 23:1171.1 Director of Office of Workers’ Compensation shall also investigate employer who has failed to provide insurance under La. R.S. 23:1168 for discontinuance of business.
In addition to the civil penalties for failure to comply with insurance/compensation coverage under La. R.S. 23:1168, an employer who willfully fails to provide security for compensation shall also be subject to a criminal fine up to $250.00 per day that the employer has willfully failed to provide the security for compensation or imprisonment with or without hard labor for not more than one year or both. Furthermore, if an employer willfully misrepresents to any person that he has provided security for compensation under La. R.S. 23:1168, the employer shall be imprisoned for no less than one year and no more than ten years or a fine up to $250.00 per day that the employer has willfully failed to provide the security for compensation.
Overall, as noted in the Revised Statutes 23:1172 and 1172.1, in addition to the aforementioned civil penalties an employer can be assessed with criminal penalties for any willful failure to provide compensation insurance under La. R.S. 23:1168.
Under La. R. S. 23:1171.2, if an employer fails to comply with necessity of security for compensation under Revised Statute 23:1168, the employee’s amount of weekly compensation shall be increased by 50%. The increased weekly compensation rate was sought by the employee in McClynn v. Lebouef,2008-0378 (La.App. 1st Cir. 9/19/08), 994 So.2d 663. In this claim, the employer was found to have failed to secure insurance for the employee and the 1st Circuit Court of Appeal for the State of Louisiana awarded the employee an increase of the compensation rate from $121.00 to $181.50 due to the employer’s failure to secure insurance under Revised Statute 23:1171.2. Thus, it is necessary for the employers to be aware of the fact that should it fail to comply with the requirements of La. R.S. 23:1168, the employee does have the right to seek a 50% increase in the average weekly wage due to the employer’s lack of security for compensation claims.
In addition, in 2005, the State Legislature amended the Exclusive Remedy Statute of La. R.S. 23:1032 to establish a new penalty for employers who have failed to secure compensation insurance. Act 257 provides a tort remedy for an employee or dependent whose direct employer “knowingly fails to secure workers’ compensation insurance or proper certification of self insured status” and the employee has not been paid benefits that have been awarded in a final judgment. Under this scenario, the employee/dependent will be able to file a tort lawsuit against the employer. If the employee/dependent does obtain a judgment in the tort suit, they are entitled to recover one of the judgments but not both the compensation and tort judgment. In addition, payment of the judgment elected by the employee/dependent will also discharge the other judgment obtained. As such, based on this amendment, the employee can in fact file a tort claim against the employer once it has secured a workers’ compensation judgment that has not been paid by the employer.
Under the insurance requirements, an employer who wishes to secure compensation by insurance is required to first obtain coverage from an authorized insurer before seeking coverage from an unauthorized insurer. The reason for this is that if an employer secures insurance with an authorized insurer, this protects the employee from an insurer’s insolvency. If the insurer becomes insolvent, the employee’s claims for benefits would be covered under the Louisiana Insurance Guaranty Association (LIGA) under La. R.S. 22:2055 et seq. Under this statute, an insolvent insurer is an insurer who meets the following criteria:
(a) Is licensed and authorized to transact insurance in the state, either at the time that the policy was issued or when the insured event occurred.
(b) Against whom an Order of Liquidation with the finding of insolvency has been entered by a final judgment of a court of competent jurisdiction in the insurer’s state of domicile or of this state, and which Order of Liquidation has not been stayed or been the subject of a perfected suspensive appeal or other comparable order.
As such, under La R.S. 23:2055, if an authorized insurer files for bankruptcy and becomes insolvent by the bankruptcy court, the Louisiana Insurance Guaranty Association would then step into the shoes of the authorized insurer and be required to cover the employee’s claim for benefits. It should be noted that while the Louisiana Guaranty Association would then be required to assume liability for the employee’s claim for benefits, the Louisiana Insurance Guaranty Association is not subject to assessment of penalties and attorney’s fees for the unreasonable actions in handling the workers’ compensation claims on behalf of the insolvent insurer.