Articles Posted in Employment Law

worker2It is sometimes possible for employees injured on the job in Florida to be compensated through both the state’s workers’ compensation system and its civil justice system. As to the compensation available and the manner in which the compensation is sought and received, the systems are more different than they are alike. One of the primary differences is that compensation for human damages such as bodily injury, pain and suffering, disfigurement, mental anguish, and the loss of capacity for the enjoyment of life, are elements of a civil remedy but not workers’ compensation. In a nutshell, workers’ compensation benefits are limited to medical and indemnity benefits. Non-economic damages, which can amount to millions of dollars, are not recoverable.

What limits most employees from being able to receive the civil remedy is the legal concept known as workers’ compensation immunity. The basic concept is set forth in Fla. Stat. Sec. 440.11(1):

The liability of an employer prescribed in s. 440.10 shall be exclusive and in place of all other liability, including vicarious liability, of such employer to any third-party tortfeasor and to the employee, the legal representative thereof, husband or wife, parents, dependents, next of kin, and anyone otherwise entitled to recover damages from such employer at law or in admiralty on account of such injury or death….

Special laws have been devised to deal with workers’ compensation immunity in the context of contractor-subcontractor relationships. See Fla. Stat. Sec. 440.10(b)-(f). For the employees of contractors and subcontractors, the general law is set forth in s. 440.10(b):

In case a contractor sublets any part or parts of his or her contract work to a subcontractor or subcontractors, all of the employees of such contractor and subcontractor or subcontractors engaged on such contract work shall be deemed to be employed in one and the same business or establishment, and the contractor shall be liable for, and shall secure, the payment of compensation to all such employees, except to employees of a subcontractor who has secured such payment.

“[T]he purpose of section 440.10 . . . [is] ‘to insure [sic] that a particular industry will be financially responsible for injuries to those employees working in it, even though the prime contractor employs an independent contractor to perform part or all of its contractual undertaking.’” Gator Freightways, Inc. v. Roberts, 550 So. 2d 1117, 1119 (Fla. 1989) (quoting Roberts v. Gator Freightways, Inc., 538 So. 2d 55, 60 (Fla. 1st DCA 1989)); see also Crum Servs. v. Lopez, 975 So. 2d 1184, 1186 (Fla. 1st DCA 2008) (explaining that section 440.10(1)(b) “is designed to ensure that employees engaged in the same contract work are covered by workers’ compensation, regardless of whether they are employees of the general contractor or its subcontractor”).

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scales of justiceIn previous blogs, we addressed the first and second elements of a Section 440.205 Florida Statutes wrongful retaliation/termination cause of action. This blog will address prong the third element.

§440.205 reads as follows:

Coercion of employees.No employer shall discharge, threaten to discharge, intimidate, or coerce any employee by reason of such employee’s valid claim for compensation or attempt to claim compensation under the Workers’ Compensation Law.

Case law has broken this cause of action down into the following elements:

  1. The employee engaged in a statutorily protected activity;
  2. An adverse employment action occurred; and
  3. The adverse action was causally related to the employee’s protected activity.

Russell v. KSL Hotel Corp., 887 So.2d 372, 379 (Fla. 3d DCA 2004); and Humphrey v. Sears, Roebuck, and Co., 192 F. Supp. 2d 1371, 1374 (S.D. Fla. 2002).

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pinoccioOur previous blog addressed the first prong of a Florida Statute §440.205 workers’ compensation retaliation/wrongful termination cause of action (COA). §440.205 provides:

Coercion of employees.No employer shall discharge, threaten to discharge, intimidate, or coerce any employee by reason of such employee’s valid claim for compensation or attempt to claim compensation under the Workers’ Compensation Law.

Case law has established the elements of a §440.205 COA as follows: the employee must prove: (1) he engaged in a statutorily protected activity; (2) an adverse employment action occurred; and (3) the adverse action was causally related to the employee’s protected activity. Russell v. KSL Hotel Corp., 887 So.2d 372, 379 (Fla. 3d DCA 2004); and Humphrey v. Sears, Roebuck, and Co., 192 F. Supp. 2d 1371, 1374 (S.D. Fla. 2002).

This blog will address prong (2).

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Florida is an at-will employment state. The doctrine often allows employers to terminatedend employment relationships without suffering any negative consequences besides paying unemployment compensation benefits.

While the doctrine creates a climate of vulnerability, Florida employers do not have absolute immunity for every termination decision. They can find themselves in hot water for

This blog will address the first element of a §440.205 retaliatory discharge claim.

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scales.jpgFlorida Statute 440.205 creates a civil remedy for various types of retaliatory misconduct by employers against employees for claiming or attempting to claim workers’ compensation. (Florida’s workers’ compensation statutes are contained in Chapter 440.) 440.205 reads as follows:

Coercion of employees.–No employer shall discharge, threaten to discharge, intimidate, or coerce any employee by reason of such employee’s valid claim for compensation or attempt to claim compensation under the Workers’ Compensation Law.

Traditionally, civil disputes have been handled by trial courts with judges and juries. (Florida’s civil trial court system consists of county and circuit courts.) Trial courts were imagined by America’s Founding Fathers as the most effective way of leveling the playing field in disputes between the small and powerless and the rich and powerful. Juries, composed of citizens from all walks of life, were seen as being in the best position to render fair and impartial verdicts after thoughtfully considering the evidence. Sadly, the recent trend in Florida and nationwide is away from this form of dispute resolution, towards a process known as arbitration:

“Arbitration, a form of alternative dispute resolution (ADR), is a technique for the resolution of disputes outside the courts, where the parties to a dispute refer it to one or more persons (the “arbitrators”, “arbiters” or “arbitral tribunal”), by whose decision (the “award”) they agree to be bound.” From Wikipedia

This movement has been fueled by Big Business to make it more difficult for individuals to pursue civil remedies against them. Public Citizen, a public interest non-profit organization, concluded that arbitration may be just as expensive and time-consuming as litigation. In their report, “The Costs of Arbitration,” the writers found that:

  • The cost to a plaintiff of initiating an arbitration is almost always higher than the cost of instituting a lawsuit.
  • Arbitration costs are high under a pre-dispute arbitration clause because there is no price competition among providers.
  • Arbitration costs will probably always be higher than court costs in any event, because the expenses of a private legal system are so substantial.
  • Arbitration saddles claimants with extra fees they would not be charged if they went to court.
  • Arbitrators tend to favor repeat customers. Naturally, large companies with frequent litigation select the arbitrators who rule in their favor.
  • Taking a case to arbitration does not guarantee that a consumer or employee will stay out of court, making arbitration still more costly. If crucial documents or testimony must come from a third party, court litigation is necessary to enforce subpoenas.
  • The inability to exclude irrelevant evidence since the “Rules of Evidence” are discretionary with the arbitrator
  • The loss of the right to appeal erroneous decisions.

The bottom line is that arbitration is often bad for the little guy. Plaintiffs’ lawyers prefer having matters resolved in trial courts. They don’t always have the choice.
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scales of justice.jpgFlorida’s workers’ compensation system, embodied in Chapter 440 of Florida’s Statutes, is mostly unfriendly towards injured workers. Some smart people predict that it is only a matter of time before the system is declared unconstitutional as no longer providing a fair alternative to the personal injury system, which is what is was created to do nearly 80 years ago and what it mostly did until 2002, until Jeb Bush and Republican legislators began eviscerating the system one large cut at a time. The workers’ compensation system today is a shadow of the one that existed a mere 10 years ago. (For a detailed breakdown of the differences, see our recent blog, Florida’s Workers’ Compensation System’s Steady Decline Into the Abyss.)

One area of Chapter 440 that has not lost its bite for injured workers is

people.jpgFlorida Statute 440.205 is supposed to protect employees from being terminated for making workers’ compensation claims. Making a claim can be as simple as reporting an accident. It does not require the filing of a formal Petition for Benefits with DOAH.

Proving a claim for wrongful termination can be difficult. Florida employers are not required to modify work duties or hold jobs open while employees recover from injuries, and Florida is an “At Will” employment state, a legal principle that allows employers to terminate employees at will, for no reason at all. (Thankfully, in addition to the protections of 440.205, At Will is constrained by the U.S. Constitution’s prohibition against discrimination based on age, race, and religion. Whistleblowers, individuals who report illegal activity, also are protected against At Will termination. Ironically, it is often safer for employers to fire employees for no reason at all than to fire for particular reasons.)

Employers hide behind these protections when accused of wrongful termination. In appropriate situations, they should be challenged.

An employer found to have violated 440.205, can be liable for civil damages such as lost wages and emotional distress, and subject to criminal fines as a second degree misdemeanor.
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worker.jpgThe Fair Labor Standards Act (FLSA) requires employers to pay employees overtime pay, at a rate of time and a half, for all hours worked in excess of 40 hours per week. See Section 207 of the Act.

To calculate the amount of compensation an employee is owed under the FLSA, the overtime rate (OT rate) must be determined.

The first step in this equation is establishing the “regular rate of pay,” the hourly rate. If the employee has not received employer-furnished fringe benefits, such as health insurance and housing, the “regular rate of pay” is the hourly rate, and the OT rate is 1/2 of the hourly rate. For example, if the “regular rate of pay” is $10.00/hour, the overtime rate is $5.00.

Where fringe benefits have been provided, their value must be included in the calculation. In the case of health insurance, the fringe benefit value determination is relatively simple to make, with the employer’s share of the premium payment being the actual “value” of the fringe benefit. Where the employer is not making an easily identifiable payment, such as in the case of self-administered medical programs provided by some big emloyers, or where housing is provided by the employer, determining the value of the benefit is not as simple. Not infrequently, the parties will fight over the value of fringe benefits. (Caveat: the employer may try to argue that the fringe-benefit is a form of payment for overtime wages, rather than a benefit which increases the “regular rate of pay.” Paycheck stubs and tax records, among other evidence, must be considered to resolve this dispute.)

Where fringe benefits are part of the calculation, determining the OT Rate is a 3-step process:

Step 1 – Regular Weekly Pay: Hourly rate of pay times (x) hours worked per week plus (+) value of fringe benefit(s). (Example: $10/hr x 62 hours + $50 (weekly insurance premium.))

Step 2 – Regular Rate of Pay: Regular Pay divided (/) by hours per week.

Step 3 – OT Rate: Equals 1/2 of Regular Rate of Pay.

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pills.jpgThe Fair Labor Standards Act (FLSA) requires employers to pay employees overtime pay, at a rate of time and a half, for all hours worked in excess of 40 hours per week. See Section 207 of the Act. However, the FLSA contains many exemptions, including for “administrative” employees, perhaps the most common exemption, and “outside” salespeople.

Novartis is a drug manufacturer. It sells its drugs to wholesalers, who sell to pharmacies, who sell to patients who are prescribed the drugs by their doctors. Novartis benefits from doctors prescribing its drugs.

Novartis employs a small army of individuals who do not sell the drugs directly to the doctors but instead make regular calls on doctors to encourage them to prescribe Novartis drugs to their patients. 2500 of these individuals brought a class action against Novartis for FLSA overtime wages. Novartis argued that they were exempt as outside salespeople and administrative employees. The Plaintiffs countered by arguing that they do not make sales or obtain orders, and thus are not salespeople, and do not exercise discretion and independent judgment, two of the critical indicia for the “administrative” employee exemption.
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Permanent Total Disability (PTD) (440.15(1)) is the most valuable wage loss benefit available under Florida’s workers’ compensation system. Unlike Temporary Partial Disability (TPD) (440.15(4)) and Temporary Total Disability (TTD) (440.15(2)), monetary benefits that are available for only a short period of time, PTD can last for years and includes an annual supplemental increase equal to 3 percent of her or his weekly compensation rate.

The PTD standard has changed numerous times over the years. Until 1996, the standard was to meet a scheduled catastrophic injury, like total blindness or loss of limbs, or prove the inability to perform at least light duty work uninterruptedly on a full-time basis. In 1996, the light duty standard was replaced by the standard required to qualify for Social Security Disability (SSD) benefits, which the Florida Legislature believed was more demanding. In 2002, thanks to Governor Jeb Bush, the SSD standard was replaced by an even more stringent standard. Injured workers would be required to prove that they could not perform at least sedentary duty work on a part-time basis within a 50 mile radius of their homes. This standard prevented all but the most catastrophically injured workers from qualifying for PTD.

Because this standard proved so onerous… and unfair, the Florida Legislature was persuaded to eliminate the part-time element from the PTD requirement in its 2006 version of 440.15.

Pre-1996, one of the ways claimants proved entitlement to PTD benefits was by performing an exhaustive but unsuccessful job search. Because of the many variations in the standard since then, many workers’ compensation practitioners believed that this method no longer applied and abandoned it as a way of proving entitlement to PTD.

Thankfully, in Blake v. Merck & Co., 43 So. 3d 882 (Fla. 1st DCA 2010) the assumption was proven wrong. The Blake court set forth three alternative methods by which a claimant may prove entitlement to PTD benefits: by presenting evidence of (1) permanent medical incapacity to engage in at least sedentary employment, within a 50-mile radius of the employee’s residence, due to physical limitation; (2) permanent work-related physical restrictions coupled with an exhaustive but unsuccessful job search; or (3) permanent work-related physical restrictions that, while not alone totally disabling, preclude Claimant from engaging in at least sedentary employment when combined with vocational factors.
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