Legal Updates & News

The Maine Workers’ Compensation Board Appellate Division’s recent decision in Gregory Traussi v. B&G Foods, Inc. could spell trouble for employers and insurers if the decision is not reversed on appeal.

Date: 4/14/15
Summary: Panel affirms hearing officer’s dismissal of petitions and subsequent refusal to reinstate petitions due to the pro se employee’s failure to prosecute. Standard of review of Hearing Officer’s decision to dismiss/not reinstate petitions is abuse of discretion.

Read the full text of Jeffrey R. Dolloff, Sr. v. Link Property Management, Inc.

In the recent case Estate of Ralph Zeitman v. WW Osborne, a widow whose petition for death benefits against five employers was dismissed on statute of limitations grounds prevailed on appeal to the Appellate Division of the Maine Workers’ Compensation Board. The widow, Ms. Zeitman, filed her petitions against the employers twelve years after the death of her husband. The employers filed a joint motion to dismiss, raising the two-year statute of limitations period on death claims. Because he was asked to decide the issue on a motion, rather than after a hearing, the hearing officer made every inference in favor of Ms. Zeitman, including assuming that she was operating under a mistake of fact as to the reason of Mr. Zeitman’s death until shortly prior to the filing of the petitions. Despite the assumption of a mistake of fact, the hearing officer found that twelve years was not a “reasonable time” within which to file petitions and granted the motion to dismiss.

The Appellate Division reversed, finding that, in the event of a mistake of fact as to the cause of death, the two year statute of limitations did not begin to run until the widow’s mistake of fact was cured. The case was remanded to the hearing officer for further proceedings consistent with the decision.

This case provides employers and insurers with some additional clarity regarding the mistake of fact exception to the statute of limitations defense. It is now clear that the limitations period does not begin to run until the mistake of fact is cured, effectively entitling the claimant to the full limitations period after she becomes aware that she has a viable claim.

In a recent decision, the Appellate Division of the Maine Workers’ Compensation Board was asked to decide whether an employment relationship can exist between a “special” (or borrowing) employer and an employee where no employment relationship exists between the “general” (or lending) employer and that employee. Malpass v. Gibbons, et al. App. Div. 13-0043. In this case, a member of a framing crew asked an independent contractor at another job site for help with lifting a wall. During the lift, the wall fell, injuring the independent contractor. The Appellate Division found no employment relationship between the contractor and the supposed lending employer. Citing Torsey’s Case, 153 A. 807 (Me. 1931), the Appellate Division found that, where there is no employment relationship between a worker and his supposed lending employer, there can be no “transfer” of employment, and therefore no employment relationship can be created between the worker and the borrowing employer under the lent employee doctrine.

For small business owners hiring both independent contractors and employees, it is important to fully understand the distinctions between the two to avoid complications from the Maine Workers’ Compensation Board (WCB). With everyone looking to cut costs and the WCB’s Abuse Investigation Unit cracking down on worker misclassification, we take a look at the definition of an independent contractor as laid out in the Workers’ Compensation Act, 39-A M.R.S.A. §102(13-A).

The Act requires that all of the following factors be true before an employer can designate a worker as an independent contractor:

1. The employer does not control day-to-day work: the worker sets his/her own hours.
2. The worker has “an independently established trade, occupation, profession or business.”
3. The worker has a chance for profit and loss from the work, so should not be paid on a salaried or hourly wage basis.
4. Any assistants to the worker must be hired, paid, and supervised by the worker.
5. The worker can work for multiple companies, even if his right to do so is temporarily restricted by a work assignment.

If all five of the above factors apply to the worker, he/she can be designated an independent contractor if at least 3 of the below are also true:

1. The worker uses his/her own tools and materials.
2. The worker can work for multiple companies.
3. The worker is contractually responsible for satisfactory completion of the work.
4. There is a written contractor for independent contractor services.
5. The worker is not paid hourly.
6. The work is outside the usual course of business for which the service is performed.
7. The IRS has determined that the worker is an independent contractor.

To make employers’ lives easier, the Board provides an Application for Predetermination of Independent Contractor Status, which can be filled out and submitted before work begins. It is important to remember that submitting the form does not make you audit-proof. However, by following the rules laid out above, employers can rest a little easier in the knowledge that they are likely properly designating their workers’ status.

For more information about this complicated issue, please contact the attorneys at Tucker Law Group.