Pre-Settlement Questionnaires and Medical Exams

Have you ever settled a case for a substantial sum only to see the claimant’s obituary in the newspaper a few weeks later? What steps can you take to come up to speed on the claimant’s health status before you settle?

When settling a case involving injuries to a specific body part, it is often easy to focus on that body part exclusively without looking too deeply into the claimant’s overall health status. This could be a serious mistake. The parties’ expectations about the claimant’s life expectancy often dictate the value of a settlement. It is therefore wise to get detailed information to help estimate what that life expectancy may be.

One method an insurer might use is to refuse to settle unless the claimant fills out a pre-settlement questionnaire which would include questions about any conditions the employee is suffering from. They could take this a step further and demand the production of all primary care medical records to verify the claimant’s health status. Insurers could even require a full pre-settlement IME with lab work. Whichever method they chose, insurers should be aware that more information is better when it comes to settlement.

Regulators Won’t Enforce Prohibition-Era Beer Law, but Uncertainty Remains

In recent weeks, a 77-year-old law prohibiting Maine businesses from displaying the alcohol content of beers earned Maine national attention. The law, enacted in the wake of Prohibition, prohibits signs or labels referring “in any manner to the alcoholic strength of the malt liquor” or using “such words as ‘extra strength,’ or ‘pre-war strength.’” The Maine Bureau of Alcoholic Beverages & Lottery Operations recently began interpreting this law to prevent the display of alcohol-by-volume (ABV) numbers on signs or menus, and issued warnings to restaurants and bars throughout the state. Thankfully, on Tuesday the Bureau announced a new enforcement policy. But is the problem really solved?

The Bureau has announced it will not enforce the law against bar or restaurant operators who display the ABV of beer on signs or menus in an unembellished manner, as it appears on the label. Anything else that reflects on the beer’s strength (for instance, “It’ll get ya drunk!”) will still be subject to the law.

The policy change is welcome to many, as commentators have argued that ABV labeling is a matter of public safety and consumer rights. For instance, a beer drinker used Bud Light’s 4.2% ABV might be in for a shock if they had just one Sam Adams Triple Bock, weighing in at a whopping 18%. The law may also be unconstitutional: The legislative push to deny consumers ABV information is a remnant of state and federal laws arising in the wake of Prohibition, such as the Federal Alcohol Administration Act (FAAA). The FAAA was struck down by the U.S. Supreme Court in 1995 as an unconstitutional restraint on commercial speech. However, its legacy of patchwork state legislation lives on.

While the Bureau has backpedaled on its decision to enforce the law to prevent display of ABVs, the law remains on the books and open to future interpretation. As long as this potentially unconstitutional law remains unchanged, regulators may prevent businesses from displaying the alcohol content of the beverages their customers consume. Fortunately, one legislator, Representative Luis Luchini (D-Ellsworth), has already submitted a bill to resolve the law’s ambiguity and ensure ABV information remains available to consumers.

Overtime overhaul may cost employers billions

On March 13, President Obama issued a memo to the Secretary of Labor calling for sweeping changes to the regulations that govern overtime pay. According to the President, the “regulations regarding exemptions from the Act’s overtime requirement, particularly for executive, administrative, and professional employees (often referred to as ‘white collar’ exemptions) have not kept up with our modern economy.” The President’s use of his executive power to push new rules without congressional approval has been controversial, and it is not yet clear what form the new rules will take.

Currently, employers cannot deny at least time-and-a-half overtime pay for non-executive employees who work more than 40 hours a week and make less than $455 per week, or roughly $24,000 per year. One thing the new rules are likely to do is raise that minimum threshold. If it is raised, millions more employees could be owed overtime pay.

The president will likely also try to change the rules allowing employers to define whether their workers are “executives,” and therefore exempt from receiving overtime pay. Currently, if an employer classifies an employee’s job as executive in nature, such as overseeing a work crew or making hiring and firing decisions, then the employer may exempt that employee from overtime. The new rules will likely redefine which employees can be considered “executives,” and may drastically expand employers’ liability for overtime pay.

If the Department of Labor passes the rules the president hopes for, many employees will see an increase in or become eligible for overtime pay. On the other side of the coin, many employers will see increased costs as they are required to pay more overtime or hire additional help. The new rules have yet to be written, and the attorneys at Tucker Law Group will follow them with interest and report any developments here.

When Can A Corporation Be Sued? Supreme Court’s Recent Decision May Signal A Change

There are venues in certain corners of the United States that exert a magnetic pull on plaintiffs’ attorneys everywhere. In Madison County, Illinois more than 800 asbestos cases are filed annually, 90% by out-of-state plaintiffs. In the Eastern District of Texas, shell “patent troll” companies rent empty offices to create “headquarters” from which to file over 1,000 patent infringement cases per year. Driven by statistics showing plaintiff-friendly judges or astronomical jury awards, plaintiffs’ lawyers travel to these venues to haul in the next big catch. But a new decision from the nation’s highest court might signal the death knell for “forum shopping.”

n Daimler AG v. Bauman, several Argentines sued the German car-maker Daimler AG in a California Federal District Court claiming that the company collaborated with state security forces to kidnap, torture, and kill some of its own employees during Argentina’s 1976-1983 “Dirty War.” None of the events giving rise to the suit had taken place in California. The Ninth Circuit held that Daimler was answerable to any lawsuit in California through its agent, Mercedes-Benz USA, LLC, a Delaware limited liability corporation with multiple California-based facilities.

The Supreme Court unanimously reversed the Ninth Circuit in an extremely broadly worded decision. The Court said that, when the suit does not arise out of the defendant’s contacts with the forum state, it can only be subject to “general”, rather than “specific” personal jurisdiction. The court then said that in order for a company to be subject to general jurisdiction in a state, it must have contacts with the state that are so “continuous and systematic as to render [the company] essentially at home” there. The Court gave a very limited definition of what it means for a company to be “at home,” listing the place of incorporation, the principal place of business, and maybe nowhere else.

Assuming that state courts begin to follow the Daimler decision, plaintiffs’ lawyers will no longer be able to file suit in some random plaintiff-friendly forum that has no connection to the parties or the cause of action. After Daimler, a plaintiff’s potential forum may well be limited to at most three states: the state where the events took place, the state where the defendant is incorporated, and the state where the defendant has its principal place of business.

We will monitor the impact of Daimler with curiosity, particularly here in Maine , and will report back with any developments.

Flanagin v. State of Maine Department of Inland Fisheries and Wildlife

Recently, the Appellate Division clarified the employee’s burden of proof of contemporaneous notice required to toll (or pause) the statute of limitations in Maine workers’ compensation cases. Contemporaneous notice is a doctrine which tolls the statute of limitations for an earlier injury if the employee can show the employer/ insurer made payments on a later injury with contemporaneous knowledge those payments were at least partly necessitated by the earlier injury.

In Ronald Flanagin v. State of Maine Department of Inland Fisheries and Wildlife the Appellate Division clarified that there is a “a relatively low threshold to meet the employee’s burden to establish the causative relationship” between the earlier and later injury: The employee must show (1) that the earlier injury “contributed in some part” to the later incapacity or need for treatment, or (2) that treatment after the later injury was “in part necessitated by” the earlier injury. To show the employer/insurer had contemporaneous knowledge the two injuries were related, the employee can (1) provide medical records available to the employer at the time of the payments suggesting the later injury is connected with the first, or (2) simply show he or she had asserted a belief at the time of the payments that the older injury is at least partly responsible for the later incapacity or treatment.

This is the first time the new Appellate Division has addressed the employee’s burden of proof of contemporaneous notice to toll the statute of limitations. The Appellate Division characterizes the employee’s burden of proof on the sufficiency of notice as a “relatively low one,” and a mere “connection standard.” It also clarifies that a mere showing the employee expressed a belief at the time of the payments that the later injury is related to the first is sufficient to show the employer had contemporaneous knowledge of their relatedness, and will toll the statute of limitations.

Six Questions Every Business Should Ask About Its Unpaid Internship

With summer around the corner, the labor market is about to be flooded by students looking for internships to gain some hands-on experience in their chosen fields. Internships can be a great experience for both interns and employers; however, employers should look closely at the nature of the work an intern will do before advertising an unpaid internship.

This is because the Fair Labor Standards Act (FLSA) requires employers to compensate anyone they “employ,” and the FLSA defines term “employ” very broadly – namely, to “suffer or permit to work.” Lawsuits by interns alleging their employers violated the Fair Labor Standards Act (FLSA) are on the rise. This trend is due largely to the U.S. Department of Labor’s issuance in 2010 of Fact Sheet #71, which lays out the six factors that an unpaid internship should meet, based on a 1947 U.S. Supreme Court case. At least three recent court cases (Glatt v. Fox, Pfunk v. Cohere, and Grant v. Warner Music Group) have used the DOL’s six factors to find that unpaid interns should have been paid.

No Maine court has ruled on the issue of when an intern must be paid. However, based on U.S. Supreme Court precedent, the DOL’s guidance, and the increase in lawsuits by interns, a business should try to meet as many of the following six factors as possible, if not all of them. As the DOL guidance explains, if all six factors are met, no employment relationship will be found, and a business may safely take on an unpaid intern:

1. Is the internship – even though it involves the actual operations of the employer’s facilities – similar to training which would be given in a vocational school or academic setting?

Unpaid internships should provide something beyond on-the-job training that typical employees receive, and the intern should learn new skills aside from those specific to the organization.

2. Is the internship experience for the benefit of the intern?

The more centered around education and vocational training the internship, the less likely an employment relationship will be found.

3. Does the intern work under close supervision of other employees, without doing their work for them?

The unpaid intern should not perform tasks that paid employees would perform if not for the intern’s presence, and should work under close supervision.

4. Does the employer gain no immediate advantage from the intern’s work, and on occasion are its operations actually impeded?

The intern’s work should not directly benefit the business, and on the contrary, the time required to educate and train the intern may even hinder employees in their work.

5. Is the intern not necessarily entitled to a job at the end of the internship?

This factor suggests that unpaid “tryouts” for a job should be avoided.

6. Do the employer and the intern understand that the intern is not entitled to pay?

Both intern and employer should agree that the internship will be unpaid.

The DOL explains that these factors should be considered based on the whole picture; so it may be possible to have an unpaid internship that doesn’t meet all six factors. However, if an internship doesn’t meet all of the factors, it becomes more likely that a court would find the intern is an employee who should be paid. In the event you are sure your internship meets the requirements, it may be a good idea to draft an internship agreement that spells out why – and a plan for how – each of the six factors will be met, and to ensure employees stick to that plan.

If you have any questions about this subject, feel free to contact the attorneys at Tucker Law Group.

Don’t Get Snowed Under by Legal Costs this Slip-and-Fall Season

Most Mainers know the old adage that Maine has only two seasons: winter and mud season. The joke has a grain of truth, however, and the dangers and costs of ice and snow are no laughing matter. According to the Maine Department of Labor, since 2011, slips and falls on ice and snow have cost Maine workers, employers, and insurers more than $2.3 million annually in lost time and medical expenses. When winter weather hits, Maine businesses need to be prepared, or potentially face slip and fall suits and workers’ compensation claims. Maine law can shield a business exercising best practices from slip and fall suits, but it can also create pitfalls for the unprepared. Read on after the break for some tips to protect your business and your bottom line.

While “slip and fall season” presents many challenges, there are a few things you can do this winter to keep your risk to a minimum. For example:

  • If you use a snow removal contractor, make sure you have a well-drafted snow removal contract
  • Keep all approaches and entryways to your organization clear of ice and snow
  • Where employees handle ice and snow, ensure they do it safely and effectively

For more information on how to protect your business from the risks that go hand in hand with winter weather, contact the attorneys at Tucker Law Group.

Maine Worker’s Compensation Premiums Continue to Plummet

A biennial nationwide ranking of workers’ compensation premiums was released by the Oregon Department of Consumer and Business Services this month. The 2014 Oregon Workers’ Compensation Premium Rate Ranking Summary shows that, while Maine remains one of the states with the highest premiums in the nation, Maine premiums continue to fall.

The summary’s “index rating” reflects the cost of workers’ compensation premiums per $100 of payroll. Together, the last several ranking summaries reveal that between January 1, 2008 and April 1, 2014, Maine’s premiums have fallen from 5th highest in the nation at $3.04 per $100 payroll, to 13th at $2.15 per $100 payroll – a 29% reduction in premiums.

What factors are driving such a consistent decline in premium costs? According to the 2014 Annual Report on the Status of the State of Maine Workers’ Compensation System, a number of changes may drive the trend. For instance, Maine is one of the states with the largest decrease in benefit costs, and Maine is approaching the national average for indemnity benefits and medical benefits. This decrease in benefits paid may be accounted for in part by several factors including: the adoption and continued revision of a new medical fee schedule in 2011 that aims to minimize medical costs; changes to the Board’s structure; and a significant amendment to the Act in 2013 addressing – among other things – entitlement to partial incapacity benefits.

Whatever the cause for the continued gradual decrease in Maine workers’ compensation premiums, the trend is cause for Maine employers to celebrate. The state has a long way to go before it approaches the national average, but if the Board and legislature continue to address cost drivers, we are hopeful the trend will continue.

Welcome to Your First Report

Welcome to YOUR FIRST REPORT, an insurance defense blog where Maine employers, insurers, third party administrators and their attorneys can come together to discuss the latest issues relating to this area of practice. By visiting this site you will stay up-to-date on a wide variety of topics, including the latest cases, unique scenarios we have run across, as well as some lighter fare, such as the intersection of insurance defense with popular culture.

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Medical Marijuana Law’s Effect on Employers’ Drug Policies Still Hazy

In light of the protections Maine’s Medical Use of Marijuana Act (MMUMA) affords to qualifying patients, many employers are left wondering how the law impacts them.  And while medical marijuana use is legal in Maine, possession and use of the drug still violates federal law.  In this complex legal environment, employers must use caution in making employment decisions based on their employees’ medical marijuana use.
 
Maine’s medical marijuana law provides, among other protections, that patients whose conduct is authorized by MMUMA may not be subjected to “disciplinary action by a business or occupational or professional licensing board or bureau.”
 
However, MMUMA does not require employers to accommodate marijuana use in the workplace, or allow any employee to work while under the influence of the drug.  It also prohibits employees from being under the influence at work if doing so would be negligent or violate professional standards.
 
While these provisions are a nod to common sense, less obvious is the way MMUMA interacts with drug-testing laws and policies.  An employer with a federal- or state-approved drug-testing policy must be careful in making employment decisions based on drug tests.  For instance, a CDL driver who tests positive for using legal medical marijuana outside of work may, under DOT regulations, be removed from duty.  While that employee must then be referred to a Substance Abuse Professional, terminating that employee may or may not violate MMUMA’s protection of patients against disciplinary action (more on that below).
 
While MMUMA does appear to protect employees from discipline due to medical marijuana use outside of work, it is unclear just how far the protection extends.  Courts in other states, such as the 6th Circuit Court of Appeals, have recently found that employers have the right to discharge employees for testing positive for medical marijuana use outside of work.  The 6th Circuit reasoned that Michigan’s act only prevents state occupational and professional boards – and not private employers – from disciplining employees for medical marijuana use.
 
You may be wondering, why does Michigan’s law matter to Maine employers?   Because the language the 6th Circuit interpreted in the Michigan Act is identical to the relevant language in MMUMA.   The very same language in MMUMA which appears to prevent private Maine employers from disciplining employees for medical marijuana use outside of work has been interpreted by at least one federal court to extend no such protection.
 
Because no Maine case has yet addressed this issue, and because there are so many variables at play, a wise employer will tread carefully when making employment decisions based on medical marijuana use.  As always, feel free to contact the attorneys at Tucker Law Group if you have any questions on this issue.