RICO Suave or No Way?

In a short decision released on December 7, 2009, the United States Supreme Court declined to hear a workers’ compensation case on appeal from the United States Court of Appeals for the Sixth Circuit in which the appeals court held that the plaintiffs could sue their employer and its workers’ compensation claims adjustor under the federal Racketeer Influenced and Corrupt Organizations Act (RICO).
The six plaintiffs involved in Paul Brown et al. vs. Cassens Transport Co. et al., current or former employees of the trucking company, Cassens Transport Co, alleged that the defendants - Cassens, Crawford & Company, and Dr. Saul Margules - had colluded to deny them workers’ compensation benefits under the Michigan Worker’s Disability Compensation Act in violation of RICO.The outline by the Court of Appeals noted that "specifically, the plaintiffs alleged that Cassens and Crawford deliberately selected and paid unqualified doctors, including Margules, to give fraudulent medical opinions that would support the denial of workers’ compensation benefits, and that defendants ignored other medical evidence in denying them benefits. The plaintiffs claimed that the defendants made fraudulent communications amongst themselves and to the plaintiffs by mail and wire in violation of the racketeering act."The decision by the Supreme Court now sends the matter back to the Eastern District of Michigan for trial. What remains to be seen is how the court will determine the question of what is and is not a permissible level of contact between and among the employer, adjustor, and doctor so as not to run afoul of the RICO statutes in the future.While this case arises out of Michigan, it should be a cautionary tale for self-insured employers, their workers’ compensation adjustors, and medical professionals who perform workers’ compensation medical evaluations in all states.  It is easy to give off-hand opinions as to the validity of a workers’ compensation claim to an adjustor or doctor’s office, but those off-hand opinions can carry weight.  It may be as the result of this action that the parties will need to find it necessary to adopt strict rules for dealing with each other at an arm’s length in the years ahead. 


Discrimination Laws Expanded

Effective November 30, 2009, it is unlawful to discriminate against an individual on the basis of sexual orientation and/or gender identity in Akron and Summit County, Ohio. Ordinances recently passed by Akron City and Summit County Councils now expressly prohibit discrimination in employment, housing and public accommodations by creating two new protected classes of individuals. The City of Cleveland enacted similar legislation last year that prohibits discrimination based upon sexual orientation and recently added provisions that cover gender identity and expression, effective December 3, 2009.

As a result of these new protections, employers within these jurisdictions should review their anti-discrimination and anti-harassment policies to ensure compliance with local laws. Dress code policies may also need attention if they contain provisions that would unreasonably inhibit gender identity or sexual orientation protections as provided in the new statutes. There are also some exemptions and new definitions which should be reviewed to determine if they apply to your organization.



Supreme Court Interested in Retaliation Claim When Employer Takes Adverse Action Against Spouse

This week, the United States Supreme Court asked the Justice Department to give an opinion on whether the Court should review a ruling from the Sixth Circuit Court of Appeals that Title VII’s anti-retaliation provisions did not cover an employee who claimed to be terminated because his fiancée had filed a sex discrimination charge against their employer.

In Thompson v. North American Stainless, LP, 567 F.3d 804 (6th Cir. 2009), a splintered full panel of the Sixth Circuit considered a retaliation claim brought under Title VII by a man who alleged that he was terminated in retaliation for his fiancée’s (a co-worker) EEOC charge of sex discrimination. In a 10-6 decision, a majority of the Sixth Circuit held that the authorized class of claimants under Title VII’s anti-retaliation provision is limited to persons who have personally engaged in the protected activity by opposing a practice, making a charge, assisting or participating in an investigation. Because the plaintiff in Thompson did not claim that he engaged in any statutorily protected activity on either his own behalf or his fiancée’s behalf, the Sixth Circuit determined that he failed to show that he engaged in protected activity by personally “opposing” a discriminatory practice.

The Thompson plaintiff filed a petition for Supreme Court review, arguing in part that the Justices should review the case because the Sixth Circuit’s decision created “a grotesque incentive” for employers to retaliate against a worker by punishing the worker’s friends or relatives. The defendant employer filed a brief opposing review, stating that the Sixth Circuit’s decision properly applied the statute as written as is the court’s obligation. The U.S. Supreme Court’s recent invitation to the U.S. solicitor general to provide an opinion on the petition signals the Court’s interest in possibly taking the case.

Author: Emily Ciecka Wilcheck


Ohio Supreme Court Continues Limited Use of Voluntary Abandonment Defense in Workers’ Compensation Claims

In an attempt to clarify when an employer can rely upon termination as a voluntary abandonment and bar future disability benefits, the Ohio Supreme Court continued to adhere its prior rulings and strict requirements.

In the Saunders case, the employee was terminated from his employment a month after he injured his knee at work for insubordination. The employer had initially supplied him with an employee handbook in June of 2004, who signed an acknowledgement for receipt of the handbook. However, that handbook was amended in June of 2004 and a new policy was included that referenced insubordination as a reason for termination. Unfortunately, the employer did not obtain any further acknowledgement from the employee that he had received the new policy or was aware of the policy.

The employee later underwent surgery and applied for additional temporary total disability benefits during his recovery. The employer raised the defense of voluntary abandonment to block the payment of those benefits. The Commission agreed with the employer and the employee then filed for mandamus relief with the court of appeals. The Tenth District Court of Appeals upheld the Commission’s findings and the employee then appealed to the Ohio Supreme Court.

In overturning the court of appeals’ decision and thus vacating the Industrial Commission’s denial of benefits, the Supreme Court focused on the lack of evidence that the employee was aware of any work rule regarding insubordination and of the consequences of violating that work rule. The Supreme Court reiterated that in order to rely upon a voluntary abandonment defense, the employer must establish:
  1. That a written work rule exists that clearly defines the prohibited conduct;
  2. That the prohibited conduct had previously been identified by the employer as a dischargeable defense; and
  3. That the written work rule was known or should have been known to the employee as well as the consequences.
While it would appear obvious that the insubordination of an employee could naturally lead to their dismissal, the court refused to adhere to this more practical or common sense approach. Instead, the court ruled that the three-prong elements of Louisiana-Pacific demanded a “clear, written articulation of work place rules and the penalties for their violations.”

The Saunders case sends a clear message to employers that if they intend to rely upon a termination as a tool to defeat future temporary total disability benefits, they must ensure they have:
  • evidence of a clear written rule prohibiting the conduct that gave rise to the termination;
  • evidence that the company could utilize the policy as a basis for termination, and;
  • specific evidence that the employee was aware of not only the prohibited conduct but of its consequences.
This is true even when the termination was clearly justified.

See State ex rel. Saunders v. Cornerstone Foundation Sys., Inc., 123 Ohio St. 3d 40, 2009-Ohio-4083.

 Author: Charlie Smith


Update - Extended Unmployment Compensation Benefits

On November 6, 2009, President Obama signed legislation into law that extends unemployment insurance benefits by up to 14 additional weeks in all fifty states and up to 20 weeks in states with a three-month average unemployment rate of at least 8.5%, which includes Ohio.
Author: Karen Adinolfi