Sixth Circuit Rules that Denying Workers’ Compensation Benefits May Lead to RICO ViolationApril 13, 2010
Sometimes the most tedious tasks in managing a workers’ compensation claim can have the most significant impact on your liability. It used to be widely accepted that when a claimant provided evidence that he had been unemployed during the year preceding his injury, that period of unemployment would be excluded from the calculation of his average weekly wage. That would, of course, give him a higher weekly benefit rate because it would reduce the number of weeks divided into his total wages earned for the preceding year. All it took was testimony from the injured worker that the period of unemployment was due to reasons or conditions beyond his control. No further evidence was required from the injured worker.
That, however, has changed and employers have now been given another tool by the Ohio Supreme Court to help control benefit costs.State ex. rel. Warner v. Industrial Commission, Slip Opinion No. 2012-Ohio-1084. In Warner, the Court held that in calculating the average weekly wage for a claimant during the year before his injury, and in determining
whether to include or exclude a period of unemployment, the Commission must determine if the claimant made a reasonable attempt to find other work during that period of unemployment. The Court also held that any amount of unemployment compensation benefits received during the period of unemployment should not be included as wages in the calculation, as well.
The Court focused specifically on Ohio Revised Code Section 4123.61 in determining when special circumstances arose that would allow the exclusion of certain weeks in the calculation of the claimant’s average weekly wage. Normally, the claimant’s wages for the year prior to the injury are divided by 52 weeks to determine the AWW. The statute indicates that the Commission should not count “any period of unemployment due to sickness, industrial depression, strike, lockout, or other causes beyond the employee’s control.” Mr. Warner asserted that his period of unemployment was clearly due to factors beyond his control because he was unemployed due to a seasonal layoff. He also argued that because he was receiving unemployment compensation benefits a determination had already been made that he had attempted to and was continuing to look for other work but had been unsuccessful. The Court rejected Mr. Warner’s arguments and, instead, held that the Commission had the duty to question Mr. Warner’s period of unemployment and, more importantly, that the mere recovery of unemployment compensation benefits did not mean that he had engaged in a good faith job search. The court noted, “a job search sufficient to satisfy OBES might not satisfy the Commission.”
The Warner decision is good news for Ohio employers. No longer will it be assumed that merely because a claimant can provide proof of a layoff, the claimant will be able to exclude any periods of unemployment resulting from that layoff from the calculation of his benefits. The Claimant will have to show that he made some effort to return to employment to utilize the exclusion.