Monday, March 23, 2015

A Workers' Compensation "Miranda Warning"

WorkCompCentral reported in February that two states are considering statutory amendments that would require a warning for all injured workers. Essentially, the "Arizona and Montana" proposals would "require injured workers to be notified of potential imprisonment and fines for making a false claim." 

The proposals are not necessarily meeting with universal support. Each purports to inform injured workers. There are issues of benefit forfeiture, financial penalties, and even criminal penalties apparently associated with "false statements" in the course of workers' compensation claims in these states. That is a similarity with the Florida workers' compensation law. 

We have seen a fair amount of litigation and attention regarding our Fla. Stat. §440.105. We have seen Hector, Brock, and an instance in which over 100 workers were arrested at one company, for issues related to their representations in the employment process. A state that gets a great deal of publicity regarding workers' compensation is Ohio. However, it is hard to tell whether fraud is a large issue there, whether Ohio does a better job of catching it, or whether it is more likely to publicize arrests. Regardless, workers' compensation fraud is a subject that is getting in the news. 

The Arizona and Montana bills are purportedly focused on informing injured workers of the potential for liability, civil and criminal, when they claim benefit entitlement. There is a provision in one of the bills to require certain forms from injured workers, and for these forms to also contain language regarding misstatement or fraud.

One bill sponsor, a business owner, was quoted by WorkCompCentral explaining his motivation. He seeks to "help honest people be more honest." He characterized his motivation as "protecting our employees from making a false claim." 

Another legislator has questioned the scope of workers' compensation fraud. Essentially asking how large a problem this is. Some periodically question whether employee fraud is significant as a portion of any waste or abuse in the system generally, This is a refrain that has been heard in Tallahassee from time to time. 

The quoted legislator said that "nationwide, it's estimated that only 1% to 2% of workers' compensation claims are fraudulent." He asserted that "in workers' compensation, employer fraud dwarfs worker fraud. There is no doubt about it." That is another refrain that has been heard in Tallahassee. 

A lobbyist for the Montana Trial Lawyers labelled that state's bill a "workers' compensation Miranda warning." He cautioned that the warning would dissuade "some injured workers from filing legitimate claims." 

When I read this, I remembered the "forgotten Supreme Court Case," Brock v. State of Florida. It presented some intriguing questions about the statutory prohibitions regarding misrepresentation in obtaining a job. The prohibition is in 440.105(4)(b)(9), clearly part of the workers' compensation law. But it has been used to prosecute people who never made a claim for workers' compensation benefits. 

The Fourth District concluded that this was acceptable, because there is no workers' compensation without work and work is obtained through an interactive process. Thus, the conclusion that the "gateway" to workers' compensation is perhaps the interactive employment process, that is the application, interview, etc. So the gateway can be guarded by the workers' compensation statute. This is a sure-fire conversation starter with attorneys, as the opinions on this statute are diverse, heart-felt, and opinionated from all perspectives. 

In the grand context, however, is it better that people know of the potential for prosecution (fore-warned is prepared) or does informing about potential penalties amount to threatening? I had a chance to describe the Brock case to a group of non-lawyers recently. Their reaction was enlightening. One member asked "who does not lie on their resume?" And followed that with "I could be prosecuted for lying on a job application?"

Is it better for people to know, or is informing people an inappropriate intimidation? The debate will go on in at least two states this spring. What do you think?

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