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Appellate Reversal a Landmark Decision for Workers’ Compensation Defense

Case Study

Appellate Reversal a Landmark Decision for Workers’ Compensation Defense

May 1, 2012
Sean J. McKinley

Sean J. McKinley, special counsel in Goldberg Segalla’s Workers’ Compensation Practice Group, was the author of the brief used in the New York Court of Appeals’ reversal of  Zamora v. New York Neurologic Associates, a landmark decision that overcame a major blow to the defense bar and sets important precedent for insurance carriers and employers in the defense of workers’ compensation claims involving permanent partial disabilities. This work was performed by Sean shortly before he joined Goldberg Segalla.

In Zamora, the claimant was classified with a permanent partial disability and stopped working for reasons related to her injuries and disability. According to cases developed over the past 15 years by the New York Workers’ Compensation Board (WCB) and the Appellate Division, partially disabled injured workers must search for work within their restrictions in order to maintain an entitlement to indemnity benefits for lost wages. However, the claimant in this case did not capitalize on her partial disability by searching for legitimate work and attempting to find a job within her medical restrictions. The little work she did search for was work she was physically incapable of, and therefore her search was not considered in good faith by the WCB. 

Accordingly, the WCB stopped the claimant’s benefits, holding that she was partially disabled and needed to maintain a legitimate attachment to the labor market. The Appellate Division, Third Department reversed the WCB in a 3-2 decision, holding that the claimant was entitled to an inference that her lost wages were the result of her permanent partial disability, and that it was the employer/insurance carrier’s burden to prove otherwise. The Appellate Division did not believe the lack of an adequate job search was sufficient to rebut that inference.

Upon appeal, which was joined by the Attorney General on behalf of the WCB, the Court of Appeals examined whether a permanently partially disabled individual has the right to collect their benefits and “sit on the beach,” as one judge put it, or whether the injured worker should mitigate damages and contribute to society by working, or attempting to find employment, in whatever capacity they are capable.

On May 1, 2012, the Court of Appeals decided the following issue: “whether the WCB must infer, from a finding that a claimant withdrew from her employment due to an accident at her workplace, that her post-accident loss of wages is attributable to physical limitations caused by the accident.” The court held that the WCB is not required to draw that inference, but may determine the claimant’s entitlement to benefits on a case-by-case basis.

The Court of Appeals’ ruling will have a profound impact on the expectations of permanently partially disabled injured workers and their obligation to mitigate damages under the Workers’ Compensation Law. It essentially eliminated the unrebuttable presumption and upheld the concepts of “attachment to the labor market” and “voluntary withdrawal from the labor market” — critical defense theories used by carriers and employers in defending these types of workers’ compensation claims.