Penalized by the Hour

A company can't avoid paying temporary total disability to an injured construction worker. But can it avoid stiff penalties and attorney's fees?

A construction worker was sent to work as an electrician's helper on a hotel project. He claimed that he slipped off a ladder and landed on his left side on the concrete floor. He said his tool belt injured his left knee. There were no witnesses to the accident. He reported his injury to a secretary who told him a manager would take care of it the following week. Upon leaving for the day, he signed a standardized sign-out sheet and disclaimer of work-related injuries. He said he could not receive his paycheck without signing the sheet.

The employer paid benefits and sent him for treatment but later failed to authorize treatment and stopped paying benefits. The employer said it ceased payment of benefits because of a pre-existing injury and because the accident was not witnessed. The worker sought compensation.

The workers' compensation judge found the worker was entitled to temporary total disability benefits, penalties and attorney's fees. The employer appealed.

The court of appeal found no evidence contradicting the worker's testimony that he would not have been paid if he did not sign the sheet. Also, the medical evidence corroborated the worker's version of events. The court found he incurred a work-related injury.

The employer argued that the worker forfeited his right to benefits by failing to disclose a pre-existing permanent partial disability to his back. No evidence showed a pre-existing injury to his left knee. Also, the worker said his manager told him not to include previous injuries on a form giving notice of the injury.

The court disagreed with the employer because it failed to show a merger between the pre-existing and new injuries. The employer also failed to show prejudice from the failure to inform it of previous injuries. The court found the worker was entitled to TTD benefits. The court found the worker was entitled to be paid based on a 40-hour week despite the employer's arguments that he was a day laborer. Evidence showed that the worker was paid by the hour rather than by the day.

The employer next argued that penalties and attorney's fees were incorrectly assessed.

Was the WCJ correct in awarding penalties and attorney's fees to the worker?

A. No. The employer reasonably controverted the claims.

B. No. The employer's actions were not arbitrary and capricious.

C. Yes. The employer incorrectly calculated the worker's average weekly wage.

How the court ruled: C.

The Louisiana Court of Appeal held that the worker was entitled to $8,000 in penalties. Burkett v. LFI Fort Pierce, Inc., No. 10-1478 (La. Ct. App. 05/04/11).

The court explained that, because the court found the worker's average weekly wage should be calculated based on his hourly earnings rather than daily earnings, the employer was subject to penalties. The court found the WCJ's award of penalties was above the statutory cap, so it amended the award.

A is incorrect. The court explained that the employer did not have an actual objective reason for discontinuing benefits at the time it did so.

B is incorrect. The court agreed with the WCJ's findings that the employer's actions were arbitrary and capricious.

CHRISTINA DIFONTE is the legal editor of the WorkersComp Forum.

This feature is not intended as instructional material or to replace legal advice.

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