Truck Law

A Transportation Law Blog from TransportationAttorneys.NET

Category: Worker’s Compensation Claims

Defending against Workers Compensation Claims: The AOE/COE Defense

by G. Spencer Mynko, Esq.

Here at Transportation Attorneys, we regularly get calls from trucking companies who are being sued in a claim for Worker’s Compensation benefits. The typical scenario is where a current, or more likely, former Driver files a claim at the Worker’s Compensation Appeals Board (WCAB). Of course, we usually deal with situations where the driver was treated as an independent contractor, and therefore no Worker’s Compensation insurance was in place. As is always the case, the Motor Carrier quickly points out that because the driver was an Independent Contractor, they were not obligated to secure Workers’ Compensation insurance. Nonetheless, that didn’t stop the “Independent Contractor” from trying to hold the trucking company liable for his or her work injuries. We regularly advise and defend companies who find themselves in this very situation.

One of the potent weapons we have in our legal arsenal to fight such claims is an AOE/COE hearing. AOE/COE stands for Arising Out of Employment and in the Course Of Employment. Basically, for an injury to trigger benefits in the Worker’s Compensation system it has to ” arise out of employment”, and occur in the “course of employment”.  In other words, the injury must be “proximately caused by employment.”  However, in the case of an independent contractor, there is no employer – employee relationship. So “employment” does not exist between the principal and the independent contractor driver, and therefore if the independent contractor was injured in the course of his work, his or her injuries did not arise out of or occur in the course of employment. Simply put, Since the independent contractor was not employed by the Motor carrier, his or her Worker’s Compensation claim should be dismissed.

The way we handle this is to promptly set a date for an AOE/COE hearing in front of the Worker’s Compensation Judge. At this hearing, we will make arguments and put on evidence as to why the injured worker is actually an independent contractor, and therefore not entitled to Worker’s Compensation benefits. The way we do this is to analyze the specific facts involving the independent contractor and his relationship with the motor carrier. We then apply the Borello factors (the legal test used to determine if someone is an independent contractor or employee) to the facts of the case in front of us, and hopefully convince the judge that the driver is truly an independent contractor and therefore not entitled to benefits. If we win this argument, the case/claim is automatically dismissed. (Of course, the applicant – the injured worker making the claim – could appeal that decision). However, if the applicant is unsuccessful in the appeal or, does nothing further, the case will be dismissed for good. On the other hand, if the judge decides that the driver was misclassified as an independent contractor, then the motor carrier is on the hook for the driver’s injuries. This includes being responsible for all medical treatment (past and future) and any disability (past and future).

Of course, The battle will be fought over whether the driver was properly classified as an independent contractor. The driver’s lawyers will argue vigorously that the driver was a common-law employee who was misclassified as an independent contractor, and therefore entitled to benefits. We will argue vigorously that the driver truly is an independent contractor and therefore has no rightful claim against the motor carrier. Be advised that Worker’s Compensation judges are extremely experienced in making these determinations. It has been our observation that Worker’s Compensation judges abhor uninsured employers and will look to hold the motor carrier responsible for the drivers injuries. Again, this is why it is so important that you are careful in classifying drivers as independent contractors, because at the Worker’s Compensation Appeals Board, it could make the difference between owing  nothing and owing hundreds of thousands of dollars

And just like EDD, the Workers Compensation Appeals Board Judge will scrutinize the relationship you have with your drivers to determine if they have been misclassified.  (Please refer to my prior articles where I discuss that process in-depth).

We hope that once you utilize Transportation Attorneys to help you get your IC agreements and business model set up, you’ll enjoy many miles of trouble-free trucking. Worker misclassification is a big deal in California.  Trucking companies who use independent contractors should carefully review their contracts and practices in order to comply with the law.  We are one of the few law firms that focuses on trucking, transportation and logistics with the knowledge and experience to competently guide you through these ever present hazards.  We are very experienced in dealing with the distinctions between independent contractors and employees.

We here at Transportation Attorneys can help you with your Independent Contractor business model and your ability to withstand  the toughest scrutinization of anyone alleging your company is misclassifying its drivers.

Contact today!

Is your next driver your next headache? Are you about to hire a professional Worker’s Compensation applicant?

by gspencermynko

Recently, Transportation Attorneys helped a client, a local trucking company, deal with a “Serial Applicant”. What is a “Serial Applicant” you ask?

A “Serial Applicant”, or as I sometimes like to refer to them, a “professional applicant”, is someone who, year in and year out, injures various parts of his body, hires an applicant attorney, and files a workers compensation claim.

Astonishingly, each new year brings with it the promise of a new injury. One year it’s his leg and lower back, another year it’s his neck and shoulder, and perhaps next year he’ll develop carpal tunnel syndrome.

Despite the marginal and questionable nature of his injury claims, the “serial applicant” will have no trouble finding an attorney willing to take his claim. Why? The applicant’s attorney can easily effectuate an economic settlement and pick up some 5710 fees, which will put a few thousand dollars in the attorney’s pocket for a minimal amount of work.  Furthermore, there are “high-volume” applicant attorneys who literally sign up hundreds of cases like these. Do the math and you can see why this is a lucrative business model.

So, the “Serial Applicant” and his attorney file a claim down at the Worker’s Compensation Appeals Board, knowing that for a minimal amount of effort, they should be able to get several thousand dollars.

Now here’s the kicker: The “serial applicant”, in the case that I’m referring to, was actually an “owner operator”, who should be considered an independent contractor. Therefore, the trucking company/carrier should not be responsible for any work injuries suffered by the “serial applicant”. Right?

Wrong.  In this case, the “Serial Applicant” was clearly misclassified as an owner-operator, and was in fact an employee driver. Therefore, the trucking company was on the hook for his “injuries.” The trucking company had no choice but to pay the “Serial Applicant” $10,000 to make the case go away.

The trucking company in this case could have saved thousands of dollars, by hiring Transportation Attorneys to do a workers compensation background check on this particular driver prior to hiring him. We would have told the trucking company that the potential driver had no less then 10 separate Worker’s Compensation claims in the last eight years. Accordingly, this “serial applicant” would never have been hired by our client, and would’ve been forced to move on down the road in search of his next victim.

Don’t let this happen to your trucking company. Transportation Attorneys is a law firm with expertise in protecting your trucking company. Call us or visit today!