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Bar News - August 17, 2016

Workers’ Comp & Personal Injury: NH Supreme Court Decision Further Establishes Law on Job Reinstatement


Holding Also Clarifies Ability to Challenge Administrative Regulations Outside Superior Court

Appeal of Raymond Cover, released Feb. 26, 2016, is a watershed case for both New Hampshire workers’ compensation law and for administrative law in general. The decision established as a matter of law that the right of job reinstatement extends to part-time workers, in spite of an explicit Department of Labor regulation to the contrary, and clarified that overreaching administrative regulations can be procedurally challenged in the course of an administrative hearing, rather than bringing a separate declaratory judgment action in Superior Court.

The case arose out of a simple and short work injury. For years, the claimant was a part-time worker for the NH State Liquor Commission at one of the ubiquitous stores that dot the New Hampshire landscape; he was a retail worker who unloaded product from pallets and rang up purchases. In 2013, he suffered a minor injury when lifting boxes of liquor and needed to spend about three weeks out of work.

During those three weeks, there was miscommunication between the claimant, his doctor, and the employer regarding his work restrictions. Because the employer claimed not to have received the appropriate paperwork about his restrictions in a timely fashion, he was terminated. In the meantime, his workers’ comp claim was also denied.

The claimant requested a Labor Department hearing on the denial of workers’ compensation benefits and made a formal request for reinstatement of his part-time job. When a hearing was finally held in January 2014, the hearing officer held the claimant met his burden to establish the work-related nature of his injury, but ruled that part-time employees are not eligible for reinstatement pursuant to a Department of Labor Rule (LAB 504.05), which explicitly held that “An employer shall not be obligated to provide the former position to a part time employee as defined by the employer’s personnel policy.”

The claimant appealed only the department’s adverse ruling on reinstatement of his position. Importantly, the workers’ compensation statute on reinstatement (RSA 281-A:25-a) makes no distinction between full-time and part-time workers. The employer did not appeal the finding favorable to the claimant on causal relationship. So, the department’s holding that the claimant suffered a cognizable workers’ compensation injury became final and binding on the parties.

When the appeal came before the Compensation Appeals Board, there was no dispute that he was then capable of performing the duties of his position, or that the employer had part-time vacant positions available. The only question was whether the employer could rely on the department’s regulation to deny reinstatement.

On appeal, the board believed it had no authority to resolve the inconsistency between the Department of Labor regulation that removes part-time employees from the protection of RSA 281-A:25-a, and the statute itself. The board held in its decision that it “has no jurisdiction to interpret the statute as it sees fit and is bound to apply the administrative rule as written to the facts of the case… [a]ny remedy in this case is legislative or regulatory.”

The claimant then brought the case to the NH Supreme Court, asking it to hold that the regulation exceeded the department’s authority to enact because it impermissibly conflicted with a controlling statute. The claimant noted there are more than 130,000 part-time workers in New Hampshire who stood to be affected by this regulation.

Though sometimes overlooked, the right to reinstatement is among the most important substantive rights given to injured workers by New Hampshire’s workers’ compensation law. It is integral to the workers’ compensation scheme because it works hand-in-glove with the provisions on medical treatment and indemnity benefits. Together, these benefits allow an injured worker sufficient time to focus on recovery from an injury, with medical treatment paid for and a modest wage replacement provided to support him until he is medically able to be reinstated to his job.

The job reinstatement protection provided by RSA 281:A-25-a is substantial, unlike the corresponding benefit under federal law. If an employee is injured in a non-work-related accident and cannot perform her job duties, the federal Family and Medical Leave Act of 1993 (FMLA) only requires her employer to hold that employee’s position for 12 weeks - with no pay, and no provision of medical care. FMLA is subject to further restrictions, in that it only applies to employers with more than 50 employees, and any employee who seeks its protection must have already been employed with that employer for at least 12 months.

New Hampshire’s workers’ compensation law sweeps much more broadly. If an employee has sustained a workers’ compensation injury, the law explicitly requires employers to hold that worker’s position for 18 months from the date of injury. If the injured worker can return to her position with reasonable accommodation for the injury within that time, the employer must reinstate her. This right is enforceable by injured workers against all employers who employ five or more employees, and there is no threshold number of hours an employee must have worked, or any requirement of length of employment since date of hire, before the right attaches.

The right to reinstatement in New Hampshire terminates only when one of three things happen: 1) it is determined (by the employee’s doctor or by a decision following a hearing at the Labor Department) that the worker cannot medically return to the job; 2) the worker accepts employment with another employer; or 3) 18 months elapse from the date of injury, according to RSA 281-A:25-a,II(a)(1)-(3). (Appeal of Marti, decided June 28, 2016, affirms the noncontroversial proposition although not explicit in the statute, a termination for cause also independently cuts off the right to reinstatement.)

The importance of Appeal of Cover is that the Department of Labor cannot narrow the rights granted by statute by issuing an administrative rule. And perhaps as significantly, prior to oral argument, the State of New Hampshire raised a jurisdictional argument: that the claimant could not challenge the viability of that administrative rule in the context of an ordinary workers’ compensation claim – the claimant was instead required by the Administrative Procedures Act (RSA 541-A:22) to bring a declaratory judgment action in Merrimack Superior Court.

After reviewing the history of challenges to administrative regulations, the NH Supreme Court rejected that argument and concluded that Cover’s challenge was permissible: that the declaratory judgment proceeding in Superior Court prescribed by RSA 541-A was a non-exclusive means to challenge an administrative rule.

While this case was pending, the Department of Labor modified its own regulations to remove the offending language that eliminated protection from part-time workers. As a result, the lingering effect of Cover may be the Court’s holding that “finding nothing in the text of RSA 541-A:24 or our case law to support the [employer’s] argument that a declaratory judgment action was the only way that Cover could have contested the validity of Lab 504.05(b)(3), we reject the [employer’s] argument that we lack subject matter jurisdiction over Cover’s appeal.”

If administrative regulations go too far in conflicting with statutory law, it is now clearly permissible to challenge them in the course of a routine hearing.

Jared O’Connor

Jared O’Connor practices at Shaheen & Gordon where he has been representing injured workers and haranguing the Labor Department and weary defense counsel with legal theories of varying plausibility since 2003. O’Connor represented the claimant in Appeal of Cover throughout litigation at the Labor Department and the Supreme Court.

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