Federal Court Revives Lawsuit Over Florida Employer’s Decision to Stop Worker’s Compensation Payments

Worker’s compensation insurance is mandatory for all Florida retailers employing at least four people. Although worker’s compensation is designed to settle most on-the-job injury claims without the need for litigation, it does not provide absolute protection for employers. In cases where employers fail to compensate an alleged injury either directly or through worker’s compensation, the aggrieved employee may pursue a tort claim in civil court.

The employer may assert worker’s compensation is an exclusive remedy as an affirmative defense in such cases, but a judge may reject that argument. Indeed, a recent decision by a federal appeals court helps illustrate the dicey position many Florida businesses face when addressing worker’s compensation claims. This ongoing case involves an employer that initially provided compensation for an alleged employee injury before attempting to change course.

Picon v. Gallagher Bassett Services, Inc.

Elizabeth Picon worked for Gallagher Basset Services for 20 years. In 2012, she complained to a doctor about severe shoulder pain. The doctor said she had developed tendonitis as the result of “working on the computer at her desk.” A second doctor later provided a similar diagnosis.

Picon and Gallagher reported the tendonitis to Gallagher’s worker’s compensation insurance carrier. For six months, the insurer paid for Picon’s medical care related to the tendonitis. Gallagher referred Picon to a physical therapy clinic. There, a surgeon advised Picon to undergo shoulder surgery, pending approval from the worker’s compensation insurer. Gallagher requested Picon get a second opinion. The second doctor agreed Picon continued to suffer from severe shoulder pain, but suggested there were other medical causes unrelated to Picon’s employment. Based on this second report, Gallagher and its insurer declined to authorize the surgery and discontinued worker’s compensation benefits.

Picon then sued Gallagher for civil negligence. Although Picon made her claims under Florida law, the case went before a federal court since Gallagher is based outside the state. Gallagher asked the district court for a summary judgment in its favor, arguing Picon was prevented—or estopped, in legal terms—from bringing her case as Florida law required her claims to be settled exclusively under worker’s compensation law. The court agreed and granted Gallagher’s motion.

Picon appealed to the U.S. Eleventh Circuit Court of Appeals, which oversees all federal courts in Florida. A three-judge panel of that court reviewed Florida case law and reversed the district court’s decision to grant summary judgment. The panel noted that various Florida appeals courts have said that whether or not estoppel applies depends on “what reasons were given for denying workers’ compensation benefits.” In cases like this one, where “the record reveals multiple possible explanations for the denial,” summary judgment is not appropriate. The trial court needs to more fully develop the record before making a final decision.

Paying the Price for Inconsistency?

We don’t know how the courts will ultimately decide the merits of Picon’s case. But one lesson Florida retailers can take away from the appeals court’s decision, is that inconsistencies in treating workers can raise litigation flags. The fact that Gallagher paid for Picon’s treatment for six months and then stopped clearly weighed heavily in the appeals court’s decision to reverse the grant of summary judgment.

Worker’s compensation is a tricky area of the law. It’s important that you don’t try and navigate it without the help of an experienced Florida business attorney. Contact John S. Sarrett in Naples today if you have any questions.

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