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The Employer E-Letter:
Labor and Employment Law News from the
Duluth, Minnesota law firm of
Hanft Fride, A Professional Association
Editor, Kathleen S. Bray, ksb@hanftlaw.com or 218.529.2427.
Please feel free to forward this e-mail or share it with others. If there are other topics of interest to you or any other suggestions concerning this newsletter, please let us know.
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THIS MONTH'S TOPICS:
- VOLUNTARY PAYMENT OF WORK COMP BENEFITS WAIVES STATUTE OF LIMITATIONS DEFENSE
- PENSION PROTECTION ACT OF 2006
- WAGES FOR ATTENDANCE AT LECTURES AND TRAINING PROGRAMS
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VOLUNTARY PAYMENT OF WORK COMP BENEFITS WAIVES STATUTE OF LIMITATIONS DEFENSE
In a recent Minnesota Workers' Compensation Court of Appeals (WCCA) case, that may be reviewed further by the Minnesota Supreme Court, Stanley Roemhildt v. Gresser Cos. Inc. and Zurich Ins. Co./Creative Risk Solutions, and Met Con Cos. and State Fund Mutual Ins. Co., No. WC06-105 (W.C.C.A. 8/23/06), the parties addressed a long-held concept in Minnesota workers' compensation: whether the initial voluntary payment of benefits by an employer and insurer forever waives the statute of limitations defense. This decision involved the WCCA sitting en banc, with concurring and dissenting opinions on both issues decided. While the WCCA held and confirmed that the statute of limitations defense may not be asserted after voluntary payments of benefits have been made, despite later denial of primary liability.
The employee suffered a low back injury on 8/17/01, while working for MetCon. MetCon admitted primary liability for the injury and paid wage loss benefits and medical expenses through 9/16/01. On 9/18/01, MetCon filed another notice of primary liability determination, denying liability, due to failure of the employee to cooperate with the investigation and prior injury. He went back to work, and claimed he was going to contest it, but never followed up.
Several years later, in the fall of 2004, the employee again injured his low back, while working for Gresser Companies. Gresser paid benefits under a Temporary Order, and sought contribution or reimbursement from MetCon. Subsequently, Gresser settled with the employee on a full, final basis, except for future medical, with the employee settling both Gresser's and MetCon's injuries. Gresser reserved the right to seek contribution from MetCon in the Stipulation for Settlement. MetCon did not participate in the mediation leading to the settlement, nor was it a part to the settlement agreement.
A hearing was held later on Gresser's claim for contribution against MetCon, as well as MetCon's statute of limitations defense. The compensation judge found MetCon did not have a viable statute of limitations defense, and also addressed the contribution issues, although the contribution issues are not discussed further in this summary.
MetCon had asserted the statute of limitations defense under Minn. Stat. § 176.151, which limits the right to bring actions for compensation to three years following filing of the First Report of Injury. The employee's Claim Petition and Gresser's subsequent Petition for Contribution were filed more than three years after MetCon's First Report of Injury, but the compensation judge held that MetCon's voluntary payment of benefits after the injury tolled the statute of limitations, citing Meinen v. Dashow, 167 N.W.2d 730, 24 W.C.D. 883 (1969).
MetCon argued that amendments to Minn. Stat. § 176.221, subd. 1, since the Meinen decision compel a different finding. Amendments in the statute have shortened an insurer's time frame to commence the initial benefits for a work injury, and also extended the time to file a denial of liability. The statute expressly preserves all defenses concerning compensability of the claim, so long as the other time frames outlines in the statute are satisfied. Therefore, MetCon argued that even if initial voluntary payments of benefits were made in the 14 days required, so long as they timely denied primary liability within the longer statutory timeframe allowed, all defenses, including the statute of limitations defense, should be preserved.
The WCCA was unconvinced by MetCon's arguments, and continued to endorse the concept that a voluntary payment of benefits indicates acceptance of liability and results in a "proceeding" being commenced, thereby tolling the statute of limitations defense. While the WCCA recognized that an employer and insurer can later reverse its posture on primary liability for an injury, it held that the statute of limitations defense cannot be revived – as stated by the court, "a bell once rung can not be unrung." The court also found public policy compelled the decision, as any other result would penalize employees who accept voluntary payment of benefits versus filing a formal claim for benefits.
Because the case addresses some interesting statutory interpretation and legislative history arguments, and also addresses a very significant legal issue, the Minnesota Supreme Court may be interested in taking a look at this recent decision. The Employer E-Letter will keep readers informed of any developments on this issue.
If you would like a complete copy of this WCCA decision, or have any other questions regarding workers' compensation matters, please contact Kathy Bray at ksb@hanftlaw.com or 218.529.2427.
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PENSION PROTECTION ACT OF 2006
On August 17th, the President signed into law the Pension Protection Act of 2006. House Majority Leader John Boehner said the Act represents the most sweeping overhaul to U.S. pension laws in more than 30 years. One of the major purposes of the new law is to strengthen the funding rules for defined benefit pension plans. By tightening the funding rules, the law seeks to ensure that employers make greater contributions to their pension funds, ensuring solvency and avoiding a potential multi-billion dollar bailout of the PBGC. While many of the provisions apply to pension plans, there are also numerous provisions affecting 401(k) plans and IRAs. Highlights of some of those provisions are set forth below:
- For those plans with self-directed investments, the law creates a prohibited transaction exemption for investment advice provided to employer-sponsored retirement plans through a computer model that is certified by an independent party. An exemption is provided for advice provided by an adviser whose compensation does not vary with the investments selected will be available to both employer-sponsored plans and IRAs.
- The law creates a safe harbor to encourage employers to offer automatic enrollment in their defined contribution plans.
- It requires plan administrators to comply with new strengthened disclosure rules.
- It allows small employers to establish a combined defined benefit/401(k) (DB/K) plan.
- It will allow direct rollovers from retirement plans to Roth IRAs.
- It liberalizes the 401(k) hardship distribution rules.
- It allows non-spouse beneficiaries to roll over qualified plan or IRA inheritances to their own IRAs.
Questions regarding the new reform act? Contact Faye Witt at fmw@hanftlaw.com or 218.722.4766.
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WAGES FOR LECTURES, MEETINGS AND TRAINING PROGRAMS
An employer is not required to pay an employee for attendance at lectures, meetings, and training programs only if four criteria are satisfied. The attendance would not be considered time worked if the lecture or program is:
- outside normal hours,
- voluntary,
- not job related, and
- no other work is concurrently performed.
The U.S. Department of Labor's Wage and Hour Division has a helpful information sheet that explains what are "hours worked" for purposes of determining wages. The sheet is available on DOL's website at www. dol.gov/esa/regs/compliance/whd/whdfs22.htm.
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Hanft Fride's business and trial lawyers are located at 1000 U.S. Bank Place, in Duluth Minnesota. Visit our our website at www.hanftlaw.com. In addition to general information on the firm and our attorneys, you can find past issues of this newsletter. Keep checking back for new information, and let us know if there is anything you would like to see added to the site that would help you and your organization.
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The information provided in this E-letter is general in nature and should not be used as a substitute for professional services and advice. The communication and receipt of this information is not intended to create an attorney-client relationship. Readers should consult with their legal counsel before taking any action on matters covered in this E-letter.
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To subscribe or unsubscribe to Employment Express, e-mail your request to Kathleen S. Bray, ksb@hanftlaw.com or call 218-722-4766.
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Copyright 2006 by Hanft Fride, P.A. All rights reserved. Hanft Fride, A Professional Association, 1000 U.S. Bank Place, 130 W. Superior Street, Duluth, MN 55802. Phone 218-722-4766; fax 218-529-2401.
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