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Answers to Often Bewildering Questions about New Jersey Comp Settlements

By on June 12, 2017 in Awards with 0 Comments

Clients often ask questions about the permanency phase of the New Jersey Workers’ Compensation system.  Frankly our system with respect to awards of permanent partial disability is so vastly different than those of neighboring states that it is no wonder there is confusion.  Here are some of the questions this practitioner regularly receives.

Question (1):  Why don’t employers settle cases before a workers’ compensation formal petition is filed?  Wouldn’t that be more proactive?

Answer: There are two statutory provisions that deal with this issue.  The first is N.J.S.A. 34:15-22, which states that “No agreement between an employee and his employer or insurance carrier for compensation shall operate as a bar to the formal determination of any controversy, unless such agreement has been approved by the commissioner (Judge of Compensation).”

The second section is N.J.S.A. 34:15-50, which states “Whenever an employer or his insurance carrier and an injured employee, or the dependents of the deceased employee, shall, by agreement, duly signed, settle upon and determine the compensation due to the injured employee . . . the employer or the insurance carrier shall forthwith file with the bureau a true copy of the agreement.  The agreement shall not bind the employer or injured employee, or the dependents of a deceased employee, unless approved by the bureau.”

So the basic answer is that all agreements must be approved by a Judge of Compensation in New Jersey.  If an employer and employee reach an agreement without such approval, the agreement is not valid and is not binding on the employee.

Question (2):  When the petitioner’s doctor estimate 60% permanent partial disability and the respondent’s doctor estimates 5%, why not use the AMA Guidelines to the Evaluation of Permanent Impairment to resolve the dispute?

This question underscores a basic feature of the New Jersey system:  we are one of only a few states where judges do not use the AMA Guides to the Evaluation of Permanent Impairment.  This non-use of the AMA Guidelines is by tradition, not statute.  There is no statutory prohibition against consulting the Guidelines to inform judges.  In fact, it would be helpful if judges did utilize the AMA Guidelines where opinions on disability vary to a large extent.  In respiratory claims the guidelines are extremely helpful in assessing permanency because spirometry and other pulmonary function testing are complicated to understand.  For instance, the Guidelines provide certain norms for spirometric parameters like the FVC (forced vital capacity), FEV1 (forced expiratory volume in the first second) and FVC/FEV1 ratio.  Using the AMA Guidelines would provide more uniform assessments and consistency in certain kinds of cases.

Question (3):  What type of evidence matters most to the Judge of Compensation in arriving at an award of permanent partial disability?

Judges look for evidence in two broad categories: first proof of a medical impairment, and second, proof of disability from such impairment.  An employee must prove an impairment under N.J.S.A. 34:15-36 by demonstrable objective evidence, but that alone is not enough.  If a medical impairment exists but does not affect the employee in his work or non-work life, there is no disability.  In this sense, “disability” is a broader concept than impairment.  You need both.

The employee must demonstrate that the medical impairment reaches out and affects the employee in the activities of daily living or lessens the employee’s ability to perform work in a material degree.   So judges focus on objective medical evidence like MRI results, surgical studies, CT scans, x-ray results, and they pay close attention to how the medical impairment has affected the life of the employee.  Has the employee had to give up certain sports or cut back on hobbies or activities that he or she used to enjoy?  Has the employee had to reduce hours at work or has the injury caused a reduction in pay?  This is the kind of evidence that the judge studies in order to evaluate the degree of permanent disability.  That is also why every Judge of Compensation requires testimony to support an order approving settlement regarding the complaints of the employee and the impact on work or non-work activities.

Question (4):  Why does surgery drive up the value of a workers’ comp caseIsn’t surgery supposed to make the employee better?

This is a complicated question.  Yes we all know people who have had surgery and have been completely healed with little or no lasting restriction. Surgery is often incredibly effective.  For instance, a football player with a severe meniscal tear could never return to football again without surgery.  A pitcher without ulnar collateral ligament reconstruction, also known as Tommy John surgery, might never pitch again.  That is exactly what happened to the great Dodger pitcher, Sandy Koufax, who retired young because there was no Tommy John surgery in the 1960s. Now many pitchers with Tommy John surgery return to pitching at the same high level as before the injury, albeit perhaps with some loss of velocity.

In New Jersey, workers’ compensation practitioners are well aware that an employee has the potential to file a reopener petition should surgery be required in the future. The thinking is that if the injury does not require surgery now, it might not be as significant as it would be down the line when surgery will be required.  Our statute under N.J.S.A. 34:15-27 permits the employee to reopen the case and seek additional treatment – often surgery – within two years of the last payment of compensation, as well as additional indemnity benefits.  It is true that few if any claimants come to court and testify at settlement that their level of function is the same as they had before the work accident.  If they did, they would not be entitled to permanency benefits. The expert for the claimant may point out that in spite of the surgical procedure, the employee has lost function post-surgery. The employee will testify to limitations in work or non-work functions.  Hence, unoperated herniated discs are often valued lower than operated herniated discs because the condition has not reached a level requiring surgery.

It is also worth noting that there are many employees who have surgery who never file claim petitions because they feel they have fully recovered and have no complaints post-surgery.  We don’t see those cases but must remember that they do exist.  Not all employees who suffer work injuries in New Jersey file claim petitions for permanency.

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John H. Geaney

About the Author

About the Author:

John H. Geaney, an executive committee member and shareholder with Capehart Scatchard, began an email newsletter entitled Currents in Workers’ Compensation, ADA and FMLA in 2001 in order to keep clients and readers informed on leading developments in these three areas of law. Since that time he has written over 500 newsletter updates.

Mr. Geaney is the author of Geaney’s New Jersey Workers’ Compensation Manual for Practitioners, Adjusters & Employers. The manual is distributed by the New Jersey Institute for Continuing Legal Education (NJICLE). He also authored an ADA and FMLA manual as distributed by NJICLE. If you are interested in purchasing the manual, please contact NJICLE at 732-214-8500 or visit their website at www.njicle.com.

Mr. Geaney represents employers in the defense of workers’ compensation, ADA and FMLA matters. He is a Fellow of the College of Workers’ Compensation Lawyers of the American Bar Association and is certified by the Supreme Court of New Jersey as a workers’ compensation law attorney. He is one of two firm representatives to the National Workers’ Compensation Defense Network. He has served on the Executive Committee of Capehart Scatchard for over ten (10) years.

A graduate of Holy Cross College summa cum laude, Mr. Geaney obtained his law degree from Boston College Law School. He has been named a “Super Lawyer” by his peers and Law and Politics. He serves as Vice President of the Friends of MEND, the fundraising arm of a local charitable organization devoted to promoting affordable housing.

Capehart Scatchard is a full service law firm with offices in Mt. Laurel and Trenton, New Jersey. The firm represents employers and businesses in a wide variety of areas, including workers’ compensation, civil litigation, labor, environmental, business, estates and governmental affairs.

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