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Board Issues First Decisions Addressing Labor Market Attachment After COVID-19

Most of our readers know that the Board put the labor market attachment defense "on pause" at the beginning of the COVID-19 emergency. This allowed claimants receiving temporary partial disability benefits to continue to do so without the need to demonstrate labor market attachment.
Since the start of the COVID-19 emergency, the Board has (as of this writing), issued three decisions discussing the Board's consideration of labor market attachment since the start of the COVID-19 emergency. 

In two of these three cases, the claimant was receiving temporary partial disability benefits and the carrier in each case raised the labor market attachment defense. In the first of those cases, BJ's Wholesale Club, N.Y.Work.Comp. G1808394 (5/7/2020), the carrier raised the defense at a hearing in December 2019. The Judge decided to hold in abeyance the labor market attachment issue and directed the parties to produce medical evidence of permanency. In a later decision one month later, the Judge again held the labor market attachment issue and instead directed the parties to develop the record on permanency. The carrier appealed both decisions, arguing that awards should have been suspended without prejudice pending resolution of, among other things, the issue of labor market attachment. On review, the Board Panel affirmed the both of the Judge's decisions and noted that the issue of labor market attachment should be held in abeyance due to the COVID-19 outbreak. 

In the other case, Chipotle, N.Y.Work.Comp. G1376145 (5/7/2020), the claimant attempted to avoid the carrier's use of the labor market attachment defense by relying on an over four-year-old letter from her employer stating that she was still employed by the employer of record. At a hearing in January 2020, the carrier argued that it should be permitted to pursue the labor market attachment defense because although the claimant was still technically an employee of the employer, the claimant could not reasonably expect that she would return for the work for the employer nearly 4 1/2 years after the date of injury. The Judge disagreed, finding that "since the claimant is still employed by [the employer] the issue of attachment to the labor market is not applicable right now.”

On appeal, the Board felt that the over four-year-old letter produced by the claimant was insufficient to show an "active employment relationship" with the employer of record but said that the record required development regarding whether such active employment relationship existed. Rather than returning the case to the Judge for this purpose, however, the Board cited the ongoing COVID-19 outbreak and held in abeyance any development of the record on this issue or labor market attachment generally. 

Finally, in Republic Services of NY, Inc., 2020 N.Y.Work.Comp. 70007534 (5/1/2020), at the November 2019 hearing, the Judge awarded the claimant temporary partial disability benefits and directed the claimant to produce documentary proof of labor market attachment. In January 2020, the carrier requested a suspension of benefits based on the claimant's failure to produce proof of labor market attachment. The claimant's attorney alleged that the claimant had intended to produce the proof but he neglected to bring it to the hearing. The Judge denied the carrier's request and directed the claimant to produce proof of labor market attachment by 2/24/2020. The claimant did not produce the proof by that date but he later produced a C-258.1 showing a search for seven jobs on 3/11/2020. On 4/7/2020, the Judge issued a decision in which he took judicial notice of the "employment restrictions implemented by New York State as a result of the [COVID-19 crisis], and noted that the claimant did not have to search for work at that time."

On appeal, the Board Panel ruled that the claimant should not have been awarded benefits from the January 2020 hearing to 3/10/2020. However, the Board Panel said that awards should be reinstated as of 3/11/2020 because the claimant produced job search evidence on that date and because "any search for employment thereafter is not required based on employment restrictions implemented by New York state as a result of the Coronavirus (COVID-19)."

There was no discussion in the Board Panel decision as to the sufficiency of the job search evidence provided (i.e., whether the evidence met the American Axle standard) and one wonders if the Board was willing to overlook any deficiencies in the evidence provided in light of the alternative: suspending the claimant's benefits during the COVID-19 crisis. 

Left unanswered by this decision is the question of whether a claimant found not attached to the labor market prior to the COVID-19 crisis would be able to successfully reinstate benefits upon request without producing proof of labor market attachment. 

We believe that the Board should still find a claimant in this situation not attached to the labor market because the text of the Board's announcement states that the Board will not require claimant's to demonstrate that they are attached to the labor market in order to maintain partial disability payments. The use of the verb "to maintain" suggests to us that the suspension of the labor market attachment requirement applies only to those claimants who were already entitled to and receiving temporary partial disability benefits before the COVID-19 emergency began.

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