The Supreme Court of Ohio in Friebel v. Visiting Nurse Association of Mid-Ohio recently determined that an employee who was injured in a car accident while dropping passengers off at a mall on the way to perform her work duties could not use the doctrine of dual intent or dual purpose in support of her request for workers’ compensation benefits.

Home health nurse Tamara Friebel was employed by Visiting Nurse Association of Mid-Ohio (“VNA”) to travel to client’s homes and provide in-home health care services. While working, she was primarily in client’s homes, and not at VNA’s offices, but sometimes she went to the offices to pick up supplies or attend meetings. During the week, VNA paid Freibel for travel time and mileage, but subtracted 24 miles from the mileage and 30 minutes from the travel time each day to account for the time and distance it would take Friebel to travel to and from her home and VNA’s offices, even when she never presented to the offices. On weekends, VNA paid Freibel for travel time and mileage and did not make any deductions.

On Saturday, January 22, 2011, Friebel was scheduled to work at a patient’s home in Ontario, Ohio. On the way to her patient’s home, Friebel chose to take her daughter, her son and two family friends to the Richland Mall in Ontario. Prior to dropping anyone off at the mall, Friebel’s car was hit from behind. Subsequently, Friebel filed an application for a workers’ compensation claim for a neck injury sustained in the car accident.

Administratively, the Industrial Commission of Ohio allowed the claim, finding that because the employer had conceded that Friebel was paid mileage and for her travel time from her home to her patient’s home on the day of injury, that the injuries were sustained in the course and scope of employment. VNA appealed to the Richland County Court of Common Pleas and filed a motion for summary judgment, alleging Friebel was not in the course and scope of her employment at the time of the accident.

The trial court granted judgment in favor of VNA, concluding that Friebel’s action of transporting her children to the mall was a personal errand and that her injury did not arise out of her work duties and did not occur in the course of her employment. The court found that it was immaterial that Friebel was paid for travel time and mileage on the weekends because at the time of the accident, she was travelling to the mall, not to her patient’s home. Friebel appealed and the Fifth District Court of Appeals reversed. In a split decision, the Court of Appeals held that, as a matter of law, Friebel’s injury arose out of her work duties and occurred in the course of her employment. The Appellate Court found that Friebel had the dual intent to travel to her patient’s home and perform her work duties and drop her children off at the mall. Further, the court found that Friebel would not have been at the place of the accident had she not been performing her work duties because she was on route to her patient’s home when the accident occurred. VNA appealed to the Supreme Court of Ohio.

In Ohio, an injury is compensable when the injury occurred in the course of and arising out of the injured worker’s employment. In general, for employees with a fixed place of employment, injuries sustained while traveling to and from their place of employment are not compensable.

In this case, the Supreme Court focused its analysis on whether the doctrine of dual intent or dual purpose is applicable when determining whether a request for a workers’ compensation claim is compensable. Other states have created this doctrine to permit a claim to be recognized when an employee is travelling for both business and personal purposes.

In New York, a court defined the test for determining when a travelling employee is acting in the course of his employment as: “[i]f the work of the employee creates the necessity for travel, he is in the course of his employment, though he is serving at the same time some purpose of his own. . . If, however, the work has had no part in creating the necessity for travel, if the journey would have gone forward though the business errand had dropped, and would have been cancelled upon the failure of its private purpose, though the business errand was undone, the travel is then personal and personal the risk.” In re Marks v. Gray, 251 N.Y. 90, 167 N.E. 181 (1929).

Here, the Supreme Court soundly rejected the dual intent or dual purpose doctrine and held the doctrine is not applicable in determining the compensability of a claim. Instead, the Supreme Court stated that the proper way to analyze a workers’ compensation claim in Ohio is to apply tests to determine whether the injury occurred ‘in the course of’ employment and ‘arose out of’ an employee’s work duties. Ultimately, the Supreme Court reversed the Court of Appeals decision and remanded the matter back to the trial court to determine whether Friebel was injured in the course and scope of her employment with VNA.

Potentially, this fact pattern was not an ideal set of facts for the Court to evaluate whether this doctrine should be applicable in Ohio. In other states, the doctrine applies when an employee was performing a personal task at the same time as a business task. For example, in the New York case, the employee was asked by his employer to perform a task in a different city only because the employee was already planning to travel to that city to meet his wife. In this case, if Friebel was going to meet a patient at the mall as well as drop her children off at the mall, the facts may have been more applicable to address this doctrine. As the Court was explicit in its conclusion that the doctrine is not applicable in Ohio and did not address the underlying facts in this particular case, it appears the Court’s approach to the doctrine will remain intact. However, it is likely another employee with a more applicable fact pattern may ask the Court to revisit this issue down the road. For now, employers will have a solid defense to any claim in which an injured employee alleges dual intent or dual purpose in pursuit of a workers’ compensation claim.

Editor’s Note:  This blog first appeared last Thursday on our sister blog – Employee Benefits Law Report.

My assistant informed me that my patience is shot and I need to do something about that, so I am channeling my energy into one issue. Since health care reform was enacted, I have been hearing about how we should anticipate a flood of ERISA Section 510 (29 U.S.C. Section 1140) discrimination cases from people who are not participants under the plan terms, but want to be participants. I don’t get it.

ERISA Section 510 provides, “[i]t shall be unlawful for any person to…discriminate against a participant or beneficiary…for the purpose of interfering with the attainment of any right to which such participant may become entitled under the provisions of an employee benefit plan.” ERISA Section 3(7) defines “participant” as “any employee or former employee of an employer, or any member or former member of an employee organization, who is or may become eligible to receive a benefit of any type from an employee benefit plan.”

In Firestone Tire & Rubber Co. v. Bruch, the United States Supreme Court first considered Section 3(7) (29 U.S.C. Section 1002(7)) in the context of standing. It found this term to include “employees in, or reasonably expected to be in, currently covered employment,” or former employees who “have . . . a reasonable expectation of returning to covered employment” or who have “a colorable claim” to vested benefits.  The Court held that in order to establish that he or she may become eligible for benefits under ERISA Section 502, a claimant must have a colorable claim that (1) he or she will prevail in a suit for benefits, or that (2) eligibility requirements will be fulfilled in the future. The Court applied the same standard to Section 104(b)(4), the provision that requires providing plan documents that indicate whether or not an individual is eligible to participate to a person who claims to be eligible.

As Justice Scalia explained in an opinion concurring in part and concurring in the judgment, this definition ignores the fact that some of these supposed participants and beneficiaries are not actually participants and beneficiaries. Consider competing claimants to a 401(k) plan death benefit:  a same-sex spouse not designated as a beneficiary, and a parent designated as beneficiary. One of these will ultimately be found to be a beneficiary, and the other will not. But both will be treated as beneficiaries for purposes of making their case.

In Fleming v. Ayers & Assoc., the Sixth Circuit held that where an employer hired a part-time employee with the [employer’s] intent that she would become full-time when a position opened up, the employee was a participant under ERISA Section 3(7) and for purposes of Section 510. The Court did not further explain this conclusion, or discuss Firestone or Justice Scalia’s caution. A number of courts have distinguished Fleming, explaining that ERISA Section 510 does not require employers to make a part-time employee who is ineligible for benefits a full-time employee and thereby eligible for benefits. See, e.g., Geist v. Gill/Kardash P’ship, LLC, 671 F. Supp. 2d 729  (D. MD 2009) (plaintiff was not a full-time employee and was not eligible for benefits under the plan terms; plaintiff rejected a forty hour per week full-time schedule on more than one occasion and seems to have understood that this decision disqualified her for benefits); Pine v. Crow, 2001 U.S. Dist. LEXIS 8629 (S.D. IN 2001) (ERISA does not require an employer to make an employee full-time); Shawley v. Bethlehem Steel Corp., 784 F. Supp. 1200, 1203 (W.D. Pa. 1992) (concluding ERISA does not expressly prohibit a refusal to hire based on the employer’s potential benefit liability), aff’d, 989 F.2d 652 (3rd Cir. 1993).

Now let’s consider the ERISA claims in Sanders v. Amerimed, Inc., a recent decision in the Southern District of Ohio. Sanders was a part-time employee and not a participant in the health care plan, because the plan’s eligibility provisions provided that only full-time employees were eligible to become participants. Sanders wanted to be a full-time employee, and he wanted to be a participant, and quit. He then argued that the defendant violated ERISA Section 510 by not hiring him into a full-time position. The Court held that under Firestone and Fleming, Sanders had a colorable claim to benefits and standing to pursue his claims. The Fleming decision seems to be overreaching; it does not explain the significance of “intent” in the context of case law. But even if we assume the conclusion was valid, it does not appear to provide authority for treating Sanders as anything other than a participant want-to-be. Sanders was well aware he was not a plan participant: that is why he quit. So I do not understand how he even had a colorable claim to benefits, but for the sake of argument, let us move on to the Section 510 claim itself.

The definition of “participant” in Section 3(7) is just the beginning; ERISA goes on to develop this concept in Section 202 (29 U.S.C. Section 1052) and other provisions. The steps require asking whether under the plan terms, as limited by law:

  1. Is the employee a member of a classification that is eligible to participate?
  2. Has the employee satisfied any age requirement?
  3. Has the employee satisfied any service requirement?
  4. Has the employee reached an entry date?

Continue Reading ERISA Section 510: wanting to be a participant, versus being a participant

We recently blogged about an infrequent ERISA surprise from the US Supreme Court, in CIGNA v. Amara, and now we have a second ruling from the Supreme Court in that case, granting Amara certioria and remanding.  This is a procedural twist that is more interesting to lawyers than employers, but it underscores the point we made about uncertainty in this area:  we don’t really know what remedies are other "appropriate equitable relief" under ERISA, or know how much exposure employers face regarding their ERISA plans.  Establishing procedures for compliance with ERISA’s disclosure and other requirements is essential to limiting exposure in an uncertain environment.

Supreme Court decisions about ERISA cases, while infrequent, typically contain some surprises, as demonstrated most recently in CIGNA Corp. v. Amara.

In 1997, CIGNA notified employees that it was freezing accruals under its traditional defined benefit plan, and converting the plan into a cash balance plan. A cash balance plan is a "hybrid" defined benefit plan with features similar to a defined contribution plan. The method for determining accruals under the cash balance plan is different from the method under the traditional defined benefit plan, and in many cases takes into consideration the benefits already accrued under the traditional defined benefit plan. Ms. Amara and other participants filed a class action suit in the Second Circuit, raising numerous allegations regarding this conversion.

Continue Reading Supreme Court Time Travels with an ERISA Case