Important Changes in the ’09-’10 Workers’ Compensation Landscape

By Michael L. Forrester, Esq. and R. Lee McVey, II, Esq.

(June 2010, published in The Johnson City Business Journal)

In the past year, the Courts and legislature have been busy updating and clarifying Tennessee Workers’ Compensation Law.  This article presents just a few of those changes and how they might impact Tri-Cities businesses.

The Courts

No workers’ compensation case in the past year demonstrates the interplay between management principles and workers’ compensation law like Durham vs. Cracker Barrel.  In that case, an associate manager at the Pigeon Forge Cracker Barrel, along with another employee, played a practical joke on a fellow manager.  Immediately following the joke, the employee fell and injured her knee.  Cracker Barrel initiated an investigation into the prank and subsequently terminated the employee for misconduct.  The employee filed a workers’ compensation claim and alleged that her termination was not due to misconduct and that her permanent disability recovery should not be “capped” at 1.5 times her medical impairment rating.Evidence was presented that pranks were common at this Cracker Barrel.  The claimant was a “prankster” who had been disciplined for previous pranks.  The other employee involved in the prank, however, only received a reprimand.  Accordingly, the Court held the employee was not terminated for misconduct and the cap should not apply.

Implicit in this decision is that inconsistency in the application of work place rules prohibited Cracker Barrel from claiming work place misconduct in the termination of an employee.  Arguably, had Cracker Barrel had been consistent and documented each case of this employee’s previous misconduct it would have been allowed to properly characterize the final prank as misconduct and the 1.5 times cap would have applied.

In Pigg vs. Liberty Mutual the employee sustained both shoulder and back injuries, settled both claims and returned to work.  After her return, she failed to meet certain production requirements and was fired.  The employee, after her termination, asked the Court to rule that she did not have a meaningful return to work.  However, the panel found that the employer should be permitted to enforce work place rules without being penalized in a workers’ compensation case.  Accordingly, the Court denied her reconsideration rights.Contrast Pigg with the Cracker Barrel case:  In Pigg the employee’s failure to meet requirements was well documented and easy for the employer to prove, while in the Cracker Barrel case rules were haphazardly applied, making it difficult for Cracker Barrel to prove any misconduct.

The courts also decided a couple of “parking lot” cases regarding injuries suffered on or about the employer’s premises.  In Moore vs. City of Manchester the employee received word that her sister had been injured and left to check on her.  On her way to her vehicle the employee fell in the employer’s parking lot and broke her wrist.  While the employer claimed that the employee was on a purely personal errand to check on her sister the panel found that this particular employee was in no different position than an employee who was done working for the day, and found the injury was compensable.  However, in the case of CARTA vs. Coleman the claimant was a bus driver for the Chattanooga Regional Transit Authority (CARTA).  Claimant had a lengthy shift break during which time she was free to do as she pleased.  During one of her breaks, she clocked out and walked to a credit union located in a building owned by CARTA but with no other affiliation.  The employee fell and was injured while walking back from the credit union.  The Moore court found that the employee left on a purely personal errand, since there was no affiliation between CARTA and the credit union.  Accordingly, the injury was deemed not compensable.  Still, employers should operate under the assumption that most injuries that happen on the employers’ premises will be compensable claims.

Legislative Changes

The legislature addressed situations involving employer merger or buyout.  Typically, an employee who has previously been paid “capped” permanent disability benefits will request reconsideration of that award after a merger because he no longer works for the “same employer.”  The new legislation states the employee is not entitled to seek reconsideration rights as long as the employee continues to be employed at the same or higher pay or the employee declines an offer of employment with the new employer at the same or higher pay.

The legislature also passed the “Overstreet” Bill which clarifies the procedures that must be followed to communicate with an employee’s authorized medical provider.  Under the new statute, the employee must provide a Medical Authorization to the employer.  Then, whenever the employer requests medical records, the employer must notify the employee of the request and provide copies to the employee and the employee’s attorney.  Further, the employee and attorney must be copied on all correspondence to the provider.  The Overstreet Bill also requires the employer to provide a written summary within seven days of any opinions or statements made by the authorized medical provider.

In the realm of recreational activities new legislation clarifies what is and is not compensable.  Initially, if the employee voluntarily participates in an activity the injury is not compensable.  However, if the employee can prove one of the following, the claim can still be deemed compensable:

  • Participation is expressly or impliedly required by the employer;
  • Participation produced a direct benefit to the employer beyond morale and health;
  • Participation was during work hours and was part of the employees work related duties; or
  • The injury occurred due to the “negligence” of the employer.

Finally, the legislature attempted to tackle the issue of illegal immigrants in the workers’ compensation system.  The new law caps illegal immigrants to receiving 1.5 times their medical impairment rating for any recovery, even if there is no return to work.  However, if the employer hired the worker knowing of their illegal status the employer will have to pay a lump sum of 3.5 times the illegal immigrants medical impairment rating into the uninsured employers fund.There have been several notable changes, clarifications and decisions in Tennessee workers’ compensation law in the past year.  This should come as no surprise to those who follow this ever-changing area of the law.


Michael L. Forrester and R. Lee McVey, II practice labor and employment law with Hunter, Smith & Davis, LLP.  Certification as a labor and employment law specialist is not currently available in Tennessee.