Reversal of Fortune: Delaware Supreme Court Delivers Blow to the Use of Labor Market Surveys

Reversal of Fortune: Delaware Supreme Court Delivers Blow to the Use of Labor Market Surveys

At the risk of being accused of overstating the situation, all I can say is it's the end of an era.  I am reminded of Second Corinthians 5:17: "The old has passed away; behold, the new has come."  I think this is a Second Corinthians moment, folks.

Behold the new - a case released by the DE Supreme Court last Friday in Watson v. Wal-Mart, Del. Supr. No. 442, 2010 (10/21/11).  As well as a copy of the IAB ruling, Watson v. Wal-Mart, IAB#1303174 (10/13/09) and Superior Court affirmance, Watson v. Wal-Mart, No. 09A-06-002 (Del. Super. 6/16/10) of that ruling below, courtesy of a colleague involved in the case. By way of background, the IAB granted a Petition for Review, as affirmed by the Superior Court, and now reversed by the DE Supreme Court with some very impactful suggestions regarding the labor market survey ("LMS") among other things.  The issues in this case were:

Was the claimant displaced?
Was his job search reasonable?
Was the labor market survey sufficient to support a showing of job availability?

I will leave it to you to read the attached for the facts as there is no doubt that some, going forward, will argue that the decision is limited to its facts.  I have serious concerns that this is precedential, however, and will likely prompt a need for dramatic changes in the way a carrier meets its burden of proof to establish job availability in the future.  It just might happen that in the wake of the Watson v. Wal-Mart holding, the days of the hypothetical retroactive labor market survey are over.  Some may say that my take on the holding is a little "draconian" to borrow a Henry Davis adjective, but my advice to you if you are a defense lawyer is to take this decision very seriously.

A few comments from attorney Barry Snyder who represented the claimant Eugene Watson:

 " I feel the Supreme Court wanted to send a message to those large employers with a big employment base" [in terms of offering modified duty-noting that an employer as large as Wal-Mart did not have a light duty job for this claimant].

"The Court was admonishing the employer and vocational rehab specialist that they have to do a better job to establish that those positions [in the labor market survey] are truly available.....not in the hypothetical sense but actually available to the claimant."

Picking up on those remarks, a footnote in the Supreme Court opinion observes: "A job opening that generates a long line of applicants the day it is posted cannot reasonably be considered an available job.  Common sense tells us that an employer is going to hire a person with no disabilities for an entry level unskilled job that is in demand."

And some words of wisdom from Henry Davis, a veteran practitioner from "slower lower"--

"Those that think this fact specific are probably the same people who said that about Gilliard-Belfast, Blake v. State, and even Smith v Thompson or Sewell and they are just as clearly wrong about this ruling if they do. The Supreme Court just clearly rebuked the Board for the practice of blindly accepting a labor market survey as gospel truth and for not accepting the uncontroverted testimony of claimants. Clearly, this is no quickly fired off oddball , one-shot ruling. They explicitly told the Board they are doing it wrong and need to change practices. I heard of a famous blogger foretelling, in accord with her appellation, that this would be an important ruling.

"To focus in on what all the ballyhoo is about, here are what I perceive to be the problematic aspects of this holding:

   The labor market survey it should not and does not count against claimant if the jobs are not available at the time he applies for such

   It is not sufficient that the LMS jobs were available "at some point"......"if the claimant has applied for most of the jobs in the labor market survey without success-the survey's evidentiary value is significantly diminished

   The employer's failure to re-hire a claimant on modified duty "is strong evidence that claimant is displaced.

"What I take from this among other concerns is that if the LMS jobs are not available when claimant applies (and what control does the employer/carrier have over when he applies?) then the LMS stands to be thrown out, or otherwise discounted,  by the IAB going forward.  Or perhaps not thrown out but "given the weight it deserves" [and we all know what that means]."

 Walt Schmittinger was also kind enough to weigh in, and it would appear that there is consensus among the four of us that this case is likely to forevermore change the face of a Petition for Review:

"I think it's a remarkable result........ because the Court ultimately determined that the Board's judgment on what constitutes a reasonable job search is incorrect.  Whereas the many appeals that have gone before have recited the same case law and ultimately deferred to the Board on how the Board applies that law to the facts of the case in question, here the Court took the extra step and said that all of the Board's usual criticisms of the claimant's effort at finding work (applied for jobs outside his restrictions, employers weren't hiring, no response from prospective employers) are inapposite.  The Court also ruled that the LMS is not the end all and be all of proving availability of work -- perhaps the most telling comment is the Court's characterization of the LMS as indicating the "possible availability" (emphasis in original) of work is not enough.

"The Court is more specific about the Employer's burden, indicating that the Employer "had to demonstrate that appropriate jobs actually were available, and that the prospective employers would hire -- not merely consider hiring -- a person in [Claimant's] position."  Wow.

"I am sure that there will be cases that follow that test the limits of the Court's decision in Watson.  However, I also think it will fundamentally change the practice of trying termination cases (for both sides), as the Court has certainly raised the bar for Employers in establishing what is required in order to successfully terminate total disability benefits.........I also think that a question implicitly raised by the opinion for practitioners is the timing of production of the LMS, which is customarily faxed on the 31st day prior to hearing.  Of course, many of the jobs on the list will have long been filled as a result of the last minute production, which would seem to invalidate their availability to the claimant under the Watson case."

I think Walt said it best when he said "wow".

If you represent carriers or employers, the question will become how does one change the mechanics of job development so as to be fully compliant with the admonition in Watson?  Ask for weekly job development to be sent immediately to the claimant's counsel to share with his client with an admonition to apply for the job?  Does one start to consider offering direct job placement to circumvent this issue altogether? More pressure on employers to offer modified duty?   One would think that the job of vocational experts who create these surveys is going to be impacted greatly, with an attendant cost to the carriers.  Is this the demise of the computerized retroactive job bank that is so often utilized? Oh, say it ain't so........

Irreverently yours...... but a little less cocky in light of Watson!
Sassy Cassy (aka Cassandra Roberts)

Delaware Detour & Frolic   Visit Delaware Detour & Frolic, a law blog by Cassandra Roberts subscribers can access the Lexis enhanced version of the Watson v. Wal-Mart Assocs., 2011 Del. LEXIS 569 (Del. 2011) decision with core terms, case law links, and Shepard's.

For more information about LexisNexis products and solutions connect with us through our corporate site.