In 2021, the Virginia legislature enacted a statute that reversed the effect of a 2020 decision by the Virginia Workers’ Compensation Commission. Without the statute, the decision could have caused great harm to many workers’ compensation claimants.
In Virginia, an employee injured in an accident at work begins the effort to obtain workers’ compensation benefits by filing a claim for benefits. Upon filing the claim, the employee becomes “the claimant.”
It’s common for a claim for benefits to assert several distinct injuries arising from the work accident. The workers’ compensation insurer might agree that the accident caused some of the injuries but deny its liability for the others.
For years, it’s been common for a claimant and a workers’ compensation insurer to resolve injuries the parties agree upon (i.e., injuries the insurer concedes arose from the accident) via an “Award Agreement.” This agreement is on a form the Virginia Workers’ Compensation Commission has created. The form allows the submission of only the information it expressly requests. The form says nothing regarding the dismissal of pending injury claims the form does not address.
The Commission gives effect to an Award Agreement via an “Award Order.” This order is on a form the Commission has created. The order tracks the information contained in the agreement. The order says nothing regarding the dismissal of pending injury claims the form does not address.
Workers’ compensation insurers are always looking for ways to limit their liability to injured workers. One way they did so in the past was to rely on the doctrine of res judicata (“the thing has been decided”) to argue that an Award Order ended a claimant’s ability to pursue injury claims the order did not address. The theory was that the claimant had the opportunity to have all injuries addressed but waived it by agreeing to the Award Agreement/Award Order.
In Williams v. Drug Transport, Inc., a 2014 case, the Commission rejected the res judicata argument described above. The Court of Appeals of Virginia affirmed the Commission’s decision.
Williams provided useful clarity in the law until March 2020, when the Commission decided Viera Lazo v. Wholesome Energy LLC. The Commission agreed that Williams continued to be governing law on the issue of res judicata, but the Commission added a very troubling wrinkle to the law by implicitly finding that the Award Order at issue in the case had dismissed all pending claims the order did not address. In December 2020, the Court of Appeals affirmed the decision.
The Commission’s implicit ruling in Viera Lazo created a huge trap for the unwary. In this regard, it is important to remember that thousands of workers’ compensation claimants in Virginia do not hire lawyers and instead represent themselves.
As noted above, a claimant begins the effort to obtain workers’ compensation benefits by filing a claim for benefits. Again, it is common for a claim to assert multiple injuries stemming from an accident.
Once the Commission decided Viera Lazo, a claimant who resolved only some injury claims via an Award Agreement/Award Order was obliged to file a renewed claim for benefits for the injuries the order did not resolve. The possibility of recovering for these injuries was forever lost if the claimant did not file a renewed claim prior to the expiration of the statute of limitations (i.e., two years from the date of the accident).
The claimant in Viera Lazo fell into the trap described in the preceding paragraph. On two occasions, he filed a timely claim for an injury to his shoulder. Later, he resolved a claim for burn injuries arising from the same accident via an Award Order. As noted above, the Commission implicitly found that the Award Order dismissed the shoulder claim. Although the Commission entered the Award Order before the statute of limitations expired, the claimant did not file a renewed claim for the shoulder injury until after the expiration. The Commission relied on this fact to deny the claim for the shoulder injury.
Viera Lazo would have had an even more draconian effect in a case where the Award Order resolving some injuries was entered after the statute of limitations had expired. A new claim for benefits for the injuries the order did not resolve would invariably be ineffective because it would necessarily be filed after the statute of limitations had already expired.
Virginia lawyers who represent workers’ compensation claimants immediately recognized the threat Viera Lazo posed as detailed above. They drafted a statute to correct the decision and in 2021 presented it to the Virginia General Assembly for consideration. Happily, the legislature enacted the statute, and it became effective on July 1, 2021. It states as follows:
No order issued by the Commission awarding or denying benefits shall bar by res judicata any claim by an employee or cause a waiver, abandonment, or dismissal of any claim by an employee if the order does not expressly adjudicate such claim.
Lawyers for claimants know that the next battleground is the meaning of the term “expressly adjudicate.”
As the discussion above shows, the law is both complicated and ever evolving. If you’re injured at work, your best chance at obtaining a workers’ compensation award is to retain an experienced workers’ compensation lawyer.