Spears v. Carhartt, Inc.

215 S.W.3d 1, 2006 Ky. LEXIS 126, 179 L.R.R.M. (BNA) 3019, 2006 WL 1359034
CourtKentucky Supreme Court
DecidedMay 18, 2006
DocketNo. 2005-SC-0694-WC
StatusPublished
Cited by9 cases

This text of 215 S.W.3d 1 (Spears v. Carhartt, Inc.) is published on Counsel Stack Legal Research, covering Kentucky Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Spears v. Carhartt, Inc., 215 S.W.3d 1, 2006 Ky. LEXIS 126, 179 L.R.R.M. (BNA) 3019, 2006 WL 1359034 (Ky. 2006).

Opinion

OPINION OF THE COURT

This appeal concerns a workers’ compensation claim that was submitted for Alternative Dispute Resolution (ADR), as authorized by KRS 342.277 and a collective bargaining agreement between the claimant’s union and her employer. An arbitrator determined after a hearing that the claimant’s request for arbitration was untimely under the agreement, and the Workers’ Compensation Board (Board) and the Court of Appeals affirmed. Among other things, the claimant raises two broad arguments, that the ADR program was invalid because it diminished her rights under Chapter 342 and that it denied her due process. We affirm.

On September 15, 1997, the claimant injured her back while working for the defendant-employer. With the assistance of legal counsel, she filed a Form 101 application for benefits on September 21, 1999. In an order that was entered on September 30, 1999, and served on counsel for the parties, the Chief Administrative Law Judge (CALJ) referred the claim to the company’s ADR program for further proceedings, stating:

Pursuant to the Alternate Dispute Resolution Agreement for Workers’ Compensation between Carhartt, Inc., and the National Apparel, Garment & Textile Workers Council, United Food & Commercial International Union, AFL-CIO & CLC, all workers’ compensation claims for injuries occurring on or after May 1, 1996, must be immediately referred to the Alternate Dispute Resolution Program.

It is undisputed that the commissioner of the Department of Workers’ Claims approved the parties’ ADR agreement. Although a copy of the agreement has not been made a part of the record in this appeal, the parties indicate that it requires all claims to be referred immediately for mediation. A union representative may be present at the mediation conference, but legal counsel “will not be permitted to directly participate at mediation.” As the [3]*3mediator assigned to this case later noted in a supplemental report, Article IV, sub-paragraph g, of the ADR agreement provides for arbitration if mediation is unsuccessful. The parties do not dispute that it states as follows:

Within thirty (30) calendar days after the completion of the mediation process, any party not satisfied with the outcome may file with the mediator a request that the matter be referred for arbitration. Upon receipt of such a request, the mediator shall immediately refer the matter to the arbitrator agreed to by the parties to this Agreement for arbitration. The arbitration date will be set with sufficient advance notice to permit the parties to retain and/or consult with legal counsel.

In the present case, a mediation conference was held on April 24, 2000. Nothing indicates that a union representative attended. The employer offered to settle the claim, but the claimant would not agree. As the mediator’s May 1, 2000, report indicated:

The mediator was then advised that the Plaintiff was not in a position to accept a lump sum offer that day and needed an opportunity to seek the advice of counsel. The mediation was then concluded.1

No further action appears to have been taken until August 20, 2001, at which time a letter from the claimant’s attorney to the employer’s stated as follows:

As you know, I represent Brenda Spears in the above-styled workers’ compensation claim.
Mediation was conducted in this claim in May, 2000; however, settlement was not reached between the parties. My client would like to schedule arbitration of this matter at this time. If any paperwork is required to be completed by Carhartt, please send same to me at your earliest convenience.

The employer’s attorney responded on August 30, 2001, declining the request for arbitration on the ground that the claimant failed to request it within 30 days after the mediation concluded.

A March 15, 2002, ex parte letter from the claimant’s attorney informed the mediator of the employer’s refusal and gave notice that the claimant rejected the April 24, 2000, offer of settlement. It requested a report that stated as much and also requested a referral to arbitration. On March 20, 2002, the mediator issued a supplemental report, attaching a copy of the letter. The supplemental report noted that the mediator was unaware the claimant rejected the employer’s lump sum offer until he received counsel’s letter and determined that the mediation process was not complete until then. The mediator referred the matter to an arbitrator agreed to by the parties under the terms of the ADR agreement.

In response to the employer’s objection and request that the supplemental report be withdrawn, the mediator issued another order. It explained that the mediator assumed at the close of the mediation conference that the claimant or her attorney would be in contact regarding the employer’s settlement offer and had not considered the process to be complete. It also noted that the ADR agreement did not clearly spell out “some procedural fine points.” Nonetheless, the mediator accepted responsibility for failing to advise the claimant to contact him within a stated number of days after the conference and fading to state in the initial mediation report that the claimant had 30 days from [4]*4the date of the mediation order to request that the matter be referred to an arbitrator. On that basis, the mediator concluded that the matter must be resolved in the claimant’s favor.

After a series of heated communications between the parties’ counsel and an advisory opinion by the Commissioner, the matter proceeded to arbitration. The parties submitted evidence, after which a hearing was held and the contested issues were briefed by counsel. They stipulated that the employer had paid $63,721.47 in medical bills and 29 weeks of temporary total disability (TTD) benefits at the rate of $176.90 per week but that the correct rate was $216.03.

On June 30, 2003, an arbitrator awarded the TTD to be paid at the correct rate and ordered medical bills to be paid through May 31, 2000. The arbitrator dismissed the claim for permanent income benefits on the ground that the request for arbitration was unreasonably late, and the claimant offered no plausible excuse for the delay. Moreover, the mediator had no duty to advise the claimant of her right to arbitration because it was described in the ADR Agreement. As a union member, she was charged with knowledge of her rights under the agreement, including the right to have union representation at the mediation conference, the right to request arbitration within 30 days after mediation concluded, and the right to have an attorney represent her during arbitration. Noting that the very purpose of ADR was to resolve workers’ compensation claims promptly, the arbitrator observed that to give a worker two years after mediation to decide whether to accept a settlement offer was contrary to that goal. Nonetheless, the arbitrator did suggest that management give workers a form to request arbitration at the end of an unsuccessful mediation and also that the union assist workers who requested help in preparing the request and in finding legal counsel.

Although Chapter 342 sets forth a procedure for resolving disputed workers’ compensation claims in which an ALJ is the finder of fact, KRS 342.276

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215 S.W.3d 1, 2006 Ky. LEXIS 126, 179 L.R.R.M. (BNA) 3019, 2006 WL 1359034, Counsel Stack Legal Research, https://law.counselstack.com/opinion/spears-v-carhartt-inc-ky-2006.