WORKERS' COMPENSATION

Moonlighting costs cop

Montana's Workers' Compensation Act provides that a worker may not receive both wages and temporary total disability (TTD) benefits without the insurer's consent. If a worker does that, he is guilty of theft and can be prosecuted criminally. An Anaconda police officer recently made the news for just such an offense.

Facts

John Roche worked as a police officer in Anaconda. In the course of his work, he injured his knee and began receiving $473 in TTD benefits per week. In 25 months, he collected $45,272.86 in benefits.

After Roche had been released and returned to work, an adjuster for Anaconda's insurer, the Montana Municipal Insurance Authority (MMIA), learned that he had been working at M&N Sports while receiving TTD benefits. The adjuster, Kim O'Brian, called Roche and asked him if he had a connection with M&N Sports. He apparently denied that he owned the company or that he worked for it.

MMIA later sent a letter to Roche asking him to provide information regarding M&N Sports and whether he owned the business and received income from it. He didn't respond. Counsel for MMIA called him and sent a follow-up letter again asking for information. Roche failed to respond.

MMIA finally asked for a mediation conference, and as a result, Roche provided his tax returns, which showed that M&N Sports was a sole proprietorship owned and operated by him. His tax returns also showed that he had reported income from M&N during the time he was receiving TTD benefits.

Theft

With that information in hand, MMIA asked the Workers' Compensation Court to order Roche to pay back the benefits he had received. The court found that Roche's testimony wasn't credible and that he had in fact violated the Workers' Compensation Act. It ordered him to repay the benefits he had received.

Roche appealed to the Montana Supreme Court. He contended that the statute requiring him to pay back benefits was unconstitutional and that the Workers' Compensation Court had incorrectly interpreted the law.

Restitution required

The supreme court refused to address the constitutional issue because Roche hadn't raised it in a timely fashion. Moving on, the court upheld the Workers' Compensation Court's interpretation of the statute. The court held that the term "wages" was defined broadly in the Workers' Compensation Act and that the mere fact that Roche obtained his income in the form of draws from M&N Sports didn't alter the fact that he received TTD benefits while he was receiving wages. Since he didn't obtain MMIA's consent to do so, the supreme court found that the Workers' Compensation Court was correct in requiring him to pay back the benefits.

Roche's last challenge was to the Workers' Compensation Court's authority to order him to repay benefits. The supreme court made short work of that argument, finding that the Workers' Compensation Court had "exclusive jurisdiction in all matters relating to benefits under the Workers' Compensation Act." Montana Municipal Insurance Authority v. John E. Roche, Jr., 2009 MT 205N (June 10, 2009).

Practical application

This case points out why it's a very good idea for you to keep track of employees who are receiving workers' compensation benefits. We aren't saying that you should be conducting surveillance on them, but you should know what they're doing while they're receiving benefits. After all, you are the ultimate payer.

Copyright 2009 M. Lee Smith Publishers LLC

MONTANA EMPLOYMENT LAW LETTER is not intended to be and should not be used as a substitute for specific legal advice, since legal opinions may only be given in response to inquiries regarding specific factual situations. If legal advice is required, the services of counsel should be sought.