By Michael P. McCready
A new client calls your office. He explains how he was injured on the job. You figure, “great, a new worker’s compensation case!” After listening further, the client tells you he works for the US Postal Service. A federal employee. You immediately stop the conversation and tell the client you don’t handle federal workers’ compensation cases, and what’s more, you don’t know anyone who does. The client hangs up and is left on his own.
But why is it that so few lawyers handle federal workers’ compensation cases? There are 2.1 million federal civilian employees. That is a huge potential client base, larger than the working age population of twenty states! There are no court appearances in federal workers’ compensation cases. All proceedings are done telephonically and almost all documents are uploaded electronically. Because it is based on federal law, you can represent clients all over the country, and in fact, all over the world. There are no state restrictions to practicing law with federal workers’ compensation cases. Finally, many federal agencies are at a high risk of sustaining work related injuries. Employees of such federal agencies as the United States Postal Service (USPS), the Veterans Health Administration (VA), the Transportation Security Administration (TSA) and the Department of Homeland Security (DHS) are all covered under federal workers’ compensation. Given these factors, there should be a lot of lawyers who handle federal workers’ compensation cases. But there aren’t. Why?
First, there are no contingency fees in federal workers’ compensation. In fact, federal law makes it a misdemeanor to charge an injured federal worker a contingency fee. Therefore, all work for federal employees must be billed by the hour with detailed descriptions of the work performed and the time spent. Traditional workers’ compensation and personal injury lawyers are not accustomed to keeping track of time and billing clients. Additionally, contingency lawyers will charge a percentage of the recovery, which is forbidden in federal cases.
Second, although being able to represent clients nationwide is a positive, when it comes to collecting an unpaid fee for work performed, it is a serious limitation. You can’t be suing people all over the country who do not pay your fee. For this reason, most federal workers’ compensation lawyers charge an upfront retainer. Imagine being injured on the job, perhaps not being paid, and having to send a retainer to a lawyer to represent you in a workers’ compensation case. The contingency tort system is designed to allow everyone access to the courthouse, regardless of economic means. In federal workers’ compensation cases, only those who pay their lawyer have representation.
Third, assume a client has paid a retainer and you have kept detailed billing records. You are not allowed to transfer the retainer to your operating account until the client has approved the bill. Yes, that’s right, you don’t get paid if the client disapproves of the bill, even if you do the work. In a contingency case, you take the risk that you may not win, and if a contingency lawyer fails to make a recovery, there is no fee. In federal workers’ compensation, you can do the work, and win or lose, you may not get paid if a client does not approve of your fee.
Fourth, any compensation received by an injured federal employee is sent directly to the worker, not his or her attorney. In traditional contingency fee practice, you immediately send a notice of attorney lien or letter of representation to protect your right to get paid. Usually, the settlement check is made payable to the lawyer and the client. Not in federal workers’ compensation cases. The check is made payable to the client and mailed directly to the client. As you can imagine, this severely hampers a lawyer’s ability to get paid, and reinforces the need for a retainer. Because the check is mailed to the client, case loan companies will not provide a case advance to pay a retainer.
It should be obvious from the above discussion of federal workers’ compensation why there are so few lawyers handling these cases. The federal government justifies these procedures by proclaiming they want the injured worker to receive as much of the recovery as possible, not an attorney. The prohibition against contingency fees is also meant to protect federal employees from being “overcharged” for legal services. The assurance that attorneys’ fees and the claimant’s recovery are kept separate is part of that protection. But, what they have done is essentially cut lawyers out of the federal system and deprived federal workers the ability to have legal representation for their injuries.
Setting aside the ability of the lawyer to get paid, the federal workers’ compensation system is quite similar to state workers’ compensation systems. Like state Workers’ Compensation Commissions, in the federal system, “[t]he Office of Workers’ Compensation Programs administers disability compensation programs which provide wage replacement benefits, medical treatment, vocational rehabilitation, and other benefits to certain employees who experience work-related injury or occupational disease.”
Claims must be filed timely and injuries must arise within the performance of duty. There must be a factual basis to the claim as well as a medical basis. Finally, there must be a causal connection between the work and the injury. The injured federal worker has the burden of proof on each of these elements. Federal law covers both traumatic injuries as well as occupational illness which occurs over time, such as toxic exposure and repetitive injuries.
Injured federal employees are also entitled to a Schedule Award for certain permanent medical impairments. OWCP uses the AMA Guides to the Evaluation of Permanent Impairment, 6th Edition exclusively. When an injured federal worker reaches maximum medical improvement, he or she can obtain an impairment rating which will serve as the basis of their Schedule Award. This is the same as many state workers’ compensation systems, while other state systems allow for a variety of factors to determine the level of permanent impairment.
Unfortunately, there is no entitlement to a Schedule Award under federal law for mental conditions nor for injuries to the head, brain or back. Many state workers’ compensation systems cover these injuries as “person as a whole” or “non-scheduled injuries,” but under some states’ systems as well as the federal system, injuries to these body parts do not entitle an injured worker to a scheduled award. However, if an injury to the head, brain or back causes permanent impairment to an extremity (arm or leg, for example), the injured worker may be entitled to a Schedule Award for that region or body part. A Schedule Award is calculated using a formula which includes the AMA impairment rating and the rate of pay of the injured federal employee. Scheduled Awards are paid over a period of weeks, except in exceptional circumstances where it can be paid in a lump sum.
One significant difference between state and federal workers’ compensation systems is the role of neutral adjudicator. Under state law, there is typically a neutral arbitrator or commissioner who decides disputed issues and has the authority to enter an award for a compensable injury. A claims adjuster and/or respondent’s attorney are paid by an employer or insurance company and are adversarial to the interests of an injured worker. The OWCP employs claims examiners. A claims examiner is an adjuster and arbitrator rolled into one. The claims examiner deals directly with the injured worker like an adjuster. But the claims examiner also has the authority to determine compensability, benefits and ultimately the amount of the award. If you are unhappy with a decision of an OWCP claims examiner, your remedy is to file an appeal.
In the statute which creates the federal workers’ compensation system, it explicitly states the system is meant to be non-adversarial. “The mission of the OWCP is to protect the interests of workers who are injured or become ill on the job, their families and their employers by making timely, appropriate and accurate decisions on claims, providing prompt payment of benefits and helping the injured worker return to gainful employment as early as is feasible.” State workers’ compensation systems typically have similar such platitudes. But, state workers’ compensation systems are premised on an adversarial model, with neutral adjudicators. The federal system is not, and thus, the dual role of claims examiner.
As a practical matter, an injured federal worker is at the mercy of a claims examiner, with an appeal being the only remedy for a disagreement with their determination. Appeals are governed by rigid procedural rules and take a long time to be resolved. In the case of an adverse determination by a claims examiner, his or her decision is often the final word. Compound this with the fact that most injured federal employees proceed pro se and you can imagine the scale of the injustice.
Although federal workers’ compensation law has many similarities to its state counterparts, the role of the injured worker’s attorney is quite different. The vast number of injured federal workers either can’t afford to hire a federal worker’s compensation lawyer or don’t see the value in paying a lawyer a retainer. Many potential clients are surprised we cannot charge a contingency fee and shocked that they have to pay an attorney themselves. In our practice, only one in ten injured federal employees who contact our office retain us for representation. If federal compensation lawyers were able to charge a contingency fee and have the check mailed to their office, that number would be closer to nine in ten.
It’s a very sad system and it is heart-breaking to hear the stories of these workers. Too often, people come to us because they tried to appeal it on their own and now are losing their house because they have gone so long without any kind of a pay check. They finally borrow money from a relative so that we can help them and we are successful, but when they receive their back pay that they should have received all along, it is without interest or any kind of penalties. Also, they do not receive attorney’s fees back when they win. While the system is flawed and the workers’ are at a disadvantage, we are here to help them fight for what they deserve. These are people who got hurt doing their job. They should be compensated while they heal and for any permanent injury they suffer. These cases are often easily fixed with the help of an attorney and a doctor, but the claims examiner denies them and most people cannot fight them alone.
If an injured federal worker contacts your office, you have a few choices. First, you can refer them to a lawyer who handles federal workers’ compensation, with the caveat, that they will need to pay a retainer; Second, you can handle the case yourself, either with or without a retainer; or Third, you can handle the matter pro bono. If you handle it yourself without a retainer, you may be handling it pro bono anyway for the reasons set forth above. But, injured federal workers deserve legal representation.
Michael P. McCready is the managing partner at McCready, Garcia & Leet in Chicago, Illinois and can be reached at michael@mccreadylaw.com.
