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eTrends - North Carolina's New Misrepresentation Defense to Workers' Comp Claims

06.28.2012

North Carolina employers now have a new affirmative defense to workers' compensation claims that arose on or after June 24, 2011. As part of the "Protecting and Putting North Carolina Back to Work Act," the North Carolina Legislature added N. C. Gen. Stat. §97-12.1 to the state's Workers' Compensation Act. This new statute bars workers' compensation benefits for an employee injured on the job if the employer is able to prove that the employee knowingly and willfully misrepresented his or her physical condition during the hiring process and there was a causal connection between the misrepresentation and the employee's subsequent injury. Specifically, the new statute provides:

No compensation shall be allowed under this Article for injury by accident or occupational disease if the employer proves that (i) at the time of hire or in the course of entering into employment, (ii) at the time of receiving notice of the removal of conditions from a conditional offer of employment, or (iii) during the course of a post-offer medical examination:

  1. The employee knowingly and willfully made a false representation as to the employee's physical condition;
  2. The employer relied upon one or more false representations by the employee, and the reliance was a substantial factor in the employer's decision to hire the employee; and
  3. There was a causal connection between false representation by the employee and the injury or occupational disease.

North Carolina General Statute §97-12.1.

If an employer attempts to use this new defense, it must exercise extreme caution to ensure that it does not violate the federal Americans with Disabilities Act ("ADA"). Under the ADA, an employer may not ask any health- or medical-related questions or require any medical exam prior to making an offer of employment. For example, an employer may not ask the following questions: "Is there any health-related reason that you may not be able to perform the job for which you are applying," or "Have you ever filed a workers' compensation claim?" After making a conditional offer of employment, an employer may ask health and medical questions and require medical exams, provided it does so for all entering employees in the same job category. And, after employment begins, an employer may ask health- or medical-related questions and require medical exams only if they are job-related and consistent with business necessity under the ADA.

In light of the ADA's prohibition on medical inquiries prior to an offer of employment, the new defense may prove useful to most employers only when an employee misrepresents his or her physical condition in the course of a post-offer medical exam or inquiry. Employers should consider advising employees in writing in connection with any post-offer medical examination that knowingly and willfully making a false representation as to the employee's physical condition may result in a denial of workers' compensation benefits and having employees acknowledge their understanding of the same in writing.

Please contact Travis Hockaday with any questions.

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Smith Anderson publishes eTrends periodically as a service to clients and friends. The purpose of this eTrends is to provide general information about a significant legal development in the field of employment law. Readers should be aware that the facts may vary from one situation to another, so the conclusions stated herein may not be applicable to the reader’s particular circumstances.

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©Copyright Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P. 2012
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Jamie Greene
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T: 919.838.2045

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