Employment Issues and ERISA Claims

Welcome to Season 3, Episode 26 of Winning Isn't Easy. In this episode, we'll dive into the complicated topic of "Employment Issues and ERISA Claims."

In this insightful episode, we're diving deep into the intersection of employment issues and ERISA claims. Join our host, Nancy L. Cavey, a seasoned ERISA Disability Attorney, as she uncovers the complexities and challenges that individuals may face when their employment situation intersects with their ERISA disability claims.

In this episode, we'll cover the following topics:

1 - How employment issues can impact your eligibility for ERISA disability benefits.

2 - The legal intricacies of navigating ERISA claims when employment-related challenges arise.

3 - Key strategies for successfully pursuing your ERISA disability claim while dealing with employment-related issues.

Whether you're an employee facing difficulties at work, or an attorney seeking to better understand the complexities of ERISA claims, this episode is packed with valuable insights to help you navigate the intersection of employment issues and disability claims. Tune in to empower yourself with knowledge regarding the world of ERISA claims and employment challenges.


Resources Mentioned In This Episode:

LINK TO ROBBED OF YOUR PEACE OF MIND: https://caveylaw.com/get-free-reports/get-disability-book/

LINK TO THE DISABILITY INSURANCE CLAIM SURVIVAL GUIDE FOR PROFESSIONALS: https://caveylaw.com/get-free-reports/disability-insurance-claim-survival-guide-professionals/

FREE CONSULT LINK: https://caveylaw.com/contact-us/


Need Help Today?:

Need help with your Long-Term Disability or ERISA claim? Have questions? Please feel welcome to reach out to use for a FREE consultation. Just mention you listened to our podcast.

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Please remember that the content shared is for informational purposes only, and should not replace personalized legal advice or guidance from qualified professionals. 

Transcript

Speaker 1: 0:11

Hey, I'm Nancy Cavey , national ERISA and I D I Disability attorney. Welcome to this week's episode of Winning Isn't Easy . Before we get started, I've gotta give you a legal disclaimer. This podcast is not legal advice. The Florida Bar Association says I have to say this, so I've said it, but nothing will ever prevent me from giving you an easy to understand overview of the disability insurance world, the games that disability carriers play, and what you need to know to get the disability benefits you deserve. So off we go. Today I'm gonna be exploring what you need to know about return to work guidelines and severance agreements and traps that can screw up your ERISA disability benefit claim . Now, there are three specific topics that I'm gonna be covering. Number one, disability insurance companies return to work guidelines and what you need to know about their call to you about a return to work . Number two, what do you , uh, do you have a financial incentive to sign a severance agreement or release if you're eligible for or are getting your ERISA disability benefits? Number three, buyer's remorse. Can you change your mind about terminating your employment and an ERISA settlement? Got it. A lot of great topics, a lot of questions that I get. Let's take a quick break.

Speaker 2: 1:44

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Speaker 1: 2:05

Welcome back to Winning Isn't Easy. Let's talk about disability insurance companies return to work guidelines and what you need to know about their call to you about a return to work. Now, disability insurance companies or plans are not in the business of paying benefits. Are you surprised? Their goal is to get you off your disability benefits as quickly as possible. And one of the ways in which they do that is to continually review your medical records. They have their medical consultant staff determine whether they think you're able to return to work. The disability carrier plan often has their consultants speak with your doctor and have them agree that a return to work is appropriate. And once your physician agrees that you're able to return to work, you just might get a claims denial. But before that, you might get a telephone call from the claims examiner. Now, don't be surprised that you get a call if your physician , uh, doesn't think that you've returned to work because they're playing games with your physician. And ultimately that's a topic for another day. But let's assume for the purpose of this discussion that either your doctor has agreed to your return to work or that the disability carrier doesn't care what your doctor has to say, their doctor says you can return to work. So what are the three things that are going to be discussed in this return to work phone call that the disability carrier or plan is gonna have with you? Well, of course, the purpose of the call is to get you to agree with your physician's agreement with them that you can return to work or get you to agree that their physicians say that you can return to work and then they're gonna talk to you about the date that you think you could return to work. The three things that are gonna be discussed during the course of this call is one, whether you agree that your medical or behavioral health impairments allow you to return to work, to whether you agree with date of return to work that their doctor is , um, proposing or the claims examiner is proposing, and whether there are any vocational issues that need to be addressed regarding the estimated return to work. Now, this discussion is presuming that in fact, you have a job to return to with your employer, and if not, it might even include an offer, a generous offer of vocational services to assist you in returning to work with your employer who may or may not want you back , uh, and any other employer in the local economy. The phone call template is one that we see regularly and it's gonna start out like this. Are you ready for this? I'm your disability claims examiner. I'm your friendly claims examiner who have your best interests at heart, and I wanna talk with you about the date your attending physician indicates you'll be physically or emotionally able to return to work. I wanted to make sure we're on the same page so that we understand your needs and support your return to work on this magic date. Your physician has suggested that the return to work date is tomorrow. What do you think about this? Now, this might be the first time you've heard this little narrative and a release to return to work. And if that's the case, I suggest that you advise the claims examiner that you wanna speak with your doctor about this return to work date and information before continuing the discussion. Now how you answer this question, we'll determine what happens next in your disability insurance claim. If you say, I agree, well guess what? Your benefits are gonna be terminated. You can be assured of that. So the phone call template then requires the claims examiner to discuss whether there are any vocational issues that you might have that they could help you with in a return to work scenario. And these questions include something like, Hmm , do you have a job to return to? Do you have transportation issues? Will you need accommodation in the workplace? Do you think that you could return to work full-time or part-time? What would need to be done to allow you to go back to work full-time? Do you have any vocational issues you'd like to discuss with our vocational rehabilitation counselor? Now you gotta think closely about those answers, and in fact, you might ask for some time to think about those answers, get off the phone and then hire a , an ERISA disability attorney 'cause you know you're being set up. But once you've answered those questions, the claims examiner will try to note that you're in agreement with a return to work date , uh, and the claims examiner may reach out to your employer to see whether or not there's a job available that can be offered to you so that you can return to work. Now, your employer does not have to offer you a job, and the disability carrier generally doesn't have to provide you with any vocational services. In fact, sometimes the policies will say , um, that e even if your employer doesn't offer you a accommodation, that's too bad, so sad , uh, and there is no, as we've said, affirmative obligation on an employer to make any accommodations. And so you're caught again in this catch 22 situation. Now, they may offer you vocational assistance in finding other work if your employer , uh, doesn't want you back. Uh, the disability carrier or plan really doesn't have a big obligation to provide you with those services. Uh, even though the policy may say that they do, what they'll do is they may give you a call and , and ask some questions about your work history, your educational background, and then their vocational evaluator will say, oh , well , we think that they have transferable skills to these three different kinds of jobs. And by the way, they're all sorts of jobs in the national economy or the local economy that you would be capable of performing mythically or hyper hypothetically, that would pay away such that no benefits are due to you. They don't have to have an employer identified, they don't have to have an employer offer you a job. They don't necessarily have to do any of that , uh, under the terms of the policy. They just simply have to show that you are able to go back to work based on their physician's review or your physician's acquiescence. That there is is work that you can do either in your , uh, own field with or without transferable skills. And depending on the definition of disability, if you're at the any occupation stage that you've got these skills that you could take to any kind of job or occupation that you wouldn't wanna do that doesn't necessarily pay the wage that you are getting, but just simply pays a wage such that mathematically the disability carrier doesn't owe you any money. And guess who gets the short stick you do? They're gonna deny the claim or , or terminate benefits by saying that you're able to return to work either in your own occupation or in any occupation leaving you holding the bag. So what happens if you disagree with the return to work date? Of course, the disability claims examiner doesn't wanna hear that you're unable to return to work. The disability claims examiner's gonna ask you questions about your perceptions of your medical or your emotional status, the symptoms that you have that in your opinion, prevent you from performing your own occupation or any occupation, whether you wanna discuss this with your physician , um, and whether or not you understand your prognosis for further recovery and why it is that you should be able to go back to work at this point , uh, whether or not , uh, you maybe wanna return to, don't wanna return to work , uh, because of issues with your family, you know, childcare issues or better yet that you know your employer just doesn't want you back and you really don't like your job and you like staying at home , uh, they may ask you , uh, if you want to schedule a conversation with your doctor to discuss those kinds of things and then have a discussion with them. Again, once you've had an opportunity to , uh, return , uh, have this discussion with your, with your physician and they're gonna document this call and they're adjusting notes and they'll , we'll give you a follow-up call. They'll try to get you to agree that, you know , we'll call you back in 10 days once you've had an opportunity to talk to your doctor. And guess what? On the at 8:00 AM on the 10th day, they're going to be calling you and they're gonna go through the same kind of questions and they're gonna be looking for reasons , uh, that they can document in this conversation to justify claims that , or termination, like you didn't talk to the doctor or your doctor did confirm that you could go back to work. Or that notwithstanding the fact that, that you don't think you can go back to work and your doctor , uh, doesn't think you can go back to work , uh, that the , they'll tease out of you reasons why you don't allegedly want to go back to work. Childcare issues, school care issues , um, uh, transportation issues , um, disputes that you had with your employer or coworkers because they wanna tag the reason why you don't wanna go back to work, not to your disabling medical condition, but because of all other types of reasons that have nothing to do with your disability. They may in the course of this second discussion question, your symptoms, your functionality or activities of daily living, the side effects of medication. And they're looking for inconsistencies between what's in your medical records, what you're putting on, your activities of daily living forms and what you're telling the adjuster because they're gonna cherry pick those inconsistencies and say, Hey, you know, our doctors say that, you know , you can go back to work and we really don't care what your doctor has to say because your doctor is relying on your complaints about your symptoms and functionality and all that's inconsistent with what you're telling us , uh, in the , in your conversations with us in your activity of daily living forms or , or better yet, the surveillance that we've got off you. So these return to work calls I think are just another setup . And if you're getting a return to work phone call, that should tell you that the disability carrier's looking for reasons to deny or terminate your benefits. And that's a clue to consult with an experienced or risk a disability attorney because you are being set up for a claims denial or termination. You need protection now, not before, during, or after that call and when your benefits have been denied or terminated. Don't you agree? Let's take a quick break. Hey, welcome back to Winning Isn't Easy. Do you have a financial incentive to sign a severance agreement or release , uh, if you are eligible for or getting your ERISA disability benefits? Divorces are never easy and that includes a termination of your employment, particularly when you have an ERISA disability claim. Termination can make or break your ERISA disability claim because once you've been terminated your group disability coverage ends and that can make claiming you're disabled after termination pretty hard. Your employer may be coming to you with a proposed severance agreement and you're thinking, Hmm , it's time for a divorce. Uh, you have to understand that many times employers are gonna dangle that severance agreement and release in front of you hoping that they've offered you enough money to go away and d terminate your employment. Your employer will present you with a severance agreement and release and buried in those documents is a general release of all group employee benefit claims, including short and long-term disability benefits. If you sign the severance agreement and release , uh, you have basically destroyed any potential claim that you might have for shorter long-term disability benefits. And worse yet, if you sign this, you accept that lump sum of money that looks really attractive and you accept it because you're in desperate financial circumstances and you do have a valid ERIS disability claim. You've just reduced the value of that long-term disability claim that might actually exceed the value of the severance benefits that are being offered. Now, there's commonly a twist in a ERISA disability policy or plan and that says we can legally offset or reduce the amount of your shorter long-term disability benefits by the amount of any severance pay or salary continuation that you are being paid. And the practical result is that the long-term disability offset will destroy the value of what you're being paid by your employer in signing that severance agreement or release. So you get screwed legally, in my view, coming and going, you probably are not gonna be paid enough in that severance agreement to make it last. You may get some temporary relief of your financial circumstances, but you've also given away potentially your right to claim shorter long-term disability benefits. The other alternative of, as I've said, is they offer you that severance. You are getting short or long-term disability benefits, but what they pay is impacting what you're going to be getting in terms of your ERISA disability benefits. 'cause generally it's a dollar for dollar offset. So you've gotta do the math of this to figure out whether or not there is a sufficient financial incentive here for you to sign that , uh, severance agreement and get the money. So how can your employer create a financial incentive to avoid the offset? That depends , uh, in large measure on what the disability policy or plan has to say about the offsets and how they define the term other income. I will tell you that your employer is not really looking at the disability insurance policy or plan to understand what's being defined. If they are, congratulations to them and better yet, congratulations to you. The offset provisions will often define other income to include severance pay, earned income, deferred income, disability pay, even p t o, even vacation time. So how are you going to be able to fashion and employment severance agreement that has enough financial incentives and is loaded in a way that doesn't allow the long-term disability carrier plan to do an offset? Well, you want the agreement to clearly state that the severance does not represent any of those forms of other income. You wanna outline them specifically and say, it doesn't include this, it doesn't include that it doesn't include this. And make sure that that money is being characterized as something other than severance pay. Obviously you want to be consulting with an experienced employment attorney in conjunction with an experienced ERISA disability attorney. You really need both of those types of lawyers to fashion , uh, the the correct type of agreement. The ERISA attorney is gonna be explaining to the employment attorney what the policy says and how they think it's best to fashion the terms of the , uh, severance agreement. And the employment attorney will be the one who is doing the negotiating and making sure that that release or severance agreement is acceptable to the ERISA attorney. And I think that that money can be money well spent because as I've said, the consequence is going to be either you lose your rights to shorter long-term disability benefits or alternatively you've destroyed , uh, the value of your ERISA disability benefits or reduce the value of those benefits. Got it. Alright , let's take a break.

Speaker 2: 19:14

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Speaker 1: 19:51

Welcome back to Winning Isn't Easy Buyer's Remorse. Can you change your mind about terminating your employment and entering into an ERISA settlement? Once you file a lawsuit in federal court to get your ERISA DIS disability benefits, the court's gonna set a settlement conference, which is known as a mediation. The purpose of the mediation is to settle the outstanding issues , uh, and avoid having the court making a decision on your case. Now in mediation , um, you're supposed to have control, if you will, over the results of the litigation, and it is led by a neutral third party who's called a mediator. The mediator is subject to the rules of ethics and isn't supposed to pressure or threaten any party in an attempt to resolve the case. But what also happens is that the mediator is going to most likely, as part of the mediation process, be presenting you with a release that the disability carrier , uh, wants you to sign and sometimes the employer wants you to assign. And in that release you'll be giving up your vested ERISA disability benefits such as life insurance, your short and long-term disability benefits, your group insurance, and the employer might also be asking you to sign a severance agreement as part of this litigation. Now, your employment status really shouldn't have much to do with your ERISA disability claim. It should be subject to a completely different process and a different type of of agreement, which that agreement should be taking into consideration the impact of that severance agreement on your ERISA benefits as I spoke about in an earlier , um, segment. So what happens in the course of this mediation, if the mediator violates the rules of ethics and pressures you to enter into a settlement and sign a severance agreement, can you have buyer's remorse? I'm gonna tell you the unfortunate story of Carelli Zahara . His disability claim against Hartford was denied and he filed a suit seeking the reinstatement of his long-term disability benefits. The mediator, who's supposed to be a neutral third party was appointed by the court to assist the parties to reach a settlement. And allegedly during the course of the mediation, the mediator pressured him into settling the case and insinuated that if he didn't settle, Hartford would continue its surveillance. Now Hartford is well known in the ERISA world for its surveillance tactics, and during the mediation, the settlement was reached and the court entered an order dismissing this action without prejudice. Uh, and the um, parties , uh, ultimately , uh, indicated that the settlement would not be consum if it wasn't consummated within 60 days, that the parties could move to reopen the action and restore it to the calendar , uh, under the federal rules of civil procedures 60 B . Now the court would retain jurisdiction to enforce the settlement if in that 60 day period of time Zohar had secondary second thoughts, didn't like the settlement agreement, didn't like the um, resignation requirements or anything about this agreement, he could have come back and said timeout. But Zari cashed the settlement check and the parties ultimately filed a joint stipulation of dismissal with prejudice. Now, several months later, he moved to reopen his case and set aside the previous judgment on the basis of the mediator's misconduct that it led him to accept what was now an unfavorable settlement agreement. So let's talk about federal Rule 60 B and mediator misconduct. Rule 60 B permiss a court to relieve a party from an order on the grounds of mistake, inadvertence and excusable neglect, newly discovered evidence fraud, or any reason that justifies the relief. This remedy is an extraordinary relief and can only be invoked upon a showing of exceptional circumstances including fundamental injustice. You have to show three things to win this motion. You have to show a meritorious claim or defense. You have to show that the alleged misconduct has to be proven , uh, by clear and convincing evidence and the misconduct where prevented you from fully presenting your case. And after proving those three things, the court then has to balance the competing policies favoring the finality of the judgment and justice being done in view of the facts to determine within its discretion whether the relief that you've sought is appropriate. Now, just by me going through these elements, you understand this is an incredibly high burden. Ultimately, this case ends up in the Fourth Circuit. And what did the Fourth Circuit do? They ruled that , uh, there was no extraordinary exceptional circumstances under the federal, federal Rule 60 B that would allow him to reopen his case. The court reasoned that he had knowledge of the mediator's alleged improper conduct at the time he settled the case that he had 60 days in which to reopen the case if he chose not to consummate it. Uh, and he chose to go forward with this settlement by cashing this settlement check and by agreeing to a joint order of dismissal. And then of course, he waited over a month after the expiration of the 60 days before having buyer's remorse. Um, and ultimately the court said, look, we don't really understand why the threat of further surveillance would've caused you to settle this case prematurely. Um, and and so we don't hold , we don't get your whole argument regarding the impact of the mediator's statement about possible surveillance. So you can see there was a lot of reasons why uh , the court was not going to , uh, allow , uh, the , the claimant in this case to repay the money and reopen his case. Now, I will tell you, having attended thousands of mediations, if the mediator's conduct was improper , uh, you can say, wait a second, we're gonna terminate this mediation. Uh, I'm want a new mediator . Mediator. I'm gonna file a grievance against the mediator based of conduct. I'm gonna ask the court to appoint a new mediator. Um, and if you negotiate a settlement at mediation and you're having buyer's remorse, you should file that motion within 60 days to reopen and explain how the mediator's threats , uh, led you to enter into this settlement and why the, the threats were the motivation for you to do something that you wouldn't have done. If you've got the check, you should return the check and you should refuse to sign the stipulation. All of this lack of action and the timing of the lack of action was really detrimental to him. The better thing, quite frankly, is not to have buyer's remorse. The better thing is to understand that when you're entering into a mediation, as part of that mediation agreement, you are going to be asked to sign a general release. And that release is going to be giving up your rights, including , um, your rights to , uh, disability benefits, your rights to life insurance, potentially through that particular carrier. And you may be sign , asked to sign an employer's , um, severance or termination agreement. If that happens and you're presented with all of that, there's a timeout. The employer should not be presenting you with that sort of stuff and an ERISA disability mediation. And that's a cause to stop and pause the mediation. You don't wanna let yourself get caught up or set up in this type of situation. Better yet, you should be prepared. You should be represented by counsel , and you should be understanding the rights and obligations you're giving up because buyer's remorse, quite frankly, won't fly in federal court. Got it. I hope you've enjoyed this week's episode of Winning Isn't Easy. If you've enjoyed this episode, please like our page, send us a review, share the your family and friends, and please subscribe to this podcast. That way you're gonna get notice every time a new episode comes out. Thanks, and we look forward to having you tune in in next week's episode of Winning Isn't Easy.