New York Law Blog

It was first revealed a few weeks ago that Long Island Rail Road retirees were collecting double disability claims, and now the New York Times is reporting that a group of “disability consultants and physicians” were assisting record numbers of LIRR workers to collect disability along with their pensions for early retirement. According to the TImes, the LIRR had “the nation’s hightest rate of disabled retirees even while it was earning awards for employee safety.” Now a state and federal investigation is looking into these allegations of fraud against the LIRR by employees.

One consultant, Marie T. Baran, ran the board’s Long Island office until she quit two years ago and began selling advice to rail workers on how to navigate the system of which she had been a part. Other disability advisers are prominent former union leaders, including one who once represented labor on the board of the L.I.R.R.’s parent agency, the Metropolitan Transportation Authority.

Government investigators are particularly interested in learning why L.I.R.R. retirees tend to use the same physicians, while citing the same ailments in numbers far out of line with other railroads. Investigators have issued dozens of subpoenas to consultants, doctors and retirees, among others.

Disability consultants are charging roughly $1,000 for the use of their services. Several of these consultants, as well as a few doctors, have been subpoenaed by the state attorney general regarding the investigation into the fraud.

The story about Long Island Rail Road retirees collecting disability benefits is heating up after it was discovered that some were seeking disability payments from private insurers also. According to the New York Times, close to 97 percent of retired LIRR workers are receiving disability payments from the federal Railroad Retirement Board on top of their normal retirement package. Apparently now some of those retired employees are seeking private disability payments as well.

On Tuesday the railroad gave the state attorney general, Andrew M. Cuomo, and the inspector general of the Metropolitan Transportation Authority evidence raising the possibility that hundreds of its employees were buying private disability insurance policies knowing that the federal railroad board would declare them disabled.

In referring the matter to state investigators, L.I.R.R. officials said their suspicions were raised by two types of disability insurance purchased by railroad employees. One is a general, short-term disability policy; the other guarantees payment of auto loans, credit card debts or personal loans in the event the policyholder is unable to work.

L.I.R.R. officials wrote to the investigators that the pattern of insurance policy purchases “raise a concern in light of the high rate of disability pensions awarded by the R.R.B.”

The disparities were found after the Times invoked the Freedom Of Information Act and the LIRR went to investigate how many employees are using private disability insurance. The initial story by the Times seems to have been the impetus for the fraud investigation:

Two days after The Times first reported that virtually all career L.I.R.R. employees were getting federal disability payments after retiring, federal agents raided the Long Island office of the retirement board, seizing records and computers. Mr. Cuomo’s office has been issuing subpoenas to people associated with the granting of federal disability pensions.

When are you technically on and off the job, and is there any grey area to that? A recent case that went before the New York state court of appeals had to define the difference, and came up with a surprising ruling. A taxi driver was in his vehicle on a lunch break when a stranded motorist asked for help jump starting a dead battery. The battery exploded in the process, leaving the taxi driver blind. When filing a claim for workers compensation, a judge ruled that the injury received was on personal time seeing how the driver was on a break from his work duties. End of story, right? Well, not so after an appeal to the state.

To be compensable under New York’s Workers’ Compensation Law, an injury must have arisen both out of and in the course of employment. Here, the employer argued that the injury wasn’t compensable because the taxi driver was on a meal break at the time of the accident. The court agreed that injuries that occur during meal breaks taken off employer’s premises are generally not compensable.

However, the court noted that the general rule doesn’t apply in situations in which the nature of the job dictates the time and place of the meal, and the employee is still considered to be on the job at the time the break occurs.

The employer argued that their drivers were given explicit instructions NOT to do any repair work on their own vehicles, but the court countered with the fact that it did not apply to the drivers helping out a fellow stranded motorist. And the most interesting ruling of all?

Furthermore, when an employee in the course of employment is temporarily involved in an activity that benefits the employer, the activity falls within the scope of employment. Here, because the cab was clearly marked with the employer’s name, the assistance created a good-will benefit to the employer. The court affirmed the Board’s decision.

It just goes to show that there is a very fine line between what could be considered on and off the clock when it comes to employers, and that it never hurts to seek outside council should you feel like you have been injured surrounding your employment.