NY Court Affirms Use of Hearsay Evidence to Establish Employee Fraud

In an unusual case that shows how traditional procedural rules can sometimes be disregarded in workers’ compensation cases, a New York appellate court affirmed a finding of the state’s Workers’ Compensation Board that an injured employee made material false statements for the purpose of obtaining workers’ compensation benefits, in spite of the fact that the dominant part of the employer’s evidence of fraud was hearsay [Matter of Calabrese v. Fortini Inc., 2020 N.Y. App. LEXIS 207 (Jan. 9, 2020)]. The court added that it would not disturb the Board’s decision disqualifying the claimant from receipt of future benefits.

Background

In 2015, claimant suffered a work-related injury to his back and was awarded workers’ compensation benefits. Following a hearing, the employer argued that claimant had violated N.Y. Worker’s Comp. law § 114-a, based upon alleged misrepresentations that he made regarding his search for employment. In an amended decision, the WCLJ found that claimant had provided false reports and testimony regarding his search for employment and imposed both the mandatory penalty and the discretionary penalty of disqualifying claimant from receiving future benefits for his claim. The Board affirmed.

Claimant reported and testified that he had filed numerous job applications either in person, by email, or via paper application provided by the prospective employers. The employer’s investigator contacted various employers to which claimant was reported to have submitted an application. According to the investigator’s report and testimony, in which the investigator identified whom he spoke to and when, the prospective employers informed him that there was no application on file from claimant, the contact name listed by claimant did not work for the prospective employer, the position applied for did not exist and/or the prospective employer did not provide or accept applications in the form that claimant purportedly used in submitting the application.

Hearsay OK, says the Court

Acknowledging that the evidence offered by the investigator was hearsay, the appellate court said it nevertheless was “sufficiently reliable and provided substantial evidence supporting the Board’s finding that claimant made false misrepresentations in order to obtain benefits” [Opinion, p. 3]. Accordingly, the court would not disturb the Board’s findings of disqualification.