De Novo, Deference, or Something in Between: The Complex Landscape of Workers’ Compensation Administrative Review

Personal Observation

In 1977, I stood before the North Carolina Industrial Commission as a young workers’ compensation defense attorney, barely a year into practice, challenging a deputy commissioner’s credibility determination. It was my second appearance before the Full Commission, which consisted of three commissioners. The firm that employed me represented the two dominant carries in claims west of Charlotte.

When I confidently asserted that the statute clearly gave the full commission, not the deputy, final say on witness credibility, one commissioner responded by simply turning his chair, presenting his back to me. I thought, “Wow, one down, two to go.” I lost that challenge, two votes to one.

Looking back now, after handling hundreds of compensation cases in the decade that followed my first defeat, and then spending the past 38 years writing for Larson’s Workers’ Compensation Law, I find myself resonating with that commissioner’s visceral reaction to my argument. While North Carolina courts would later adopt one of the nation’s most rigid positions against deference to deputy commissioner findings—explicitly holding in Norton v. Waste Mgmt., Inc., 552 S.E.2d 702 (N.C. App. 2001), that the state’s commission need not defer even on credibility issues—that early encounter illustrated a fundamental tension in workers’ compensation practice: Should administrative boards and commissions truly retry cases de novo, or should they give deference to the hearing officers who actually observe the witnesses?

Recent Arkansas Decision

A recent Arkansas appellate decision, Conagra Packaged Foods, LLC v. Beauchamp, 2024 Ark. App. 548 (Nov. 6, 2024), illustrates how this tension continues to shape workers’ compensation practice. There, the employer argued that the state Workers’ Compensation Commission had overstepped by deciding the case on a theory—the “natural consequence” doctrine—not specifically raised before the ALJ.

Background

The facts were straightforward: Beauchamp injured his left hip and knee in a January 2022 workplace fall. While the employer accepted the left-sided injury, it disputed compensability when Beauchamp later complained of right hip problems. An ALJ found Beauchamp had injured both hips in the original fall. The Commission modified this finding, concluding instead that the right hip condition was a compensable “natural consequence” of the original left hip injury—a theory not explicitly argued at the ALJ level.

The appellate court’s rejection of the employer’s challenge to the Commission’s authority illustrates the majority approach to administrative review in workers’ compensation cases. But the national landscape is far more complex, with states adopting varying approaches to this crucial procedural issue.

The Majority Rule: True De Novo Review

Most jurisdictions treat the board or commission as having broad, original jurisdiction. Under this approach, the ALJ’s findings are viewed essentially as recommendations, with the commission engaging in independent fact-finding. This authority typically extends beyond mere error correction to include consideration of new theories supported by the record evidence.

For example, Illinois courts have extensively developed this approach through a series of significant decisions. In Crane v. Industrial Comm'n, 57 Ill. 2d 158 (1974), the state supreme court held that the commission may disagree with the arbitrator without taking additional evidence. In Adams Truck Lines v. Industrial Comm’n, 193 Ill. App. 3d 814 (1990), the court upheld the commission’s reversal of an arbitrator’s denial of benefits, despite the commission taking no new evidence. Notably, the court distinguished the case from Orkin Exterminating Co. v. Industrial Comm’n, 172 Ill. App. 3d 753 (1988), where credibility had been more central to the determination, explaining that in Adams the “degree of contradiction and impeachment of the claimant's testimony was much smaller.”

Georgia courts go even further, holding that even on credibility issues, the full board may reverse a deputy’s decision based solely on the record. In Travelers Ins. Co. v. Buice, 124 Ga. App. 626 (1971), the court upheld the board’s reversal of a deputy’s credibility determination made entirely on record review, emphasizing the board’s broad fact-finding authority.

North Carolina has adopted perhaps the most rigid adherence to commission autonomy. In Norton v. Waste Mgmt., Inc., 552 S.E.2d 702 (N.C. App. 2001)], the court emphatically stated that ultimate fact-finding is the commission’s duty, whether working from a cold record or live testimony. The court held that even when credibility might be better judged by a first-hand observer, the commission need not demonstrate it gave special weight to the hearing officer’s personal observations. The Norton court upheld an award of benefits for chronic fatigue syndrome and fibromyalgia despite the deputy commissioner’s contrary credibility findings.

The practical implications of this majority approach are significant. Parties must prepare their cases comprehensively at the ALJ level, recognizing that the commission might analyze the evidence through different legal frameworks. The approach promotes flexibility in claim resolution but can create uncertainty about which legal theories might ultimately decide the case.

The Credibility Exception: The Florida Rule

Several states have carved out an important exception when ALJ findings turn primarily on witness credibility. Florida led this movement in 1951 with [U.S. Casualty Co. v. Maryland Casualty Co., 55 So. 2d 741 (Fla. 1951)], where the court relied heavily on the fact that under Florida's statute, the hearing was conducted by a Deputy Commissioner, with the full Commission considering the matter only on the written record. The court reasoned that even if Commission members would have held differently, they must affirm the Deputy's findings if supported by substantial evidence. The Florida Supreme Court later emphasized that this rule's principal justification was the Deputy's superior vantage point in judging witness credibility, though it has occasionally carved exceptions when that rationale didn't apply [John Caves Land Dev. Co. v. Suggs, 352 So. 2d 44 (Fla. 1977)].

California requires "considerable substantiality" to reject an ALJ's credibility-based findings [Rubalcava v. Workers' Comp. App. Bd., 220 Cal. App. 3d 901 (1990)]. New Jersey mandates affirmance of ALJ findings if they "could reasonably have been reached on sufficient credible evidence" [Delesky v. Tasty Baking Co., 175 N.J. Super. 513 (1980)]. This approach recognizes the ALJ's unique position to assess witness demeanor and credibility, creating a quasi-appellate standard of review for credibility determinations while maintaining broader review powers for other issues.

The Hybrid Approach: Balancing Competing Interests

Some jurisdictions have fashioned middle-ground solutions. Wisconsin requires the commission to explicitly consider the ALJ's superior position regarding credibility when that issue is central [A.D. Braun v. Industrial Comm'n, 36 Wis. 2d 48 (1967)]. Massachusetts allows the reviewing board to function as fact finder but prohibits review of credibility determinations regarding live witness testimony [Case of Lettich, 403 Mass. 389 (1988)].

Virginia has developed a particularly nuanced approach. The commission may freely review credibility findings not based on demeanor or appearance but must defer to ALJ findings based on in-person observation [Corestaff Corp. Servs. Group v. Carter, 2004 Va. App. LEXIS 128]. This balancing act recognizes both the commission's expertise and the ALJ's advantaged position in evaluating live testimony.

Special Circumstances and Practical Challenges

The death, retirement, or reassignment of an ALJ mid-case presents particular challenges. When credibility is not central, some courts uphold awards based on record review by a successor ALJ [Duquesne Brewing Co. v. Workmen's Comp. App. Bd., 8 Pa. Commw. 531 (1973)]. However, when credibility is crucial, courts often require new hearings [Pritchard v. Halliburton Serv., 104 N.M. 102 (1986)]. New York courts have held that absent explanation, decisions by ALJs who didn't conduct the hearing cannot stand [Matter of Prather v. Amerada Hess Corp., 95 A.D.3d 1633 (2012)].

Questions also arise about commissioners' review of the record. Most courts reject challenges based on commissioners not personally reading every word of the transcript, either holding that complete reading isn't necessary or presuming the commission considered all evidence [Allied Comp. Ins. Co. v. Industrial Accident Comm'n, 57 Cal. 2d 115 (1961)]. However, Wisconsin requires that the complete transcript be available to the commission, even if every word need not be read [Lambrecht Farms v. Industrial Comm'n, 15 Wis. 2d 143 (1961)].

Some states have developed special procedures for medical evidence. These typically involve statutory medical panels whose findings may be "final" on medical issues, though such finality usually remains subject to review for errors of law. Even with such panels, boards generally retain discretion to accept opposing medical testimony in the record.

Emerging Trends and Future Considerations

Recent decisions suggest a trend toward more structured review processes, particularly regarding credibility determinations. While maintaining the commission's broad authority, courts increasingly require explicit acknowledgment of ALJ advantages in assessing witness demeanor. This trend recognizes both the efficiency of the majority rule and the practical wisdom underlying the credibility exception.

The Beauchamp decision demonstrates this evolution. While upholding the commission's broad review authority, the court emphasized the commission's careful review of the entire record and its reasoned explanation for adopting a different theory of recovery. This suggests that even under the majority rule, commissions must exercise their authority thoughtfully and with clear justification.

Conclusion

The varying approaches to administrative review reflect the complex balancing act at the heart of workers' compensation systems: promoting efficient claim resolution while ensuring thorough and fair consideration of evidence. While the majority rule of broad commission authority remains dominant, the evolution of credibility exceptions and hybrid approaches suggests continuing refinement of these procedural frameworks. As demonstrated in Beauchamp, the key lies not just in the scope of review authority, but in its careful and reasoned exercise.