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Case # 70511177
Matter of Rochester Business Alliance
2011 NY Wrk Comp 70511177

Board Panel Decision

By: Board Members Lower, Finnegan, Foster

Ruling:

Claimant's counsel filed an application for review on June 23, 2010, of the Workers' Compensation Law Judge's (WCLJ) reserved decision filed June 3, 2010, which denied claimant's motion to preclude the carrier's WA-1 forms, found that claimant violated Workers' Compensation Law (WCL) § 114-a, disqualified her from receiving benefits from July 23, 2009, onward, and thereafter permanently disqualified her from receiving benefits. The carrier filed a rebuttal on July 16, 2010.

ISSUES

The issues presented for administrative review are:

  1. whether the carrier's WA-1 forms are admissible, and
  2. whether claimant violated WCL § 114-a, and if so, what penalty should be imposed?

FACTS

On December 2, 2005, claimant, then a 44 year old data entry clerk, suffered injuries when she fell down some stairs. She was diagnosed with a L3-L4 and L4-L5 mild disc protrusion and chronic low back strain with bilateral radicular symptoms.

Claimant retained an attorney, and the Notice of Retainer and Appearance (OC 400) was filed with the Workers' Compensation Board (Board) on December 19, 2005. At the first hearing on February 13, 2006, her claim was established for the back and the buttocks, the average weekly wage was set at $355 without prejudice, and various awards were made (decision filed February 17, 2006).

Three years after the injury, at a hearing on January 27, 2009, claimant testified that she has a year and a half of college and a certificate in nursing and also in administrative information processing. She testified that she had not worked for anyone since November 10, 2008. The Judge stated: "You have to report to the carrier if you go back to work or engage in self-employment."

In the subsequent decision filed January 30, 2009, the WCLJ referred claimant for vocational rehabilitation training, continued payments at $157.78 per week, and directed claimant to provide the carrier with a copy of a written job search within forty-five days. A letter dated April 9, 2009 (received in the Board's file on April 14, 2009), from a vocational rehabilitation counselor at VESID shows that based upon claimant's disability, she was eligible for vocational rehabilitation services.

In response to a July 15, 2009, letter from the carrier to claimant's counsel for copies of claimant's recent job search, claimant's counsel, in a letter dated July 28, 2009, and received at the Board on August 7, 2009, submitted a handwritten list of places where claimant applied for work. The list shows that claimant applied to numerous places for employment, including faxing a resume to Highlands of Brighton on June 22, 2009, wherein claimant stated that she would like "to apply and be considered for a CNA position...." Seven days earlier, in a C-4 report dated June 15, 2009, for treatment on June 10, 2009, claimant's treating physician, Dr. Barron, stated that claimant was 50% disabled, attending training for phlebotomy at VESID, and is capable of limited duty if available. Her work restrictions included a ten pound lifting restriction, a forty pound pulling restriction, no repetitive bending or twisting at the waist, and being able to vary positions as need for comfort. He noted that claimant was not presently working.

Three months after the claimant's counsel's response to the carrier's request for claimant's job search, the carrier filed an RFA-2 on October 7, 2009, requesting that the case be calendared on the issue of a WCL § 114-a violation. At the subsequent hearing on November 2, 2009, the carrier requested that benefits be suspended in that claimant returned to work at full pay on July 21, 2009 (C-8 filed October 6, 2009). The claimant did not attend the hearing and claimant's counsel could not supply a reason for her non-attendance. Thereupon, the WCLJ held the awards in abeyance from July 21, 2009, onward and continued the case on the issue of disqualification under WCL § 114-a (decision filed November 5, 2009). A hearing was thereafter scheduled for December 9, 2009.

The claimant did not attend the December 9, 2009, hearing, and the WCLJ continued the case to January 25, 2010, for the testimony of claimant on the issue of WCL § 114-a. At the December 9, 2009, hearing, the carrier submitted as an offer of proof a sample of its two-sided WA-1 form, along with five WA-1 forms allegedly signed by the claimant on December 14, 2008, April 15, 2009, July 8, 2009, August 15, 2009, and September 27, 2009.

The WA-1 form, with a pre-addressed postage paid window envelope enclosed, is a questionnaire mailed to the claimant by the carrier with the following opening instructions in capital letters:

"SO THAT YOUR PAYMENTS CAN CONTINUE WITHOUT INTERRUPTION, PLEASE COMPLETE THIS FORM IMMEDIATELY. All PAYEES MUST SIGN AND RETURN THIS FORM WITHIN 2 WEEKS."

Near the signature line, there is a statement about fraud:

"Any person who knowingly and with intent to defraud any insurance company or other person files an application for insurance or statement of claim containing any materially false information, or conceals for the purpose of misleading, information concerning any fact material thereto, commits a fraudulent insurance act, which is a crime, and shall also be subject to a civil penalty not to exceed five thousand dollars and the stated value of the claims for each violation."

On the reverse side of the form is information about promptly notifying the Board and the carrier "of any and all work activity, for any employer, or in your own business, whether that work activity is paid or unpaid." The form concludes:

"The Workers' Compensation Board and the State Insurance Fund routinely ask injured workers who are receiving wage replacement benefits about their work history since the time of the accident. It is important that you answer these questions truthfully. If you intentionally conceal work activity, you may be prosecuted criminally for insurance fraud, workers' compensation fraud and other crimes.

Please fill out the form printed on the front of this notice, and return it to us promptly, so that we can review your case and confirm your eligibility for continuing payments.

If you have any questions about work activity while collecting workers' compensation benefits, you should contact your attorney or representative, the Workers' Compensation Board or The State Insurance Fund."

The forms were mailed to the claimant at two different Rochester, New York, addresses, but it does not appear that any of the forms were copied to the claimant's attorney.

On the form signed December 14, 2008, claimant indicated that she worked 20-40 hours per week at an hourly rate of $9.75 at Lifetime Assistance as a direct care specialist from December 29, 2007, to April 14, 2008. On the form signed April 15, 2009, she indicated again that she worked at Lifetime Assistance from January 2008 to April 2008 for 40 hours per week, earning $9.90 per hour. She repeated that same information on forms signed July 8, 2009, August 15, 2009, and September 27, 2009.

A notice was sent to the parties that a hearing would be held on January 25, 2010, for the testimony of claimant, Brian Wald (sic), Fred Van Scott, and Paul Applebee on the issue of WCL § 114-a. Since claimant did not attend the January 25th hearing, a hearing was scheduled for February 10, 2010, to take the testimony.

At the hearing on February 10, 2010, claimant was not present, but testimony was taken from the carrier's witnesses.

Fred Van Scott testified as follows. He is a field investigator for ICS Merrill located in Jacksonville, Florida. He was involved with the investigation of claimant on July 21, 23, 30, 2009; August 12, 17, 19, 25, 31, 2009; and September 2, 2009. Three investigators were involved in the surveillance, and he compiled the report which was a compilation of all the videotapes taken. He confirmed claimant's identity with her son. He also knew claimant from when he worked at the Episcopal Senior Life Community as a security manager as claimant worked there too. He took her ID picture there. Mr. Van Scott identified the surveillance report (Exhibit 1) and testified that it summarizes his surveillance periods.

Mr. Van Scott testified that he proceeded to claimant's address on July 21, 2009, and learned from her son that she would be home after 5 o'clock. He continued that he followed claimant to the Highlands of Brighton on July 23, 2009, a skilled nursing facility in Rochester, and observed her entering the facility wearing apparel similar to that of a nurse's aide or assistant. He confirmed with his acquaintance, the facilities manager at Highlands, that claimant had been in orientation there on July 22nd.

On July 23, Mr. Van Scott testified, claimant, wearing a light colored top and white scrubs, entered the Highlands facility by 6:55 a.m. through the rear employee entrance. On July 30th and August 12th, he observed claimant with blond hair entering the Highland facility through a rear entrance. On August 17th, he observed claimant at 2:49 p.m., wearing what appeared to be nursing attire and carrying a large black bag and a purse, enter the Highland facility. On August 19th, he observed claimant being dropped off at the Highland facility at which time she was carrying a purse and a cooler type bag over her left shoulder. On August 25th, he observed claimant departing the Highland facility at 11:13 p.m., and on August 31st, he observed claimant exiting the main entrance to the facility at approximately 11:15 p.m. At that time she was wearing a flowered top with blue scrub type slacks. The last time he observed claimant was on September 2nd, at 11:06 p.m. walking from the front entrance of the Highland facility toward her vehicle. She was wearing a flowered multi-colored top and blue scrub slacks.

On cross examination, Mr. Van Scott admitted that he used a pretext or lied when speaking with claimant's son and the facilities manager at Highlands. When he took claimant's ID picture at the Episcopal Senior Life Community, he remembered her name and that she was a short black female of heavy stature. He also remembered her face. He saw her five to six times there and had her in orientation class too.

On redirect, Mr. Van Scott testified that he spoke with the claimant at the Episcopal Senior Center and that they were acquainted on a professional basis.

Paul Appleby testified that he is a field investigator for ICS Merrill since August of 2007. He was involved in the investigation of claimant. He observed claimant on September 4, 2009, arriving at the Highlands of Brighton at 2:41 p.m.

On cross examination, Mr. Appleby testified that he confirmed that the person he was observing was the same person previously recorded on the video. He did not establish his own independent verification of the individual. He did not ask the person her name.

At the hearing on February 10, 2010, the carrier submitted as exhibits the surveillance report (Exhibit 1), the DVD video (Exhibit 2), and the WA-1's described earlier (Exhibit 3). Claimant's counsel objected to all three exhibits being admitted into evidence. As to the WA-1's (Exhibit 3), he asked that they be precluded in that they were not sent to the claimant's attorney's office. Counsel for the carrier responded that the WA-1's "are automatically sent from our computer directly to the Claimant" (transcript 2/10/10, p. 32). The WCLJ thereupon reserved decision on the issue and directed the carrier to notify claimant's counsel within fifteen days "if any of the documents in carrier Exhibit 3 were sent to Claimant's attorney" (decision filed February 16, 2010).

By letter dated February 17, 2010, the State Insurance Fund advised claimant's counsel that "[i]t is the State Insurance Fund's normal process to send the WA-1's directly to the claimants. These forms are most frequently automatically generated by our computers."

The WCLJ filed his reserved decision on June 3, 2010. On the issue of admissibility of the WA-1 forms, the WCLJ found that the WA-1 forms should not be precluded because three prior Board decisions have held that it is not improper for the carrier to send the WA-1 form letter to the represented claimant without first receiving permission of the claimant's representative and without sending copies to the claimant's representative.

On the issue of a WCL § 114-a violation, the WCLJ found a violation based upon the adverse inference from claimant's refusal to appear at hearings and to be questioned regarding her work activities, the DVD surveillance video, the testimony of the carrier's investigators, and the WA-1 forms containing claimant's signature. The WCLJ concluded such evidence was credible and showed that claimant was working at Highlands of Brighton in contradiction to her false statement of a material fact on the WA-1's that she only worked for Lifetime Assistance. Thereupon, the WCLJ found that claimant is permanently disqualified from receiving workers' compensation benefits from July 23, 2009, onward.

LEGAL ANALYSIS

Claimant's counsel filed an application for review of the WCLJ's reserved decision on June 23, 2010. Claimant's counsel argues that the WA-1's must be precluded because they were submitted directly to the claimant in violation of Rule 4.2 (22 NYCRR 1200.33[a] and [b]). He continues that with the "improperly obtained evidence precluded, there is NO statement from the claimant that she was working," there is no evidence to support a finding of a 114-a violation, and that the proper issue is reduced earnings.

The carrier's counsel counters that mailing the WA-1's directly to the claimant to sign is proper under previous Board decisions and therefore, the WCLJ was correct in receiving them into evidence.

Rules of Conduct Involving Communication with Parties

At the time of indexing a claim for compensation, the parties are identified: the claimant and the employer (12 NYCRR 300.37[b]). Generally, in subsequent matters or proceedings before the Board on the claim, both parties are represented: the claimants by attorneys or Board licensed representatives (12 NYCRR 300.2[8]; 302-1.1[a]) and the employers by their insurance carriers and their agents or third party administrators (WCL § 50; 12 NYCRR 317.2[d]).

Attorneys-at-law or Board licensed representatives who represent claimants must file with the Board a notice of retainer and appearance (OC-400) "immediately upon being retained. The attorney ... shall also transmit a copy of such notice to the insurance carrier, self-insured or other representative of the employer at the time of filing" (12 NYCRR 300.17[a]).

Attorneys-at-law in New York State are governed by the Rules of Professional Conduct which provides in part at 22 NYCRR 1200.0 [Rule 4.2 Communication with person represented by counsel]:

  1. (a) In representing a client, a lawyer shall not communicate or cause another to communicate about the subject of the representation with a party the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the prior consent of the other lawyer or is authorized to do so by law.
  2. (b) Notwithstanding the prohibition of paragraph (a), and unless otherwise prohibited by law, a lawyer may cause a client to communicate with a represented person unless the represented person is not legally competent, and may counsel the client with respect to those communications, provided the lawyer gives reasonable advance notice to the represented person's counsel that such communications will be taking place" (emphasis supplied).

Similarly, Board licensed representatives for claimants and self-insurers are governed by Rules of Conduct expressed in 12 NYCRR 302-2.6 which provides in part:

"A representative should ... communicate with an adverse party who is represented by an attorney or licensed representative only through such attorney or representative."

As to communications involving a claimant, the WCB, citing Rule 4.2 for attorneys, issued Subject Number 046-309 entitled "Return to Work Policy" on May 14, 2009, which provides in relevant part:

  1. Communications Involving the Claimant:

    If a claimant is represented by an attorney, and Form OC-400 (Notice of Retainer/Substitution) has been filed with the Board, then an attorney-client relationship has been established and any communication with the claimant by the employer and/or carrier's attorney that is related to the claimant's workers' compensation case must be initiated through the claimant's attorney (see 22 NYCRR 1200.33(a) [Rule 4.2]). The only exception is if the employer and/or carrier's attorney has the consent of the claimant's attorney or licensed hearing representative to engage in such communication or such contact is authorized by law."
  2. Communications Involving the Claimant's Counsel:

    The employer or carrier's attorney is not permitted to communicate directly with a represented claimant concerning his/her workers' compensation case and must communicate only with the claimant's attorney or licensed hearing representative (see 22 NYCRR 1200.33(a) [Rule 4.2])...." (emphasis supplied).

The Board's General Counsel has emphasized the necessity of complying with the Board's Communications Guidelines regarding the carrier's contacts with represented claimants in a letter dated November 5, 2009, to the carrier of record in this case.

Admissibility of WA-1's

The Court of Appeals has commented that the disciplinary rules of conduct for attorneys are not statutes, but a "legal profession's document of self-governance, embodying principles of ethical conduct for attorneys as well as rules for professional discipline (cite omitted). While unquestionably important, and respected by the courts, the code does not have the force of law" (cite omitted) (Niesig v Team I, 76 NY2d 363 [1990]). The Court went on to say about DR 7-104(A)(1), now Rule 4.2: it "fundamentally embodies principles of fairness. 'The general thrust of the rule is to prevent situations in which a represented party may be taken advantage of by adverse counsel; the presence of the party's attorney theoretically neutralized the contact'" (cite omitted) (id.). The Court, in interpreting the rule, noted that it must strike a correct balance, and articulate a clear rule that minimizes uncertainty, yet is practical and workable (id., see also Siebert & Co., Inc. v Intuit Inc., 8 NY3d 506 [2007]).

Generally, New York follows the common law rule that absent some constitutional, statutory, decisional authority, or overriding policy mandating suppression, violation of a disciplinary rule in a civil case does not lead to exclusion of the evidence gathered during the violation (see Stagg v New York City Health and Hospitals Corp., 162 AD2d 595 [1990]; Radder v CSX Transportation, Inc., 2009 NY Slip Op 9847 [2009]; see also Prince, Richardson on Evidence § 4-104 [Farrell 11th ed.]). Nevertheless, the Workers' Compensation Board is not "bound by common law or statutory rules of evidence or by technical or formal rules of procedure...." (WCL § 118).

In the context of a workers' compensation case, the New York State Bar Association issued Opinion 846 on October 27, 2010, on the issue of contacts by non-lawyer insurance representatives with workers' compensation claimants represented by counsel. In addressing Rule 4.2, it found that Rule 4.2 is violated when (1) the carrier's attorney sends a form to a specific claimant represented by counsel, or (2) when the carrier's attorney directs a non-attorney to send a form to a specific claimant represented by counsel. Nonetheless, the Bar Association Opinion adds, where the carrier's attorney directs the insurance company's non-lawyer agents to send a form to a specific claimant, Rule 4.2(b) applies and there is no violation of Rule 4.2 as long as reasonable advance notice is given to the claimant's counsel. The Bar Association indicated that reasonable advance notice

"must be provided in a manner and with enough time so that the receiving lawyer has a reasonable amount of time, under all the circumstances, to contact his or her client regarding the planned communication."

The Bar Association Opinion, however, did not find a violation of Rule 4.2 when (1) the carrier's non-attorney acting on his own sends the form to a claimant represented by counsel, or (2) a carrier's computer process without human intervention sends a form on a regular basis to claimants. The Bar Association Opinion concluded "that the fact that an attorney designed or assisted in designing a form to be sent to claimants generally - some of whom may be represented by counsel - does not, for the purposes of Rule 4.2 constitute 'causing' the carrier to communicate with those claimants who are represented." Interestingly, the Bar Opinion failed to address the fact that an attorney will use the information from the form notwithstanding the fact that the attorney may not have played a direct role in preparing or submitting the form to the claimant.

In contrast to the Bar Association Opinion, the State of New York Insurance Department has issued a number of opinions from its Office of General Counsel which indicated that an insurer may not communicate directly with a claimant represented by counsel (Opinions dated November 21, 2006, February 18, 2005, and July 12, 2001). In its opinion letter dated November 21, 2006, it stated:

"The Insurance Department's consistent position on this matter is that once a claim is filed and the insurer knows that the third party claimant is being represented by counsel, ethical standards of conduct require that any necessary communications be made to the counsel rather than to the third party claimant.

An insurer, or its representatives, may not communicate directly with a claimant represented by counsel without counsel's consent as there is a real or potential conflict of interest inherent in the unauthorized communications."

Like the common law, the Board is not bound by either the advisory Opinion of the Bar Association or the Opinions of the Insurance Department. Rather, as the Court of Appeals instructs, the Board must fashion a rule that is balanced, practical, and workable so that it incorporates the necessary flow of information such that it protects the substantial rights of both parties.

The Board, in adopting its code of conduct for licensed representatives and its policy statement on ex parte communications with claimants represented by attorneys, clearly announced that such communication be accomplished only through the attorney or representative. The Board finds that such a rule embodies principles of fairness, prevents an unsophisticated claimant from being taken advantage of, and preserves the attorney/client relationship announced in the Notice of Retainer and served upon the parties. To eviscerate the rule by allowing the communication to be initiated by either non-attorneys or computers is neither logical nor rational in the adversarial forum of workers' compensation since all communications deal with the compensation case and ultimately the claimant's entitlement to benefits. Moreover, it is important to note that the fruits of the "non-attorney" communications with claimants are ultimately used by opposing counsel. Finally, having differing rules for licensed representatives and attorneys is not workable.

The provisions of this communications rule can be accomplished when simply the carrier (the employer's legal representative) insures that its written communications with a claimant have been simultaneously copied to the claimant's attorney or licensed representative (hereinafter referred to as representative), and the claimant's representative has simultaneously copied its written communications with the employer to the carrier. Communications between the claimant's representative and the carrier are not affected by this rule because the employer, not the carrier, is the client.

The carrier's act of simultaneously copying correspondence to the adverse parties' representative is familiar in workers' compensation practice as it is required by various Board regulations (see forms C-7, C-8/8.6, C-8.4, C-300.34, C-669, PH 16.2, RB-89, RFA-2, C-8.1). It is neither burdensome nor impractical for a carrier to simultaneously copy its own WA-1 form requesting information from the claimant to the claimant's representative since it already has notice by way of the OC-400 that the claimant has retained counsel relative to his/her compensation claim. Simultaneously copying the form to the claimant's representative provides sufficient advance notice to that representative that the carrier is seeking information from the claimant as long as the form itself specifically provides in a predominate way that a claimant has the right to speak with his/her representative prior to responding, and the form allows for a reasonable time in which to respond. Of course, if the carrier or its attorney or agent is actually meeting with or speaking to the claimant in person relative to his/her workers' compensation case, the claimant's representative must be advised prior to the meeting or conversation so that he/she has sufficient time either to participate or advise the claimant accordingly.

The Board notes that in articulating this policy on a carrier's communications with a represented claimant, it is departing from its previous reasoning that the requirement to "communicate with an adverse party who is represented by an attorney or licensed representatives only through such attorney or representative" is limited only to licensed representatives whom it regulates and does not apply to claimants, employers and carriers themselves (Matter of Nick Tahou's Inc., 2008 NY Wrk Comp 70210028 [WA-1 forms not precluded on question of WCL § 114-a violation], citing Matter of Fink Baking Co., 2007 NY Wrk Comp 34566 [claimant contacted by carrier's investigator to complete the WA-1 questionnaire; carrier has absolute right to have direct contact with claimant on behalf of its insured; WA-1's considered] ; Matter of NYS Dept. of Corrections, 2001 NY Wrk Comp 59800320 [carrier has absolute right to send G-2 and C-39 questionnaires about work activities to claimant; counsel should so advise a client at the onset of representation]; see also Matter of New York State Dept. of Corrections, 2010 NY Wrk Comp 59121537 [WA-1's form not precluded as claimant not prohibited from discussing forms with counsel prior to completion and return to carrier]). Rather, the Board now finds that this bright line rule applies to both parties to a compensation claim, a finding that will minimize uncertainty but will not hamper a carrier's obligation of appropriate investigation on behalf of its policy holders.

The Board notes that this bright line rule concerning simultaneously copying claimant's representative on written correspondence to a claimant, applies equally to documentation submitted with applications to reopen pursuant to 12 NYCRR 300.23(c)(1). Supporting affidavits constituting the grounds for reopening must contain the statement that all attached written correspondence to the claimant (at the claimant's address where compensation checks have been sent) has been copied to claimant's representative, as long as the claimant's representative has filed a Notice of Retainer (OC-400) as required 12 NYCRR 300.17(a) with the carrier, and as long as such retained attorney has not thereafter been substituted or dismissed by the claimant. This is a departure from the Board's prior decisions concerning affidavits and the supporting documentation necessary to meet the burden of raising an issue of fact sufficient to justify its application to reopen (see e.g. Matter of Smith's Tire Shop, 2010 NY Wrk Comp 5881 7870 [2010]); Matter of Green Bus Lines, 2010 NY Wrk Comp 448960 [2010]; Matter of New York State Dept. of Mental Health, 2010 NY Wrk Comp 50014280). Nonetheless, such departure is necessary to avoid situations wherein the documentary evidence presented is not ultimately admissible in a compensation proceeding on the issue raised.

In the instant case, the carrier was advised that claimant was represented by counsel by the OC-400 on or about December 19, 2005. Accordingly, the carrier had knowledge that claimant was represented by counsel when it sent its five WA-1 forms dated December 18, 2008, April 15, 2009, July 8, 2009, August 15, 2009, and September 27, 2009, to the claimant. While it could easily have simultaneously copied those forms to the claimant's attorney, the carrier did not do so.

Accordingly, the Board finds that the carrier's computer mailed WA-1's are a direct communication with a represented claimant, without advising the claimant's attorney of such communication; are contrary to principles of fairness; create an unacceptable risk that unsophisticated claimants may be misled; and interfere with the attorney/client relationship announced in the Notice of Retainer and served upon the parties. Therefore, as that direct communication by the carrier with a represented claimant, without simultaneously copying the claimant's representative with the communication, is improper and irregular, the information obtained from such contact is not admissible.

WCL § 114-a Disqualification

WCL § 114-a(1) provides in part:

"If for the purpose of obtaining compensation pursuant to [WCL § 15], or for the purpose of influencing any determination regarding any such payment, a claimant knowingly makes a false statement or representation as to a material fact, such person shall be disqualified from receiving any compensation directly attributable to such false statement or representation." (WCL § 114-a[1]).

Finding a violation of Section 114-a subjects a claimant to both mandatory and discretionary penalties or disqualification. A mandatory disqualification of forfeiture is applicable when a claimant received compensation benefits which were directly attributable to the material misrepresentation. In addition, the claimant may incur a discretionary penalty in an amount equal to the mandatory disqualification, or may be disqualified from receiving all or a portion of further lost wage benefits (see Losurdo v Asbestos Free, Inc., 1 NY3d 258 [2003]; Matter of Peguero v Halo's Rest., 24 AD3d 986 [2005]).

In the instant case, the claimant's response to the WA-1 forms that formed the basis for the WCLJ's finding that claimant had made false statements must be precluded. However, that does not end the inquiry. The issue remains whether the record contains other evidence sufficient to find that claimant made a false statement or representation in connection with her work activity. The mere failure of a claimant to disclose work activity, unconnected to any assertive conduct, does not constitute a false statement or representation pursuant to WCL § 114-a. But, a claimant's omission of a material fact in the course of an assertive act of conveying information to the carrier or Board, may be deemed a false representation under WCL § 114-a. (Matter of Fighera v New York City Dept. of Envtl. Protection, 303 AD2d 861 [2003]).

Claimant's Work Activities

The Board finds that credible evidence in the record shows that claimant was working at a nursing facility called the Highlands of Brighton as of July 23, 2009. This conclusion is based on the following undisputed facts: the claimant had a certificate in nursing; she was partially disabled and capable of limited duty pursuant to a C-4 report dated June 15, 2009; she faxed a resume to the Highlands of Brighton on June 22, 2009, wherein she stated she would like to apply for a CNA position; and she was subsequently observed by the carrier's investigators entering the Highlands facility wearing scrubs on various days from July 23, 2009, through September 4, 2009.

In spite of the fact that claimant was awarded continuing benefits of $157.78 per week from January 28, 2009, onward (decision filed January 30, 2009), there is no evidence in the record that shows that claimant notified the Board or the carrier of her work activities at the Highlands.

Claimant's Representation

Credible evidence in the record shows that claimant, through her attorney, submitted to the Board on August 7, 2009, a copy of a faxed document dated June 22, 2009, to Highlands of Brighton that she was applying for a CNA position. She did not, however, disclose to the Board at that time, that she had in fact secured a job at the Highlands of Brighton, and had been working there as early as July 23, 2009, the day the carrier's investigator observed her wearing scrubs and entering the facility through an employee entrance at 6:55 a.m. By submitting the work search report, claimant made the false representation that she was searching for work at Highlands when in fact she was employed at Highlands.

Failing to accurately disclose work activities to the Board for the purpose of continuing benefits constitutes a violation of Section 114-a (see Matter of Bottieri v New York State Dept. of Taxation and Finance, 27 AD3d 1035 [2006] [claimant made false statements by reporting on questionnaires that he was not working when, in fact, he was working in his brother's automotive business at the time]). Additionally, a negative inference may be drawn from claimant's non-appearance at four hearings scheduled to resolve the issue of a Section 114-a violation (see Matter of Suburban Construction Co., 2008 NY Wrk Comp 3020 1690 [2008]).

In that claimant's submission of her work search report was an assertive act constituting a knowing false representation of a material fact, the Board finds that there is sufficient credible evidence in the record upon which to find a violation of Section 114-a and to impose a mandatory disqualification of awards made subsequent to July 23, 2009, and a discretionary disqualification of wage benefits on a permanent basis.

CONCLUSION

Based upon the above, the WCLJ's reserved decision filed June 3, 2010, is modified, finding that the WA-1 forms are inadmissible because the communication with claimant was not copied to her attorney, and affirming the finding of a violation of WCL § 114-a based on the preponderance of the evidence as articulated herein.