Workers' Compensation Defense Playbook Decoded

Welcome back. If you’re seeing a different name on this newsletter, that’s intentional. A quick word on what’s changing and why, and then we’ll get into a Third Department decision from today that I cannot stop thinking about.

Why the rebrand

For the past while, this newsletter has been called “Workers’ Compensation Insights,” which is accurate, professional, and — if I’m being honest with myself — instantly forgettable. There are a hundred newsletters in this space that could be called Insights. There is one person writing this one who spent years as Deputy Chief of the Workers’ Compensation Division at the NYC Law Department before switching to representing injured workers full-time. That’s a relatively unusual career path, and it gives me a perspective most claimant attorneys don’t have: I know what the defense is going to do because I used to be the one doing it.

So going forward, that’s the angle. Each week, I’m going to take a recently issued decision and walk you through what the defense actually did, why they did it, what worked, what almost worked, and what it means for your claim or your practice. The goal is to make this the most useful 10-minute read in NY workers’ comp — for injured workers trying to understand what’s happening to them, and for fellow practitioners who want a peek at the playbook from the other side.

Now, to the case.

Matter of Shakil v. New York City Transit Authority — or, How to Accept a Claim Without Actually Accepting It

The Setup

Mehwish Shakil worked as a customer service agent for NYC Transit, sitting in one of those enclosed booths in a subway station. In January 2021, an emotionally disturbed person came up to her booth, started banging on the window, and screamed threats to kill her. She did what anyone would do. She pushed the emergency call button, got authorities involved, took some unpaid leave, came back, had a panic attack on the job, and filed a workers’ comp claim for anxiety and PTSD.

She did everything right. She got medical treatment. She filed her claim. Her supervisor told her to file the claim. Her medical provider documented causally related anxiety and acute stress reaction. By any common-sense measure, this is a claim.

She lost. And the way she lost is the entire point of this issue.

The Defense Move

This is where it gets interesting, because there are actually two defense plays running in parallel, and the court blessed both of them.

Play one: The “L-With Liability” sleight of hand. When a self-insured employer files a First Report of Injury electronically, there are fields they have to fill in. One field is “Agreement to Compensate.” For a medical-only claim — meaning the employer is paying medical bills but not indemnity — the EDI system in 2021 required the filer to enter “L-With Liability.” Not an option. The system rejected anything else.

So the employer entered “L-With Liability.” Sounds like an admission, right? Sounds like they accepted the claim. The claimant’s attorneys certainly thought so, and argued exactly that.

The Board said no. The Third Department agreed. The reasoning: because the EDI system forced the employer to enter that designation for medical-only claims, the entry can’t be construed as a binding acceptance. The employer had no choice, so no waiver. The court even rejected the “gaming the system” argument, essentially saying you can’t game a system that’s checking the box for you.

Read that again, because it matters: an employer can pay your medical bills, file paperwork that literally says “With Liability,” and then turn around months later and controvert the entire claim — and that’s fine, because the box-check was mandatory.

Play two: The “Don’t index, don’t worry” maneuver. Under Workers’ Compensation Law § 25(2)(b), if the Board indexes a claim against an employer, the employer has 25 days to file a notice of controversy or they’re barred from contesting key elements like employment status or whether the injury arose out of work. That’s a real deadline with real teeth.

But here’s the catch: that 25-day clock only starts running if the Board indexes the case. And under 12 NYCRR 300.37(c)(1), if the employer files something first — including a FROI accepting the claim or paying without prejudice under § 21-a — the Board doesn’t index it.

So what happened here? Employer files the FROI. Board doesn’t index. The 25-day clock never starts. The employer waits until the first hearing in November 2021 — five months after the original FROI — to controvert the claim for the first time.

The penalty for waiting that long? Three hundred dollars. That’s it.

Three hundred dollars to keep a contested claim alive for five months while the claimant sits in limbo.

The Counter

This one stings because there isn’t a clean counter to either play, at least not within the existing rule set. The court was straightforward about that. But there are things that could have shifted the dynamic, and they’re worth knowing for the next case that looks like this one:

The 45-day hearing request. This is buried in footnote 3, and it’s the most important practical takeaway in the whole opinion. Under § 25(2)(a), when a claimant is disabled, not working, has medical evidence of work-relatedness, and the employer hasn’t paid or controverted, the claimant can request a hearing to be held within 45 days. Shakil’s counsel filed a Request for Further Action in July 2021 but did not invoke the 45-day hearing provision. Had she done so, the controversy gets forced into the open within weeks instead of months. The leverage is completely different.

Pushing for indexing. The claimant can affirmatively trigger indexing under 12 NYCRR 300.37(b)(1) by submitting the C-3, the medical report, and the medical authorization. Once those three documents are in, the Board has to index within five business days, which starts the 25-day clock. If you wait for the Board to index on its own initiative, you may be waiting forever. Take the wheel.

Re-arguing the medical-only classification. The court noted in footnote 1 that the claimant didn’t preserve the argument that the claim shouldn’t have been classified as medical-only in the first place. That argument might have had legs — she was out of work for three months and had a panic attack on her return — and a different classification would have changed the entire EDI analysis. The lesson: preserve everything at the Board level, even arguments you’re not sure you’ll need on appeal.

The Takeaway

If you’re an injured worker: The fact that the insurance carrier is paying your medical bills does not mean your claim is accepted. It does not mean they can’t fight you later. It does not mean you’re safe. If you’re out of work and not getting indemnity payments, that’s a problem you need to solve now, not later — and there are mechanisms that force the issue on a 45-day clock if you know to ask for them. Most people don’t know to ask.

If you’re a claimant attorney: Read footnote 3. Then read it again. The 45-day hearing under § 25(2)(a) is an underused tool, and Shakil is going to be cited by every defense attorney in the state who wants to slow-walk a controvert. The procedural counter exists. Use it early or don’t get to use it at all.

The broader point: The Legislature did partially fix the underlying merits problem — § 10(3)(c) now says the Board can’t disallow PTSD, acute stress disorder, or major depressive disorder claims based purely on a finding that the workplace stress wasn’t worse than usual. The court flagged this in footnote 4 and noted that the parties hadn’t briefed whether the amendment applies retroactively. So Shakil loses, but the next claimant in her position likely doesn’t — at least not for the same reason. Cold comfort for her, useful precedent for everyone else.

Procedurally, though, the EDI loophole and the indexing workaround are both still very much alive. The Board has since changed the EDI system so “L-With Liability” is no longer mandatory for medical-only claims, but the underlying logic of the decision — that a procedural box-check isn’t a substantive admission — is going to outlive that particular technical fix.

Hope you like the new format. See you next week.

Levi Grosswald represents injured workers in New York. He previously served as Assistant Corp Counsel and Deputy Chief of the Workers’ Compensation Division at the NYC Law Department. Nothing in this newsletter is legal advice.