McKay v. Inalfa - Georgia Court of Appeals Decision

Our client’s workers’ compensation claim was denied by the Georgia State Board of Workers Compensation and we appealed to the Georgia Court of Appeals.

The issue in this case was: whether the “Rycroft” defense applies where the employer learns about the false representation after hiring the employee but before the injury in question and, despite that knowledge, retains the employee.

Court of Appeals Holding: The defense does not apply in those circumstances.

The Three Prongs of Rycroft

Under the Ga. Elec. Co. v. Rycroft, 259 Ga. 155, 158 (378 SE2d 111) (1989), when an employee intentionally misrepresents his physical condition to an employer, it may bar the claimant from receiving compensation.

All three elements below must be present to bar recovery of workers’ compensation benefits in Georgia. The three elements of what is also called the “Larson” test include:

1. The employee must have knowingly and willfully made a false representation as to his physical condition.
2. The employer must have relied upon the false representation and this reliance must have been a substantial factor in the hiring.
3. There must have been a causal connection between the false representation and the injury.

The Employer Was Using the Rycroft Defense As A Sword Rather Than A Shield

It is essential to consider the judicial purpose of the three-pronged test described in Rycroft. At common law, a contract obtained through fraud is voidable at the option of the injured party. The purpose of the Rycroft prongs is to provide additional protections for injured workers that otherwise would not be available in a “fraudulent inducement” case. See Dynasty Sample Co. v. Beltran, 224 Ga. App. 90 (Ga. App.1996) (discussing that “fraud in the inducement” of the type involved in Rycroft alone is insufficient to necessitate an employment contract’s voiding).

EXAMPLE: Imagine an employee who failed to disclose a prior back injury from a car accident but later suffered a hip fracture at work. If there is no causal connection between the prior back injury and the hip fracture, the third prong of Rycroft is not satisfied. However, under the common law fraudulent inducement defense, the employer would still be able to “void” the employment contract if they can show they would not have hired the employee. As such, you can say that the Rycroft prongs are for the employee’s benefit (to make the defense less harsh).

However, in Ms. McKay’s case, the Board applied an even harsher standard than the common law defense. It is very clear that under Georgia common law, this defense would have been waived. The Board’s holding was a clear violation of the spirit of the Rycroft test. Moreover, according to the Board’s holding, the employer could have returned Ms. McKay to work for a third time and still deny her compensation if she got reinjured. This would be an absurd result. Essentially, the employer would get an unlimited “get out of jail free card” for perpetuity.

We consider the Court of Appeals decision to be a common sense application of existing law. The Court of Appeals correctly held that they Rycroft defense was waived by the Employer. The Court did not allow the employer to use the defense as a sword rather than a shield. We are pleased with the outcome and believe that the Court of Appeals decision will help protect injured workers in the future.

The opinion can be accessed at: https://efast.gaappeals.us/download?filingId=5fdab3cf-62be-40bb-81c6-961ff959968d