Forfeiture of Workers’ Comp Benefits for Fraud in La. Applies Post-Misrepresentation Only

Case File

When a workers' compensation claimant indulges in fraud, he forfeits his right to obtain benefits, but is the forfeiture retroactive or only after the misrepresentation was made?

Case

Cousain v. Smitty's Supply, Inc., No. 2025-C-01318 (La. 06/29/26)

What Happened?

A worker was involved in a work-related motor vehicle accident, which he reported to his employer but reported no injuries. Two days later, the employer terminated the worker. The worker then reported neck and back injuries and filed a claim for compensation.

The worker testified that he sought emergency room care for his injuries two days after the accidents, but the medical records showed that he did not. Later, the worker reported that he made the representation about the emergency room visit due to "confusion." A workers' compensation judge rejected this argument, finding that the worker violated state law by willfully making false statements in his deposition to obtain workers' compensation benefits. Accordingly, the WCJ found that the worker forfeited any right to workers' compensation benefits, commencing on the date of the deposition in which the WCJ found the falsehood occurred.

The WCJ also found that before the misrepresentation occurred, the worker was temporarily totally disabled for 12 weeks and awarded him indemnity befits in the amount $6,437.40 and medical expenses of $1,251. The WCJ ordered the employer to pay $5,000 in attorney's fees for failing to pay indemnity benefits, $5,000 in attorney's fees for failing to pay or authorize necessary and related medical care, and $2,000 in attorney's fees for failing to authorize the worker's choice of physician. The WCJ imposed three separate penalties against the employer in the amount of $2,000 for each of the three violations.

The employer appealed the judgment to the appellate court, seeking a retroactive forfeiture of all benefits and arguing that all penalties and attorney's fees should be overturned.

The appellate court found that the employer satisfied its burden of proving the three requirements for forfeiture of workers' compensation benefits:

(1) There was a false statement or representation.

(2) It was willfully made.

(3) It was made for the purpose of obtaining compensation benefits.

The court also found that the forfeiture was effective at the time of the misrepresentation, which was after the time of the accident.

The employer appealed to the Louisiana Supreme Court, arguing that the forfeiture applied retroactively.

Rule of Law

Under Louisiana law, "it shall be unlawful for any person, for the purpose of obtaining or defeating any benefit or payment ... to willfully make a false statement or representation." An employee violating the law shall "forfeit any right to compensation benefits."

What the Louisiana Supreme Court Said

Looking to other parts of Louisiana workers' compensation law, the Louisiana Supreme Court found that it would be "inconsistent" to allow a blanket denial of benefits under one subsection with only a time-limited restitution remedy under another subsection.

"A retroactive interpretation would provide a more favorable remedy to the employer who denies benefits from the inception of the claim, while failing to afford a restitution remedy to the employer who pays in good faith," the court wrote.

In the court's analysis, where the employer successfully proves a violation of the misrepresentation portion of the statute, the WCJ "may" order restitution under one subsection and "shall" order forfeiture benefits accruing after the fraud under another subsection.

"Reading these subsections together and in light of one another to afford meaning to each, we find that the forfeiture is effective at the time of the misrepresentation, rather than at the time of the accident," the court wrote.

Verdict: The Louisiana Supreme Court affirmed the appellate court's ruling.

Takeaway

An employee found in violation of Louisiana's statute on misrepresentation forfeits the right to obtain workers' compensation benefits from the time the willful misrepresentation occurs. The forfeiture is prospective from the date of the misrepresentation forward and is not a retroactive loss of benefits to which the employee was entitled before the misrepresentation was made.

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