Electronic FROI “L-With Liability” Entry Is Not a Binding Acceptance Where System-Required; SROI-Employer Paid Preserves One-Year Controvert Period Under WCL § 21-a in Unindexed Claims

1. Introduction

Matter of Williams v New York City Tr. Auth. (2026 NY Slip Op 03707 [3d Dept 2026]) is a Third Department workers’ compensation decision addressing two recurring procedural flashpoints in New York practice: (1) whether an employer’s electronic filing entries on a First Report of Injury (FROI)—specifically the “Agreement to Compensate” field showing L-With Liability—constitute a binding acceptance that waives later controversion; and (2) which statutory deadline governs the timeliness of a notice of controversy when a claim was never indexed and the employer initially pays benefits “without liability.”

The parties were claimant Charles O. Williams, a train conductor, and the self-insured employer, the New York City Transit Authority, with the Workers’ Compensation Board as respondent. Substantively, claimant sought benefits for PTSD allegedly caused by a March 15, 2021 fatal incident involving a passenger falling between train cars. Procedurally, claimant argued the employer’s May 7, 2021 controversion was late and therefore preclusive; on the merits, claimant argued the PTSD was compensable as an accident arising out of and in the course of employment.

2. Summary of the Opinion

  • No waiver/acceptance from FROI entry: The court upheld the Board’s determination that the FROI entry L-With Liability did not amount to a binding acceptance of liability, given limitations in the Board’s electronic filing system at the time for “Medical Only” claims.
  • Timely controversion under WCL § 21-a: Because the employer filed an SROI–Employer Paid form on March 30, 2021 reflecting payment of indemnity benefits “without liability” for March 16–29, 2021, the employer preserved the statutory one-year period to investigate and later controvert under Workers’ Compensation Law § 21-a (1). The May 7, 2021 notice of controversy was therefore timely.
  • Claim disallowed on the merits (pre-2025 standard): Substantial evidence supported the Board’s finding that the workplace stressor was not “greater than that which other similarly situated workers experienced in the normal work environment,” and thus did not constitute an “accident” under the governing standard applied at the time of the Board’s decision. The PTSD claim was disallowed.

3. Analysis

A. Precedents Cited

(i) The case’s prior appellate history: 214 AD3d 1099 [3d Dept 2023]

The court situates this appeal as the continuation of a remittal ordered in the earlier decision (214 AD3d 1099 [3d Dept 2023]). In that prior ruling, the Third Department reversed because the Board had not addressed claimant’s waiver/acceptance arguments about the FROI and had not articulated a basis for timeliness. The 2026 opinion is thus the court’s review of the Board’s post-remittal determinations on those questions and on the merits.

(ii) System-required “with liability” entry on FROI: Matter of Shakil v New York City Tr. Auth

The court treats Matter of Shakil v New York City Tr. Auth, ___ AD3d ___, 2026 NY Slip Op 02897 [3d Dept 2026] as essentially controlling on the FROI issue. The reasoning adopted is that, due to the electronic filing system’s constraints at the time, an employer handling “Medical Only” claims was required to select L-With Liability, so that entry is not reasonably construed as a deliberate, binding concession of compensability that waives later controversion. The court also relies on Shakil to reject the argument that 12 NYCRR 300.37 (c) effectively creates an “unlimited time” to controvert without claimant protection.

(iii) Timeliness and “accident” standards: Matter of Hogan v ABF Frgt. Sys., Inc., Matter of Fernandez v New York City Tr. Auth.

For the standard of review, the court cites Matter of Hogan v ABF Frgt. Sys., Inc., 246 AD3d 1201 (3d Dept 2026) and Matter of Fernandez v New York City Tr. Auth., 224 AD3d 1066 (3d Dept 2024) for the proposition that whether an accident occurred is a fact question for the Board, and the Board’s determination stands if supported by substantial evidence.

(iv) Governing law for stress-induced psychological injury at the time: Matter of McLaurin v New York City Tr. Auth., Matter of Waddy v Manhattan & Bronx Surface Tr. Auth., Matter of Spillers v Health & Hosp. Corp.

The court frames the merits analysis through Matter of McLaurin v New York City Tr. Auth., ___ NY3d ___, 2025 NY Slip Op 06529 (2025), which reiterates (a) psychological and physical injuries are compensable to the same extent, but (b) both still require proof of an “accident” arising out of and in the course of employment. Importantly, McLaurin is used here to describe the then-applicable “greater-than-normal stress” accident test for emotional stress claims.

The Third Department further relies on Matter of Waddy v Manhattan & Bronx Surface Tr. Auth., 234 AD3d 1141 (3d Dept 2025), lv denied 43 NY3d 906 (2025) and Matter of Spillers v Health & Hosp. Corp., 225 AD3d 1100 (3d Dept 2024) for the operational framework: the Board must decide whether the stressor is one the claimant should reasonably and ordinarily be expected to encounter in the normal work environment (non-accidental) or is unusual/unexpected/extraordinary (accidental).

(v) Substantial evidence examples: Matter of Cook v East Greenbush Police Dept.

The court analogizes to Matter of Cook v East Greenbush Police Dept., 114 AD3d 1005 (3d Dept 2014), lv denied 23 NY3d 904 (2014) as supporting the proposition that the Board may conclude certain traumatic exposures are nevertheless within the ordinary expectations of similarly situated workers and thus not “accidental” under the then-governing stress test.

(vi) Retroactivity raised too late and rejected: Uzamere v State and Matter of Croom v New York State Dept. of Corr. & Community Supervision

The opinion’s footnote addresses claimant’s attempt to invoke the 2025 legislative change—Workers’ Compensation Law § 10 (3) (c)—to bar disallowance of PTSD claims based on a “not greater than normal work stress” finding. The court notes the argument was raised for the first time in a reply brief and thus not properly before it, citing Uzamere v State, 240 AD3d 1020 (3d Dept 2025). It also states that, in any event, for the reasons set forth in Matter of Croom v New York State Dept. of Corr. & Community Supervision (___ AD3d ___ [3d Dept 2026] [decided herewith]), the retroactivity contention “lacks merit.” This signals alignment with Croom on non-retroactive application of the amendment to pre-effective-date Board decisions.

B. Legal Reasoning

(i) FROI “L-With Liability” and waiver

The claimant’s central procedural theory was that the employer’s FROI entry of L-With Liability should be treated as a binding acceptance, so that any later controversion would be barred. The court, following Matter of Shakil v New York City Tr. Auth, accepts the Board’s factual/administrative explanation: the electronic filing system at the time constrained filers such that selecting that entry was required for “Medical Only” claims. Because that entry was not a reliable indicator of a deliberate assumption of liability, the Board’s no-waiver conclusion was “reasonable” and upheld.

(ii) Indexing, 12 NYCRR 300.37 (c), and statutory deadlines

Claimant also argued that 12 NYCRR 300.37 (c)—which “dispenses with the need to index a claim where the claim is accepted”—could improperly extend the controversion timeline and undermine Workers’ Compensation Law § 25 (2) (b). The Third Department rejects this challenge (again, relying on Shakil), effectively treating the regulatory indexing mechanism and the statutory deadlines as capable of coherent operation where an employer preserves rights via recognized statutory tools (notably WCL § 21-a), rather than by exploiting a regulatory gap.

(iii) Timeliness grounded in WCL § 21-a (1)

The court affirms the Board’s alternative (and decisive) timeliness holding: the employer’s March 30, 2021 SROI–Employer Paid filing reflected that indemnity benefits were paid “without liability,” which is the hallmark of invoking Workers’ Compensation Law § 21-a (1). That statute allows an employer to make payments while reserving the right to controvert within one year. Because the employer controverted on May 7, 2021—well within one year—the notice was timely.

(iv) Merits: “accident” and the then-applicable “greater-than-normal stress” test

The Board disallowed the claim after finding the incident did not constitute an “accident” under the then-applicable standard for stress-induced psychological injury: claimant had to prove workplace stress greater than that experienced by similarly situated workers in the normal work environment.

Substantial evidence supporting the Board’s finding included testimony from management witnesses that train conductors/operators are trained to expect the possibility of train strikes, including use of a specific code (“12-9”) to communicate such incidents. Claimant himself acknowledged prior similar incidents (including one in 2007 and another after March 2021) and medical histories reflected multiple prior strikes. Although the March 15, 2021 event was tragic, the Board could rationally find it was not “unusual, unexpected or extraordinary” for similarly situated workers in this line of work as the law then defined “accidental” stress.

C. Impact

(i) Administrative filing entries will be construed in context, not formalistically

The decision reinforces that Board e-filing artifacts—particularly entries compelled by system design—will not automatically be treated as binding acceptances that waive defenses. Practically, litigants should expect the Board and courts to consider the operational realities of the e-filing platform when evaluating whether an employer made a true concession. The court’s footnote noting the Board’s September 26, 2024 elimination of the “L-With Liability” requirement for medical-only FROIs underscores that this was a system-driven issue.

(ii) Employers’ preservation of defenses via WCL § 21-a remains potent

The opinion highlights the continuing importance of the “pay without liability” mechanism. An employer that properly documents § 21-a payments can secure a one-year window to investigate and controvert, which can be case-dispositive on “preclusion” arguments even when indexing or § 25 (2) (b) timelines are contested.

(iii) Merits analysis is transitional in light of WCL § 10 (3) (c)

Although the claim here was evaluated under the former “greater-than-normal stress” accident test, the court flags (in Footnote 2) the 2025 amendment adding Workers’ Compensation Law § 10 (3) (c), which prohibits disallowing certain mental injury claims (including PTSD) on a finding that the stress was not greater than usual. The court’s reference to Matter of Croom v New York State Dept. of Corr. & Community Supervision indicates that, at least for Board decisions predating the effective date, claimants should not expect retroactive rescue via the amendment. For future cases, however, the substantive battlefield will shift away from comparative-stress proof toward other elements (causation, work-relatedness, credible medical evidence, exclusions/defenses not barred by the statute).

4. Complex Concepts Simplified

  • FROI / SROI: The First Report of Injury (FROI) starts the electronic claim reporting process; a Subsequent Report of Injury (SROI) reports subsequent actions such as payments, suspension, or denial.
  • “With liability” vs “without liability” payments: Paying “without liability” is a statutory device (WCL § 21-a) allowing temporary payments while the employer investigates. It preserves the right to later deny the claim within a defined period (one year).
  • Notice of controversy and preclusion: A notice of controversy is the formal denial/defense filing. If untimely under applicable rules, an employer can be “precluded” from raising certain defenses. This case holds the denial was timely because § 21-a was invoked.
  • Indexing: Indexing is the Board’s assignment of a formal case number and procedural posture. Disputes can arise about which deadlines apply when a case is not indexed, especially where regulations reduce indexing steps for accepted claims.
  • “Substantial evidence” review: On appeal, courts do not reweigh the proof; they ask whether the Board had enough evidence that a reasonable factfinder could reach its conclusion.
  • “Accident” for psychological injury (then vs now): At the time applied here, stress-based mental injury required proof of stress greater than that faced by similarly situated workers. The 2025 amendment (WCL § 10 [3] [c]) limits disallowance of certain diagnoses on that comparative-stress basis going forward.

5. Conclusion

Matter of Williams v New York City Tr. Auth. delivers two key procedural clarifications and one merits holding with broader significance: (1) an e-filing “L-With Liability” entry on a medical-only FROI—when system-required—does not constitute a binding acceptance that waives the right to controvert; (2) an SROI–Employer Paid filing documenting “without liability” indemnity payments can validly invoke Workers’ Compensation Law § 21-a (1), making a later denial timely within one year; and (3) under the pre-amendment framework, the Board may disallow PTSD where substantial evidence supports a finding that the stressor was not greater than what similarly situated transit workers ordinarily face.

The decision is best read as both an affirmation of deference to the Board’s factfinding and an appellate insistence that electronic filing mechanics be interpreted realistically—while also marking the doctrinal transition underway as WCL § 10 (3) (c) reshapes how PTSD and related claims will be litigated going forward.