Here’s What Happened
A high school teacher was injured when she slipped and fell from a bleacher while attending a state convention of the Beta Club, a national scholastic honor society. She contended her injuries arose out of and in the course of her employment. Her employer disagreed, noting that the teacher’s presence at the gathering was totally voluntary, that she was not required to serve as the high school club’s faculty adviser, that serving as adviser and attending the convention did not maintain or advance the teacher’s certification, and that the employer received no specific benefit from her attendance.
Should the teacher recover workers’ compensation benefits for her volunteer activities?
How Did the Court Rule?
In Clark County Bd. of Educ. v. Jacobs, [2008-SC-000222-WC] (February 19, 2009), the Supreme Court of Kentucky affirmed a ruling of state’s court of appeals that, in turn, approved the Worker’s Compensation Board’s award of benefits. At issue was whether the teacher was “otherwise serving the employer’s interests” at the time of the injury. The high court acknowledged that the injury occurred outside normal school hours and off school property and further indicated that self-improvement activities generally are outside the scope of the employment. Citing Larson’s Workers’ Compensation Law, ch. 27, §§ 27.01, et seq., the court observed, however, that the teacher’s attendance need not have been required in order to bring it within the employment. Here the school’s Beta Club was required to have an adviser and the teacher served in that capacity. She was not required to give up her pay on the days she attended the state convention. Not only did the school principal approve the formation of the school’s Beta Club and its trip to the convention, students who attended were excused from classes. The court also indicated that the teacher’s activities and the existence of the Beta Club assisted the employer in its overall mission of educating students. Considering all these factors, the teacher’s injuries occurred within the course and scope of the employment.
See generally Larson’s Workers’ Compensation Law § 27.03.
Tom Robinson, J.D. is the primary upkeep writer for Larson’s Workers’ Compensation Law (LexisNexis) and Larson’s Workers’ Compensation, Desk Edition (LexisNexis). He is a contributing writer for California Compensation Cases (LexisNexis) and Benefits Review Board – Longshore Reporter(LexisNexis), and is a contributing author to New York Workers’ Compensation Handbook(LexisNexis). Attorney Robinson is an authority in the area of workers’ compensation and we are happy to have him as a Guest Contributor to Workers’ Comp Kit Blog. Tom can be reached at: compwriter@gmail.com.
http://law.lexisnexis.com/practiceareas/Workers-Compensation
WC Cost Calculator to show the REAL COST of workers www.ReduceYourWorkersComp.com/calculator.php
WC 101 for the basics about workers comp. www.ReduceYourWorkersComp.com/workers_comp.php
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
Employers are often dismayed at the remote, passive role they are compelled to play in comp claims. Frequently, claims are contested which the employer believes are worthy. Also, the law firm appearing for the carrier often does not contact or coordinate with the employer and even remains unknown throughout proceedings. Even worse, the law firm or attorney assigned to a file may change from hearing to hearing. Surprisingly, there is no specific language in the law or the insurance contract which spells out who has the right to appoint an attorney or control the issues raised. Instead, the policy language provides that the insurance carrier has a "right and duty to defend," and some general principles have evolved over the past 80 years. Here are some considerations: 1-The principal parties to a comp claim are the employee and the employer. The insurance carrier is merely a "surety" who guarantees payment of awards although they sometimes seem to replace the employer at hearings. 2-The carrier is more likely to be familiar with compensation law and procedures than the employer and is more likely to know attorneys familiar with compensation. Therefore, it is more practical, in general, to have the carrier define the legal issues and select counsel. However, there are many situations where an employer should have their own legal advocate and the carrier has an obligation to inform employers when such situations exist. 3-When a carrier contests a claim it may be exposing an employer to a lawsuit for negligence if it succeeds. A carrier may be liable under its "errors and omissions" policy if it has failed to advise the employer of consequences and offer the employer a chance to argue that a claim is compensable. A slip and fall in an employer's cafeteria at lunch is an example of this sort of situation. 4-Another conflict, more frequent now than previously, is where a carrier contests a claim arguing that the worker is an "independent contractor" and loses. Often the carrier then substantially raises the premium and even alleges employer fraud.In such cases, the carrier is negligent if it did not afford the employer an opportunity to be represented by independent counsel and advise the employer of adverse consequences. 5-Perhaps the most frequent source of conflict between carrier and employer is the carrier's failure to obtain outside counsel that consults with the employer. The attorney's client, in comp proceedings, is the employer, NOT the carrier. If an attorney's loyalty is to the source of work (the carrier) rather than to the client (the employer) the ingredients for a potentially deadly situation are present. 6-Employers should take the time to locate a qualified compensation attorney whenever a serious claim, or series of claims, arises. The attorney need not take over the entire claim but is best used as an advisor and communicator. Carriers will pay more attention to the claim and are less likely to overlook issues beneficial to the employer's interests. 7-For insured companies who want to maintain control, make sure to include in your account instructions that you have the right to select counsel. Discuss this with your insurance broker before coverage is bound while you have the most negotiation leverage. The most recent case in NY is Elacqua v Physicians' Reciprocal. The Account Instructions would become part of the contract but would vary from account to account. Attorney Theodore Ronca is a practicing lawyer from Aquebogue, NY. He is a frequent writer and speaker, and has represented employers in the areas of workers' compensation, Social Security disability, employee disability plans and subrogation for over 30 years. Attorney Ronca can be reached at 631-722-2100. WC Cost Calculator www.ReduceYourWorkersComp.com/calculator.php REAL COST of work comp. WC 101 www.ReduceYourWorkersComp.com/workers_comp.php for the basics about workers comp. Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs. ©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
Borrowed Employee Sues Borrowing Employer For Retaliatory Discharge.
Here’s what happened?
Plaintiff, an employee of Manpower, Inc., was assigned to defendant corporation for work. One day after the plaintiff testified in a workers’ compensation proceeding filed by one of defendant’s employees, plaintiff was told her services were no longer needed at defendant corporation and that she should seek reassignment at Manpower. She filed a retaliatory discharge tort action against the defendant corporation, contending she had been discharged because of her participation in the workers’ compensation proceeding, a violation of public policy. The defendant corporation contended it hadn’t fired her at all, that she was not its employee and, therefore, she hadn’t lost her job. She was free to work at any assignment her employer, Manpower, Inc., might have available for her skill set.
Can the employee maintain a retaliatory discharge action against defendant corporation?�
In Hester v. Gilster-Mary Lee Corporation, 899 N.E.2d 589, 326 Ill. Dec. 372, 2008 Ill. App. LEXIS 1291(December 18, 2008), the trial court entered an order granting defendant’s motion to dismiss, finding that plaintiff had failed to state a cause of action. The appellate court disagreed, noting that in as much as the employee had functioned under the supervision of defendant’s managers, worked side-by-side with defendant’s employees, and received no real supervision from Manpower’s managers, she was the special employee of defendant.
The appellate court indicated that it was required to address two separate questions: first, whether an action for retaliatory discharge exists for a borrowed employee, an issue of first impression in Illinois, and second, whether Illinois public policy protected workers from discharge for testifying in a coworker’s claim hearing. Answering both in the affirmative, the court observed that all rights and remedies of the Workers’ Compensation Act apply to borrowed employees, that a borrowing employer is primarily liable for the payment of a borrowed employee’s workers’ compensation claim, and that the public policy considerations which led to recognition of an action for retaliatory discharge equally to a claim by a borrowed employee against a borrowing employer. According to the court, defendant’s argument ignored the nature of a borrowed-employee relationship. In the context of that relationship, the most severe sanction a borrowing employer could impose was to refuse all further work. In that context, the sanction was tantamount to a discharge.
For further information, See generally Larson’s Workers’ Compensation Law § 104.07. or go to LexisNexis Workers’ Compensation Law Center. This entry was written for Workers’ Comp Kit Blog, and we appreciate the helpful insight this brings to our readers.
Tom Robinson, J.D. is the primary upkeep writer for Larson’s Workers’ Compensation Law (LexisNexis) and Larson’s Workers’ Compensation, Desk Edition (LexisNexis). He is a contributing writer for California Compensation Cases (LexisNexis) and Benefits Review Board – Longshore Reporter (LexisNexis), and is a contributing author to New York Workers’ Compensation Handbook(LexisNexis). Attorney Robinson is an authority in the area of workers’ compensation and we are happy to have him as a Guest Contributor to Workers’ Comp Kit Blog. Tom can be reached at: compwriter@gmail.com.
Try the WC Cost Calculator to show the REAL COST of work comp.
Look at WC 101 for the basics about workers comp.
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
Legal expert Tom Robinson, J.D. from Lexis Nexis reported to us on an interesting case where bankruptcy rules versus Missouri Rules for Filing Hearing Loss Claims were contradictory.
CAN THE WORKER RECOVER FOR HIS HEARING LOSS?
A worker was diagnosed with hearing loss on February 1, 2001, six days before his employer filed a petition for Chapter 11 bankruptcy in the Bankruptcy Court. A few months later, the plant closed, terminating the worker’s employment. About one month later, the bankruptcy court sent a notice advising creditors that they had 60 days to file proofs of claim. The worker, who had consulted a lawyer shortly after his hearing loss diagnosis, did not file a proof of claim with the bankruptcy court because a statute within the Missouri Workers’ Compensation Act (“the Act”) stated that no hearing loss claims could be filed until at least six months had passed after the worker was removed from the hazardous environment. More than a year later, the filed a formal claim under the Act, alleging injury to both ears. He alleged an injury date of May 15, 2001 (his last day of work). On the date of injury, the employer was self-insured, but after the company’s bankruptcy, its workers’ compensation obligations became the responsibility of the Missouri Private Sector Self-Insurers Guaranty Corporation (“the Guaranty Corporation”).
WHO WON?
In Jones v. GST Steel Co., 2009 Mo. App. LEXIS 6 (January 6, 2009), noting that pursuant to Mo. Rev. Stat. § 287.197.7, the worker’s claim could not be filed until after six months’ separation from the noisy work–until after November 15, 2001–three and one-half months after the close of the bankruptcy claim period, the state court of appeals recognized the unavoidable collision of rules, but noted the general public policy consideration that injured workers should be allowed to recovery for work-related injuries and conditions. The court observed that the purpose of the Guaranty Corporation was to provide some level of benefits for employees whose employers became insolvent and accordingly held that the worker was not barred by his failure to file a bankruptcy claim for his injuries within the time prescribed in the Bankruptcy Court’s notice.
For further information, see Larson’s Workers’ Compensation Law, Ch. 102, § 102.04. or go to LexisNexis Workers’ Compensation Law Center. This entry was written for Workers’ Comp Kit Blog, and we appreciate the helpful insight this brings to our readers.
Tom Robinson, J.D. is the primary upkeep writer for Larson’s Workers’ Compensation Law (LexisNexis) and Larson’s Workers’ Compensation, Desk Edition (LexisNexis). He is a contributing writer for California Compensation Cases (LexisNexis) and Benefits Review Board – Longshore Reporter (LexisNexis), and is a contributing author to New York Workers’ Compensation Handbook(LexisNexis). Attorney Robinson is an authority in the area of workers’ compensation and we are happy to have him as a Guest Contributor to Workers’ Comp Kit Blog. Tom can be reached at: compwriter@gmail.com.
Try the WC Cost Calculator to show the REAL COST of work comp.
Look at WC 101 for the basics about workers comp.
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
Do you think every injury taking place in the workplace environment automatically rises to the level of a compensable Workers’ Compensation claim? If you do, you’d be wrong! Sometimes employer’s feel as though workers’ comp is a lost cause, that they lose no matter what the circumstances…
Here’s what Happened
A shipping clerk, who usually took a lunch break walk around the employer’s property, tripped and fell, injuring her shoulder. She filed a workers’ compensation claim, arguing before the Workers’ Compensation Commission the walks were “incidental to” her employment. She argued her claim by citing the health benefits of walking, which in turn made her a healthier worker and prevented absences as she suffered a number of health problems. The Commission agreed with her.
But, not so fast! The Compensation Review Board overturned the WCC decision saying the worker’s shoulder injury was not related to her work as a shipping clerk. The case went to the State Appellate Court. The Appellate Court upheld the Compensation Review Board’s decision.
Here’s Why
The three judge panel said the employee’s argument stating walking was good for her health and prevented absences thus benefitting her employer was invalid because:
“This argument ignores that (workers compensation) coverage does not turn on whether the activity is beneficial to one’s health. Coverage in such cases turns on whether the activity in question is incidental to one’s employment and has nothing to do with whether the activity is recreational in nature.”
In addition, the Appellate Court found no supporting evidence the employee “in undertaking her physical fitness regimen . . . intended to benefit her employer,” even though employer “acquiesced” to employees’ walking during the lunch hour. The employer did not promote or encourage employees to do so. In essence, during lunch break employees are considered “off the clock” and on their own time.
Extracted from: “A Walk in the Park” by Howard French, Journal Inquirer, Saturday, 2/7/09; Workers’ Compensation Commission-2006; Compensation Review Board-2007; Appellate Court, Feb. 2009; (All in State of Connecticut)
Try the WC Cost Calculator to show the REAL COST of work comp.
Look at WC 101 for the basics about workers comp.
Workers’ Comp Kit® is a web-based online Assessment, Benchmarking and Cost Containment system for employers. It provides all the materials needed to reduce your costs significantly in 85% less time than if you designed a program from scratch.
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
Workers’ Compensation Exclusive Remedy Rule versus Iowa’s Strict Liability Statute Regarding Dog Bites
Husband and wife own and manage a retail establishment. Trying to promote the business as friendly and family-oriented, they often bring their dogs to the store. They also take pride in the cookies and favors they provide to prospective customers. One day, husband and wife bring their Akita dog to work, securing it on a leash in the back of the store. When a co-employee, Smith, goes to the back of the store to retrieve cookies for customers, she’s attacked by the dog. Smith seeks and recovers workers’ compensation benefits from her employer and then files a tort action against the husband and wife under a special Iowa statute making the owners of dogs strictly liable for bite-related injuries. Husband and wife contend the strict liability action is barred by the exclusive remedy rule.
HOW WOULD YOU DECIDE?
In Smith v. Elick, 2009 Iowa App. LEXIS 24 (January 22, 2009), the Court of Appeals of Iowa determined that the workers’ compensation exclusiveness defense trumped the state’s strict liability “dog bite” statute. The case is generally in line with decisions from other states which hold that the exclusivity defense is generally successful against all sorts of actions filed under Employers’ Liability Acts, Structural Work, Scaffold, Defective Machinery Acts, RICO, and Labor Laws. For further information, see Larson’s Workers’ Compensation Law, Ch. 100, § 100.03.
Tom Robinson, J.D. is the primary upkeep writer for Larson’s Workers’ Compensation Law (LexisNexis) and Larson’s Workers’ Compensation, Desk Edition (LexisNexis). He is a contributing writer for California Compensation Cases (LexisNexis) and Benefits Review Board – Longshore Reporter (LexisNexis), and is a contributing author to New York Workers’ Compensation Handbook (LexisNexis). To say the least, Attorney Robinson is an authority in the area of workers’ compensation and we are thrilled to have him as a Guest Contributor to Workers’ Comp Kit Blog. Tom can be reached at: compwriter@gmail.com.
Try the WC Cost Calculator to show the REAL COST of work comp.
Look at WC 101 for the basics about workers comp.
Workers’ Comp Kit® is a web-based online Assessment, Benchmarking and Cost Containment system for employers. It provides all the materials needed to reduce your costs significantly in 85% less time than if you designed a program from scratch.
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
Attorney Tom Robinson, Lexis Nexis, shares insight into an interesting claim about a workers compensation and sexual harassment claim.
In a suit against Cheesecake Factory, the EEOC alleged that sexualized hazing of workers occurred at the company’s Chandler, Arizona facility. A restaurant worker should not reasonably expect to suffer humiliation and sexual abuse at the hands of coworkers, but if multiple reports are true, that is exactly what a number of male workers had to endure at this restaurant.
To what extent are sexual harassment suits against employers barred by the exclusive remedy provisions of a typical state workers’ compensation act? After all, once such an act has become applicable either through compulsion or election, it affords the exclusive remedy for injury by the employee against the employer [see Larson's Workers' Compensation Law § 100.01et seq.]. But does it always?
Title VII of the Civil Rights Act of 1964
It is axiomatic that the exclusive remedy provisions of a state’s workers’ compensation act cannot trump federal anti-discrimination laws, such as Title VII of the Civil Rights Act of 1964, which generally prohibits discrimination and/or harassment of employees on the basis of, among other things, their sex [see The Supremacy Clause (USCS Const. Art. VI)].
State Anti-Discrimination Laws
The same is usually true for claims for sexual harassment brought pursuant to state anti-discrimination laws. The predominant justification is the important public policy underlying such civil rights laws, which would be thwarted by a rigid application of the exclusiveness doctrine.
Tort Claims Associated With Charges of Sexual Harassment
In conjunction with their statutory sexual harassment claims, plaintiffs frequently raise related tort claims for injuries or distress caused by the alleged offensive and prohibited behavior. Because workers’ compensation law was created to supplant the common law of tort for injuries arising out the workplace, courts are far more likely to find these tort claims barred by exclusivity [see Larson's Workers' Compensation Law § 104.05[4]].
In most jurisdictions, however, some tort claims are successful as against the exclusivity defense, being treated as outside the ambit of the workers’ compensation system. Decisions of this kind generally rely on one of three distinguishing features:
- the intangible or emotional nature of the plaintiff’s injury;
- the intentional–rather than accidental-quality of sexual harassment; or
- the personal-rather than work-related-origin of sexual harassment.
Defenses Related to Respondeat Superior
The plaintiff who attempts to hold the corporate employer liable in tort has the additional burden of connecting the corporation with the offensive act. One common defense to a claim based on sexual harassment is that the injury, typically the act of a supervisor, was not one arising out of the employment, but rather was the personal act of a third person. One effort to get around the defense is to show negligent hiring and retention of a known offender. Ordinarily, mere negligence is insufficient to implicate the employer; retention on the part of the employer, as demonstrated by repeated refusals to act in the face of ample warnings, may suffice to show intent.
Key Is the Type of Injury Sustained by Victim
Usually, an exclusivity challenge will hinge upon the type of injury sustained. If the core elements of the suit allege humiliation, mental distress, indignity, embarrassment or such typical job discrimination items as lost wages or loss of promotion, the exclusiveness clause does not apply. However, if a substantial portion of the complaint involves physical injury, or the kind of mental or nervous injury or emotional distress compensable under the workers’ compensation law, most states will hold the action to that extent banned.
An important corollary of this rule is that the more liberal a jurisdiction is in compensating for mental-mental injuries, the more the range of possible tort suits is reduced. A state which refuses to compensate within the workers’ compensation system for mental-mental harms may well have left the door open to tort suits for emotional distress.
Application of “Exclusivity Defense” in Cheesecake Factory Case
According to most news reports, the instances of alleged sexual hazing at the Chandler, Arizona Cheesecake Factory restaurant involved not so much physical injury, but rather humiliation, intimidation, and the like. The EEOC’s case is not subject to the exclusivity defense-it isn’t a claim filed by an employee-and to the extent that individual plaintiffs file suits of their own against the employer, their claims of discrimination and harassment will likely move forward in spite of workers’ compensation exclusivity. Only to the extent that the plaintiffs claim physical injuries are they likely to be hindered.
Author: Thomas A. Robinson This blog was specially prepared by Lexis Nexis for the Workers’ Comp Kit Blog by LexisNexis Workers’ Compensation Law Center and reprinted with the publisher’s permission.
Try the WC Cost Calculator to show the REAL COST of work comp.
Look at WC 101 for the basics about workers comp.
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
The C-2 Form (Employers Report of Injury) in New York should be filled out completely with as much detail as possible, according to Attorney Theodore Ronca. While this form can be supplemented with information the employer needs on their own Injury Treatment Form, the C-2 should be filled out as completely as possible to increase the employer’s chances of prevailing if the injury is not compensable or apportion-able. The employer can document all known conditions on a “See Attached” memo to the C-2. Attorneys for employers can subpoena records of prior injuries.
Although treating doctors should make reasonable inquiries about past medical history and carriers should make reasonable inquiry, it is much faster and more effective to have the employer’s Medical Advisor or the employer’s attorney to make these requests.
Some doctors’ offices may object to providing medical records material based on HIPAA privacy regulations, however, there is an exemption in these regulations for occupational injuries.
The old saying of “taking the claimant as is” is quite false, but nonetheless many claims examiners don’t look for prior conditions. This is one key activity with which an in-house Medical Advisor can be helpful. Often an MD can determine if there is a likelihood that a prior condition exists, then medical records can be subpoenaed.
7 parties who can subpoena records:
1- a carrier
2- an employer
3- a short-term disability carrier
4- a long-term disability carrier
5- a spouse seeking support liens
6- an estate with interests in awards
7- attorneys for agencies holding concurrent proceedings (in-state and out-of-state regarding the same accident or occupational disease.
Records of prior injuries are necessary for several reasons:
1- you may be able to apportion with prior conditions in several ways:
a) between a prior workers comp claim
b) between a prior negligence claim
c) between a prior condition that worsens AFTER the comp claim where the worsening was not due to the comp claim.
d) Also, subsequent conditions can reduce comp liability.
Out-of-state Records: Get out-of-state records as well. Don’t be deterred if the records are out of state and thus not as easily available. In NY, out-of-state records are obtained by “letters rogatory”, a process named after the Latin word “rogere” which means “to order.” Basically, the NY court politely orders another state to assist in obtaining records.
Other States: This concept may apply to many other states in addition to NY, however, you must consult with legal counsel in those states to find out.
Attorney Theodore Ronca is a practicing lawyer from Aquebogue, NY. He is a frequent writer and speaker, and has represented employers in the areas of workers’ compensation, Social Security disability, employee disability plans and subrogation for over 30 years. Attorney Ronca can be reached at 631-722-2100.
Try the WC Cost Calculator to show the REAL COST of work comp.
Look at WC 101 for the basics about workers comp.
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
The Ohio General Assembly bailed out the BWC group rating system on the last day of the legislative session, passing Substitute HB 79 which removes the word “retrospective” from the statute. The change was necessitated because Judge Richard McMonagle of Cuyahoga County Court of Common Pleas issued an injunction requiring the Bureau to administer its group rating program in a retrospective fashion, as technically required by the statute. The one-word change eliminates the need to apply the program in that manner and reinstates group rating as we know it. Judge Richard McMonagle, after hearing evidence and testimony for over a week, issued the preliminary injunction preventing the Bureau from implementing the current Group Rating plan for the policy year beginning July 1, 2009. This unexpected decision would have had a major impact upon State Fund rating for the next policy year.
The case was brought by several employers, on their own behalf and on behalf of a class of employers not yet certified, some of which were denied group rating. Plaintiff employers asked for a preliminary injunction and restitution for premium payments previously made. Judge McMonagle granted the preliminary injunction enjoining the current group rating plan for next year. Essentially, the Judge took a literal reading of the one provision of the statute, pointing out that the statute speaks of “retrospective” group rating. After hearing the voluminous testimony and written evidence, the Judge concluded that there is nothing “retrospective” about the current group rating program.
The Bureau had argued that the statute does not mean all group rating must be only retrospective, and introduced some evidence that the word “retrospective” was a typographical error. The Judge dismissed this argument, stating that the legislature needed to correct its mistakes and the Bureau could not do so through its regulations. Surprisingly, no mention was made in his opinion of the fact that we have been operating under this system for almost 20 years. Ignoring past practices, he decided that “retrospective” is the operative word and, as a result, the current program does not match the statute and a preliminary injunction is appropriate.
The legislature moved quickly to amend the statute to correct the problem. Taking testimony from a number of interested parties, including James Barnes, General Counsel of the BWC, George Wilkinson of Dinsmore & Shohl on behalf of the Ohio Manufacturer’s Association, and Stuart Garson, lead attorney in the Cleveland case, the Senate Insurance, Commerce and Labor Committee moved passage of the bill on the 16th, and the Senate approved it. The House concurred today and sent it to the Governor, who signed the bill.
The sudden change brought about by the injunction would have created chaos for Ohio employers. While group rating as we know it will be around in 2009, it is unclear now what will happen now to the lawsuit. Plaintiffs intend to ask for restitution, according to Plaintiffs’ attorney, James DeRoche, who applauded the court’s decision.
Information Provided by George B. Wilkinson, Partner. Attorney Wilkinson is Workers Compensation Group Practice Leader at Dinsmore & Shohl in Cincinnati, OH. He can be reached at George.wilkinson@dinslaw.com or 513-977-8316.
Try the WC Cost Calculator to show the REAL COST of work comp.
Look at WC 101 for the basics about workers comp.
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
MYTH: Once implemented, your workers’ compensation premiums will immediately go down.
REALITY: The loss costs (as distinguished from the premium) will fall immediately, but the premiums take several years to fall because they are based on a company’s experience modification which is a 3-year rolling average. As one good year “rolls” into your experience, a bad year drops out so it takes three years for the full benefit of a workers’ compensation cost containment program to be reflected in your premiums.
However, the full value of every dollar you save on each claim that is within your deductible, will be a dollar you save immediately. For companies with high deductibles of $250,000 to 2 Million dollars, every claim dollar is saved immediately. Actually, because you save that money off the bottom line, the real value of the savings is much greater.
For example, if you bring an employee back 30 days earlier, and that employee’s pay is $80/day, and the replacement employee is paid $2,000, the total amount the company will save by bringing the employee back in a Transitional Duty position is $67,692.31 assuming a 6.5% profit margin. Try an example for your company TD Calculator.
For more cost-saving tips go to WC Cost Reduction Tips.
Show the REAL cost of workers’ comp with the Real Cost Calculator.
Workers’ Comp Kit® is a web-based online Assessment, Benchmarking and Cost Containment system for employers. It provides all the materials needed to reduce your costs significantly in 85% less time than if you designed a program from scratch.
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
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