Thursday, June 20, 2013

What Sedgwick Should Do About Romano

The Central Coast Chapter of the California Applicants Attorneys Association (CAAA) is holding a press conference this morning at the Ventura County District Attorneys office urging the DA to file criminal charges in the death of Charles Romano.

If you recall, Charles Romano sustained an injury on Dec. 20, 2003, while stocking shelves for Ralph’s in Camarillo, CA (coincidentally only a couple miles from WCC headquarters). After undergoing surgery on Aug. 29, 2005, he contracted methicillin-resistant staphylococcus aureus (MRSA) that caused his lungs and kidneys to fail and paralyzed him below the shoulders.

Sedgwick refused to authorize the treatment for MRSA. Even after a judge ordered Sedgwick to pay for treatment in October of 2006 Sedgwick failed to authorize critical services, or pay for any services.

Sedgwick allegedly continued to delay and deny care until Romano died. Sedgwick failed to authorize his hospitalization at Community Memorial Hospital where he died on May 2, 2008, from cardiorespiratory arrest, respiratory failure and pneumonia brought on by his MRSA infection, according to the board's findings.

Sedgwick didn’t make any payments for medical care until June 23, 2008.

These were the findings of fact in a review of the case by the California Workers' Compensation Appeals Board (WCAB), which issued a scathing opinion on the matter, stating:

“We have rarely encountered a case in which a defendant has exhibited such blithe disregard for its legal and ethical obligation to provide medical care to a critically injured worker. Sedgwick CMS, acting as claims administrator for the Kroger Co./Ralph’s Grocery Co., demonstrated a callous indifference to the catastrophic consequences of its delays, inaction and outright neglect. In light of defendant’s repeated, unreasonable delays and denials, and its willingness to ignore a 2006 finding and award issued by the Workers’ Compensation Appeals Board, we will refer this case to the Audit Unit of the Division of Workers’ Compensation.”

I was highly critical of Sedgwick's behavior in this case. I said:

"How can this industry profess to be laudable and above reproach - going after fraudulent claimants, employers and vendors - when we can't even keep our own house clean? I don't care that YOU wouldn't do such things - the fact is that someone in our industry does, and it is all of our jobs to call them on it, to make them accountable, to make them PAY for ruining the lives of others, when it is our job to help improve those lives."

In that editorial I called for revisiting the issue of penalties, and the enforcement powers of the Audit Unit.

But perhaps CAAA is on to something. Or perhaps not - there is a possibility that the statute of limitations for a criminal prosecution has lapsed.

I was told by a defense attorney close to Audit Unit issues that indeed carriers and administrators are very concerned with these penalties because they come off the bottom line - and that may be true, but apparently Audit Unit penalties weren't a sufficient deterrent in this case.

Through all of this I have yet to see anyone from Sedgwick deal with this publicly. Search the news, go on their website, look for press releases, any public acknowledgment whatsoever - no one from that organization has said anything about this tragedy. Indeed, at least with regard to WorkCompCentral news, the only reference to communication is, "Sedgwick did not respond to calls or emails on Wednesday" or something similar.

Likely, Sedgwick and its employees have been told by counsel to keep quiet, lest something be said that can (and will) be used in a court of law.

A criminal case out of workers' compensation homicide is very, very rare. So rare, in fact, that I was not able to find any news or legal cases in either the WorkCompCentral database, or on Google, about such an occurrence.

But criminal charges HAVE been brought against big companies and their executives for callously causing the death of another - and just because the Romano case falls under the exclusive remedy of workers' compensation doesn't mean that there is protection against homicide charges, barring statute of limitations protection.

If criminal charges are what it takes to get a company whose responsibility it is to take care of people, not kill them, and to own up to its responsibilities, then so be it.

It is in tragedy when real leadership comes through to guide those affected and provide direction to a company and an industry - and it is in this regard that I find the leadership of Sedgwick lacking.

I'm quite certain that the Romano case has made it all the way to the top of the executive suite. I'm also sure that heads have rolled, that Sedgwick is doing all it can to make things right for its client, Kroger, Inc., parent of Ralphs Grocery, behind the scenes. 

This is a huge public relations mess and in my experience silence exacerbates negative feelings in emotionally charged issues, such as this Romano case, which can make public relations even worse.

I respect and admire Sedgwick's CEO, David North. He is an excellent business man, very intelligent, astute at the science of insurance, and has built Sedgwick into a global powerhouse claim administration firm.

NOW is the time, though, for Mr. North to come forth publicly, take the blame for what has happened under his leadership, and make things right for the Romano family - if that is even achievable.

North has the opportunity right now to be a true leader of the workers' compensation industry, to publicly demonstrate that Sedgwick does care about the injured workers it is tasked to serve, to show the industry what to do and not just give a keynote speech at a conference.

This is a tragic, lamentable event and I'm sure that Sedgwick management is putting into place controls to make sure this doesn't happen again.

But that doesn't fix things in the court of public opinion, and doesn't put Sedgwick into a good place relative to this claim, the bad press that will evolve or the possibility of facing criminal prosecution and all of the distraction that will follow.

If I were counsel to Sedgwick and Mr. North I would advise coming out publicly now to apologize to the Romano family and to the workers' compensation industry at large; I would ambitiously seek to provide monetary compensation to the Romano family for this egregious mistake; I would aggressively pursue a media relations campaign owning up to this mistake in judgment and demonstrate to the world that lessons have been learned, that corrections have been made, and that Sedgwick can be trusted to do the right thing.

The only way to control bad press is to participate in the editorial process and to provide opinion and explanation. Sedgwick has this opportunity and can take a leadership position within the industry to demonstrate how to execute the right thing in the face of tragedy.

Now is the time to lead, not to cower.


  1. Excellent comments David! Once again, you hit the nail on the head!

    No need for this crap. Penalties should be raised because this goes on all the time, on a smaller scale, but still destroys lives!

    Marygrace Coneff, MSW
    Voters Injured At Work Board Member

  2. David,

    Leadership is indeed needed from Mr. North as well as California's legislature, the Dept. of Industrial Relations and Division of Workers' Compensation. Ms. Coneff makes an excellent point. As you've written, Mr Romano's death is perhaps a tragedy beyond compare in the comp system, but there are tragedies taking place by a thousand cuts on a regular basis. Neither should be ignored.

  3. I totally agree!! there's much need for leadership in this industry, the problem is that the law makers and the law enforcers would not take the risk of going against the rich an powerful!! and all we have left is frustration and a feeling of impotence and sadly is not getting any better!!

  4. My colleagues at Sedgwick and I are fully aware of the situation regarding Mr. Romano that is generating discussion at the moment. I wanted to reach out to our clients, colleagues, friends and partners in the industry to address this matter within legal limits.

    We have the utmost compassion for the Romano family and extend our condolences. We regret the delays that occurred in handling this complex claim.

    Those of you who are familiar with our company know we work very hard to provide timely and accurate benefits within workers’ compensation regulations and laws. We understand our industry’s and our clients’ interest in this issue. We have taken significant corrective and process-improvement steps to act upon the lessons learned. We value our reputation as a company that establishes and follows best practices. We will continue to do all that we can to protect our clients and their employees today and every day.

    If you have any questions please feel free to contact me at You can also read the interview done by Sedgwick CEO Dave North with Dave DePaolo.

    1. Darrell Brown Please!

      I too, nearly died at the hands of Sedgwick and fervently recorded the events on my blogs and websites. These events nearly destroyed my family and me as well. And the result? Sedgwick sued me in federal court under a myriad of bogus allegations. Fortunately a federal judge dismissed the entire mess with prejudice and that should have been the end. It wasn’t. Undaunted, David North and his gaggle of lawyers, 5 in all, from 2 separate firms, appealed to the Ninth Circuit to take another run at me and lost again. At that point they decided enough was enough. The moral of the story, I have communicated with hundreds of injured workers that have been brutalized by Sedgwick with no redress. I believe nothing that comes out of David North’s mouth regarding reform at Sedgwick. Or yours. Sorry.