Wednesday, February 8, 2012

TX Case Shows How Insurance Business Creates Bad Public Perception

For an employer (or its insurance companies) the only thing worse than an employee filing a workers' compensation claim, is getting sued in civil court by a worker.

It never ceases to amaze me how employers (and in actuality we know it is the employer's insurance companies) try to shift the buck to fit the needs.

And yet, time and time again, we see efforts by employer insurance companies to claim that either a workers' compensation case should be a civil matter (i.e. claiming that the injured person was an employee) or that it should be a workers' compensation matter (i.e. claiming that the injured person was NOT an employee) - and all of this points to the insanity of our current insurance climate and how the industry creates a negative image for itself on a case by case basis.

In Texas the 14th District Court of Appeals ruled that the parents of a Texas welder who was fatally electrocuted on his second day of work can proceed with their negligence claims against the machine shop that hired him.

Yes, the employer claimed that the welder was an employee, when the facts set forth in the court's opinion are pretty clear that the employer considered the welder to be an independent contractor, with very few facts pointing to an employment relationship.

In Raynor et al. v. Moores Machine Shop, No. 14-10-01242-CV, 02/07/2012, Joseph Raynor died while welding on the premises of Moores Machine Shop in July 2007.

His parents sued Moores for negligence in connection with his death. Moores moved for summary judgment, asserting, in part, that the suit was barred by exclusive remedy because Raynor was its employee.

Moores' primary business was machining oilfield tools, which generally did not involve welding. Moores did not require Raynor to complete an application or drug test before beginning work, which it demanded of its other 50-plus employees, and it allowed Raynor to leave work after only four hours on his first day so that he could go to a job interview.

While Moores undisputedly provided Raynor with the tools and materials to do the welding job, Raynor was left alone at the job site to do the work in the manner of his choosing.

Moores also did not withhold any taxes from Raynor's check or pay Social Security.

The court concluded there were sufficient issues of material fact so as to preclude summary judgment against the exclusive remedy of workers' compensation, allowing the case to proceed to trial in the civil arena.

In the meantime, the family of Raynor has to continue re-living the grief of his death - and I'm sure it was a gruesome death as many electrocutions are - an extended period of time, rather than getting the comfort of closure of either a case settlement or quick trial. Note, Raynor's death was in 2007, and the case is not even close to getting to a trial 5 years later.

And, I'm sure the employer (or its insurance providers) have calculated that if successful in an exclusive remedy argument that the statute of limitations for a workers' compensation claim has long since lapsed, thus a Catch-22 for Raynor's family.

But, this is a matter of business, not philanthropy. The business of insurance involves the management of risk, and part of the management of risk is shifting the burden of responsibility if possible.

My liberal side though says that, in particular with situations such as the Raynor case, the business of insurance needs to be tempered with compassion for humanity.

Shifting the burden of responsibility is part of the equation factoring the general public's negative perceptions of the insurance industry. (See for example

I am sure there are cases out there where compassion did trump business. Perhaps some good news once in a while, demonstrating compassion for humanity over the raw business of risk management, would go a long ways towards changing the public perception of insurance.workers compensation, work comp, injured worker 
Of course, no sooner had I posted this editorial then I read this story: - the flip side of the business of risk management. I have a tough time with this pilot's claim...

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