Tuesday, January 27, 2015

Probability vs. Possibility

As Tennessee gets ready to start debating about offering a non-subscription option, a recent Texas award against a "bare" employer is a reminder that a part of workers' compensation is about risk mitigation.

Tennessee Sen. Mark Green plans to introduce legislation that would allow self-insured businesses the option of foregoing the state’s workers’ comp scheme.

Details are lacking at the moment and those in the know would not divulge any to WorkCompCentral's Joey Berlin.

According to the story, the Association of Responsible Alternatives to Workers’ Compensation provided Green the assistance to build the plan.

Green’s only public pronouncements about the bill at this time are what was contained in his list of legislative priorities released last week. That release said Green’s proposal would call for a “workers’ compensation ‘opt-out’ program for businesses that self-fund” tailored to Tennessee, and intended to drive down costs and create more competition, ostensibly to ultimately benefit the state's consumers.

The state just recently went through a reform in 2013, transitioning its workers’ comp scheme to a fully administrative system for all claims on or after last July 1.

Texas law allows employers to forego workers’ compensation coverage completely; they can provide employees with an alternative benefit plan if they choose. Oklahoma, which recently reformed its system, allows qualified employers to opt out of the state scheme, but only if they offer an alternative plan with equivalent benefits.

A big difference between Texas and Tennessee, though, is that Tennessee caps personal injury damages.
Bowzer ponders the risks...

The Tennessee Civil Justice Act, signed by Gov. Bill Haslam in 2011, caps noneconomic damages at $750,000 for each injured plaintiff, or $1 million for an injury deemed to be catastrophic.

A recent Texas case shows how that cap on damages might appeal to Tennessee employers wanting to exit the state's workers' compensation system.

On April 23, 2007, Charles Robison, a flat bed truck driver with 30 years experience, was attempting to pull a 150-pound tarp over an uneven load stacked on his trailer.

His employer, West Star Transportation, had to borrow a fork lift from a neighboring business to lift the tarp to the top of the load. Robison attempted to pull the tarp down to cover his cargo without safety equipment and without help from coworkers when he fell 13 feet.
Robinson sustained a severe head injury, among other injuries and is no longer able to work, care for himself or live independently. He will require extensive medical treatment for the rest of his life.

The non-subscribing, "bare," employer argued it had no duty to warn Robison about the unsafe conditions because of his long experience as a truck driver.

The jury at trial didn't buy that argument, and awarded Robison $1 million for physical pain, physical impairment and mental anguish; $411,724 for loss of earnings capacity; $3,716,575 for past and future medical expenses; and $400,000 for loss of consortium.

The appellate court wasn't impressed with West Star's arguments either.

"Although an employer is not an insurer of his employee's safety at work, every employer owes its employees a primary, continuing, and nondelegable duty to use ordinary care in providing a reasonably safe work place," the 7th District panel said, in an opinion written by Justice Patrick A. Pirtle [West Star Transportation v. Robison, 07-13-00109-CV, 01/23/2015]. "Accordingly, an employer may not place an employee in an unreasonably dangerous work environment without taking appropriate precautions."

And while Robison got a big jury award, he still has the burden of collecting - some eight years after his injury.

There's no indication that Tennessee will allow employers to completely opt-out, but rather will implement something akin to what was passed in Oklahoma, allowing employers to provide alternative work injury protection.

Robinson vs. West Star Transportation is testament to the philosophy that even the slightest probability of risk must be weighed against the possibility of catastrophe, which is why some form of work injury protection requirement will likely be a part of Sen. Green's plan.

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