Racing Risk

I love racing, particularly motorcycle racing.

I grew up on motorcycles. Though I didn't get my first motorized two wheels until age 10, my brother, friends and I would fantasize about having a motor, riding our bicycles and making vroom sounds or using playing cards to create the noise.

Riding bikes is thrilling, but racing takes the experience to a whole new level. Close riding proximity, the test of skills against another rider, competitive adrenaline - if you've raced anything on two wheels you know exactly what I'm talking about.

Zoom...

My last race was a motocross at Piru Race Track 10 years ago. I won my age class, and got third in the age 35-40 age group. I stopped because I realized my motor skills didn't keep up with my mental agility...

But spectating is just as thrilling. Perhaps it is because I can relate from my experience, or perhaps because motorcycle racers aren't hidden from view so you can see what the riders are actually doing; to me it's just much more up close and personal than automobile racing, or any other kind of racing really.

I try to go to a race every year. Usually it's the U.S. round of the World Superbike Championship held at Laguna Seca raceway near Monterey, CA. It's the proverbial child in a candy store adventure for me.

Of course, up on two wheels eventually means going down - as in crashing. Two wheels are inherently unstable. The gyroscopic effect keeps everything in proper order so long as the laws of physics are respected.

Racing always challenges those laws, though. Anyone and everyone that races eventually will get on the wrong side of Newton's laws. Momentum becomes an enemy. Injury and death result.

This past weekend three professional motorcycle racers died.

Luis Salom was only 24, and a rising star in the World Superbike support class, Moto 2.

Just a few days later the Isle of Man, known in racing circles as the most dangerous of courses, took two riders in one day.

Last year, at Laguna Seca, a horrible crash in the last MotoAmerica race of the day claimed two lives.

Of course there are the countless injuries on a daily basis too.

Bikes are dangerous. Risk management is taken beyond science to an art level in motorcycle racing.

Curiously, I know pretty much nothing about how workers' compensation works in professional racing, particularly international racing like World Superbikes, which goes to 13 different countries.

How are racers and crews covered? Who pays for what? What jurisdiction controls? How adequate are benefits (if any)? What is the scope of medical care, both preventive and responsive? How expensive is insurance and how is it rated?

I'm sure there are brokers who specialize in covering motor racing risks, and in particular international motorcycle racing - I hope you'll chime in and educate us domestics about racing risk management and insurance, and in particular occupational risk management...

Live Advertisement

I got this email from the RIMS organization a few days ago. Others I know received the exact same email. They want the speakers to pay for the privilege of speaking at their event.

********

Dear David,

Thank you so much for your continued support of RIMS Annual Conference & Exhibition. As a past speaker, I wanted to let you know about our new registration policy for speakers. All speakers will need to purchase a full-conference access pass for US $500, a savings of up to US $795 off the attendee rate. This pass will give you access to the entire conference, and to RIMS preferred housing.

The RIMS 2017 call for presentations will open in early June. We’ll send out more information then.

We look forward to your submission.

Sincerely,

Stuart Ruff
Vice President, Events and Education

********

Talk about alienation via blatant commercialization... I hope everyone has a good time listening to endless live advertisement.

Stuart - save the postage and effort. I don't need any information about presentation submissions.

BTW - I have never spoken at RIMS. Every single one of my prior topic submissions were rejected, I assume because they were outside the RIMS safe, risk management formula.

Why Work Comp

Along with changing its image and brand, the International Association of Industrial Accidents Boards and Commissions (aka IAIABC as part of its brand identity realignment) is publishing a new magazine that it says should challenge perspectives on workers' compensation.

This new focus of IAIABC is timely, and in my opinion, necessary.

An article in this first issue by Berkeley researcher, Frank Neuhauser, does this by asking: perhaps workers' compensation isn't needed for everyone all the time.

The reason - it's not work that hurts people, it's life...

Neuhauser, of the Survey Research Center at University of California, Berkeley, has directed social insurance studies, including on work comp, for as long as I can remember. His article, as you might guess, is filled with data, statistics, and numbers.

The nature of work has certainly changed over the 100 years that workers' compensation has been around. And so have various different social protections. At the early stages of the Industrial Revolution work comp was the only injury/illness/death protection system available; now we have health insurance, disability insurance, government programs and other systems that didn't come into being until the last 40 or 50 years - and they have become bigger and more omnipresent.

When work comp came into being the work being done was heavy, manual and industrial with an unacceptable injury/death rate: in 1914 the work place death rate was 61 per 100,000 workers. Now it is 3.3, a 500% difference.

But, even though American adults spend a quarter of their lives at work, they are 10.3 times as likely to have a fatal injury outside the work environment.

For non-fatal injuries, the risk of an emergency department visit was 5.8 times higher for non-occupational risks versus at work.

And while the injury incidence rate ("frequency" in insurance speak) for work has steadily been declining for the past 30 years, non-occupational rates of injury have actually inflated.

"The numbers in the paper suggest that if work were as risky as non-work, injury rates and costs in the US would be about 26% higher for the adult population," says Neuhauser. "Put another way, work has the effect of reducing injuries and related costs to the adult population by 20%."

An interesting perspective indeed and likely one that return-to-work proponents will jump on: it's safer to be at work so everyone should work all the time!

What Neurhauser observes is that there is a very small fraction of occupations that are actually responsible for the vast majority of work injury/illness; disproportionately so.

"What is immediately clear is that more than 2/3rds of workers are in very low risk occupations with a risk of injury or illness substantially below average for all workers," writes Neuhauser. "In addition, given that work has 1/6th to 1/10th the risk of non-work settings, on average, virtually all workers are in jobs where the injury risk is less, on average, than that faced in nonoccupational settings."

So the argument fostered by Neuhauser is, why is this vast population of virtually no-risk workers required to be covered by workers' compensation? Why not provide medical care to ALL workers, and implement a disability supplement system supported by wage deductions (like California's state disability system) to take care of this majority? The high risk minority can be covered by a supplemental "workers' compensation" package for which a premium would be paid by the employer (for engaging in this hazardous work).

Neuhauser suggests that workers would be much better off; research shows that the cost of workers' compensation is partially offset by lower wages. In addition, this kind of program would eliminate a great source of friction, i.e. the silos of work comp versus general health or other benefits.

"Workers’ compensation is the relic of the early industrial age and does not fit the vast majority of the 21st century workplace," Neuhauser concludes. "In the early 20th century, work was often very dangerous. Today, the work environment protects the vast majority of workers from injury and illness risk. When workers’ compensation was adopted, health insurance was virtually unknown. Today, employers are the primary payers of health insurance for workers, through employment-based group policies or subsidy payments to exchanges under the Affordable Care Act. As wage protection, workers' compensation does little to protect workers from the economic consequences of disability because so few disabilities are work related."

IAIABC, and other groups, have started dialogues across the country about the relevancy of work comp in the twenty first century. Courts are challenging its constitutionality. Business increasingly finds work comp an expensive, unnecessary adjunct. The employed population is getting louder about the inadequacy of traditional work injury protection.

Maybe it is time to rethink this social bargain.

Stay On The Game

There's an immutable truth about two wheels - eventually you will go down.

Riding motorcycles involves a higher level of risk than other "ordinary" daily activities, so the level of risk management is also heightened.

After a risk event has occurred, then the task evolves from risk management to event assessment, then short term corrective activity, and eventually long term adjustment.

Hopefully, along these phases, we learn something to a) increase risk management skills and b) improve post event procedures.

Through my 46 years of motorcycling adventure, I've improved my risk management skills considerably, and have also increased my knowledge and understanding of post event procedures.

Alas, I tested those skills and knowledge on Saturday. Fortunately, all 46 years of learning paid off.

For instance, not long ago I recognized that my riding clothes were not suitable for the type of riding I most often engage in (canyon roads in Malibu), so I upgraded to an Alpinestar full leather two piece riding suit. I got a great deal on it, so it passed my wife's value test (sliding scale: the more safety provided the more I can spend, but if I get a "bargain" then it's like an 'Ebay instant buy' approval - no discussion needed!).

It was sunny and clear. In the canyons probably in the mid-90s. The roads weren't busy.

My favorite first run is up Deer Creek Canyon - the views at the ridge top, where it turns to Pacific View Drive, sweep from the Pacific Ocean on the right, to the beautiful red rock of Boney Mountain on the left.

After the ridge the road turns into Cotharin Road, and then intersects Yerba Buena.

Normally I would go north on Yerba Buena towards Boney Mountain. But I knew it would be over 100 at the top, so I decided to stay at the lower elevations and instead of left at Yerba Buena, I turned right to head down to Pacific Coast Highway.

I love Yerba Buena Road. It's tight, twisty, and relatively good pavement on that south-bound leg (going up to Boney Mountain the road is in dire need of repair).

So down Yerba Buena Road I went, pitching The Sewing Machine (2011 Honda CBR250R) left to right and right to left, diving into corners, scrubbing those tires, and having The Time of My Life.

Ah, but a moment of inattention resulted in a test of my risk management skills.

I wasn't riding particularly assertively as I entered a tight right hand drop away 180 degree corner about half way down Yerba Buena (40 miles into my ride) - ... my demise.

It was slow motion. I clearly felt the slide start, and I countered with my best corrective action - a little more counter-steering, a touch more throttle, no brakes - alas, too little too late.

TMS slid out at about 30 MPH - a low-side on the right. I held on, as I have learned over those 46 years, to maintain as much control over machine and man as possible. Clutch in, throttle still in hand - after we stopped sliding, I noted that we had swiveled nearly 120 degrees so the front of the bike was facing up hill.

Dang it!

Post event assessment ensued.

I quickly remounted, engine still running, and throttled out of the roadway, back up a few feet to identify what the heck happened and that's when I noticed that the right footpeg on TSM was missing.

The Alpinestar suit proved an excellent risk management system - no bruises, no cuts, no rash: no insult to my body whatsoever.

The only damage, other than the broken foot peg, was scraps on the tail pipe heat guard, scratches on the right mirror, a bent brake pedal and the scuff marks on the leathers.

Otherwise, very little damage, and if I didn't tell my wife she might not notice...

Inspection of the road didn't reveal anything abnormal. I didn't notice any loose dirt. The asphalt appeared normal. My conclusion was that I was just a hair off my game, and payment was extracted.

But clearly, the "temporary disability" of a missing footpeg meant the balance of my ride (Mulholland Highway, Latigo Canyon Road, Decker Canyon Road, among others) would be cancelled - time to limp home with my right foot using the rear, passenger, footrest for support.

Back home I straightened the brake lever with a wrench, cleaned up the hash marks on the mirror with a file, and ordered up a surplus footpeg on Ebay for $11.00, tax and shipping included.

The Alpinestar leathers are now officially broken in...

The thing about risk management is that one never knows whether the techniques implemented work until a risk event occurs. And then it's too late to make adjustments - you can only learn from that risk event to make adjustments for future possibilities, which of course you won't know whether the adjustments are successful until the following risk event.

And the risks come from all sorts of different angles. In my case there's the risk of falling in the first place, but that is the major, precipitating event to other risk events.

But once a risk event happens, once an injury occurs, once a claim is made, managing the risk is no longer applicable. It's too late. The risk happened!

Risk management in the work place is about ensuring safe practices so a work injury or claim does not occur.

Risk management on the other hand is not about managing the work comp claim because, as I said above, the injury or claim occurred because of the failure in risk management in the first place.

What happens after a risk event, after the claim is made or injury incurred, now becomes claim management - or if we were following the lessons from Monday's teachings, people management.

Injured workers are not a risk anymore, they are real - risk management already failed because there was an injury or illness, or a claim of such. Using risk management techniques on injured workers fails them, fails the employer, fails the system.

The skills and techniques are different.

After the risk event it's time to manage the person, not the risk.

I think its noteworthy that the preeminent organization for risk managers includes in its title, insurance. For not only does the professional risk manager assess and remediate potential risks, but part of the equation is ensuring mitigation of a risk event with insurance coverage.

And once the risk event occurs the risk manager becomes the insurance manager to ensure the folks to whom the risk was transferred do their jobs in the post event setting. The top risk managers recognize that the next stage has occurred and people management becomes paramount.

Medical costs can go up, claim frequency can go down, indemnity severity might go up - at the end of the day, risk management first retards the probability of a risk event, but then moves into managing the claims response.

I said that after a risk event occurs the risk manager learns and makes adjustments.

After nearly 20 years of marriage, I have learned and have made adjustments, particularly in my post risk event people management techniques.

When I returned home I told my wife that I was really happy with my Alpinestar leather suit and that it "worked perfectly."

She was ecstatic at first, but frowned when I told her of my first person testing. She smiled again after I noted that there was no damage to body, or soul, and that TSM had only about $11 worth of damage.

Next weekend I'll be just a little more attentive to my riding, and stay on my game.

High Flying Work Comp Claim

When a space ship falls out of the sky and there's a surviving test pilot, and one that incurs fatal injuries, how does the workers' compensation system cope?

Are test pilots treated differently than us regular folks? Are the medical bills of the survivor strictly scrutinized for appropriate charges? Are medical decisions rendered quickly, or will there be rounds of utilization review and independent review?

It's now been preliminarily determined by the National Transportation Safety Board that SpaceShipTwo's structural failure was induced by pilot error - the swinging boom that was used to slow the spacecraft for reentry into the atmosphere was unlocked and initiated prematurely, presumably accidentally, by the right seat pilot.

The NTSB believes that mission copilot Michael Alsbury, 39, who died in the crash and was sitting in the right seat of SpaceShipTwo, prematurely flipped a switch that unlocked the boom while the craft was still traveling in excess of Mach 1.3, or 1.3 times the speed of sound.

The experimental rocket plane broke up over the Mojave Desert moments after that action. Mission pilot Peter Siebold, 43, parachuted out of the aircraft and suffered serious injuries. Investigators have not yet been able to interview Siebold, who was discharged from Antelope Valley Hospital Monday according to news reports.

Test pilot ranks high in the occupational risk category for obvious reasons - surviving a plane crash is rare.

Siebold bailed out at 50,000 feet which is nearly twice as high as Mount Everest. At that altitude there is essentially no oxygen, and the ambient air temperature is about minus 70 degrees fahrenheit. The pilots did not wear pressure suits, because the cabin of SpaceShipTwo was pressurized.

This is 6641M, not SpaceShipTwo

That Siebold had enough wits about him to get out of the craft at over 600 miles per hour, maintain sufficient situational awareness to be able to deploy his parachute at a safe altitude and speed, and in fact be able to do so despite the extreme cold, is nothing short of miraculous.

Now the recovery starts. Undoubtedly there will be long term medical consequences and potential disability. Will his condition prevent Siebold from flying again professionally? And if it doesn't will there be a position for him at his employer, Scaled Composites (a division now of Northrop Grumman Corp.)?

I don't know how Northrup's workers' compensation program is set up - the company is a global corporation with operations in many different countries, let alone states. Someone out there likely knows how the company structures its work comp compliance. But there does at least appear to be some sort of wage differential program to make up for the capitation of benefits provided by work comp.

I don't have any answers. I don't really know what will happen with Siebold, or whether the family of his copilot, Alsbury, will receive any compensation above the statutory limits for death benefits (I would assume there was a supplemental life insurance policy...).

I suspect however that, from a claims perspective, the cases of Alsbury and Siebold will be handled quite efficiently and expertly - this is after all a high profile situation. But more importantly the culture of space exploration encompasses calculated risk and a close-knit relationship between all involved in a project like SpaceShipTwo.

My guess is that Siebold will be flying again, professionally, and probably for his employer - test pilots are of that rare psychological makeup that perseveres against the most challenging situations; it's more than training, it's genetic. And Siebold has a huge amount of knowledge about the plane and the project that his employer is going to want to preserve.

A work injury recovery system, whether called workers' compensation or otherwise, requires the cooperation and coordination of many different elements to deliver as successful an outcome as possible.

The primary element is the attitude of the employer and the attitude of the injured worker. When their interests are aligned surprising things can happen.

Siebold has already demonstrated his attitude - surviving the near space breakup of an aircraft is demonstrative of his mindset.

The culture of Scaled Composites, a company that operates at the fringes of space itself and overcomes huge risks every day is also demonstrative of a mindset I suspect that is in alignment with Siebold's.

No Teeth, No Respect

One of the topics that was discussed at the 11th Annual National Workers' Compensation Insurance ExecuSummit held at the Mohegan Sun Convention Center & Hotel in Uncasville, CT was the deterrent effect workers' compensation could have over and above safety regulations on worker safety.

The theory goes (and I'm sure has some validity) that when properly educated an employer would see the light be providing a more safe work place and instigate work safety initiatives and incentives.

Some employers don't care.

Alas, an administrative law judge's appeal decision last month upheld serious citations issued by Cal OSHA to San Francisco-based adult film employer Treasure Island Media Inc. for inadequate protection of employees during production of adult film videos.

Serious citations are those that can cause death or serious physical injury. The final penalty for the safety violations was $8,670, lowered on administrative appeal from Cal OSHA's proposed penalty of $20,485.

The allegations were that Treasure Island Media performers were featured having sex with multiple partners without mandated controls to prevent exposure to bloodborne pathogens, including HIV, and Hepatitis B and C. The bloodborne pathogen standard for workplaces was adopted to prevent workers from exposure to blood or other potentially infectious materials.

The first serious violation alleged that Treasure Island lacked an exposure control plan to limit employee contact with infectious bodily materials during filming and set cleaning. The second cited the failure to observe universal precautions during film production and failure to institute engineering and work practice controls, including the use of condoms.

This has not been the first time CalOSHA took action against the company.

In 2009, the Cal OSHA High Hazard Unit cited Treasure Island Media for numerous general violations as well as the two serious violations for failure to protect employees against sexual transmission of bloodborne pathogens.

Obviously neither workers' compensation nor the abysmally small penalties have served as a deterrent to the company nor have they served as motivation to comply - apparently these "incentives" are more a cost of doing business rather than motivation to comply with the law and provide a safe working place for its employees.

Yesterday I talked about the Rule of Law - yes, most people in my observation are respectful of the Rule of Law.

But when the Rule of Law lacks sufficient "teeth" then those with less respect for it won't comply.

Just The Facts, Ma'am

A recent case heard by the West Virginia Supreme Court found that simply assisting a co-worker lift a box of personal effects was not a task beneficial to the employer, thus denying workers' compensation benefits.

This is why many people who are not trained in the vagaries of the law hate it; how do you determine what's beneficial to the employer in those close cases, like Morton v. West Virginia Office of Insurance Commissioner, No. 11-1382?

Morton worked for Seneca Health Services, as a member of its support staff. Her job required that she provide secretarial, reception and data-entry functions necessary for accurate processing of clinical and administrative data at Seneca.

In September 2010, one of Morton's coworkers put a large box in Morton's office for Elisa Robinette, a mutual colleague, to retrieve. The box contained maternity clothes that Robinette had let the coworker borrow.

When Robinette arrived to claim the box, she was unable to lift it on her own and she asked Morton for help. Morton lost her balance while helping lift the box and fell backwards, injuring her right wrist and shoulder.

Morton filed a claim for workers' compensation benefits, but Seneca's claims administrator denied it, finding Morton's injury had not resulted from her employment.

Up the judicial ladder the claim went: Morton's argument, acknowledging the box contained personal effects, was that acquiescing to any request for assistance by another employee fell within the scope of her job duties and that her employer benefited by having employees who "work collaboratively and cooperatively with one another."

The Supreme Court majority acknowledged that there was no question that Morton's injury had occurred in the course of her employment because Morton was on Seneca's premises, during her regular work hours and ostensibly was tending to her duties at the time.

But whether Morton's injury had resulted from her employment was a closer question, the majority said, and there was no West Virginia precedent directly on point.

The majority also noted something that perhaps legislators understand when they write the laws, or perhaps they don't - that such cases are particularly fact driven.

In this case, the majority reasoned that the box of maternity clothes and the function of taking them to Robinette's car had nothing whatsoever to do with Seneca's business, aside from the fact that the box happened to have been left there for the convenience of Robinette. The majority said it could "discern no particular benefit to Seneca in petitioner’s admittedly kind, but purely gratuitous, gesture of assisting her co­worker with the box."

If Morton could recover in workers' compensation, this would essentially make employers "the insurer of anyone injured on the premises, regardless of the nature of the activity giving rise to the injury, so long as an employee was assisting with the activity in an effort to be helpful and collegial," the court majority said.

In dissent Justice Davis argued that the fact the box had been left in Morton's office meant that it had a direct impact on Morton's job, and that it was "obvious that removal of the large box from the petitioner’s workspace benefited the employer by allowing the petitioner to have all the space she needed to efficiently perform the tasks she was assigned."

I don't know how Morton got her medical bills paid or whether there was any claim for time off.

And I'm not saying the majority in this case was wrong, or that the dissent was right - what is interesting to me is where the line in the sand gets drawn and for what reasons.

Maybe Morton's argument is accurate and that this case will have a chilling effect on people helping others at work which would demoralize the work force thus impinging production with a deleterious result to the employer.

My guess is most workers have no clue about the Morton case and that human behavior will prevail and there will be some new Morton like case with a slightly different twist on the facts that will result in a compensable injury.

For work comp wonks, this is like Disneyland...

What Will Get Brown's Signature

There are 2 weeks left in the 2013 California legislative session with a few bills pending relating to workers' compensation. Here's my list of what's going to be sent to the Governor's desk, and will obtain his signature.

AB 1373, by Speaker John A. Perez, D-Los Angeles, would double to 480 weeks the current 240-week window in which dependents of public safety officers can seek benefits for deaths caused by cancer, tuberculosis, methicillin-resistant Staphylococcus aureus or a blood-borne infectious disease.

This bill will get out of the legislature - it passed the Appropriations Committee 5-2 on Friday despite lack of a cost projection - but Gov. Brown will not sign it. He vetoed a similar measure last year for lack of cost projections.

AB 454, by Roger Dickinson, D-Sacramento, would require that indemnity benefits for a worker injured on a project subject to federal, state or city prevailing wage requirements be calculated at the prevailing wage rate, regardless of what the worker actually was paid.

This bill is backed by powerful labor unions and building/contracting lobbies to "even the playing field" against contractors who engage in unfair competition tactics with their employees on government projects. I give it an 80% chance of getting Gov. Brown's signature to help dissuade unfair competition.

AB 1309, by Henry Perea, D-Fresno, would impose restrictions on cumulative trauma and occupational disease claims by professional athletes in addition to imposing tighter jurisdictional requirements on claims made by football, baseball, hockey and basketball players.

The NFL's unprecedented settlement of the class action brain injury lawsuit in federal court last week was just a warmer for this bill - an obstacle that could have derailed NFL's ambitions because AB 1309 could be seen as an attempt to skirt responsibility for the league's players.

Consequently, I'm calling AB 1309 a slam dunk, a touch down, a goal, a home run; the Governor has pen in hand ready to sign.

And Los Angeles will thus eventually get a football team...

Senate Bill 258, a bill by Sen. Ted Lieu, D-Torrance is an SB 863 clean up bill that clarifies the prohibition against selling liens unless the service provider has gone out of business to apply only to liens that were sold after the reform bill took effect on Jan. 1, 2013. In addition the bill would require that all seven members of the Workers’ Compensation Appeals Board be experienced attorneys.

An amendment to the bill posted on the Legislature’s website on Friday clarifies that the employer or carrier is required to reimburse a lien claimant for the $150 filing fee if the claimant prevails.

I'm also giving this bill a high probability of signature by the Governor, assuming it can get out of the Legislature without additional amendment that would require debate.

SB 375 corrects erroneous references in SB 863 to sections of the Government Code and the Labor Code. The bill would also replace a reference to “administrative hearing” interpreters to “medical examination” interpreters. This is an obvious candidate for Brown's pen.

Brown has already signed SB 527, by Marty Block, D-San Diego, that would give full-time lifeguards in San Diego the same enhanced temporary disability benefits as other safety officers and another to simplify pharmacy billing requirements.

And Brown has already signed SB 146 by Ricardo Lara, D-Long Beach, which eliminates the requirement to include a copy of an original prescription when submitting invoices to work comp payers that got in the way of submitting bills electronically.

The 2013 legislative session ends on Sept. 13.

The Collision of Techno-Babble and Work Comp

There's a slide presentation circulating around the Internet about the marvelous culture of NetFlix, the video rent-by-mail company that has transformed itself into the largest video-on-demand delivery service in the world.

The presentation is pure Silicon Valley stuff - 126 slides of amorphous descriptions using lots of techno-babble about unique un-rules that promote the overriding theme: Freedom and Responsibility.

For instance, there is no vacation time recording - everyone is supposed to be self regulating and realize when they are supposed to work and when they are supposed to be leisurely and rest.

Of course nothing is said about the fact that in California vacation time is the same as wages and must be accounted for at the time of employee termination and paid. So somewhere along the way the "culture" of NetFlix collides violently with the law.

I don't know how NetFlix deals with that situation - not sure I really care frankly - the reason I bring this up is because Silicon Valley is often heralded as the originator of Big Ideas that are promoted by Smart People out to Change the World.

Because of this reputation things that happen in the Valley tend to be emulated in other parts of the country because, it seems, everyone feels that if you're going to develop software and compatible hardware you need to behave like those successful people that come out of Stanford and Berkeley, including far-fetched human resource management ideas.

Of course it's all Valley techno-babble - at a certain point in organizational scaling the ability to treat individuals individually becomes logistically impossible and expensive. Thus over the growth of a company, despite its "culture," regimentation is necessary to maintain order in processes.

I did a quick search on WorkCompCentral for "NetFlix" to see if there were any Appeals Board Panel opinions or higher court decisions concerning the company. I wanted to see how the NetFlix culture fit within the confines of workers' compensation law.

I didn't find any cases where NetFlix was the party defendant.

That doesn't mean there aren't any, just that WorkCompCentral's archive didn't contain any such cases.

There was one case where "NetFlix" did come up in the search, and that is an unpublished case out of the 5th Appellate District entitled American Home Assurance v. WCAB (Wuertz) dated 9/11/09.

Donald Wuertz worked as a machine operator for RR Donnelley in its printing business in Visalia. Wuertz commuted to work about 50 miles each way on a motorcycle from his home.

A mandatory 7:30 a.m. meeting at the worksite to address specific complaints from one of the company s customers, Netflix, was called. These meetings occur rarely but they are mandatory - everyone must attend.

Wuertz was on his way to the meeting and got into a serious motorcycle accident. Though he didn't attend the meeting he was still paid for the two hours that the meeting would have taken because his former supervisor considered that he would not have been in the motorcycle accident but for the meeting.

The workers' compensation judge, the Appeals Board and the 5th District all found compensability.

In Kansas, the state Supreme Court sent a case back to the fact finding courts to determine if an employee who was injured in a go-kart accident was in the course and scope of employment at the time.

In Douglas v. Ad Astra Information Systems, No. 101,445, Douglas had worked for Ad Astra Information Systems, an academic scheduling software program developer and administrator, in Overland, Kan. His normal duties required him to answer questions and solve customers' problems regarding Ad Astra's software between the hours of 8 a.m. and 5 p.m., Monday through Friday.

In November 2006, Ad Astra's owners sent out an email inviting Douglas and his coworkers to spend the afternoon at Sadlers Indoor Go-kart Racing. The company had reserved exclusive use of the go-kart track and covered all of the event expenses, including food.

Ad Astra deducted the cost of the event as a necessary business expense and paid the employees their normal wages for the time they spent at the event.

The company's owners said they had arranged the event primarily to show its appreciation to its employees for their recent work at a client conference, but Douglas and some of his coworkers testified that they felt pressured to attend.

Ad Astra employees were given the option of either attending the event or remaining at work. Those who attended divided themselves into teams and competed for prizes.

Sounds a bit Valley-like, doesn't it?

Douglas stated that he would normally not race a go-kart but that he agreed to race because he wanted to be a part of his team.

While Douglas was racing, he encountered another go-kart stopped on the track. He turned sharply to avoid a collision while traveling at an estimated 20 to 30 mph and crashed into a tire wall. Douglas was thrown from the cart and landed on his right side.

After the wreck, Douglas experienced pain and did not race again, although he remained at the event for the rest of the workday.

Douglas sought medical treatment that night and doctors diagnosed him with a rib fracture, pulmonary contusions, reduced pulmonary function and a lung injury that required surgery.

He sought workers' compensation benefits and obtained a 15% permanent impairment rating for his injuries. Douglas' attorney said his claim was worth about $32,000.

Up the appellate chain Douglas won each round with the majority of those opining on the situation that Kansas law held that if the employee felt participation was mandatory then a recreational activity was within the course and scope of employment.

The Kansas Supreme Court sent the case back down for further evidentiary hearings to ensure that the correct legal standard, K.S.A. 2006 Supp. 44-508(f), is used in the analysis rather than the lower court's reliance on Larson's treatise on the topic.

Whether or not Douglas' case is found compensable in Kansas is debatable. Kansas has a different culture than California.

So does Florida, and Oregon, and New York and every other state.

The NetFlix culture is laudable, if not inspirational. But at some point human resource management fails to align with the "culture" of the law. Organizations are free to do what they want to do with their employees within the bounds of the law, but at some point in time there is an intersection where proceeding before stopping and looking both ways is bound to involve a collision with how the rest of society works.

Culture is refined by a greater theme - the Rule of Law. That's when the control of a company's culture is removed from the executive suite and laid bare for societal review.

The lesson for business is, emulate but be prepared for the consequences.

Drug Overdosing Becomes the Employer's Risk

While Washington is a monopolistic, state-run workers' compensation system, lessons applicable to the traditional private insurance systems of most other states are occasionally delivered.

And this time the lesson is that if industry doesn't step in and help resolve this nation's growing problem with prescription drugs, the courts will make them do so.

On Tuesday a divided Washington Court of Appeals panel ruled that the widow of a trucking company employee who died after ingesting six different prescription medications and alcohol was entitled to surviving spouse benefits as a matter of law.

In Department of Labor and Industries v. Shirley, No. 66994-0-I, Brian Shirley injured his low back while working for Wells Trucking and Leasing in 2004. He filed an application for benefits with the Department of Labor and Industries, and his claim was allowed.

The department closed Shirley’s claim in March 2005 with no award for permanent partial disability. Shirley objected, but was unsuccessful in challenging the department's action.

At the time his claim was closed, Shirley was taking only ibuprofen. Later Shirley's treating physician, Dr. Chester Jangala, said he had prescribed oxycodone, citalopram, alprazolam and amitriptyline to treat Shirley's back pain.

Two years later, Shirley's wife found him dead. He was 37 years old.

Shirley's wife testified that Shirley had a job, and that he had gone to work as normal on the day before his death. That evening, Shirley helped a neighbor chop wood and then came home and went to bed. He did not wake up the next morning.

The King County Medical Examiner performed an autopsy and listed the cause of death as an accident resulting from acute alcohol and drug intoxication.

A toxicology report indicated that Shirley's blood alcohol content was 0.07 grams per 100 mL, slightly lower than the state-presumed intoxication level of 0.08 grams per 100 mL. There were also traces of oxycodone, citalopram, desmethylcitalopram, alprazolam, Nortriptyline, amitriptyline, carbamazepine, Promethazine, and acetaminophen in his system.

Shirley's widow filed an application for survivor benefits under the Industrial Insurance Act after his death, but the department denied her claim.

The case went through several layers of hearings and appeals. During these proceedings, all of the medical experts who testified agreed that the cause of Shirley's death was the combination of alcohol, oxycodone, citalopram, alprazolam, amitriptyline, carbamazepine and acetaminophen.

They all said that none of the drug levels in Shirley's blood were highly elevated. Even though the levels of oxycodone and citalopram in Shirley's system during the autopsy were inconsistent with normal dosing, several doctors testified that the level was closer to a "therapeutic" level than a "toxic" level.

All of the doctors agreed that neither the drugs alone nor the alcohol alone would have killed Shirley, but the combination of drugs and alcohol suppressed Shirley's respiration and gag reflex, causing him to suffocate.

Even though Shirley's consumption of alcohol in conjunction with his medications was "not a wise decision," the court majority opined, this "did not amount to a supervening cause (of death)" since it was undisputed that neither the drugs nor alcohol alone would have killed him."

The court concluded that the evidence "clearly indicates that but for the prescription medications, prescribed specifically and directly for the effects of the industrial injury, Mr. Shirley would not have died" and so his widow was entitled to survivor benefits.

The dissent by Judge C. Kenneth Grosse argued that he "cannot accept as rational the conclusion that it was foreseeable that a back injury of this nature would inexorably result in the injured workman abusing the painkillers prescribed for his treatment while simultaneously abusing alcohol."

This Washington case puts the national problem of prescription drugs squarely into the hands of the workers' compensation industry. Sure, other state courts may differ in their interpretation of the law, but clearly a new risk is being foisted upon employers and their carriers.

The industry will react in two ways: 1) measure the risk and price it into new policy years; 2) engage in tactics designed to minimize the risk and increase safety.

We have seen numbers from various state filings in the past year or so reflecting an increased awareness of potential risks due to drug overdosing, so the pricing impact of this problem is starting to be factored into the economics of workers' compensation.

And we have started to see new carrier tactics, such as California's State Fund's requirement that physicians in their network agree to prescription contracts.

While the government may be able to regulate and educate, it's when the financial consequences are handed down to the ultimate consumer - employers - that meaningful and serious reform occurs. This Washington case reflects that reality.

How Much Cost is Tied to Reasons Other Than Injury?

A Wisconsin case highlights the tension between an employer's desire to maintain an healthy, fit workforce, and the unwillingness to pay for consequences that result from employees injured in the pursuit of fitness.

As one might expect, the case involves public service - specifically in this instance a police department and one of its officers.

Appleton Police Sgt. Michael Nofzinger injured his shoulder doing pushups at home that he said were for the purpose of maintaining fitness for duty on the police force.

Nofzinger’s employment with the City of Appleton was covered by a collective bargaining agreement, which included a provision that required a twice-yearly physical fitness test. Nofzinger was tested for upper body strength, abdominal strength, flexibility, cardiovascular endurance, and percentage of body fat, according to court documents.

Employees who pass benchmarks in the physical fitness test receive a lump-sum cash bonus and also become eligible for a retirement bonus incentive.

The Wisconsin Court of Appeals in March affirmed a circuit court ruling that upheld the Wisconsin Labor and Industry Review Commission decision in the case. The appellate court ruled that the pushups were not “voluntary” and were directly related to the officer’s employment. The state Supreme Court denied review to the decision in August.

In ruling the shoulder injury was a result of employment, the commission wrote that “there was an exact match between the type of exercise required by the employer-mandated physical fitness test and the exercise the applicant was performing when injured.”

“While the employer exerted no direct control over his off-premises, employment-required exercise program, there was a direct link between the type of exercise he was performing when injured and the type of exercise required by the employer to pass the physical fitness test,” the commission ruled.

The decision was the right one. As a citizen I want my police force physically fit and mentally aware. Whether an officer (or firefighter for that matter) sustains some injury in the process of either getting fit or maintaining fitness at home, or at the station, is irrelevant. If it furthers the job then it is part of the job.

In the WorkCompCentral story that covered the case some folks commented that this was a slippery slope and that it may be applied to other types of occupations.

The ruling is “going to affect all employers that have a similar policy that you have to be physically fit,” said workers’ compensation defense attorney Bill Sachse of the law firm Peterson, Johnson, and Murray in Milwaukee. “I don’t know if there are any limits.”

I'm not sure there should be, or that it really matters. In the Nofzinger case, his pursuit of fitness was a benefit to the employer, encouraged by the employer through its policies and pay incentives, and is something that could happen "on the job" just as easily as at home.

The key test is whether there was a benefit imparted to the employer and whether the employee was incentivized to engage in that physical activity.

“I carry my files in and out of my car to prepare for a trial and I throw my back out,” Sachse said. “A claims adjustor takes an online insurance course at home, has books all over the floor, and trips. All of these scenarios are potentially compensable under this ruling.”

The two scenarios painted by Sache are fundamentally different, though they could produce compensable injuries under other liability theories (and again, I'm not sure that's a bad thing).

I guess what struck me about this case is that the City of Appleton disputed this case in the first place. In my mind this case really is a "no-brainer" in terms of compensability due to the aforementioned qualities.

There must be some other, underlying, reason why the City decided to challenge the claim.

I think a lot of decisions by employers to challenge a claim has some underlying reason or purpose that doesn't get into the record. Was it because Nofzinger wasn't all that welcome as an employee? Was it because the City didn't want to add to its disability retirement liabilities? Was there some personality conflict between Nofzinger and the claims adjuster, or his supervisor?

We don't know. Likely we never will.

But we see poor employer decisions all of the time.

Just as workers' compensation is the poor man's dispute resolution venue for dispensing with employer actions that leave a bad taste with the employee, workers' compensation can also be the employer's alternative dispute resolution system when dealing with employment issues it otherwise finds offensive.

I wonder how much of the "costs" incurred by employers in workers' compensation is tied to denying claims for reasons other than the claimed injury.

Pakistan Factory Fires Reminiscent of NY, 1911

Yesterday I wrote about what I thought was despicable behavior by a Tennessee employer. Then later that morning I read about a factory disaster in Pakistan that put the Tennessee case into perspective, and was eerily similar to a disaster over 100 years ago in New York.

It was March 25, 1911 when the Triangle Shirtwaist Factory went up in flames, the deadliest industrial disaster in the history of the city of New York and the fourth highest loss of life from an industrial accident in U.S. history. It was also the second deadliest disaster in New York City – after the burning of the General Slocum on June 15, 1904 – until the World Trade Center attack 90 years later. 

146 garment workers died from burning, smoke inhalation, or falling.

Because the managers had locked the doors to the stairwells and exits – a common practice at the time to prevent pilferage and unauthorized breaks – many of the workers who could not escape the burning building jumped from the eighth, ninth, and tenth floors to the streets below. 

The fire led to new laws on factory safety, unionization of workers, and sparked the need for workers' compensation and industrial safety laws in New York and throughout the nation.

Fast forward to September 11, 2012 and nearly the exact same disaster is repeated in Pakistan where fires swept through two clothing factories in Pakistan, killing 283 workers, many trapped behind locked doors and barred windows.

The twin blazes broke out Tuesday night at a garment factory in the southern port city of Karachi and a shoe manufacturer in the eastern city of Lahore. At least 258 people died in the fire in Karachi according to news reports. An additional 25 died in Lahore.

The workers in Karachi had only one way out since the factory's owner had locked all the other exit doors in response to a recent theft, according to media reports. Many of the victims died of asphyxiation in the smoke-filled basement because they could not escape. Others jumped from up to five stories to escape the flames. There were between 300 and 400 workers in the building when the fire erupted.

Pakistan has workers' compensation and worker safety laws, and news reports say that it is a crime to lock emergency exits. 

There is no independent legislation on occupational safety and health issues in Pakistan. The main law, which governs these issues, is the Chapter 3 of Factories Act, 1934. All the provinces, under this act, have devised Factories Rules. The Hazardous Occupations Rules, 1963 under the authority of Factories Act not only specify some hazardous occupations but also authorize the Chief Inspector of Factories to declare any other process as hazardous.

But according to the Wall Street Journal report on the fires, Pakistan workers still face atrocious conditions with workplaces that often lack basic safety equipment and owners who bribe officials to ignore the violations.

Under Pakistan's Workers Compensation Act, 1923 an employer has to compensate his employees for injuries by accident. If death or permanent and total disablement of a worker results from the injury, the employer has to pay the dependents of that employee 200,000 Pakistani Rupees, which at current exchange rates is equivalent to 2114.21 US dollars.

According to the Wall Street Journal, on Wednesday a provincial minister ordered an inspection of all factories and plants in the Sindh province within 48 hours.

"Things like this used to happen in the US all the time before all that 'Red Tape' that everyone whines about came along,"someone commented to the Journal story. 

I think that says it all.

I Won't Eat At This Restaurant

Sometimes its almost impossible to believe some reports of abusive employer conduct. Perhaps in some other country a tale like this would not be surprising, but in modern United States one would not expect this kind of story.

A recent Tennessee case demonstrates the extent of callousness and inhumane treatment some employers can display, even in the second millenium where society is presumably more advanced than in the Industrial Age.

Lance Erickson was employed as a co-manager of the Sonic Drive In restaurant in Oak Ridge, Tenn., owned by SDI of Oak Ridge Turnpike, LLC. On Nov. 14, the general manager of the restaurant asked him to repair a heating element used to keep food warm until it was served.

As Erickson attempted to repair the heating element, an unknown person plugged the device into an electrical socket, sending a 220-volt current through Erickson's hands and body. The shock rendered him unconscious for five minutes. Employees told him later that he fell and hit his head on the floor or a safe, but he had to call his fiance to take him to the hospital because workers at the restaurant were too busy, according to the court record.

Erickson was treated at the Methodist Medical Center but suffered chest pains, memory loss and sensitivity to light after the accident. He asked his district manager, Wade Bell, and Bell's successor Phillip Wheatley to pay his medical expenses. They told him they would "take care of it," but the bills remained unpaid.

On Nov. 3, 2008, 51 weeks after the injury, Erickson filed a workers' compensation claim fearing the statue of limitations would preclude him from reimbursement of his medical expenses.

A few days after filing his claim, Wheatley vulgarly expressed his anger, asking him, "What the ... do you think you are doing? I told you this was taken care of."

Erickson had worked at the Sonic Drive In for six years and had never received a reprimand the entire duration of employment.

But within weeks of filing his workers' compensation claim Erickson received two reprimands.

On the first occasion, he received a reprimand for giving a customer a $2.97 refund four minutes after the restaurant had closed and not properly reporting the refund so that it would not be logged onto daily sales records. On Dec. 20, 2008, he was reprimanded and later fired for leaving the store during his shift without another manager on site.

SDI placed Erickson on three days' suspension after the second reprimand, extended the suspension for three more days and then told him he was being terminated.

Remarkably, yet in an all too commonplace situation, SDI denied that Erickson's injuries were work related and alleged that he had been fired for misconduct.

At trial, co-workers testified that other store managers had routinely left the premises without other managers on site and that Erickson had used the usual process for reporting refunds.

Medical and vocational evidence was presented and the trial court found that Erickson suffered a 10% permanent partial disability and was entitled to a vocational disability benefit equal to six times the impairment rating − an award of $107,702.40 − because his employer had not offered him a meaningful return to work. The court also ordered the employer to pay continuing medical benefits for his injury.

SDI appealed and lost.

In addition the Tennessee Department of Labor fined the employer for failing to report the accident. The amount was not noted by the court opinion and as far as I'm concerned it wasn't enough.

My only solace in this case is that in all likelihood SDI's insurance didn't cover the judgment because the employer didn't follow its insurance claims reporting policy and likely the carrier denied both coverage and cost of defense.

I know the fast food industry is the bottom of the totem pole when it comes to working conditions, but employers like those in this case are all too common, and should frankly be put out of business. If a business can't treat the people who flip your burgers with any regard, how do you think they view their customers? I'm not taking the chance...

And in all honesty, knowing that appellate cases get published for the whole world to see and then taking an appeal with these facts is evidence that these business owners have zero interest in public perception of their brand. That can only translate to the quality of their products.

The case is Erickson v. SDI of Oak Ridge Turnpike LLC, E2011-02427-WC-R3-WC, 09/04/2012.

Can More Paper Protect MA Temp Workers?

A while back I posited that most workers probably don't know what workers' compensation was, or cared, until they have an injury at work or unless they know someone who is "on comp".

Massachusetts is going to try to keep workers for temporary staffing firms informed about who the coverage provider with House Bill 4304, sponsored by Rep. Linda Dorcena Forry, D-Dorchester, called the "Temporary Worker Right to Know Act."

Proponents say the bill will help ensure that the more than 40,000 day laborers in Massachusetts are protected from injuries.

HB 4304 also requires temporary staffing firms to tell workers what safety equipment and training are required for the job.

The Workplace Safety Task Force of the Massachusetts Bar Association and the Massachusetts Coalition for Occupational Safety and Health (MassCOSH) has been pushing for passage of versions of HB 4304 for the past two years.

They argue that day laborers – primarily in the construction industry – are working without protection and often without knowing the identities of staffing company clients.

The bill exempts professional workers, secretaries and administrative assistants.

The bill requires staffing companies to provide a written job order that includes:

• The name, address and telephone number of the staffing agency, its workers' compensation carrier, the employer at the worksite and contact information for the state Department of Labor Standards.
• The type of job and any requirements for training, equipment or licenses.
• The designated pay day, hourly rate and anticipated start and end times for the job.
• Any meals or transportation provided by the staffing company or the worksite employer and associated fees charged workers.
• A multilingual notice that the job order contains important information and should be translated.
• The bill also prohibits staffing companies from charging workers for registering with the state or for procuring the job.

The opposition to HB 4304, the National Federation of Independent Business (NFIB) and the Massachusetts Staffing Association argue that the law may be unenforceable and will bury legitimate staffing companies in paperwork. They also argue that the bill would drive unscrupulous staffing companies underground.

"There's definitely a day laborer issue. These are the folks who are picked up for some job at 6 a.m. and don't know where they are going. They get hurt on the job and find out there's no workers' compensation," Bill Vernon, Massachusetts director of NFIB, said. "But what (lawmakers) have done is sucked in legitimate companies, and the bill may create a real problem with compliance."

I tend to agree with NFIB. I'm not sure employees really care about workers' compensation, safety or training. They might care about safety if the engage in an activity that they believe might not be safe, but most of the time those workers are too worried about getting paid and putting food on the table than whether a particular job is safe.

Likewise whether training is required, equipment, licenses - not particularly important when each and every hour worked means another step away from poverty.

I hope that the Massachusetts law accomplishes its intended purpose - to help protect the state's temporary workers from injury and ensure access to care and benefits if the unfortunate happens.

I'm just not convinced that another couple of required pieces of paper are going to make a difference.

Chinese Work Comp Surprisingly Similar

Yesterday I posted on Facebook a link to a horrific photo in the Wall Street Journal of a Chinese construction worker getting steel bars cut from his body - the look on the faces of the people helping conveys the sheer terror of the situation.

The photo is here (I am unsure if this is subscription content, so it may not work):

http://online.wsj.com/article/SB10001424052702303734204577464740934182320.html?mod=WSJ_hps_PhotosModule_1#slide/1

I wondered if China had workers' compensation - turns out it does.

China passed a workers' compensation law that took effect January 2004. While workers' compensation is "voluntary" in China (until "ordered"), employers that do not subscribe to the insurance program are required to pay the same benefits available through the program.

Sort of like the Oklahoma non-subscription model that didn't pass this year with some key differences.

But China is different because such a large percentage of the population works for the government or the military. About half of the population is still agricultural.

China's work injury protection history follows a similar path to Western cultures that have workers' compensation systems and it is rooted (pun intended) in the transition from agricultural to industrial economies, and in China this means a transition from a command economy (where the government decides what is done, when, and with what resources) to a market economy.

It turns out that China, prior to its Cultural Revolution (between 1966 and 1976), had an employment insurance system which included work injuries. This system was interrupted by persecution of dissidents and the Cultural Revolution, and then beginning around 1978 the economic transition started.

This transition saw the migration of workers from agricultural regions to urban regions as the economy required more labor to build things, rather than feed themselves. At first these migrating agricultural workers were seen culturally as less than equal (sound familiar?) - they had low levels of training and skills, and consequently high rates of accidents and deaths on the job. These people were regarded as peasants and were not covered by insurance though arguably they were the most in need of some form of work injury protection.

While this migration pattern was going on there was also transition in State-owned Enterprises (SOE). Laws were changed as the economy moved from command to market based, and as a consequence SOEs had to compete on a cost basis with market based companies. This meant that savings were sought everywhere possible, and thus worker safety was secondary to company profit.

In 2004, with China's manufacturing economy rapidly growing, the government's Regulations on Work Injury Insurance became law. All employers are required to participate with insurance funded solely by employer premiums, which are generally less than 1% of payroll, with different rates based on classifications. Both injury and illness is covered and it is administered through the Work Injury Insurance Board affiliated with the Labor Department.

For employers that paid into the system as requested the insurance would pay for most compensation items such as medical expenses, lump sum indemnity, monthly pensions, survivor's benefits - there is no loss of earning compensation though - employers are required to maintain wages during the period of medical treatment. In addition an employer can not terminate an employee during the period of medical treatment and if an employment contract ends during that period the law requires its continuation until the end of the medical period.

For employer that did not pay into the system they would be "ordered" to do so - the penalty for failure to do so is that if a work injury occurred during the period of non-insurance the employer would be liable for all benefit just the same as though they were part of the system.

Benefits under the Chinese system are similar to Western systems, though probably with less subjectivity and more concrete divisions in levels of, for instance, permanent disability. Medical expenses are advanced by the employer or injured worker and then are reimbursed by work injury insurance. As mentioned above, wages are maintained so there is no lost earnings paid (thus no "temporary disability"). And permanent disability is paid via a lump sum system that is based on "degrees" of disability.

There is a bifurcated dispute resolution system in place depending upon whether the employer pays into the system or not. If the employer pays into the system then any dispute is between the injured worker and the Work Injury Insurance Board. If the employer is a non-subscriber then there are two systems: compensability is determined in an action by the injured worker to the Work Injury Insurance Board. But compensation matters are treated the same as labor disputes, with mediation, then labor arbitration, then litigation with review by a higher court.

And like counter parts in the West the system is subject to "reforms". And like in the West employers carry on about the cost and how it inhibits competition while Labor fights for fair treatment and working conditions.

There is one very big important difference from the Chinese model and the Western model that stems from how the different governments work: the Western model is a provincial level system - meaning that each state has its own system, and even different Federal risks have different systems (e.g. LSHW, DBA, etc.). But the Chinese system is national in scope - the provinces do not have separate systems. 

I have obviously glossed over the Chinese workers' compensation system, and certainly there are experts who probably should correct my many generalities here.

What I find of particular interest is that, even though it was established after almost 100 years after the Western model was established, how similar the system is with nearly the same types of benefits and detriments. 

It turns out that humans are all the same - regardless of whether we live in the East or the West, motivations, emotions, the process of life are no different.

What we have in the US may just turn out to be about as good as it can get. It may not be perfect, and there will always be disputes, but if the Chinese had 100 years to figure out something better you'd think they would - and it turns out they haven't...

A very good PowerPoint slide show on the Chinese workers' compensation system is available for download from the University of Ottawa's website.

NFL CTE Cases Uniquely American

As the various lawsuits concerning allegations of misrepresentation and violation of safety protocol against the National Football League (NFL) progress, one element that is going to provide some very interesting legal fodder is whether the teams themselves, and their carriers, will be able to subrogate for workers' compensation benefits against the NFL suits.

The cases are maturing. In May, 558 players filed 13 complaints in federal courts in Georgia, Louisiana, Pennsylvania and Texas and in district courts in Los Angeles and Fulton, Ga. More than 2,200 former players have filed 80 lawsuits against the league since Aug. 17, 2011.

The basic allegations in the lawsuits say the NFL withheld from players evidence linking multiple concussions to chronic traumatic encephalopathy (CTE), a progressive and degenerative disease that causes headaches, dizziness, dementia, depression and possibly Alzheimer’s disease.

Certainly many of those players filed for and received workers' compensation benefits against their teams. The past several years have seen quite a bit of legal, legislative and public relations maneuvering by the NFL and the player's union concerning jurisdictional issues since many players preferred to use the loose jurisdictional rules of certain states, most notably California, to take advantage of more liberal laws - primarily concerning recognition of continuous trauma injuries.

Player's head injuries fall within that category.

The civil cases appear headed for consolidation and/or class certification status. On April 26, Anita Brody, a U.S. District judge in Philadelphia, ruled that plaintiffs must submit a master administrative complaint by June 8 compiling common statements in the growing number of lawsuits filed at the federal and state level against the NFL.

The timeline for managing this litigation in Philadelphia will take the master case through the balance of the year to get to the first ruling regarding consolidation and class status:

• Plaintiffs must submit the master complaint by June 8.
• NFL and Riddell can file briefs on the master complaint by June 19.
• Motions to dismiss filed in response to the master complaint are due Aug. 9.
• Plaintiffs’ response to the motions to dismiss are due Oct. 10.
• Replies to plaintiffs’ motions are due Nov. 26.

According to experts, if the Philadelphia case rules favorably towards players, the courts where the complaints were originally filed will determine damages.

Someone with more expertise on NFL team workers' compensation policies will have to educate me here, but my guess is that most of these policies are high deductible policies meaning that the teams have quite a bit of subrogation potential in these cases and whether or not to join the suits is going to be more of a political decision between the owners rather than a legal decision.

But certainly the carriers for the teams have no obligation to the NFL, and the decision of whether or not to join in these suits to recover payments made in related workers' compensation claims is a more pure business decision.

Whether or not the teams can exert influence on their carriers presents an interesting ethical dilemma due to the inherent conflict of interest.

The NFL concussion cases are nothing dramatic in my opinion, and reach newsworthy status only because this country loves its football. If this were some other industry there would be hardly any notice at all.

Indeed some of the sports commentators have ridiculed the lawsuits and the publicity they are drawing, stating that the players knew they were getting into a dangerous, violent game and that they are paid well to do so - basically assumption of the risk.

For legal wonks though, this is a very interesting situation because the NFL is owned by its member teams setting up a closed network that can five rise to conflicts of interest such as this potential subrogation issue.

It will be a couple of years before this all gets sorted out. I suspect eventually the game of football is going to undergo some "reform" in both equipment and rules. 

In the meantime the uniquely American appeal of football extends to the legal playing field too.

OK Opt Out Plan Moves Forward as Big Insurance Tries to Protect Its Turf

Oklahoma's historic move to become only the second state in the nation where workers' compensation becomes a voluntary participation system made huge leaps forward this past week as versions of the new law passed both the state's senate and house.

Senate Bill 1378 by Senate President Pro Tempore Brian Bingman, R-Sapulpa, passed Wednesday by a 27 to 17 margin in the Senate and was moved to the House.

House Bill 2155 by Speaker of the House Kris Steele, R-Shawnee, passed on Tuesday with bipartisan support on a 70 to 22 vote in the House and was moved to the Senate.

The two bills are both referred to as the “Oklahoma Employee Injury Benefit Act”.

Both bills began as identical measures but supporters of the bills say possible changes to them are being discussed by lawmakers. The bills were passed to meet a legislative deadline for considering measures.

Ultimately, one revised bill is expected to be drafted and sent to each chamber for a final vote.

The measures would allow qualifying employers to offer benefit plans regulated by the federal government under the Employee Retirement Income Security Act (ERISA) to provide medical and indemnity benefits to injured workers, as an alternative to workers' compensation.

The opt out provisions apply only to large employers with large incurred claims and an ex-mod greater than one.

Bill Minick, president of PartnerSource, a Dallas-based provider of services to Texas nonsubscribers, who has worked with OBIC on the legislation, told WorkCompCentral that the application to larger employers with high loss histories was to “deal with insurance carrier concerns” over “protecting their turf.”

Indeed, the primary objection to the Oklahoma voluntary bills is coming from the insurance industry according to the WorkCompCentral report.

Joe Woods, vice president and regional manager of Property Casualty Insurers Association of America (PCI) in Austin, said benefits under the opt-out plan for injured workers would be more limited than those provided through workers' compensation.

What's more, the legislation does not include an effective dispute resolution system, Woods said. "Everything would be done through arbitration," and the arbitrator could be a company employee, he said.

Woods said PCI also worries that allowing some businesses to set up alternative plans would damage future efforts to reform the system.

Under HB 2155, Oklahoma's larger employers could leave the system and lose their motivation for changing it -- while the smaller employers left in the system might "lack the political juice" needed to force changes, Woods said.

From my perspective much of what Woods claims is without foundation.

The legislation mandates that benefits be the same or greater than what is currently available under work comp - how is that limiting benefits that are more traditionally available to injured workers?

Some would argue that current dispute resolution through workers' compensation is ineffective with lengthly delays, extraneous attorney involvement and unnecessarily high costs. And I understand that the arbitration under the opt-out program is not binding, which means it can be appealed.

Finally, small businesses are nearly always left out of the bargaining process in attempts to "reform" workers' compensation - so how does the opt out provision change that?

Really, the big concern is pointed out by Bernie Hauder, a Dallas attorney who defends nonsubscribing employers in workplace injury suits.

He makes the very good point that allowing only employers with poor experience modifications to nonsubscribe creates an odd incentive for employers who don't qualify because of their good safety records.

"If you like this (alternative ERISA plan) and you're sitting there with a .95 experience modifier, what are you going to do? Do you go out and hurt someone?"

If Minick's allegation is correct, that this provision was put in to placate big insurance, then one has to wonder really who's interest big insurance really has in mind in objecting to the “Oklahoma Employee Injury Benefit Act”.

Another example of a special interest protecting its turf, except on the other side of the fence.

Market Basket Fine Shows Enforcement is the Only Relevant Safety Motivator

Right on the heels of my post on Monday about a study from the Rand Corporation concluding that safety plans are benign relative to improving safety, but that enforcement was the prime motivator, comes a story this morning about a significant safety enforcement action.

The U.S. Labor Department has asked the Occupational Safety and Health Review Commission to compel Tewksbury, Mass.-based DeMoulas Super Markets, owner of 60 Market Basket stores in Massachusetts and New Hampshire, to correct safety problems and pay fines of $589,200.

In 2006, after being cited by the Occupational Safety and Health Administration (OSHA), DeMoulas agreed to complete job-hazard analyses in all of its stores but failed to do so.

The Labor Department's complaint alleges that employees at the stores were exposed – or were likely to be exposed – to hazards from unguarded, open-sided work and storage areas, including storage lofts, produce coolers and freezers.

Also alleged in the complaint is that the supermarket chain failed to protect workers in the produce, deli and bakery departments from laceration hazards from knives and other cutting instruments by not conducting an analysis of job hazards.

An employee was seriously injured in April 2011 when he fell 11 feet onto a concrete floor from an inadequately guarded storage mezzanine, and an employee at a Billerica, Mass., store was seriously injured under similar conditions in 2007 according to OSHA.

Between 2008 and 2011, employees at stores in Rindge and Concord, N.H., sustained at least 40 hand lacerations.

OSHA said the DeMoulas complaint is only the second such action taken by the Labor Department, which filed a complaint against the U.S. Postal Service in July 2010, seeking the correction of electrical safety violations at 350 post offices throughout the nation.

DeMoulas is contesting the FINES according to the OSHA press release, which is silent about any action DeMoulas is taking relative to correct the safety problems.

The point is that the super market chain/employer did not take seriously the agreement to complete job-hazard analyses.

It took enforcement action to get this employer to view workers safety in a serious manner. 

That's a sad statement as to this employer's commitment to doing business in the United States in a legal, ethical and morally conscionable way, and testament to the fact that labor enforcement departments on both the federal and state level need adequate funding in order to protect the working population of this nation.workers compensation, work comp, injured worker 

Safety Plans Inconsequential; Enforcement is What Reduces Injuries

Workplace safety is a good thing, and is often cited as the driver behind a continuing declination in injury frequency.

21 states mandate that businesses have some sort of "safety plan". Logic would say that this mandate is part of the reason behind work place safety improvements and that safety plans are a primary reason why injury frequency rates have improved.

As with most things that seem logical, there has never been any empirical study to determine whether such logic is valid. With many such cases of assumption, the empirical evidence suggests that such assumptions are not supported, according to a news report in WorkCompCentral this morning.

Rand Corp.'s Center for Health and Safety in the Workplace has released a preliminary draft of a study report, "An Evaluation of the California Injury and Illness Prevention Program." Rand concludes that while mandatory written safety plans have not significantly reduced workplace injury and fatality rates in California, several elements that must be included in the safety plan, such as training and hazard abatement, do appear to lead to safer workplaces.

While the elements of an injury prevention plan are "obvious ingredients" of a good safety program, there is surprisingly little research that confirms the written plans themselves are actually effective, according to the report.

"Moreover, it is not at all clear that a mandate to adopt these practices will result in the same outcomes as when they are adopted voluntarily," the study's authors wrote. "Firms may do as little as they can get away with and, depending upon the enforcement effort, that could include doing nothing at all."

California has mandated that businesses implement and maintain an "effective" injury and illness prevention plan since July 1991. Title8, California Code of Regulations Section 3203 requires the plan to identify who is responsible for implementing the safety program, ensure employees comply with safe work practices and ensure the plan is communicated to workers. The plan must also include procedures for identifying and evaluating work hazards, outline the procedure for investigating occupational injuries and provide training and instruction when the program is implemented, when new hazards arise or when new employees are hired.

Outside of the first two years following the enactment of the injury prevention plan mandate, the number of violations for not having a written plan in place has held steady. About 20% of inspections were for not having a written plan, and 16% were for specific violations, such as not documenting a hazard survey or employee training.

Whether the prevention plans reduced fatality rates compared to other states, the authors "did not find any improvement." They added that even if an improvement was noticed, it would have been difficult to determine whether the safety plan was responsible or whether other factors contributed to reducing fatalities.

What the study did find is that citations for violations for failure to provide training improved safety - in other words requiring a plan itself did nothing towards safety, but enforcement of safety training requirements greatly improved work place accident and injury rates.

"The most consistent finding for the subsections was that a citation for failing to provide appropriate training was linked both to poorer performance prior to the inspection and to improved performance (a 44% reduction) after the inspection," the report said.

In addition, passage of time introduces complacency.

"The motivational effects of a serious violation fade over time and compliance decays," the report says. "In contrast, it is plausible, but hardly guaranteed, that efforts to support the practices required by a firm’s safety and health program could have more enduring effects."

It's unfortunate that safety is subject to our old nemesis, human behavior, but when legislators start trimming safety enforcement budgets this report will surely surface to combat the red ink.workers compensation, work comp, injured worker