Category Archives: Workers’ Compensation

Portability, The Gig Economy And Workers Compensation

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

Changing employment laws to encourage so-called “portable benefits” is an idea that goes hand in hand with finding new ways to classify gig economy workers. These proposals are being pushed in a  growing number of states. These proposals also enjoy support from Democrats and Republicans in Congress. These proposals could also radically alter workers’ compensation in the United States.

The idea of third classification of worker between employee and independent contractor is to give so-called “gig economy” workers some protections and benefits without employers having to bear the full costs of employment – including unemployment, workers’ compensation and health insurance. Sometimes this third class of workers is described as “dependent contractors.

Portable benefits are usually discussed in the context of contractors because traditionally benefits such as unemployment, workers’ compensation and health insurance have been provided by employers. So-called portable benefits, are detached from employers. The Affordable Care Act increased portability of health insurance benefits through the use of exchanges Portability of health insurance was touted as a way to help create new businesses because potential entrepreneurs were not tied to an employer for health insurance.

The idea of portable benefits and a new classification for gig employers is also touted as a way to reduce litigation against companies such as Uber for how they classify employees. But former National Labor Relations Board member Craig Becker pointed out that creating a new class of workers may actually create more litigation when employers try to re-classify employee as dependent contractors. Becker and others pointed out that this is what happened in Italy when Italy created a third class of worker that was neither employee nor independent contractor.

Becker and others point out that the drive to create a new class of workers is being driven by tech companies such as Uber as a way of reducing labor costs. The real risks of creating a new classification of workers is shared even by some who promote the sharing or gig economy. Gene Zaino, founder and CEO of MBO Partners, a firm that provides services to independent workers, stated that any new classification of independent workers should only include workers who earn more than $50 per hour. Under such a scheme lower-paid workers would still retain the benefits and protections of the employment relationship.

Though states are pondering portability and dependent contractor laws, there is a push for federal legislation so that laws can remain uniform across the country. Any federal push for portable benefits for so-called independent workers would clash with state-based workers’ compensation laws. Workers’ compensation is traditionally a state law concern because when workers’ compensation laws were enacted the power of the federal government to implement laws regarding workplace safety were limited. During the New Deal-era, that interpretation of the interstate commerce clause changed to allow broad regulation of the workplace.

Advocates for state-based workers’ compensation laws likely have little constitutional grounds to overturn any federal legislation that would substitute “portable benefits” for so-called “independent workers” for state-based workers’ compensation benefits. Some critics who argue, correctly, that many state-based laws inadequately compensate injured workers could also be open to or even welcome a federal substitute for  insufficient state workers’ compensation laws.

Protecting Yourself At Work: What To Do If There Is An Active Shooter

Today’s post comes from guest author Catherine Stanton, from Pasternack Tilker Ziegler Walsh Stanton & Romano.

As an attorney who has been practicing before the New York State Workers’ Compensation Board representing injured workers for more than 27 years, I am drawn to organizations that assist workers. That’s why I am a member of the New York Committee for Occupational Safety & Health (NYCOSH), whose mission notes that every worker has the human right to a safe and healthy workplace and that workplaces injuries are often preventable. As a member, I receive many emails with various announcements regarding workplace safety, as well as statistics of injuries and deaths that occur on the job, many of which are preventable.

It is a sign of the times that on May 23, 2017, I received an email about educating workers on how to best respond in case of an active shooter. NYCOSH, along with the New York City Central Labor Council (NYCCLC), was sponsoring the event that was meant to educate participants on what actions to take to prevent and prepare for potential incidents, including what to do when an active shooter enters the workplace. Many of the cases that make front page news are mass shootings or those in the name of terrorism. Few of us can forget the Islamic extremist, who along with his wife fatally shot 14 of his co-workers at a Christmas party. Many of us go about our workday never anticipating a disgruntled employee, a client harboring a grudge, a terrorist, or a coworker intent on robbery, who may come to our workplaces with murder on their minds. When NYCOSH set out to sponsor their recent event trying to deal with a growing problem in this country, there was no way of knowing that workplace shootings would be in the national headlines three times in just two weeks. 

Last week we were shocked and appalled by the images of Republican Senators and their colleagues being shot at by a deranged person not happy with current politics. While many of our elected officials have heavy security when they are at work in the Capital’s office buildings, these members were on a ballfield early in the morning practicing for a charity baseball game taking place the next day. Despite the close proximity of the Capitol Police there to protect Steve Scalise, the current United States House of Representatives Majority Whip, five people were shot. Thankfully the sole fatality was the shooter himself.

In Orlando in early June, a disgruntled ex-employee systematically shot and killed five coworkers and then himself. A week later, a UPS employee in San Francisco walked into a UPS facility and killed three coworkers before killing himself.

According to the Bureau of Labor and Statistics, in 2015 there were 354 homicides by shooting at the workplace. There were 307 in 2014, 322 in 2013, 381 in 2012, and 365 in 2011. Based on these statistics, it is clear that this is not an issue going away anytime soon. These are scary times and we all need to prepare for this new normal. 

While I was not able to attend the NYCOSH event, I did go to the website for the U.S. Department of Homeland Security, which offered these suggestions for responding when an active shooter is in your area.

  • Evacuate if you can.
  • Run as fast as you can and leave everything behind.
  • Just get out if possible.
  • If there is no accessible escape route, then hide somewhere and lock and blockade the door and silence any noise such as a radio or cell phone.
  • Lastly, if your life is in imminent danger, take action and try to incapacitate the shooter.
  • Throw things.
  • Use anything as a weapon.
  • Don’t go down without a fight.

It’s unfortunate that we even have to talk about protecting ourselves from active shooters. But in today’s day and age, we can never be too careful. As a mother, I worry for the safety of my children when they walk out the door as I’m sure many of you do as well. As a lawyer, I worry about the safety of workers every day on the job who are continually dealing with workplace injuries that could have been prevented.

 

Catherine M. Stanton is a senior partner in the law firm of Pasternack Tilker Ziegler Walsh Stanton & Romano, LLP. She focuses on the area of Workers’ Compensation, having helped thousands of injured workers navigate a highly complex system and obtain all the benefits to which they were entitled. Ms. Stanton has been honored as a New York Super Lawyer, is the past president of the New York Workers’ Compensation Bar Association, the immediate past president of the Workers’ Injury Law and Advocacy Group, and is an officer in several organizations dedicated to injured workers and their families. She can be reached at 800.692.3717.

Alabama Court Strikes Down Anti-Worker Provisions Of State Workers’ Compensation Law

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

An Alabama trial-court level judge ruled the Alabama Workers Compensation Act was unconstitutional in a recent decision. Though the decision isn’t binding on a state level and it was recently stayed or delayed indefinitely, it is an important and interesting decision for many reasons.

The Alabama workers’ compensation statute was found to be unconstitutional because it capped benefits at $220 per week for permanent injuries and it limited attorney fees for plaintiff attorneys to 15 percent. Jefferson County Circuit Court Judge Pat Ballard found that Alabama’s cap on permanent damages violated equal protection of the laws because it created two classes of workers without any rational basis because some workers were fairly compensated for permanent disability while others were not. Ballard also found that the attorney fee cap violated constitutional due process rights.

Ballard’s reasoning about equal protection and due process mirror recent state supreme court decisions in Oklahoma and Florida striking down anti-worker reforms to the workers’ compensation laws in those states. Florida struck down attorney fee caps for plaintiff’s attorney because they impaired the ability of injured workers to find counsel. Oklahoma struck down the so-called Oklahoma option because it impermissibly created two separate systems for workers’ compensation, one of which could make it almost impossible for workers to collect benefits.

While it is encouraging that courts are protecting the rights of injured workers, the decisions in Oklahoma, Florida and Alabama have all been driven by anti-worker legislation in those states. Unfortunately, that trend is continuing in 2017.  Possible Democratic presidential candidate and New York Governor Andrew Cuomo pushed through anti-worker reforms to New York’s workers’ compensation act.

The recent attack on workers’ compensation has been bi-partisan. A newly- elected Republican legislature in Iowa passed anti-worker workers’ compensation reforms which were signed into law by that state’s Republican governor. The Iowa reforms include a cruel measure that caps benefits for senior citizens who are injured on the job. That provision may be ripe for an equal protection challenge.

Relying on appellate courts to protect the rights of injured workers’ is a risky strategy. Workers compensation laws were passed by state legislatures in response to pressure from unions and other workers advocates during the early 20th century when appellate courts were generally hostile to employees. While it seems that trend may have reversed in the early 21st century, appellate judges certainly can’t be accused of pro-worker bias.

Good legislation also prevents the need for worker advocates to look to the judiciary to protect the rights of workers. Part of the reason, Judge Ballard ruled against the Alabama Workers Compensation Act was because the maximum benefit rate had not increased in 30 years. In Nebraska, our maximum benefit rate increases automatically under a formula determined by the Department of Labor. Nebraska’s current maximum rate is $817 per week for temporary and permanent disability.

Attorney Fees and Incentives in Workers’ Compensation

Today’s post comes from guest author Charlie Domer, from The Domer Law Firm.

Abe Lincoln said it best “The matter of fees is important far beyond the mere question of bread and butter involved.  Properly attended to, justice is done to both lawyer and client. . . when you lack interest in the case, the job will very likely lack the skill and diligence in the performance.”

Three states have recently addressed the issue of attorney fees in workers’ compensation cases, most recently in Alabama, where an attorney fee cap of 15% on already-low benefits was found unconstitutional. It took a judge in Alabama who had been a carpenter for 15 years and then a lawyer before he took the bench, to recognize that an attorney fee cap at 15% of a $220 weekly Permanent Partial Disability benefit would not provide sufficient incentive for attorneys to be involved in workers’ compensation claims for Permanent Partial Disability in Alabama, depriving injured workers of their constitutional rights.  Judge Pat Ballard gave the legislature in Alabama four months to cure the deficiencies in the Alabama Code.

Judge Ballard found persuasive the Florida Supreme Courts reasoning in Castellanos v. Next Door Company where the Court indicated the inflexible nature of Florida attorney fee statute made that law unconstitutional.  He also agreed with the reasoning of the Utah Supreme Court, which found its workers’ compensation attorney fee caps unconstitutional.

An attorney’s determination to take a workers’ compensation case has to do with both the merits of the case and potential for recovery of attorney fees.  In Wisconsin attorneys are not paid on any portion of the medical expenses and fees are capped at 20% of the Temporary Total and Permanent Partial Disability benefits obtained for the injured worker.  In Permanent and Total Disability claims, fees are capped at ten years of benefits.  (Routinely benefits that are further offset by the injured worker’s receipt of Social Security Disability and Long Term Disability benefits.)  As Abe Lincoln indicated long ago, “When you feel you are working for something, you are sure to do your work faithfully, and well.”  (Notes to the Ohio State Law School Graduating Class of 1858.)

Theodore Roosevelt Pushed For Protection Of Workers

Today’s post comes from guest author Brody Ockander, from Rehm, Bennett & Moore.

Workers’ Compensation benefits are often confusing and seemingly unfair at first glance to many of my clients. As a result, I often find myself explaining to these clients how we, as a country, got to where we are with workers’ compensation laws and why the benefits are more limited than other civil lawsuits.

In explaining work comp laws, I usually give a brief description of the work comp system that was first developed in the early 20th century and a description of the “Grand Bargain”, the premise that employers pay for some benefits of their injured employees in exchange that the employee cannot sue that employer for negligence in civil court.

I, and many scholars, could go on and on about the history of the Grand Bargain and how it was strengthened/reworked in the 1970’s. Also, scholars can (and have), go on about the recent “reform” to workers’ compensation laws that have eroded workers’ rights in domino-fashion in many states by anti-worker legislation.

Nevertheless, I think the most poignant description of why we need to protect workers, and continue to protect workers, is this quote from our 26th president, Theodore Roosevelt, in calling for further reform of laws that Congress passed for employers’ liability laws:

In spite of all precautions exercised by employers there are unavoidable accidents and even deaths involved in nearly every line of business connected with the mechanic arts. This inevitable sacrifice of life may be reduced to a minimum, but it can not be completely eliminated. It is a great social injustice to compel the employee, or rather the family of the killed or disabled victim, to bear the entire burden of such an inevitable sacrifice. In other words, society shirks its duty by laying the whole cost on the victim, whereas the injury comes from what may be called the legitimate risks of the trade. Compensation for accidents or deaths due in any line of industry to the actual conditions under which that industry is carried on, should be paid by that portion of the community for the benefit of which the industry is carried on–that is, by those who profit by the industry. If the entire trade risk is placed upon the employer he will promptly and properly add it to the legitimate cost of production and assess it proportionately upon the consumers of his commodity. It is therefore clear to my mind that the law should place this entire “risk of a trade” upon the employer. Neither the Federal law, nor, as far as I am informed, the State laws dealing with the question of employers’ liability are sufficiently thorogoing.

— Theodore Roosevelt: Sixth Annual Message, December 3, 1996.

“They have a mosque in small town Nebraska?”

Islamic Center of Omaha

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

I spent a lot of time in rural Nebraska, so I have enjoyed following Chris Arnade’s tour of the forgotten parts of rural America. His tweets are a highlight of a Twitter feed filled with self-promotion and nasty bickering.

On July 3rd, Arnade made it to Nebraska and stopped in a place I know fairly well, Lexington, Nebraska.

Lexington is home to Tyson beef packing plant that employees roughly 3500. I have been travelling to Lexington since 2006 to represent clients who have been hurt at Tyson and other employers. My father Rod, has been doing the same thing since about 1990.

Like many other outside observers of Lexington, Arnade’s attention was drawn to the presence of a large Somali community in Lexington Arnade and other commenters immediately drew the connection between the Tyson plant and the Somali population. Comments about the Somali population in Lexington broke down into three categories:

  1. Vile racist alt-right comments.
  2. Comments from “locals” like me that amounted to “This isn’t news to us” but that were sympathetic towards immigrants.
  3. Comments that were generally sympathetic to the immigrant population made by commenters from coastal and urban areas.

The first group of comments doesn’t deserve a response. The more sympathetic comments from urban areas do deserve a response. Underlying the well-intentioned sympathy for immigrant meat packing workers in rural areas is an assumption that these immigrants are doing work that native-born workers refuse to do.

This assumption is not true. I can argue this anecdotally because I have represented several native-born Americans in meat packing cases over the years. But there are other explanations of why meat packing plants in rural areas hire a substantial number of immigrants.

The first reason is population. Rural areas have a difficult time finding employees to fill highly-paid professional jobs. Meat packing doesn’t pay particularly well and is notorious for being hazardous. A combination of dangerous work and a small population base makes even good paying jobs difficult to fill. As an example, Nebraska placed a maximum security prison in rural Tecumseh, Nebraska in 2001. The combination of dangerous work and the lack of nearby workers has contributed to chronic staff shortages at Tecumseh. Large meat packing plants in rural areas need more labor than those rural areas can provide on their own. Immigrants help fill the need.

Meatpacking plants also draw in native born workers for urban areas. I recently represented a man from Denver whose wife was from New York City who worked at a packinghouse in rural Nebraska. His family didn’t want to move to an urban area because of crime and a higher cost of living. My client is representative of many former urbanites who have moved out of cities into urban areas. Much attention has been drawn recently to the drastic decline of the African-American population in Chicago. The decline is attributed to crime, the cost of living and lack of jobs in Chicago. Again, anecdotally, I have represented several transplanted Chicago residents in Nebraska workers compensation claims over the years. Former Chicago residents are making their home in rural Nebraska for the same reasons that immigrants are: lower cost of living and the availability of jobs

Despite the overwhelming evidence that native born employees are willing to work in meatpacking, the myth that only immigrants work in meatpacking is persistent. The persistence of this myth rests on several assumptions. The first assumption is based on a romantic notion about manual labor, usually spread by people who never had to support themselves by manual labor. Nebraska Senator Ben Sasse is a prominent proponent of this myth. The myth is something along the lines of people are is soft “too soft” and some hard work will just toughen you up. This myth can deflect legitimate concerns about workplace safety into wimpy and politically correct griping.

An even more insidious basis for the myth that native born Americans won’t work in meatpacking is scientific racism. Scientific racism is the belief that certain ethnic groups are better at some tasks than others. When urban liberals state “Immigrants do the jobs that natives won’t do” they probably don’t mean that there is something inherent in the DNA of Latinos and east Africans that allows them to not to get bi-lateral carpal tunnel and epicondylitis from trimming 3000 briskets over an 8 hour shift. But there is an assumption that immigrants are willing to tough it out while native born workers can’t. This isn’t true. Lots of immigrants can’t handle the physical demands of meatpacking working, but some can. The same goes for native born workers.

Another reason for the myth that native born workers won’t work in meatpacking is the subtle bias of those who report on working conditions in the meatpacking industry. Much of what America knows about meatpacking in rural America is reported by urban journalists like Arande or Fast Food Nation author Eric Schlosser. You almost get the impression that when journalists like Arande see an east African restaurant paired with a Hispanic clothing store in rural Nebraska they feel some intense wave of nostalgia for some idealized crime free but non-gentrified urban neighborhood free of hipsters and artisan cheese shops.  The shock when a journalist happens upon a mosque and African restaurant in rural Nebraska overwhelms the larger story about the impact of meatpacking on the labor force in rural America.

Arnade has gone out of way his way to be fair to rural residents. However not all writers share Arnade’s fair-minded attitude towards rural Americans. In December, liberal commentator Markos Moulitsas wrote that people should be glad that coal miners who voted for Donald Trump were going to lose their health insurance. Coal mining is probably as hazardous a job as meatpacking. But to an urban liberal audience, immigrant meat packers deserve sympathy for working in a dangerous job, but Trump-supporting native born coal miners who work in an equally hazardous job deserve contempt.

The ugly sentiments expressed by Moulitsas found a more hideous expression from New York Times columnist Bret Stephens. The toxic Tory “joked” that the U.S. should deport native born working class people, but that nobody would want them. Stephens “ironic” comments draw an eerie parallel with the ironic racists of the alt-right. it’s disturbing that a so-called liberal publication would give this jerk a bi-weekly forum.

The ugliness of Bret Stephens class prejudice follows from well-meaning assumptions that native born Americans will not work in industries like meatpacking. There is a shared assumption that immigrants have particular virtues and native-born Americans have particular vices and defects. These misconceptions fuel resentments and backlash that opportunists can exploit.  A better understanding of the workforce in rural areas will help honest-minded people overcome views that help perpetuate anger that works to undercut rights and benefits of all workers regardless of race or citizenship status.

Law Promoting Openness Regarding Pharmacy Benefit Managers Meets Industry Resistance

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

A North Dakota law attempting to promote openness about fees and prevent conflicts of interests with so-called pharmacy benefit managers (PBM) would seem non-controversial.

Non-controversial to everyone besides lobbyists for the PBMs who have sued the State of North Dakota in federal court claiming this commonsense legislation harms patient safety and is unconstitutional.

The North Dakota suit matters in the world of workers’ compensation because PBMs are an essential component of drug formularies which are popular with workers compensation insurers and have been touted as a way to prevent opioid abuse and control drug costs. Formularies are a list of approved drugs and dosages. Formularies are administered by the PBMs who buy the drugs, allegedly at a discount, from drug companies and pass along those savings onto users.

Drug formularies have come under criticism for issues addressed by the North Dakota legislation. First, a PBM may have a relationship with a particular drug maker which means that drugs are picked on for business reasons rather than medical reasons. Formularies also may not control drug costs as advertised.  In response to a drug formulary bill in Nebraska last session, the City of Omaha was concerned that formularies might increase drug costs because of the inability to use generic drugs.

Related to that concern, PBMs have been criticized for their role in helping drug companies pass along higher drug costs to consumers. PBMs are paid on what the discount they can negotiate, so drug companies have an incentive to inflate drug costs which benefits PBMs.

Lawmakers on a state or federal level are correct in having concerns about PBMs if they want to address drug costs and opioid use. The PBM industry has argue that state laws are “pre-empted” by federal laws regulating prescription drugs, so state laws are unconstitutional. Pre-emption is premised on the fact that federal laws are superior to state laws if there are federal and state laws on both subject matters.  Recently the U.S. Supreme Court has used pre-emption to strike down state-based consumer protection laws in favor of corporate defendants. The threat of successful litigation may scare states, especially smaller states, from passing laws to regulate PBMs.

But state laws regulating the use of PBMs in the context of workers’ compensation may be easier to defend from a legal standpoint. Workers compensation laws are enacted under a state’s police powers under the 10th Amendment. The constitutional basis of workers’ compensation laws is arguably a fluke of legal history but workers’ compensation is traditionally seen as a state law concern so federal courts may be less to strike down laws regulating PBMs in the context of workers’ compensation.

Post-Injury Drug Test? OSHA Says Not So Fast

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

Workers who report an on-the-job injury may not be subject to mandatory drug testing if a new rule from the Occupational Safety and Health Administration that prohibits blanket post-injury drug tests withstands a court challenge from employers.

In May, OSHA published a rule prohibiting employers from having policies that force employees hurt on the job to take drug tests because of concerns about retaliation. This blog has long recognized the potential for retaliation that mandatory drug tests pose and supports the proposed rule by OSHA. OSHA’s new rule was drafted at roughly the same time as the release of the U.S. Department of Labor report that was critical of the shortcomings in state workers’ compensation systems.

Though OSHA implemented the limits on drug testing to limit retaliation, the rules limiting drug testing also help preserve employee doctor choice, which is an integral part of workers’ compensation law in Nebraska and other states. Many employers will inform employees that they must get drug tested at an occupational medicine clinic if they have a work injury even if workers have a right to see their own doctor. This can lead to employees being forced back to work too soon and or not receiving sufficient treatment for their work injuries. Both the fear of retaliation and the circumvention of doctor choice rules lead the costs of work injuries to be borne by employees, which is a major concern of the Department of Labor.

Due to push back from employers, the rule’s enforcement will be postponed until Nov. 1 and will likely be delayed longer due to a court challenge to the rule. A challenge to a Labor Department rule deeming that home health aides were employees for the purposes of the Fair Labor Standards Act took over a year to work its way through the federal courts, until it was upheld by a federal circuit court in June.

Even if the rule is implemented, post-injury drug testing will not disappear from the workplace. Employers can still test if they have a reasonable suspicion of intoxication or drug use. Most federal and defense contractors will be exempt from the OSHA rule, as well as truckers and railroad employees. Furthermore, in states with drug-free workplace laws, mandatory post-injury testing may still be permitted, depending on the language of the statute. Nebraska allows employers to fire an employee who refuses a lawful request for a drug test. If the new OSHA rule is ultimately upheld by the federal courts, I would expect a push by employers to amend drug-free workplace laws.