Monthly Archives: March 2010

California furloughs of workers comp attorneys ruled ‘illegal’

He may not be a terminator in real life, but that Gov. Shwarzenegger is a rip-snorter for putting state workers on furlough–so much so that now there’s seven separate lawsuits challenging the legality of the tactic, which the San Francisco Chronicle reports has affected nearly a quarter-million state employees.

Wow, if the Chronicle is correct (apparently they’re rounding up numbers, to 238,000), then all state employees are affected: according to the California State Controller’s Web site, the State Employee Demographics page shows a total of 237,731 employees, including part-time, intermittent and indeterminate workers.

Schwarzenegger says the furloughs are a cost-cutting measure for state coffers that have been ravaged by the Great Recession. Unemployment reached a record level in January, and California is one of five states sharing $1.5 billion in aid, for the areas hardest hit by foreclosures.

Whatever the total count turns out to be, the furloughs certainly involve several thousand employees of a state workers comp fund, a quasi-public agency that has one set of rules for line workers and another for execs.

Furloughs of 7,400 already ruled on, last year

We first mentioned the furloughs back in September, when a superior court ruled “that Gov. Arnold Schwarzenegger illegally furloughed 7,400 employees of the State Compensation Insurance Fund this year. . . .”

The governor’s actions have been upheld in some courts, but according to a March 20 San Francisco Chronicle piece, “An Alameda County judge ruled in December that Schwarzenegger illegally furloughed more than 50,000 employees in 68 agencies, [although] other judges have upheld the governor’s actions.”

But on Friday, Schwarzenegger took another hit when a three-judge appellate panel ruled that he “had no right to furlough about 475 lawyers who work for the State Compensation Insurance Fund.

“The Court of Appeal said the attorneys are protected by a provision of state insurance law that makes fund employees ‘exempt from any hiring freezes and staff cutbacks otherwise required by law,’ according to the Silicon Valley Mercury News.

The Chronicle had this: “The ruling by the First District Court of Appeal in San Francisco applies to about 500 attorneys and hearing officers who work for the State Compensation Insurance Fund. It is likely to affect a separate case, pending before another division of the court, that involves more than 7,000 clerical workers, support staff and other employees of the insurance fund.

“Other laws apply to most of the 238,000 state employees the governor furloughed for two days a month from February through June 2009, and for three days a month since then.”

Governor asks Supreme Court to intercede

A very interesting aspect of the seven suits is that Schwarzenegger has requested intervention from the state supreme court, which the Sacramento Bee earlier this month described as move that stunned labor unions: “Gov. Arnold Schwarzenegger’s request Tuesday for the California Supreme Court to take over seven key furlough lawsuits caught state employee unions off guard.

“Schwarzenegger wants to legally leapfrog two appellate courts now considering those cases and go straight to the state’s highest legal authority, sort of like skipping the playoffs and going straight to the Super Bowl.”

And, of course, the sheer size of the numbers grabs your attention–this from the Chronicle’s account: “At stake is more than $1 billion in back pay, plus interest, that the state would owe the workers if they won their cases.”

But here’s what really interesting, again (with our emphasis added) from the Chronicle:

“The governor’s Supreme Court request did not include suits by employees of the insurance fund, which is authorized by state law to make its own staffing decisions. Schwarzenegger’s press secretary, Aaron McLear, was noncommittal about an appeal of Friday’s ruling, saying only that the administration was reviewing its options.

“Patrick Whelan, lawyer for the union representing the insurance fund attorneys, said the ruling doesn’t apply directly to most furloughed state employees but is still encouraging.

” ‘It shows the governor’s authority is not as broad as he believes,’  he said.


Whether you’re an injured employee or an aggrieved employer, if you’re facing legal problems regarding workplace injuries, be sure to seek counsel with attorneys trained and experienced in workers’ compensation. Here’s some resources:

Workers compensation basics

Denial of benefits

Choosing an attorney

In battle of suits and countersuits over workers’ comp premiums, AIG gets to subpoena more than 400 competitors

AIG, the giant insurer and a major player at the core of the Great Recession, has been allowed by a federal judge to begin issuing subpoenas to 400 of its competitors in the workers compensation insurance business, according to a March 16 piece at

The ruling, which allows AIG to pursue “nonparty discovery,” is part of a larger dispute between AIG and several competitors–but extends to “discovery of practices by insurers not named in the lawsuit, AIG said Monday in a statement.”

Industry leaders involved

The fracas involves some heavyweights in the industry, including some who joined forces in the original RICO suit against AIG: “The ongoing litigation grew out of a May 2007 lawsuit against AIG originally filed by the National Workers Compensation Reinsurance Pool made up of AIG competitors and operated by Boca Raton, Fla.-based NCCI Holdings Inc. That suit alleged violations of the Racketeer Influenced and Corrupt Organizations Act by AIG, among other assertions.”

It also involves some colorful language, for what might seem an otherwise dry topic.

Let’s pick up the story in 2005 when, according to an August 26, 2009 post at an insurance law blog, “a New York state investigation revealed that AIG had, over several decades, provided false reports of its workers’ compensation premiums to NCCI and state tax authorities to evade its residual-market obligations.” Id. Thereafter, in 2006, AIG entered into settlement agreements, including a $1.6 billion settlement with New York and federal authorities. The Participating Companies contested that the settlement agreements offered full and fair restitution. Id. at 5.

“On May 24, 2007, NCCI filed suit against AIG, alleging underreporting of premium data. AIG interposed numerous defenses and asserted counterclaims for an equitable accounting and an action on an open, current, and mutual account, both of which survived NCCI’s motion to dismiss. AIG also filed a 12-count third-party complaint against 24 named companies and numerous unnamed companies. Id. at 3.”

Court dismisses NCCI suit

But in August 2009, a federal district court dismissed the suit against AIG, “holding that the NCCI failed to establish standing to assert claims on behalf of the Pool.”

That’s when AIG came out swinging, inserting itself as plaintiff, and as described at, in September 2009 amended that complaint “in its Chicago racketeering conspiracy fight alleging fellow members of the National Workers’ Compensation Reinsurance Pool conspired to suppress a state and federal probe of the systematic underreporting of workers’ compensation premiums.”

AIG’s amendment, according to Michael Whiteley, “names as defendants the pool, NCCI and 19 insurance companies. It focuses on the actions of Liberty Mutual Group, Travelers, The Hartford, Ace INA Holdings and Sentry Insurance Co. as carriers AIG says have dominated the governing board of NWCRP.

“The amended complaint, which was filed under the Racketeer Influenced and Corrupt Organizations Act (RICO), alleges that NCCI flagged significant problems with the misreporting of premiums as early as 1986 and then conspired with pool members to conceal the problem while then-New York State Attorney General Eliot Spitzer was investigating the practice at AIG.”

AIG says it was targeted as scapegoat

Furthermore, AIG alleges the whole thing was a longstanding sham-up, designed to hurt AIG.

Again from the Whiteley piece: “And AIG repeated assertions that its competitors – led by Liberty Mutual, which last year overtook AIG as the leading comp insurer in America – conspired to make AIG the scapegoat in the Spitzer probe to prevent investigators from broadening their target.

“AIG said a Liberty Mutual representative on the pool’s governing board said at a board meeting in 2005 that the Spitzer probe gave the board ‘an opportunity to get the bastards at AIG.’ “

The residual market

What’s at stake is who-owes-what to cover costs in the so-called “residual market,” the pool for employers who can’t workers’ comp coverage in the primary market. As the insurance law blog explains:

“The action concerned the workers’ compensation insurance market. Employers obtain workers’ compensation insurance coverage from insurers in what is known as the “voluntary market.” Insurers that provide coverage to the voluntary market are required by state law to provide coverage to the “residual market,” which is the market for employers who cannot obtain coverage on the voluntary market. Those employers obtain workers’ compensation insurance coverage through an individual state’s assigned risk plan. Under that plan, the amount of insurance an insurer is required to provide for the residual market is directly proportional to the amount of premiums it collects for the policy it writes for the voluntary market. Mem Op. 3”

“Therefore, ‘any company that underreports its premiums to NCCI decreases its reinsurance participation rate and the overall total used to calculate all the rates.’ Id.”

‘Common practice in the insudtry’

Looking through the various accounts of the lawsuits and countersuits, it’s hard to find any instances in which AIG denies under-reporting these premiums. After all, it did settle for at least $1.6 billion in 2006. So far, it seems like AIG is merely saying, well, everybody did it.

From the conclusion, re AIG’s most recent action: “Now AIG is seeking proof through its subpoenas that premium underreporting practices it is alleged to have engaged in were common practice in the industry.”


Regardless of whether you’ve been hurt on the job, it’s wise to know the basics of workers compensation in case you, a friend or family member need to file a claim in the future. If you do get hurt, you should be aware of the first things to do or what to tell a co-worker who has been injured.

Sometimes an injured employee takes all the correct steps but still has trouble getting the claim taken care of; in that case here’s some information for problems with denial of benefits. If legal help is needed to help with the case, be sure to speak to a trained, experienced attorney.

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Diversity of workers comp cases show necessity of experienced counsel

One thing about workers comp cases–the issues can be so broad that you never know what oddity may pop up.

For example, regular readers are aware that most states include undocumented workers in workers comp protection. We discussed a couple of such cases here, one from Michigan and one from Nebraska.

Undocumented workers protest in Michigan

Now Michigan is back in the news. Posted March 11 at, this brief describes a protest at the state Capitol, including “[s]ome [who] were illegal immigrants, rallying for the state to grant them rights to workers’ compensation.”

State Rep. Rashida Tlaib (D-Detroit) has introduced a bill that would grant such coverage and was quoted as saying, “We’re only one of two states in the nation that does not allow workers that are undocumented to compensate when they are injured on the job.”

As might be expected, not all her colleagues agree with the idea, indicating its passage has a snowball’s chance…

Rep. Rick Jones (R-Grand Ledge) said, ““The only thing we should be giving illegal immigrants is a bus ride home.”

Jones, taking a “Michigan-workers-first” stance, brought up bogus Social Security IDs and the expense to companies to pay into the workers comp system.

But Tlaib “and others” countered with a point to ponder: pointing out “that requiring companies to pay workers’ comp might discourage them from hiring illegal immigrants in the first place.”

Ex-Deputy Warden cites nepotism as stressful

Now here’s a doozy, from a March 10 post with a Wilkes-Barre (PA) dateline: everybody knows somebody who’s felt disadvantaged by on-the-job nepotism. But in this case, former Deputy Warden Sam Hyder,  Luzerne County Correctional Facility, says nepotism was a major reason for the workplace problems that should leave him eligible for $800 a week in workers comp benefits.

“Hyder claims he suffers from work-related stress due to pressures brought on by” County Commissioner Chairwoman Maryanne Petrilla’s “hiring requests and threats, the suicide of a co-worker, his attendance at an inmate’s autopsy and the publicity he received for outing a drug-dealing prison guard.”

Petrilla has denied not only pushing Hyder to hire unqualified cronies but also says she did not single out Hyder for political reprisal.

According to the article, “Hyder was on medical leave from Aug. 28, 2009 until he was laid off from his $74,263 job in late January 2010. He testified Feb. 2 about how he ‘blacked out’ one day at work from the stress and suffers from anxiety, panic attacks and nightmares. On Tuesday, the county countered with five defense witnesses.”

At least one other employee, a secretary promoted to assistant business manager, seems to back up Hyder’s version, indicating that a “hiring list of the politically connected trumped applications from other qualified candidates.”

Said Jaqueline Grimes: “Everybody, commissioners, judges, magistrates, police officers, would be saying, ‘Give this person a shot. (Prison management) wanted to know, whose person it was. ‘John Doe is my guy, this one is (former Manager/Chief Clerk) Sam Guesto’s.'”

Fired workers say boss pushed her religion on them

And from Ohio, a March 3 AP account reminds us that freedom of religion just might encompass freedom from religion:

“After a sweeping scandal nearly five years ago that cost the state’s insurance fund for injured workers $300 million because of investments in Beanie Babies, rare coins and other risky assets, Ohio beefed up oversight and created a panel to help lawmakers look out for the health of the fund.

“Now, three years after lawmakers created the Ohio Workers’ Compensation Council to advise them on bills involving workers comp issues, the council finds itself entangled in chaos with a director accused of firing the entire staff amid allegations that she pushed her religion on employees.

“The three fired workers each sent letters to council members Tuesday accusing Director Virginia McInerney of wrongful discharge, religious discrimination and harassment, age discrimination and retaliation.”

Described as an occasional guest on “The 700 Club” who also was active in a large evangelical church,  McInerney was said to have led prayers at work and to have passed out religious CDs and at least one religiously themed book.

The piece quotes a former staff attorney as writing in a letter that “It became increasingly clear that the Director was judging employees not on professional performance but on the quality of their faith, according to her beliefs.”

McInerney denies the allegations and says she can’t comment on an ongoing case, but “that she saw no alternative under the law but to fire them.”


Whether you’re an injured employee or an aggrieved employer, if you’re facing legal problems regarding workplace injuries, be sure to seek counsel with attorneys trained and experienced in workers’ compensation. Here’s some resources:

Workers compensation basics

Denial of benefits

Choosing an attorney

Worker’s Compensation In Minnesota

Minnesota workers compensation is a no-fault system of laws which was created to provide work injury compensation to employees who sustain an injury at work while performing their normal job duties. Worker’s compensation is provided to the Minnesota employee without their proving their employer’s negligence contributed to their work injury.

Not all work injuries are covered by insurance workers comp, only those which are aggravated or accelerated by the employer’s job responsibilities or accidentally occurred while performing a job duty. Work injuries are not covered if they are caused by an intentional employee action, rough housing, recklessness or intoxication.

Minnesota workers compensation provides benefits for a variety of occupational diseases and work injuries including:

  • Abrasions and burns
  • Amputations of arms or legs
  • Concussions
  • Heart attack or strokes on the job
  • Carpel Tunnel
  • Diseases caused by inhalation of chemicals or other toxins
  • Back and neck injuries

Minnesota Workers Compensation Benefits:

Minnesota’s workers comp insurance provides wage loss compensation and medical benefits to employees who are injured.

  • Medical Benefits – Medical compensation is provided to Minnesota workers who suffer an injury at work without a time or monetary limit and includes all medical care which is reasonable and necessary to treat a work injury. Care can include: doctor’s visits, laboratory services, prescriptions and hospital visits. Employees, under most circumstances, can choose their own physician and change doctors as desired.
  • Wage loss compensation –
    • Permanent partial disability – Minnesota employees who have lost permanent use of certain body parts from their occupational illness or work injury will receive permanent partial disability benefits based on a rating assigned to them from worker’s compensation. To determine worker’s compensation benefits the rating assigned is multiplied by the dollar amount for the injury for a specific number of weeks to determine the amount paid.
    • Permanent total disability – Minnesota workers who have sustained an injury at work and are unable to continue working may receive permanent total disability payments. These benefits are calculated using a similar formula as temporary total disability benefits.
    • Temporary partial disability – Minnesota workers who sustain an injury at work and are able to return to work but their wage is lower due to their work injury, may be able to receive work injury benefits to compensate them for lost wages.
    • Temporary total disability (TTD)– Minnesota workers who temporarily can not work at all due to their work injury can receive weekly temporary total disability payments (with a waiting period). Benefits are 2/3 of the worker’s gross average weekly wage at the time of the work injury. TTD benefits may end when 1)the maximum number of weeks for benefits has been reached 2)the employee is not taking part in the vocational rehabilitation program 3)the worker has found new employment or has returned to their current job.
    • Vocational Rehabilitation Services – Minnesota worker’s compensation may provide vocational rehabilitation services to help an employee return to their current job or to find new employment if they can not perform their current job due to their physical or mental limitations.

Do I Need a Minnesota Worker’s Compensation Attorney?

Minnesota workers who would like assistance navigating complex workers compensation laws can contact a worker’s compensation lawyer. Minnesota workers do not have to hire a worker comp attorney to file their work compensation claim, but a work injury lawyer may be able to help the employee get the work injury compensation they deserve.

Workers’ comp violators face prison or slap on wrist–while Florida worker seems trapped in pain, agonizing delay

Three recent news items reflect the breadth and depth of disparity among the states’ regulations concerning workers’ compensation.

The first and third are from California and Florida, the second from Pennsylvania; taken together they reveal a shocking disconnect between treatment of perps and victims.

Roofer injured in 2003

According to a March 1 article in the Orange County (CA) Register, roofing contractor Michael Amzie Hollings “is expected to be sentenced to three years in state prison” after pleading guilty to various charges that boiled down to trying to hide workers, thereby paying nothing to the state’s workmen’s comp fund. No word from the Register on how long the scheme lasted, but it began unraveling in 2003 when a worker “fell from a roof and filed a workers’ compensation claim,” which resulted “in a denial of benefits,” according to prosecutors. The account also makes no mention of whether the injured worker ultimately received benefits–or even treatment.

On the one hand, the plea agreement shows how long such cases can slog through the system; on the other, even though Hollings faced a maximum sentence of 21 years and eight months, the expected three-year sentence should serve as a red flag for those who attempt to run similar schemes–at least, in California.

Agency owner dodges more than 1,000 counts

In another plea agreement reported today at, 80-year-old William R. McCandless has apparently slipped through the system with a pretty sweet deal. Charged (along with his business) of “1,054 counts of failure to insure” from August 2006 through July 2009, McCandless “entered a general plea of no contest to a single count of failure to insure,” which is expected to net him a mere $3,000 fine plus probation.

One presumes the agency’s workers are now covered–and, of course, there’s no mention of anyone falling from a roof–but, still…more than a thousand counts? That must be one happy old guy.

Holdup victim awaiting surgery for more than a year

The next case is flat out tragic and has the father of an injured man taking on reform of Florida’s statutes, which were altered to prevent abuse by scam-running workers.

Posted March 01 at, this account tells the tale of Sam McGinnis, a drug store clerk gunned down during a holdup that netted $88 in Nov. 2008.

“We’ve all seen video of people caught on tape playing up their injuries and claiming benefits: people walking with a walker, and later walking just fine, or using or a cane where now you see it, now you don’t,” writes investifative reporter Doug Smith.

“But there’s nothing funny or phony about the video of Sam McGinnis, a clerk behind the counter at a drug store in Tampa, Florida on November 29, 2008. A camera inside the store shows a holdup.”

Cursed at by the robber and shot twice–for not moving fast enough–McGinnis still has a slug lodged in his back and remains “in constant pain,” with “[e]ven the simplest tasks . . . a challenge . . . and he says the workers’ compensation system is compounding his agony.”

Apparently, Florida’s worker-abuse reform went too far: Not only have the new regs have resulted in denial of surgery that would help McGinnis but also he’s been prevented from using his own private insurance–because he was hurt on the job.

“McGinnis hasn’t been able to get surgery that his doctors say could ease his pain because so far workers’ compensation won’t approve it. McGinnis says he had very good private insurance, but because he was hurt at work, he can’t use it.”

The article also says “McGinnis will need a lifetime of care.”

McGinnis’ father has begun a campaign to change the regs, creating a dual-track system, with one track for more routine on-the-job injuries and another for “for people who are catastrophically injured. . .” The father (Facebook profile here) has launched a Web site with a brief background and links to a youtube video and an online petition.


Regardless of whether you’ve been hurt on the job, it’s wise to know the basics of workers compensation in case you, a friend or family member need to file a claim in the future. If you do get hurt, you should be aware of the first things to do or what to tell a co-worker who has been injured.

Sometimes an injured employee takes all the correct steps but still has trouble getting the claim taken care of; in that case here’s some information for problems with denial of benefits. If legal help is needed to help with the case, be sure to speak to a trained, experienced attorney.