Two longstanding precedents–including landmark workers’ comp case–’should be overruled’

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There’s times for almost any attorney who enjoys litigation when the best feeling in the world is to win a big court case for a deserving client.

Sometimes, though, the best thing a lawyer can do for a client is to negotiate a good, solid settlement and keep the case out of court. It’s sad to say, but sometimes the merits of a case may not “matter” as much as political sway–take the ruling by the US Supreme Court calling a corporation a person, thereby opening the floodgate to campaign finance as a  gluttonous abandon never envisioned by the Founding Fathers.

Supreme Court overturns 20 years of ‘established law’

According to a Texas consumer activist group, such a ruling was recently handed down by the Texas Supreme Court:

In a major opinion today, the Texas Supreme Court overturned more than 20 years of established law to protect workers’ comp insurance providers from claims by injured workers.  In the opinion, Texas Mutual Insurance Co. v. Timothy J. Ruttiger, the Court ruled that injured workers who have been subjected to bad faith claims handling by their workers’ comp insurance provider are not protected by the Texas Insurance Code’s provisions against “unfair settlement practices.”

“Once again, the Texas Supreme Court is upending established law, ignoring the legislature’s clear intent, and overturning its own precedents to shield big insurance companies from responsibility to hard working Texans,” said Alex Winslow, executive director of the citizen advocacy group Texas Watch.  “Today’s decision allows insurance companies to purposely deny, delay, or underpay legitimate claims without fear of penalty or public accountability.”

Workers in Texas already face significant obstacles to accountability following a workplace injury.  Workers are already forced into a broken and inadequate comp system that severely limits their legal rights and oftentimes does not provide adequate benefits.  The Court’s decision today further restricts the ability of workers to be fully and promptly compensated for their injury.

Carrier calls Rutigger decision a win for employers

According to an Aug. 26 press release from Texas Mutual:

The Court reversed the Houston Court of Appeals and rendered judgment that Mr. Ruttiger take nothing on his Insurance Code and Texas Deceptive Trade Practices Act claims.

Justice Phil Johnson wrote in strong terms that a bad faith cause of action is inconsistent with the current workers’ compensation system.

“[If the plaintiff were to prevail, the precedent would build] additional costs into the system by increasing litigation expense to employees, insurers and employers,” Justice Johnson wrote. “The way the dispute was resolved after Ruttiger initiated the dispute resolution process is the way the Act is designed to function.”

The company’s position is further spelled out:

“The Texas Supreme Court has today given careful consideration to the many speedy remedies and protections that the Legislature has granted to injured workers,” Mary Barrow Nichols, General Counsel and Senior Vice President for Texas Mutual, said. “It found that permitting an injured worker to additionally recover with a lawsuit of this kind is inconsistent with these remedies and protections. This decision is a significant victory for Texas employers.”

Majority cites Legislature’s position in reform

A summary of the case at jdsupra.com sheds some light on what it terms a “ground-breaking decision.” First, pointing to one of the cases cited as basis to uphold the lower court’s finding (Aranda v. Ins. Co. of North America, 748 S.W.2d 210 [Tex. 1988]), the Supreme Court “majority would have overruled Aranda in section 5 of the opinion. Stating that “The [Workers Compensation] Act effectively eliminates the need for a judicially imposed cause of action outside the administrative processes and other remedies in the Act. Recognizing and respecting the Legislature’s prime position in enacting, studying, analyzing, and reforming the system, and its efforts in having done that, I conclude that Aranda should be overruled.” Aranda created a cause of action for breach of the duty of good faith and fair dealing between insurers and policyholders. Aranda itself was a workers compensation decision, and the cause of action has since expanded to other insurance policies in Texas.”

Adjuster conceded interviewing ‘only the employer’

The same account also adds some telling details of the original case: The “Ruttinger [case]  involved an investigation by a carrier that failed to follow what the adjuster admitted was a standard investigation. At trial, the adjuster admitted that he did not interview the claimant or his doctor, only the employer. The adjuster also admitted that he should have interviewed all three. The jury found that the carrier violated the Texas Insurance Code by failing to conduct a reasonable investigation. It also found a ‘knowing’ violation, leading to trebling of damages.”

Dissent also cites Legislature, saying it clearly intended to preserve limited GFFD claims

The Texas Watch piece includes some highlights of the dissent:

Chief Justice Jefferson (joined by Green and Lehrmann) dissented, noting precedent makes both Insurance Code and common law claims viable (AETNA Casualty & Surety Co. v. Marshall, 724 S.W.2d 770 (Tex. 1987), and Aranda v. Ins. Co. of North America, 748 S.W.2d 210 (Tex. 1988), respectively). After the Comp Act was overhauled in 1989, its express language clearly stated the Legislature’s intent to preserve limited GFFD claims. The Act is not an exclusive remedy with respect to carriers (see Tex. Labor Code §§ 408.001 & 416.001, et seq.). The Legislature, while aware of the cases cited above, did not override them, and nothing in the Comp Act overcame the Insurance Code’s plain language. Therefore, there is no reason to hold that Insurance Code claims are now precluded. The Legislature has not made the Comp Act exclusive with respect to extra-contractual claims, and the Court’s preemption is without merit.

So even the Chief Justice found no reason to block bad-faith finding. May not be a giant decision for employers per se, but it’s certainly huge win for insurance carriers. And it reinforces the need for “mere workers” to get representation as early as possible in a workers’ comp case that may need litigating.

We can help you find an attorney

Frequently enough, a worker’s compensation case may be so complex as to demand legal representation. However, sometimes what seems like a cut-and-dried situation to an injured worker may result in a smaller award than envisioned–or even a denial. Have you, a friend or a loved one been injured on the job? Whether you’re merely seeking answers about your rights or believe a lawsuit may be necessary, be sure to seek counsel with attorneys trained and experienced in workers’ compensation. Here’s some resources:

Workers compensation basics

Injury on the job

On August 25, 2011, a preliminary report from the Bureau of Labor Statistics’ National Census of Fatal Occupational Injuries was issued by OSHA. The report stated that 2010 workplace fatalities failed to decrease substantially from those of 2009.

Secretary of Labor Hilda L. Solis had the following thoughts on the matter, “No worker should have to sacrifice his or her life to earn a living. An average 12 workers die on the job every day, and that reality continues to drive the work of the Labor Department.

When the Occupational Safety and Health Act was passed in 1970, the National Safety Council estimated that 14,000 workers died each year on the job. Now, with a workforce that has doubled in size, the annual number of fatalities has dropped significantly. But it’s not enough. We cannot relent from our enforcement of laws that keep our nation’s workers safe. One worker killed or injured on the job is one too many.”

Solis continued by emphasizing the Department of Labor’s mission to ensure that safety is not sacrificed as America’s workers provide for themselves and their families. “My constant focus is good jobs for everyone,” she said, “and safety is an essential part of that equation.”

Worker’s Compensation in Texas

Many injured Texas workers do not realize they have the right to free assistance from the Texas Office of Injured Employee Counsel. Local assistance is offered in offices across the state of Texas and provides workers compensation services from the Texas Department of Insurance (the agency that administers the system through the Division of Workers’ Compensation).

How do you contact the Office of Injured Employee Counsel? They can be reached by calling 1-866-393-6432. They also have a website that provides additional information (www.oiec.state.tx.us).

Types of Workers Compensation benefits in Texas

The Texas Labor Code (TLC) Section 408.081-408.187 identifies the types of workers compensation benefits which are provided to injured workers including income benefits, medical benefits, burial benefits and death benefits.

Medical benefits can provide necessary medical treatment for injured workers for work-related injuries. Income benefits provide income replacement benefits for the worker. Death benefits provide the family of the deceased with compensation for specific family members and burial benefits provide payment for
funeral expenses.

Hiring a Workers Compensation Lawyer in Texas

Although many workers are able to settle their Texas workers’ compensation claim without the help of a Texas work comp lawyer, many workers with serious or permanent injuries may need help.

Employers and insurance companies, who have their own work comp attorneys, may be less interested in ensuring you get the medical benefits you need and more eager to save costs and close your Texas workman’s comp claim.

Texas workers comp attorneys understand the complexities of workman’s comp laws in Texas and can help if you have been denied work comp benefits, suffered discrimination, have been fired from your job or offered an impairment rating that does not fully compensate you for your workplace injuries.

Some things to consider before hiring ‘day help’

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Today, let’s start off smallish in topic and end up biggly, as in Texas, in the next episode.

Disinformation, misinformation & real information

It’s kind of amazing, in some kind of degree, what you might kind of run across on the Internet, when what you really need instead is good, solid information.

Our first two cases are from California, the first involving unemployment as well as workers’ comp from a homeowner’s perspective; the second involving, again, both unemployment and workers’ comp–but from a worker’s perspective. These are from an “ask-an-attorney” Web site. On to the first case:

‘Off-the-book’ workers draw scrutiny in NY; Connecticut shuts down jobsites over lack of coverage, other payments

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A general trend of reduced costs for workers’ comp costs may be good news for employers, but the long-term implications are disturbing because the reduced costs trace to reductions in the workforce. In other words, unemployment is so bad that fewer workers need to be covered by workers’ comp.

NASI report based on 2009 jobless data–which, let’s face it–ain’t changed much since then

As described in an Aug. 17 piece in EHS Today, “According to a report released Aug. 16 by the National Academy of Social Insurance (NASI), workers’ compensation coverage and costs to employers have declined, a trend that likely can be attributed to the nation’s unemployment levels.

“The report, ‘Workers’ Compensation: Benefits, Coverage and Costs, 2009,’ reveals that the number of employees covered by workers’ comp dropped 4.4 percent in 2009, the most recent year with complete data available. Employer costs for workers’ comp benefits, meanwhile, declined by 7.6 percent.

“ ‘As one might expect, when the Great Recession hit, employers paid less in workers’ compensation costs because there were fewer workers to cover,’ said John F. Burton Jr., chair of the panel that oversees the report.”

‘Largest drop in two decades’

Says Insurance Networking News about the report: “The number of workers covered under worker’s compensation decreased by 4.4 percent in 2009, the largest drop in such coverage in two decades, according to the report. Meanwhile, benefits coverage increased by 0.4 percent, which can be attributed largely to carryover from workers injured in previous years; specifically, benefits covered by private carriers increased by 0.3 percent.

“The drastic drop-off in worker’s being covered reflects the heavy impact the recession had on employment in the construction industry, where worker’s compensation is most likely to be incurred. According to the report, the 19 percent dip in employment suffered by the construction industry made it the “hardest hit industry” between 2008 and 2009.”

Cost per $100 of payroll termed ‘lowest in past 30 years’

The Business Courier (Cincinnati, OH) also quoted Burton, and reports that medical care costs declined:

“Although the drop in employer costs represents the biggest decrease in the last two decades, benefits increased slightly by 0.4 percent to $58.3 billion, reflecting in part benefits provided in 2009 to workers injured in prior years.”

Among other statistics, payments for medical care declined for the first time in a decade by 1.1 percent to $28.9 billion, although they continue to make up roughly half of total workers’ compensation benefits.

Employers paid $73.9 billion nationwide for workers’ comp, with a cost of $1.30 per $100 of payroll, the lowest in the last 30 years.

Dealing with companies that dodge the law

Well, at least workers’ comp haven’t gone up because of unemployment. Of course, it’s fairly likely that a number of able-bodied workers are “ratting-in” jobs not only off the books but also working without any kind of protection against job-related injury or illness.

County in NY riled up about ‘off-the-book’ contractors; considers ‘registry’ for compliance–yet, state seems to have info on its Web site, already

In fact, an Aug.17 piece in The River Reporter (SW New York, near the corner shared with New Jersey and Delaware) addresses exactly that issue:

Contractor Patrick Murtagh estimates that there are hundreds of construction employees who work off the books every season in Sullivan County.

Murtagh paid a visit to the Sullivan County Legislature on August 4, and listed various reasons that employment laws should be enforced. Murtagh, who has three year-round employees, pays their workers’ compensation, half of their social security, Medicare, unemployment insurance and New York State Disability Insurance. His employees pay federal and state taxes, social security and Medicare.

Contractors who don’t pay these various state and federal costs can charge lower rates for work, and make it hard for the contractors who do work by the rules to survive.

There was a suggestion that the county could set up a registry where contractors who provide proof that they carry all the necessary coverage could be included, thus the public would know which contractors are abiding by NYS employment rules.

The point about “a registry” seems worth exploring, except the same article also says homeowners worried about uninsured workers “can determine whether a contractor is covered by workers’ compensation by going to www.wcb.state.ny.us and clicking on Insurance Carriers, and then clicking on ‘Does Employer Have Coverage,’ and following the prompts.”

Connecticut slams gate on ’19 companies at six construction sites’

In Connecticut, officials apparently can trace workers’ comp scofflaws easily enough to not only assess fine but also to shut down jobsites. According to an Aug. 17 report at Bloomberg:

Connecticut labor officials said Wednesday that they have recently halted work by 19 companies at six construction sites in Westport.

The state said the firms misclassified workers as independent contractors to avoid workers compensation and other payments.

Gary Pechie, director of the Department of Labor’s division of wage and workplace standards, said the companies face a daily fine of $300 for each day they fail to carry workers’ compensation coverage as required by law.

103 stop orders in six months

Hartford Business says the alleged intent “was to avoid employment obligations such as unemployment taxes, payroll reporting and workers’ compensation.

“The division issued stop work orders from July 25 to  Aug. 5 at the six Westport sites — halting all construction — and issuing civil penalties of $300 per day for each day a company did not carry workers’ compensation coverage.

“Over the past six months, the division says it has issued 103 stop work orders and collected $81,110 in civil penalties for the misclassification of workers.”

We can help you find an attorney

Frequently enough, a worker’s compensation case may be so complex as to demand legal representation. However, sometimes what seems like a cut-and-dried situation to an injured worker may result in a smaller award than envisioned–or even a denial. Have you, a friend or a loved one been injured on the job? Whether you’re merely seeking answers about your rights or believe a lawsuit may be necessary, be sure to seek counsel with attorneys trained and experienced in workers’ compensation. Here’s some resources:

Workers compensation basics

Injury on the job

More news from around the country, showing the stressors at work in workers’ comp programs

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We’ve been following  the situation in Colorado with Pinnacol since 2009. Pinnacol Assurance has wanted to break free of quasi-government agency and be owned privately by policy holders.

Pinnacol bails out–Colorado state employees left up in air

According to an Aug. 5 piece in The Washington Post, “A Colorado-chartered workers’ compensation insurer will no longer administer the claims of state employees following disagreements with state officials over lavish trips, compensation and golden parachutes for key executives.

“Pinnacol Assurance’s decision to bail forced Colorado to scramble to hire an independent contractor to administer claims for state workers. State Rep. Sal Pace, D-Pueblo, said about 42,000 employees were affected, including about 1,000 who have claims pending.”

‘Do the damned work”

It’s not clear how a state-chartered entity can refuse to do its work, and doing so has drawn the ire of a leader in State House, according to a piece in the Pueblo Chieftain. Apparently, Pinnacol had announced its intention in January:

“It sounds like they just don’t want to do the work,” said House Minority Leader Sal Pace, D-Pueblo. “I’m sorry to tell Pinnacol this, but you’re owned by the state of Colorado. Do the damned work.”

One year remained on Pinnacol’s contract as third-party administrator of state employees’ workers’ compensation claims when it terminated its services to the state and forced Colorado to put the services out to bid.

“They didn’t say why, but they did send a letter,” said Markie Davis, state risk manager.

Davis acknowledged that Pinnacol informed the state in January of its intent to discontinue offering administrative services to the state, which is self-insured as it had been before Pinnacol bowed out.

According to the Denver Post, the idea of changing Pinnacol to a private company is still on the table. We’ll keep monitoring developments.

Alaskan tour operator busted

Another early August article, from Canadian Business, describes a sorry situation involving an Alaskan tour operator that’s getting popped for more than a mil in penalties because they did not carry workers’ comp coverage for employees:

An Alaska tour operator has been fined $1.5 million for allegedly failing to carry workers’ compensation insurance, violating stop work orders and misclassifying employees as independent contractors.

Ultimate Tours LLC and Godwin Glacier Tours LLC can appeal the Alaska Workers’ Compensation Board decision or ask that it reconsider. An attorney for the tour operator declined comment Friday.

Mike Monagle, director of the workers’ compensation division, said the state attempted to reach agreement with the company but it wasn’t cooperative with investigators.

He said stop work orders were issued in 2005 and 2010, meaning the company couldn’t have employees. He said the operator designated workers as independent contractors.

What were they thinking?

It really makes you wonder, doesn’t it? What are employers thinking when they get warned and proceed, anyway, to try to:

Five people have now died and more than forty people were hurt in the collapse of an outdoor concert stage at the Indiana State Fair on Saturday evening. Just minutes before the country group Sugarland was set to take the stage, a strong gust of wind blew the stage and scaffolding down onto concert-goers.

Some of the injured are in critical condition and unfortunately the death toll could rise. Indiana Governor, Mitch Daniels, called the collapse of the stage “freakish”. The storm that accompanied the winds was anticipated, but the gust of wind that brought the stage down was unexpected.

An official evacuation order had not been given to the people at the concert, but officials had informed spectators that the concert may have to be postponed due to weather.

A spectator at the concert filmed the stage collapse. The video shows a blast of wind that blows down the stage and the steel rigging above the stage. Concert-goers can then be seen running to the collapsed stage and working together to hold up the rigging and try to rescue anyone who was trapped underneath.

The fair was closed on Sunday but reopened on Monday with a memorial service for the victims. Sugarland sent out a message via Twitter soon after the tragedy saying: “We are all right. We are praying for our fans, and the people of Indianapolis. We hope you’ll join us. They need your strength.”

Worker’s Compensation and Personal Injury

Four individuals were killed on the scene. The fifth person who was killed was stagehand Nate Byrd, 51. He was on the stage scaffolding to operate the show’s spotlight at the time of the collapse. He died on Sunday from his injuries. While Indiana Worker’s Comp issues are far from being decided in this case, individuals who are hurt or fatally injured while on the job are often entitled to Work Comp benefits.

The stage collapse is under investigation by the Indiana State Police and the Indiana Occupational Safety and Health Administration, a group that is often involved in Indiana Workers Comp cases.

The weather is a big factor in this case. A severe thunderstorm warning was announced before the collapse with winds gusting up to 70 mph. There are conflicting reports on what concert-goers were told shortly before the incident in regards to the weather and evacuation plans.

As most people know, no one can be held liable for an accident that is caused by an “act of God.” An act of God usually refers to a natural disaster such as a hurricane or earthquake or extreme weather events such as storms, lightning or tornadoes. On the other hand, if the resulting injury or damage was preventable or predictable, then a party can be held responsible. An act of God may have contributed to a disaster, but one must look beyond to ascertain whether human negligence permitted the act of God to cause the injury or death.

Filing a Work Comp Claim

Experienced attorneys can assist victims who are injured or their families in case of a death whether the accident happened at work or at a concert. The injured party needs to take vital steps shortly after the incident to make sure they receive proper medical care and compensation. Some of these steps are:

*Inform a supervisor of the incident and insist on a written report.
*Obtain a copy of the report for your records.
*Attend all appointments made by the insurance provider.
*Track the time you lost from work due to injury.
*Keep detailed records

If you have been hurt or your family has lost a loved one in an incident that the defending party or insurance company claims was caused by an act of God, do not just accept this explanation and move on. Contact a personal injury attorney that has the expertise to determine whether human negligence was involved.