Hundreds of former employees at Sears benefit from workers comp laws: EEOC final award called ‘largest ever’ for ADA case

Eddie Lampert, the billionaire hedge-fund operator who masterminded the Kmart/Sears deal and wound up as chairman of Sears Holding Corp., is making headlines recently over remarks in his annual letter to shareholders. For example, Michael Corkery gigs Lampert in the Wall Street Journal (“Sears’s Lampert Feeling Testy”); an AP writer takes a dig from BusinessWeek.com; and Rich Dupre, at MotleyFool concludes that “it seems a little early for Lampert to be churlish and thumb his nose at the critics by saying ‘I told ya so!’ ”

These opinions are reaction’s to Lampert’s assertions about “self serving . . . [b]usiness leaders, regulators, public officials, and journalists” who “have become an echo chamber of self-support and self-congratulation, whether on TV, in print or at numerous conferences.” He also had comments for critics of his investment and store-upgrade choices, as well as the role of rating agencies and “the seizure of Fannie Mae and Freddie Mac . . . .”

But what employees might notice–past. current or potential–is his take on regulation. Some highlights:

• “I fear that Americans have been provided a false choice between a little more and a lot more regulation and taxes.”
• “On the other hand, there are many who believe that less regulation, less government interference, less arbitrary regulation when it does exist, and lower government spending will generate more growth and more jobs.”
• “However, in most industries and societies where there is more regulation, there is typically lower growth, lower employment, and less innovation.”
• “Self-regulation is a better idea and it is a better choice, whether for an individual or a corporation.”

Maybe he’s talking about tariffs or trade restrictions or minimum wage–or all the above. Regardless, let’s hope he’s not talking about job safety and treatment of injured workers.

Worker injured, reassigned–then fired

A couple of recent cases show that at least a few hundred Sears workers have benefited from workers comp regulations.

The first one, dating to August 2005, seems to be a win for Sears–at first blush. In this case, reported Feb. 9 at Leagle.com, a Virginia court of appeals agreed with Sears and its insurers, in the sense that it remanded the case back to the workers comp commission. The appeals court found the commission erred when it denied “Sears’s request for a hearing on its claim that William L. Cruse (claimant) filed his claim for benefits after the statute of limitations had run.”

Things may not be as bright for Sears as that ruling might indicate, though. Here’s how it started, according to the Leagle summary: “On August 10, 2005, claimant was injured while working for Sears. Sears filed an accident report approximately one month later. Claimant filed a claim for benefits with the commission on August 16, 2007.”

In other words, Cruse filed the claim six days past the ostensible two-year limit.

But “[w]hen the commission held its hearing on the claim, no representative of Sears was in attendance. Claimant appeared and testified about the events that led to his workplace accident. He also explained that Sears’s operations manager told him after the accident to go to the doctor and that the manager said, ‘Sears will take care of it, we’ll pay for it.’ The doctor prescribed physical therapy, which Sears’s insurance carrier refused to cover.

Claimant testified that when he informed his manager that the carrier refused to pay for the physical therapy, the manager said that claimant should go to physical therapy and ‘we’ll pay for it.’ ”

Apparently, though, Sears never paid any of the medical bills, but the company did lighten Cruse’s work duties and “and paid him regular wages for a short time after the accident”–when they fired him.

Commission rules injury compensable

Following the hearing, the commission ruled in January 2008 that the injury was compensable and awarded Cruse medical expenses. The statute of limitations was not mentioned in the ruling, and Sears remained quiet, for a while. Then, nearly three years since the injury, on “August 8, 2008, Sears filed a motion to vacate the award, contending that claimant did not file his claim for benefits before the statute of limitations had run and, therefore, that the commission did not have jurisdiction to enter the award.”

The commission not only denied a hearing but also the motion to vacate, saying the original ruling had been final and “that the statute of limitations was not a subject matter jurisdiction issue.”

Sears appeals

So Sears turned to the appeals court. In its analysis, the court considered several cases, appelate decisions and the statutes themselves, in consideration of Sears’s assertion that the employee was out of luck simply for waiting more than two years to file. The court didn’t agree, however, quoting statute showing that the two-year time period can be “tolled,” or extended, under certain, specific circumstances. Then the court cited a state Supreme Court ruling that found ” ‘[u]nder these circumstances,’ it was appropriate to ‘affirm the rulings of the [c]ommission,’ but also to ‘remand the case for a hearing’ on the question of the statute of limitations and the possibility that it was tolled. Id. at 411, 83 S.E.2d at 733.

“We find that Winston most nearly addresses the issues raised by Sears. The commission here did not address the issue of the statute of limitations, perhaps in part because Sears failed to appear at the hearing. Claimant did not explicitly raise any issues regarding tolling during the hearing before the commission, although some evidence in the record suggests that the statute of limitations in this case might be properly tolled for a period of time.

Appeals court finds ‘tolling’ provisions may apply

Thus, we conclude that this case, as in Winston, should be remanded for an evidentiary hearing on the statute of limitations and any tolling or estoppel provisions that may apply.”

So, in other words, Sears “won” in the sense that the Cruse case now returns to the workers comp commission. But it also sounds like the court recognizes that by not appearing at the original hearing, Sears may have left the door open for the commission to ignore the two-year filing requirement. Plus, according to a footnote, Sears may have a problem with having changed Cruse’s duties and paying him a regular wage for a time before canning him. Certainly, the court did not grant Sears’s motion to vacate the award, so this story’s not over.

EEOC settlement from earlier case

The story is over, however, for 235 former Sears employees, who will receive anywhere from $2,500 to $125,000 as a result of the largest ever settlement involving the Americans with Disabilities Act (ADA). As ohs.online explains, “On Feb. 5, the U.S. Equal Employment Opportunity Commission announced court approval of the distribution of a $6.2 million compensation fund in the landmark Americans With Disabilities Act (ADA) litigation between EEOC and Sears, Roebuck & Co. The distribution is being carried out pursuant to the terms of a consent decree approved by Federal District Judge Wayne Anderson on Sept. 29, 2009.”

This case dates to 2004, when, says law.com, ” The EEOC sued Hoffman Estates, Ill.-based Sears in 2004 following a complaint from John Bava, an injured appliance service technician who said Sears fired him after he took a leave for knee, wrist and back injuries suffered on the job. Bava is the only plaintiff to get the top $122,500 payout, based on his initiation and the facts of his particular case, said John Hendrickson, who leads the Chicago regional EEOC office that pursued the matter.”

Now, this is a settlement, so Sears did not plead guilty to anything, as explained at chicagobusiness.com, “Sears did not admit guilt as part of the settlement, which brought and end to a November 2004 lawsuit filed by the EEOC on behalf of a former Sears employee. That employee claimed he was fired from his Sears job at the end of a one-year workers compensation leave.”

Settlement benefits employees still on the job

Moreover, the benefits of the settlement extend beyond the damaged former employees. Back at ohsonline: EEOC “Chicago Regional Attorney John Hendrickson said, ‘The Sears case has been a long haul, but now it’s over–this is it. The court has enjoined future discrimination by Sears and approved the amount of money each class member will receive for the particular discrimination he or she suffered. Their day for compensation is here, and as far as the EEOC is concerned, that makes it a good day for everyone involved.’

“EEOC Trial Attorney Aaron DeCamp noted that, in addition to the disbursement of settlement funds, EEOC is seeing positive effects from the consent decree. ‘As a result of the decree, we believe Sears has an improved worker’s compensation leave process, and it has posted notices regarding the decree. We know that employees have been seeing the notices because we’ve been receiving inquiries as a result. So we think it’s pretty clear that our lawsuit genuinely benefited the employees of Sears and strengthened the company’s human resources processes.’ ”

So, despite Lampert’s protests to shareholder about free markets and government regulations, it doesn’t take a legal scholar to understand what might have happened to these hundreds of workers without regulations and legal recourse.

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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.