Schwarzenegger smacked down again; 9/11 workers get improved settlement; Oklahoma reform passes
Schwarzenegger furloughs headed to Supreme Court
As a follow-up to our March 22 post, “California furloughs of workers comp attorneys ruled ‘illegal’, “ we see a June 13 piece in the San Francisco Chronicle reporting that yet another court has found that “[a]bout 7,900 state workers’ compensation employees were furloughed illegally by Gov. Arnold Schwarzenegger last year and are entitled to $25 million in back pay . . . .”
The March ruling was from a different appellate panel, which “found Schwarzenegger acted illegally when he furloughed about 500 lawyers and hearing officers employed by the same insurance fund.”
The June 11 ruling applies to all employees of the fund, which “sells workers’ compensation insurance to employers and uses their payments to run its operations.”
According to the Silicon Valley MercuryNews, “The furloughs were part of an cost-cutting move by the governor last year, when he ordered nearly 200,000 state employees to take two days off each month without pay.”
However, the issue does not appear to be over. Both outlets report that the state Supreme Court has agreed to review the furlough issue.
Fired manager plans WC fund for construction insustry
Another brawl over workers comp funds is shaping up in Minnesota, where, says a June 14 StarTribune.com report, “The founder and former head of Minnesota’s largest workers compensation self-insurance fund is launching a new, competing insurance program for the construction industry.
“David Bjorklund said The Builders Group (TBG), the Eagan-based fund he founded in 1997, has lost its way, citing its recent $30,000 state fine for falsifying safety-related scores and a drop in its financial reserves.”
According to the article, Bjorklund was fired as manager by the fund’s board, 11 years after he created the fund. He says he was a whistle-blower and that speaking out is what got him fired. Subsequently, he and other ex-employees helped the state during an investigation of the fund.
“Last week, he said, he met with several concerned fund members to outline the new venture. His goal is to line up charter members for a new ‘captive’ insurance company owned and controlled by the membership.” Such firms “are a bit like self-insurance funds, but members don’t bear ‘joint and several’ liability for losses, Bjorklund said. The venture, yet to be submitted to insurance regulators or given a name, would operate under the umbrella of a large insurer, though Bjorklund said he would administer it.”
Settlement for 9/11 workers extends benefits, caps legal fees
Yet another captive insurance fund made news recently, as part of the revised, $712 million settlement between New York City and thousands of 9/11 rescue workers. According to a June 10 piece in Bloomberg BusinessWeek, “Lawyers for 10,000 workers claiming illnesses from rescue, recovery and debris removal after the Sept. 11 World Trade Center attack have agreed with New York City on a $712.5 million compensation fund to settle the cases.”The city and its WTC Captive Insurance Co., set up with $1 billion from [FEMA], joined with plaintiffs’ attorneys to present the agreement today to U.S. District Judge Alvin Hellerstein in Manhattan.”
According to Reuters, the revision includes a larger payout to the workers but less to the attorneys: “In March a federal judge rejected an initial settlement of up to $657.5 million, saying it needed to be more transparent and that too much of the money — about one third — would be spent on lawyers’ fees.”
The settlement caps attorney fees at 25 per cent, which lowers “their previous cut by more than $50 million. The WTC Captive Insurance Company has agreed to pay up to an additional $55 million to the workers as part of the revised settlement.”
BusinessWeek says the judge termed the agreement “a very good deal,” and “signed an order dismissing the lawsuit, and set a June 23 public hearing for claimants and their attorneys to raise any objections. At least 95 percent of the plaintiffs must consent to the agreement for it to become legally binding.”
Oklahoma finally passes WC reform package
Elsewhere, reform is the name of the game in Oklahoma, where Gov. Brad Henry has signed legislation aimed at upgrading the workers comp system. According to a May 28 report from TulsaWorld.com, “The key features include a reorganization of the workers compensation courts and a tightening of definitions and benefit eligibility.
“Supporters say the reforms will save businesses more than $60 million a year.”
A June 12 piece at NewsOK.com explains that the legislative reform comprises four separate bills and that its passage removes one ballot proposal from November elections.
“The two bills signed by the governor Friday were part of four measures legislators approved after months of negotiations with business, medical and legal representatives. Henry earlier this week signed Senate Bill 1973, which allows the state Supreme Court to review workers’ compensation claims like any other civil case and requires that the claimant be in attendance unless all parties agree, and HB 1611, which requires workers’ compensation claims adjusters to have six hours of education on the state workers’ compensation act.”
A twenty-two point, bulleted list of changes in the reform measures are spelled out at InsuranceJournal.com.
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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:
