The Workers' Compensation Daily News for Jan 27, 2012
Firefighter Loses Post Injury Discrimination Case Against LA County
Fri, 27 Jan 2012 11:17:45 - Pacific Time
Michael Shannon was employed at the Los Angeles County Fire Department LACFD since 1987. He achieved the rank of firefighter specialist and was qualified to drive the Urban Search and Rescue truck. He had an exemplary record. In 2004 he suffered an injury which placed him on light duty, and later he became temporary totally disabled. In 2005 he was also diagnosed with a major depression. By 2006 he was also diagnosed with PTSD.
On May 16, 2006, four days after the PTP informed Intercare Insurance Services that Shannon had been diagnosed with PTSD, LACFD wrote Shannon indicating that it intended to discharge him for an event in 2005 when he was found in a deep sleep and had to be awakened to respond to a call. Shannon had bloodshot eyes and was slurring his speech that day and the next day. He was also driving erratically. Shannon denied the allegations and requested a Skelly hearing. Shannon was discharged effective September 7, 2006. No progressive discipline was used with Shannon. As a result, Shannon was successful in overturning the discharge. A hearing officer found that there was no presumption that Shannon was under the influence of alcohol or drugs because the procedure required to attain that presumption - i.e., a demand for a drug test - did not occur. The hearing officer concluded that "[t]o the extent that [Shannon’s] driving on September 28, 200[5] was below par, it was caused by a recognized medical condition and not by illegal drugs, prescription drugs or alcohol." The hearing officer ultimately concluded that because this was Shannon’s first discipline in 18 years, the discipline was disproportionate and the discharge was grossly unfair. The Civil Service Commission overturned Shannon’s termination, and he was reinstated with back pay.
In 2008, Shannon sued the LACFD, Mark Bennett, William Blackburn, Norman Branch and Steve Lindsey alleging causes of action for breach of contract, breach of implied contract, wrongful termination, disability discrimination, harassment, retaliation, Labor Code violation, defamation, intentional interference with prospective economic advantage, negligent interference with prospective economic advantage, willful misconduct, intentional infliction of emotional distress, negligent infliction of emotional distress, negligence, and loss of consortium. In his cause of action for disability discrimination, Shannon alleged that he suffered from PTSD and was perceived as suffering from drug abuse. He alleged that he was discriminated against on the basis of his PTSD and wrongfully terminated "under the pretext" that he used drugs. He alleged LACFD failed to reasonably accommodate his need for medical attention due to PTSD or his perceived need for drug intervention. The trial court granted motions for summary judgment in favor of the employer, and Shannon appealed.
The Court of Appeal in the unpublished opinion of Michael Shannon v LACFD sustained the dismissal of the case. "We conclude that although appellants provide evidence Shannon should not have been terminated, they fail to provide any evidence raising a triable issue that his termination was motivated by discriminatory animus or that Shannon was retaliated against or harassed because he suffered from posttraumatic stress disorder (PTSD) or a perceived drug addiction. ‘While an employer’s judgment or course of action may seem poor or erroneous to outsiders, the relevant question is . . . whether the given reason was a pretext for illegal discrimination or other illegal conduct." Read More...
No Subrogation When Employer Has Exclusive Possession Of Accident Site
Fri, 27 Jan 2012 11:15:29 - Pacific Time
In 2008, Essy Mottahedi was employed by 99¢ Only Stores (Stores). She was an assistant manager of Stores’ Reseda facility, which was located in the Reseda Plaza, a shopping mall in Los Angeles. Stores leased the building from the mall landlord, Moose Holding Company (Moose). Ms. Mottahedi had been working for Stores at the Reseda location for some five years when she suffered an accident in June 2008. She was standing outside the gate to the store’s loading dock, trying to close the gate, when the gate fell on her. She suffered injuries from this accident. At some point she commenced a workers compensation proceeding against Stores. Ms. Mottahedi also filed a personal injury tort action in the Los Angeles County Superior Court against Moose and others in August 2009. Her tort action was dismissed after a motion for summary judgment, and Mottahedi appealed the dismissal of her case.
The Court of Appeal sustained the dismissal in the unpublished opinion of Essy Mottahedi v Moose Holding Company, As contemplated by the Tenant’s Work provision of the lease between Moose and Stores, the loading dock area was built out with an enclosure at the expense and under the direction of Stores. The loading dock enclosure was built out by Stores; neither Moose nor Vons Company (which also had ownership rights over the Common Areas) was asked to construct the enclosure or to make repairs there. The enclosure is within the area for which Stores paid rent, and Stores was entitled to and had exclusive possession of the area. It was gated and locked, and was used for the store. Only the store manager had a key to the enclosure. The enclosure is rectangular with a sliding gate. It was Stores’ custom and practice to keep the enclosed area locked in order to protect merchandise and equipment. No other tenant keeps merchandise or equipment there. Stores employees cleaned the area. After the enclosure gate fell on appellant, Stores made repairs, including replacement of the gate. The foregoing evidence established that Stores had exclusive possession and control of the loading dock structure, including the gate.
The evidence demonstrates overwhelmingly that Stores, not Moose, controlled the enclosed loading dock area at the Stores premises. The lease gave Stores the right to erect the enclosed area, and Stores exercised that right, at its own expense and without approval (beyond the lease itself) by Moose. The enclosed area was not a "Common Area" because it was under the exclusive control of Stores. The area was fenced with a locked gate, and Moose did not have a key to the lock; only the Stores manager had a key. The trial court correctly determined that Stores had as much authority over the area as it did in its store premises open to the public. Moose considered the structure to be under the exclusive possession and control of Stores, just like the interior of the store. The enclosure was secured so that no one other than a Stores employee could access it (except Moose in case of an emergency or by a noticed request). It existed to secure the Stores’ property which it enclosed. Read More...
Man Convicted on Five Fraud Counts in Yolo County
Thu, 26 Jan 2012 07:25:32 - Pacific Time
The Yolo County District Attorney announced that on January 24, 2012, a Yolo County jury found defendant Stephen Eugene Harder, age 45, of Woodland, guilty of five counts of Workers' Compensation Insurance Fraud relating to his claim for benefits.
In 2009, the Yolo County District Attorney Insurance Fraud Unit received a complaint from the State Compensation Insurance Fund alleging that the defendant was attempting to exaggerate his industrial injury and claiming that it was more severe than it actually was. During the course of the investigation the defendant was observed acting, moving, and appearing in a manner that was inconsistent with his claimed injuries. The defendant was video taped engaging in gold mining activity which sharply contrasted with how he was presenting to the doctors that were treating him.
Yolo County District Attorney Jeff Reisig stated, that "The cost of labor in California is directly impacted by workers' compensation insurance premiums. Those premiums are affected when workers' embellish their symptoms and attempt to get more benefits than they are otherwise entitled to receive. This verdict is the result of the efforts of Deputy District Attorney Carolyn Palumbo, Lt. Dan Stroski, the District Attorney’s Insurance Fraud Unit and the State Compensation Insurance Fund.
The Honorable Steven Mock of the Yolo County Superior Court will sentence the defendant on March 23rd, 2012 at 8:30 AM. The defendant faces a maximum of eight years imprisonment, and a fine of one hundred fifty thousand dollars ($150,000). Read More...
Warehouse Gets $256K in Cal-OSHA Citations
Thu, 26 Jan 2012 07:22:41 - Pacific Time
The California Division of Occupational Safety and Health reported that a staffing buyer and a staffing firm in Southern California both received $265,445 in citations for unsafe working conditions.
The firms receiving the citations were National Distribution Centers and Tri State Staffing, according to Cal/OSHA. The citations cover more than 60 violations at four warehouses in the Inland Empire region east of Los Angeles, an area in the southern part of the state with a high concentration of warehouses. Violations included lack of fall protection from high-rise pickers, unstable storage stacking and unguarded machinery.
"When employers use a contractor for their staffing needs, they are not released from their responsibilities to provide a safe workplace," said Cal/OSHA Chief Ellen Widess. "As dual employers sharing responsibility for training and worker safety, both National Distribution Centers and Tri Sate Staffing were responsible for ensuring that all employees are protected on the job."
The warehouse inspections followed a worker suffered a heat-related illness in August 2011 as well as complaints from Warehouse Workers United. In the heat-related injury, a 49-year-old warehouse worker who had become dizzy and nauseous while working in 90-degree temperatures inside the building. Read More...
Probe Finds City Workers' Compensation Settlements are "Exceedingly Large"
Wed, 25 Jan 2012 06:12:07 - Pacific Time
The Los Angeles Times reports that an investigation found that more than half of the disability retirements awarded to police officers under former Bell City Administrator Robert Rizzo -- including those given to three police chiefs -- should not have been granted, and workers' compensation settlements for 13 officers were "exceedingly large," As a result of those awards, the officers could receive millions of dollars in extra benefits. Because Bell is self-insured, the cost of the worker's comp settlements falls on the city.
The advantage of a disability retirement is that only half of the pension is taxed; workers' compensation settlements are tax free. The city investigation was prompted by the state retirement system after the Los Angeles Times inquired about allegations that one of L.A. County's poorest cities had used disability and workers' compensation to provide bonus pay to police chiefs Rizzo had forced out. The California Public Employees' Retirement System asked Bell to investigate. The Times reported that in at least two instances, the city wrapped severance and unused vacation and sick time into the workers' comp settlements, which experts said violated tax laws.
Rizzo and seven other officials in the financially strained town have been accused of draining the city treasury by paying themselves enormous salaries, handing out generous pensions and lending city money to employees and businesses. David Thomas, the attorney who conducted the city's investigation, said that if CalPERS arrives at the same conclusion as the city, he expects it will refer the matter to the district attorney. It is unclear whether the awards and settlements can be rolled back. A CalPERS spokesman said the agency will conduct its own investigation. "If we believe the pensions were improperly awarded, we will take all steps necessary to recover the money, including referring the issues to the appropriate authorities for further investigation," spokesman Brad Pacheco said in an email.
In a four-page letter to CalPERS last week, Thomas said his investigation was "nothing short of a revelation." He said that the disability retirements were not justified in seven of the 13 cases, including those awarded to former chiefs Michael Chavez, Andreas Probst and Dennis Tavernelli. None of the former police chiefs commented on the investigation's findings. Chavez receives an annual pension of $117,942, Probst $160,649 and Tavernelli $169,027. Chavez received a workers' comp settlement of $140,000, Probst received $250,000 and Tavernelli $395,667. A disability pension does not prevent them from taking other jobs. Thomas said in an interview that the disabilities of the seven officers "were not justified based on the existing medical evidence." In his letter, he cited Tavernelli as an example. The police chief suffered a heart ailment, and his doctor said he should limit his heavy lifting and have "no exposure to greater than ordinary amounts of stress." Those restrictions would have prevented him from working as a patrol officer, but not as police chief, Thomas said. Tavernelli told the doctor he had planned to retire anyway. "The clear implication is he wasn't forced to retire because of injury," Thomas said. State law allows cities to approve disability retirements when an on-the-job injury prevents an employee from performing normal duties. Read More...
Guidewire Software Closes $115M IPO
Wed, 25 Jan 2012 06:12:00 - Pacific Time
Insurance software company Guidewire will begin trading publicly on the New York Stock Exchange (NYSE) this week. It has raised $115 million in the initial public offering by selling 8.85 million shares at $13 apiece. That’s well above the 7.5 million shares at $10 to $12 that the company had planned. Guidewire, which filed its IPO paperwork in September, will use GWRE for its stock ticker. Two of the company’s biggest investors -- U.S. Venture Partners and Bay Partners -- have shown interest in purchasing up to 400,000 shares of common stock at the IPO price, according to a Wall Street Journal report.
Guidewire provides software targeted at insurance companies that provides property, workers’ compensation and casualty insurance to its customers. Its software product includes a web-based claims system, an enterprise application for transactions and other administrative tasks. Founded in 2001, the San Mateo, California-based company brought in $190M in revenue in the past year (ending Oct. 31). The company’s net profits were $38.5 million in the twelve months ended October 31, 2011, while sales increased 51 percent to $52.4 million in the most recent quarter.
According to Guidewire, about 90 percent of the more than 7,000 insurance companies are still using outdated technology systems originally developed over 30 years ago, meaning there are still plenty of potential clients available. The company currently has more than 100 customers, including major insurance company clients, including Nationwide, CNA and American Family Insurance. Read More...
Hearing Representative Escamila Continues Battle Against Suspension
Tue, 24 Jan 2012 06:22:39 - Pacific Time
Last September, the Appeals Board, sitting en banc, issued a notice that a hearing was scheduled to take evidence on whether or not it will suspend or remove hearing representative Daniel Escamilla’s privilege to appear in any proceeding as a representative of any party before the Appeals Board or any workers’ compensation administrative law judge pursuant to Labor Code section 4907.
The allegations claim that while acting as a hearing representative for various lien claimants before the Appeals Board and WCJs, Mr. Escamilla has been repeatedly sanctioned for engaging in bad-faith actions or tactics that are frivolous or solely intended to cause unnecessary delay. The reasons for those sanctions included Mr. Escamilla’s willful failures to comply with statutory and regulatory obligations, disruption and delay of proceedings for an improper motive, and presenting arguments that were indisputably without merit,
Escamilla has previously filed a petition for reconsideration which was denied. He has now filed two new petitions n propria persona, on January 6, 2012: a Petition for Change of Venue [Labor Code section 5501.6] and a Petition for Removal and Request for Immediate Stay of Proceedings. While the relief sought in the Petition for Change of Venue is not clearly stated, it appears that Mr. Escamilla seeks a change of venue to an unspecified Workers' Compensation Appeals Board (WCAB) district office in Southern California. In his Petition for Removal, Mr. Escamilla seeks review of the December 20, 2011 orders by workers’ compensation administrative law judge (WCJ) David Hettick, serving as the designated hearing officer for the Appeals Board, relieving Traci Hinden as petitioner’s counsel of record, denying appointment of an attorney under Code of Civil Procedure section 285.4, denying a 60-day continuance of the January 27, 2011 hearing, and requiring Mr. Escamilla, by January 6, 2011, to disclose the names and addresses of all witnesses, together with a short, concise offer of proof as to their anticipated testimony. Mr. Escamilla also seeks a stay of the proceedings so that the WCAB may address the issues raised in his petition and so that he may engage in discovery and obtain counsel.
The WCAB has considered the petitions and the replies filed by John Shields, prosecuting attorney for the WCAB, and and has reviewed the record in this matter. They dismissed the Petition for Change of Venue and denied the Request for Immediate Stay of Proceedings. They granted removal, affirmed the order relieving Ms. Hinden as Mr. Escamilla’s counsel, continued the January 27, 2012 hearing, and directed the hearing officer to reschedule the pre-hearing conference for no sooner than 45 days from the date of this decision, and a hearing approximately 45 days after the conference.
With regard to the Petition for Change of Venue the Appeals Board initiated this proceeding under section 4907, and the Appeals Board has only one location, San Francisco. No district office has venue in this proceeding; venue is with the Appeals Board. While the Appeals Board requested that a WCJ employed in the San Francisco district office serve as hearing officer, he performs this function on a direct delegation from the Appeals Board for our convenience, not because the San Francisco district office has venue. Because the Appeals Board has no offices outside of San Francisco, there is no other office to which to transfer venue.
The WCAB concluded by saying "Nevertheless, to afford Mr. Escamilla 'utmost due process' as he requests, we will afford him one final additional opportunity to retain counsel to represent him in this matter prior to any further conference or hearing," Read More...
WC Cost Increases Due to Recession
Tue, 24 Jan 2012 06:22:32 - Pacific Time
The recent recession may have driven an increase in workers compensation indemnity costs in California, according to the Workers Compensation Research Institute. Indemnity costs climbed an average of 7% per year between 2007 and 2009, despite little change in the average weekly wage of injured California workers during that time, the Cambridge, Mass.-based WCRI said in a report released Monday. That increase is compared with a 30% decline in indemnity costs per claim in California from 2005 to 2007, the report said. The decline was attributed largely to workers comp reforms passed by California from 2002 to 2004.
The article in Business Insurance claims that the average duration of temporary disability claims increased by one week per year during the recession, which drove much of the recent increase in indemnity costs, WCRI said. Other factors included more injured workers who were out of work for more than one week. WCRI said the data is possible evidence that the recession had an impact on workers comp costs.
"During a recession period, one would typically expect to see slower wage growth, slower return to work (because there are fewer jobs available due to higher unemployment rate), and more incentive to settle cases for both parties because of greater uncertainty regarding the future," the report said. Read More...
New Federal Regulations Will Require Employers to Demonstrate Compliance With Safety Laws, Wage and Hour Laws and Anti-Discrimination Laws
Mon, 23 Jan 2012 05:56:33 - Pacific Time
The Department of Labor (DOL) is working on an initiative known as “Plan/Prevent/Protect,” which will require employers to assemble plans, create processes, and designate people charged with achieving compliance with various workplace laws including the Occupational Safety and Health Administration (OSHA), Mine Safety and Health Administration (MSHA), the Office of Federal Contract Compliance Programs (OFCCP), and the Wage and Hour Division (WHD). Employers will be required to implement these plans and evaluate their effectiveness in achieving compliance. According to the DOL, “compliance will be non-negotiable under the 'Plan/Prevent/Protect' system.” OSHA, MSHA, OFCCP, and the WHD will propose regulatory actions requiring employers to develop programs addressing certain employment law compliance issues within each agency's portfolio.
Although the specifics will vary, according to the DOL, the "Plan/Prevent/Protect" strategy will require employers to take three steps to ensure safe workplaces and compliance with the law: (1) the “Plan”—this requires employers to create a plan for identifying and remediating risks of legal violations and other risks to workers. (2) "Prevent"—this requires employers to completely implement the plan in a manner that prevents legal violations. (3) "Protect"—under part 3, the employer must ensure that the plan's objectives are met on a regular basis; in other words, the plan must actually protect workers from violations of their workplace rights. Employers who fail to take these steps will be considered out of compliance with the law and subject to remedial action.
Read More...
CSHWC Study Discusses Impact of AMA Guides Adoption
Fri, 20 Jan 2012 05:56:39 - Pacific Time
The Commission on Health and Safety and Workers’ Compensation (CHSWC) announced that the Commission’s draft report on "Impact of the Adoption of AMA-Based Permanent Disability Rating Schedule in California" has been approved for release for public comment.
Summary of results
- The average rating for cases with ratings>0% before apportionment decreased by 40.1% for unrepresented cases and 28.4% for represented cases. Overall, the change was -31.5%
- The average compensation for cases with ratings>0% before apportionment decreased by 51.7% for unrepresented cases and 37.2% for represented cased. Overall, the change was -40.4%.
- Apportionment on unrepresented cases reduced ratings by an average of 5.3% and compensation by 6.2%. These are probably lower bounds on the impact on represented cases.
- A conservative estimate of the fraction of cases that are rated as having no impairment under the PDRS-05 that would have received a positive rating under the PDRS-97 is 25%. We do not know whether these eliminated cases were, on average, higher or lower rated cases than the average of all ratings.
- If one assumes the fraction of apportioned cases was the same for represented and unrepresented cases, and the average "zero" case eliminated was similar in rating to the cases not eliminated, then the impact of the PDRS-05, the change in apportionment, and the case law involving Almaraz, Guzman, and Ogilvie was to reduce overall PD compensation by 58%.
Past Week News Archive
Physician Sentenced to 8 Years for $5 Million Scam: Fri, 20 Jan 2012 05:56:33 - Pacific Time: Read More...
Panel Decision Allows Judicial Notice of AD Website to Prove Valid MPN: Thu, 19 Jan 2012 14:43:18 - Pacific Time: Read More...
CHSWC Released the "Construction Case Study Training Guide": Thu, 19 Jan 2012 14:43:13 - Pacific Time: Read More...
CHSWC Study: California Injury and Illness Prevention Program is Ineffective: Wed, 18 Jan 2012 05:40:11 - Pacific Time: Read More...
Carriers Report Combined Premium Increase of 2.8 Percent for 2012: Wed, 18 Jan 2012 05:40:05 - Pacific Time: Read More...
DWC Clarifies Policy on QME Billing Requirements: Tue, 17 Jan 2012 06:11:28 - Pacific Time: Read More...
DWC Bulletin on "First Fill" Pharmacy Situation: Tue, 17 Jan 2012 06:23:25 - Pacific Time: Read More...
CDI Forms Insurance Diversity Task Force: Fri, 13 Jan 2012 05:09:07 - Pacific Time: Read More...
LAPD Sergeant Arrested for Comp Fraud: Fri, 13 Jan 2012 04:55:02 - Pacific Time: Read More...
Santa Barbara Physician Arrested for Drug Trafficking: Thu, 12 Jan 2012 05:03:59 - Pacific Time: Read More...