April 2007 Archives

April 30, 2007


Workplace cancer - According to the World Health Organization, at least 200,000 workers die each year from cancers related to work exposures, such as asbestos, benzene, and second-hand smoke. Nearly half of those deaths - or 90,000 each year, are related to asbestos. Think that asbestos exposure is no longer a problem here in the U.S.? Think again.

Chlorine exposure - The Arkansas Court of Appeals reversed a denial of benefits for a city water department worker who had died after exposure to chlorine gas. Jerry Slaughter died one month after being spewed in the face by chlorine that escaped from a cracked cylinder. A doctor retained by the city suggested that his death was related to a parasitical infection commonly associated with HIV, so the state Workers' Compensation Commission found that chemical exposure was "but one factor" contributing to Slaughter's death, not the major cause. The Appeals Court found Slaughter's treating physician to be compelling and sided with his opinion that the exposure was "the major precipitation event."

Implants and pharma costs - Joe Paduda has a few interesting posts related to cost items that can add to a claim's medical bill. First, he looks at the often all-too-cozy relationship between physicians and big pharma. In another post, he suggest taking another look at the invoice for implants used in spine surgery, bone and joint surgery. The price tag can be hefty - adding 11-33% to hospital bills in California.

South Carolina - does it seem like workers comp reform in South Carolina has been in the offing for an awfully long time? In the light of a recent NCCI recommendation that the loss cost level be increased by 23.7 percent, the Property Casualty Insurers Association of America is speaking out.

Shavers cramp - as the nature of the work we do changes, so do the risks. Jobs have changed considerably since 1923. Check out some of the occupational ergonomic maladies of yesteryear. (Thanks to Ergonomics in the News for the pointer.)

Photo of the week - from the Naval Safety Center - Eyewash Yikes and Eyewash Yuk.

April 27, 2007


Workers' Memorial Day - April 28 - is both a day of remembrance for workers who have died on the job and a grim reminder that we must all work to prevent further workplace deaths and injuries. April 28 has been dedicated as a day of remembrance since 1989. The significance of April 28th is to commemorate the 1971 date that OSHA was established as an agency to administer the Occupational Safety and Health Act, which became law in 1970. Workers Memorial Day has grown to become an international remembrance - safety advocates, workers, and trade unions in more than 100 counties now observe the event. The AFL-CIO Worker Memorial Day site offers more in the way of information, links, and toolkits, including a state-by-state directory of Workers' Memorials that have been erected to commemorate workers who have been injured or killed on the job. For a more global perspective, Hazards magazine has a page dedicated to International Workers Memorial Day, which includes extensive links and resources.

Death on the Job - The Toll of Neglect
In conjunction with Workers Memorial Day, the AFL-CIO recently released its annual report, Death on the Job: The Toll of Neglect. Among other things, the report offers a state-by-state snapshot summarizing fatalities, injuries and illnesses, penalties, and the number of OSHA inspectors. It also offers a state-by-state breakdown of fatalities by event or exposure.

The report relies heavily on BLS data for 2005. (We discussed BLS data last August in our post BLS Stats on Dying at Work: Spin Control in the Graveyard.) Here is an excerpt from the report's summary of key data:

According to the BLS, there were 5,734 workplace deaths due to traumatic injuries in 2005, a decrease from the number of deaths in 2004, when 5,764 workplace deaths were reported. The rate of fatal injuries was 4.0 per 100,000 workers in 2005 compared to 4.1 per 100,000 workers in 2004, a 2 percent decrease. Wyoming led the country with the highest fatality rate (16.8 per 100,000), followed by Montana (10.3), Mississippi (8.9), Alaska (8.2), South Dakota (7.5) and South Carolina (6.7). The lowest state fatality rate (1.1 per 100,000) was reported in Rhode Island, followed by Vermont (2.0), Maine (2.2), Hawaii (2.3), Massachusetts (2.3) and Michigan (2.3). Twenty-four states saw an increase in either the rate or number of fatalities between 2004 and 2005, with Mississippi, Montana, and South Dakota having the biggest increases in fatality rates.
The construction sector had the largest number of fatal work injuries (1,192) in 2005, followed by transportation and warehousing (885) and agriculture, forestry, fishing and hunting (715). Industry sectors with the highest fatality rates were agriculture, forestry, fishing and hunting (32.5 per 100,000), mining (25.6 per 100,000) and transportation and warehousing (17.7 per 100,000). Transportation incidents, in particular highway crashes, continue to be the leading cause of workplace deaths, responsible for 2,493 or 43 percent of all fatalities in 2005.

The report goes on to note that BLS data only tells part of the story because it only covers certain segments of workers. For example, It does not include self-employed workers, domestic workers, farms with fewer than 11 employees, employers regulated by other federal safety and health laws, or federal, state and local government agencies. A recent study points to the issue of underreporting:

While government statistics show that occupational injury and illness are declining, numerous studies have shown that government counts of occupational injury and illness are underestimated by as much as 69 percent. A recent study published in the April 2006 Journal of Occupational and Environmental Medicine that examined injury and illness reporting in Michigan has made similar findings. The study compared injuries and illnesses reported in five different data bases - the BLS Annual Survey, the OSHA Annual Survey, the Michigan Bureau of Workers' Compensation, the Michigan Occupational Disease reports and the OSHA Integrated Management Information System. It found that during the years 1999, 2000 and 2001, the BLS Annual Survey, which is based upon employers' OSHA logs, captured approximately 33 percent of injuries and 31 percent of illnesses reported in the various data bases in the state of Michigan.
One reason why even more progress in reducing work fatalities hasn't occurred can be found in the dearth of OSHA inspectors. While the United Nations' International Labour Organization recommends one inspector for every 10,000 workers as a benchmark, the OSHA reality is far different. The report includes a graphic visual depiction of the number of years it would take each state to inspect every workplace once.

We've had occasion to visit thousands of employer worksites over our 20+ years, and we have been heartened by the increased emphasis on safety that we've seen. Sometimes that dedication is a heartfelt commitment to workers and to excellence; other times, it is a calculated matter of good business economics - strangely enough, doing the right thing is often the cheapest option. One thing we've seen all too often: the safest workplaces are often those that have experienced a death-on-the-job - a truly terrible and traumatic way to join the ranks of the safety believers. Of course, we also recognize that the employers we see are a self-selecting group: those that choose to do better. We are mindful that there are negligent employers, both large and small, who accept injuries, illnesses, and even fatalities as a normal cost of doing business.

Related reading:
The Weekly Toll: Death at work
The sad, quiet death of Bud Morris - father, husband, motorcycle afficianado
The Lonely Death of Octavio Godinez
A terrible burden: the death of a coworker

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April 26, 2007


New York Times reporter Steven Labaton presents an interesting portrait of OSHA in action. It's a story about popcorn. Americans eat more than a billion pounds of popcorn a year. According to the industry, that's nearly 14 gallons of popcorn for every man, woman and child in the country. Unfortunately, quite a few of the people packaging the product are coming down with a rare and potentially fatal illness. Sounds like an opportunity for OSHA, doesn't it?

Seven years ago, a Missouri doctor discovered a pattern at a microwave popcorn plant in the town of Jasper. After an additive was modified to produce a more buttery taste, nine workers came down with a rare, life-threatening disease that was ravaging their lungs.

Puzzled Missouri health authorities turned to two federal agencies in Washington. They got two very different responses. Scientists at the National Institute for Occupational Safety and Health (NIOSH), which investigates the causes of workplace health problems, moved quickly to examine patients, inspect factories and run tests. Within months, they concluded that the workers became ill after exposure to diacetyl, a food-flavoring agent. (You can find their recommendations for managing the exposure here.)

But the response at OSHA has been, well, a bit laid back. OSHA did not step up plant inspections or mandate safety standards for businesses, even as more workers became ill. OSHA Director Edwin Foulke says “the science is murky” on whether the additive causes bronchiolitis obliterans, the disease that has been called “popcorn worker’s lung.” You can find a few industry officials who agree with Mr. Foulke, but leading scientists and doctors agree with NIOSH scientists that there is compelling evidence linking the additive to the illness. (Hm, did someone mention global warming?)

In keeping with the OSHA philosophy under the Bush administration, Foulke has not issued any regulations about diacetyl - or anything else, for that matter. Instead of regulations, Mr. Foulke favors a “voluntary compliance strategy,” reaching agreements with industry associations and companies to police themselves. Let's just sit down, munch a few artificially flavored kernels and come up with a (PR) plan.

Blame the Victim
Early in his tenure at OSHA, Mr. Foulke delivered a speech called “Adults Do the Darndest Things,” which attributed many injuries to worker carelessness. Large posters of workers’ making dangerous errors, like erecting a tall ladder close to an overhead wire, were displayed around him.

“Kids don’t always know what their parents do all day at work, but they instinctively understand the importance of them working safely,” he told the audience, which included children who had won a safety-poster contest. “In contrast, adults could stand to learn a thing or two. Looking at the posters, I was reminded of a couple examples of safety and health bloopers that are both humorous and horrible.”

Listening to Mr. Foulke, I am reminded that administrators also can do the darndest things. They are confronted with strong evidence of a problem - workers falling ill to rare and serious illness. Government scientists confirm that the illness is caused by a chemical in the workplace. So what does OSHA do? Not much.

Perhaps Foulke believes that the workers are being careless: after all, they keep on breathing in these darned factories, don't they?

Onerous Regulations?
Historically, you can certainly make the case that some OSHA regulations have been ponderously worded, onerous, perhaps even downright silly. But even if you believe in small government, you have to understand the role your agency plays in the working world. OSHA is in charge of workplace safety. If there are unsafe working conditions, OSHA is supposed to respond. Regulations are needed: write the regs as succinctly and clearly as possible, but write them!

Mr. Foulke's boss, Secretary of Labor Elaine Chao, points out that “there are more words in the Federal Register describing OSHA regulations than there are words in the Bible. They’re a lot less inspired to read and a lot harder to understand. This is not fair.”

Ah, but workers in popcorn factories are dying because a chemical has destroyed their lungs. That's not fair either. Ideology and the wording of regulations aside, it's OSHA's job to mitigate the risk. I don't care how they do it, but they need to get the job done.

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April 25, 2007


The Silicon Valley Blogger is hosting Cavalcade of Risk #24 at The Digerati Life. One of the things that I enjoy about this blog roundup is that there are not only good work-related topics, but there's usually some topics that are useful for one's non-work life too, such as investing advice and discussion about housing markets.

We also encourage you to spend a little time exploring the host blog. The Digerati Life is the blog of a Silicon Valley-based software engineer who worked at some of the big, familiar names in the tech world during the boom - so she knows the ups and downs of start-ups. Her blog's focus is on money and personal finance, technology, and entrepreneurial endeavors. Here's a sampling of some recent posts:
3 Ways To Fund Your Business: How To Finance A Startup For The Best Growth
Who Cares About Sex, Money and Personal Finance? What Google Trends Are Telling Us
5 Ways To Survive A Volatile Stock Market

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April 24, 2007


Duke University recently published a study of its own employees, which found a significant link between obesity and the cost of workers compensation. The analysis found that obese workers filed twice the number of workers' compensation claims, had seven times higher medical costs from those claims and lost 13 times more days of work from work injury or work illness than non-obese workers. Although these are alarming numbers, the practical implications for American employers are not entirely clear.

The researchers looked at the relationship between body mass index (BMI) and the rate of workers' compensation claims. Because the BMI takes into account both a person's height and weight, it is considered the most accurate measure of obesity. For Americans, a BMI of 18.5 to 24.9 is considered normal; 25 to 29.9 is considered overweight, and 30 and above is considered obese. (You can calculate your own BMI here.)

The researchers zeroed in on employees with a BMI greater than 40. That is way up on the scale (so to speak). These employees had 11.65 claims per 100 workers, compared with 5.8 claims per 100 in workers within the recommended range. (With these incident rates, Duke may receive a letter from OSHA as a "high frequency" employer. See our blog here.)

Some of the numbers are truly alarming: in terms of average lost days of work, the obese averaged 183.63 per 100 employees (that makes lumberjacks look good!), compared with 14.19 per 100 for those in the recommended range. Yikes! The average medical claims costs per 100 employees were $51,019 for the obese and $7,503 for the non-obese. These are huge differentials.

The disparity between the obese and the "normal" is so large, it raises some questions that the press release simply doesn't address. How many people meeting the definition of obese were included in the study? Were the trends truly "average" - or did a relatively small number of outlier claims magnify the disparity? Perhaps most important, how well does Duke manage its injured workers? How effective is their return to work/stay at work program? Are they able to accommodate injured employees, whether obese or not?

As you would expect from an academic institution, Duke recommends a proactive approach. Truls Ostbye, a professor of community medicine, says the following:

Given the strong link between obesity and workers' compensation costs, maintaining healthy weight is not only important to workers but should also be a high priority for employers. Work-based programs designed to target healthful eating and physical activity should be developed and then evaluated as part of a strategy to make all workplaces healthier and safer.

I'm sure some less enlightened employers might be inclined to come up with a simpler solution: fire anyone who is obese. (These workers may or may not be protected under the Americans with Disabilities Act. It's a gray area that we've looked at in the past.) But realistically, obese people are valuable contributors in many workplaces. It's neither practical nor desirable to exclude them simply on the basis of their size.

Ultimately, the calculus of employment has to take in a number of key factors:
- the work performed
- the motivation of the employee
- the inherent risks in the work
- the employee's willingness to tackle what is ultimately a personal problem

As a company specializing in the control of workers comp costs, Lynch Ryan focuses on the looming challenges for American employers: an aging workforce. undocumented workers with few transferable skills, the lack of conventional health insurance. Obesity certainly belongs on the short list of big challenges. The Duke study may or may not reflect the true cost of obesity to employers across the country. But the alarm has been sounded. Prudent employers will analyze their own situations and take action to mitigate the risks.

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April 20, 2007


Jason Shafrin has posted Health Wonk Review #30 at Healthcare Economist - some good end-of-the week reading. Some of the prevailing these in this issue are HSAs and managed care, physician incentives, and the Massachusetts health insurance experience. And check out some other postings on the site too - if you care about healthcare policy, Jason's blog should be on your short list of must-reads.

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April 18, 2007


Our hearts go out to the Virginia Tech community in their time of mourning. What a terrible event and what a sad reminder that life is short and and can be snatched from us and those we love at any moment in the most unlikely of circumstances. Perhaps the best memorial we can offer to the deceased is to redouble our efforts to live with kindness and goodwill. That, and to reach out and hug our loved ones.

Be alert for your employees' reactions to this event. A horrible incident like this can take a psychic toll on many - even those who are remote observers with no actual connection to the event can suffer emotional stress. This is particularly true for those who have previously been involved in episodes of violence. Events of this nature can rekindle or exacerbate post-traumatic stress disorder for people unrelated to the actual event. For others, it can bring repressed fear and anxiety to the surface. The continual media drumbeat 24/7 and focus on sensational details can add to general distress.

In the aftermath of this and other horrors, we seek to make sense of senseless events. It's natural that many would look to find someone or something to blame beyond the deceased perpetrator. Right now, many are looking to the university's security procedures and questioning why the campus wasn't locked down after the first shooting. That's a valid question. Of course, it's easy in hindsight to say what should have been done, but the reality can be more complex, so we will need to wait for the investigation to answer this and many other questions. Certainly, Columbine delivered some hard lessons about how things could have been handled better to minimize loss of life. Recommendations from follow-on Columbine investigations have been adopted by law enforcement personnel nationwide, and may already have saved lives.

The psychology of security
Can a community of 30,000 ever be securely locked down against a deliberate and cunning killer? Bruce Schneier presents a sober look at the issues of risk management and security in his excellent article, The Psychology of Risk. He points out that security is both a mathematical reality that can be calculated and a feeling based on psychological reactions to both risks and countermeasures. In regard to the latter, he notes:

* People exaggerate spectacular but rare risks and downplay common risks.
* People have trouble estimating risks for anything not exactly like their normal situation.
* Personified risks are perceived to be greater than anonymous risks.
* People underestimate risks they willingly take and overestimate risks in situations they can't control.
* Last, people overestimate risks that are being talked about and remain an object of public scrutiny.

He goes on to present several examples of how and why people exaggerate some risks and downplay other risks, often in complete disregard to the mathematical realities. These perceptions influence our expenditures of time and effort:

"Why is it that, when food poisoning kills 5,000 people every year and 9/11 terrorists killed 2,973 people in one non-repeated incident, we are spending tens of billions of dollars per year (not even counting the wars in Iraq and Afghanistan) on terrorism defense while the entire budget for the Food and Drug Administration in 2007 is only $1.9 billion?"

Noting that absolute security is an impossibility, Schneier frames the matter of relative security as a trade-off. We measure the time, expense and inconvenience of a given security measure against our perception of the risk. If that perception is faulty, it's an irrational trade off that doesn't do much to increase our security.

After a tragedy, emotion often prevails over dispassionate rationality. Thus we can't carry shampoo on planes and we strip down to almost our skivvies in airports. Does that make us safer or does it just make us feel safer? It's unlikely that any measures can be thorough enough to guard us from a random determined killer in our midst. Efforts might be better spent trying to determine the root causes of why there are so many random determined killers in our midst.

Schneier's article presents interesting, well-framed ideas in well-written format. Whether you work in the business of risk or just live in a risky world, it's worth a read.

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April 17, 2007


We recently blogged the publication of OSHA's list of 14,000 employers with "high" workplace injury and illness rates. One of the links posts the list as an Excel spread sheet, so you can search, state by state, to find the names of frequent flyers.

But what exactly does the list tell us? Is it automatically an indicator of a safety-deficient employer? Is OSHA handing out "the Scarlet O"?

In their own press release, OSHA backpedals from the start. While they are publicizing their list of 14,000 workplaces with "high" injury and illness rates, they are quick to add that help (OSHA itself) is readily available. OSHA states that the notification "was a proactive step to motivate employers to take steps now to reduce those rates and improve the safety and health environment in their workplaces."

"This identification process is meant to raise awareness that injuries and illnesses are high at these facilities," said Assistant Secretary of Labor for OSHA Edwin G. Foulke, Jr. (You may remember Foulkie from a prior blog on fatality rates. He is still presumably doing a heck of a job.) "Our goal is to identify workplaces where injury and illness rates are high and to persuade employers to use resources at their disposal to address these hazards and reduce occupational injuries and illnesses."

So OSHA has pointed a finger at a few thousand employers. Just how should they take this news?

Inadequate Data
OSHA uses employer-reported data from 2005. The 14,000 workplaces identified had 5.3 or more injuries or illnesses resulting in days away from work, restricted work activity, or job transfer (DART) for every 100 full-time workers. The national average for all industries during 2005 was 2.4 DART instances for every 100 workers.

There are a few problems with OSHA's data:
First, the information, because it is self-reported, is not very accurate. Many employers have no clue how to fill out the forms. They make a lot of mistakes. (For the most part they err on the side of omission, rather than over-reporting their rates.)
Second, some employers are over-zealous in their own reporting. They report everything, which may give the appearance of higher-than-average rates, but really reflects higher-than-average safety awareness (especially in regard to incidents that do not result in lost time).
Third, the data lumps too many items together: they include not just incidents resulting in days away from work (the most reliable indicator of safety issues), but incidents requiring modified duty or job transfer. That's a very broad net.
Finally, a single incident rate for all industries is pretty meaningless. The rates should be industry specific.

Even as they publish this somewhat embarassing list, OSHA is not concerned enough to schedule visits to the violators. Later this year they will announce a "limited" number of companies for targeted inspections.

If OSHA is really serious about profiling high risk employers, they need to do some more homework. For starters, they could lobby their fellow feds at the Bureau of Labor Statistics (BLS) to revive the data collection effort that came to an abrupt halt in the early 1990s. BLS used to publish some very useful and compelling data, including the average number of lost workday cases and case rates by specific industry. Those benchmarks were extremely helpful for employers trying to answer the key question: How are we doing relative to others in our same type of business?

OSHA as Officer Friendly?
Mr. Foulke's tenure at OSHA has been characterized by a lot of platitudes and not much in the way of enforcement. We are in an era of "self-enforcement" - which works for some and does not work at all for others. Here's a quote from a speech Foulke gave to the national tower erectors association:

Here is an analogy anyone can relate to: When you see a police officer on a street corner, you are not afraid of him. You might even go up and ask for directions and you'll be grateful for the advice. However, you are also aware that if you run a red light, that same friendly, helpful police officer will issue you a ticket that could result in your paying a hefty fine for breaking the law. This is how I want all employers to think of OSHA.

Hmm, OSHA as Officer Friendly. If you belong to a racial minority, or if you are an undocumented immigrant, you might well be afraid of the cop on the corner. In many instances, you would be too afraid to ask his advice. In addition, if you did run the red light, you might or might not get a ticket. Those in powerful places have ways to make those tickets disappear, while most of us have no option but paying the fine. The analogy is a bit more complicated than Foulke would admit.

When we think of OSHA in its current form, we see the federal agency responsible for workplace safety pandering to the powerful, whether safety conscious or not, and ignoring the interests of the worker. The agency, driven by hard-line ideology, is out of balance.

In the final analysis, can we do anything useful with OSHA's list of 14,000 "high frequency" employers? Probably not. OSHA's "Scarlet O" is neither a badge of shame nor honor. It doesn't mean much of anything. It's really just a big fat zero.

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April 16, 2007


Medical risk factors - Occupational Hazards features a report on a study in the April Journal of Occupational and Environmental Medicine that links job strain to high blood pressure. Job strain is defined as "high psychological demands combined with low control or decision-making ability over one's job."

Is litigation the answer? - Stewart Levine goes into some detail about the many costs of conflict in Law Practice Today, pointing out that "Twenty percent of Fortune 500 senior executives' time is spent in litigation-related activities."
Judge Robert Vonada of Pennsylvania Workers Compensation Journal cited this article as a "valuable resource for parties to understand the process and benefits of mediation."

Worker Memorial Day - Tammy Miser at Weekly Toll reminds us that Worker memorial is upcoming on April 28. She also offers a history of the event and how it came to be.

Quick takes

The lighter side

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April 13, 2007


Federal workers exposed to asbestos - Effect Measure points to the a story in the Washington Post about the plight of 10 employees of the Architect of the Capital who have been exposed to asbestos for a number of years. These workers toil in underground tunnels strewn with asbestos debris, and have complained about working conditions over a number of years. Now, in what they see as retaliation for their complaints, they are being transferred to an active asbestos removal project at a power plant. Hopefully, this public airing will help to provide some help for these workers, most of whom are demonstrating lung scarring from years of exposure. (Thanks to our friend Joe Paduda for the pointer.)

Addendum 4/17/07: a former New York City employee mailed this note to us related to the above:

"Thank you for posting the story of the workers for the Architect of the Capital. I have had the same experience as an employee of the city of New York. I worked for years removing asbestos from city hospitals. After being hospitalized with asbestos related lung disease and filing a claim for workers compensation, I was assigned to a more hazardous location and assigned to oversee asbestos abatement projects. I informed my employer that the conditions I was working under were further damaging my condition and attached a letter from my doctor to that effect. Their response was to leave me in a dangerous environment for another five weeks and then fire me for not being able to preform the functions of my job."

Ergonomic seating - Ergonomic Office Chairs Health Hub is a comprehensive resource on ergonomic office chairs and seating options, providing information on how to set up an ergonomic chair and computer workstation, and alternative seating options. It's affiliated with Spine-health.com, a peer reviewed medical journal for patients with back pain and spinal disorders, written by physicians who specialize in spine medicine. There are some good articles on related topics, such as choosing the right chair, tips for improving posture, and pain-free travel tips. We'll add this link to our sidebar resources.

OSHA initiatives -

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April 12, 2007


Covenant Transport describes itself as a "faith based" company operating out of Chattanooga, Tennessee. Their website states: "At Covenant Transport, our values drive our performance, as proven by industry statistics ranking us one of the ten largest truckload carriers in the United States measured by revenue."

That's an interesting sentence. The fact that they rank in the top 10 largest carriers "proves" that their values drive their performance. No. It just proves that they are big. When it comes to values, whether faith based or not, Covenant is downright pagan.

We read in the Insurance Journal, in an article by Bill Poovey, that Chancery Judge Frank Brown has blocked Covenant from forcing employees to sign away their workers' compensation benefits. Employees had been asked to sign a form, entitled "notice of waiver by employee for benefits provided by the Tennessee workers' compensation law." The form appeared to originate at the state's Division of Workers Comp. It's apparently a forgery. Beyond that, under Tennessee law (and in most states) you cannot sign away your rights to workers compensation. It's part of the covenant, if you will, between employers and their employees.

A quick search of the web finds some distinctly negative views of Covenant's operation (here and here). While postings from a few disgruntled truckers is nothing definitive, Covenant is about to answer to a higher (if not the highest) authority: the judge has scheduled a hearing for April 24. Covenant will likely learn that forging documents and coercing employees to sign them is illegal, if not an act of "bad faith." Not exactly what you'd expect from a faith-based company.

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April 11, 2007


Last month, more than 14,000 employers got missives from OSHA informing them that their workplaces were at least twice as hazardous as that of the average U.S. workplace. In 2005, the average workplace has a rate of 2.4 injuries or illnesses that resulted in days away from work for every 100 workers. In contrast, employers who got OSHA notices had rates of 5.3 or higher. Rankings were determined through employer-reported data secured from a survey OSHA conducted in 2006 relative to 2005 work-related injury and illness occurrences.

Included in this correspondence, employers also received their injury and illness data and a list of the most frequently violated OSHA standards for their specific industry. OSHA says that the list is meant to raise awareness and is not an indication that a workplace is targeted for an inspection.

You can download a zip file of the list of 14,000 from OSHA and scan by state. Or you can get an Excel spreadsheet of the file from a posting on The Pump Handle, where Celeste Monforton of has taken a closer look at the list, offering some observations and breakdowns by state:

"Recipients of the OSHA letter include: Lowe's, Home Depot, United Parcel Service, Wal-Mart, Harley-Davidson, and two Jelly Belly candy factories, with the highest percentage of letters (23 percent) sent to residential nursing care facilities. More than 3,200 employers in 3-digit SIC code 805 or NAICS 623 receive the notice from OSHA ... including 67 sites operated by Beverly Enterprises, 46 Kindred Care sites, and 32 Evangelical Lutheran sites. Among all workplaces, employers in Pennsylvania, Ohio and Texas received the most letters; none were sent to worksites in the 21 States that operate their own OSHA State Program."

One of the people commenting on this post suggests that the list shows that the bulk of injuries "don’t come from the so-called 'low road' employers, they come from the median employers, maybe even from employers which pay better wages benefits and provide better working conditions than the median in their sector."

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April 9, 2007


Dillard's is a major department store chain, with 330 stores in 29 states, mostly in the south. Their motto is "The Style of your Life." I am not sure what that is supposed to mean, but one thing is clear: Dillard's does a lot of hiring. Their website, featuring a handsome African American in a three button suit, tells you what they are looking for in an employee:

Are you a professional person of integrity who enjoys working with the public, is outgoing, energetic, reliable and who wants to join a dynamic retailer?

We can assume that they are not looking for bigoted individuals with a particular hatred of African Americans. But they hired one (with a spotty employment record) and they kept her (after several ugly incidents with customers). Now they find themselves on the defending end of a lawsuit.

A federal appeals court ruled that a Kansas City couple could pursue its racial discrimination lawsuit against Dillard’s. The 8th U.S. Circuit Court of Appeals reversed a lower-court judge, who had thrown out the lawsuit filed by Rodney and Charlan Green in 2004.

Big Trouble in a Simple Purchase
In August 2002, the Greens went to a Dillard's store in Kansas City to buy a handbag, purse and watch. They asked a clerk to help them, but she refused and then followed them around, glaring at them and muttering something under her breath. When the Greens made a $500 purchase from a different clerk, the first clerk questioned their ability to pay for it.

Rodney Green asked the clerk to leave them alone, then asked the other clerk to call the manager. While Green waited for his wife to purchase the watch, the clerk used a racial epithet and walked away.

After the manager arrived, the Greens decided that they had had enough of the Dillard's life style and returned their just-purchased items.

The manager apologized for the clerk's behavior and admitted that the store had had past problems with her. The clerk was fired the next day.

The Sales "Contract"
The Greens sued Dillard's two years later, alleging the company had violated their right to "make and enforce contracts," a civil rights protection adopted shortly after the Civil War and amended in 1991. In the Greens' case, that right was in the context of a simple retail purchase.

The federal court determined that "their evidence includes not only a most egregious racial slur, but also a series of actions which a trier of fact could find as a whole thwarted their attempt to make and close a contract with Dillard's for the wristwatch."

If you are thinking that it's a stretch to include the purchase of a retail item as a "contract," you're right. This is a new interpretation of a long-standing law. The Greens are hoping to parlay this innovative interpretation into $5 million. While the federal court allows the case to continue, that in itself is no guarantee of success. Given that the Green's voluntarily returned their purchases, the lawsuit may be a long shot.

HR Fundamentals
Win or lose, Dillard's careless approach to human resource management raises an important issue for all employers whose workers are in contact with the general public. Dillard's apparently hired a woman with some serious attitude problems. They compounded this mistake ("negligent hiring") by keeping her on the job ("negligent retention"), despite racist behavior toward certain (minority) customers. Regardless of whether the purchase of a watch ends up being a "contract," I suspect that Dillard's will settle with the Greens. Dillard's put the wrong person on their sales team. They kept her there, despite poor performance. They have deep pockets, so they are going to pay.

One final thought: I sure hope Dillard's followed their own written procedures when they terminated the racist sales clark. The prior problems had better be well documented. If not, Dillard's could find themselves defending a wrongful termination claim filed by the ("misunderstood, maligned") clerk. It's the American way.

Thanks to Overlawyered for the heads up on this situation.

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April 6, 2007


When you talk to insurers doing business in New York, they are quick to point to New York Labor Law as a very big problem. The law, going back to 1885, holds employers absolutely and completely liable for any injuries resulting from a fall. This liability is over and above workers compensation. Injured workers can (and often do) sue for damages that go far beyond the wage replacement and medical bills paid by comp. I imagine that the building of skyscrapers was a big factor in the law's original passing. But it applies to every form of building, from Trump's glitziest tower to a strip mall in Poughkeepsie.

Any law that's been around for 120 years has an extraordinary pedigree, and this one is no exception. Attorney Andrew Siracuse - a proponent of the statute - has made a lot of useful history and case law available here. The original statute (S.18) required proof that the owner "knowingly and negligently" caused the injury by fall. That was was soon amended (in 1897) to remove any mitigating circumstances for employers. In other words, the law does not take into account prior safety training, the availability of personal protective equipment or other attempts to reduce job site risk. Nor does the law care if the employee acted negligently, was stoned, or failed to use available safety equipment. Employee falls, employer pays. Employers are absolutely liable. It's that simple.

The law holds employers to perhaps the highest standard for safety in the world. Here's the language of an amendment from 1921:

A person employing or directing another to perform labor of any kind in the erection, repairing, altering, painting, cleaning or pointing of a building or structure shall furnish or erect, or cause to be furnished or erected for the performance of such labor, scaffolding, hoists, stays, ladders, slings, hangers, blocks, pulleys, braces, irons, ropes and other mechanical contrivances which shall be so constructed, placed and operated as to give proper protection to a person so employed or directed.

Any fall is presumed to be the result of a failure on the part of the general contractor/employer. In New York, there is no such thing as a free fall.

Impact of Workers Comp Reforms
The arguments, pro and con, continue to this day. Attempts to modify the law have repeatedly failed. To be sure, the law provides an important safety net for seriously injured construction workers. (It also pays the painter, standing on a bucket in a closet, who injures himself in a fall totalling 24 inches.) Given the historically paltry benefits available under the state's workers comp law (see our prior blog here), some form of additional benefits was probably necessary. Try living in New York on $400 a week indemnity. The new reforms up the maximum indemnity to $600, but that will still not support a well-paid construction worker and his/her family. If New York really wants to make the Labor Law obsolete, they need to mirror Massachusetts in offering a maximum weekly benefit of $1,000+.

There is one part of this situation that puzzles me. Every state builds tall buildings. Every construction project involves the risk of falling. But only New York has chosen to move beyond comp's "exclusive remedy" benefits to offer tort liability to workers in construction. Only New York has held contractors to the highest possible standard - and has done so for 120 years. Has this unique standard actually reduced the number of falls in New York? Has New York succeeded in creating safer workplaces, by hammering employers and their insurers with higher costs? I doubt it.

On the other hand, there are times when I am happy that workers carry the extra protection. One only need glance at a recent fatal fall in Buffalo, involving Jonathan Fundalinski, a 24 year old worker. We read in the Insurance Journal that the construction crew began erecting a safety railing minutes after Fundalinski plunged 30 feet to his death. According to police, the crew ignored repeated orders to stop as paramedics battled to revive the victim. The irony is that even if the crew was able to convince authorities that the railing had been in place before the fall, it wouldn't make any difference. It might support their case in some other state, but not in New York. Railing or no railing, the contractor is liable for the fatal fall of a young worker. They are going to pay, big time. And in this particular case, that's a good thing.

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April 5, 2007


Jane Hiebert-White has posted a new edition of Health Wonk Review at Health Affairs Blog, with a special thematic focus on "Health Reform 2.0." There's no doubt about it - health care reform is in the air - and a bi-weekly reading of Health Wonk Review is a great way to stay up on issues, news, and opinions from those in the trenches. As our friend Joe Paduda notes, it's time to be paying attention - there is probably no other single issue that will affect us all more than health care reform, consumers and employers alike.

The hosting blog is an adjunct to the highly esteemed Health Affairs, the leading peer-reviewed journal of health policy thought and research, which is issued six times a year. Published since 1981, Health Affairs is nonpartisan and presents a wide range of timely research and commentary on health issues of current concern in both domestic and international spheres. Washington Post has deemed the publication "a must-read for anyone with a serious interest in medicine, health care, and health care policy." You can view Web Exclusives free for a two-week period following posting. Their blog, which is viewed as a way to engage readers in the health policy debate, also offers informed commentary. It's a welcome addition to the online health policy blog community.

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April 4, 2007


Tool of the week - Kearney-Abrams offers a pretty cool tutorial on office ergonomics - helpful for anyone who works on a desktop computer. It's a slide show with a voice over that discusses ergonomics in general, offers self-assessment tools to identify risks for potential pain and strain, points out common ergonomic risks in an office environment, and explains how to set up your desktop to minimize risks.

Firefighter study - Harvard researchers recently published a study in the New England Journal of Medicine that suggests that firefighters face a greater risk of dying of heart problems while fighting fires than was previously recognized, with the risk of a heart-related death while fighting fires being up to 100 times higher than the risk during down time. Every year, about 100 firefighters die in the line of duty, and nearly half those deaths are due to heart disease. The study suggests that fire departments should put more priority on health, fitness, training, and wellness programs for firefighters to limit risk factors.

In related news, the Orange County Fire Rescue Department is taking an active approach to reducing risk factors: it mandates that all of its firefighters exercise for an hour every day. The initiative to improve the health of firefighters started six years ago, and this preventive approach appears to be working:

"Since then, the number of workers' compensation cases has decreased 43 percent, from 295 in 2001 to 167 in 2005. Workers' compensation claims cost the department about $672,400 in 2005, down from $1.84 million in 2001, according to department reports. In the same period, the department's ranks grew from 750 to 1,100."

Blog news - We are sorry to see that another of our favorite regular blog stops is changing from a daily to an occasional posting format. This posting of March 18 at rawblogXport indicates that after 6735 posts since February 2003, the blog will be slowing down on future postings. This is too bad following so closely on the closing of Confined Space, but we would like to thank Dave Livingston for the excellent work he has done over the years. Blogs are relentless, they require a lot of dedication and time so we appreciate his efforts. And we are happy to see that this is not a good-bye, he is still posting occasional stories.

In the new discovery arena, we have enjoyed exploring Mike The Actuary's Musings. Mike is both an actuary and a techno-geek with a penchant for gadgets, patterns, complex designs, algorithms, and puzzles. Sounds like it is a blog worth following.

Pay attention! - that's the word from Joe Paduda who tells us that no matter how busy our lives are, there is an urgent matter pending that requires our attention because "it will affect you more than anything else going on in the US today."

PDA and Smartphone Ergonomics - tips to avoid the dread Blackberry thumb.

The Pandemic in Your Plans - Peter Rousmaniere makes a case for catastrophic planning in Risk & Insurance.

The Risk Manager's Survival Guide - William J. Kelly discusses the politics of survival in this month's Risk management.

Silly stuff
Lawyer cartoons and lawyer jokes - talk about shooting fish in a barrel. Also, Law Comix.

"Sorry, gotta go ..." - you know the person that you can never get off the phone? Here's the solution.

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April 3, 2007


Restless modern minds have developed some new approaches to risk. These examples of thinking "out of the box" will eventually end up back in the box - as case studies in business schools across the country: "Risk Management For Dummies - and we really mean dummies!"

NINJA Mortgages
Let's begin at the micro level: the collapse of the sub-prime home lending businesses, one bad mortgage at a time. This once hot market gave rise to some interesting schemes, none more absurd than what Steve Pearlstein of the Washington Post dubs "the NINJA mortgage" - no income verification; no job verification; no asset verification. You walk in with empty pockets, you walk out with a mortgage. Why didn't I think of that?

Of course, the mortgage starts out at a very low rate, one that even the NINJA householder can handle. After a year or two, however, the rates go up - way up. The homeowner (and I use that term advisedly) defaults, so the bank kicks them out and takes over the loan. Unfortunately, the value of the mortgage (issued at the peak of the market) exceeds the value of the house. As any good accountant will tell you, these numbers simply don't work. The once proud homeowner is forced to become a tenant; and the once proud lender (did someone say "New Century"?) skips the first ten chapters of the morbid story and heads straight for Chapter 11.

Florida's Insurance Shingle
Which brings us to some foolish thinking on a much larger scale, a scale as big as the state of Florida. Water views - the state's greatest asset - have become, with global warming, something of a liability. We are less than two years removed from the worst hurricane season in history, with three of the most destructive storms on record hammering the state's extensive coastline. Property insurers have gotten skittish. They want more premium for the risk of writing coastal property. But higher premiums make homeowners and politicians unhappy. While there's not much a homeowner can do, politicians could do a lot: they could tighten coastal zoning regulations. They could severely limit coastal development. They could establish barriers between the open ocean and development. They could raise construction standards. They could, but of course, they won't.

No. The first thing the politicians did was roll back the insurance rates. They put a couple of hundred bucks in the pockets of voters -- oops, I mean homeowners. Take that, Property Casualty Insurers! Then in its infinite wisdom, the legislature jumped head first into the property risk business. With a mere $1.9 trillion in coastal property exposure, the state has decided, essentially, to self-insure. That is, the state is underwriting future losses through future bonds. If another big one hits, the state will finance recovery by borrowing. How will they pay for the loan? Simple: by adding a surcharge to every business, auto and homeowner policy written in the state. It might cost the average homeowner $14,000 or more over the life of the bond, but at least they have a couple hundred in their pockets right now.

Unlike conventional insurers, who try to set aside adequate reserves to cover future losses, Florida has entered the gray zone of post-event funding. I suppose it might even work for a modest storm. But what about another major hit like Katrina - or, dare we think, two or three major hits? (I know. I'm a Nervous Nelly. With this country's pro-active, can-do approach to global warming, these hypothetical risks will remain...hypothetical!)

If you're interested in exploring the implications of Florida's Brave New Risk Retention program, Towers Perrin has a nice study here. They are careful to avoid any value judgments. They call their paper "a study of recent legislative changes to Florida property insurance mechanisms." I'm inclined to give it another title: Blowin' In the Wind: Florida Stakes its Future on Loaded Dice.

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April 2, 2007


Employers and insurers in NY take note: if you have claims with potential for second injury fund reimbursement, your window of opportunity for recouping recovery dollars has narrowed significantly. New York just passed legislation which includes provisions to phase out their fund. Also in the works, South Carolina legislators are discussing a schedule to close their fund as well, bringing a plan that has been under discussion for years one giant step closer to enactment.

New York Special Disability Fund - phasing out by 2010
The New York workers compensation reform bill, which was recently signed into law by Governor Eliot Spitzer, lays out a schedule for shutting the Special Disability Fund (aka Second Injury Fund) to new claims on or after July 1 of this year, and closing the fund down for all new reimbursement claims by July 1, 2010, regardless of date of injury. These are the major legislative provisions, but as the saying goes, the devil is in the details, which the folks at Insurance Recovery Group have explained in greater detail: NY Workers' Compensation Reform Impact on Second Injury Fund.

South Carolina Second Injury Fund - next up?
After years of debate around workers compensation reforms, the South Carolina Senate and executives of the Second Injury Fund are looking at possible schedules for closing the fund. Some proposals under discussion have this happening by 2013.

More information: For a primer on second injury funds, see our April 2005 post Maximizing recovery: Second injury funds.

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