The application deadline has passed for the anticipated vacancy in Ft. Myers. The applicants are:
George Boring (Bar No. 0063370), Ft. Myers
Eric Bredemeyer (Bar No. 318442), Ft. Myers
Frank Clark (Bar No. 748455), Punta Gorda
Kenneth Kugler (Bar No. 0745456), Ft. Lauderdale
Tania Ogden (Bar No. 975826), Cape Coral
Timothy Stanton (Bar No. 0117404), Madeira Beach
Jack Weiss (Bar No. 0880612), Ft. Myers
The Commission member names and addresses as well as the notice of the Commission Meeting are on the OJCC website.
Wednesday, January 28, 2015
"Medical Marijuana"
I have always found the oxymoron intriguing. Some examples are "jumbo shrimp," or "adult children," or "genuine immitation." As the debates rage across the country, and as Floridians contemplate state law change or constitutional amendment, there is much discussion of "medical marijuana." Is that term an oxymoron or not?
The Drug Enforcement Agency, "DEA," one of the agencies of the United States government with responsibilities regarding drugs, recites the federal process used to categorize drugs. Various drugs are listed in "schedules," and the extent of legal control or restraint of a particular substance is guided by which schedule in which it is listed. Section 812(a) of
the Controlled Substances Act sets forth this "schedule" system:
"There are established five schedules of controlled substances, to be
known as schedules I, II, III, IV, and V. Such schedules shall initially
consist of the substances listed in this section."
The constraints of Schedule I are broad. Section 812(b)(1) of the Controlled Substances Act, says:
"(1)
Schedule I. -
(A) The drug or
other substance has a high potential for abuse.
(B) The
drug or other substance has no currently accepted medical use in treatment in
the United States.
(C) There is a
lack of accepted safety for use of the drug or other substance under medical
supervision."
The DEA website
says that "Some examples of
Schedule I drugs are: heroin, lysergic acid diethylamide (LSD), marijuana
(cannabis), 3,4-methylenedioxymethamphetamine (ecstasy), methaqualone, and
peyote" (emphasis added).
The Food and Drug
Administration, "FDA," is another federal agency concerned with
medication. On its website, it recites some provisions of the Controlled
Substances Act.
"The term
''controlled substance'' means a drug or other substance, or immediate
precursor, included in schedule I, II, III, IV, or V of part B of this
subchapter." "The term marihuana means all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin. Such term does not include the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination." That is a comprehensive definition.
From all of this, it seems that marijuana is a controlled substance, with no currently accepted medical use. The term "medical marijuana," would seem to actually then be defined as medical use of a drug with no accepted medical use.
States have passed laws allowing the prescription of "medical marijuana." In fact 23 of fifty states have such laws (list here), some more detailed or constrained than others. Four states have recreational marijuana laws. According to governing.com, Colorado and Washington passed laws in 2012; Oregon and Alaska passed laws in 2014. The District of Columbia also voted on recreational marijuana, but that jurisdiction is a federal district, and their decision is subject to the approval of Congress.
The basis for such laws may be an exception described by the FDA as "compassionate use." The FDA website describes this as making "promising drugs and devices available to patients with serious or immediately life-threatening diseases." In this context, something which lacks FDA general acceptance may be used for treatment. Coincidentally, some laws like California's Proposition 215, that legalize "medical marijuana" use "compassionate." Prop 215 is titled the "Compassionate Use Act of 1996."
The basis for such laws may be an exception described by the FDA as "compassionate use." The FDA website describes this as making "promising drugs and devices available to patients with serious or immediately life-threatening diseases." In this context, something which lacks FDA general acceptance may be used for treatment. Coincidentally, some laws like California's Proposition 215, that legalize "medical marijuana" use "compassionate." Prop 215 is titled the "Compassionate Use Act of 1996."
In 2014, I noted questions regarding the federal "preemption." In a post titled Zohydro or Pot, a Study in Federalism. Under our United States Constitution, when the federal government acts pursuant to some enumerated power, their action can "pre-empt" states from acting in that same area. A helpful explanation of that process regarding Massachussets' unsuccessful efforts to ban Zohydro are available on Patti Zettler's blog, Zohydro Update and A Second Zohydro Update. Essentially, the court ruled that since the federal government regulated Zohydro, the states could not do so; the states were preempted from doing so. The same preemption does not appear to apply to marijuana.
Most recently, Marijuana is back in the news in New Mexico. WorkCompCentral (subscription) reported in January that the New Mexico Court of Appeals has again ruled that workers' compensation is liable for the cost of marijuana. The most recent case is Maez v. Riley Industrial. Following the precedent of its 2014 decision on the subject, the court concluded that medical marijuana is compensable under the "Lynn and Erin Compassionate Use Act, NMSA 1978, §§ 26-2B-1 to -7."
Is this monumental news? The subject of marijuana remains complex. As WorkCompCentral reported, Courts in California, Oregon, and Washington state have concluded that an employee may be terminated for marijuana use, even while off duty. The same result in the Federal Seventh Circuit (Indiana, Illinois, and Wisconsin). The article also notes, though, that at least Michigan has held that such a terminated employee is nonetheless entitled to unemployment compensation.
Currently, employers and lawyers watch and await a decision of the Colorado Supreme Court. It heard arguments last year in Coates v. DISH Network. According to the Denver Post, this case asks "if it isn't illegal to use medical marijuana, does that make it a lawful activity for which employers can't fire you?" An interesting question. Phrased this way, it does not acquiesce in the fact that the use of marijuana is not a lawful activity according to the federal government. The perspective is that Coates uses pursuant to a prescription, thus it is "medical marijuana," and so arguably legal under the compassionate use standard.
There is a fair amount of authority to support that "drug-free" can apply to prescription drugs. The Department of Labor says on their website that employers may include prescription of over-the-counter medications, but that workplace requirements must be weighed against employee privacy concerns. In the context of using such substances, is the employer interest safety, in which case the impairment caused by the drug may be the real issue?
There is a fair amount of authority to support that "drug-free" can apply to prescription drugs. The Department of Labor says on their website that employers may include prescription of over-the-counter medications, but that workplace requirements must be weighed against employee privacy concerns. In the context of using such substances, is the employer interest safety, in which case the impairment caused by the drug may be the real issue?
The Coates question as phrased, and the courts, do not go to any lengths to explain how something illegal under federal law can be legally used under state law. One of the issues in Coates, noted by National Public Radio, is that the Federal Drug-Free Workplace Act places restrictions on the federal government and contractors. Some federal contractors and all federal grantees are required to provide a drug-free workplace. It's terms apply to the "controlled substances" that are listed in the Schedules discussed above. To protect its ability to do government work, a company may have to test for substances such as marijuana.
Can employers test for legal, yet controlled, substances in the workplace? Can employees be terminated for testing positive? Does it matter if the positive test can be equated to impairment, such as seen in alcohol use, versus presence? Some tests for marijuana may remain positive for days or weeks after the effects or impairment of the drug have subsided. What kind of testing would measure marijuana "impairment?"
In at least one high-profile case reported by ESPN, of a race driver named Tony Stewart, a medical conclusion was published that a victim was "under the influence of marijuana the night of the accident enough to impair judgement." The type of testing, and the measurement process or standards used to reach this conclusion are not explained. The situation there suggests that there is testing that measures impairment from marijuana as opposed to simply the proof that it has been used at some point.
The current national environment will present ongoing challenges in workers' compensation. Marijuana remains illegal under federal law. It remains defined by federal law as having "no currently accepted medical use." It is nonetheless being prescribed by doctors in almost half of the states under "compassionate use" state laws that seem to contradict the federal definition under Schedule I. The federal government has declined to enforce federal law in that regard and is not prosecuting either the users or those who prescribe for, or supply, them.
Questions remain regarding whether the federal government would enforce the Drug-Free Workplace Act, punishing employers with federal contracts if they failed to test for drugs and take appropriate actions with employees who test positively. Employers may begin to face interstate issues as well. Maez v. Riley Industrial appears to involve a New Mexico employee and employer, with a medical recommendation to use marijuana in a state with a compassionate use law.
Currently, neither Georgia or Alabama are on the list of "compassionate use" states. For the time being, Florida may not face the neighboring state issue. There is indication that some states see the potential for complications from marijuana legalization in neighboring states, and litigation has begun. Federal courts will decide if a state can sue its neighbor for the burdens caused by its regulation or lack of regulation of marijuana. The implications of such a suit make me think about the "pill mills" and the way some states regulated distribution of narcotics.
There are other potential interstate issues. If a Florida resident worker is injured in Florida, and then moves back to Michigan to be with family, a carrier might authorize a treating physician in Michigan. If that Michigan physician prescribed "medical marijuana" under the Michigan Medical Marijuana Act, would the Florida employer/carrier be responsible for such treatment under the Florida workers' compensation law? Does the absence of any Florida "compassionate" use law affect that analysis?
There are other potential interstate issues. If a Florida resident worker is injured in Florida, and then moves back to Michigan to be with family, a carrier might authorize a treating physician in Michigan. If that Michigan physician prescribed "medical marijuana" under the Michigan Medical Marijuana Act, would the Florida employer/carrier be responsible for such treatment under the Florida workers' compensation law? Does the absence of any Florida "compassionate" use law affect that analysis?
Or, if a resident of a state like Michigan or New Mexico traveled to Florida to work and suffered an accident here, and then returned home for treatment including marijuana and sought payment or reimbursement as part of her/his Florida workers' comp claim for such treatement, would it be the Florida employer/carrier's responsibility? Would Florida workers' compensation compel provision of a medical modality that is not legal in Florida in such a situation?
Or, assume that Georgia or Alabama passed either compassionate use medical marijuana or recreational marijuana. Then an employee who lives in that state is hired and travels daily to work in Florida. This happens more than some might think. For example, Kingsland Georgia is a reasonably short 35 mile commute to the industry of Jacksonville. Would it matter that the marijuana is legal in the employee's state of residence in that context?
In the context of the Coates challenge in Colorado, would such an employee's legal use (under hypothetical Georgia of Alabama law) make it inappropriate for a Florida employer to terminate under their Drug-Free Workplace program as DISH terminated Coates in Colorado?
There are many questions.
Section 812(a) of the Controlled Substances Act, cited above, establishes the "schedules." That section also says "The schedules etablished by this section shall be updated and republished on a semiannual basis." Would the removal of marijuana from Schedule I change the answers to any of these questions? There are those who criticize its inclusion in Schedule I. There are those who point to physicians prescribing in 23 states as proof that there are accepted medical uses, which they argue supports moving this substance to another Schedule.
The discussions will continue. The closest state to Florida with a compassionate use law is currently Maryland. The southern states have not joined the movement as yet. So the issues may come more slowly to Florida, but it is likely that they will come nonetheless. In the meantime, it is interesting to watch some of the questions play-out elsewhere. It is perhaps helpful to see how such issues are decided in other states.
The discussions will continue. The closest state to Florida with a compassionate use law is currently Maryland. The southern states have not joined the movement as yet. So the issues may come more slowly to Florida, but it is likely that they will come nonetheless. In the meantime, it is interesting to watch some of the questions play-out elsewhere. It is perhaps helpful to see how such issues are decided in other states.
Monday, January 26, 2015
Workers Compensation Attorney Fees in the News
Florida workers'
compensation is sometimes a polarizing subject. The process of workers' comp
was designed for the benefit of employees and their employers. Much has been
written on the subject of the "grand compromise" and whether this
proverbial handshake between labor and business remains balanced and
sufficient.
Some allege that
the "reforms" of the last several decades have tilted the system too
far and this compromise is no longer constitutional. That debate will play out
in the courts. The case that has become known as Padgett concluded
that the balance is not sufficient, and that therefore exclusive remedy in
Florida is unconstitutional. The Third District Court is considering that now,
in case 3D14-2062. Briefs have been filed, but no oral argument has been
set. The court does not have to hold such an argument, time will
tell. Intellectually, we live in an interesting time.
Another
constitutional challenge is proceeding in Florida regarding the more
specific subject of workers' compensation claimant attorney
fees. Castellanos v. Next Door Company has been under review at the
Florida Supreme Court for several months. Oral arguments were held November 5,
2014. Shortly thereafter, the parties in some other attorney fee challenges were
asked to brief those cases as well. They are being called collectively the
"companion cases." Some feel it is likely the Court will rule on all
of these fee constitutionality challenges collectively.
So, attorney fees
are a topic on the minds of many in Florida right now. The subject is not
isolated to Florida though. Last week, WorkCompCentral (subscription)
reported that Texas is having discussions about how attorneys are compensated
there. Texas, like Florida, has a limitation on attorney's fees.
According
to WorkCompCentral, claimant's attorneys in Texas "are limited to 25%
of an injured worker's recovery." In Florida, the limitation is "20
percent of the first $5,000 of the amount of the benefits secured, 15 percent
of the next $5,000 of the amount of the benefits secured, 10 percent of the
remaining amount of the benefits secured to be provided during the first 10
years after the date the claim is filed, and 5 percent of the benefits secured
after 10 years." At the outset, one might conclude that the Texas formula
is easier.
Florida's
provision requires us to do a bit more math in some cases than the Texas law.
If the benefits are $5,000 or less, the process is similar in each state. The
fee on $5,000 in Florida is 20% of this, or $1,000; in Texas 25%, or $1,250.
Some might argue this is not a significant difference. The difference would be
more pronounced as the value of the recovered benefits increased.
Without the
intricacy of hypothesizing how many years after the claim, for simplicity,
compare a recovery of $100,000 in benefits. The Texas calculation would be 25%
or $25,000. Under the Florida calculation, without regard to the time
definition, would be 20% of $5,000, or $1,000; then 15% of the next $5,000, or
$750; then 10% of the remaining $90,000, or $9,000; the total in Florida would
be $10,750 ($1,000 + $750 + $9,000). The fee in Florida ($10,750) is about 43%
of the fee in Texas. That disparity would become more pronounced as the value
of recovered benefits increased.
WorkCompCentral
reports that Texas also allows hourly attorney fees in some instances. Their
current issue with that topic is whether to increase their cap on hourly fees.
Since 1991, the hourly rate has been capped at $150.00 per hour. Last year, the
Texas Division proposed raising that cap to $175.00 per hour.
Incidentally, WorkCompCentral reports that this cap applies in Texas
to claimant fees and to defense attorneys in workers' compensation indemnity
disputes. Defense attorneys are not limited by the cap in other disputes. It
also appears from the context that claimant fees in this regard are payable by
the injured worker.
After Texas
published its proposal to increase this hourly cap, comments were received from
the public. Some of the quoted comments were focused on the level of the cap.
One commenter suggested the hourly cap should be $400 per hour. The Texas Bar
suggested that the cap should be the "median billing rate for all
attorneys (in Texas) at $238.00."
The cap change
was not thereafter "adopted," and so it is no longer on the table for
discussion or adoption. In Texas, after "publication of a proposed
rule" the agency, similar to our Florida Division, has six months "to
adopt it, amend it or withdraw it." Thus, the passage of time without
action essentially allowed the proposed increase to expire.
The crux of the
WorkCompCental article is when and whether the Texas Division may address the
subject again. Their interview with the Texas Division supports that no further
administrative or rule action is anticipated during the current term of the
Texas legislature, which ends in June. So, for now, attorney fees are a
subject of discussion in Texas. The discussion seems focused on when they may
know more.
In this regard,
the discussion is similar to Florida. Here the system participants question
when they will know more, and what they will know. In Texas, they seem to be
asking the same questions. In Florida, the wait is for a decision by the
Supreme Court. In Texas, it is for action by the Texas Legislature or the
Division perhaps reopening the cap discussion.
In Florida, the
decision could go either way. I long ago gave up prognosticating on how any
given court would rule on a particular topic. Assuming that the Court
finds Fla. Stat. §440.34 (2009) unconstitutional, that decision
would be retrospective. In other words, it would affect cases in the past. That
is precisely what occurred in 2008 when the Court interpreted the statutory
language of Fla. Stat. §440.34 (2003), finding that the language
was ambiguous in Murray v. Mariner Health. That 2008 interpretation
affected all claimant fee claims dating back to the effective date of the
statute language, July 1, 2003.
Similarly, a
conclusion of the Court that the current statute is unconstitutional would
render it unenforceable. The current statute was passed in the 2009
legislature and became effective July 1, 2009. Thus, the immediate effect of a
conclusion that it is unconstitutional could be on those cases with a date of
accident between July 1, 2009, and the date upon which the Florida Court renders
its decision. The decision could be limited to the facts of a particular case, that is unconstitutional "as applied" to the facts in that case, or the decision might address the statute in all contexts, that is unconstitutional "on its face."
The Court's decision likewise may apply to all cases thereafter, or to all cases thereafter in which the application of the statute is similar. To whichever population such a decision applies, that application will continue thereafter until
and unless the legislature addressed attorney fees through legislation.
There are those
who vow the legislature will act should the court
determine Fla. Stat. §440.34 (2009) is unconstitutional. Some
even prognosticate that a legislative "special session" might be
called for that purpose in the event the Court's decision comes after the regular
session. It seems logical that the extent and application of the Court's decision, as well as the decision itself, might influence whether the legislature acts and how rapidly.
Many eyes on Tallahassee, and the wait continues. But, Florida is not
alone.
Wednesday, January 21, 2015
Misclassification - What it is
There is a fair amount
of discussion in the news about Florida and "insurance fraud" or
"workers' compensation fraud." Some of the discussion has been
stimulated by the discussion of 440.105 and the Brock and Hector cases. Some of the discussion comes
from the misclassification issue that is involved with independent
contractors and employees alike.
Misclassification is the
term generally applied when worker status is misrepresented to the insurance
carrier that will ultimately be responsible for any accident or illness through
workers' compensation. It can be a collusive effort between multiple parties or
an effort of the employer alone. It has become a part of our workers'
compensation world.
Because workers'
compensation is what we do, many of us tend to focus on this industry when we
perceive an issue. Certainly, misclassification is an issue that profoundly
affects workers' compensation. However, like so much with workers'
compensation, this problem sometimes only comes to light when the worst happens, an
accident.
Misclassification is a
far broader issue for workers and the economy generally. A misclassified worker
may not receive the wages to which an employee is entitled. Payment to a
misclassified worker may not be accompanied by the appropriate tax payments or
unemployment compensation premiums/taxes. While misclassification affects
workers who are hurt in our specific context, it affects all misclassified
workers in these broader perspectives.
To understand
misclassification, we have to understand something of workers' compensation and
how it is designed to distribute costs of work injuries to the industries in
which they occur. Some occupations are more dangerous than others. In deciding
which are the "most" dangerous, one would need criteria.
One measure might be the
occupations in which the most work fatalities occur. The Bureau of Labor
Statistics tracks this metric. As reported in Forbes, the most dangerous jobs based on
fatality occurrence are (the following quoted from Forbes)
1. Logging workers
2. Fishers and fishing
workers
3. Aircraft pilot and
flight engineers
4. Roofers
5. Structural iron and
steel workers
6. Refuse and recyclable
material collectors
7. Electrical power-line
installers and repairers
8. Drivers/sales workers
and truck drivers
9. Farmers, ranchers,
and other agricultural manages
10. Construction
laborers
Judges did not make the
list. So, logically, a company might charge less premium to insure liability
for injury to a judge than for liability regarding a logging worker. In fact,
workers' compensation premiums are calculated with multiple variables considered.
One is usually the occupation of those who are covered. The rate charged is
higher for occupations with a higher risk of injury; it logically costs more to insure
loggers than judges.
Another variable of
premium charges is "experience." A company whose employees tend to
have accidents will likely pay more for workers' compensation coverage than a
company with a great safety record and few or no reported claims. A company with few employees and most of its labor performed by "independent contractors" may avoid the "experience" of accidents, and thus maintain lower premium costs for those who are listed as "employees."
Misclassification can
involve the employer hiring someone to perform tasks or labor, but not as
an employee. The person is hired but as an "independent contractor."
This employment relationship means less bookkeeping for the employer, and relieves
the employer from payment of the "matching" social security tax
contribution, and unemployment taxes. Since the worker is not an
"employee," the worker is not covered by the employer's workers'
compensation. If the worker is thus "self-employed" and has no
employees, she or he may not be required to have her/his own workers'
compensation policy. She or he may have no coverage for an accident.
Misclassification can
also be an accounting practice. An employer might seek a lower workers'
compensation premium by listing its employees in an occupation that is seen as
less risky. For example, a logging company might list its employees as
"clerical" workers in reporting its payroll to the insurance company.
An insurance company could rely on that representation in calculating premiums,
believing that the employer's workers are bookkeepers, secretaries, estimators,
etc. instead of people who actually cut down trees.
Misclassification may be
caught when that workers' compensation insurer performs a payroll audit. The
Florida Division of Workers' Compensation also performs audits and inspections
in which such misclassification can be discovered. But recently, the news is about a new partnership between
the Florida Department of Revenue and the U.S. Department of Labor.
They announced their
collaboration in January. Their efforts will be primarily focused on the
characterization of workers as "independent contractors." The press
release reports that in 2013 "investigations resulted in more than
$83,051,159 in back wages for more than 108,050 workers in industries such as
janitorial, food, construction, hospitality and garment." Florida does
have a concentration of construction, food, and hospitality industries.
The efforts at
misclassification may be focused on reducing or eliminating the cost of workers'
compensation coverage. Those efforts may as likely be focused on avoiding taxes
and other regulations. The additional focus brought to the subject by this new
partnership may help Florida to better address the issues of
misclassification.
Monday, January 19, 2015
Hector is Gone in Florida, Is the U.S. Supreme Court Next?
The Florida Supreme Court Friday declined to accept jurisdiction to review the case of Jordan Hector v. State of Florida (SC14-1207). The Court's docket reflects its decision:
"Upon consideration of the responses to this Court's order to show cause, this Court has determined that it should decline to accept jurisdiction. It is hereby ordered that the petition for review is denied. No motion for rehearing will be entertained by the Court. See Fla. R. App. P. 9.330(d)(2)."
In early January, I explained the history of Brock and Hector in Brock is gone, is Hector next, in the Florida Court or the U.S. Supreme?
Now we know one answer, Hector was next to be declined by the Florida Supreme Court. The two cases are similar and when the Court declined to hear Brock, but did not simultaneously address Hector, there was curiosity in the community. Was the Court going to address Fla. Stat. § 440.105(4)(b)9? The short answer is now "no."
Why was Hector declined by the Court months after Brock? In the 1970s venerated candy-maker Tootsie Roll ran an ad campaign questioning how many licks it takes to reach the center of a Tootsie-Pop. The outcome in the ad was the conclusion that the "world will never know." The answer regarding why the Hector decline of jurisdiction was slower than the Brock decline is likely in that category. It was slower because it was. No gain is likely to come from wondering why they were different in timing. The fact is that they were the same in outcome, jurisdiction denied.
And now we will watch the U.S. Supreme Court. With issues of free speech, same-gender marriage, campaign finance, and more before it this year, will the Court take up the constitutionality of this Florida statute? Time will tell.
What is Comp Worth?
I recently had an
interesting conversation about changing workers' compensation benefits in
various states. There is an interesting study done every two
years by the Oregon Department of Consumer and Business Services
("DCBS"), which measures the cost of workers' compensation in the
various states.
It is focused on the premium cost to cover workers' compensation, rather than the cost of actual expenditures for benefits. One criticism of the study is that this process does not include the segment of the market that is self-insured. As this segment does not have insurance, it likewise lacks insurance premiums. The volume of risk that is self-insured in a state could thus affect the persuasiveness of the Oregon study results.
It is focused on the premium cost to cover workers' compensation, rather than the cost of actual expenditures for benefits. One criticism of the study is that this process does not include the segment of the market that is self-insured. As this segment does not have insurance, it likewise lacks insurance premiums. The volume of risk that is self-insured in a state could thus affect the persuasiveness of the Oregon study results.
Discussion of
this report at the Southern Association of Workers' Compensation
Administrators' (SAWCA) All Committee Conference last fall in Hilton Head led to a
discussion of what benefits are afforded in the various states. In other words, what are the values of the respective state's benefit payouts, for which carriers are assuming risk in exchange for those premiums?
California had ranked first, the most expensive premium state in the most recent DCBS study. Officials there were quick to respond with claims that California comp costs what it does, essentially, because it is worth it. They argue that the quantum of benefits in California is superior and thus worth the cost compared to other states. The lowest 2014 rate was North Dakota at $.88 per $100 of payroll, and California was the highest at $3.48.
California seems to argue that their benefit package is almost four times better than North Dakota's ($.88 x 4 = $3.52). One simple variable to isolate may be the wage rate. If the wages are higher in California than in North Dakota, then the indemnity payments would likewise be expected to be higher on a weekly basis (intensity) as well.
California had ranked first, the most expensive premium state in the most recent DCBS study. Officials there were quick to respond with claims that California comp costs what it does, essentially, because it is worth it. They argue that the quantum of benefits in California is superior and thus worth the cost compared to other states. The lowest 2014 rate was North Dakota at $.88 per $100 of payroll, and California was the highest at $3.48.
California seems to argue that their benefit package is almost four times better than North Dakota's ($.88 x 4 = $3.52). One simple variable to isolate may be the wage rate. If the wages are higher in California than in North Dakota, then the indemnity payments would likewise be expected to be higher on a weekly basis (intensity) as well.
Studying the
value of the benefit package would be difficult. There are obvious system
components that could easily be valued, such as monetary benefits afforded. This would likely have to be considered in terms of both intensity (per week)
and duration (how many weeks). Medical care might be measured in terms of the
quality of care afforded, but that is more subject to interpretation or
discussion. Valuing medical care might involve consideration of a vast spectrum
of variables.
In the end, it is
difficult to say what the market value is for benefits within a specific jurisdiction.
Possibly, with a great deal of time and some academic interest, one might value
the "market basket" of benefits flowing from some hypothetical
injury/recovery. In other words, an exemplar injury such as a torn meniscus,
with two surgeries, 8 weeks of physical therapy, 6 months of work restrictions, and a permanency of x% to
the whole body might be valued under each of the 51 U.S. jurisdictions for a
comparison.
For validity, such a comparison would likely need to be a broader in perspective, with perhaps similar components comparing a defined back or neck injury, an upper extremity injury, etc. With a spectrum comparison of various injuries, a valid comparison of the value of benefits might be achieved. That would be interesting, but also time-consuming. It is the sort of thing for which data already exists. However, accumulating and examining it would require resources.
For validity, such a comparison would likely need to be a broader in perspective, with perhaps similar components comparing a defined back or neck injury, an upper extremity injury, etc. With a spectrum comparison of various injuries, a valid comparison of the value of benefits might be achieved.
One measure that could be addressed relatively simply is the intensity of indemnity benefits. That is, ignoring the potential duration of benefits, what is the maximum value of a week of benefits in each state. Most states have a maximum compensation rate. The rate is adjusted periodically. In Florida, it is adjusted annually. Currently, the maximum compensation rate in Florida is $841.57, effective January 1, 2015. How does that compare with other states?
Following the conversation in which the Oregon Study was raised, I began searching for a resource listing all of the state's maximum compensation rates. States are not uniform in their processes; not every state changes their rate annually. There is a Federal resource that lists the most current data known to Social Security regarding the maximum compensation in each state. They are presented at the end of this blog post in order from lowest to highest.
The lowest will not surprise some, it is Mississippi at $454 per week. Comparing that rate to the Florida maximum effective at the same time (01.01.14), Mississippi was about 55% of Florida's $827.
The highest on the list will likely be a surprise. Not New York, California, Connecticut or the like. The highest on the list is Iowa at $1,543 as of July 1, 2013. So, Florida's 2014 maximum weekly rate is about 54% of Iowa's. Iowa has not adjusted since the summer of 2013; with the 2015 increase in Florida's maximum rate to $842, Florida is currently about 55% of Iowa.
The lowest rate is about 55% of Florida's. Florida is 55% of the highest. Some would argue that this evidences Florida in the middle of the spectrum. Others would be curious as to the median and mean maximum rates and how Florida compares. The median maximum rate is $843 and the average maximum compensation rate is $888.00. So Florida's maximum rate is currently right on the median, and slightly below average.
The lowest rate is about 55% of Florida's. Florida is 55% of the highest. Some would argue that this evidences Florida in the middle of the spectrum. Others would be curious as to the median and mean maximum rates and how Florida compares. The median maximum rate is $843 and the average maximum compensation rate is $888.00. So Florida's maximum rate is currently right on the median, and slightly below average.
Only one state is below $500, Mississippi. Only two are between $501 and $600, Georgia and Kansas. Between $601 and $700, are Idaho, Arkansas, Louisiana, Indiana, Arizona, Delaware, South Dakota, and Montana. Between $701 and $800 are Maine, Nebraska, South Carolina, West Virginia, New Mexico, Kentucky, Hawaii, Utah, and Alabama.
Between $801 and $900 are Oklahoma, New York, Michigan, Nevada, Florida, New Jersey, Ohio, Texas, Missouri, Wyoming, Oregon, Colorado and Wisconsin. Between $901 and $1,000 are North Carolina, Tennessee, Pennsylvania, Virginia, Minnesota, and Maryland. Between $1,001 and $1,100 are Rhode Island, California, and North Dakota.
Between $1,101 and $1,200 are Alaska, Vermont, and Massachusetts. Between $1,201 and $1,300 Washington state is alone. Between $1,301 and $1,400 are Illinois and New Hampshire. Between $1,401 and $1,500 are the District of Columbia and Connecticut. Above $1,500 is Iowa alone.
An interesting distribution.
Having discussed the intensity of benefits, it is critical to reiterate that this is a simplistic comparison of Florida to other states based solely on a single facet of workers' compensation. It is neither an exhaustive comparison of the value of workers' compensation nor competent as one.
It examines one element that could be used to determine the value of compensation if an analysis was undertaken which also included factors such as the duration of benefits, potentials for reductions in benefits (safety rules, drug-free workplace statutes), the volume of medical care, the value of medical care, and so much more. Nonetheless, it is interesting.
It examines one element that could be used to determine the value of compensation if an analysis was undertaken which also included factors such as the duration of benefits, potentials for reductions in benefits (safety rules, drug-free workplace statutes), the volume of medical care, the value of medical care, and so much more. Nonetheless, it is interesting.
Wednesday, January 14, 2015
Finding the Rulings of the Florida Industrial Relations Commission
In a general sense, we learn from history. In American law there a special place for history, or prior decisions which we call precedent. Precedent is often followed due to the legal maxim "stare decisis," or "to stand by things decided," or "let the decision stand." The respect for prior decisions helps to make our legal systems predictable and therefore helps it move more efficiently for those who need it.
Workers' compensation came to Florida in 1935. A number of states have recently celebrated the 100th anniversary of respective workers' compensation systems. In 2014 Louisiana and Kentucky celebrated. In 2015 Colorado, Indiana, Maine, Montana, Oklahoma, Pennsylvania, Vermont and Wyoming will celebrate. Florida will wait another 20 years to celebrate our centennial of workers' compensation. Will workers' compensation as we know it exist in twenty years?
Workers' compensation came to Florida in 1935. A number of states have recently celebrated the 100th anniversary of respective workers' compensation systems. In 2014 Louisiana and Kentucky celebrated. In 2015 Colorado, Indiana, Maine, Montana, Oklahoma, Pennsylvania, Vermont and Wyoming will celebrate. Florida will wait another 20 years to celebrate our centennial of workers' compensation. Will workers' compensation as we know it exist in twenty years?
The Florida Division of Workers' Compensation has a detailed history of workers' compensation on its website. It is titled Workers' Compensation, A Brief History. The author, Lloyd Harger, notes that there was a major reform in Florida in 1978. He describes this as "the first major change since 1935." On this timeline, the concept was adopted in 1935 and the "major overhaul" came forty-three years later in 1978.
The revisions included the change in nomenclature from "workman's" to "workers," the transition to wage-loss, and the end of the Industrial Relations Commission, or "IRC." For forty-three years, the first tier appellate review in Florida workers' compensation cases was the IRC. Beginning September 30, 1979, the appeals of Florida decisions were vested in the Florida First District Court of Appeal.
As an aside, the First District Court was created by the legislature in 1957, along with the Second and Third. For the first 112 years of Florida's existence, since 1845, the appellate process across the state was the sole responsibility of the Supreme Court. Twenty-two years after the District Court was created, the jurisdiction over appeal of workers' compensation appeals was vested. There it has remained for the last 35 years. In 2022, the Court will achieve forty-two years and historically equal the IRC.
The history of worker's compensation in Florida is thus intertwined with the IRC and its decisions. There are those who argue that the decisions of the IRC lack relevance in the modern, Twenty-First Century, world. With the changes in the statute in 1979, 1989, 1990, 1991, 1994, 2001, and 2003, there may be some validity to that argument. There are occasions when attorneys and others want to review an IRC order. They are occasionally cited by the District Court in more modern opinions.
There are a few copies of the original IRC orders still in circulation. The Miami and Tallahassee district offices still have copies. They are bound in three-ring binders. That is how they were distributed and kept, "back in the day." Periodically, people still refer to this written history of workers' compensation in Florida. So, the OJCC has scanned all of the IRC orders and they are searchable on the OJCC website, www.fljcc.org. Under the "case search" tab, you will find "search IRC Orders via Google."
This "Google" refers to the Google hardware system that the OJCC uses to index all of the OJCC trial orders, which are also searchable on this section of the website. With keywords such as the party name, or issue, anyone can search the IRC orders. Whether for an understanding of historical context when such an order has been cited by a judge or court, or for basic research, this tool may be of assistance.
Currently, the OJCC is working on digitally scanning all versions of Chapter 440 over the last eighty years. Periodically we receive a request for a copy of an older version of the statute. We hope to have this tool deployed in 2015.
Monday, January 12, 2015
Auto Death Decline - Vindicated Results of a Team Approach
I think a great deal about workplace safety. Reducing the occurrence of accidents and illness is a great goal. We are engaged in a vast industry tasked with dealing with the results of workplace injury and illness. Certainly, we see tie-ins with the safety industry, but it is not always intertwined with workers' compensation.
The employee/employer relationship in this country is complex, and perhaps increasingly so. Most companies have a human resources (HR) department or at least a department of some name that deals with the various employment regulatory issues. Some integrate responsibility for workers' compensation within the same department, but it is sometimes housed instead in the risk management department. Likewise, safety concerns are sometimes within the same department as risk, sometimes HR, and sometimes safety is yet another department in itself.
I have discussed this with various professionals in workers' compensation. Some lament the lack of connection in their company, between workers' compensation, safety, and other employment issues. One explained to me recently that her department (comp) paid the bills, but had no say in preventing accidents. Her department was not even invited to periodic safety meetings. Similarly, all return-to-work accommodation decisions were made by the HR department instead of comp. Her job was essentially limited to paying the bills for events she could not try to prevent before or mitigate after.
I recently ran across an insurance promotional page (cited below) touting America's success in decreasing automobile fatalities. It explains that the key to that success was that "researchers pinpointed countless problems and then engineers, policymakers and advocates tackled them one by one."
There have been great strides in reducing American automobile fatalities. The American population is increasing. More people are driving more miles, and yet the volume of traffic fatalities is decreasing. This seems counter-intuitive perhaps. As the volume of drivers and the number of miles driven increases, one might expect more accidents and as a result more fatalities. However, the data does not bear that out.
According to Auto Safety: The Road Behind – And Ahead, "as a percentage of the U.S. population, traffic fatalities were more than twice as high in the 1960s than today." Automobile fatalities peaked in 1972, when there were 54,000 traffic fatalities in America. By 2012, that had decreased to only 34,000. By comparison, a great improvement. However, 34,000 is still a great many people losing life in an automobile each year.
Today it is easy to forget how far cars have come. Airbags are now ubiquitous (car makers brag about how many bags their model has compared to others), but they have been available for only about 40 years. According to Consumer Affairs, the first airbag was offered by Oldsmobile in 1974. According to The Hotly Contested History of the Seat Belt, Seat belts were only mandatory standard equipment in 1970. By 1989, only 34 states had mandated seat belt use. According to the Governor's Highway Safety Association, forty-nine states now have some seat belt mandate for adult vehicle passengers. New Hampshire does not. Seat belts and airbags have been an evolution, not a revolution.
The Washington Post had an interesting piece in 2013 on traffic fatalities around the world. Using information from the World Health Organization and others, it describes where auto accident deaths are most prominent and offers some analysis as to why.
Auto Safety: The Road Behind – And Ahead documents the marked reduction in vehicle fatalities from 54,000 in 1972 to 34,000 in 2012. Almost a 40% reduction in 40 years. The decrease in raw volume is significant. However, the report points out that the volume of miles driven in America has increased. The volume of vehicle fatalities per "million vehicle miles traveled," or million "VMT" is 1.1. This is a marked reduction "from the 7.2 rate of 1950 – and a fraction of the 1921 rate of 24.1 deaths per million VMT."
I struggle with not sounding like my grandfather ("I remember when"). However, I clearly remember vehicles without seat belts. I remember the first airbags, with their $250.00 price tag. While that does not sound like much, if this were an option price today, adjusted for inflation, it would be about $1,200.00 (that is for one airbag, for the driver). Few bought them as an option. I remember a car dealer telling me that the option would never sell.
A cartoon in the 1980s (as a side note for the non-boomers, Americans used to read daily news delivered or purchased, on dried wood pulp called a "newspaper," and it generally included a section of drawings with captions intended to be funny) made sport of one gentleman's decision to purchase the driver's side airbag "for safety" and whether that demonstrated the appropriate concern for his passenger (his date). When we are concerned about safety, whose safety do we focus on? For those interested in learning more about the "newspaper," there is a video on YouTube.
According to Auto Safety: The Road Behind – And Ahead the reduction in vehicle fatalities in this country resulted from the efforts of researchers, engineers, and policymakers. No one group or profession can lay claim to the improvements. In the end, it was a team effort that led to recognizing and dealing with the problem(s).
Perhaps such a team effort is easier when safety, HR, and workers' compensation are under the same supervision at a company. But a team effort is likely possible even when these three are under distinct leadership. The key, essentially, is that all of these functions may play a role in an effective approach to preventing injuries in the workplace, providing timely and effective care for injuries and illnesses that do occur, coordinating the interaction of workers' compensation and other employee benefits, and ultimately returning the employee to full gainful employment.
These are the goals of workers' compensation. Of them, the most important is undoubtedly accident and illness prevention. The best outcome is that we are not hurt to begin with. But, accidents are going to happen. Successful recovery from and mitigation of the effects of those accidents/illnesses that do occur will involve teamwork. In the end, the more coordinated and effective all of these functions are, the more effectively injured workers' can be returned rapidly to their role as productive members of the employer's team.
Friday, January 9, 2015
Federal Terrorism Backstop Re-authorization Now Seems Certain
In December, Congress adjourned without re-authorizing the federal backstop program for terrorism risks. There has been significant discussion in the news since November regarding what the new Congress would prioritize in the new year. Common discussions included the Keystone Pipeline, Obamacare, and Immigration. With little or no fanfare, Congress acted with swift bipartisan votes in the opening days of 2015 to re-authorize what has commonly been called "TRIA," a backstop for insurance losses in the event of terror attacks in America. TRIA, it turns out, is a priority for the new Congress.
The speed may perhaps have been encouraged by the recent terror events in France. Perhaps news coverage of the start of a major terror trial in Boston this week provides reminders of what can happen. These are tragic events. It is easy perhaps to lump terrorism into one large category. Terror events like Boston and Paris, which are in the news and our collective conscience right now, are troubling and can be risks to the broad insurance industry including workers' compensation markets. The TRIA laws are a backstop for terrorism events in America, but TRIA's application would not apply to these incidents currently in the news, it is limited to events on a very large scale.
When a terror event occurs there may be significant loss caused in a relatively small geographic area. The September 11, 2001 events are an example of such an event. Something of that magnitude could result in significant losses for insurance companies. And following that attack there was significant doubt in the insurance industry regarding coverage for these kinds of risks.
The federal government stepped into that uncertainty with the Terrorism Risk Insurance Act (TRIA) passed in 2002. It was reauthorized as the Terrorism Risk Insurance Extension Act (TRIEA) in 2005 and as the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) 2007. These laws, generally still referred to collectively as "TRIA," provide “reinsurance” from the full faith and credit of the United States. In the event of losses in excess of a defined level (currently $100 million), resulting from terrorism, the federal government would step in and provide relief to a carrier, to offset its catastrophic losses from that event.
The speed may perhaps have been encouraged by the recent terror events in France. Perhaps news coverage of the start of a major terror trial in Boston this week provides reminders of what can happen. These are tragic events. It is easy perhaps to lump terrorism into one large category. Terror events like Boston and Paris, which are in the news and our collective conscience right now, are troubling and can be risks to the broad insurance industry including workers' compensation markets. The TRIA laws are a backstop for terrorism events in America, but TRIA's application would not apply to these incidents currently in the news, it is limited to events on a very large scale.
When a terror event occurs there may be significant loss caused in a relatively small geographic area. The September 11, 2001 events are an example of such an event. Something of that magnitude could result in significant losses for insurance companies. And following that attack there was significant doubt in the insurance industry regarding coverage for these kinds of risks.
The federal government stepped into that uncertainty with the Terrorism Risk Insurance Act (TRIA) passed in 2002. It was reauthorized as the Terrorism Risk Insurance Extension Act (TRIEA) in 2005 and as the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) 2007. These laws, generally still referred to collectively as "TRIA," provide “reinsurance” from the full faith and credit of the United States. In the event of losses in excess of a defined level (currently $100 million), resulting from terrorism, the federal government would step in and provide relief to a carrier, to offset its catastrophic losses from that event.
It is not a government hand-out. The TRIA reinsurance, or temporary cash infusion to the carrier after a qualifying terror event, would have to be repaid by the policyholders thereafter, in what is called a recoupment. Thus, it is akin to a loan. And, keep in mind that the reinsurance or infusion is only payable to the carriers, under the current law, if the loss exceeds 100 million dollars, and if the event or occurrence is certified as an act of terrorism.
TRIA/TRIPRA 2007 expired on December 30, 2014, because the 113th Congress adjourned without addressing TRIA. The 114th Congress convened on Tuesday, January 6, 2015. On Wednesday, the House passed the "Terrorism Risk Insurance Program Reauthorization Act of 2015," or "TRIPRA 2015" on a vote of 416 to 5. Hailed as a bipartisan effort. Not to be outdone, the Senate acted Thursday, January 8, 2015, passing the bill on a vote of 93 to 4. If signed, this will extend the TRIA concept through 2020.
TRIA/TRIPRA 2015 is not the same backstop, simply reauthorized. The new bill makes changes. Last year, in the event of qualifying losses in excess of $100 million, resulting from terrorism, the federal government would have stepped in and provided relief to a carrier. Under the 2015 plan, that threshold will increase by $20 million in each of the next five years, that is in 2016 it will be $120 million, in 2017 - $140 million, in 2018 - $160 million, in 2019 - $180 million, and 2020 - $200 million.
There is also a "co-share," element of the law, which currently leaves the insurance company responsible for 15% of the loss in excess of the threshold. Under TRIA 2015, that "co-share" will likewise increase incrementally over the next five years, by one percent annually. Thus, by 2020 the "co-share" will be 20%, leaving the federal government to backstop 80% of a qualifying catastrophic terror loss rather than the 85% currently.
There has been criticism of the increased "co-share" and threshold. There will be much discussion as to how the insurance industry may adjust to a marketplace influenced by TRIA/TRIPRA 2015. Actuaries will do the math, carriers will price their products (where they can; some products are generally priced by states, including workers' compensation), and will decide how much risk to assume (how many policies to sell) in particular geographic regions.
There may be shifts in coverage availability as a result of TRIA/TRIPRA 2015. Some employers may be forced to obtain coverage in some secondary market or state risk pool. The results will be documented, studied, and discussed. When Congress revisits the TRIAsubject in 2020 more will be known as to the effects of these 2015 changes.
Any such shifts could be immediate as carriers focus on their 2020 horizon, or may occur more subtly over the next five years. Having been faced last year with the expiration of TRIPRA 2007, having stared into the potential of that program ending, it is likely that the insurance industry will be ruminating in coming years upon the "what ifs" of whether there will be a TRIPRA 2020, and if so what that legislation might entail as regards thresholds, "co-share" and more.
According to a report by Marsh (page 8), uncertainty surrounding the future of this “backstop” program contributed to 2014 uncertainty in the workers’ compensation insurance markets. The TRIPRA 2015 passage, if signed by the President, alleviates or reduces that uncertainty for the next 5 years. However, if not reauthorized well in advance of expiration, the final year of the extension, 2020, may see similar uncertainty and hesitation as that reported for 2014.
In Baby Hold On, Eddie Money sang "The future is ours to see, whatever will be will be." Then he adds "Don't be thinkin' 'bout what's not enough now baby, just be thinkin' 'bout what we got." Perhaps that is the best reaction to TRIPRA 2015. Who knows what the next five years will bring? Well, "whatever will be will be." Who knows what pressures the adjustments in TRIPRA 2015 may bring to the workers' compensation insurance marketplace? It is what we've got, with notable bipartisan support, on the second and third days of the 114th Congress.
Many predicted the new Congress would address TRIPRA. Some even predicted it would occur quickly. I did not hear anyone predict that Congress would pass TRIPRA 2015 in its first week on the job.
TRIA/TRIPRA 2015 is not the same backstop, simply reauthorized. The new bill makes changes. Last year, in the event of qualifying losses in excess of $100 million, resulting from terrorism, the federal government would have stepped in and provided relief to a carrier. Under the 2015 plan, that threshold will increase by $20 million in each of the next five years, that is in 2016 it will be $120 million, in 2017 - $140 million, in 2018 - $160 million, in 2019 - $180 million, and 2020 - $200 million.
There is also a "co-share," element of the law, which currently leaves the insurance company responsible for 15% of the loss in excess of the threshold. Under TRIA 2015, that "co-share" will likewise increase incrementally over the next five years, by one percent annually. Thus, by 2020 the "co-share" will be 20%, leaving the federal government to backstop 80% of a qualifying catastrophic terror loss rather than the 85% currently.
There has been criticism of the increased "co-share" and threshold. There will be much discussion as to how the insurance industry may adjust to a marketplace influenced by TRIA/TRIPRA 2015. Actuaries will do the math, carriers will price their products (where they can; some products are generally priced by states, including workers' compensation), and will decide how much risk to assume (how many policies to sell) in particular geographic regions.
There may be shifts in coverage availability as a result of TRIA/TRIPRA 2015. Some employers may be forced to obtain coverage in some secondary market or state risk pool. The results will be documented, studied, and discussed. When Congress revisits the TRIAsubject in 2020 more will be known as to the effects of these 2015 changes.
Any such shifts could be immediate as carriers focus on their 2020 horizon, or may occur more subtly over the next five years. Having been faced last year with the expiration of TRIPRA 2007, having stared into the potential of that program ending, it is likely that the insurance industry will be ruminating in coming years upon the "what ifs" of whether there will be a TRIPRA 2020, and if so what that legislation might entail as regards thresholds, "co-share" and more.
According to a report by Marsh (page 8), uncertainty surrounding the future of this “backstop” program contributed to 2014 uncertainty in the workers’ compensation insurance markets. The TRIPRA 2015 passage, if signed by the President, alleviates or reduces that uncertainty for the next 5 years. However, if not reauthorized well in advance of expiration, the final year of the extension, 2020, may see similar uncertainty and hesitation as that reported for 2014.
In Baby Hold On, Eddie Money sang "The future is ours to see, whatever will be will be." Then he adds "Don't be thinkin' 'bout what's not enough now baby, just be thinkin' 'bout what we got." Perhaps that is the best reaction to TRIPRA 2015. Who knows what the next five years will bring? Well, "whatever will be will be." Who knows what pressures the adjustments in TRIPRA 2015 may bring to the workers' compensation insurance marketplace? It is what we've got, with notable bipartisan support, on the second and third days of the 114th Congress.
Many predicted the new Congress would address TRIPRA. Some even predicted it would occur quickly. I did not hear anyone predict that Congress would pass TRIPRA 2015 in its first week on the job.
Wednesday, January 7, 2015
Bullying in the Workplace - A Workers' Comp Issue?
About a year ago, I posted Bullying is in the News, is it in the Workplace? A focus of that post is an unsuccessful Florida legislative effort to recognize workplace bullying and to provide a remedy for it. The bill did not pass, though, and today Florida does not have a specific legal remedy for workplace bullying.
In December, Tommy Wyher blogged on The Epoch Times about the effects of bullying. Mr. Wyher describes how bullying in the workplace can affect productivity, attendance, and "overall quality of life" similar to a physical injury at work. His posting is not specific, but the context supports that the marketplace he is addressing is Great Britain.
He argues that "workplace
bullying takes the form of verbal abuse, threatening behavior, sabotage, and
gossip or rumor spreading, and it’s a serious problem." The article alleges a huge volume of workplace victims and witnesses of bullying, which the author estimates as about half of the workforce in the United Kingdom.
He concludes that "bullying leads to 18.9 million
lost workdays per year, which contributes to a loss of £18.9 (British Pounds) million annually
or as much as 10 percent of overall profits for an individual company." A Pound is worth about $1.56 today, so that is equivalent to almost $30 million. There is no data cited in support of either the conclusions regarding the extent or the cost of bullying.
These statistics are difficult to reconcile. If 18.9 million workdays are lost and this equates to a loss of £18.9 million annually, then each of those workdays was worth about £1. That seems curious, as does the lack of any documentation of data or sources to support the financial loss assertions. A day of work worth about $1.56?
These statistics are difficult to reconcile. If 18.9 million workdays are lost and this equates to a loss of £18.9 million annually, then each of those workdays was worth about £1. That seems curious, as does the lack of any documentation of data or sources to support the financial loss assertions. A day of work worth about $1.56?
Mr. Wyher notes that workers' compensation claims in the United Kingdom (UK). are "rarely simple." He proceeds to describe the complexity of U.K. workers' compensation claims for workplace bullying. He says that in the U.K. bullying "claims often
hinge upon an injured worker’s ability to prove that their employer could have
prevented the injury. In the case of a bullying claim, the victim must prove
that not only were they injured by bullying, but also that the employer didn’t
prevent it."
In the United States, there are some states that allow claims for mental injuries without a physical injury, the so-called "mental mental claim." There have been a multitude of analyses addressing this. Some worth reading are by Arthur Larson and Eliashof and Streltzer. Other states only provide treatment and compensation for a mental injury if it results from some physical injury. It is interesting that in the U.K. there is compensability for workplace bullying in any circumstance. Does this extend workers' compensation even beyond the "mental-mental" claim?
Mr. Wyher contends that business in the U.K. invests significant time and effort on training to prevent bullying in the workplace. He notes that some employers broadcast their "zero tolerance" of bullying, but concedes that even in a "zero tolerance" environment these claims can still occur.
Mr. Wyher contends that business in the U.K. invests significant time and effort on training to prevent bullying in the workplace. He notes that some employers broadcast their "zero tolerance" of bullying, but concedes that even in a "zero tolerance" environment these claims can still occur.
The article explains that to some degree compensability may depend in significant part on the way the employer responds to the allegations once they are made. He says that if "an employee
makes a claim, but his or her employer can prove that it provided training,
reprimanded the offender, and made steps to improve the environment, then a
victim might not have a successful case."
In this regard also, this paradigm is curious. In what other workers' compensation process do we see compensability dependent upon the actions and reactions of the employer? Imagine an orthopedic injury being deemed non-compensable because lifting training was provided and disregarded by some coworker involved in the accident. Then the co-worker is reprimanded afterwards for violation of the lifting instructions, and the claims is therefore not compensable? This paradigm seems more akin to American sexual harassment allegations than to workers' compensation.
In this regard also, this paradigm is curious. In what other workers' compensation process do we see compensability dependent upon the actions and reactions of the employer? Imagine an orthopedic injury being deemed non-compensable because lifting training was provided and disregarded by some coworker involved in the accident. Then the co-worker is reprimanded afterwards for violation of the lifting instructions, and the claims is therefore not compensable? This paradigm seems more akin to American sexual harassment allegations than to workers' compensation.
It is intriguing to explore how workers' compensation works in other states. The comparisons with other countries sometimes provides an even starker contrast. In what American workers' compensation claim is it relevant what actions the employer takes after the report of injury? Intriguing.
How prevalent is bullying in the workplace, is workers' compensation the appropriate remedy, is post-accident remediation ever appropriately relevant in workers' compensation compensability determinations? As the 2015 legislative session approaches, it will be interesting to see if the subject arises again.
How prevalent is bullying in the workplace, is workers' compensation the appropriate remedy, is post-accident remediation ever appropriately relevant in workers' compensation compensability determinations? As the 2015 legislative session approaches, it will be interesting to see if the subject arises again.
Sunday, January 4, 2015
Brock is gone, is Hector next, in the Florida Court, or the U.S. Supreme?
There is a fair amount of discussion in the news about Florida and "insurance fraud" or "workers' compensation fraud." Some of the discussion comes from the misclassification issue that is involved with independent contractors and employees alike. It has also been brought to the fore by the dismissal the Brock appeal by the Florida Supreme Court last year.
The defendant in Brock was charged under Fla. Stat. §440.105(4)(b)9, specifically, the provision which states it shall be
unlawful for any person " . . . [t]o knowingly present or cause to be
presented any false, fraudulent, or misleading oral or written statement to any
person as evidence of identity for the purpose of obtaining employment or
filing or supporting a claim for workers’ compensation benefits."
Brock allegedly used a false social security number to obtain his employment. The Fourth District Court concluded that the use of a false social security number to obtain employment is criminal, regardless of whether any claim for workers' compensation is ever made. There was an interesting and detailed analysis of Fla. Stat. §440.105(4)(b)9 published by James Kidd and Rick Blystone in the Florida Bar Journal in 2007. It is worth the read.
Brock sought review by the Supreme Court, alleging that the Fourth DCA conclusions regarding Fla. Stat. §440.105(4)(b)9 conflict with the conclusions of the First DCA in Matrix Employee Leasing v. Hernandez. In Hernandez, the court concluded it was "clear that claimant violated section 440.105(4)(b)(9) by procuring work with a false social security card." However, the court concluded that this violation did not preclude Hernandez's entitlement to workers' compensation benefits.
The Supreme Court did not describe its logic in dismissing Brock. Appellate courts do not necessarily have to explain why cases are or are not accepted, but when they do not there will be conjecture.
The Supreme Court did not describe its logic in dismissing Brock. Appellate courts do not necessarily have to explain why cases are or are not accepted, but when they do not there will be conjecture.
The contention in the Supreme Court appeal in Brock, is that the conclusions of the First and Fourth DCAs are in conflict and that the appropriate solution to such conflict is for the Supreme Court to clarify the interpretation and application of Fla. Stat. §440.105(4)(b)9. The Court concluded that there is no true conflict and dismissed Brock. Essentially, it appears that the statute outlaws misrepresentation in obtaining employment (Brock), but that does not preclude the collection of workers' compensation benefits (Hernandez).
There is a second case pending before the Supreme Court, on similar facts as found in Brock. It is Jordan Hector v. State of Florida, SC14-1207. Some believe that the Court will yet take up the alleged conflict between Brock/Hector and Hernandez. They contend that is the reason that Hector remains pending following the dismissal of Brock. Others argue that the Court simply has not gotten around to dismissing Hector. Time will tell. Sometimes delay means a tough issue is being pondered. Sometimes it just means there is a delay.
I have heard that if the Florida Supreme Court does not address the issue in Hector, then there will be a petition for writ of certiorari filed with the U.S. Supreme Court in Brock and/or Hector. This contention is that the provisions of 440.105 are contrary to federal law. Proponents of this thought believe that §440.105 is an immigration and naturalization statute. They contend that as such, it violates the Supremacy Clause of the U.S. Constitution in that the authority to regulate immigration is a power expressly granted by the people to the federal government.
I have heard that if the Florida Supreme Court does not address the issue in Hector, then there will be a petition for writ of certiorari filed with the U.S. Supreme Court in Brock and/or Hector. This contention is that the provisions of 440.105 are contrary to federal law. Proponents of this thought believe that §440.105 is an immigration and naturalization statute. They contend that as such, it violates the Supremacy Clause of the U.S. Constitution in that the authority to regulate immigration is a power expressly granted by the people to the federal government.
They argue that United States v. Arizona controls this
determination. In that case, the state of Arizona passed a law "that
(1) created a state-law crime for being unlawfully present in the United
States, (2) created a state-law crime for working or seeking work while not
authorized to do so, (3) required state and local officers to verify the
citizenship or alien status of anyone who was lawfully arrested or detained,
and (4) authorized warrantless arrests of aliens believed to be removable from
the United States."
Some may have trouble seeing how Fla. Stat. §440.105(4)(b)9, a ban on any person presenting "false, fraudulent, or misleading oral or written statement to any person as evidence of identity for the purpose of obtaining employment" is similar to the Arizona laws enacted to address and criminalize immigration into the United States. It is not necessarily a conspicuous comparison. One is a state law obviously seeking to regulate immigration, and the other is a provision regulating the obtention of employment or workers' compensation by anyone, regardless of their immigration status.
There are two main avenues for proving that a statute or regulation is unconstitutional. The first is dependent upon proof that there is no way the statute or regulation can apply to any set of facts in a constitutional manner. That is the argument being pursued in Castellanos, the currently pending Florida Supreme Court challenge to Fla. Stat. §440.34 (attorney fees) and this type of allegation is called "facial unconstitutionality."
There are two main avenues for proving that a statute or regulation is unconstitutional. The first is dependent upon proof that there is no way the statute or regulation can apply to any set of facts in a constitutional manner. That is the argument being pursued in Castellanos, the currently pending Florida Supreme Court challenge to Fla. Stat. §440.34 (attorney fees) and this type of allegation is called "facial unconstitutionality."
The second argument would show that the statute or regulation is unconstitutionally applied in a particular set of facts. This is an "as applied" constitutional challenge. Most scholars agree that the "as applied" challenge is the more difficult of the two to prove. The argument would apparently be that the provisions of Fla. Stat. §440.105(4)(b)9 are unconstitutional in a particular case because the false statements or documents were provided by someone whose legal status is otherwise determinable under federal immigration law.
There would be various interesting perspectives on this issue. One side of the argument would argue that because some lack valid social security numbers due to their immigration status, the provisions of Fla. Stat. §440.105(4)(b)9 result in a "disparate impact" on those people and is thus unconstitutional. In other words, based upon immigration status, some cannot obtain employment without use of a false social security number. Others would argue that the prohibition on lying to obtain employment affects all job applicants, regardless of their motivation for using a number that is not his or hers.
There would be various interesting perspectives on this issue. One side of the argument would argue that because some lack valid social security numbers due to their immigration status, the provisions of Fla. Stat. §440.105(4)(b)9 result in a "disparate impact" on those people and is thus unconstitutional. In other words, based upon immigration status, some cannot obtain employment without use of a false social security number. Others would argue that the prohibition on lying to obtain employment affects all job applicants, regardless of their motivation for using a number that is not his or hers.
Sometimes, the courts avoid addressing constitutional questions. They instead resort to statutory interpretation to resolve some issues without reaching the constitutional question. Remember Murray v. Mariner Health, 994 So.2d 1051 (Fla. 2008)? This was the first Florida Supreme Court challenge to the 2003 attorney fee restriction of Fla. Stat. §440.34. In Murray, the Court noted that it is "obligated to construe statutes in a manner that avoids a holding that a statute may be unconstitutional."
So, can Fla. Stat. §440.105(4)(b)9 be interpreted in a constitutional manner? Is the application of this statute as to those who lack social security numbers unconstitutional in the same way that the United States Supreme Court concluded the Arizona statute to be? Is there a conflict between the Hernandez and Brock/Hector decisions, and if so will the Florida court address this or will it dismiss Hector?
So, can Fla. Stat. §440.105(4)(b)9 be interpreted in a constitutional manner? Is the application of this statute as to those who lack social security numbers unconstitutional in the same way that the United States Supreme Court concluded the Arizona statute to be? Is there a conflict between the Hernandez and Brock/Hector decisions, and if so will the Florida court address this or will it dismiss Hector?
If Hector is dismissed, will the United States Supreme Court accept the analysis for review among the approximately 100 cases it reviews annually? Interesting questions all. These are interesting times in the world of Florida workers' compensation.
Updated January 7, 2015. According to Fox News, a federal judge has enjoined enforcement of an identity theft law in Arizona. These laws reportedly were passed in 2007 and 2008 "as part of a package of legislation that sought to confront employers that hire immigrants who are in the country illegally."
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