Update on Padgett, aka Florida Workers' Advocates v. State of Florida

Monday came and went. On March 30, 2015 the Third District Court of Appeal heard oral argument in the case of Florida Workers' Advocates v. State of Florida. The case was once Cortez v. Velda Farms, but those two parties are no longer involved. There is an intervenor named Elsa Padgett; thus this case is often referred to as "the Padgett case."  

I listened to the argument on Tuesday. If you are interested, it can be accessed here and put case number 14-2062 in the search box. Sorry, but that is the most direct way to get to the video, and it does not stream, it will download for you to watch. 

The panel is Chief Judge Frank A. Sheppard, Judge Barbara Lagoa and  Judge Vance Salter. 

The question on many people's minds now is when the court will rule. Others question what the likely outcome is. The answer is the same to both questions from where I sit, that is "I don't know."  

There are a variety of interesting issues raised by both sides in the oral argument. It is well worth the few minutes it takes to watch. 

The trial order is here, courtesy of the WCI360.com.  

Obesity Can Kill Me? What Could Be Worse!?

Early in my career, I worked on claims against the Florida Special Disability Trust Fund. In the days before the Americans with Disabilities Act (ADA) there were efforts to encourage employers to hire those with pre-existing medical concerns. These "second injury funds" were designed to soften the financial impact on the employer of a workplace accident if some pre-existing condition contributed to the resulting disability or need for treatment. Florida has sunset its Fund, as have other states to varying degrees. 

How do these funds work? In Florida, the conditions that might qualify were listed in the statute, Fla. Stat. 440.49. The list included a variety of potentially serious medical conditions such as diabetes, Parkinson's diseases, cardiac disease, and more, One on that list that surprised many was obesity. It may be that surprise was influenced by realization, such as my own, that the law was calling me obese. What the statute actually provided was:

Obesity if the employee is 30 percent or more over the average weight designated for her or his height and age in the Table of Average Weight of Americans by Height and Age prepared by the Society of Actuaries using data from the 1979 Build and Blood Pressure Study.

As a young lawyer, I was surprised to learn that obesity was viewed in the same category with these other medical conditions. I looked-up that average weight and did the math. I found myself barely under the mark for the label "obese." Back then I did not consider myself obese, though in ensuing years I went through a weight gain that removed all doubt. When I was learning about the SDTF, we had not yet heard the national cacophony on obesity. 

That national focus has come in the last 25 years. We have heard and learned a great deal, particularly in the last decade or so, about obesity and the health risks that are associated with it. It is somewhat comforting to know that Florida had recognized the seriousness of obesity in the SDTF statute before it became a national focus. I wish I had recognized it earlier myself. 

Now we face a "national obesity epidemic." A recent post on Jon Gelman's blog cites to Kaiser Health News. It notes that as obesity increased in particular populations, the incidence of "chronic diseases" also increased. They note that this trend is worrisome. And that "one out of every three adults in the U.S. are clinically obese." Yes, that includes me, which means two of the rest of you are in the clear.

This reminds me of a quote from the beginning of The Paper Chase, which influenced a generation regarding attending law school. The protagonist there was giving the new law students a reality check when he said "look to your left, look to your right, because one of you won't be here by the end of the year." This analogy works with obesity, one in three. A staggering statistic.  

The Kaiser article notes potential for health complications that may be suffered by those of us that are obese. One cited study concluded that "obese people have higher health care costs." They note that obese people are heading into nursing homes at younger ages, and that there is added expense associated with care "for heavier residents."

Not shocking news, I grant you. The last 25 years have seen a variety of reports, publicity and news trying to convince us all to lose a few pounds. We as a nation are obsessed with weight. The "annual revenue of the U.S, weight-loss industry" is about $20 billion dollars. So, it is a problem that has gained recognition, and is receiving focus. Whether I individually will prevail in my own little battle of the bulge is up to me though. Some days I feel I am winning and other days I surrender to the sweet lure of chocolate.

With this backdrop of the seriousness of obesity, I was surprised to run across a headline trumpeting another recent study. In February 2014, the Guardian announced Loneliness Twice as Unhealthy as Obesity for Older People, Study Finds. The conclusion is that "a long-term feeling of extreme loneliness can have a worse impact on increasing potentially lethal health risks than obesity."

The study found that "chronic loneliness increases the risk of premature death by 14%." This was compared to obesity. The study concludes that loneliness increases the risk of premature death twice as much as the increase caused by being overweight. This is perhaps worrisome. As a side note, worse than either obesity or loneliness is poverty, which increases the risk about 19% according to this study. So being poor increases risk the most, then loneliness, then obesity. 

I wondered, as I read that, what that means for those who suffer all three, poverty, loneliness and obesity? Not an encouraging thought.

The authors claim that this loneliness finding portends a "crisis as the population ages and people increasingly live alone or far from their families." The Guardian discusses this recent study and cites previous studies that are supportive of their conclusions. It says that loneliness has been implicated in "a range of health problems, from high blood pressure and weakened immune system to a greater risk of depression, heart attack and strokes." Serious concerns. 

One author of the Guardian story suggests that individuals need to protect themselves from the threats presented. He suggests that remaining engaged in a community has merit and benefit. He advocates taking "time to enjoy yourself and share good times with family and friends." 

But, these are not infallible solutions. The study found some people "suffered the impacts of loneliness even with family and friends close by." Likewise, the "researchers found that some people were happy living a life of solitude." It may be that the impact depends somewhat on how the particular individual feels about the solitude or the companionship.  

One solution to both of these issues may be to find a social environment in which to exercise. I have tried for years to make exercise part of my daily routine. My continued obesity tells you my success has been limited. However, perhaps the solution is not a quiet, i-pod ensconced treadmill walk, but instead some engagement in a group social activity? At my age, I am not advocating touch football. But perhaps there is merit in the idea of group exercise class or a walking partner? 

While it does nothing for the biggest threat, poverty, perhaps it helps us with the other two? Besides the fact that I am perhaps more likely to exercise with company than alone. 

The Code of Judicial Conduct and Scouting

The conduct of Judges in Florida are bound by the Florida Code of Judicial Conduct. By its terms, the Code "applies to justices of the Supreme Court and judges of the District Courts of Appeal, Circuit Courts and County Courts." The Judges of Compensation Claims (JCC) are not part of the Florida Judiciary. We are administrative judges in the executive branch. The Office of Judges of Compensation Claims is not a "court," though some insist on referring to the OJCC as a court.  

The Code of Judicial Conduct applies to JCCs for the same reason that answers virtually every question about Florida's workers' compensation adjudication process, because the statue says so. Specifically, Fla. Stat. §440.442 says that the JCCs shall abide by the Code of Judicial Conduct, as adopted by the Florida Supreme Court. 

Lately, the Code of Judicial Conduct has been in the news. It is easy to say "the Code," but each state has its own Code. So there is not really any "the Code" unless you are referencing some specific jurisdictions provisions on judicial behavior. 

But, as a general reference "the Code" has been in the news lately following actions regarding the Boy Scouts of America, and a Federal lawsuit in California. Codes of Judicial Conduct address topics like discrimination. For example, the Florida Code, in Canon 2c, provides

A judge should not hold membership in an organization that practices invidious discrimination on the basis of race, sex, religion, or national origin. Membership in a fraternal, sororal, religious, or ethnic heritage organization shall not be deemed to be a violation of this provision.

That Code was adopted by the Florida Supreme Court. California's Supreme Court has likewise adopted a Code of Judicial Conduct. Canon 2c of the California Code is similar, but worded somewhat differently:

A judge shall not hold membership in any organization that practices invidious discrimination on the basis of race, sex, gender, religion, national origin, ethnicity, or sexual orientation. (Emphasis added).

The California Code is broader than Florida's. That there are similarities is not surprising. The Code process includes advocacy by the American Bar Association (ABA), which has published its Model Code of Judicial Conduct. As a voluntary association, the ABA cannot dictate what laws or codes say, but it publishes this "model" as a suggestion of what it believes the states should adopt. The language of the Model Code, Canon 3, Rule 3.6 is identical to California's Canon 2c (above).

A recent story on Breitbart.com says that "forty-seven states ban judges from belonging to groups that discriminate." Up to that point, Florida and California are in the same category. The story then addresses the distinctions, describing that "22 of those" also ban "membership in groups that discriminate based on sexual orientation."

This was in the news in 2014 because of the Boy Scouts of America. The Scouts had a policy the precluded membership of "gay" individuals. In May 2013, NBC News announced that the Scouts lifted the ban regarding youth members, but maintained the ban on "gay" adult leader membership. 

For historical context, In 2000, the United State Supreme Court was asked to consider the Scouts' ban on membership of homosexual adult leaders. In Boy Scouts of America v. Dale, a leader challenged the ban, alleging it "violated the state (New Jersey's) statute prohibiting discrimination on the basis of sexual orientation in places of public accommodation." Eventually, the New Jersey Supreme Court concluded that Dale was correct.

The United States Supreme Court reviewed that conclusion and considered the competing rights on the two sides of the question. The Court concluded that "applying New Jersey's public accommodations law to require the Boy Scouts to admit Dale violates the Boy Scout's First Amendment right of expressive association." 

The recent Boy Scout membership change compromise did not fully satisfy either side of the scouting membership debate. Some threatened to "pull their sponsorship of packs and troops" or to "take their boys out of Scouting," a negative reaction to the admission of youth. On the other side of the debate, "activists" complained the "policy change doesn't go far enough because gay adults still wouldn't be allowed to participate."

According to the 2014 article, California has historically recognized an exception to their Canon 2c to allow judicial participation in Scouting. Thus, recognizing that the Scouts discriminated, they allowed judicial volunteerism nonetheless. The article reports that accommodation began to change last year when the "ethics committee of the State Supreme Court has unanimously recommended a total ban on state judges volunteering for Scouts." The article notes that Disney had moved more rapidly, banning its employees from using "official volunteer time to work for the Scouts."

The California Supreme Court acted on the committee recommendation early in 2015. NBC News reported that the court voted unanimously to withdraw the historical "exception for nonprofit youth organizations" that had existed since 1996 when the court banned participation with "groups that discriminate on the basis of sexual orientation."

Thus, it appears that the Boy Scouts are within their rights under Dale to ban membership by adult volunteer homosexuals. But, participation by California Judges is precluded by their Code. Some may question the ban on judges serving as adult leaders. A Federal Judge quoted in the 2014 Breitbart article explained:

As it stands now, an out gay judge would not be allowed by the Boy Scouts of America to be an adult leader. A private country club that does not let Jews, Catholics, or African Americans into their club obviously chooses to discriminate, and they are in their rights to do so, as long as they are not subsidized by public funds. But, judges cannot join these organizations, and they shouldn’t. It’s the appearance of bias that is the problem.

California's Code, along with reportedly 21 others, according to Breitbart.com, bans judicial membership in organizations that discriminate based on sexual orientation. Florida's Code currently does not  contain that specific language. The question might seemingly remain open in Florida. However, the Federal judge's reference above to an "appearance" may give some pause. The Florida Code does otherwise reference the "appearance of impropriety." 

In Canon 2a, the Florida Code says:

A judge shall respect and comply with the law and shall act at all times in a manner that promotes public confidence in the integrity and impartiality of the judiciary.

The Code includes explanations of the Canons, in "comments" essentially to provide guidance on what these sections mean. The Comment to Florida Canon 2a says: 

The prohibition against behaving with impropriety or the appearance of impropriety applies to both the professional and personal conduct of a judge. Because it is not practicable to list all prohibited acts, the proscription is necessarily cast in general terms that extend to conduct by judges that is harmful although not specifically mentioned in the Code. 

The comment continues 

The test for appearance of impropriety is whether the conduct would create in reasonable minds, with knowledge of all the relevant circumstances that a reasonable inquiry would disclose, a perception that the judge's ability to carry out judicial responsibilities with integrity, impartiality, and competence is impaired.

So the question that will be debated is whether Florida Judges may continue to serve as volunteers in the Boy Scouts. There may be argument that the specific language of Canon 2c does not preclude such participation, as the corresponding California Canon does. There may be argument that the broader "appearance" language of Canon 2a nonetheless precludes judicial participation. And, that these two provisions seem to apply to the analysis is not to say that the debate would necessarily be limited to these two provisions, it may be broader still. 

What is clear today, has been clear however. Judges must be conscious about organizations before they join. The Code of Judicial Conduct is in place for a reason, and was statutorily applied to JCCs for a reason. Whether this debate will become news in Florida or not remains to be seen, but it is an interesting illustration of the conflicts between freedom of association and other rights and privileges. 

At the Top of My Lungs "What's Going On?"

In 1992 a group called Four Non-Blondes recorded "what's up," a catchy one-hit wonder. In her angst, the singer tells us that at times she "scream(s) at the top of my lungs, What's going on?" I get that sometimes, and find myself asking the same question, though I refrain from doing it at the top of my lungs. 

Sometimes I hear about behavior, and I am simply astounded. I am hopeful that I, or someone, has misunderstood. I recently received an inquiry from a judge, describing representations that are being made, and essentially I am asking "what's going on?"

In the course of various hearings, this judge is being told that lawyers have instructed their staff to not return phone calls from specific opposing counsel's office. In other words, "if attorney so and so calls, just ignore it."

In another iteration of this problem, an attorney explained to the judge how his/her firm had instructed it's email program not to accept communications from a specific attorney. The explanation included description of the involvement of the firms information technology (IT) department.

Would an attorney who received a letter in the US Mail attempt to prevent the Mail person from leaving the envelope? Picture trying to tell the Mail person to sort out and not deliver mail with certain return addresses. Picture your firms mail room sorting the mail and instead of forwarding all of yours to you, the mail room automatically sends some back, quoting the late, great, King of Rock and Roll, "return to sender."

Why would someone reject mail on that basis, unexamined, unread, unopened? In some ways, I see a potential other side of the coin. I receive much in my US mail box that I would just as soon not receive. 

I have no idea where these companies get my name and address. Nor can I can see what I did to attract their attention. One which consistently amuses me is a catalog for camping equipment. I received one from this company about every 60 days. I've never ordered anything from them. Admittedly I have camped, but it has been many years. I guess it would be nice to somehow prevent the mail delivery person from leaving that catalog in my mailbox. It would sure save me the effort of throwing it away.

But correspondence from another attorney? That is certainly not in the same category. If you receive a letter from opposing counsel, would you attempt to get the mail delivery person to take it back? Would you toss it in the garbage can atop that ubiquitous camping equipment supply catalog without reading it? Would pretending it never arrived be productive? Doubtful.

Years ago, I heard of a firm that only turned their fax machine on when they needed to send a fax. The remainder of the day, the fax machine remained powered-down, to prevent anyone from sending the firm a facsimile. I have never understood the point of that. Someone wants to communicate with you efficiently and quickly, but thinks it is appropriate to deny you the reciprocal courtesy?

What stimulates this refusal to accept communications? Are you one of the attorneys that sends verbose, threatening, repetitive, incomprehensible correspondence? Are you an attorney that leaves repeated, lengthy, threatening voicemail messages? Is there any chance that your communication could be the equivalent of another one of those camping equipment catalogs?

I think we could all spend a bit of time on introspection. I believe we could all ask ourselves how is the recipient going to, or is supposed to, perceive this communication? There's always value in putting yourself in the other person's shoes.

I recently attended a phenomenal continuing education program in Tallahassee. Please excuse my shameless praise, as it was the program sponsored by the WCI and OJCC in February. A great segment of that program focused on how to get the Appellate court to focus on your issue on appeal.

The speaker, Randall Porcher, reminded everyone that there are only so many minutes in each day. Time is precious. He reminded appellants and appellees alike, that there is value in getting to the point. He likewise reminded the audience that hiding your point, or leaf, in the midst of a huge forest may obscure your point. Are you trying to hide it, or do you want the recipient of your communication to get the point?

Is it possible, in our communication with one another, that we could also take this to heart? Time is precious and limited. If the issue is whether you can or will agree to a certain set of facts, scheduling dates, or other questions, why not ask that? Why not say what you mean, get to the point, be brief, respectful, and direct?

Is there a value in recapitulating each and every point which you believe to be in your case's favor, in each communication? Or alternatively, would making all of our communication respectful and concise be to everyone's advantage.

On the other hand, I would appreciate hearing the explanation of the attorney who tells her or his staff not to return phone calls from opposing counsel. Having slept on this allegation for days, I cannot conceive of a professional reason for instructing staff to ignore communications from anyone. 

I cannot conceive the logic behind having your server rejecting emails from a specific address, unless some particular sender has become abusive or unprofessional in their own right. Even then, however, you risk missing messages that are relevant and important. By "blocking" someone's email you are just like the firm that turns off the fax machine. You deny that attorney of convenience and efficiency. Will that attorney reciprocate and block your email? Is that professional? What happens if everyone begins refusing everyone else's mail or email? I am not saying it is inexplicable, I just cannot come up with an explanation.

That's not to say that IT or even intent is required for email rejection. It is a lesson I recently learned about the way the Internet works. There are computer programs (I call them "Autobots") which measure the output and content of email addresses. I sent a series of emails out to a multitude of people regarding a professional organization a couple of years ago. As a result of that effort, one of these lurking Internet programs identified my email address as a distributor of spam, based upon the similarity of the content of many emails, including the similar or identical nature of the subject line.

Because this Autobot determine me to be a spam generator. It communicated my "spam-generator" status to a multitude of agents across the Internet. As a result, several anti-spam software's thereafter listed me as a spammer. So, for a period of days, all of the emails from my address were being flagged, and many placed into spam folders at the end user.

I know of other instances in which a firm's address has been identified with spam. For a period of time, there was a law firm whose emails to me were being placed in my spam folder. Advised of that, I asked our IT department to investigate. They determined our spam filter had identified that address, but could not determine why. We all get updates to our spam software from these agents that gather data. 

There is an easy solution for accidental or incidental spam identification like this. You can instruct your email program that emails from specific addresses are "safe." Just Google "marking email sender safe" to find instructions for doing so in your particular email program. 

I would appreciate hearing the other side of the story. Please email me at david.langham@doah.state.fl.us and explain what circumstances justify systematically refusing to return calls from opposing counsel's office. Explain what justification supports blocking opposing counsel's emails. I cannot say it is always unjustifiable. I can say that I do not understand it and would appreciate someone explaining it to me. What is the rest of the story? Write and tell me "What's going on?"

A Workers' Compensation "Miranda Warning"

WorkCompCentral reported in February that two states are considering statutory amendments that would require a warning for all injured workers. Essentially, the "Arizona and Montana" proposals would "require injured workers to be notified of potential imprisonment and fines for making a false claim." 

The proposals are not necessarily meeting with universal support. Each purports to inform injured workers. There are issues of benefit forfeiture, financial penalties, and even criminal penalties apparently associated with "false statements" in the course of workers' compensation claims in these states. That is a similarity with the Florida workers' compensation law. 

We have seen a fair amount of litigation and attention regarding our Fla. Stat. §440.105. We have seen Hector, Brock, and an instance in which over 100 workers were arrested at one company, for issues related to their representations in the employment process. A state that gets a great deal of publicity regarding workers' compensation is Ohio. However, it is hard to tell whether fraud is a large issue there, whether Ohio does a better job of catching it, or whether it is more likely to publicize arrests. Regardless, workers' compensation fraud is a subject that is getting in the news. 

The Arizona and Montana bills are purportedly focused on informing injured workers of the potential for liability, civil and criminal, when they claim benefit entitlement. There is a provision in one of the bills to require certain forms from injured workers, and for these forms to also contain language regarding misstatement or fraud.

One bill sponsor, a business owner, was quoted by WorkCompCentral explaining his motivation. He seeks to "help honest people be more honest." He characterized his motivation as "protecting our employees from making a false claim." 

Another legislator has questioned the scope of workers' compensation fraud. Essentially asking how large a problem this is. Some periodically question whether employee fraud is significant as a portion of any waste or abuse in the system generally, This is a refrain that has been heard in Tallahassee from time to time. 

The quoted legislator said that "nationwide, it's estimated that only 1% to 2% of workers' compensation claims are fraudulent." He asserted that "in workers' compensation, employer fraud dwarfs worker fraud. There is no doubt about it." That is another refrain that has been heard in Tallahassee. 

A lobbyist for the Montana Trial Lawyers labelled that state's bill a "workers' compensation Miranda warning." He cautioned that the warning would dissuade "some injured workers from filing legitimate claims." 

When I read this, I remembered the "forgotten Supreme Court Case," Brock v. State of Florida. It presented some intriguing questions about the statutory prohibitions regarding misrepresentation in obtaining a job. The prohibition is in 440.105(4)(b)(9), clearly part of the workers' compensation law. But it has been used to prosecute people who never made a claim for workers' compensation benefits. 

The Fourth District concluded that this was acceptable, because there is no workers' compensation without work and work is obtained through an interactive process. Thus, the conclusion that the "gateway" to workers' compensation is perhaps the interactive employment process, that is the application, interview, etc. So the gateway can be guarded by the workers' compensation statute. This is a sure-fire conversation starter with attorneys, as the opinions on this statute are diverse, heart-felt, and opinionated from all perspectives. 

In the grand context, however, is it better that people know of the potential for prosecution (fore-warned is prepared) or does informing about potential penalties amount to threatening? I had a chance to describe the Brock case to a group of non-lawyers recently. Their reaction was enlightening. One member asked "who does not lie on their resume?" And followed that with "I could be prosecuted for lying on a job application?"

Is it better for people to know, or is informing people an inappropriate intimidation? The debate will go on in at least two states this spring. What do you think?

Can Benefits Be Reduced through Negotiation?

A few years ago General Motors got into financial difficulties. Historically, some characterized GM as "the most important industrial company in the history of the United States." Several people were quoted in the 2000s as saying GM and others were "too big to fail." GM was seen as a bell-weather of this country. According to The Cutting Edge, "in 1953, at the peak its dominance, its President Charles Wilson declared before Congress that what was good for the country was good for GM and vice versa,"

In the economic situation in which the U.S. found itself towards the end of the first decade of this century, there was doubt about whether GM could survive. There are car enthusiasts who insist that GM as we know it did not survive, citing the elimination of Pontiac and Saturn from the corporate structure, and the sale of the Hummer division. GM survived, but there has been critique of the form in which it emerged. 

I learned a long time ago that bankruptcy is an intriguing process. It seems that trustees and Bankruptcy Judges are faced with very difficult decisions affecting a company, and those who invested therein, loaned thereto, and labored therefore. I have never done any real bankruptcy work, though the subject has intruded on my professional life a few times. From my distant vantage point, what appears to be a real frustration endemic to the process is that there will always be too little, sought by too many, and as a result a parade of difficult or impossible choices. 

In the uncertain recent financial times, GM and the United Auto Workers (UAW) attempted to renegotiate a variety of issues affecting the company and those who labored there. One of the issues was a renegotiation of of the rights of some retirees under a collective bargaining agreement. This negotiation was tied to workers' compensation benefits for some retirees.

MichiganLive reported recently on litigation following some specific renegotiation. GM was sued by the estate of Clifton Arbuckle, a GM retiree. His workers' compensation benefits were reduced pursuant to that contract. At the outset, that idea itself may be a curiosity to the workers' compensation community. When you understand the process, it becomes a quite interesting story.

In 1980, Michigan's workers' compensation law allowed some adjustment of benefits based on receipt of other parallel benefits. Similarly, the Florida law may allow such a reduction or "offset" when an injured worker receives both social security disability benefits and workers' compensation indemnity benefits. It is a somewhat complex calculation in some cases, but the law allows it. The Michigan law afforded General Motors a statutory right to reduce benefits, that is apply an "offset" when both workers' compensation and certain other company benefits. 

There are a variety of rights which we all enjoy as a result of our existence. The U.S. Constitution and various state constitutions recognize and memorialize these individual rights. The founders of this country did not believe that those rights were granted to people by governments, but that these rights are inherent in our existence. A distinction worth remembering. 

The law can grant other rights, or benefits. The right to workers' compensation benefits is granted by various state laws. In many instances, those rights come at some expense. In other words, to earn entitlement to some statutory rights, we may give up other statutory rights, or even constitutional rights. Thus the "grand bargain" explanation for workers' compensation. 

American television spent decades enthralled with the Miranda decision, and shows incessantly intoned "you have the right to remain silent, if you give up that right . . . ." Every police show and lawyer show loved to feature that phrase. We should have learned from that. Rights can be given up. Having rights is one thing. Enforcing or protecting rights is something else. 

Though GM had every right to reduce workers compensation benefits based on the concurrent receipt of disability retirement benefits beginning in 1980, it chose not to do so. Essentially, it had a right, but it elected not to enforce that right. What reason? Well, as with so much else in the world, a decision like this is in all likelihood a compromise. 

similarly, why would GM pay its employees $24.00 per hour when the Michigan minimum wage is $8.15? It is a business decision. They pay what the market demands for the skills, employee continuity, and other tangibles or intangibles in which it sees value. In a similar vein, GM agreed not to reduce workers' compensation benefits as a result of some employee receiving other forms of benefits, that is it waived its statutory right. It agree to that in a collective bargaining agreement with the UAW. 

Then the economy took a turn in the first decade of the new century, and GM began to experience financial issues. GM thought one way to change the financial situation would be to exercise the right to offset those other benefits. In other words, having agreed to not enforce its legal rights for a period, GM sought to enforce. They raised the issue with the UAW, and an agreement was reached. As a result, GM decreased the workers' compensation benefits for about 1,800 retirees.

However, by that time Clifton Arbuckle was no longer an employee of GM, but a retiree instead. He contended that as he was not an employee, and that therefore the UAW had no authority to negotiate on his behalf, or to agree that he would receive less benefits. 

The litigation has been a bit of a roller coaster. The Magistrate (similar to the Florida JCC) concluded the reduction was improper. The Michigan Workers' Compensation Appellate Commission disagreed and upheld GM's authority. The Michigan Appellate Court last month reversed the Commission and held the reduction was improper. According to Michigan Live the Appellate Court found "no evidence that plaintiff authorized the UAW to act as his representative to modify the 1990 agreement under which he retired." GM vows to appeal the case further. If the Michigan Supreme Court hears the case, they could side with the Magistrate and appellate court of the Commission.

It is an interesting reminder of the way that statutes work. Rights and benefits can be codified, but they can also be waived. When there is an issue of such waiver, a good question to ask may be whether the person doing the talking has the authority of the person who will suffer the detriment being offered. There is no way to know from the published material whether there was any discussion between GM and UAW regarding the question, "does the UAW currently have authority to speak for retirees?" 

Perhaps they discussed it fully and reached a thoughtful conclusion. If so, and the courts later disagreed, that is something that happens in the world of disputes. However, if it was not discussed, and everyone involved just presumed that authority existed, it might be a lesson to others for future negotiations. Might this story lead others to discuss authority when entertaining negotiations?

But will it Really Help?

There has been a great deal of discussion regarding how things could be different in workers' compensation in the United States. One of the issues in recent years has involved the interplay between the state workers' compensation programs and the federal government. 

Certainly, workers' compensation is a variety of systems and processes codified by the different states. But there are instances in which those state benefits interact with federal benefits. One of the first places that this interaction received coverage was in the realm of Medicare. Medicare is a federal program that provides health coverage to people 65 and older; in that regard it is intertwined with retirement benefits from Social Security. 

Social Security also provides support benefits for people with disabilities. As I explained in June 2014, this disability program is headed for bankruptcy in 2016. There have been concerns for years about the liquidity and solvency of Social Security and the programs that operate with it. For many years, there was a confidence among Unites States residents that Medicare would cover medical costs. 

When the Florida workers' compensation law was changed in 1994, it became practical to settle the entitlement to future medical care in the majority of cases. Back then a settlement required a Joint Petition, and the Judge would make findings as to whether the settlement was in the best interest of the injured worker. In 2001, the law was amended again and settlement was further simplified. After 2001 the judge would make such findings only if the injured worker was not represented by counsel. 

In 1980, the Medicare Secondary Payer (MSP) law was passed. This was intended to require payments for medical care from non-Medicare sources. In workers' compensation, for example, the intent was for workers' compensation to pay for work-related medical charges. There was a perception at least that Medicare was sometimes left holding the bag for medical expenses related to work accidents. According to the Medicare Advocacy Recovery Coalition (MARC), "for many years, the MSP laws and regulations were poorly understood and" the federal government "rarely enforced" claims. 

According to MARC, the law was amended in 2007 to strengthen enforcement. Companies that settled cases had to report each "settlement, judgement award or other payment to a beneficiary." With the enforcement enhancements in place, it was quickly discovered that the Centers for Medicare and Medicaid Services (CMS) was not equipped to deal with the resulting volume of information. The result of an unprepared federal infrastructure was delay of many workers' compensation settlements. 

In 2012, the Congress passed the SMART Act (Strengthening Medicare and Repaying Taxpayers). This was intended to bring efficiencies to the process. The goal remains that the interests of Medicare, and thus the taxpayer, are protected when a case is settled. Essentially, the cost of treating the work-related injury is to be covered by the employer or its carrier. The settlement of such liability is now subject to the approval of CMS. Anyone who spends any time around workers' compensation knows this process and the issues that have arisen. 

In March, WorkCompCentral reported that the President's 2016 budget proposal would require carriers and state regulators "to report benefit information so that the (Social Security) administration can  reduce disability benefits to beneficiaries who have received workers' compensation." In somewhat the same spirit as the MSP provisions, this provision is directed at the interrelationship of federal and state disability programs. There is an interesting explanation on Jon Gelman's blog also. 

If someone is entitled to both workers' compensation and Social Security Disability (SSD), then the SSD benefits can possibly be reduced somewhat. This occurs when Social Security takes an "offset." It is to facilitate the calculation and application of this offset that motivates the President to seek easier access to that information. The federal government seems to be acknowledging that its current access to information as to who may be receiving workers' compensation, and how much, is not sufficient. According to WorkCompCentral, there are those in the workers' compensation industry that see this proposed requirement as "a burden."

The news has reported that federal social programs are not currently funded. There are some who predict that Social Security will run out of funding, perhaps as early as 2043, others predict 2049. So, it makes some sense for the federal government to get the benefit of the offset that the law allows it. 

There are some questions that need to be asked though. First of all, how much of "a burden?" That bears consideration. And second, will it really help?

What the news coverage has not addressed in any respect is how much it would help. When the offset provision became part of federal law, it turns out there were already some state laws that allowed a reduction of workers' compensation benefits in recognition of concurrrent receipt of SSD. The federal government recognized the existence of these provisions and labelled those states "reverse offset" or "reverse jurisdictions." If a jurisdiction is a "reverse" jurisdiction, then the federal law allows the workers' compensation to be reduced rather than the SSD. 

The states with recognized "reverse offset plans" include Alaska, California, Colorado, Florida, Louisiana, Minnesota, Montana, Nevada, New Jersey, New York, North Dakota, Ohio, Oregon, Washington, and Wisconsin. A minority of states to be sure, but with a significant impact on the market. In these states, the federal government would be entitled to no offset. Arguably, the question of how much "burden" might be irrelevant because if the federal government can get no benefit, is any "burden" justifiable?

According to Business Insurance, California accounted for 17.4% of workers' compensation benefits paid in 2011. That is all benefits paid, not just the benefits paid that might be subject to the offset we are discussing here. Florida was 4.5%, New York was 8.5%, Ohio was 3.7% and Washington was 3.8%. 

The Business Insurance percentages were extrapolated from Table 8 of the Workers' Compensation Benefits, Coverage and Costs, 2011, published by the National Academy of Social Insurance. Extrapolating the share represented by the other "reverse jurisdictions, yields: Alaska (.4%), Colorado (.2%), Louisiana (1.4%), Minnesota (1.7%), Montana (.4%), Nevada (.6%), New Jersey (3.6%), North Dakota (.2%), Oregon (1%) and Wisconsin (2%).

These states, with "reverse offsets" accounted for almost 50% of all workers' compensation benefits in the United States. If the corollary is that these states were responsible for 50% of the potentially offset benefits, then the current proposal is to gain additional ease of reporting regarding information that may assist in the remaining 50-51%.

There is an argument that reporting would occur regarding some of these states even though they are "reverse jurisdictions." The insurance carriers that are paying these benefits would perhaps be likely to invest in programming to report their company data to Social Security. That would be perhaps simplified by reporting all of a carrier's data instead of its data for particular states. Less moving parts would perhaps be less of "a burden" for the large industry participants. 

The industry is dominated by a few very large entities. In Where did it Come From, Lex and Verum (June 2014) I noted that "the 25 largest workers' compensation insurers, based upon their net written prmium, account for about 70% of the net written premium. If these payors wrote computer code for reporting this information on permanent benefits to Social Securlty, a great deal of the reporting burden would be covered. 

However, that leaves about 30% of the market still to report, and that reporting would be by the smaller carriers. Also, there may well be self-insured employers in these "reverse jurisdictions" that might be forced to report data that could not assist the federal government as no offset could be taken by SSD in any event. Likewise, there are "monopolistic" workers' compensation states. Workers' compensation in those states (North Dakota, Ohio, Washington) is paid by state-controlled funds. Those funds pay benefits only for that specific state. In these examples any requirement of reporting might be a significant "burden" with no commensurate benefit to the federal government.

Is reporting worth the investment? To answer that, the "burden" has to be quantified. How much effort, time and money would that programming require? Second, with 50% of the market in a posture that will not allow any federal offset, is the return on investment in the remaining 50% sufficient to justify the proposed regulation and reporting?

More on Bullying in the Workplace

In February, I posted on the reintroduction of proposed Florida legislation dealing with workplace bullying. 

This was not the first time that bullying was the subject in this blog. In 2013 I posted Bullying is in the News, is it in the Workplace? 

In March, I received a nice email from Hannah Williams, regarding an info-graphic that she helped to produce, published by the International Business Degree Guide, titled Beyond the Schoolyard, Workplace Bullying. 

It is an interesting composition of statistics. Some highlights:

"bullies . . .can also hurt business - driving away good employees in their quest for control."

Workplace bullies include "tormentors, tattlers, finger pointers" and those who "publicly pick on people, cc the whole world in emails, and point out your mistakes and tell everyone."

It is an interesting publication. Worth a minute to consider.  

Can I Get an Uber Update?

Last November, I penned Can I get an Uber Lift about the development of "ride-sharing" companies. These arrangements are discussed at national workers' compensation conferences. There is a debate raging as to whether drivers involved with these companies are employees or independent contractors. 

WorkCompCentral recently reported further developments on the horizon. It appears that California may be center stage for some of the debate regarding these "ride-sharing" applications. It reports that the "California Public Utilities Commission voted last year not to force ride-sharing companies to buy workers’ compensation insurance for its drivers." Thus addressing a regulatory challenge for the process. There is a requirement that the companies buy liability insurance. 

However, now the industry is facing federal litigation, and thus facing similar classification questions in a non-regulatory setting. WorkCompCentral reports that Cotter v. Lyft Inc. and O'Connor v. Uber Technologies have been filed in the U.S. District Court, Northern District of California.

The plaintiffs seek "reimbursement of mileage and application of minimum wage standards." In that context, the drivers associated with these two services are "seeking status as employees, which would make them eligible for workers’ compensation benefits."

So, states continue to struggle with whether and how to regulate the new paradigm that is "ride-sharing." The Fair Labor Standards Act (FLSA) and the minimum wage, however, will be interpreted by the court. The conclusion under that law of "employee" or "independent contractor" may not be the end of the analysis. Arguably such an FLSA determination may not bind state regulators regarding the appropriate label under state law for purposes such as workers' compensation. 

However, it will bring an interesting perspective to the debate as to what these companies are and how their drivers are appropriately classified. Are they "employers" or merely communication service providers? They claim they merely provide services, that connect drivers with riders. 

The article posits that the FLSA debate will focus in large part on the issue of how much control is exerted by the "ride-share" companies over these drivers. There may be a comparison with other transportation industry classifications, particularly noted is the litigation in which "FedEx Ground has lost major battles in the U.S. 9th Circuit Court and Kansas Supreme Court this year when judges ruled that thousands of the company’s delivery drivers were employees."

WorkCompCentral points out that these questions are likely to face a variety of regulators. They note that the "ride-sharing" paradigm is rapidly growing. Two companies are featured in the article, which notes that last year Lyft reported "that it grew its ridership fivefold in 2014 and expanded from 15 cities to more than 60." The other provider, Uber, "boasts on its website that it offers services in more than 260 cities in 54 countries." 

It is an issue that concerns the drivers and the "ride-share" companies. However, the insurance industry may also seek clarification. The industry recognizes "misclassification is a major issue in workers’ compensation because it denies insurance carriers the ability to properly gauge risk." If the drivers are employees, then carriers may be liable to provide benefits. It that is to be the outcome, payroll will have to be valued, and premiums collected.

More recently, Montana undertook consideration of a statutory amendment to dregulate taxi companies. This would apparently pave the way for Uber, Lyft, and others. By passing a state law on the subject, Montana would also preclude cities or localities from banning these services. There could be significant revenue concerns for municipalities if they lose fee-paying cab service providers as a result of these services.

It may be that the questions of classification for "ride-sharing" drivers may be coming soon to a legislature or regulatory agency near you. Because of the various definitions in state statutes and regulations, the regulatory outcome of this debate may not be consistent across the continent. With the employee/contractor questions currently in a federal court, the FLSA treatment of the Uber-driver may be clear soon. As it would be a federal decision, that might provide consistency at least in the wage context. 

Welcoming John Ruser to WCRI

The Workers' Compensation Research Institute (WCRI), was founded in 1983. as workers' compensation was in the realm of 70 years old in North America. Essentially, it is a think-tank focused on the accumulation of workers' compensation data. I was privileged to speak at their annual conference the first week of March, 2015. I met and discussed workers' compensation with a veritable plethora of workers' compensation thought-leaders from across the continent. 

The presentations were interesting and diverse. There is great coverage of the program on workcompwire.com. Researchers and experts presented on fee schedules, surgery costs, hospital costs, and the Affordable Care Act. There were statistics, data compilations, bar graphs, studies, conclusions, predictions, and more. 

Certainly, you might take issue with various conclusions, or various approaches regarding data. In the business of analyzing data, there will be choices made. That is what makes research an academic study from which conclusions can be drawn, rather than scientific proof positive of any singular conclusion. 

How one defines parameters, asks questions, and presents conclusion may support a population of conclusions. Different definitions, questions and approaches might yield differing conclusion from the same or similar data. This is a strength of research, it yields conversation and debate. These are healthy. 

Recently, WorkCompCentral published Stakeholders Object to Decision to Leave Physician Dispensing Alone for Two Years. It is an illustration of data use and discussion in workers' compensation. The story describes data produced by the Maryland Workers' Compensation Commission and data from WCRI. The two sets of data led to discussion of physician dispensing. That the two data sets supported different conclusions did not not necessarily mean either is "right" or "wrong." Data is collected based on parameters. Analysis of data has scientific aspects, but results are subject to interpretation. 

WCRI obtains data from various states, and from the workers' compensation industry. They also undertake studies that involve surveys and investigations regarding individual and group experiences in the workers' compensation marketplace. They have eyes and ears on the nation's systems. Their actuaries are focused on trying to interpret the data that emanates from the various states' efforts to manage the various contingencies and variations of workers' compensation. 

Part of the program last week was a tribute to, or recognition of, the efforts and contributions of Richard Victor. Mr. Victor will soon be transitioning to a less-active role in WCRI. The organization has undertaken a thoughtful and focused search for a new leader, and is now engaging in a patient process for transition to new leadership.  

The WCRI tribute to Richard Victor was prompted by his decision to pass the leadership baton in coming months. In 2014 WCRI started a methodical search for new leadership. In February 2015 WCRI announced that Richard Victor was being promoted to CEO, and that John Ruser has been named to Mr. Victor's former position, Executive Director. The plan, as I understand it, is that about a year out, Mr. Victor will move from the fore, and Mr. Ruser will assume the position of CEO and become both the leader and public face of WCRI.

Four members of the WCRI Board took the stage last week in Boston to discuss the contributions that Mr. Victor has made to the national debate of workers' compensation. Though some anticipated something of a "roast," the comments highlighted dedication and focus. There were anecdotes, accolades and remembrances. Believe it or not, Richard Victor has been at the helm of WCRI since it was formed 32 years ago. 

Following the comments from the Board, Mr. Victor took the stage to acknowledge the praise and comments. He was quick to point out the successes of WCRI results from the efforts of a great many individuals. He mentioned several by name, describing the composition and contributions of the team. The WCRI team of researchers and writers is formidable. The graciousness of Mr. Victor's comments were typical of his persona over the relatively brief time that I have known him. 

In business school, it is an oft-studied conundrum when a founding chief executive must be replaced. Replacing any CEO is challenging enough. Replacing a founding CEO is only more so. One theory of minimizing the impact of such change is that "replacement" is impossible. Face it, there will always be one Henry Ford, one Herb Kelleher, one Oprah Winfrey, one Walt Disney. Taking over from a founder like these is a challenge of epic proportions. 

Mr. Ruser will be many things. He will be the second person to helm the organization, a leader, a sounding-board, a course-setter, and more. But he will not be Richard Victor. He will be second-guessed and questioned. This will have nothing to do with who he is or what he knows. Though Mr. Ruser does not come from a workers' compensation background per se, neither did Mr. Victor when he came to WCRI thirty-two years ago from the Rand Corporation. 

There will be questions because Mr. Ruser lacks something, but it is the same something that any new WCRI CEO would have lacked. Mr. Ruser is not Richard Victor. It will be important for the industry to remember this, to accept this, and to understand that no one else is Richard Victor, and this is not a failing. Things may be different, but different in itself is not a bad thing.

There is not yet the technology or will to clone Mr. Victor. I would suggest to everyone that even if we could, it would be unwise. Organizations are dynamic, and need to be dynamic. The change of leadership will strengthen the WCRI. I know that because Richard Victor told the whole assemblage in Boston last week. 

He explained and stressed that WCRI is a team. He identified  some of the many who have contributed to the success of the organization. His description substantiates an organization that has a focus, a mission, and principles. He assures us that these will remain consistent. The leadership of a diverse Board will continue. 

The Board's thoughtfulness about this transition is obvious. It conducted a patient and thorough search for a new Executive Director. It made that search very public. It adopted and publicized a model in which Mr. Victor remains as senior leadership through a year-long transition designed to contribute to continuity at the organization and team-building. 

There will be changes. The organization will adapt to new leadership and nuances may shift. The principles of the mission will remain. The market should welcome Mr. Ruser, and accept at the outset that he will be many things. The one thing he will not be is Mr. Victor. The market should accept and embrace that this is a truth, and that the future nonetheless may hold great things. 

There will still be disagreement about the how and when of studies. There will be room for discussion, debate, and interpretation. That is what data is for. Great minds within and without WCRI will bring their conclusions, after study of the WCRI and other data. Some will find various data persuasive, others will find shortcomings. But, they will all discuss it. The interpretation, debate, and conversation will be beneficial to the ongoing discussions of what workers' compensation is.