Tuesday, July 29, 2008

Many N.J. Workers’ Comp Judges Owe Their Jobs To Political Favors

In its excellent series on the problem-ridden workers’ compensation system in New Jersey, the Star-Ledger examines how the process of politically appointing workers’ comp judges creates conflicts of interest and puts unqualified people in these important jobs.

The system is populated by jurists whose résumés often include past political appointments or elected office but thin trial experience. It also includes attorneys and insurance consultants who rank among the state's prolific campaign donors.

That political mix also casts a shadow in the Statehouse, where lawmakers routinely consider measures that would either boost workers' benefits or limit expenses for compensation carriers. Some of those same lawmakers run private law firms that earn tens of thousands of dollars representing insurers in comp court.

A Star-Ledger analysis of more than 117,000 workers' comp cases pending in 2007 found 469 cases in which insurance companies were represented by law firms whose principals were related to sitting compensation judges. And 606 more cases involved firms owned by county political chairs.

The article points out how much power workers’ compensation judges hold with relatively little oversight. Arguably, the rulings that they make are as important as those that any judge in any courtroom in the state makes, but much of what workers’ comp judges do occurs in closed-door mediations. What’s more, there are no juries in workers’ comp cases, though decisions, if appealed can be reviewed by a higher court.

They are asked to decide the truth, recommend a settlement or set a fair price for a severed limb or damaged spine.

The fact that workers’ comp judges in New Jersey are politically appointed isn’t in itself a cause for concerns. Many other judges in the state are appointed, but in every case, those candidates are vetted by the state bar to ensure that they are qualified. There’s no similar vetting process for workers’ comp judges.

This lack of screening was a concern as far back as 1974 when the State Commission of Investigation found that the selection process resulted too often in workers' comp judges who were "unoutstanding," appointed largely because of political pedigrees.

In a 300-page report, the SCI recommended the bar association review nominees and that its recommendations "be heavily considered in the interest of obtaining high quality and competence in the workers compensation judicuiary."
And while other states have checks and balances to ensure that workers’ compensation judges are qualified, competent and performing their jobs correctly, New Jersey has none.

As the Star-Ledger reporters revealed, New Jersey workers’ compensation judges often rule in cases where there’s a clear conflict of interest. The newspaper found hundreds of instances where judges heard cases in which their former law partners were representing the employer or insurance company. That seems a clear conflict of interest that would require the judge to recuse himself or herself, but that rarely, if ever, happens in New Jersey.

Florida law requires its comp court judges to have experience practicing workers' compensation law and to win approval from a statewide nominating commission. Then they face re-evaluation by the commission every four years. In Massachusetts, two advisory councils review and rate candidates for the workers' comp bench.

Nebraska residents vote to keep or remove their comp judges every six years. In Minnesota, a special commission compiles evaluations of judges on topics ranging from fairness to knowledge of the law, then publishes its results.

In Michigan, a Qualifications Advisory Committee comprised of workers and employers reviews comp judges every four years. Some fail to win reappointment. All are limited to no more than 12 years on the bench.

New Jersey's process is less complicated -- and less transparent.

Workers' comp judges in the Garden State get lifetime postings that now pay $140,000 a year. The appointees rarely are scrutinized, instead they typically end up as a line item awaiting approval by the Senate, one of many nominations the governor's office sends in batches.

As the Star-Ledger reporters revealed, New Jersey workers’ compensation judges often rule in cases where there’s a clear conflict of interest. The newspaper found hundreds of instances where judges heard cases in which their former law partners were representing the employer or insurance company. That seems a clear conflict of interest that would require the judge to recuse himself or herself, but that rarely, if ever, happens in New Jersey.

Sunday, July 20, 2008

Improving Construction Safety in Illinois

The Illinois building industry is up in arms over proposed legislation that would allow construction workers who are injured during falls from scaffolding, ladders and other heights to sue other contractors on the job site for not doing anything to prevent their injuries.

Rep. John Fritchey has proposed an amendment to House Bill 2094 that would create the Construction Safety Act. If passed, the legislation would essentially reinstate the Structural Work Act (SWA), which held construction companies and contractors responsible for creating safe working environments on their job sites.

The SWA allowed injured construction workers to file suit “against each party involved in the project, including owners, suppliers, contractors, subcontractors and designers” and to recover damages for those injuries if they could prove that those other parties should have known dangerous or unsafe working conditions existed.

Speaking out against the proposed legislation, the Alliance to Help Employment and Development (AHEAD) has argued the Construction Safety Act is rife with problems. Among them:

  • Threatens Illinois jobs: Reinstating SWA will increase construction costs, including insurance rates, and stifle private investment and public works projects, costing the state tax revenue, jobs and economic growth.
  • Costs to consumers: According to a study prepared by the Watson-Wyatt Group in 1998, it was conservatively estimated that SWA cost Illinois employers approximately $170 million a year in insurance costs and the legal fees alone related to defending third-party suits. These costs are passed on to Illinois consumers.
  • Workers’ right to sue already exists: Injured workers under current law have adequate remedies to pursue through Illinois’ workers’ compensation system, a no-fault remedy for workplace injuries and through common law in which workers may sue contractors for negligence.
  • No increase in worker safety: The passage of the Occupational Safety and Health Act by Congress in 1970 ushered in a new era of jobsite safety, with detailed standards and effective methods of enforcement. According to the Illinois Workers’ Compensation Commission, Illinois’ overall worker-injury rate decreased 53 percent between 1991 and 2003. The state maintains the 10th-lowest injury rate in the country.

Illinois Deserves the Truth tells another side of the story:

  • Construction work is a dangerous job. Each year in Illinois significantly more construction workers die or get injured than policemen, firemen and other public safety employees combined. Between 2005 and 2006 there were 66 construction workers deaths in Illinois compared to nine deaths of police and fire department personnel.
  • Construction worker safety is further exacerbated by the lack of oversight by the Occupational Safety and Health Administration (OSHA).
  • Notoriously understaffed and without enough resources, OSHA is utterly unable to stop even egregious violations. If OSHA were to inspect all of the Illinois construction sites at current inspection levels it would take them 121 years to complete. This statistic has not improved under the current administration as funding continues to be cut in areas like worker safety and health training and education programs.

It is important to note that injured construction workers in Illinois are still eligible to collect workers’ compensation benefits when they’re hurt on the job, regardless of what happens with the proposed Construction Safety Act. Their right to sue third parties who had some fault in their injury also is protected, even if the Act doesn’t pass.

For more information on how the repeal of the Structural Work Act has impacted construction safety in Illinois, check out the Center for Justice & Democracy study on the issue.

Building Illinois has more information on the other side of the argument – that the Construction Safety Act is a bad idea.

Tuesday, July 15, 2008

Workers’ Compensation for Work-Related Depression and Anxiety?

A United Airlines employee who was diagnosed with depression and anxiety as a result of her job was not eligible for workers’ compensation benefits, according to a recent ruling by the California Court of Appeals. Essentially, “her own behavior invited the problems she encountered,” the court ruled

The case of Verga v. Workers' Compensation Appeals Board is quite interesting:
    [The plaintiff] had some friction with her co-workers and asked her supervisor to hold a staff meeting to discuss the issues. She believed that the employees were resisting her directives and her objective at the meeting was to have her supervisor explain her authority and be harsh and direct with the others. The meeting, though, didn't go as she had planned. When the issue of respect came up, she grabbed a dictionary to look up the definition. The employees reacted …by airing their feelings that she was rude, inflexible, and a perfectionist. [The woman] later described the meeting as "the worst trial in the history of America." Shortly afterwards, she was diagnosed with anxiety and depression resulting from the trauma of negative interactions with her co-workers and supervisor--and she filed a workers' comp claim for psychiatric injury.

Saturday, July 5, 2008

Understanding How Workers’ Compensation Works

What is workers’ compensation? How did the system begin? And how does it work?

The Star-Ledger in New Jersey provides an excellent basic explanation of workers’ compensation as part of its series on how the system works and often fails injured workers.

The newspaper primer is reprinted here:

WHAT IT IS: Workers' compensation is a no-fault insurance program that pays
benefits to employees who suffer job-related injuries or illnesses.

WHO IS COVERED: Workers' comp covers every employee in New Jersey,
including those who are in the country illegally. Every state but Texas mandates
that employers provide some form of compensation insurance for their workers.

HOW IT WORKS: An injured worker files a claim and, with input or
direction from his employer or its insurer, receives medical treatment and
salary replacement until he can return to the job. If the injury is permanent,
the insurer compensates the worker for the loss.

If both sides disagree on the facts of the injury, terms of treatment or the amount of compensation, the case goes to workers' compensation court, where a judge mediates a settlement or presides over a trial and determines an award. In exchange for these benefits, the worker cannot bring a civil action against the employer for pain and
suffering or other damages, except in cases of intentional acts. Each state
devises and administers its own workers' compensation program.

CLAIMS: About 120,000 claims are filed each year by New Jersey
workers. Most are resolved quickly, but those that aren't -- roughly 40,000 a
year -- end up in comp court.

AMOUNT OF PAYMENT: Workers who are disabled, whether temporarily or permanently, receive 70 percent of the state average weekly wage for their profession, or a maximum of $732, according to 2008 rates. For partial disability, the amount depends on the type and severity of the injury.

WHO RUNS IT: The New Jersey Division of Workers'
Compensation, which is part of the state Department of Labor and Workforce
Development. Cases are heard by about 45 judges in 15 locations around the
state. Overall, the division employs 170 people with an annual budget of $23.7
million.

HISTORY: Workers' compensation traces its roots to the
Industrial Revolution in the late 1800s in the United States. As factories
multiplied, so too did the number of plant accidents and lawsuits. Cases clogged
the civil courts, and neither side benefited. Injured laborers languished
without income; employers battled costly litigation and uneven justice.
Comp systems were designed to bring both sides to a quick resolution, giving workers a stream of money, establishing uniformity in settlements and arbitration. New Jersey set up its framework in 1911. By the late 1940s, every state had workers' compensation laws.

THE BIG PLAYERS: New Jersey Manufacturers,
created by industrialists in 1913, remains the state's largest workers'
compensation insurer, with nearly a quarter of the market. Six companies follow:
Liberty Mutual, Travelers, Hartford, AIG, Zurich and Selective. Together they
represent more than half the market. About 385 other companies make up the rest.

PREMIUMS: Insurers in New Jersey collected $1.8 billion in
premiums in 2006, or $500 million more than they took in five years earlier,
according to state records.

WHO SETS THE RATES: Insurers help set their industry's premiums each year through a state agency called the Compensation Rating and Inspection Bureau. Each October, the bureau's governing committee, elected by the insurers, votes on a recommended premium rate, which must be approved by the state insurance commissioner.

Please note that workers’ compensation benefits and rules vary from state to state. But the New Jersey example provides a good overview of how things work. Consult your state’s workers’ comp board or Industrial Commission or a workers’ comp attorney to find out how things work where you live.

Tuesday, July 1, 2008

People Don’t Know Much About Disability, Workers’ Comp Benefits

Most people think that workers’ compensation and Social Security disability will protect them and provide for them if they are injured at work or become unable to work because of a disability. But that faith may be misplaced.

A new poll conducted by Harris Interactive on behalf of America's Health Insurance Plans (AHIP) reveals that “most baby boomers overestimate the breadth and depth of the public safety net available for workers who suffer a disability. Baby boomers believe public programs provide disability benefits to more people than they actually do and most overestimate the amount of benefits available.”

AHIP is using these survey results to pitch disability insurance. But that’s beside the point. This survey does highlight the difference between perceived and actual benefits available to disabled workers and injured workers under the various state workers’ compensation programs and the federal Social Security Disability system.

Among the survey findings:

  • Nearly half of baby boomers believe incorrectly that a working adult would qualify for SSDI benefits if he or she were unable to work at their current job, but could still work at another job that pays less money.
  • More than a third of baby boomers believe a worker is qualified if he or she can work no more than twenty hours a week
  • One in four say they do not know what the qualifications are. (In reality, workers are only eligible for SSDI benefits if they are unable to do any work for which they would earn $1,000 or more per month.)
  • Only one in five baby boomers correctly estimated the average monthly SSDI benefit for a disabled worker to be about $1,000 a month.
  • Eighteen percent overestimated the benefit and a significant number of baby boomers (43 percent) said they did not know how much the average monthly SSDI benefit was.
  • Many baby boomers believe people can qualify for workers' comp benefits if they suffer a disability that prevents them from working at their previous job (26 percent), forces them to work at a job that pays less than their current job (10 percent), or if they can only work part-time (9 percent).
  • 36 percent did not know how much of their current income Workers' Compensation benefits would replace and one in five surveyed overestimated benefits. (Workers’ comp generally pays about two-thirds of an injured worker's wages.)
  • 34 percent underestimated how long it takes to begin receiving Social Security disability benefits. (The current wait is about 500 days or 17 months, and many people are denied benefits repeatedly and must wait much longer before receiving any disability payments.)

A summary of survey results is available here and the survey questionnaire is also online.