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The Florida Supreme Court has ruled in favor of a workers’ compensation claimant requesting higher attorney fees as part of her award, effectively overruling a 2003 law passed to limit attorney fees in such cases.

Insurance industry observers lamented the decision and said it likely would drive up workers’ compensation premiums.

In overruling the state’s 1st District Court of Appeal, the Supreme Court found in Murray v. Mariners Health/ACE USA that awarding attorney fees based strictly on a formula in Florida law limiting the fees to a percentage of the settlement sometimes results in unreasonably low attorney fees. One example is cases where the benefits awarded are small but the legal issues involved are complex, meaning the claimant must hire an experienced attorney to perform substantial work; a percentage-based approach would produce inadequate fees for the attorney, the court said.

The Murray case represents such a case, the court found.

Emma Murray was a nursing assistant who was injured while lifting a patient. She suffered a uterine prolapse and eventually had to have a hysterectomy. Mariner Health and ACE USA initially denied benefits, but lost in court. The question of how much the insurer should pay Murray for attorney fees also went to court, centering on revisions to workers’ compensation law that the Florida Legislature passed in 2003. That legislation eliminated hourly attorney fees, requiring attorneys’ compensation be a percentage of the award.

Proponents say that hourly attorney fees are abused by lawyers who drag out cases to increase their pay, driving up systemwide costs. The cost of litigated claims was 40 percent higher in Florida than other states before the 2003 changes, according to the American Insurance Association.

Critics argue that the changes leave some workers’ compensation claimants unable to obtain adequate representation in cases in which the insurer wrongfully denies benefits, because the legal complexities require an experienced attorney, but the percentage-based formula eliminates the possibility of recovering adequate compensation for lawyers.

In the Murray case, the formula dictated that the insurers pay the claimant $684 for attorney fees, which amounts to about $8 per hour. Experts testified that attorneys for such cases in that region typically charge $200 per hour, the court said. Mariners Health and ACE USA paid their attorney a little over $16,000 at a rate of $125 per hour.

The Supreme Court ordered the respondents to pay Murray $16,000 for attorney fees, amounting to a $200-per-hour rate.

The high court did not rule that the 2003 statute was unconstitutional, as Murray alleged. Rather, the court found that the 2003 statute created an ambiguity by simultaneously calling for “reasonable” attorney fees and requiring the use of a formula that in some cases produced an unreasonable result. The court essentially ignored the required formula—because it would render the provision for “reasonable” fees meaningless, it said—in deciding attorney fees in the Murray case.

In a statement, American Insurance Association officials criticized the decision and said it would lead to an inevitable rise in workers’ compensation premiums.

“The 2003 legislative reforms rescued what was a failing workers’ comp system,” Cecil Pearce, the association’s Southeast region VP, said in the statement. “Today’s decision in Murray vs. Mariners Health/ACE USA is an unfortunate setback for a workers’ comp system that has seen significant improvement since 2003, including rate reductions of over 50 percent for Florida businesses.”

Filed by Zack Phillips of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce com.

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The Golden Gate Restaurant Association filed a petition October 22 with the 9th U.S. Circuit Court of Appeals seeking a rehearing by the full court of last month’s decision by a three-judge panel that approved San Francisco’s health care spending mandate, said the association’s executive director, Kevin Westlye.

Under the San Francisco ordinance, which went into effect in January, employers in the city must contribute to health care coverage to avoid fines.

The unanimous three-judge panel had ruled that the ordinance does not conflict with the Employee Retirement Income Security Act, which pre-empts state and local regulations that relate to employee benefit plans. The panel reasoned that the spending law does not “create an employee welfare plan.”

Filed by Judy Greenwald of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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North Carolina Insurance Commissioner Jim Long announced Tuesday, October 28, that he had approved a 4.4 percent workers’ compensation voluntary market rate decrease effective April 1.

He also approved a 3.8 percent rate decrease for the assigned risk market.

The decrease will save North Carolina employers about $65.5 million, the commissioner said in a statement. The average rate in the voluntary market is now about 2.17 percent of payroll.

Filed by Roberto Ceniceros of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Florida Insurance Commissioner Kevin McCarty on Tuesday, October 28, approved an 18.6 percent workers’ compensation rate reduction effective January 1. (California and North Carolina have also recently approved comp-rate changes.)

The reduction will produce an estimated savings of more than $610 million for Florida employers, the commissioner said in a statement. It marks the sixth consecutive rate drop since 2003, when Florida lawmakers adopted sweeping workers’ comp reforms that have since reduced rates by more than 60 percent.

McCarty said employers could eventually face rate increases as a result of an October 23 Florida Supreme Court decision in the case of Murray v. Mariner. That ruling rejected certain attorney-fee limitations in the workers’ comp system. A reduction of those fees has been cited as one of the significant causes of rate declines, the commissioner said.

Filed by Roberto Ceniceros of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Motorola Inc. will cut 3,000 jobs, or about 5 percent of its workforce, co-CEO Greg Brown told Crain’s Chicago Business on Thursday, October 30, after the company reported earnings.

News of the layoffs comes as Schaumburg, Illinois, based-Motorola tries to trim $800 million in costs next year, including $600 million from its money-losing phone business.

About 2,000 of the job cuts will come from its mobile-devices business, which continues to see sales shrink. Its market share slipped below 9 percent in the third quarter, Strategy Analytics said, and Motorola fell to No. 4 behind Sony Ericsson, Samsung Electronics and Nokia Oyj in worldwide mobile phone sales. Motorola had been No. 2 until a year ago.

Motorola also announced that it was delaying the planned breakup of the company because of credit-market turmoil and a decision to overhaul its phone lineup that would cause the slumping business to shrink even more.

The company had been expecting to split itself into two public companies by next October. It offered no new target date but says it still plans to pursue a spinoff.

Thursday, the company reported a net loss of $397 million, or 18 cents a share, compared with a profit of $40 million, or 3 cents a share, in the year-earlier quarter. The latest quarter included charges of 23 cents a share for items such as asset impairments and business reorganization. Revenue fell 15 percent, to $7.48 billion.

Motorola’s stock closed down 27 cents, or almost 5 percent, at $5.19 Thursday.

Sanjay Jha, who joined Motorola as CEO of its handset business in August, has decided to simplify the company’s expensive and unwieldy product strategy by slashing the number of software and chip families in the company’s phones.

Brown said that he and Jha made the decision to delay the breakup of the company, but it was approved by the board of directors. However, he says there was no discussion of abandoning the spinoff, which some analysts have suggested.

“It was more about timing,” said Brown, adding that investors he’s spoken with have supported the delay.

“Investors realize importance of stability and cash and earnings,” Brown said. “The overall sentiment from investors is one of pragmatism and understanding.”

It will be hard to spin off the handset division as long as it’s losing money, and Jha declined to predict when the division will stop losing money.

Jha said the company would cut the number of software platforms by half to just three: Microsoft’s Windows, the new Google-led Android system and P2K, which Motorola developed several years ago. And it plans to use chips from Qualcomm and Texas Instruments and move away from its former in-house chip unit, Freescale Semiconductor.

As part of the software changes, the company will open a development center in Seattle, likely shifting some jobs out of state.

The streamlining was widely expected and has been advocated by analysts for years. But it will further delay Motorola’s recovery and cause it to fall further behind competitors.

The company’s market share will continue to slide because the company will have to scrap several new phones that were supposed to hit the market in 2009.

The company says its phone shipments will decline in the fourth quarter, which usually produces an increase because of holiday spending. Underscoring the company’s competitive disadvantage, Motorola won’t have any new smart phones, the hottest part of the market, on store shelves until the second half of 2009 to compete with Apple’s iPhone and a host of other new products.

Filed by John Pletz of Crain’s Chicago Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Fusion, business software giant Oracle’s project to blend the best of its various product lines into a new set of applications, once was the buzz of the industry.

But now, nearly four years after Oracle unveiled its Fusion plan for HR and other applications, the effort is met more with murmurs than shouts.

Oracle’s schedule for Fusion applications appears to have slipped, and it’s still not clear when a full set of human resources Fusion products will be released. But Oracle has dodged any large-scale revolt from its customers conceringthe Fusion confusion, in part by focusing on improvements to its existing Oracle E-Business Suite and PeopleSoft products.

In addition, many organizations are still figuring out how to make their HR operations more strategic, which limits their ability to consume a lot of advanced capabilities in HR software, says Christa Degnan Manning, analyst at AMR Research. At the same time, she says, the late arrival of full-blown Fusion helps Oracle sell its existing products for a longer period as well as pitch the few Fusion applications that are coming online, such as a tool for managing job candidates.

Deemphasizing Fusion, in other words, may be smart for Oracle.

“It’s potentially in their best interest to have a slow, gradual rollout of Fusion,” she says.

Three years on the drawingboard
Oracle first announced plans for Fusion in early 2005, soon after the company acquired rival software maker PeopleSoft and its line of business applications. In 2005, an Oracle official told Workforce Managementi> that heavily used human resource applications including payroll, benefits management and recruiting would be rolled out in 2008.

But more recently, Oracle has been less definite about its plans for Fusion. Oracle declined to answer questions for this story, including a question about when the full set of HR Fusion applications will be released.

One sign of Fusion’s subdued status is Oracle’s Fusion applications Web site . Rather than begin by focusing on attributes of Fusion applications or heralding their arrival, the site’s “overview” starts by discussing the company’s “applications unlimited” program. That’s Oracle’s promises to continue upgrading its current product lines, including the PeopleSoft, Siebel and Oracle E-Business Suite lines.

Jim Holincheck, analyst with research firm Gartner, attended Oracle’s recent OpenWorld user conference in San Francisco and concluded that the complete set of Fusion applications isn’t coming immediately. “There will be no suite of Oracle Fusion Applications delivered in 2008,” Holincheck wrote in a blog item about the conference .

When it first announced the Fusion project, Oracle said the new applications would be built using “open standards.” This refers to technologies designed to make it simpler for different applications to talk to one another. During the past few years, Oracle also has highlighted “Fusion Middleware,” which is a layer of software for tying applications together.

Last year, Oracle officials outlined certain features of the coming Fusion applications. These included “software as a service” readiness—meaning the applications can be delivered over the Internet besides being installed on a customer’s internal computers.

Software as a service is one of the trends that have come on strong in the HR technology arena in recent years.

Another is “Web 2.0,” the idea that social networking and other collaborative, interactive tools first seen in the consumer Internet world ought to be tapped by corporations. Oracle sought to capitalize on that trend with its recent announcement of software dubbed Beehive. Introduced at Oracle’s September OpenWorld event, Beehive aims to let employees team up through electronic workspaces as well as calendar, instant messaging and e-mail tools.

Web 2.0 influence also could be seen at a conference session on Fusion, according to Degnan Manning. She says an Oracle feature called “person gallery” provides an organization-chart view of a company, with visual representations of employees.

The software allows for a description of an employee’s status, such as working at home. Along these lines, consumer instant messaging programs like Yahoo Messenger let users set their status.

In developing its Fusion applications, Degnan Manning says, Oracle seems to be focusing in on managers and employees—who ultimately do the work of an organization. Fusion applications initially may not cover the traditional HR processes.

But, she says, “is what they have compelling? Yes.”

Orancle vulnerable?
Holincheck says Oracle’s less-than-speedy pace with Fusion potentially makes the firm vulnerable to competitors, including Workday.

Workday, led by former PeopleSoft founder Dave Duffield, has produced a set of software-as-a-service business applications designed to give organizations fewer technology hassles and greater business agility.

In addition, the uncertainty around the arrival of Fusion applications makes it harder for Oracle customers to plan for their HR technology, Holincheck says. But customers seem to be more interested in learning about coming versions of PeopleSoft and Oracle E-Business software, he says.

The absence of Fusion applications, he argues, may be more a molehill than a mountain.

“For existing customers, I don’t think it’s terribly frustrating,” Holincheck says.

Jason Corsello, a vice president at consulting firm Knowledge Infusion whose blog is featured on Workforce.com, takes a more critical view.

“Many enterprise clients I have spoken to over the past 3+ years have had a postponement (or ‘do nothing’) strategy in place, anticipating Fusion,” Corsello wrote in a recent blog item. “Thankful for me, I don’t have to make any of these decisions because I don’t own an Oracle application. For many, though, I would argue their Oracle application assets are quickly turning into liabilities because of the undelivered Fusion promise!”

Still, Corsello concedes Oracle’s strategy has been good for the firm.

One comment to his blog argued that Oracle is wise to take it slow with Fusion, in part because of Oracle’s “huge cash cows” of annual software maintenance fees and “a relatively happy, contented” PeopleSoft client base. Corsello responded in part by saying that Oracle is “smart enough to know they have a committed customer base (note I did not mention satisfied)!”

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Dear Reliable Info Needed:

My experience is that running a quick-and-dirty survey will give you quick-and-dirty results. Employees will give you what they want (or what they think they want) instead of what the organization needs. When time is tight and supervisors are pushing them to “get the job done,” only the brave and underutilized employees wind up attending. An all-too-common gripe is: “We organized what employees asked for, but then nobody turned up.”

If this approach has worked for you in the past—or you have lots of idle money looking for a change of hands—then use the employee survey approach. Another approach that will get to the real needs, however, is to sit down with supervisors and managers (individually or in a group meeting) to identify the burning skill deficiencies that are holding your organization back.

To structure the discussion, spend time discussing (1) current operational issues and (2) future strategic directions. You should end up with a list of needs in one or more of the following areas:

• Management, leadership and supervision skills.
  
• Soft skills, such as communication and conflict resolution.
  
• Regulatory compliance, such as environment, health and safety.
  
• HR processes, such as performance management.
  
• Business skills, such as strategy, planning and process improvement.
  
• Technical line and staff skills, such as telephone etiquette and inventory management.
  

You can make sure that training fills a real need by getting together with managers and engaging in a two-way dialogue. Surveying employees or their managers is one-way communication, and the time they spend on the survey will be the quick five minutes available between other more “important” jobs.

SOURCE: Les Allan, Business Performance, Melbourne, Australia, July 22, 2008

LEARN MORE: The Workforce.com archive contains tips and other information on how to analyze training needs, including tying training to business goals.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

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American Express has unveiled a broad restructuring aimed at saving the financial services company more than $1.8 billion next year, with the bulk of the savings coming from cutting investment in technology and distribution.

Specifically, officials said Thursday, October 30, that the company would scale back its investments in technology, marketing, business development and its rewards program by roughly $1 billion next year, areas that appear to account for a portion of the company’s largest current expenses.

For the nine months ended September 30, American Express reported collective expenses of about $5.7 billion in its marketing, promotion, rewards and card-member services, according to its third-quarter filing. That’s up roughly 10 percent over the first nine months of 2007, and makes up about 40 percent of the company’s total $14.1 billion in expenses so far this year. Overall, total costs at American Express are up 8 percent this year over the first three quarters of 2007.

The cuts will “put us in a position to ramp up spending as economic conditions improve so that we can take advantage of the substantial opportunities that will be available to us over the medium to long term,” Kenneth Chenault, chairman and CEO, said in a statement.

American Express, which announced in July that it was prepping for this restructuring, will also cut its workforce by roughly 7,000 employees, or 10 percent, officials said Thursday. While they stated that the cuts would occur across various business units, positions that are “primarily focusing on management and other positions that do not interact directly with customers” will be most affected by the reductions. Likewise, management officials who are retained will have their salary increase suspended next year, and the company will also put a freeze on hiring plans for any available positions. In total, all of these moves aim to save American Express roughly $700 million next year.

American Express will also reduce its spending by $125 million on consulting and professional services, travel and entertainment, and general overhead. Professional-services expenses were $1.7 billion for the first nine months of the year, up 8 percent for the same period in 2007.

Filed by Mark Bruno of Financial Week, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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A generation after federal civil rights laws were amended to prohibit pregnancy discrimination—and despite efforts to make the workplace more flexible—having a family can knock women out of jobs and promotions, according to a new study by a Washington advocacy group.

An analysis of Equal Employment Opportunity Commission data from fiscal year 1992 to fiscal year 2007 shows a 65 percent increase in pregnancy discrimination charges, according to a National Partnership for Women and Families study released Wednesday, October 29.

The problem is more acute for racial and ethnic minorities, the study says. From fiscal year 1996 to fiscal year 2005, pregnancy discrimination charges filed by women of color spiked 76 percent.

The survey also reveals that there is no safety in numbers for women. Of the EEOC claims made from 1996 to 2005, 53 percent were from the service, retail and financial services industries, which employ 70 percent of all women.

“As a statistical matter, factors such as the number of women working, the number of working women having children, how long women work while pregnant, and when women return to work after pregnancy have grown at a slower pace than the growth of pregnancy discrimination complaints,” the report says.

The study was issued on the anniversary of the Pregnancy Discrimination Act. Approved in 1978, the act prohibits discrimination on the basis of pregnancy, childbirth or related medical conditions.

Since then, societal biases about the work ethic, skills and commitment of pregnant women have not changed, according to advocates.

“Deeply entrenched attitudes still persist, and we have not been able to eliminate the biases that nurture them,” said Jocelyn Frye, general counsel at the partnership.

More than 50 percent of pregnancy discrimination cases involve unfair dismissal, according to Elizabeth Grossman, a regional attorney in the EEOC’s New York district office.

“It’s just shocking,” she said.

The problem thrives because people don’t have the inhibitions about commenting on pregnancy that they do when it comes to making remarks about race, said Grossman. “The stereotypes are still there, and they remain more unchecked than stereotypes about other groups,” she said.

A 2007 study showed that undergraduates who wore a pregnancy prosthesis and tried to apply for jobs at retail stores were treated harshly, while “pregnant” students who sought help buying a gift were welcomed, according to Eden King, assistant professor of industrial and organization psychology at George Mason University.

“We see these complementary interpersonal punishments and rewards that maintain traditional gender roles,” King said.

Frye recommends a nationwide education campaign to change the workplace atmosphere. She urges companies to explicitly prohibit pregnancy discrimination in their policies.

They also should clearly communicate performance expectations and evaluations. “It eliminates the possibility that pregnancy is the reason motivating any employment decision,” Frye said.

Most companies are trying to keep women in the workforce because it produces positive bottom-line results, according to Rachel Lyons, director of public policy at Business and Professional Women/USA.

“Having family friendly policies is good for business,” Lyons said.

—Mark Schoeff Jr.

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1. Seasonally adjusted. 2. Cutting 25 percent or 5,000 white-collar jobs; 1,825 factory jobs. Some corporate cuts shown are worldwide and will be made over extended period. Sources: Bureau of Labor Statistics; news reports; Bloomberg (unemployment forecast.)
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