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Lawsuit Against Co-Worker Not Barred By Workers Comp Law

Workers’ compensation law doesn’t bar lawsuits against co-workers alleging intentional injury, Nevada’s Supreme Court ruled in the case of a casino employee alleging her employer’s security guards assaulted her.


Fanders vs. Riverside Resort & Casino Inc. stems from alleged injuries Juana Fanders suffered when security guards were instructed by a human resources director to “86” her, or remove her from the premises, after a dispute over her conduct at work, court records show.


During the procedure, security guards tried to photograph Fanders and she resisted by climbing under a table. Fanders alleges a guard grabbed her by her hair and pulled her out from under the table while calling her a derogatory name.


She was then handcuffed and placed in a holding cell at the casino security office until a police officer arrived and cited her for battery against a guard, court records state.


Fanders sued, alleging assault and battery, vicarious liability, wrongful imprisonment and negligence. A district court granted summary judgment to her employer and the security guards finding that Nevada’s workers’ compensation law provided Fanders with an exclusive remedy because her injuries arose out of her employment.


On appeal, Nevada’s Supreme Court ruled Dec. 30, 2010, that the district court erred in granting summary judgment because several questions of fact remained regarding whether Fanders’ injuries arose out of her employment.


The high court acknowledged it had not previously addressed whether an employee “can maintain an action outside of the workers’ compensation statute against a co-employee who purportedly commits an intentional tort against the employee.”


It found that “when a plaintiff states a viable intentional tort claim against a co-employee,” that claim is not barred by workers’ compensation exclusivity provisions.


The high court also said that “even if the district court concludes that Fanders’ claims arose out of and in the course of her employment with Riverside, she may still pursue her assault and battery and wrongful imprisonment claims against the security guards.”


It remanded the case to the district court for proceedings consistent with its opinion.  


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


 


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Towers Watson Acquires Benefits Outsourcing Firm

Consulting firm Towers Watson & Co. has acquired Aliquant Corp., a health and welfare benefits outsourcing firm.


Services provided by Milford, Connecticut-based Aliquant include employee call centers, flexible spending account and COBRA administration. The company, which was founded in 1985, generated $32 million in revenue in fiscal 2010, has more than 200 employees and more than about 75 clients, with workforces ranging from 1,000 to 100,000 employees, according to a Towers Watson news release.


Terms of the deal were not disclosed. New York-based Towers Watson said the deal closed Dec. 31, 2010.


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


 


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Dear Workforce We Are at 50 Employees. How Do We Prepare For FMLA?

Dear Crossing the Threshold:

You will need to begin complying with FMLA as soon as you employ 50 or more people for at least 20 workweeks in the current or preceding calendar year. The law does not state that an organization must have 50 “eligible” employees (as in people who have worked there for 12 months). It states that organizations with 50 or more employees for at least 20 workweeks in the current or preceding calendar year must comply. If you think you will cross that threshold, you should be preparing to comply in advance of the mark.

For starters, you will need to develop your own corporate FMLA policy, taking into consideration such key questions as:

• Will your organization run FMLA, disability and workers’ compensation time concurrently?

• If your organization employs a married couple, will you allow both parents to take 12 weeks off for the birth of a child, or will you mandate that they split the leave time?

You also must develop the needed correspondence for employees who request leave, as employees who have worked for your organization for 12 or more months already are eligible and may begin taking leave.

You can find sample FMLA corporate policies, form letters, medical certification forms, posters and notification language from the Labor Department. The sooner you begin the process, the more prepared you will be to handle FMLA issues that can—and certainly will—arise.

SOURCE: Jim Brown, senior vice president of FMLASource, an affiliate of ComPsych Corp., Chicago

LEARN MORE: Organizations are struggling to adapt to frequent changes to FMLA.

Workforce Management Online, December 2010 — Register Now!

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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Va. State Workers Would Contribute 5% of Pay Under Proposal

Virginia state employees would contribute 5 percent of pay to the Virginia Retirement System, Richmond, under a proposal released Dec. 17 by Gov. Bob McDonnell.



State employees have not contributed to the $51.9 billion system since 1983, when the state agreed to cover employee costs in lieu of an employee pay raise, said Jeanne Chenault, a system spokeswoman.



Under McDonnell’s proposal, state employees would get a 3 percent salary increase and the state would increase its contribution rate to the system by 2 percent, starting July 1, 2011.



The legislation would increase total contributions to the system, which he said is underfunded by $17.6 billion, by more than $300 million a year.



“Without action now, the solvency and future viability of the entire system is at risk,” McDonnell said in prepared remarks to state lawmakers on Dec. 17. “Nearly every public and private pension plan in America requires employees to contribute something toward the cost of their retirement plan. Virginia’s approach to pensions is behind the times and economically unsustainable.”



Diana Cantor, the system’s board chairman, said in a written statement, “The VRS board of trustees welcomes the governor’s proposal to provide an increase in contribution rates, especially during these difficult economic times when state revenues are still below pre-recession levels and the future of reliable investment returns continues to be uncertain.”


Filed by Doug Halonen of Pensions & Investments, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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House Extends Health Insurance Subsidies for Some Laid-Off Workers

While there is broad support in Congress for the subsidy, it isn’t known if the Senate will act on the proposal before the session ends.


The House on Dec. 15 approved legislation that would give an 18-month extension to a federal law that provides rich health insurance premium subsidies to workers who lose their jobs due to foreign competition and older participants in failed pension plans.


Under H.R. 6517, introduced by Ways and Means Committee Chairman Rep. Sander Levin, D-Michigan, eligible beneficiaries would continue to receive through June 30, 2012, an 80 percent tax credit to partially offset the cost of health insurance coverage they purchase, such as COBRA continuation coverage.


A 2002 law created the subsidy—known as the Health Coverage Tax Credit—and set the tax credit at 65 percent. The 2009 stimulus law raised the tax credit to 80 percent.


While there is broad support in Congress for the subsidy, it isn’t known if the Senate will act on the proposal before the session ends, said Frank McArdle, a principal with Aon Hewitt Inc. in Washington.


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


 


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Wrangling Begins in Health Care Reform Lawsuit

In all, 20 states, 47 interest groups and more than 70 legislators have filed briefs with the federal district court arguing myriad positions in the case.


Opponents and supporters of the Patient Protection and Affordable Care Act squared off in a Pensacola, Florida, courtroom Dec. 16, arguing over whether Congress has the power to mandate private individuals to buy health insurance and to force states to expand their Medicaid programs.


Both provisions are critical to the reform law’s goal of expanding insurance coverage to 32 million Americans, but critics say Democrats in power overstepped their constitutional powers in trying to achieve it. In all, 20 states, 47 interest groups and more than 70 legislators have filed briefs with the federal district court arguing myriad positions in the case.


“The statute inflicts more damage on the Constitution than any other statute in American history. It threatens to warp the very key architectural elements of our constitutional system,” including undermining individual liberty and state sovereignty, said Baker Hostetler attorney David Rivkin.


Rivkin argued on behalf of Florida Attorney General Bill McCollum and the 19 other states asking U.S. District Judge Roger Vinson to strike down the reform law. Meanwhile, Ron Pollack attended the hearing as executive director of Families USA, which filed a brief in the case.


“When you heard the attorneys general from Florida and Texas, they kept on using the words ‘freedom’ and ‘liberty,’ ” Pollack said in a conference call. “There is a converse to that. There is also the freedom and liberty of people who did exercise their personal responsibility [to have insurance] and are having other people’s health care bill foisted upon them.”


In a separate case on Dec. 13, U.S. District Judge Henry Hudson of Richmond, Virginia, ruled that the insurance mandate is unconstitutional, contradicting two previous judicial decisions in other federal district courts. Experts say the case will likely be decided by the U.S. Supreme Court.


Filed by Joe Carlson of Modern Healthcare, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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High Courts Ruling on Wal-Mart Case Could Impact Future of Class-Action Lawsuits

Businesses say they hope the U.S. Supreme Court’s eventual decision in the Wal-Mart gender discrimination case will provide much-needed guidance to courts considering massive class-action lawsuits.


Observers view the court’s agreement to even consider Wal-Mart Stores Inc. vs. Betty Dukes et al. as a strong indication that it is likely to overturn the 9th U.S. Circuit Court of Appeals’ ruling on the issue, which approved a class estimated at 1.5 million members. They note that the San Francisco-based court has a particularly high rate among federal appeals courts of having its decisions overturned by the Supreme Court.


How narrow or broad a ruling the court will make remains unknown. Oral arguments are expected in the spring, with a ruling expected during the summer.


The case involves allegations that Bentonville, Arkansas-based Wal-Mart paid female employees less than males in comparable positions despite females’ higher performance ratings and seniority. The six female employees who brought the lawsuit, initially filed in 2001, also allege that women waited longer for and received fewer in-store management positions than men.


The lawsuit seeks injunctive and declaratory relief, lost pay and punitive damages. If ultimately successful, observers estimate the lawsuit could cost Wal-Mart billions of dollars.


Although the case is said to be the largest workplace class-action lawsuit ever certified, observers noted that the Supreme Court’s decision is expected to apply to class-action lawsuits of any type, not just employment cases.


In 2007, a divided three-judge panel of the 9th Circuit upheld a lower court’s 2004 ruling that granted class-action status to women who work or have worked at any of Wal-Mart’s 3,400 stores at any time since 1998.


On April 26, an en banc 9th Circuit ruled 6-5 in agreeing with the three-judge panel in upholding on technical grounds most aspects of the district court’s ruling. It concluded that the proposed plaintiffs in the case had enough in common to create a class despite varying jobs the women held—ranging from part-time, entry-level employees to full-time, salaried managers—and the thousands of sites at which they worked.


The majority remanded the case to the district court to decide whether to certify a class with respect to punitive damages. It also remanded the issue of whether the class should include women who no longer work for Wal-Mart. Defense lawters complained, though, that the decision makes it very easy to obtain class certification.


In accepting the case for review, the Supreme Court agreed to consider one question proposed by Wal-Mart in the case, and asked for briefs on another. Both relate to federal rules of civil procedure as to when class actions can be formed and address highly technical issues as to whether members of the proposed class have enough in common.


An issue the court is expected to address also includes circumstances under which class actions can be certified when punitive damages are sought.


Business groups and defense attorneys said massive class actions put unfair pressure on businesses to settle because of the inordinate expense of defending such lawsuits, while advocates say such lawsuits are necessary to pursue justice for individuals who otherwise might not be able to recruit attorneys to represent them individually because of the relatively small sum each case likely would involve.


Mark Batten, a partner with law firm Proskauer Rose in Boston, said the court could decide to uphold the 9th Circuit decision, which he considers unlikely; it could reject the 9th Circuit’s decision and decertify the case, which would reflect the law “as we all understand it right now;” or the Supreme Court could go further and “tighten up the standards for class certification beyond what everyone sees as being the law.”


“This could be a seminal decision because it’s been several years since the Supreme Court has grappled” with the issue of class-action lawsuits, and this is an opportunity to provide lower courts with “much-needed guidance,” said Felix Shafir, a lawyer with Horvitz & Levy L.L.P. in Encino, California.


“The class-action system is way out of control and something needs to be done to rein it in,” said Richard Samp, chief counsel of the Washington Legal Foundation, which submitted an amicus brief supporting Wal-Mart in the case.


Observers say the eventual decision will not address the merits of the case. The “procedural mechanisms” for how class actions can be prosecuted will be at the decision’s heart, said Gerald Maatman Jr., a partner with law firm Seyfarth Shaw in Chicago.


Observers say if the Supreme Court rejects the 9th Circuit’s stance, it may end the case without its merits being adjudicated.


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


 


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GM Spends $200 Million on Retiree Inflation Bonus; Ford $70 Million

General Motors Co. this week spent more than $200 million to pay a lump-sum inflation bonus of up to $700 to its 267,000 hourly retirees and 72,000 surviving spouses.


Ford Motor Co. expects to pay out more than $70 million next week for the same purpose.


Chrysler Group’s figure was not immediately available.


The payments were required by the master United Auto Worker contracts with the so-called Detroit 3 automakers.


Active hourly employees at GM, Ford and Chrysler won’t get inflation adjustments this year. They gave up a cost-of-living allowance this year and next as part of 2007 and 2009 contract concessions.


GM has 53,000 hourly employees and Ford has 41,000. Salaried employees at the Detroit 3 do not receive cost-of-living allowance payments. GM said this month that its 26,000 salaried employees will not receive raises in 2011 either.


The payments to GM hourly retirees were made Dec. 13, said GM spokeswoman Sherrie Childers Arb.


Hourly retirees fondly refer to the $700 inflation catch-up as “a Christmas bonus” because it comes in December every year. Surviving spouses can receive up to $455.


Dick Danjin, a retired GM employee and one-time UAW International representative, said he would have liked to see active workers get cost-of-living allowance too, in light of GM’s profits and Chrysler’s improved financial performance.


“The companies had a contractual obligation to us,” Danjin said. “It’s a shame, though, that some concessions couldn’t be made to active employees given the state of affairs at GM and Chrysler.”  


Filed by David Barkholz of Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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Obesity Can Exacerbate Workplace Injuries, Study Notes

Injuries sustained by obese workers often require substantially more medical care and are more likely to become permanent disabilities than similar injuries suffered by employees who are not obese, a study released Dec. 13 found.


How Obesity Increases the Risk of Disabling Workplace Injuries, produced by Boca Raton, Florida-based NCCI Holdings Inc., reports on differences in treatment patterns between a sample of more than 7,000 claims with obesity as a secondary diagnosis and another 20,000 claims with virtually identical demographic characteristics but lacking an obesity diagnosis.


The range of medical treatments, costs and duration are typically, but not always, greater for obese claimants, researchers found.


A look at shoulder and arm sprains, for example, found that “the obese claim is significantly more costly due to an entire range of treatments including physical therapy and complex surgery that the nonobese claim did not incur,” the report stated.


“Essentially, the nonobese claim had only an office visit, X-ray and drug treatment the day of the injury and a follow-up office visit the next day,” according to the study. “In total, the nonobese claim had four treatments, while the obese claim had more than 75. A major cost driver for the obese claim was complex surgery.”  


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


 


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New Normal for Retirement Get a Job

Middle-class Americans need more help than they realize in planning for retirement, according to the results of a survey from Wells Fargo & Co.


The study, which surveyed nearly 1,800 households with annual income of between $25,000 and $100,000, found that three-quarters of respondents are expecting to work during retirement, and two-thirds of respondents admitted to having no retirement plan in place.


As an illustration of the gap in understanding the realities of retirement, the average respondent has $31,000 in current retirement savings and estimated that he or she will need $1.5 million in order to finance their retirement.


Even with their current average retirement nest eggs so woefully underfunded, respondents generally feel that they will be able to finance at least 10 years of an anticipated 20-year retirement.


“The gap in reality shows that people are clearly not adding things up well,” said Laurie Nordquist, director of Wells Fargo institutional retirement and trust.


The point of the survey, which was conducted between Sept. 9 and Oct. 7, was to determine where middle-class Americans are in terms of retirement planning.


One of the major findings was the “new normal” of working during retirement, according to Joe Ready, director or Wells Fargo’s Institutional Retirement and Trust unit.


In studying the research across various age groups, Ready said people in their 20s are most confident of a comfortable retirement and also most realistic about having to fund their own retirement.


People in their 40s are considered to be the “most stressed” about retirement, with 60 percent expecting to work beyond the traditional retirement age.


Survey respondents in their 50s are “feeling pretty good and are very confident about retirement,” Ready said.


The biggest factor in the level of retirement-funding anxiety, Ready explained, is the availability of pension and Social Security income.


Of those surveyed, 59 percent of people in their 60s have pension income, which compares with 55 percent of people in their 50s and just 36 percent of people in their 40s.


But based on the survey findings, complacency might be a big mistake.


For people in their 50s, the median retirement savings of respondents is $29,000.
Stretched out over a 20-year retirement and assuming a 5 percent annual rate of return, that $29,000 would amount to about $190 a month.


Yet, according to the survey, 56 percent of 50-somethings said they are “confident or very confident” they will be able to fund their desired lifestyle throughout retirement.


“Too many Americans have their heads in the sand in the face of obvious savings deficits,” Nordquist said. “People are not even close to where they need to be in total savings.”


Another obvious example of the gap in understanding is the fact that 47 percent of respondents listed health care costs as being a major drag on retirement income.

Respondents expect post-retirement health care costs to total more than $30,000, which would consume everything they saved for retirement.


However, Nordquist added, even if all the numbers don’t quite add up, Americans appear to be at least embracing the idea that funding retirement is a personal responsibility.


The survey found that 71 percent of respondents are now working to reduce debt, but only 6 percent are saving more, and two-thirds of respondents have not changed their savings habits. 


Filed by Jeff Benjamin of InvestmentNews, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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