Category: Compliance

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Nontraditional Perks Paying Off for Forward-Thinking Employers

Employees of Domino’s Pizza Inc. enjoy some unusual benefits, in addition to discounts for a large cheese and pepperoni pizza.

Among the innovative benefits offered by the Ann Arbor, Michigan-based pizza chain are Pie Perks, which provide discounts on everything from oil changes to high-definition TVs at various retailers nationwide. There’s also an extensive wellness program designed to increase employee engagement.

 

Additionally, Domino’s 12,000 corporate employees receive holiday gift boxes, can access adoption assistance programs, are treated to extended time off during holidays and participate in a bonus program.

“Every team member participates in some type of bonus plan,” says Joe Abraham, Domino’s vice president of Total Rewards & Shared Services. “This links with our high-performance culture, and we see a very high return on investment in these programs.”

Nontraditional benefits are playing a bigger role as employers look to add staff and retain key talent, says Carol Sladek, a principal with Aon Hewitt, who helps clients implement work-life solutions. The perks often are inexpensive and help boost spirits in the workplace.

“When an employee wants to add a benefit, or benefits, they are usually addressing a particular problem or opportunity, such as productivity, absenteeism or talent management,” says Sladek, who is based in Lincolnshire, Illinois. “Many of the solutions for these issues come in the form of nontraditional benefits programs that are low-cost and high-value.”

Sladek says her group often works with employers to enrich traditional benefits programs, such as paid time off. That includes pooled time off, which employees can gift to each other, or sabbatical programs.

“The key is to marry the business needs of the organization with the needs of the workforce,” she says. “Traditional benefits may not be suited for a diverse workforce, and that’s where you can expand upon what you have to meet the needs of the group.”

Sladek believes flexible working arrangements and telecommuting programs that give employees more control over their time are highly valued and yet are inexpensive while providing a benefit for the organization, such as more coverage in the morning or at night.

“We see a wide range of programs that help employees manage their time, such as flex time to on-site cafeterias and day care, fitness classes, dry cleaning and car washing services,” she says. “Some of these programs cost little or nothing, while some require a significant investment, however, helping employees save time during their workday can be a win-win for everyone.”

One employer, Oklahoma City, Okla.-based American Fidelity Assurance Co., has benefited from an extensive flex time and telecommuting program.

“We have a family-oriented environment and wanted to find a way to help colleagues balance work and life,” says Heather Henshall, human resources specialist and project coordinator. Henshall says the majority of the insurance firm’s 1,490 employees are women who are balancing work with family.

Henshall says 48 percent of the workforce takes advantage of flex-work arrangements, starting work earlier or later, which allows the insurer to staff its call center longer without incurring overtime.

About 40 percent of its employees telecommute, working from home one to five days a week, Henshall says. Employees who want to telecommute receive extensive training on everything from expectations and guidelines to information technology so they can troubleshoot computer issues on their own.

Chris Morris, a marketing consultant for Benefit Communications Inc. in Nashville, Tennessee, says many of the nontraditional benefits he sees being used by his clients focus on wellness, on-site gyms and cafeterias.

“In this case, the employer is usually trying to drive a behavior change geared toward a healthier lifestyle,” Morris says.

One client has an on-site cafeteria that offers low-cost, healthy meals. Another client runs a call center in Nashville that rewards employees with a break room that has games, including a Wii. And yet another has an on-site health clinic designed to increase employees’ use of health assessments while decreasing time away from the office for doctor’s appointments.

Morris says the increase in nontraditional, often low-cost employee benefits can have a tremendous impact on employee morale, well-being and loyalty.

“However, there needs to be an incentive to use a program, or you won’t see participation … or change,” he says.

Several years ago, Minneapolis-based accounting firm Lurie Besikoff Lapidus & Co. decided to make life more bearable during the tax season for its 120 employees.

“We started bringing in catered meals for lunch and dinner so employees can have time to eat and relax instead of running out,” says Tom Morin, human resources manager. “We now have ‘chocolate Fridays,’ Wii tournaments, on-site massages, drawings for housecleaning services, and have even created survival kits with healthy snacks and wellness products. Anything to lighten the mood and give everyone a break, because we are working six or seven days a week during our busy season.”

Morin says that in addition to traditional benefits, his firm has a flexible schedule program, pays $100 for each year of service toward a dependent child’s college education and offers bonuses to employees who bring in new business.

Another employer trying to “lighten the load” for its employees is San Diego-based ACI Specialty Benefits, which offers work life, wellness and concierge services to employers. Employees, many of whom tackle challenging issues in the call center, can take advantage of a Zen room, complete with a massage chair, lavender-filled eye compresses, and calming music and yoga classes.

“Our goal is to increase retention, because call centers have a high turnover,” says chief administrative officer and head of human resources Gilbert Manzano. “We try to keep our environment fun, with wellness warrior team challenges, and teams that compete on fitness and weight-loss goals. We believe happy and healthy employees are good for business.”

Workforce Management Online, July 2011 — Register Now!

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OSHA Wins Workers Compensation Case Fight

Aruling compelling an insurer to provide safety inspection reports and other documents to a federal agency related to a fatal grain-bin accident could chill employers’ relations with their workers’ compensation insurers.


In the case, Hilda L. Solis v. Grinnell Mutual Reinsurance Co., U.S. District Court Judge Philip Reinhard upheld a magistrate’s recommendation to require the workers’ compensation insurer to testify and present documents concerning inspections and reports that it had prepared for Haasbach, a grain bin company.


The case stems from the death of two teens last July when they were engulfed in grain 30 feet deep at Haasbach’s Mount Carroll, Illinois, site.


The U.S. Labor Department’s Occupational Safety and Health Administration said the teens, plus a third worker who was injured, were directed to engage in the banned practice of “walking down the corn,” or walking on moving grain in a storage bin while a conveyor system evacuated the grain from the bottom.


When one teen began sinking into the corn, the other tried to help, but both became engulfed, according to OSHA.


OSHA, which said the victims did not receive safety training nor did the company provide protective equipment, subpoenaed the insurer seeking more information. While Grinnell objected, the Rockford, Illinois, federal judge ruled May 2 that it must comply with the subpoena.


“The subpoena for records and inspection documents is a tool that is in OSHA’s arsenal, and they use it from time to time,” said Philadelphia-based attorney and shareholder Ben Huggett of the law firm Littler Mendelson, who represents employers in labor- and OSHA-related matters. “What this order of enforcement highlights is that OSHA is aware there are communications between the insurer and insured and that those communications are not privileged—they are not confidential or protected information.”


Grinnell argued that enforcing the OSHA subpoena would have a “chilling effect” of discouraging businesses from allowing insurers to conduct safety inspections if the resulting reports can be used against the businesses during litigation or enforcement proceedings.


Huggett agreed. Employers and insurers will have “chilled” discussions, knowing that records of such discussions and inspections could be used against them.


“I tell employers to carefully consider the insurer’s inspections and recommendations,” Huggett said. “The employer needs to address those recommendations in one form or another. They can either accept them or make a compromise on what has been suggested, but employers need to address them in some way and be aware that a document is being created.”


The Iowa-based insurer must provide to OSHA documents and reports from March 12, 2008, through June 23, 2010, according to the court order.


Grinnell’s general counsel, Dennis Day, said the company will comply with the order and will not appeal, but it will attempt to keep certain materials from being made public.

“The court affirmed OSHA’s authority to obtain relevant information from an employer’s workers’ compensation insurance company,” OSHA assistant secretary David Michaels said in a written statement. “This is not surprising legally, but it does illustrate that workers’ compensation and OSHA are not separate worlds divorced from each other.”


After an investigation, OSHA issued 25 citations to Haasbach and fined the company $555,000. Since then, OSHA has conducted 61 inspections of grain operations in Illinois, Ohio and Wisconsin and has issued 163 violations.


Workforce Management Online, June 2011 — Register Now!

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Living Wage Backers Storm City Hall in New York

Proponents of a bill to mandate higher wages at city-subsidized projects took to the streets on May 12 to call for its passage and to protest a city-funded study that found the measure would stifle development and job growth.


The City Hall Park rally, attended by several hundred people, including dozens of pastors, preceded a City Council hearing on the bill that was expected to last late into the afternoon. Protestors carried signs pressing for a “living wage” and accusing its opponents of “putting New Yorkers to work for less.” The latter sign mocked Putting New Yorkers to Work, a not-for-profit group established by the Real Estate Board of New York that has led opposition to the bill.


“When companies and developers benefit from government support, they should provide something in return—jobs that allow people to live in dignity, not jobs that keep people in poverty,” Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union, told the crowd.


Appelbaum has organized a citywide movement of religious, community and labor groups in support of the bill. Before proceeding into the hearing, the pastors led the demonstrators in a prayer and 250 people walked silently around the block housing the council’s offices at 250 Broadway.


The bill, which would compel employers at projects that receive $100,000 or more in city subsidies to pay workers $10 an hour plus benefits or $11.50 without benefits, was expected to draw passionate testimony from supporters and opponents.


Tokumbo Shobowale, chief of staff in the office of the deputy mayor for economic development, planned to testify on the findings of the city-funded study, details of which were released earlier this week. His prepared testimony called for him to say that wage mandates would hinder development and result in tens of thousands of jobs lost and billions of dollars of lost private investment over the next 20 years.


The job loss and disinvestment would occur disproportionately in neighborhoods outside Manhattan and could potentially prevent some two dozen projects—including the World Trade Center, Coney Island and Atlantic Yards—from going forward, his prepared testimony said.


Other opponents, including groups representing small-business owners, supermarket operators, and affordable housing developers, were expected to testify. Joal Savino, executive vice president of Mercedes Distribution Center, a Brooklyn Navy Yard business that fulfills orders for e-commerce sites, planned to testify that the bill would “make it more difficult and more expensive” to run his business in the city.


“Mercedes does not receive any direct financial incentives from the city and in fact pays market rents in the Navy Yard,” he was prepared to tell the council. “Yet, we would be impacted by the legislation because it covers tenants of entities like the Brooklyn Navy Yard, which do receive financial assistance from the city.”


And Pat Brodhagen, vice president of the Food Industry Alliance of New York State, was prepared to tell council members that the bill would mean the end of the city’s FRESH program, which was designed to bring supermarkets into underserved neighborhoods.


“The zoning and financial incentives included in FRESH were crafted to address some of the barriers that inhibit new store development and renovation, and happily, there are now 10 projects in the pipeline,” her prepared testimony read. “The benefit of those incentives will be wiped out if 251-A becomes law, depriving underserved communities of new and/improved food stores and depriving residents of needed job opportunities.”


But not all business groups are opposed to the bill. Mark Jaffe, president of the Greater New York Chamber of Commerce, spoke at the rally and was scheduled to testify in favor of the measure. He conducted a survey of his group’s 2,000 members and found 90 percent of respondents said the city should “absolutely not” provide subsidies to companies that do not pay a living wage.


“Now is the time for New York City to take a close look at the true cost of all developments that are subsidized by taxpayer money,” he said. “Otherwise New York City will continue to face growth in working poverty.”


Four panels of 20 bill proponents were expected to testify, many of whom planned to offer analysis of the city-funded living wage study. John Petro, a senior policy analyst at the Drum Major Institute, a think tank focused on building the middle class, planned to testify that more than half of all jobs created in the city during the recovery have been in the two lowest-paid industries: retail and hospitality.


“These low-paying jobs are having no trouble being created,” his prepared testimony read. “Why would we spend additional city resources to create more of them? Why not think of a better use of the city’s economic development resources?”


Also, a group of 13 liberal economists and experts released a report May 12 charging the city study contained “basic errors” that render it “unreliable as a guide for policymakers in assessing the merits of the proposed living wage law.”


The report claimed the study was based on a tax abatement program that is not covered under the law in order to get a result that showed more projects would be killed and more jobs lost. It said the study’s labor market analysis was too broad—that its focus detects unrelated trends that are occurring in municipal and regional labor markets and wrongly attributes them to living-wage policies.


Critics said the analysis should have focused on the results of individual projects that have wage mandates attached to them, including ones here and in Los Angeles.
Councilman Brad Lander, who helped draft the report, called the study a “$1 million piece of propaganda.”


A spokesman for the city Economic Development Corp. disagreed, saying the analysis was relevant because smaller subsidies offered under the Industrial and Commercial Abatement Program are covered under the bill, as are other incentives such as J-51 abatements for developers, and various subsidies for small manufacturers and city leases.


“Even if it were excluded, as it seems like the proponents are now proposing, both the labor and real estate analyses would still show tens of thousands of jobs lost and a significant fall-off in private investment as a result of the legislation,” the spokesman said.


Filed by Daniel Massey of Crain’s New York Business, a sister publication of Workforce Management. To comment, email editors@workforce.com.


 


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Worker’s Death En Route to Conference Compensable

A landscape manager was within the “course and scope of his employment” when he died en route to pick up a co-worker to attend a leadership conference, a Texas appeals court found.

The March 30 ruling by the 3rd District Court of Appeals in Texas in Zurich American Insurance Co. v. Chantal McVey upholds a lower court’s decision rejecting Zurich’s argument that Troy McVey’s beneficiary was not entitled to workers’ compensation benefits because he was not acting in the course and scope of his employment when he died in an auto accident.

On the day of the accident, McVey was driving a company-owned truck he regularly used to perform his work. He was scheduled to attend his employer’s leadership conference and planned to pick up the co-worker, who also was required to attend the event and lived near McVey’s route to the company gathering, court records show.

Court records also state that the employer “emphasized policies that its employees should be efficient when making company-funded travel and made employees subject to dismissal for repeated perceived abuses.”

Zurich’s arguments suggested that McVey essentially was engaged in “an everyday trip to work,” court records state.

But the appeals court found that a “coming-and-going” rule that bars benefits for accidents while traveling to work does not apply in this case. It said McVey was engaged in travel that furthered his employer’s business. Therefore, his death is compensable, the court said.  

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

 

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Chambers in New York Target Living Wage Bill

The business coalition that killed paid sick-days legislation last year has now set its sights on defeating a proposal that would require jobs resulting from city-subsidized projects to pay at least $10 an hour, plus benefits.


The 5 Boro Chamber Alliance, which formed in 2009 to fight the sick days measure, is meeting next week to orchestrate opposition to the Fair Wages for New Yorkers Act, which would require employers at projects that received $100,000 or more in subsidies to pay a living wage.


Plans are in the works to request meetings with City Council Speaker Christine Quinn, who has yet to take a position on the measure, and the bill’s sponsors to outline small business’ stance. The group convinced Quinn last year that the sick days bill would have devastated small businesses.


“We just had paid sick days, now it’s living wage,” said Nancy Ploeger, president of the Manhattan Chamber of Commerce, which is a member of the alliance. “They just keep trying to put burdens on the backs of small business.”


The planned opposition comes even as a revised version of the bill, obtained by Crain’s, carves out small businesses with revenues less than $1 million per year, as proponents had earlier promised.


“Small businesses have already been exempted from the bill,” said Councilman Oliver Koppell, its lead sponsor. “The tenants of subsidized projects will be large businesses. There is nothing for anyone to fear here.”


But Ploeger contends the $1 million or less revenue threshold is an arbitrary one that will prevent many small firms from moving into subsidized locations. “You can’t always go by revenue,” she said. “$1 million doesn’t mean it’s a big business.”


A source with direct knowledge of how the $1 million threshold was determined said it was loosely based on the federal Fair Labor Standards Act, which exempts many businesses with $500,000 in revenue or less.


Ploeger said the group’s opposition to the bill wasn’t just based on the terms of the small business carve out. If the bill passes, she said it could make it easier for government to institute prevailing wage mandates and intervene in other ways that could make life tougher for businesses. “It’s not just this one issue,” she added.


“It’s odd that opponents object to the law because they fear government intervention,” said John Petro, an urban policy analyst at the liberal public Drum Major Institute think tank. “We’re talking about government-led economic development projects here, the very definition of government intervention.”


The bill, which was introduced at the request of Bronx Borough President Ruben Diaz Jr., has 29 sponsors, five short of the supermajority needed to override a certain veto by Mayor Michael Bloomberg.


Bloomberg administration officials have consistently argued that tying wage requirements to subsidies would squash development. The city’s Economic Development Corp. retained a Boston-based consulting firm to conduct a $1 million study on the feasibility of wage mandates. That study is expected to be released in the next few weeks, before the City Council holds a hearing on the bill in April.


In addition to formulating opposition to the living wage bill, members of the alliance will discuss development of a proactive agenda so that the group is not always reacting to bills seen as harmful to business, Ploeger said.  


Filed by Daniel Massey of Crain’s New York Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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Not-for-Profits Woo Veteran Executives

When IFF began its search for a chief financial officer, it posted the position on its website and online sites geared to not-for-profits. Because those postings didn’t yield the right talent, the organization hired an executive search firm.


The headhunter connected the Chicago-based not-for-profit, which focuses on providing loans and real estate consulting to other not-for-profits, with Lloyd Shields, the former CFO at JPMorgan Chase & Co.’s corporate real estate and security group. He found the IFF position to be the perfect fit. It was one of two offers the 60-year-old received during his 19-month-long job search. “I knew this was going to be more of a challenge” than the other one, he says. “That’s what I was looking for.”


As executives are laid off or choose to leave the corporate world, not-for-profit organizations are taking advantage of a rare opportunity to snap up some of the best talent to be had.


“Nonprofits need to be more aware of bringing in the best possible business skills they can get and afford,” says Trinita Logue, founder and president of IFF—formerly known as the Illinois Facilities Fund—the largest community development financial institution exclusively serving not-for-profits in the Midwest. “There are literally thousands of very experienced people who still want to work and still want to make a contribution. They’re not ready to stop working. The nonprofit sector can benefit from them.”


Shields, who spent 34 years working for JPMorgan Chase and its predecessor companies, was floored when his position was moved to New York from Chicago. He ultimately decided not to relocate. Like many other baby boomers, he knew finding a new job would be a challenge, but he didn’t expect it to take so long.


While the 6.9 percent unemployment rate for the 55-plus cohort is lower than the overall national rate of 9.4 percent, the growth in the percentage of older jobless people has been higher than for other age groups, and older people tend to be shut out of the workforce for longer periods.


Like Shields, the graying unemployed may find their best hope lies in not-for-profits. Many leaders of such organizations are starting to reach retirement age. At the same time, some not-for-profits are seeing growth and the need for senior-level executives, says Wayne Luke, partner and head of executive search for the Bridgespan Group, a not-for-profit that works with other not-for-profits and foundations on strategy and philanthropy consulting as well as executive recruitment.


A study by Bridgespan in 2009 projected demand for 24,000 senior managers at not-for-profits that year. Luke can’t say if not-for-profits actually hired that many people because many managers delayed their retirement after the economy and financial markets plummeted in 2008. But by late 2009 and early 2010, “there was light at the end of the tunnel” and not-for-profits began hiring again, he says. “When there are tough times, there is only so long you can hunker down.” A survey of about 100 not-for-profit executive directors released in January by Bridgespan found that 60 percent said they were looking for new talent in 2011 compared with 31 percent in 2010.


While some not-for-profits are happy to tap the large pool of experienced business leaders who have lost their jobs, other organizations still have reservations. One issue is overcoming “innate distrust of people coming in on a white horse from the corporate world” who think they’ll save the organization, says Michael Jeans, president of New Directions Inc., a Boston firm that helps professionals figure out their next career step. Executives with experience serving on not-for-profit boards, however, may be better able to sell themselves, he adds.


Although not-for-profits move at a slower pace than the corporate world, their philanthropic mission is often appealing. Those who make the leap to not-for-profits typically have a “reasonable amount of financial and career success,” Jeans says, and they wonder: “What kind of mark can I leave behind?”


In the past, management shortcomings were overlooked at many not-for-profits, Jeans says, but “there’s been a major groundswell of upgrading talent over the last decade. They need more sophisticated help and the place to get it is corporate America.”


IFF’s Shields says the skills he developed during his decades in financial services were easily transferrable to the not-for-profit, where he still does credit reviews and meets with banks and customers. Shields’ management experience also appealed to IFF. “Often in the financial world people have great” technical skills, Logue says, “but not management skills.”


Former corporate executives usually take a salary cut. A study by Charity Navigator found that of 3,005 midsize to large U.S. charities, the median salary for a CEO in 2008 was $147,273, up 4.7 percent from the previous year. “It’s a question of a good person who’s at the right stage of his or her career” who can afford a compensation cut, Logue says.


A number of programs have sprung up across the country to ease the transition from the corporate to the not-for-profit world. For example, EncoreHartford, a Connecticut program, was designed to reduce unemployment and bolster the not-for-profit sector in a state where 20 percent of the workforce is over age 55.


The pilot program was launched last March with 23 Encore Fellows, all but one of whom was at least 50 years old, says David Garvey, director of the Nonprofit Leadership Program at the University of Connecticut in Storrs. The fellows had 44 hours of training on topics such as management and accounting before spending two months at a not-for-profit.


One of those fellows was Mary Jo Keating, who became planning and marketing manager with reSET, a social enterprise trust in Farmington that encourages businesses to become social enterprises. Keating, who is 58, quit her job as vice president of corporate relations for BNSF Railway in Fort Worth, Texas, to join her husband who was working in Connecticut. She couldn’t find any senior communications positions in Connecticut and briefly started her own business. But she disliked working on her own, so she joined the EncoreHartford program. Her fellowship was with reSET, and she was hired by the organization as soon as she completed the program.


Keating says she has found that compared with the corporate world, “it’s a more collegial atmosphere.” One big change: She does everything from handling marketing and communications to making photocopies. But she was drawn to the job because “I liked the purpose and I liked the people.”


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Chicago Airport Shuttle Workers Win $1.4 Million Back-Wages Ruling from Government

A Texas-based transportation company has been ordered by the federal government to help pay nearly $1.4 million in back wages and benefits it owes some Chicago-area employees.


Total Enterprise Inc. of Irving, Texas, was found to have been underpaying 140 employees who worked out of its Franklin Park, Illinois, facility for a three-year period that ended in 2009.


Total Enterprise had been hired to shuttle Transportation Security Administration employees between O’Hare International Airport and remote parking lots.


A Total Enterprise representative was not available for comment.


The settlement, to be paid by the TSA and Total Enterprise, represents “wages that [employees] should have been receiving all along,” a Labor Department spokesman said.


It’s not clear what portion of the award Total Enterprise will pay.


The 140 workers—shuttle bus drivers, parking lot attendants and bus dispatchers — will see payouts ranging from $30,000 to $90,000 for money owed to them from Dec. 31, 2005, through Nov. 7, 2009, the spokesman said.


The TSA said in a written statement that it has been “working closely” with the Labor Department to ensure that Total Enterprise employees are paid accordingly. “TSA appreciates the cooperation and assistance of the [Labor Department] in this enforcement action,” the agency said in the statement.


The nearly $1.4-million settlement requires final approval by an administrative law judge.


Wage violations, particularly among low-wage earners, are not uncommon in Cook County, according to a University of Illinois at Chicago study. In the past decade, lawsuits filed in Chicago’s federal court that allege some violation of the Fair Labor Standards Act have jumped 134 percent.  


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


 


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AIG Settles Workers Comp Case with Insurers Except Liberty

In a major development involving long-running workers’ compensation litigation, American International Group Inc. has reached a $450 million settlement with seven of the insurers involved.


However, the settlement does not include units of Boston-based Liberty Mutual Insurance Group, which has sought class-action status and plans to continue pursuing the litigation.


The legal fight began in 2007 when the National Workers Compensation Reinsurance Pool operated by Boca Raton, Florida-based NCCI Holdings Inc. first sued New York-based AIG.


The pool had argued it was excluded from a 2006 settlement with then-New York Attorney General Eliot Spitzer in which AIG agreed to pay states more than $343 million to settle allegations that it underreported workers’ compensation premiums over several decades to avoid paying its full share of residual market assessments to the states.


Since then, U.S. District Court Judge Robert Gettleman, who has been presiding over the case, dismissed the pool as plaintiff based on AIG’s objection, but the litigation continued. AIG also sued competitors, arguing they underreported workers’ compensation premiums.


Under the proposed settlement dated Jan. 5, AIG will pay $450 million, but that would be decreased by the amount put in escrow under the Spitzer settlement plus any interest earned in the meantime.


The proposed settlement stipulates that the agreement would not be affected even if Liberty Mutual units Safeco Insurance Co. of America and Ohio Casualty Insurance Co. opt out.


Court papers state that “it has become clear” that Safeco and Ohio Casualty “cannot adequately represent the absent class members in settling this matter with AIG on fair and reasonable terms at this time due to very different business judgments about the wisdom of continued litigation as opposed to settlement.”


The insurers “therefore respectfully request that they be permitted to intervene … in order to represent their own interests and to serve as settlement class representatives, in order to effectuate a global settlement of these claims with AIG,” according to court documents.


The attorney for Safeco and Ohio Casualty, Gary Elden of Chicago-based Grippo & Elden, said in a written statement that the settlement agreement is an “act of self-interest” by AIG and the settling insurers “and is detrimental to the 600-member class because it fails to consider previously undisclosed documented evidence of underreporting that extends the scope and duration of the classes’ claim.


“The current discovery process, which will be completed in stages within the next 60 and 150 days, should be allowed to proceed uninterrupted so AIG’s held to account for the true extent of its underreporting,” Elden said in the statement.


“Ohio Casualty and Safeco, class representatives, stepped forward 20 months ago to make certain that AIG adequately addresses the systemic practice of underreporting of workers’ compensation premiums when no one else would, and they remain in the best position to adequately represent the class and prosecute” the litigation, he said.


The seven insurers who agreed to the settlement are ACE INA Holdings Inc., Auto-Owners Insurance Co., Companion Property & Casualty Insurance Co., Firstcomp Insurance Co., Hartford Financial Services Group Inc., Technology Insurance Co. and Travelers Indemnity Co. The insurers’ lawyer declined comment.


An AIG spokesman said: “It is unfortunate that Liberty is refusing to participate in this fair and reasonable settlement. As the seven other settling insurers have recognized in seeking to intervene in the action, Liberty’s preference to continue litigating is not in the best interests of the class members.”


In a separate but related development, AIG in December reached a $100 million settlement with state insurance regulators on the same issue.  


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


 


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Companies not Sure How to Measure Say on Pay Success

Some 49 percent of companies don’t know what level of shareholder support of executive compensation in say-on-pay votes will be considered a successful outcome by their boards of directors, according to a Towers Watson & Co. survey released Jan. 5.


Of the 51 percent of companies that have defined how they will evaluate success, 19.6 percent say they believe that a favorable shareholder vote of at least 90 percent would be considered successful, while 37.2 percent say they believe a vote of at least 80 percent would be considered successful, 27.5 percent say they believe it needs to be a vote of at least 70 percent, 13.7 percent say they believe a vote of at least 60 percent, and 2 percent say they believe a vote of at least 50 percent, according to a Towers Watson written statement about the results.


Only 8 percent of companies surveyed have a process in place for “developing appropriate action plans in response to potential shareholder concerns” on executive compensation, the statement said.


Fifty-one percent of companies expect to hold annual shareholder advisory votes on executive compensation, while 39 percent prefer to hold the vote every three years and 10 percent every two years.


Some 48 percent of respondents “are making some adjustments to their executive pay-setting process in preparing for the upcoming proxy season,” the statement said. Those adjustments include more detailed explanations of compensation programs in SEC filings and changes in severance programs and high-profile perquisites.


Under the Dodd-Frank Wall Street Reform and Consumer Protection Act enacted last year, companies have to conduct say-on-pay votes at least every three years but are allowed discretion on whether to hold annual, biennial or triennial votes, according to a Tower Watson statement on the survey results. The law requires companies to put the say-on-pay frequency question to a nonbinding shareholder vote at least every six years.


“The survey responses suggest that companies are struggling to understand the implications of say-on-pay votes, and many are taking a wait-and-see approach to measuring success,” said James Kroll, a Towers Watson senior consultant, in the statement.


Towers Watson surveyed 135 U.S. publicly traded companies in mid-December.  


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


 


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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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