MDV Against "Safety Conscious" Employer
by Michael Fox
Turning an employer's safety program into a negative resulted in a $5 million plus dollar verdict against a South Dakota employer according to a recent story in the Seattle Legal-Ledger, Plaintiffs use little known theory to win bad faith insurance case.
The theory involved going after the employer which had taken a hard line position advocating that its workers compensation carrier not pay a claim. (According to the story the claim in dispute was slightly under $6,000.) In the subsequent suit for bad faith denial of the claim, the insurance carrier settled early and the claim against the employer proceeded on the theory that it had aided and abetted the commission of a tort. Given that it arose out of a workers compensation claim, which usually bars most tort claims against the employer, it will be interesting to see how this ultimatelyone plays out.
Regardless of the final resolution, how plaintiff's counsel was able to turn a company's safety program into a negative is an important lesson. According to the article the employer had "goals in place of less than one day of lost time due to injury for every 100 employees." In two years running the company paid out more than $400,000 in bonuses under the program.
The argument, apparently bought by the jury, was that the incentives led to improper actions on part of the company. Part of the evidence was that the company:
Failed to report employees' injuries to the South Dakota Department of Labor or to the federal OSHA and actively encouraged workers to not take days off from work because of injuries. ... One former employee testified that in order to reduce the number of days lost to injury, a supervisor came and picked him up the day after a surgical procedure and had him sit in the office all day.
Not the first time that allegation has been made and one that employers with safety incentive programs should be aware might be coming.