Jottings By An Employer's Lawyer

Thursday, December 08, 2005

MDV Against "Safety Conscious" Employer

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.


Hi Michael,

I appreciated reading your comments about the article "Plaintiffs Use Little Known Theory to Win Bad Faith Case", and how the plaintiff's counsel took the employer's safety program and turned it into a negative.

I was the plaintiff's lawyer in that particular case. I appreciate your interest in the subject, and I hope you will allow me to explain what to some must seem like an artful gimmick on my part.

Many "safety programs", such as the one involved in this case, don't really reward safety, they just reward not reporting injuries or lost work days.

For instance, under the program involved in this case, if one employee drops a brick on the head of another employee, but neither one reports the incident, then both employees are rewarded with "safety bonuses", and both will participate in a raffle drawing where the prize is a trip to Hawaii. This raffle program is called "Hawaii is No Accident".

However, if the employee who got hit on the head with a brick reports an injury, then the injured employee (who did nothing to cause an accident except perhaps fail to duck) loses his "safety" bonus and also loses the right to participate in the raffle.

The employee who dropped the brick, on the other hand, still gets to participate in the raffle because he did not report any work related injuries.

So, the employee who causes an accident is rewarded, while the employee who did nothing to cause an accident but was instead the victim of another's carelessness, is penalized.

The deciding factor between whether you are rewarded or penalized? It all comes down to one thing: whether you report having suffered an injury. Does this sound like an honest program?

In this case, the evidence showed dozens of injuries that were never reported. It showed supervisors forcing employees to report to work the day after surgery, even if they only slept in a chair while recovering from narcotic pain medications. That way the supervisors could avoid reporting a lost day of work, which would jeopardize bonuses for supervisors.

This is not an honest safety program. When injuries are covered up, the cause of those injuries go undetected and worse yet, uncorrected. Do your clients really want people driving heavy machinery who are on narcotic painkillers, just so no lost days are reported and the company "looks" safe?

Please tell the employers that you advise and represent that these are not really safety programs, they are dangerous programs.

You have a wonderful web-site and do a great service to employers who read it. Keep up the good work.

I hope the explanation contained in this note will be of some help to you, and to those well intentioned readers who are really trying to protect employees.

Mike Abourezk
Rapid City, SD
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