Weblog roundup: bad faith suit, TX networks, and “what were they thinking?”

December 29th, 2005 by Julie Ferguson

We are catching up on blog reading after an erratic holiday schedule, and offer this grab bag of interesting posts from our fellow bloggers.
Legal matters – Michael Fox of Jottings by an Employer’s Lawyer has recently posted on suits involving workers comp issues. The first is a recent $15 million judgment involving a safety incentive program run amuck. This was a bad faith suit filed against the employer. Bad faith suits generally involve claims handling on the part of the insurer, such as nonpayment of claims, mass denials of claims, and the like. This South Dakota case involved a construction company that had a goal of less than one day of lost time due to injury for every 100 employees. The firm offered substantial cash bonuses to supervisors for achieving that goal, resulting in the suppression and underreporting of legitimate claims. This is the second South Dakota bad faith suit involving incentive programs that has come to our attention. See our prior post on exclusive remedy, “bad faith” claims, and the $12 million lawsuit.
The second item is about the upcoming Supreme Court review of case involving an employer’s RICO liability for hiring of illegal workers. The 11th Circuit court offers this summary of the case:

“The plaintiffs filed this class-action complaint alleging that Mohawk’s widespread and knowing employment and harboring of illegal workers allowed Mohawk to reduce labor costs by depressing wages for its legal hourly employees and discourage worker’s-compensation claims, in violation of federal and state RICO statutes. The plaintiffs also alleged that Mohawk was unjustly enriched by the lower wages it paid, as well as the reduced number of worker’s compensation claims it paid.”

TX networks and industry performance – Joe Paduda of Managed Care Matters offers a rundown on the new rules governing Texas workers comp networks. He also points to and comments on John Burton’s discussion of industry performance in 2004. He notes there are indications that the market is softening, the key being what happens with reinsurance rates and availability.
Medical matters – For a good smorgasbord of notable recent posts from medical and health care bloggers, visit Grand Rounds, hosted this week by Matthew Holt at The Health Care Blog.
What were they thinking? – Thanks to Workplace Prof Blog for pointing us to Challenger & Gray’s compilation of The Most Unbelievable Workplace Events of 2005 (pdf). According to the release, these are stories that are likely to make you ask, “What was that person/company thinking?” or “Can a company actually do that?”