Archive for April, 2010

Massey Energy Mine Disaster: The Soul of a Bean Counter

Monday, April 12th, 2010

In our first blog of the Upper Big Branch mine disaster that took 29 lives last week, we made no attempt to point fingers. It was a time for mourning, for acknowledging the sacrifices of the brave men whose jobs never see the light of day. Well, now that the final death toll has been rendered – there were no survivors – it’s time for some accountability. Let’s begin at the top.
The CEO for Massey Energy is Don Blankenship. He is a man of humble and hard-scrabble beginnings, raised by a single mother. He worked as a union miner (an irony that will soon become evident) and attended Marshall University, where he received a degree in accounting. He worked for Massey Energy in the accounting department. where his fiscal skills and his penchant for cost controls helped him rise in the ranks, culminating in his becoming CEO in 2000. He is a vehement foe of organized labor, along with government regulations and the “the hoax and ponzi scheme” of global warming. (His business is coal, so his disbelief in global warming runs as deep as his mines.) Blankenship constantly battles regulators over safety infractions, including adequate ventilation of the mines (which at this point appears to be a major factor in last week’s exlosion).

While famous for his focus on production, Blankenship does give lip service to safety. In a July 2008 depostion defending Massey Energy’s safety record, he appears to talk the talk:

“As an accountant, I know that safety is an important cost control. So even if I were so calloused, which I am not, as to believe that safety should be sacrificed for production, I would understand that it doesn’t make any sense because the accidents and so forth cause you to have more costs.”

But somehow, in the dust and drive of production goals and profits, safety falls by the wayside. Blankenship does not walk the walk – or, as we are talking mines, he does not crawl the crawl.

Management Styles

There are clues to his management style in his personal life (a rather critical summary of which appeared in Business Week). His maid quit, saying the working conditions were intolerable. Ever the bean counter, the politically connected Blankenship successfully fought her application for unemployment benefits. The case wended its way to the West Virginia Supreme Court, where the maid prevailed. Two of the court’s justices said that “the unrefuted evidence” before the state unemployment agency showed that Blankenship “physically grabbed” the maid, threw food after she brought back the wrong fast-food order, and tore a tie rack and coat hanger out of a closet after she forgot to leave the hanger out for his coat.
“This shocking conduct” showed that she was, in effect, fired because she felt compelled to quit, the justices said. They said the conduct was “reminiscent of slavery and is an affront to common decency.”
The same, alas, could be said of Blankenship’s management of Massey Energy.

Humble No More

Don Blankenship earned about $11 million in 2008. Not bad for a man of humble beginnings. As for the survivors of the miners killed last week, they must turn to the West Virginia workers comp system, which will provide indemnity for widows and dependents. (It appears that Massey Energy is self insured for comp – a penny-pinching decision that is about to haunt Blankenship, big time.)

The company is also vulnerable under West Virginia law for civil suits: comp’s “exclusive remedy” provision can be transcended if you can prove “deliberate intent.” I would say that repeated stalling, appealing, stonewalling and dismissal of documented safety violations is likely to reach the “deliberate” standard.

You may remember the song “Sixteen Tons” – made famous by Tennesse Ernie Ford:
You load sixteen tons, what do you get?
Another day older and deeper in debt.
Saint Peter, don’t you call me, ’cause I can’t go;
I owe my soul to the company store.
Surely the miners had souls to put in hock. That may be more than can be said for the man who currently runs the company store.

The next generation in prosthetic arms

Thursday, April 8th, 2010

We like to keep our eye on advances in rehabilitative and assistive tehnologies, so we were delighted to find one of our favorite inventors and entrepreneurs Dean Kamen showcasing another of his awe-inspiring inventions in a TED talk. Kamen is perhaps most known for the invention of the Segway. We were particularly smitten by his iBOT, a revolutionary stair-climbing wheelchair that allowed the user to raise up on two wheels to be eye level to a standing person. Unfortunately, these went off the market due to cost but you can see the iBOT in action here.
Kamen’s recent invention is the DEKA Arm (or the “Luke Arm”), a highly advanced prosthetic arm which he created for veterans who lost limbs in the war. He tells the fascinating story of the development and shows some of the capabilities in the following TED video. Inspiring and exciting! (You can also view his recent appearance on the Colbert Report and you can read about it at Dean Kamen’s “Luke Arm” Prosthesis Readies for Clinical Trials.)

Cavalcade of Risk and other new briefs

Wednesday, April 7th, 2010

The 102nd edition of Cavalcade of Risk is posted at Political Calculations, where blogger Ironman offers a rating for each post based on topicality, information quality and readability. Check it out.
More on the West Virginia Mining tragedy – On Monday, we were thrilled to hear of the miracle of the surviving miners in China, only to learn of the terrible disaster for West Virgina’s miners a few hours later. Question of the day: Four years after reforms, why another mine disaster? For ongoing news and developments on the West Virginia mining disaster, follow Charleston, WV reporter Ken Ward’s blog Coal Tattoo and follow his Twitter feed
The Tesoro refinery explosion – Overall, it’s been a tough week for catastrophic workplace accidents. On Friday, 5 workers were killed in a Washington refinery blast.The Chemical Safety Board wonders why deadly tragedies are still occurring with alarming frequency, despite lessons learned 5 years ago from the BP tragedy. “”We are concerned that we are seeing a repeat of issues that we thought had (already) received widespread communication and attention,” said Don Holmstrom of the federal Chemical Safety Board, which investigates manufacturing accidents involving hazardous chemicals.” Are some industries just inherently dangerous? “By comparison, not one of the nation’s 103 nuclear-power plants has had a major accident in 30 years, said Bresland, of the Chemical Safety Board.”
OSHA – In Risk and Insurance, Steve Tuckey writes about OSHA’s deeper bite and what it will likely mean to employers. Among other points made in the article, Tuckey cites last year’s GAO study of more than 1,000 occupational health practitioners, which found that: “More than two-thirds of the respondents observed worker fear for reporting an injury or illness, according to the survey. In addition, a third of the practitioners said they were pressured by employers to provide insufficient treatment to workers or to hide or downplay work-related injuries or illnesses. Moreover, half the respondents said they were pressured to downplay the injury so that it would not be reported to OSHA, the survey also found.”
Medical marijuana & insurance – You know a business has arrived when it supports an industry trade journal: Marijuana Business Reporter focuses on the burgeoning, legitimate medical marijuana industry. It currently features an interesting insurance-related interview with Mike Aberle, the national director, medical marijuana specialty division for Statewide Insurance Services, a Sacramento, CA company that insures dispensaries and other services in the medical marijuana industry: Underwriting Medical Marijuana. (Thanks to Risk & Insurance for the tip.)
Are your internships legal? – Jared Wade of Risk Management Monitor talks about When Unpaid Internships Become Illegal. In this tough economy, there has been an upsurge in the number of organizations trying to expand the definition of “internship” to get free labor – often in direct violation of state or federal labor laws. Joel W. Rice of the law firm Fisher & Phillips offers guidance in regards to the Department of Labor’s six criteria for gauging whether or not an unpaid internship is legal. For more on this topic, see Jeffrey Hirsch’s post at Today’s Workplace: Unpaid Internships.
Asbestos awareness – John Gelman tells us that it is National Asbestos Awareness Week and he follows up with some related posts on the topic: the first deals with the launch of Libby Care, an expansion of Center for Asbestos Related Disease (CARD). His second post is about a NJ Appellate Court ruling which Upholds $30.3 million mesothelioma verdict.
Same forum, different name – If you are on LinkedIn, the Work Comp Forum has had a name change to avoid confusion with other entities with a similar name. It’s the same great group hosted by Mark Walls, but it now sports a different name: Work Comp Analysis Group
Sense of humor deficit syndrome (SOHDS) – Joe Paduda continued his tradition of featuring an April Fool’s posting on his blog. Apparently, not everyone appreciates Joe’s sense of humor.Our next question for Joe: when work-related, is SOHDS compensable?
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A Breath of Fresh Air

Tuesday, April 6th, 2010

Whatever you may be doing as you read this, take a moment to focus on your breath – the simple act of breathing in fresh air and then exhaling. Then think for a moment of the all the people who work in conditions where clean air is nowhere to be found. Think especially of the miners working deep in the earth, extracting minerals which benefit us all.
I often wonder what compels people to choose work in such dire conditions. For many, it’s the only work available. For others, it’s just what they know. Here is a passage, quoted in a lovely essay by Colin Nicholson, from one of my very favorite writers, Alistair MacLeod of Cape Breton Island, Canada (whose books Island and 25 miners in West Virginia, whose last breaths were taken 1000 feet below the earth’s surface. For each, there was a first terrifying day in the mines, perhaps following their grandfathers, fathers or uncles into tunnels deep below the surface. Over time, the terror receded, followed by the grim routine of working in the dark and breathing powder-heavy air that had been breathed before.
In the coming weeks, there will be many questions about mine safety, company policies and procedures, and survival benefits for the families. But today, there is simply the hope that the bodies can be recovered and brought one last time to the earth’s surface. In a concluding irony, the final resting place for these men will be far above the chambers where they worked and where they died.

West Virginia’s Dr. Feelgood

Monday, April 5th, 2010

Dr. Diane Shafer practices medicine in the Tug Valley area of West Virginia. The Tug River runs along the Kentucky border. It’s a hard-scrabble part of the state, famous mostly for the Matewan coal mine strike in the 1920s. (Mother Jones, featured recently in one of our blogs, led the miners in an unsuccessful attempt to establish a union.) With a declining population and a median household income of $27,000, the area is dirt poor.
Which brings us to Dr. Shafer, an orthopedic surgeon. She may practice in a desperately poor part of a relatively poor state, but she is doing pretty well for herself. We read in the Insurance Journal that prosecutors have been very busy tracking her activities. A January raid of her bank holdings yielded more than $500,000 in cash and valuables. About half that haul consisted of stacks of $100 bills found in one of her safety deposit boxes.
Where did the cash come from? Don’t bother looking for surgical fees. Dr. Shafer sells drugs. A state-federal probe tracked hundreds of people who entered Shafer’s storefront clinic daily, paid between $150 and $450 cash, and left with pain drug prescriptions. Evidence included photos showing a line of people waiting to see Shafer that reached the sidewalk and stretched down the street, with as many as 30 people waiting outside. Dr. Shafer was not just running the most popular ortho practice in Mingo County, population 26,000. It must have qualified as the most popular ortho practice in the world.
FBI Special Agent James Lafferty said in a sworn statement: “The condition of Dr. Shafer’s office during the execution of the search warrant indicated that it would be physically impossible for her to utilize her examining tables. She indicated that she examined her patients ‘at another location.”’ In the back of her pick up truck, perhaps?
Dr. Shafer has parlayed her wealth into an interest in politics. She is running for the state senate with the slogan “You are Safer with Shafer.” Well, you certainly feel less pain when she is doing her thing. On her platform, outlined in rather primitive form at her website, she proposes giving free prescriptions to senior citizens. She does not specify which drugs she has in mind, but we can probably guess.
This is not the good Doc’s first encounter with law enforcement. Her license was suspended in the 1990s for bribery and falsification of evidence in a workers comp case. (Why am I not surprised?) Eventually, her license was reinstated. The latter court noted: “The evidence is undisputed that the appellee is a hardworking, valuable member of her medically under-served community, and her technical ability to practice medicine is unquestioned.”
History Repeating Itself.
Mingo County may be poor, but it has a fascinating history, summarized here. The origin of the county is worthy of a Faulkner novel:

Mingo County is the youngest county in the state, formed by an act of the state legislature in 1895 from parts of Logan County. Its founding was related to a legal protest by a moonshiner who claimed that the Logan County Court that had found him guilty did not have jurisdiction over his case because his still was actually located in Lincoln County. A land survey was taken and discovered that the defendant was correct. The charges were then refilled in Lincoln County court. Although the moonshiner was ultimately found guilty of his crime, the state legislature was made aware of the situation and determined that Logan County was too large for the expeditious administration of justice and decided to create a new county, called Mingo. The county was named in honor of the Mingo Indian tribe that had been the earliest known settlers of the region.

Dr. Shafer appears to be carrying on in the tradition of Mingo’s founding moonshiner. She is also likely to end up as he did, with a conviction. The shutting down of her wildly popular practice may well drive the good folks of Mingo back into the hills in pursuit of more traditional methods of mitigating pain: no prescription is required; the medication comes only in liquid form; and there are no warning labels, but the risks of consuming it are beyond calculation.

Job Loss Coda: Boston Hyatt Workers Fade Away

Friday, April 2nd, 2010

We have blogged the sad tale of housekeepers at the Hyatt Regency Boston, who were fired and replaced by low wage workers hired by an outsourcing firm. The workers unknowingly trained their replacements in their final months on the job.
Katie Johnston Chace of the Boston Globe has done a follow up on the 98 laid off workers. It’s a sad story of broken dreams and piling debts. Sixty of the workers have been unable to find work.
As Northeastern labor economist Andy Sum puts it: “At the low end of the ladder, it’s not only that the unemployment rate is high, but that the number of applicants for every job is extraordinarily high.”
At the time of the firings, there was a lot of bad publicity for Hyatt. The hotel workers union estimates a loss of $3.7 million in revenues. Fighting back, Hyatt says that the job restructuring was the result of “challenging economic conditions.” As we pointed out in a previous blog, the hotel might have saved a lot of money simply by improving the safety and training of housekeepers; their injury rates – and associated costs – were double that of other major chains.
Business as Usual
Hyatt spokeswoman Amy Patti said it was interesting the union would “boast about actions they have taken to drive dollars away from Boston and put additional jobs at risk in this difficult economy.”
Well, Amy, sort of. The union wants people to keep on spending in Boston, just at other hotels. They might start with the Boston Park Plaza, which has hired four of the former Hyatt workers into housekeeping jobs with full wages and benefits. When introduced to the team, their new co-workers burst into applause.
That’s a nice coda for 4 percent of the Hyatt workers. For the remainder, no applause and, for the moment, little hope. It’s like the end of Tchaikovsky’s Symphony Number 6 (“Pathetique”), which after much drama simply fades away into silence at the end. Hyatt knew they would take a hit at the time of the firings. They also knew that memory spans are short and that business would return to normal in a few months. Throw out a few bargain rates and customers will come surging back. It’s the American way and it works like a charm.

Health Wonk Review and other noteworthy news briefs

Thursday, April 1st, 2010

Rich Elmore has posted a most excellent Health Wonk Review: Special Edition on Health Care Reform, which might also be called the “when pigs fly” edition. It has a good roundup of the health policy blogosphere’s reaction to the landmark legislation and a handy, must-see one page info-graphic of the time line.
Prevention in Health Reform – at the NIOSH Science Blog, John Howard, the Director of National Institute for Occupational Safety and Health, summarizes prevention provisions in the Patient Protection and Affordable Care Act and their implications for workplace safety and health.
Frequency – At Comp Time, Roberto Ceniceros looks at the way that health care reform might impact workers comp claim frequency. He explains that the data in this area is thin, but elicits some educated opinions on the topic.
More grim news from China – In addition to the increasingly desperate search for 153 miners which we discussed earlier this week, Ken Ward reports that in a different China mine, 12 miners have been killed and another 32 are missing.
Lifesaver – HR Daily Advisor tells us that survival rates for out-of-hospital cardiac arrest are only about 5% due to the length of time it takes to get treatment to the victim. The sooner defibrillation is started, the more likely the victim will survive. A recent series of posts discuss the benefits of adding an Automated External Defibrillator (AED) as part of a corporate wellness program. “OSHA says that immediate use of an AED can result in a 90 percent survival rate. With each minute of delay, however, nearly 10 percent fewer survive.” A follow-up post discusses related legal and training issues
Food processing – At The Pump Handle, Carlos Rich makes the case for food processing companies to treat workers more like humans and less like machines. We agree. Meatpacking and poultry processing plants are some of the most notorious environments for safety today. Many also play fast and loose with employment laws.
New blog finds

  • Fair Warning – “…an online nonprofit publication that seeks to provide robust, public interest journalism on issues of health, safety and corporate conduct.” The publication promises investigative journalism, legal and regulatory news, and reports from think tanks, academics, and advocacy groups.
  • Work Safety Blog from Blog4Safety – bills itself as “Your online resource for safety information, safety tips, and safety compliance.” It’s not a new blog, posts go back to 2008, but it is a new discovery for us. The blog is sponsored by The blog content has been provided by Texas America Safety Company (T.a.s.c.o.).

9/11 suit back to bargaining table – Southern District of New York Judge Alvin K. Hellerstein surprised a lot of people when he rejected the proposed $575+ million settlement for 9/11 first responders. His complaints? The settlement paid to victims was too little. Read more from 9/11 Lawyers Return to Bargaining Table to Refine Settlement.
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