Archive for September, 2010

You think your job is tough?

Wednesday, September 15th, 2010

Last week, we rocked and rolled you with a dramatic video of a cruise ship tossed in a storm, but for sheer fear factor, we think this video may top that one. Normally, we wouldn’t post another video so soon after that one, but we think this one may not stay up for long!

Note: the video we had posted was removed but a copy has been posted here:

Direct link: Climbing Up The Tallest Antenna Tower 1,768 feet

Once we caught our breath after the gut-churning visceral reaction to the clip, we had two thoughts: Massive respect for the jobs that infrastructure workers do to keep our lights on, our computers running, and our phones working, and absolute horror at the “free climbing” concept. The narrator says that OSHA rules really allow for this, but that doesn’t sound right. We’d be interested in comments from safety professionals.

Here’s what we found from OSHA: “Tower climbing remains the most dangerous job in America. The majority of fatalities are the result of climbers not being tied off to a safe anchorage point at all times or relying upon faulty personal protection equipment. Many fatalities have occurred during the erection, retrofitting or dismantling of a tower. “Tie or Die!” has become synonymous with the requirement for 100 percent fall protection.”

FedEx in MA: Buying Time

Monday, September 13th, 2010

Five years ago we blogged the problem FedEx would inevitably run into in Massachusetts, where the definition of “employee” is so inclusive, it’s almost impossible to find a truly “independent contractor.” Well, the proverbial chickens have come home to roost.
Attorney General Martha Coakley has announced a settlement with FedEx, wherein the delivery giant has agreed to pay a little more than $3 million relating to the status of 13 “misclassified” delivery drivers. Without admitting liability or wrongdoing, FedEx has agreed to refrain from using the “independent contractor” strategy in response to claims for benefit coverage, including payroll taxes, unemployment insurance, and workers comp. In exchange, Massachusetts will refrain from any further legal action for one year. In other words, for the modest sum of $3 million, FedEx has bought itself a year to clarify its business strategy. Therein lies a tale of attorneys, well worth the telling.
FedEx maintains a steadfast commitment to a business model for its ground delivery system where the work is performed by independent contractors. With a healthy scepticism in our hearts, we have frequently blogged the barriers to independence: the drivers wear FedEx uniforms, drive FedEx trucks, adhere to FedEx dress codes and schedules, etc. FedEx ground does not exist without these drivers and that makes them, in effect, employees. The response to the fundamental query “who controls the work?” has been unambiguously, FedEx.
ISP to the Rescue?
As part of its agreement with the Commonwealth, FedEx has outlined its rationale for the independent contractor model. They propose entering into an Independent Service Agreement (ISP) with driver/managers in each service area. Appended to the MA settlement in draft form, the ISP agreement tries diligently to carve out a middle ground where the work is performed independently, but to FedEx standards.
Here are a few of the details:

  • The local driver/manager must operate under a corporate entity recognized by the state(s) in which he or she operates.
  • The driver/manager can hire and fire employees and must provide all mandated benefits to employees, including workers comp
  • Theoretically at least, the driver/manager can be a sole proprietor without employees; in this case, the issue of workers comp coverage is governed by the state statute on sole proprietors (who usually can opt out)
  • The agreement states that FedEx Ground has no authority to “direct as to methods, manner or means” the provision of services.
  • The ISP manager has “exclusive rights” in a specific geographic area
  • While the ISP has the right to decline service, in such cases this triggers the right of FedEx to ensure services
  • Drivers are not compelled to wear FedEx uniforms or drive FedEx vehicles, but they are paid a weekly incentive to do so.
  • As you can see, FedEx is trying to establish independence while still maintaining its identity and its standards. The Attorney General has not made any judgment about the validity of this strategy; she has simply cashed a nice check, in exchange for which she has given FedEx a year to work out the kinks. After the year is up, the FedEx model will likely be challenged once again.

    Not Quite Independent?
    You have to credit the presumably well-paid FedEx team: they have tackled head on the thorny issue of “free from control and direction.” On the surface at least, the ISP approach offers a credible if not totally convincing appearance of independence.
    Unfortunately for FedEx, the MA standards have two additional components, neither of which appear to be addressed in the draft ISP agreement: independent contractors must provide a service outside of the general contractor’s usual course of business (no way FedEx can do this) and their independence is reflected in their marketing of services beyond a single customer (what would this look like?).
    It will be interesting to see how FedEx responds when local driver/managers stretch the rules and standards in an attempt to assert some real independence. That’s where the rubber will meet the road in this seemingly endless saga: a company with a ferocious need to control, giving up control in order to preserve their idiosyncratic business model.
    And some folks say employment law is boring….Stay tuned.

    Investigation report for the cruise from hell

    Thursday, September 9th, 2010

    Yesterday’s scary cruise ship video provoked quite a bit of interest, both in terms of our posting and also on the web at large. A few interesting follow-on links and stories have surfaced in the last day, which give added dimension to the story, particularly from a risk management perspective.
    The 58-page Pacific Sun investigation report (PDF) adds more details about the event itself and the aftermath. It states that 69 passengers and 8 crew were injured, with 7 injuries considered major. Most injuries were the result of falls and contact with unsecured furnishings. Part of yesterday’s video footage was filmed in the Outback Bar and Grill, where the highest number of injuries occurred – involving at least 13 passengers and crew.
    Some of the report highlights include:

    • Photos – pages 9, 12, 13, 15, 19, 21, 23-4 and 25
    • Safety issues directly contributing to the accidents – page 47
    • Actions taken – page 49
    • Recommendations – page 50

    The report states:

    “As a consequence of this accident, Princess Cruises has taken action to: supply its bridge teams with night vision glasses; improve deck officers’ training in the risks associated with heavy weather; and review the securing arrangements for its vessels’ satellite communications equipment.
    Princess Cruises has been recommended to: review the role of active stabilisers in ensuring passenger safety; review the risk of injury from moving furnishings and objects, and develop suitable means of securing such items for heavy weather; develop a standard for securing furnishings and equipment in public spaces; and develop its heavy weather guidance and instructions to include actions to reduce the risk of injury to personnel.
    MAIB has recommended that the Cruise Lines International Association and the Passenger Shipping Association develop a guide on industry best practice based on Princess Cruises’ standard for securing furnishings. The trade associations have also been recommended to promulgate the lessons learned from this accident to their members.”

    For more reports on safety issues related to the cruise industry, Cruise Junkie makes for some fascinating reading. The site bills itself as “your resource for the other information about the cruise industry, including reports on accidents, health issues, illness outbreaks, sinkings, groundings, disabling events, and persons overboard reports. It includes events broken down by cruise line and by ship. The site presents information from passenger reports and events that have made it into the public domain.

    Cavalcade of Risk #113 and a scary work scenario

    Wednesday, September 8th, 2010

    Our friend David Williams is hosting Cavalcade of Risk #113 over at Health Business Blog. Also of note on his blog, his post on a recent Kaiser study on healthcare, which includes some interesting statistics about practices related to healthcare quality monitoring.
    Here at Workers Comp Insider, we are in “back to school” mode – catching up after a long Labor Day weekend, having tucked in a few final summer vacation days. So we have only one item today that fits in with the theme of risk … a remarkable video clip of security camera footage from a harrowing 2008 cruise that just recently made its way to the web. How would you like to have been one of the employees or a guest on this particular cruise? Or the risk manager?

    I don’t know which segment is scarier – the passengers and crew sliding around in the cafeteria in the first half or the forklifts and heavy equipment careening around in the second half. Yikes.
    The Sydney Morning Herald offers more information about what happened on the cruise. The article doesn’t report on any injuries among the 671 crew, but says that, “Forty-two passengers were injured in the storm. The worst injuries were a fractured pelvis and fractured wrist, with most of the injured suffering cuts and bruises.” After the event, the company offered passengers a 25% discount on future cruises. Also, “…recommendations made after an investigation into the event, including the securing of furnishings and providing bridge staff with night-vision binoculars, had been implemented by the company.”

    It’s fresh Health Wonk Review and news roundup day

    Thursday, September 2nd, 2010

    Grab a coffee and head on over to Hank Stern’s InsureBlog, where he’s posted Health Wonk Review: In the Here and Now. He describes it as a “minimalist” style, which means more meat, less potatoes!
    And in other noteworthy news this week:
    Twittering insurers – Terry Golesworthy features an interesting post about how insurers are using Twitter, along with lists of insurance leaders by number of followers, by growth and by activity. He observes, “Twitter continues to be used by most insurers to provide soft marketing messages about promotions, sponsorships and customer endorsements. Other activities include financial quizzes, insurance related education materials, warnings regarding impended natural disasters and Facebook announcements. Some insurers do respond publically to customer questions but, largely, this is not the significant activity.” In the comments on his list, insurance agent Ryan Hanley (@AlbanyInsurance) notes that agencies are actually driving the social media movement, and that is based on their using the channel for relationships rather than as a broadcast tool.
    Safety is #1 – At The Pump Handle, Celeste Monforton posts that “just in time for the Labor Day holiday,” a new study has been released by the University of Chicago’s National Opinion Research Center, indicating 85 percent of workers rank safety on the job as their top labor standard.
    Misclassification – State efforts focusing on employer misclassification continue to be strong and there appears to be a deep vein to mine.

    • In California, Country Builders Inc is paying a whopping $3.9 million in back pay, fines, and payment to the work comp fund as a settlement with a suit filed by the Attorney General for various labor law infractions, including misclassification to avoid workers comp payments. In addition, the company is barred from working on government-funded public works for three years.
    • The New York construction industry should go on notice. Governor Patterson has just signed the Construction Industry Fair Play Act, “…which creates a clear litmus test to distinguish the difference between a worker and an independent contractor. It also provides a method to clearly define which business on a construction project is responsible for which workers. Finally, for the first time in State history, it imposes monetary and criminal penalties specifically for the act of employee misclassification on construction projects.”
    • A new Wisconsin law strengthens enforcement tools for targeting construction misclassification. The law will take effect on January 1.
    • While the construction industry has been a major area of focus, other industries such as the trucking industry have also been targets of probes. And then there is the continuing FedEx driver saga, which my colleague has posted on frequently.

    Other employment law litigation – Wal-Mart has appealed for a review by the Supreme Court in a discrimination suit the largest employment discrimination suit in U,S. history. The decade-old case involves more than a million current and former female workers. Steven Greenhouse of The new York Times discusses the issues in the case and the potential $1 billion or more in damages that Wal-Mart could face if the Supreme Court allows a class action suit to proceed.

    September is National Preparedness Month – FEMA has designated September as and offers emergency preparation resources for employers. At the Risk Management Monitor blog, commercial risk management expert Brian Smith replies to Emily Holbrook’s questions about disaster preparation and business insurance.