Posts Tagged ‘drivers’

Entrustment: Risk on the Road

Wednesday, October 3rd, 2012

When risk managers scan the virtually infinite horizon of risk, they often overlook the single greatest exposure in the working world: driving cars and trucks on the roads of America. Today we approach the issue through the back door, wherein an individual killed in an accident was deemed not be in the course and scope of employment. It might be the backdoor, but it still leads to the same conclusion.
Linda Gadbois was a cook for the California prison system. She suffered a work-related injury and was sent to a doctor. When this doctor proved unsatisfactory, she was allowed to choose another medical provider from a list. After completing her appointment in May of 2008, she headed back to work. She was involved in an accident: Gadbois was killed; the other driver, Kenneth Fields, was seriously injured. Under the theory that Gadbois was “in the course and scope” of employment, Fields sued Gadbois and the state of California, her employer. No need to ask why: the state’s pockets were significantly deeper than those of the late Gadbois.
Going to Work
Field’s case rested on the interpretation of the “coming and going” rule: was Gadbois, leaving a medical facility after work-related treatment, inside or outside of employment? The court noted that she had requested the second treatment on her own. Her employer did not require her to drive to the appointment, nor was she required to drive as part of her employment. As a prison cook, the essential job functions were limited to her cooking: how she got to work was not her employer’s concern.
As a result, the fifth district appeals court concluded that the state was not liable for any injuries Gadbois caused while on her way to work. Field’s suit against the state was dismissed; the status of his suit against Gadbois is not known, though presumably he collected up to the limits of her personal auto insurance policy.
It is worth noting that Gadbois’s death was not compensable under workers comp. Gadbois was paid for the day of her death in accordance with a death benefit policy that covers all workers who die on a regular work day, whether at work, on the way to work, or on paid vacation or leave. Gadbois received her full salary for the day of the accident, but received nothing from workers’ comp. Had she received death benefits under comp, Fields would have had a stronger case.
Drivers: Good, Bad and Indifferent
While the specific circumstances proved Gadbois to be the exception, many people do drive in the course and scope of employment: obvious examples would be tradesmen, salespeople on the road and people whose customers are visited in their homes. But the circle of drivers must be expanded to include any and all employees who run errands or perform any aspect of their jobs in company cars or in personal vehicles.
Some employees do this company-related driving on a regular basis; others only sporadically. But any employee driving “in the course and scope” of employment is a representative of the employer. Whether consciously or not, the employer has endorsed the driving skills of employees whose work involves driving. Even if the employee is in a personal vehicle, the employer has, in effect, entrusted them with the keys. This “entrustment” may well comprise the riskiest part of the working day.
Basic Management
How should employers manage this risk? It’s really quite simple. Any and all employees who drive – or who might possibly drive – while working should be required to submit annual copies of their driving records. If there is a cost in obtaining the records, the employee should be reimbursed. The employer should review the records carefully and place restrictions on any employees with marginal or poor driving records. Indeed, the employer may well find that some employees who drive while working do not hold valid licenses. If these unlicensed drivers have accidents while working, the employer is on the hook for anything that happens.
In addition, employees should be required to report any moving violations, on or off the job. A speeding violation on the weekend might not preclude an employee from driving during work, but a formal warning would be appropriate.
Finally, prudent employers should have written policies on limiting the use of cell phones while driving and, needless to add, prohibiting texting. These policies should be enforced, with appropriate documentation and disciplinary action for any violations.
The risks of driving permeate our lives. When we drive in the course of work, the risks are shared by employee and employer alike, even if the latter is oblivious to the exposure. For the savvy manager, a well organized approach to the risks of driving goes a long way toward containing the ever-present perils of the open road.

Cavalcade of Risk & other news from the blogosphere

Wednesday, June 1st, 2011

Happy birthday, Cavalcade of Risk! – Russell Chatswood hosts the Fifth Anniversary Edition of Cavalcade of Risk – check it out. Russell is a New Zealander and among the Cavalcade’s posts is an update on the Christchurch earthquake claims from a report issued by New Zealand’s Investment Savings and Insurance Association (ISI).
New to our blogrollDePaolo’s Work Comp Blog – by industry veteran Dave DePaolo, founder and CEO of WorkCompCentral.
When the bears win – In a post at Comp Time today, Roberto Ceniceros reports on a Utah appeals court ruling that upheld benefits for a light-duty employee who was fired for sending porno to colleagues via email. In citing the ruling, Ceniceros quotes The Stranger in the The Big Lebowski who said, “Sometimes you eat the bear, and sometimes, well, he eats you.” That is our nomination for our motto of the week.
Zombie style at the CDC – Have trouble getting your message heard by employers and employees? Maybe you need a new, attention-getting spin. Consumer Insurance Blog posts about how the CDC highlighted the importance of disaster and emergency planning by repackaging it as Preparedness 101: Zombie Apocalypse. With this packaging, they went from a few thousand page views for normal posts to more than 1.2 million over the course a few days.
Cell phones & brain cancer – In reaction to the recent World Health Organization warnings about cancer and cell phones, Merril Goozner posts about the role that conflicted science plays. Also see Gary Schwitzer’s post: News release precedes release of evidence on new cell phone/brain cancer warning.
ADA Amendments Act – The final regulations issued by the EEOC to implement the ADA Amendments Act of 2008 became effective on May 24. The new regulations feature 9 “Rules of Construction” to help employers determine whether an impairment substantially limits a major life activity. HR Daily Advisor offers a pair of posts to help employers plan for the changes: ADAAA Effective Tomorrow–Ready for Its 9 Rules of Construction? and ADAAA Effective Today–Steps Employers Should Take.
Cool tool – Objects falling from a height are a serious safety hazard – that’s why anyone working at a height should secure their tools. Tethers are a good way to do this. Hammerhead Industries offers a one page reference sheet: Tool Tether Guide (PDF)
Bus safety – At Risk Management Monitor, Jared Wade brings the news of another fatal bus crash which claimed the lives of 4 and injured more than 50. Driver fatigue is cited as the cause of the crash. Wade cites this as another instance highlighting the industry’s lack of oversight, and posts about other recent coverage on bus safety. He notes that there have been two stalled-in-Congress bills that have attempted to impose greater regulations: the Motor Coach Enhanced Safety Act and the Bus Uniform Standards and Enhanced Safety (BUSES) Act.
OSHA fines – from The Safety Blog, the Top 10 fines for construction companies. “In total in the 2010 fiscal year OSHA inspected 16,473 small construction companies and handed out 50,630 citations. These citations cost employers more than $46 million or an average of about $900 a citation.”

Austin City Limits: Payment for Prejudice

Wednesday, April 27th, 2011

Edwin Graning drove a van for the Capital Area Transportation System (CARTS), which serves the public in the communities surrounding Austin, Texas. He is also an ordained minister. He was sent to pick up two women and deliver them to the Planned Parenthood office in Austin. He was “concerned” that the customers were going to Planned Parenthood for an abortion, so he called his supervisor and told her that in good conscience, he could not carry out the job. He was instructed to return to the garage, where he was promptly terminated for this refusal to follow orders.
Graning, supported by lawyers from the American Center for Law and Justice, alleged a violation of the Civil Rights Act of 1964. (Goodness, quite a bit of irony in that!) He sued his employer for discrimination based upon religious beliefs. In the lawsuit, he sought reinstatement with backpay, payment for his pain, suffering and emotional distress.
Surely, there is no basis in the law for this claim. Surely, Graning is the one who should be sued. Then again, this is the Lone Star state that some would transform into a sovereign nation.
Unsettling Settlement
Lawyers for CART advised them to settle. Blanco County Commissioner Paul Granberg said that the attorneys “advised the board that it would cost a lot more in attorney fees than it would cost to settle.” So they wrote a check to Graning for $21,000. Is there any such thing as principle in law these days? Did CART’s attorneys even consider doing what is right and just?
CART, which did nothing wrong, has changed its hiring procedures, to prevent a recurrence of this ludicrous situation. David Marsh, CART general manager, said officials have begun making it clear when drivers are hired “that we have a job to do and we don’t decide what destinations are.” Boy, that must be a revelation (no pun intended) to people applying for jobs as drivers.
Graning has been amply rewarded for his discriminatory and prejudice-laden act. He had no way of knowing why the customers were going to Planned Parenthood, which offers a wide range of health services, by no means limited to abortion. He was represented in this crackpot lawsuit by attorney Thomas Brandon, Junior, of counsel to Whitaker, Chalk, Swindle & Sawyer. Chalk it up as a Swindle, indeed.

Yes, Virginia, There Might Be a Sanity Clause

Tuesday, January 25th, 2011

Two years ago we blogged the sad story of Arthur Pierce, a commercial driver in Virginia who suffered a traumatic brain injury and eventually died from a fall on the job. Pierce’s death was deemed non-compensable due to a cruel and rather peculiar glitch in the Virginia comp statute. Under the law, if a worker suffers a brain injury that is not witnessed by others, and the worker is unable to provide details on the injury (Pierce was found in a coma from which he never emerged), the incident is not compensable. There is no room for judicial discretion: no testimony, no benefits.
We also blogged a more recent incident, where Dan Casey, a cable installer, fell off a roof. Again, there were no witnesses and again, in the days and weeks following the incident, Casey had no memory of what happened. Fortunately for him and his family, he eventually was able to remember some of the details. With some reluctance, the insurer settled the case.
The problem, obviously, lies in the Virginia comp statute. Rather than allow the comp system the normal latitude in determining compensability, the law rigidly lays out a harsh standard: if there are no witnesses, the employee must provide the narrative. In the absence of a narrative, there can be no compensability. In the above rare but compelling circumstances, seriously injured workers were unable to provide details on exactly what happened.
The Fix is In?
There is finally some movement toward amending the faulty statute. Here is the language of a bill which recently made its way out of committee, onto the floor of the Virginia House:

Workers’ compensation; presumption that injury arises out of employment. Creates a presumption that a workplace injury results from an accident arising out of employment for purposes of the Workers’ Compensation Act if the employee is found dead or to have incurred a brain injury resulting from external mechanical force that impairs the employee’s brain function to such an extent that the employee is incapable of recalling the relevant circumstances of the accident. A judicially created presumption currently exists when an employee is found dead as the result of an accident at his place of work and there is no evidence offered to show what caused the death or to show that he was not engaged in his employer’s business at the time.

Note that the brain injury must be the result of “external mechanical force” – no aneuryisms need apply. This revision would crack open the door to compensability just enough for a grievously injured Arthur Pierce or Dan Casey to slip through.
Pierce’s widow has been lobbying the legislature to address this gaping hole in coverage for Virginia workers. She has nothing to gain, as the changes will not be retroactive. But it would be comforting to think that workers who suffer severe brain injuries on the job in the Old Dominion State will have recourse to the protections that are virtually universal for all workers. That would be a sanity clause, indeed.

UPS At Risk: 37,500 Temps

Wednesday, December 22nd, 2010

This is a very busy time for delivery companies.Whether it’s the post office, UPS or FedEx, there are more packages moving around than people to handle them. The UPS solution is the hiring of 37,500 (!) temporary workers. These folks have been working for a few weeks and will continue working right up until Christmas Eve, when they will all be laid off. Due to the struggling economy, UPS had no trouble filling temporary jobs. This year, many laid off white-collar workers donned the drab brown uniforms and hopped on board delivery trucks, occupying the “jumper” seat next to the regular driver.
The Wall Street Journal has a nice article about this war-scaled ramp up (subscription required). As you can imagine, there is not a whole lot of time for training the new employees: a few tips on lifting “in the power zone,” a caution about getting into the truck (“three point contact”) and then off you go. The job is a frenzy of lifting, bending, carrying and climbing. These are physically demanding jobs, with relentless exertion required.
Risk Management Nightmare
Which leads to a loaded question for the risk managers at UPS: what percentage of this temporary workforce will be injured on the job? Even if it’s only one half of one percent, that would be nearly 200 people. In all likelihood, they will have been laid off before the claim has been filed. And once laid off, these temps will have no loyalty and no commitment to UPS. They will have already handed in their brown uniforms.
More troubling from a risk perspective, the types of injuries may be the most open-ended and expensive claims in the comp system: back, shoulder and knee injuries, slips and falls on ice (for most of the country it is, after all, a rather tough winter). Statistically, you can expect an occasional robbery or animal bite.
All business entails some risk. Hiring strangers is always risky, no matter how thorough the vetting process – and in this case, that process is foreshortened, to say the least. Placing thousands of temporary employees into physically demanding jobs increases risk exponentially.
So when you go home tonight and look for the packages you are expecting, think for a moment on the harried temporary employees who brought them to your door. And say a little prayer, that the New Year brings these former white-collar workers health, happiness…and a job once again suited to their hard-earned skills.

Commercial drivers & medical certification (and other alarming commercial transportation safety matters)

Thursday, October 7th, 2010

On Mother’s Day in 1999, Custom Bus Charters’ bus driver Frank Bedell veered off a highway near New Orleans, killing 22 passengers and injuring 20 others. Just 10 hours before this trip, Bedell was treated at a local hospital for “nausea and weakness.” He had been treated at least 20 times in the 21 months prior to the accident, and 10 of those times involved hospitalization for “life-threatening” heart and kidney disease. You can read more about this horrific crash, which remains one of the nation’s deadliest bus crashes, at Loopholes let sick man drive, safety board says. Also of interest: Breaking the law went with the job.
This accident brought the issue of the medical competence of commercial drivers to the public attention in a dramatic way. In its subsequent report of the accident after the investigation, The National Transportation Safety Board (NTSB) determined that “…the probable cause of this accident was the driver’s incapacitation due to his severe medical conditions and the failure of the medical certification process to detect and remove the driver from service. Other factors that may have had a role in the accident were the driver’s fatigue and the driver’s use of marijuana and a sedating antihistamine.
The incident and investigation prompted NTSB to issue Safety Recommendations revolving around medical certification of commercial drivers.
How are we doing today?
Nearly a decade later, how are these safety measures designed to protect the public from medically unsafe commercial drivers working out? Not too well, according to a recent investigative report by News21, which was published by MSNBC in the article Truckers fit to drive — if a chiropractor says so: “From 2002, when the recommendations were made, through 2008, the last year for which data is available, there were at least 826 fatal crashes involving medically unqualified or fatigued drivers, according to a News21 analysis of the FMCSA Crash Statistics database.”
The article paints a scary portrait of a driver medical certification program that is pretty broken. Truck drivers can pop into roadside clinics to pick up certifications issued after a cursory examination by almost any health professional. And that’s a good scenario – drivers can also download online certificates and fill them out themselves or ignore the requirement entirely. Forgeries are a common occurrence. Being caught without a certificate might result in a slap-on-the-wrist fine. While there have been calls for a national registry for medical certification of commercial drivers, the idea has made little progress. It will probably take the next big incident to ignite public outrage to motivate any change.
For a resource on current regulations, see the US Department of Transportation Motor Carrier Safety Administration’s Medical Programs, which includes medical regulations and notices, including drug and alcohol testing.
The News21 story on commercial drivers is the third part in a series of four articles that deal with transportation and public safety. Here are the others:

Part 1:
Driving While Tired: Safety officials are slow to react to operator fatigue:
“NTSB does not track fatigue-related highway accidents on a regular basis. But in 1993, the board commissioned a study expecting to learn about the effects of drugs and alcohol on trucking accidents. Investigators studied all heavy-trucking accidents that year and made an unexpected discovery: Fatigue turned out to be the bigger problem. NTSB Crash investigators said driver fatigue played a key role in a bus accident in Utah in 2008 that killed nine people returning from a ski trip.
The study found 3,311 heavy truck accidents killed 3,783 people that year, and between 30 percent and 40 percent of those accidents were fatigue-related.”
Part 2: Video in the cockpit: Privacy vs. safety
In 200, the NTSB added a recommendation for video recorders to be installed in commercial and charter planes to its “most wanted” list. Pilot unions and other groups have lobbied this safety measure. See this story’s sidebar article: Shhhh! Your pilot is napping
Part 4: Outsourcing safety: Airplane repairs move to unregulated foreign shops
“More maintenance has moved overseas. Airlines are not required to use regulated repair shops. Foreign repair stations can go five years between inspections, and even then are often tipped off that inspectors are coming. Manuals are in English, but not all the workers read English. Drug tests of workers are illegal in some countries.
A News21 analysis of Federal Aviation Administration data showed that about 15,000 accidents or safety incidents in all aviation travel can be attributed at least in part to inferior maintenance or repairs since 1973, when the FAA started keeping such records. In these accidents at least 2,500 people died and 4,200 were injured.”
Most wanted list: transportation safety improvements
The NTSB keeps a most wanted list of transportation safety improvements, in which it makes recommendations for critical safety improvements for various transportation sectors. Recommendations are designed to improve public safety and save lives, but many have been on the list for years. In some cases, individual states may have requirements, but these recommendations are national in scope. While issues on the “most wanted list” are pending, individual employers might use the list as best practice guidance for safety programs to limit exposure both for workers compensation and other liability issues that might arise from commercial transportation accidents.
You can find more reports on transportation and public safety at News21, “a national initiative led by 12 of America’s leading research universities with the support of two major foundations” with a purpose of furthering in-depth and investigative reporting. In 2010, one of the main areas of focus has been Breakdown: Traveling Dangerously in America.

The Pizza Delivery Chronicles, Part Two: Drivers at Risk

Tuesday, October 5th, 2010

In yesterday’s blog on this topic, we told the story of a pizza delivery driver whose undisclosed seizure problem put others (and herself) at risk. Today we examine the inordinate and ultimately terrifying risks that routinely confront the people who deliver pizzas to homes.
The risks of delivery jobs are embodied in one sad tale. Richel Nova, 58, was a hard working immigrant who worked two jobs, one being delivering pizzas for Domino’s in Boston. He responded to a call from the Hyde Park neighborhood. The address was a vacant home. He was lured into the house, robbed, stabbed multiple times and left for dead. The three thieves took his money ($100) along with the pizza and drove off in his 1995 Subaru. (The age of the car tells us a lot about Mr. Nova.) The abandoned car was found a bit later, along with the blood-stained pizza box. All but three pieces had been eaten.
Nova’s life revolved around his family: twin 20-year-old daughters and an older son. The twins are both juniors in college. All that stood between Nova and a seat at his daughters’s graduation next year were a hundred bucks and a pizza to go.
Robberies of delivery people in the Boston area have been a long-standing problem – 52 were reported through mid-September.
Common Ground Among Competitors
The three main pizza chains – Domino’s, Pizza Hut and Little Caesar’s – have collaborated on developing safety programs for drivers. Among them, they have nearly 90,000 drivers on the road. (Here is the Domino’s description of the job.) Statistically, it’s not difficult to identify the riskiest neighborhoods for delivery, but the chains face pressure from neighborhood groups and the federal government to provide delivery services without discriminating against the poor.
Back in 2000, Domino’s reached an agreement with the Justice Department to formalize a delivery policy for all its restaurants. Reflecting what Domino’s said were well-established standard practices, the new guidelines require managers to evaluate crime statistics with local law enforcement agencies and community groups before limiting delivery. As part of that policy, drivers must report any incidences of violence, and delivery limits must be drawn narrowly. (Easier said than done.)
(Sort of) Managing Risk
There are a number of ideas floating around on how drivers should handle what appear to be risky delivery scenarios:
– Require the customer to come to the car to pay for the delivery and pick up the pizza. (This may not be feasible in all circumstances – for example, disabled customers may not be able to come to the street.)
– Require customers to have exact change for their purchase (and hope against hope that they have a bit extra for the tip!)
– Advise drivers not to enter darkened dwellings
– Limit deliveries after certain hours (in the Boston data mentioned above, many of the robberies took place after 9:00 pm.)
– When in doubt, when confronted with what appears to be immediate risk of harm, the driver is instructed to return to the store (and risk the wrath of legitimate, irate customers awaiting their dinners)
For those of us who have never had a gun or knife thrust into our faces, the dangers confronting delivery workers every day are both frightening and unimaginable. For Richal Nova’s children, any mention of pizza will haunt their thoughts for the rest of their lives – reminding them of their father’s lonely and senseless demise at the hands of cruel thugs with a half-baked plan for a free meal.

The Pizza Delivery Chronicles, Part One: Liability

Monday, October 4th, 2010

Every time I see a marginal car with a pizza delivery sign slapped onto the roof, I think about the driver. How old? How experienced? How desperate to make a few bucks in a tough economy? And from the employer’s viewpoint: how competent is the driver? Just how far must an employer go before they entrust a driver with the plastic logo and the insulated bag for delivering pizza to those of us who want dinner delivered in a box?
These thoughts congeal like day-old pizza in the sad case of Nicole Fisk, an 18 year old driver who worked (briefly) for Pizza Hut. Nicole only had her license for 3 months when hired by Pizza Hut in Clairemont CA. She was delivering pizza in November 2008 when she blacked out and drifted across the solid line into oncoming traffic. She slammed into a car operated by Shari Novak, 62, who suffered permanent brain damage and can no longer take care of herself. Shari’s mother, Olena, suffered a broken neck.
Who Pays?
The Novaks sued Pizza Hut, arguing that the company was responsible for the collision because they hired Fisk, a relatively inexperienced driver, who had a history of suffering blackout spells. Ah, there’s the rub. What did the employer know about Nicole Fisk? Only what she told them. She had a clean record, she carried the necessary insurance and her references were fine. She was not diagnosed with epilepsy until after the crash. Pizza Hut called it an “unforeseeable medical emergency” – which can be used as a defense to a negligence lawsuit.
Jurors rejected the defense, awarding Shari Novak $8.6 million and her mother $2.2 million. As one juror put it, “Fisk should have known she could have a blackout episode because of her medical history.”
Here’s where it gets interesting and where the issue of employer accountability comes to the fore. A consultant attorney points out that Nicole lied continuously about her health problems. When she first experienced blackouts, she was put on medication for acid reflux (a seemingly bizarre diagnosis, but perhaps based upon the limited information she provided her doctors). She apparently under-reported subsequent problems to these doctors. When she applied for a driver’s license, she failed to disclose her medical condition to the Registry. And when she applied for a job at Pizza Hut, she once again lied about her condition and its potential impact on her ability to perform the job safely.
It’s not difficult to feel some sympathy for Nicole. She is only 18. Her medical condition frightens her – she probably prefers not to think about it. Like any 18 year old, she wants to drive like her friends and earn a few bucks. In her own mind, she was not endangering herself or anyone else.
Impossible Standard?
While it’s important to note that the jury did not find Pizza Hut guilty of negligent hiring, it did conclude that the company is responsible for damages because Fisk was their employee at the time of the accident. John Gomez, the attorney for the Novaks, said that the verdict should send a signal to other companies “to be a little more careful when hiring professional drivers.” This is a bit disingenuous. Surely, the attorney is not suggesting that employers (illegally) research medical records on every potential hire. In this case, Pizza Hut followed its own reasonable procedures. Other than hiring a relatively inexperienced driver, they did nothing wrong.
Nicole Fisk was initially named in the personal-injury lawsuit but was later dropped from the case. Not because she was innocent – she is responsible for the tragic events on that November day – but because she had no assets of the magnitude sought – and secured – by the Novak attorneys.
There are few lessons to be learned here. Employers are routinely held accountable for many things which they do not control. It’s not so much a matter of accountability as the crass ability to pay. In a case of this scale, with damages this severe, someone must pay. That someone, obviously, is the corporate entity that was unfortunate enough to hire Nicole Fisk.

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.

    A killer edition of Health Wonk Review & other noteworthy news

    Thursday, June 10th, 2010

    Our Boston neighbor Tinker Ready hosts this week’s edition of Health Wonk Review at Boston Health News and it’s a killer edition – check it out.
    Awkward – Making the web circuits, many have been posting about the Bollywood safety dance video by Transocean’s CEO. We encourage CEOs and senior managers to ensure that safety is top company priority – so on the one hand, we applaud the attempt. But in light of the recent explosion that resulted in 11 deaths, this video is ironic and embarrassing. This, coupled with the recent news that the company’s disaster response plan was riddled with egregious errors leaves one to think that BP’s risk management efforts were not as substantive as they might have appeared on the surface. The folks over at Risk Management Monitor have been posting about various aspects of the BP story. Jared Wade gives us the rundown on BP’s pattern of neglect and corner cutting as well as an infographics style rundown on the spill. Also, if you haven’t seen the wildly popular fake BP PR Twitter account, it might give you a chuckle if you are into black humor. BP is not amused by the parody.
    Truck drivers & sleep apnea – A study on sleep apnea and truck drivers that was recently published in the Journal of Occupational and Environmental Medicine found that treatment for sleep apnea led to more than $6,000 in total health plan and disability cost savings per treated driver. “On average, researchers found that for treated drivers, health plan costs decreased an average of $2,700 in the first year and another $3,100 in the second year compared to no change for untreated drivers. The treated drivers also missed fewer workdays (average 4.4 days in the first year) and had lower short-term disability costs ($528 over two years).”
    Battle of the pharma giants – Joe Paduda keeps an eye on the Caremark vs Walmart pharma fight and offers informed commentary about what’s going on.
    No go in Ohio for Noe – The Ohio Supreme Court has rejected Thomas Noe’s request for an appeal of his convictions. You may recall that Noe got in trouble for the theft of $13 million from $50 million that he invested in rare-coins and beanie babies for the Ohio Bureau of Workers’ Compensation. His capers were a contributing factor in bringing down Governor Taft and various other state officials. Stories like this don’t surface often in workers comp – we have quite an archive from the early days of the scandal through conviction and the early days of the appeal.
    Octomom settles WC claim – From California comes the news that Nadya Suleman (aka “Octomom”) settled her workers comp lawsuit for $23,120. The injury occurred more than a decade ago. See my colleague’s prior post: Comp as Enabler: The Nadya Suleman Story
    Tooting our own horn – thanks to Evan Carmichael for including Workers Comp Insider in his listing of theTop 50 HR Blogs: 2010 – it’s a good list and worth checking out. is a good resource for entrepreneurs and small businesses.
    Also, our post on N.Y.’s domestic workers bill of rights was reprinted at Today’s Workplace, an excellent group blog on issues of workplace rights and employment law sponsored by Workplace Fairness, a non-profit organization helping to preserve and promote employee rights. Both resources are well worth your attention.