The Innovative Workplace

A sad workers comp story

…and how to prevent problems before they occur

By Don Phin

The Zolar Manufacturing Company is facing concerns typical of many employers. It has an aging workforce, some of whose members aren't retiring when management thought they would…or should. When senior employees do announce their plans to retire, their supervisors don't "mine" these experienced employees' wisdom and document their procedures and practices.

Because Zolar's talented younger employees have so many other opportunities, retention is a big problem. It seems as if the best and brightest are walking out the door—and taking their invaluable knowledge with them. As Zolar battles continued economic pressures, including layoffs, some of the remaining employees are filing questionable workers comp claims as well as employment practices claims, possibly out of frustration resulting from overwork or as a reaction to increased group health premiums and reduced benefits.

Bob, Zolar's press foreman, is looking to hire a new press operator. The last one quit when he and Bob got into a shouting match. Bob puts the word out among his current employees and places an ad in the local classifieds. Zolar is a non-union shop and offers press operators $20 per hour with basic benefits. Bob gets few feelers for his inquiries or ads. Those who do apply are underqualified.

After weeks of frustration, Bob gets a call from Joe, who says he works at a manufacturing plant in a neighboring town and happened to see the classified ad. Joe says he has experience operating presses, and Bob sets up an interview with him.

At the interview, Bob and Joe hit it off right away. Within minutes they're talking about their recent fishing trips. Bob spends all of five minutes asking Joe work-related questions and decides he's found his man. Bob makes Joe a job offer, which Joe quickly accepts. Joe is to begin working the next week.

During his first two weeks with Zolar, Joe is either late or absent on a number of occasions. Bob attributes this behavior to the challenges of getting accustomed to a new company and a new position. As time goes on, Joe's tardiness and absences continue. To top it off, when he is at work, his effort is inconsistent at best.

Bob decides to confront Joe with his concerns. Joe says he hasn't been himself lately and isn't quite sure what's wrong with him. Bob tells Joe, in no uncertain terms, that he expects his performance to improve and if he needs any help to make sure he gets it. Bob fails to document any of his concerns or conversations with Joe.

The following day Joe doesn't come in at all, and he's also absent the next day. On the third day Bob gets a note from Joe's physician stating that Joe injured his back at work earlier in the week and will be out of work for at least a month. The doctor prescribed physical therapy and referred Joe to a chiropractor.

Bob is flabbergasted. He makes an appointment with Pam, Zolar's human resources director, and tells her that he believes Joe did not hurt himself on the job and suspects he might have a drug or alcohol problem.

HR files an injury report. No one at Zolar ever calls Joe to see how he is doing. A week later, Zolar receives notice of a workers comp claim filed by an attorney on Joe's behalf. Now Bob is really upset! He calls Zolar's insurance broker and insists that the claim is a sham. The broker tells Bob it's in the hands of the carrier now.

Joe's claim drags on. After a month Bob gets another doctor's note indicating Joe still hasn't fully recovered and will be out for several more months. In frustration, Bob calls Joe's former supervisor, who refuses to comment about Joe, saying, "He's not our problem anymore."

Eventually Joe is sent for an independent medical evaluation. It is discovered that he had filed a workers comp claim with his previous employer for similar symptoms, also after being warned about his absences and performance. Not surprisingly, on the day he was hired at Zolar, Joe didn't tell Bob that this claim was still being processed.

The case goes nowhere. Joe resists offers of light duty at Zolar, claiming that everything hurts his back. Despite wanting to fire Joe, the company resists because Joe's attorney says his job is protected under the workers compensation retaliation law, the Family Medical Leave Act and the Americans with Disabilities Act. Zolar's attorney says Joe and his lawyer are right and that if Zolar fires him, it can expect to get sued. Zolar's attorney also recommends starting Joe on FMLA leave and informing the employment practices liability carrier of a potential claim to protect Zolar under the policy's "trigger" provision.

Negotiations with Joe's attorney drag on. Hearing after hearing is continued. Joe collects over a year's worth of temporary benefits apportioned between Zolar and Joe's previous employer. He also files for disability.

Joe's tactics wore everybody out. When all was said and done, Joe's attorney entered into a compromise and release agreement with both employers, which included all possible claims, for $150,000. Zolar's work comp carrier paid $75,000, and its EPL carrier paid $25,000. Zolar had to pay its EPL retention of $25,000, and Joe's previous employer also contributed $25,000. Of course, Zolar's work comp mod was raised, as was its EPL premium. This increase, which will be in effect for the next three years, caused Zolar's underlying insurance premiums to rise by approximately $15,000 per year.

As you can imagine, Zolar and Bob are not having a good time.

Coulda-shoulda

While I may have made up this story, it is based on situations that are all too familiar to many of our clients.

Here's how things could have gone differently:

1. Realizing the approaching labor shortage, Zolar could have started by documenting the standard operating procedures and practices of its senior workers. This is where the "wisdom" lies within an organization. Letting people walk out the door without so much as an exit interview is a mistake. It is hard enough going through this transition without adding this exodus of knowledge to the mix.

2. Zolar could have begun an internal or external apprenticeship program so it could hire or promote people with some skills and experience. These apprentices could have formed a mentoring relationship with some of the older workers. This approach could re-energize older workers, thereby slowing their exodus and increasing the pace at which the apprentices are learning.

3. Zolar could have conducted cross-training programs so that responsibilities could be shared during labor shortages or times of rapid production. This approach would reduce the incidence of desperate hiring decisions.

4. Zolar could have resolved to be an employer of choice, attracting the best and brightest talent in its manufacturing niche.

5. Zolar could have established a detailed, written hiring procedure. As I joke in my workshops: "If you don't have it in writing, it's not a hiring process. It's a hiring event. Which makes you an event planner!"

A better way

To identify desirable job candidates and screen out the unqualified or unsuitable, it's essential that your clients have in place an efficient system to manage the hiring process. Encourage clients to take the following steps:

1. Create a meaningful job description. You can do that for any job at no cost by going to www.onetonline.org.

2. Conduct a thorough interview. Don't base a hiring decision on personal feelings or on the impressions you get during the first few minutes of an interview. Ask this question: "Have you ever felt you were being treated unfairly at your current/previous job? What about the job before that?" Then ask the candidate why, why, why? This is my #1 question for identifying victims and manipulators. Then ask that same question of the three people who Joe says know him best. "By the way, what did Joe tell you felt unfair to him at his last job?" If any one lies to you in an interview, do not hire him or her!

3. Administer skill tests. Can Joe really run a press well? Don't take his word for it—test him. Are there some substantive facts you can test him on?

4. Make a character assessment. Find out if Joe is a good emotional fit for this job. Helpful interviewing tools are available. I like IRMI's ZeroRiskHR.com tool because it gives me pertinent questions to ask during the interview.

5. Conduct an extensive background check. The last thing you need is to hire a felon or a fraud. I refer folks to globalresearchhr.com, as they do a great job.

6. Require a pre-placement physical examination. This is where Zolar could have nipped Joe's costly claim in the bud. Bob should have made Joe a conditional job offer and sent him to a qualified local occupational medicine clinic for a pre-hire physical, including a drug test. If Zolar had mentioned in its ads that it follows this procedure, I doubt that the Joe's of the world would even bother to apply.

7. Require each employee to sign a "declaration of no injury" on a regular basis. Anytime an employee is injured, immediately refer him or her to your company's occupational medicine physician (make sure you choose a qualified, experienced physician). It's wise for the company to pay all first aid-type expenses directly rather than submitting small claims to the workers compensation carrier. As the agent or broker, you should be sure that employers understand the importance of a robust return to work program.

8. Be sure each employee is in the correct job classification to ensure that workers comp claims are covered. In conducting an audit of a client company, you as the agent or broker may discover misclassifications. For example, Bob was lumped into the same classification as Joe simply because they both worked on the shop floor. However, Bob engaged in no manual labor and should have been rated separately.

9. Quickly send a positive message to an employee who was injured at work, expressing hope that he/she heals rapidly and returns to work soon. The employer can send get-well cards and, when appropriate, flowers or meals directly to the employee's home.

10. Send out a FMLA notice if an injured employee is absent for work for more than three days. Even if it looks like a potential workers comp claim, you want to make sure the 12-week period for FMLA will start to run.

Workers compensation claims will continue to rise, in part because of the "Joe" phenomenon and also because staff shortages can result in employees taking shortcuts or sidestepping safety rules to meet production deadlines. Questionable comp claims like Joe's are an ever-present possibility, as are spurious comp and EPL claims filed by disgruntled employees.

Today's claims are as much about how people feel about their boss or employer as they are about a specific injury or wrong. Employees who trust their company and supervisor, who believe that they are moving forward in their careers, and who are encouraged to communicate openly with management likely will work smarter and safer and, if injured, certainly return to work sooner.

Now that's a good story.