Age Discrimination Claims in Workers’ Compensation Settlements?

When an employee settles a workers’ compensation claim, the employer often wants to terminate the employee and is cautious because of potential age discrimination. The Age Discrimination in Employment Act (ADEA), 29 U.S.C. 621 et seq. (2015), prohibits companies with 20 or more employees from discriminating against a person (40 years of age or older) because of his or her age with respect to any term, condition, or privilege of employment, including hiring, firing, promotion, layoff, compensation, benefits, job assignments, and training.

An individual who has been discriminated against because of his or her age may be entitled to back pay, reinstatement, hiring, promotion, front pay, liquidated damages, and court costs and attorney fees.

To avoid potential discrimination claims after a workers’ compensation settlement, the employer often seeks an ADEA waiver at the same time. For an ADEA waiver to be enforceable, it must:

  • Be in writing and understandable;

  • Specifically refer to ADEA rights or claims;

  • Not waive an individual’s future rights or claims;

  • Be in exchange for valuable consideration in addition to anything of value to which the individuals is already entitled;

  • Advise the individual to consult with an attorney before signing the waiver;

  • Provide the individual with a certain amount of time to consider the agreement:

    • 21 days for individual agreements

    • 45 days for group waiver agreements

    • A “reasonable” amount of time for settlements of ADEA claims

  • Provide a period of at least 7 days following the execution of the agreement, in which the agreement is not effective or enforceable, in which the individual may revoke the agreement.

Some termination agreements may not be enforceable, and the individual may have a valid claim to pursue under the ADEA.

States Will #RaiseTheWage for More Than 2 Million Workers

Today’s post comes from guest author Kit Case, from Causey Law Firm.

By  on November 10, 2016 – –

It has been almost four years since President Obama called on Congress to increase the federal minimum wage. While Congress has refused to take action, this hasn’t dissuaded states and localities from stepping up and giving American workers the raises they need and deserve. Election Day was no exception. Voters in Arizona, Colorado, Maine and Washington cast their ballots to ensure that hard work is rewarded with a fair wage.

The resounding win for minimum wage ballot initiatives in these states will collectively result in nearly 2.2 million workers getting a raise.*

  • In Arizona, the minimum wage will be raised to $12 by 2020, lifting the earnings of 779,000 workers. Flagstaff passed an even bigger raise − $15 by 2021.
  • In Colorado, the minimum wage will be raised to $12 by 2020, lifting the earnings of 477,000 workers.
  • In Maine, the minimum wage will be raised to $12 by 2020, lifting the earnings of 181,000 workers.
  • In Washington, the minimum wage will be raised to $13.50 by 2020, lifting the earnings of 730,000 workers.

The Election Day results are another reminder that for most Americans, raising the minimum wage isn’t a partisan issue but rather a commonsense decision. Twenty-nine states and the District of Columbia – home to 61 percent of all U.S. workers − have minimum wage rates above the federal rate of $7.25.

Voters and policymakers in these states understand what labor economists have spent decades researching and confirming: minimum wage increases have caused little to no significant job loss, but they have reduced employee turnover, strengthened families’ finances, and ultimately helped grow our economy. As our economy continues to recover from the greatest economic crisis in generations, we should all share in the prosperity we are building. And there is no easier way to do that than by raising the minimum wage.

By casting their ballots for a fair wage, the residents of Arizona, Colorado, Maine and Washington renewed President Obama’s call to take action. It’s time raise the minimum wage for all workers in America.

Dr. Heidi Shierholz is the department’s chief economist.

*Source: The Economic Policy Institute.

Note: In Arizona and Washington, the approved minimum wage ballot initiatives also require employers to provide paid sick leave to their employees. Expanding access to paid sick leavehas been another top priority of the Obama administration, and these ballot victories will help thousands more workers be able to address their health needs without putting their or their families’ economic security at risk.

Drug Formularies, Part 2: Pharmacy Benefit Managers and Drug Prices

Mylan CEO Heather Bresch testified before the House Oversight Committee about her company’s increase in the price of life-saving EpiPens by more than 500 percent since 2007.

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

This fall, most Americans were outraged at revelations that the price of life-saving EpiPens had increased by 600 percent since 2007. The anger over the drastic price increase for EpiPens focused attention on the role that pharmacy benefit managers play in the increase of drug prices. Pharmacy benefit managers administer drug formularies, so the use of drug formularies should also be questioned on prescription price control in addition to the question of whether drug formularies shift costs to more expensive treatment.

Pharmacy benefit managers have been praised for helping negotiate drug discounts. However, pharmacy benefit managers have been criticized on the same grounds because their profitability depends in large part on being able to pocket a percentage of the discount that they negotiate. This is a lucrative business. Express Scripts is described by Wall Street-types as a “pure play” pharmacy benefit manager. In the last quarter, Express Scripts made $722.9 million in profit, a 9 percent year-over-year increase.

In addition to being criticized for benefiting from the increase in pharmacy costs, pharmacy benefit managers have also been criticized for having conflicts of interest. Pharmacy benefit managers run drug formularies. However, since pharmacy benefit managers negotiate discounts with specific drug firms, pharmacy benefit managers have an incentive to put those drugs on drug formularies. These types of arrangements have drawn the attention of Preet Bharara, the high-profile United States attorney for the Southern District of New York. In 2015, Bharara settled a charge against Express Scripts for $45 million. The settlement came after an Express Scripts unit participated in a kickback scheme involving Novartis under the False Claims Act and the Anti-Kickback Statute.

In fairness to pharmacy benefit managers, there may be other factors driving increased prescription prices. Recently, former Democratic presidential candidate and current U.S. Sen. Bernie Sanders wrote a letter to the Federal Trade Commission alleging collusion among pharmaceutical companies in regards to insulin prices. Insulin is a generic drug, and generic are cheaper than so-called brand-name drugs. However, the increase in insulin prices is far from the sole example of drastic increases in generic drugs.

In 2015, the National Council on Compensation Insurance (NCCI) released a report on prescription drug prices in workers’ compensation. On page 36 of this report, NCCI pointed out that four of the 10 drugs most responsible for the increase in drug prices were generics. In 2014, the price of generic Oxycodone-Acetaminophen rose 35 percent, Oxycodone’s price rose 60 percent, the price of generic muscle relaxer Baclofen rose 86 percent, and the price of generic Morphine Sulfate ER rose by 25 percent.

There is strong evidence that pharmacy benefit managers do little to control prescription drug prices. There is also strong evidence that pharmacy benefit managers benefit from increases in drug prices. If advocates of workers’ compensation reform want to expand the use of drug formularies, they need to explain to policy makers how the pluses of pharmacy benefit managers outweigh the myriad problems related to pharmacy benefit managers.

Drug Formularies, Part 1: The Rest of the Story

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

A drug formulary is a term describing a list of drugs that are covered by an insurance plan. In workers’ compensation, formularies are touted as a way to reduce prescription costs and lead to more effective care. Formularies are particularly pushed as a solution for opioid use and abuse for injured employees.

The headline numbers about the reduction of prescription costs look eye popping. One group of pharmacy benefit managers, the companies that manage drug formularies, claimed a 9 percent reduction in prescription costs over the last year. Ohio, which has the largest state-run workers compensation fund in the country, claimed a 16 percent reduction in prescription costs in the first three years after they implemented a drug formulary. Ohio reported 15.7 million fewer doses of opioids in that time period and a 36 percent reduction in opioid costs.

The Rest of the Story about Drug Formularies

Florida workers’ compensation judge David Langham has asked “what is the rest of the story” about drug formularies. If drug formularies are so effective, then why have they only been adopted in a few states for workers’ compensation?

While drug formularies are a relatively recent development in workers’ compensation, they are well established in the larger world of health insurance. Drug formularies have long been criticized for increasing costs in health insurance plans by reducing prescription usage because costs are shifted to insureds, which forces insureds to seek more expensive care, because chronic conditions go untreated. Overall costs are increased. The costs are also shifted onto insureds who have to pick up the costs for more expensive procedures that could have been taken care of through medication. Cost shifting from the employer onto the employee, other forms of insurance and the government is already a serious problem in workers’ compensation. Drug formularies in workers’ compensation could exacerbate the issue of cost-shifting.

Do Drug Formularies add up?  Cost = Price * Utilization

When you study drug formularies for any amount of time, you run across the equation that drug costs equal price multiplied by utilization. Proponents of drug formularies tout that they can decrease both the utilization and the price of prescription drugs. Ohio has provided detailed information about the decrease in the utilization of certain drugs like opioids because of formularies. However, the decrease in the utilization in opioids cited by proponents of drug formularies coincides with an overall long-standing decrease in the frequency or number of workers’ compensation claims. Fewer overall claims mean less overall utilization, which could explain some of the cost decrease. A better measure of the effectiveness in drug formularies in controlling costs would be measured by looking at prescription cost per claim. So far, drug formulary proponents have been unable to show that data. Even if drug formulary proponents could show that data, there is still the issue of whether reductions in prescription drug costs lead to increases medical costs by forcing injured employees to seek more expensive care that could have been taken care of by prescriptions.

On the price end of the equation, drug formularies are thought to control costs by having pharmacy benefit managers negotiate bulk discounts on prescription drugs. But pharmacy benefit managers have come under fire with allegations that they actually increase drug prices or at the very least are powerless to stop the increases in drug prices. The issue of drug formularies, pharmacy benefit managers and drug prices is complicated and will be addressed in Part 2 of this series.

Increase in Work-Related Fatal Injuries in 2015 – North Dakota the Highest

According to the Census of Fatal Occupational Injuries, in 2015 the number of work-related fatal injuries increased nationally. There were 4,836 work-related fatal injuries in the United States and 150 work-related fatal injuries in North Carolina compared to 4,821 in 2014.

After the oil-and-gas industry’s sharp increase in work-related fatal injuries in 2014, the industry saw a 38 percent drop in 2015. The occupation with the most reported work-related fatal injuries was “heavy and tractor-trailer truck drivers” with 745. However, logging workers had the highest work-related fatal injury rate at 132.7 per 100,000 workers.

North Dakota reported the highest work-related fatal injury rate at 12.5 per 100,000 workers and Rhode Island recorded the lowest rate at 1.2 per 100,000 workers. North Carolina’s 2015 work-related fatal injury rate was 3.4 per 100,000 workers, with a total of 150 fatalities. In 2014, North Carolina had 137 work-related fatal injuries.

 

2015 Fatal Occupational Injuries Counts and Rates by State of Incident

 

Count

Rate per 100,000 Workers

Alabama

70

3.7

Alaska

14

4.1

Arizona

69

2.4

Arkansas

74

5.8

California

388

2.2

Colorado

75

2.9

Connecticut

44

2.6

Delaware

8

1.9

District of Columbia

8

2.4

Florida

272

3.1

Georgia

180

4.3

Hawaii

18

2.6

Idaho

36

4.8

Illinois

172

2.9

Indiana

115

3.9

Iowa

60

3.9

Kansas

60

4.4

Kentucky

99

5.5

Louisiana

112

5.8

Maine

15

2.5

Maryland

69

2.4

Massachusetts

69

2.1

Michigan

134

3.1

Minnesota

74

2.7

Mississippi

77

6.8

Missouri

117

4.3

Montana

36

7.5

Nebraska

50

5.4

Nevada

44

3.5

New Hampshire

18

2.7

New Jersey

97

2.3

New Mexico

35

4.1

New York

236

2.7

North Carolina

150

3.4

North Dakota

47

12.5

Ohio

202

3.9

Oklahoma

91

5.5

Oregon

44

2.6

Pennsylvania

173

3.0

Rhode Island

6

1.2

South Carolina

117

5.6

South Dakota

21

4.9

Tennessee

112

3.7

Texas

527

4.5

Utah

42

3.2

Vermont

9

2.9

Virginia

106

2.8

Washington

70

2.1

West Virginia

35

5.0

Wisconsin

104

3.6

Wyoming

34

12.0

 

 

 

Total

4,836

3.4

 

 

Carbon Monoxide Poisoning at Work

Hundreds of individuals have been exposed to dangerous levels of carbon monoxide while at work, including 150 employees at Middleville Tool and Die in Michigan when a hi-lo vehicle malfunctioned emitting carbon monoxide and hydrogen sulfide fumes, and 3 construction workers in Berkley, California who were operating a gas power washer inside a building. Carbon monoxide poisoning is a dangerous risk for workers.

Carbon monoxide is a colorless, odorless, tasteless, and poisonous gas that results from the incomplete burning of natural gas, gasoline, kerosene, oil, propane, coal, and other carbon-containing materials. Workers may be exposed to harmful levels of carbon monoxide in boiler rooms, warehouses, petroleum refineries, steel production, blast furnaces and coke ovens.

Initial symptoms of carbon monoxide poisoning include headache, fatigue, dizziness, drowsiness, nausea, chest pain. Within minutes and without warning, large amounts of carbon monoxide can cause loss of consciousness, suffocation, and death. If caught early, carbon monoxide poisoning can be reversed; however, there may be permanent brain and heart damage from the lack of oxygen to the organs during the exposure.

There are several measures employers can take to prevent carbon monoxide poisoning including installing effective ventilation systems that remove carbon monoxide from work areas and installing carbon monoxide monitors with audible alarms. To be safe, employees should report any situation to their employer that might cause carbon monoxide to accumulate and be alert to any ventilation problems.

If you or someone else is experiencing symptoms of carbon monoxide poisoning move to an open area with fresh air and call 911. For more information on carbon monoxide poisoning, read the U.S. Department of Labor Occupational Safety and Health Administration’s Carbon Monoxide Poisoning Fact Sheet.

Book Review: Strangers in Their Own Land

The author, Arlie Russell Hochschild, a sociologist from Berkeley, California, has attempted to understand the Tea Party movement by going to rural Louisiana. Over a five-year period she got to know the people of this region; attended political events, including Donald Trump rallies; and became friends with many hard-working men and women, all of whom live in an area that has been severely environmentally damaged by the oil industry. The result of her research is her 242 page book, Strangers in Their Own Land.

Hochschild attempted to solve a paradox: why do citizens who live in this area allow drastic cuts in public funding to the extent that Louisiana has fallen to the bottom of  the states in overall health, education, and welfare, particularly during the 8 years when Governor Bobby Jindal was governor, yet  have no objection to giving businesses over $1.6 billion in tax breaks? Hochschild developed a “deep story” that is an image of the way Tea Party people feel about their place in the political and cultural world today. Why are they so angry, and so upset with the federal government? They see themselves in a long line waiting to reach the American dream at the top of a hill.  They are patient, hard-working, devoted to family, church and community, but over the years they see the line becoming slower, and they are convinced the federal government is letting people “cut in line.” They see African Americans, females, the disabled, Mexicans, gays and now even Syrian refugees, being allowed to cut in front of them and get ahead of them. Mild discontent has grown to anger. 

Tea Party activists “feel” as though they are being left behind and isolated, yet believe they have better morals and a better work ethic than those getting in front of them. They have lost empathy for the poor and disabled, and reject the notion that big government has the correct solution for economic and environmental problems, notwithstanding that because of lack of regulations Louisiana has become an environmental disaster (you cannot drink river water; local fish cannot be eaten; cypress trees are dying; and toxic waste is being stored below the surface, with adverse effects). These people are genuine and care about their communities, but the feelings they have about being abandoned by the federal government and disrespected by the media and northern elites, has made them callous to those who do not work and who do not contribute to society. As one person stated, “ I think if people refuse to work, we should let them starve.” 

We need to appreciate the bitterness and sense of loss of  Tea Party activists, and we need to try to bridge the gap in understanding. It is clear from this book, however, that unless both sides make a good faith effort to communicate, there will be no early reconciliation.  This book should be mandatory reading for all those who are clueless as to the makeup of a Tea Party voter.

More Takeaways from the Demise of the Oklahoma Option in Workers’ Compensation

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

The Oklahoma Supreme Court’s decision to strike down the so-called “Oklahoma Option” in Vasquez v. Dillard’s was one of the biggest events in the world of workers’ compensation. Vasquez represents a growing trend by advocates for injured workers recognizing that workers’ compensation is a matter of constitutional law. But the Vasquez decision is important for other reasons.

Opt-Out is Still Viable

Though some commentators declared the defeat of the Oklahoma option was the death of opt-out, many justices on the Oklahoma Supreme Court who overturned the Oklahoma option would disagree.

A concurring opinion contrasted the Oklahoma opt-out system with the Texas opt-out system. In Texas, employers are not required to have or “subscribe” to workers’ compensation. But if Texas employers do not subscribe to workers’ compensation, injured Texas employees can sue their employer in tort with all affirmative defenses stripped away. This encourages employers to carry workers’ compensation insurance. Nebraska has a similar law for agricultural employers who are exempt from having to carry workers’ compensation.

Oklahoma’s “opt-out” created separate workers’ compensation systems: the state system under the Administrative Workers’ Compensation Act (AWCA) or the private systems under the Oklahoma Employee Injury Benefit Act (OEIBA), where employees were eligible for the same benefits but where employers could draft their own rules for eligibility. Regardless of whether an employee was covered under the AWCA or the OEIBA, employers still had to be covered under one system or another, and employees could not sue their employer in tort for work injuries. What doomed the Oklahoma option was the fact that unfair procedures under the OEIBA created separate but unequal workers’ compensation systems.

The contrast between the now defunct Oklahoma option and the still-viable Texas opt-out system was reinforced when the Vasquez court rejected Dillard’s argument that Vasquez’s claim was pre-empted by the federal Employee Retirement Income Security Act (ERISA) law. Under the Oklahoma option, plans under the OEIBA were to be governed by the ERISA law. However, since OEIBA served as workers’ compensation and ERISA plans that serve as workers’ compensation plans do not pre-empt state workers’ compensation laws, the OEIBA was not pre-empted by federal law. In contrast, state law claims against employers on disability insurance plans who are “nonsubscribers” in Texas are pre-empted by ERISA.

Few, If Any States, Are Going to Implement the Oklahoma Option

The Oklahoma option was struck down on equal-protection grounds based on the Oklahoma state constitution. Most other states have similar provisions in their state constitutions. In Nebraska, that provision is found at Article III, Section 18 of our state constitution. This provision concerns itself with disparate treatment in much the same manner as does the language of the 14th Amendment of the U.S. Constitution, which prohibits a state from making or enforcing any law that denies any person within its jurisdiction “the equal protection of the laws.” Distinctive Printing & Packaging Co. v. Cox, 232 Neb. 846, 443 N.W.2d 566 (1989). Even in a state without an equal protection clause in the state constitution, separate but unequal workers’ compensation systems could be likely be struck down on equal-protection grounds under the U.S. Constitution.

Injured Workers Are a Protected Class

Injured workers are sometimes subject to retaliation for bringing workers’ compensation claims. In 2013, the U.S. Supreme Court distinguished “discrimination” or “protected status” from “retaliation” or “protected activity” cases under Title VII and held that there was a higher burden of proof for employees bringing a retaliation case than for an employee bringing a discrimination case. However, if injured workers are thought of as a protected class, then discrimination in the form of termination should be thought of as a form of discrimination, and those claims should be subject to a more relaxed burden of proof than required in the Nassar case.