Injury Reporting

U.S. Steel Lawsuit Could Impact Reporting Policies

If the Department of Labor wins the case, all companies may have to revise rules for immediate reporting of injuries.
By: | March 23, 2016 • 4 min read

It’s commonly known that the earlier a work injury is reported, chances are better that claim costs will be controlled and the worker’s absence will be limited.

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But strictly enforced policies that require workers to report an injury in 24 hours or face disciplinary action are being deemed too rigid.

In February, the U.S. Department of Labor filed suit against U.S. Steel for disciplinary action the company took against two employees.

The Pennsylvania-based workers reported injuries several days after they occurred and were suspended without pay for violating U.S. Steel’s policy that required reporting of an injury within 24 hours.

The employees filed complaints with the Occupational Safety and Health Administration (OSHA), alleging the suspensions were retaliatory.

“The reliability of witness statements can degrade significantly over time.” — Joseph Freeman, managing director, risk control, Beecher Carlson

DOL’s lawsuit charges that U.S. Steel’s action violates the anti-discrimination provision of the Occupational Safety and Health Act.

In announcing the lawsuit, Richard Mendelson, OSHA regional administrator in Philadelphia, said the company’s policy “discourages employees from reporting injuries for fear of retaliation.”

“Because workers don’t always recognize injuries at the time they occur, the policy provides an incentive for employees to not report injuries once they realize they should, since they are concerned that the timing of their report would violate the company’s policy and result in some kind of reprimand.”

Joseph Freeman, managing director, risk control, Beecher Carlson.

Joseph Freeman, managing director, risk control, Beecher Carlson.

The suit demands that U.S. Steel rescind the disciplinary actions, and pay the workers lost wages and damages. It also wants the company’s policy to be changed so that employees can report workplace injuries or illnesses up to seven days after becoming  aware of them.

Workers’ compensation experts say that there is nothing wrong with asking employees to report an injury immediately, in theory anyway.

“Many companies have a rule that you must report workplace injuries immediately, and it is not designed to be a ‘gotcha’ opportunity,” said Joseph Freeman, managing director, risk control at Beecher Carlson.

Prompt reporting of workplace injuries lowers costs and improves outcomes, experts said.

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“The insurance companies have statistics on the amount of money paid depending on how late the claim is reported,” said Robert Phelan, president and CEO of TriPoint.

“If you miss a week in reporting, you get killed. And it goes downhill from there.

“What’s really critical in workers’ comp today is to get the injured employee the right medical treatment from the beginning. Conditions worsen when treatment is delayed, which can happen if the wrong treatment is sought from the start.”

Phelan said that delays can cause medical-only claims to become lost-time claims.

Delays also impede efforts to investigate — and remediate — the causes of injury or illness.

“Conditions at a workplace can change very rapidly,” Freeman said. “If the employer isn’t given the opportunity to investigate immediately, when they do conduct their investigation, the environment could be completely different from when the incident actually occurred.”

“Workplace safety is all about communication, and communication is what creates the culture.” — Robert Phelan, president and CEO, TriPoint

He added that injured workers often don’t see the injury occur, making co-workers’ accounts important.

“The reliability of witness statements can degrade significantly over time,” Freeman said.

Immediate reporting policies help companies gather statements while they are as accurate as possible, he said.

Fraudulent claims, while rare, do occur, and delays, particularly over a weekend, not only make it harder to determine a claim’s validity, but can also spark employer suspicions, harming workplace culture, experts said.

Longer delays can also trigger exclusions to coverage.

“In every insurance policy there is an obligation to report a claim in a timely manner,” Phelan said.

“If you get outside of 30 days, an insurance company could say … ‘We’re not going to pay for it.’ … because your ability to understand what really happened is compromised.

“The [insurance] premium is going to increase on its own, because if you have this late reporting, the statistics prove it will make your claims values higher, and if the claims are higher … your premium goes up,” Phelan says.

Implications of Lawsuit

The suit could have implications beyond U.S. Steel’s policy and procedures.

“If OSHA wins the case, I think many companies will have to revise their policies and retrain people to say, ‘We would appreciate you reporting these immediately so we can investigate in a timely manner, but you have seven days, per OSHA,’ ” Freeman said.

Robert Phelan, president and CEO, TriPoint

Robert Phelan, president and CEO, TriPoint

While Phelan doubts U.S. Steel intended to discourage reporting, he said punitive policies are a bad idea.

Strict disciplinary action, he said, could make workers wary of filing safety reports and damage the collaborative workplace culture that is the most powerful tool in reducing reporting times.

“Workplace safety is all about communication, and communication is what creates the culture. You can’t just send out an email or put something in their pay envelope — it’s got to be continuously communicated. We tell our employees to get everyone to report everything, because if it doesn’t amount to anything, you just throw the paperwork in the trash.’”

Freeman agreed.

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“Careful communication between employers and employees is absolutely critical,” he said; the wrong tone can put employees on the defensive.

“When those policies are communicated with greater care, the employees will adhere to them more frequently and you end up having a better culture because of it, which sets all parties up for success.”

Jon McGoran is a novelist and magazine editor based outside of Philadelphia. He can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Robotics Risk

Rise of the Cobots

Collaborative robots, known as cobots, are rapidly expanding in the workforce due to their versatility. But they bring with them liability concerns.
By: | May 2, 2017 • 5 min read

When the Stanford Shopping Center in Palo Alto hired mobile collaborative robots to bolster security patrols, the goal was to improve costs and safety.

Once the autonomous robotic guards took up their beats — bedecked with alarms, motion sensors, live video streaming and forensics capabilities — no one imagined what would happen next.

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For some reason,  a cobots’ sensors didn’t pick up the movement of a toddler on the sidewalk who was trying to play with the 5-foot-tall, egg-shaped figure.

The 300-pound robot was programmed to stop for shoppers, but it knocked down the child and then ran over his feet while his parents helplessly watched.

Engaged to help, this cobot instead did harm, yet the use of cobots is growing rapidly.

Cobots are the fastest growing segment of the robotics industry, which is projected to hit $135.4 billion in 2019, according to tech research firm IDC.

“Robots are embedding themselves more and more into our lives every day,” said Morgan Kyte, a senior vice president at Marsh.

“Collaborative robots have taken the robotics industry by storm over the past several years,” said Bob Doyle, director of communications at the Robotic Industries Association (RIA).

When traditional robots joined the U.S. workforce in the 1960s, they were often assigned one specific task and put to work safely away from humans in a fenced area.

Today, they are rapidly being deployed in the automotive, plastics, electronics assembly, machine tooling and health care industries due to their ability to function in tandem with human co-workers.

More than 24,000 robots valued at $1.3 billion were ordered from North American companies last year, according to the RIA.

Cobots Rapidly Gain Popularity

Cobots are cheaper, more versatile and lighter, and often have a faster return on investment compared to traditional robots. Some cobots even employ artificial intelligence (AI) so they can adapt to their environment, learn new tasks and improve on their skills.

Bob Doyle, director of communications, Robotic Industry Association

Their software is simple to program, so companies don’t need a computer programmer, called a robotic integrator, to come on site to tweak duties. Most employees can learn how to program them.

While the introduction of cobots into the workplace can bring great productivity gains, it also introduces risk mitigation challenges.

“Where does the problem lie when accidents happen and which insurance covers it?” asked attorney Garry Mathiason, co-chair of the robotics, AI and automation industry group at the law firm Littler Mendelson PC in San Francisco.

“Cobots are still machines and things can go awry in many ways,” Marsh’s Kyte said.

“The robot can fail. A subcomponent can fail. It can draw the wrong conclusions.”

If something goes amiss, exposure may fall to many different parties:  the manufacturer of the cobot, the software developer and/or the purchaser of the cobot, to name a few.

Is it a product defect? Was it an issue in the base code or in the design? Was something done in the cobot’s training? Was it user error?

“Cobots are still machines and things can go awry in many ways.” — Morgan Kyte, senior vice president, Marsh

Is it a workers’ compensation case or a liability issue?

“If you get injured in the workplace, there’s no debate as to liability,” Mathiason said.

But if the employee attributes the injury to a poorly designed or programmed machine and sues the manufacturer of the equipment, that’s not limited by workers’ comp, he added.

Garry Mathiason, co-chair, robotics, AI and automation industry group, Littler Mendelson PC

In the case of a worker killed by a cobot in Grand Rapids, Mich., in 2015, the worker’s spouse filed suit against five of the companies responsible for manufacturing the machine.

“It’s going to be unique each time,” Kyte said.

“The issue that keeps me awake at night is that people are so impressed with what a cobot can do, and so they ask it to do a task that it wasn’t meant to perform,” Mathiason said.

Privacy is another consideration.

If the cobot records what is happening around it, takes pictures of its environment and the people in it, an employee or customer might claim a privacy violation.

A public sign disclosing the cobot’s ability to record video or take pictures may be a simple solution. And yet, it is often overlooked, Mathiason said.

Growing Pains in the Industry

There are going to be growing pains as the industry blossoms in advance of any legal and regulatory systems, Mathiason said.

He suggests companies take several mitigation steps before introducing cobots to the workplace.

First, conduct a safety audit that specifically covers robotics. Make sure to properly investigate the use of the technology and consider all options. Run a pilot program to test it out.

Most importantly, he said, assign someone in the organization to get up to speed on the technology and then continuously follow it for updates and new uses.

The Robotics Industry Association has been working with the government to set up safety standards. One employee can join a cobot member association to receive the latest information on regulations.

“I think there’s a lot of confusion about this technology and people see so many things that could go wrong,” Mathiason said.

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“But if you handle it properly with the safety audit, the robotics audit, and pay attention to what the standards are, it’s going to be the opposite; there will be fewer problems.

“And you might even see in your experience rating that you are going to [get] a better price to the policy,” he added.

Without forethought, coverage may slip through the cracks. General liability, E&O, business interruption, personal injury, cyber and privacy claims can all be involved.

AIG’s Lexington Insurance introduced an insurance product in 2015 to address the gray areas cobots and robots create. The coverage brings together general and products liability, robotics errors and omissions, and risk management services, all three of which are tailored for the robotics industry. Minimum premium is $25,000.

Insurers are using lessons learned from the creation of cyber liability policies and are applying it to robotics coverage, Kyte said.

“The robotics industry has been very safe for the last 30 years,” RIA’s Doyle said. “It really does have a good track record and we want that to continue.” &

Juliann Walsh is a staff writer at Risk & Insurance. She can be reached at [email protected]