View From the Bench

Workers’ Comp Docket

Significant workers' compensation legal decisions from around the country.
By: | March 2, 2017 • 9 min read

Exposure to Pigeon Droppings Results in Compensable Claim

Lankford v. Newton County, et al., No. SD34269 (Mo. Ct. App. 01/17/17)

Ruling: The Missouri Court of Appeals held that an investigator suffered a compensable occupational disease.

What it means: In Missouri, a worker does not have to establish an “unequal exposure” for an occupational disease claim. The worker must show that the disease he suffered is not an “ordinary disease of life to which the general public is exposed outside of the employment.”

Summary: An investigator for the prosecutor’s office smoked in the employer’s basement. He began going to the roof of the building to smoke at the suggestion of an assistant prosecutor. He said that he preferred the roof because it was quiet, and he could think about the case he was working on. While on the roof, coworkers sought him out to talk about work-related matters.

The roof was a popular place for pigeons, and pigeon droppings accumulated there. The investigator was diagnosed with chronic obstructive pulmonary disease. He was also diagnosed with diseases relating to the exposure to pigeon droppings.

He underwent surgery and had a stroke, which left him unable to work. The investigator filed a workers’ compensation claim, asserting that his exposure to pigeon droppings caused an injury to his lungs and respiratory system. Subsequently, the investigator died due to complications of pneumonia and COPD. The Missouri Court of Appeals held that the investigator’s occupational disease was compensable.

The employer argued that the investigator’s duties did not require his presence on the employer’s roof, and the employer did not receive a benefit from the investigator retreating from his job to the roof to be alone and smoke 10 times per day.

The court found that the investigator’s exposure to pigeons and pigeon droppings arose out of and in the course of his employment. Experts agreed that the investigator underwent lung surgery to treat the infection caused by the bird droppings. The court found that the evidence establishes that the investigator’s work activities caused the exposure to the infection.

Award of Benefits Does Not Confer Immunity to Coworker

Entila, et al. v. Cook, et al., No. 92581-0 (Wash. 01/12/17)

Ruling: The Washington Supreme Court held that a coworker was not immune from a third-party suit because he was not acting in the course and scope of his employment when the accident occurred.

What it means: In Washington, the fact that a worker received workers’ compensation benefits plays no role in determining a coworker’s immunity in a third-party suit.

Summary: A worker for Boeing finished work for the day and was walking across the employer’s access road when he was struck by a coworker who was driving his vehicle out of the employee parking lot. The worker received workers’ compensation benefits for his injuries and sued the coworker.

The coworker argued that he was immune from suit because he was acting in the course of his employment and Boeing’s employer immunity shielded him from liability. The Washington Supreme Court held that the coworker was not immune from suit.

The court explained that if an injured worker qualified for benefits, the employer cannot be sued. However, the worker’s receipt of benefits does not control third-party immunity. The court explained that a third-party coworker is not eligible for immunity unless he is in the “same employ” as the injured worker. “Same employ” can be shown when the coworker is acting in the course of employment.

The court sent the case back to the trial court.

Passing Mention of Soreness Does Not Constitute Notice of Work Injury

Ross v. American Ordnance, et al., No. 16-0787 (Iowa Ct. App. 01/11/17, unpublished)

Ruling: In an unpublished decision, the Iowa Court of Appeals held that a worker’s claim was barred because she failed to provide sufficient notice of her injury to her employer.

What it means: In Iowa, a worker must give her employer notice of an injury within 90 days unless the employer has actual knowledge of the injury.

Summary: A worker for American Ordnance claimed that she told her supervisor that she hurt her shoulder when a box fell over. The supervisor said that the worker said her shoulder hurt a little bit. The supervisor asked if she wanted to call an ambulance or see a doctor, but she declined.

The worker continued to have problems with her shoulder. She was eventually diagnosed with a torn rotator cuff that required surgery. More than 90 days after the alleged injury, the worker filed a workers’ compensation claim. The Iowa Court of Appeals held that her claim was barred because she failed to provide American sufficient notice of her claim.

The court found that the worker had to do more than tell the supervisor that her shoulder was sore. She did not tell him there was a reasonable possibility that her condition was related to her work. The court found that American did not have actual knowledge of a reasonable possibility that her injury was related to her work.

The worker argued that the discovery rule applied to her claim. Under the discovery rule, the 90-day notice period would not begin to run until the worker recognized the nature, seriousness, and probable compensable nature of the condition.

The court rejected the argument, finding that the worker recognized the nature, seriousness, and probable compensable character of her injury on the date it occurred, so she informed her supervisor at the time of her injury.

A dissenting judge found that the worker provided sufficient notice to the employer when she said that a box fell and that she hurt her shoulder. The judge pointed out that the supervisor responded by offering to call for an ambulance.

Worker Wins Benefits for Blackout Accident Caused by Non-Work Factors

Nuclear Diagnostic Products, 116 NYWCLR 211 (N.Y. W.C.B., Panel 2016)

Ruling: The New York Workers’ Compensation Board held that a driver, who crashed his work vehicle after losing consciousness while driving, sustained a compensable accident under the WCL.

What it means: In New York, where a worker loses consciousness while driving the employer’s vehicle in the course of his employment, he is entitled to a presumption that his accident arose out of his employment.

Summary: The board held that a driver who crashed his work vehicle after losing consciousness while driving sustained a compensable accident. The driver reported to hospital staff that he started coughing, lost control of the car, and then remembered someone waking him up after the accident.

He also reported that he had been coughing due to an asthmatic reaction to a new air freshener in his house. The board explained that because the driver’s accident occurred in the course of his employment he was entitled to a presumption that the accident arose out of his employment.

Although a review of the medical records indicated that the driver lost consciousness due to a coughing attack caused by his asthma condition, the driving of the employer’s vehicle was an added risk of employment. This added risk caused the injuries to his neck and back. Therefore, the driver’s claim was compensable.

Worker Denied Benefits for PTSD After Death of Infant Client

Griffin v. Luzerne County Children and Youth, 31 PAWCLR 233 (Pa. W.C.A.B. 2016)

Ruling: The Pennsylvania Workers’ Compensation Appeals Board affirmed the workers’ compensation judge’s decision denying benefits to a caseworker who alleged she sustained post-traumatic stress disorder and depression after the traumatic death of a young baby she was supervising.

What it means: In Pennsylvania, the traumatic death of a baby that a caseworker is supervising is not sufficiently extraordinary or unusual within the context of the caseworker’s specific employment to rise to the level of an abnormal working condition.

Summary: The board affirmed the WCJ’s decision denying benefits to a caseworker who alleged that she sustained post-traumatic stress disorder and depression after the traumatic death of a young baby she was supervising.

Evidence indicated the caseworker had been at the baby’s home and held the baby. After she left, the parents began drinking, and ultimately, the mom closed the baby in the recliner and left him there all night.

On appeal, the caseworker argued the WCJ erred in finding that she failed to establish abnormal working conditions. Rejecting this argument, the board explained that the events in this case, while indisputably tragic, were not found to be sufficiently extraordinary or unusual, within the context of the caseworker’s specific employment, to rise to the level of an abnormal working condition. The caseworker had to deal with abused and neglected children, and her agency was charged with reviewing these types of scenarios.

Relying on a prior case holding that the more fact intensive the inquiry, the more deference a reviewing court should give to the WCJ’s findings, the board found no sound basis for disturbing the WCJ’s decision.

Evidence Establishes That Mosquito Bite at Work Led to Compensable West Nile

Allen v. Graphic Packaging International, Inc., No. 51,080-WCA (La. Ct. App. 01/11/17)

Ruling: The Louisiana Court of Appeal held that an operator established a work-related accident when he was bitten by a mosquito and contracted West Nile encephalitis. The operator was entitled to temporary total disability benefits.

What it means: In Louisiana, work-related insect bites or stings can be a compensable accident under the workers’ compensation law.

Summary: An assistant operator for Graphic Packaging International was sitting in the break room of the plant when he was bitten by a mosquito. Days later, he had fatigue and fever-related symptoms. He was eventually diagnosed with West Nile encephalitis. He filed a workers’ compensation claim. The Louisiana Court of Appeal held that he established a work-related accident.

The court found that the operator showed it was more probable than not that he was bitten on the job by a mosquito carrier of West Nile. The widespread outbreak of West Nile throughout the area and the summer conditions supporting the mosquito population demonstrated that the operator was exposed to other mosquitoes in the days before and after the accident. Also, the evidence and common sense established that the operator was exposed to mosquitoes away from work.

However, the operator’s time in the plant during the week before he experienced symptoms allowed for a conclusion that he was probably bitten during his 56 hours at work. Large doors to the plant were open allowing for exposure of mosquitoes to workers.

Also, the operator worked early in the morning and later in the afternoon, which were times that mosquitoes were the most active as confirmed by experts. The operator also pointed out that a coworker also contracted West Nile at work.

The court found that the operator was not entitled to permanent and total disability benefits before a proper evaluation of rehabilitation possibilities. The court found that he was temporarily totally disabled.

Christina Lumbreras is a Legal Editor for Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Black Swan: Cloud Attack

Breaking Clouds

A combination of physical and cyber attacks on multiple data centers for cloud service providers causes economic havoc. Even the most well-prepared companies are thrown into paralyzing coverage confusion.
By: | July 27, 2017 • 10 min read

Scenario

By month 16 of the new presidential administration, the Sunshine Brigade is more than ready to act.

Stoked by their anger over rampant economic inequality, the mostly college-educated group of what might best be called upper-middle-class anarchists — many of them from California, Oregon and Washington State — put in motion the gears of a plan more than two years in the making.

Their logic, to them at least, is unimpeachable. Continued consolidation of economic power into the hands of fewer and fewer corporations is creating a world where the rich increasingly exploit and shut out the poor.

Advertisement




The rise of the techno giants is accelerating this trend, according to the Sunshine Brigade’s de facto leader Emily Brookes, an All-American rugby player and a graduate of Reed College in Oregon.

With a new presidential administration seemingly bent on increasing the economic advantages of the rich with no end in sight, nothing to do then but break things up; and in so doing break the hold of this technology oligarchy.

As Emily Brookes so forcefully put in her instant messages to the other members of the brigade: Break the Cloud.

With more than 500 members, many of them with ample financial and technical resources, the Sunshine Brigade is very capable of delivering on its plan for a two-pronged attack.

It is also radicalized enough to justify the loss of some human life, even its own countrymen, to “save” — in its collective logic — the tens of millions of global citizens that are living as virtual slaves in this callous, exploitative global economy.

With websites and digitally connected services large and small down for days, irritation turns to fear.

The first wave in the attack is an attempt to infect and shut down the data centers for the top three cloud service providers. It takes months to set up this offensive.

Rather than rely on a phishing scam from outside the firewalls of the service providers, The Sunshine Brigade uses its social and business connections to place three members on each of the cloud provider’s payrolls. An infected link from someone you know, someone in the cubicle right next to you, seems like an unstoppable play.

It only partially works. Only one of the cloud service providers is harmed when an unsuspecting employee clicks on a link from their traitorous co-worker. The released malware manages to cripple a major cloud service provider for 12 hours.

With millions of users affected, the act creates substantial disruption and garners global headlines. Insured losses are around $1.5 billion. But this is just the beginning.

The morning after, the Sunshine Brigade unleashes a far more devastating and far more ruthless Round Two.

Using self-driving trucks, the Sunshine Brigade smashes into five data centers; three on the West Coast, and two in the Midwest. Fourteen employees of those cloud servers are killed and another 23 injured; some of them critically.

This time the Brigade gets what it wanted. The physical damage to the data centers is substantial enough that it significantly affects three of the top four cloud service providers for five days.

With websites and digitally connected services large and small down for days, irritation turns to fear.

Small and mid-sized banks, which host their applications on clouds, are shut down. Small business owners and consumer banking customers immediately feel the brunt. Retailers that depend on clouds to host their inventory and transaction information are also hit hard.

But really, the blow falls everywhere.

In the U.S., transportation, financial, health, government and other crucial services grind to a halt in many cases.

Not everyone is disrupted. Some of the larger corporations are sophisticated enough in their risk management, those that used back-up clouds and had steadfast business resiliency plans suffer minimal disruption.

Many small to mid-size companies, though, cannot operate. Their employees can’t get to work and when they can, they sit idly in front of blank computer screens connected to useless servers.

For the man on the street, this is hell.

Advertisement




Long lines blossom at the likes of gas stations, banks and grocery stores. A population already on edge from a steady diet of social media provocation becomes even more inflamed.

By nightfall of Day Five, the three major cloud service providers are recovered, and digital “normalcy” begins to creep back. But for many small and medium-sized businesses, the recovery comes way too late.

Economic losses promise to register in the tens of billions. It’s not being too imaginative to think that losses could hit the $100 billion mark.

Two multinational insurers based in the U.S., three Lloyd’s syndicates and a Bermuda insurer signal to regulators that their aggregate cyber-related losses are so great that they will most likely become insolvent.

Emily Brookes and her cohorts were willing to kill more than a dozen people to promote their worldview. In their youthful naiveté, they could not know just how much suffering they would cause.

Observations

For some commercial insurance carriers, the aggregated losses from a prolonged disruption of cloud computing services could be catastrophic, or close to it.

“It’s on a par with any earthquake or hurricane or tornado,” said Scott Stransky, an associate vice president and principal scientist with the modeling firm AIR Worldwide.

AIR modeled the insured losses for the Fortune 1,000 were Amazon’s cloud service to go down for one day. They came up with a figure of $3 billion.

Now consider that most businesses in this country are small businesses, with not nearly the risk management sophistication of the Fortune 1000. Then consider a cloud interruption of five days or more.

Mark Greisiger, president, NetDiligence

“Almost any company you talk about today would rely to some extent on the cloud, either to host their website, to do invoicing, inventory, you name it — the cloud is being used across the board,” Stransky said.

“It’s a significant issue for insurers and one we think about a lot,” said Nick Economidis, an underwriter with specialty carrier Beazley.

“Should a cloud service provider go down, everybody who is working with that cloud service provider is impacted by that,” he said.

“Now, pretty much every software maker is on the cloud,” said Mark Greisiger, president of NetDiligence.

“In the old days, someone would come in and install software on your servers and come in annually for maintenance. That’s all gone bye-bye. Everybody who makes software is forcing you onto their private cloud,” Greisiger said.

The aggregation risk for carriers is complicated by the degree of transparency they have into which insured’s applications are hosted on which cloud provider.

Now here’s the even trickier part. Clouds outsource to other clouds.

“It’s almost becoming a spider’s web of interdependencies on who has access to what in terms of upstream and downstream providers,” Greisiger said.

Determining which of their insureds is hosted on which cloud, and in turn, where that cloud is outsourcing to other clouds can be very difficult for carriers to determine.

Even if a company is careful to diversify the risks they’re taking, they might not realize that a high percentage of insureds are even with the same cloud provider. They could be hit with devastating losses across their entire portfolio of business, said an executive with BDO consulting.

AIR’s Stransky said his company launched a product in April, ARC, which stands for Analytics of Risk from Cyber, which is designed to help carriers gain that much needed transparency.

Among insureds, surviving an event of this magnitude will depend not only on the sophistication of their risk management department, but on the company’s overall ability to negotiate contracts with vendors and suppliers that will indemnify the company in the case of a cloud outage of this duration.

It will also depend on organization’s understanding that there is no off-the-shelf solution that will prevent an event like this or make a company whole after it.

Shiraz Saeed, national practice leader, cyber, Starr Companies

Experts say contracts with cloud service providers, customers and suppliers must be structured so that a company is defended should it lose cloud access for as much as five days or more.

Best practices also include modeling just what your losses would look like in this area, and vetting your full portfolio of insurance policies to understand how each would respond.

One broker said buyers can’t be blamed if the complexities of the coverage issues at stake here are initially hard to grasp.

“It’s becoming a spider’s web of interdependencies on who has access to what.” —Mark Greisiger, president, NetDiligence

“I think it’s the broker’s job to inform the client of this exposure,” said Doug Friel, a vice president with JKJ Commercial Insurance, based in Newtown, Pa.

“You may have business interruption coverage for direct physical damage to your building. But have you ever thought about your business income if your IT structure goes down?” Friel said.

He said many buyers might not realize there is a difference.

Advertisement




Large businesses should have the resources to demand from their cloud service providers that they be indemnified for the entirety of a cloud failure event. There will be a fee for that, but it will be well worth paying, Friel said.

“You have to push,” Friel said. “They are going to say, ‘Here is our standard contract, sign it.’ ”

Don’t settle for that, he said, although many do in ignorance, he added.

“Where possible, we would look for clients to negotiate their contracts. These business relationships should be mutually beneficial, even if one of these events occur,” said Shiraz Saeed, national practice leader, cyber, for the Starr Companies.

It’s a partnership, he said.

“It shouldn’t be a zero sum game on either side. I think there should be an understanding of what the potential loss might be and then designing a contract around that,” he said.

While cloud service providers are known for having high grade security systems, most average organizations don’t have the means for that. But no matter what a company’s resources, the first step is modeling where your digital assets are, and what you and your customers stand to lose if you lose access to them.

“Most insureds don’t seem to understand the amount of individual loss that you could be subject to,” said Jim Evans, leader of insurance advisory services at BDO Consulting. “Usually this stuff is measured in hours,” he said. “But what if a cloud provider is out for three or four days?” he said.

“Trying to quantify what you did lose in an event is hard enough. Trying to do a modeling exercise about what you could lose? It’s something that just doesn’t get done enough,” he said.

Once you have an understanding of what you own and what you stand to lose, the next step is prioritizing the protection of the assets you have. That means drilling into your contract with your cloud service providers to get the maximum indemnification.

It also means spreading your risk so that if at all possible, not all of your assets or your customers’ assets are housed by one cloud service provider. Cloud platforms can be public, private, or a hybrid of the two.

Understanding where your assets are in that architecture is crucial. Spending the money to insure that they are protected behind a diverse menu of firewalls is highly advisable.

Navigating the different iterations of business interruption coverage in property, cyber and kidnap and ransom policies is also important.

Make sure your broker can provide clarity on the different types of coverages and tailor them to your needs, experts said.

The concept of design thinking is really what’s in play here. Organizations have to work with vendors in every aspect of their operations to design a risk management system that can sustain this kind of hit.

“Build a better mousetrap to protect yourself,” said JKJ’s Friel.

“Depending on your service, you need to have the best and the brightest designing this stuff. Spread the risk.”

“Don’t be afraid to ask for more,” he said.

Postscript

In engineering an attack on the cloud, Emily Brookes and her cohorts accomplished the opposite of what they set out to do.

Advertisement




Only the largest corporations with the most sophisticated risk management programs were able to survive the attempt to break the cloud with manageable losses.

Small businesses, the true backbone of the U.S. economy, suffered terribly. Entrepreneurs who put their life’s work into their business lost it in many cases.

Those on the lowest part of the economic scale, the working poor, lost their jobs and their ability to cover their rent and grocery bills. They joined the ranks of those subsidized by the government by the millions.  The attempt to break the cloud resulted in an even more polarized society. &

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]