View From the Bench

Workers’ Comp Docket

Workers comp legal developments from around the country.
By: | April 7, 2014 • 10 min read
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Employer Must Pay for Injury Sustained While Tying Shoes

Vawter v. United Parcel Service, Inc., No. 40660, 2014 Opinion No. 6 (Idaho 02/07/14)

Ruling: The Idaho Supreme Court held that a driver’s back injury while tying his shoes was compensable.

What it means: In Idaho, a worker’s injury that occurred while performing an act required for his employment arises out of his employment.

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Summary: A delivery driver for United Parcel Service clocked in, sat down, and bent over to tie his boot laces. UPS had a “no loose or dangling parts” shoe policy. He felt a pop and pain in his lower back. Subsequently, he underwent surgery. The driver sought workers’ compensation benefits. The Idaho Supreme Court held that he was entitled to benefits.

UPS did not dispute that the accident causing the driver’s injury occurred in the course of his employment but argued that the accident did not arise out of his employment. UPS asserted that the driver’s employment did not expose him to any greater risk of injury than he was exposed to outside of his employment and that the risk of injury from tying his shoes was personal to him. The court pointed out that the driver was required to have his shoes tied or secured according to UPS policy. Therefore, the injury he suffered was connected to his employment and arose out of his employment.

UPS argued that the Industrial Special Indemnity Fund was liable for some of the driver’s benefits because he had a preexisting impairment. The court pointed out that at the time of the previous injury, UPS avoided paying benefits because it successfully argued that he was not impaired. His current position was inconsistent. The court concluded that UPS was solely liable for the driver’s benefits.

The court found that the driver was entitled to recover his medical expenses and attorney’s fees.

Brain Damage Doesn’t Trigger Awards for Loss of Vision, Hearing

State ex rel. Smith v. Industrial Commission of Ohio, No. 2014-Ohio-513 (Ohio 02/18/14)

Ruling: The Ohio Supreme Court held that a worker was not entitled to compensation for the loss of vision and hearing.

What it means: In Ohio, a worker is not permitted an award of compensation for the scheduled loss of vision or hearing when the inability to comprehend sights or sounds results from a lack of brain stem function.

Summary: A worker for Ohio State University suffered a hernia. The Industrial Commission allowed his claim. Postoperative complications from surgery to repair the hernia resulted in brain damage, leaving the worker in a persistent vegetative state. He amended the claim to add the conditions of anoxic brain damage and seizure disorder. The commission awarded him benefits for permanent total disability and later granted additional benefits for the scheduled loss of use of both of his arms and legs. The worker sought additional schedule awards for the loss of vision in both eyes and the loss of hearing in both ears. The Ohio Supreme Court held that he was not entitled to additional compensation for the loss of vision and hearing.

Ohio State University asserted that an award of loss of vision is allowed when a worker presents evidence showing the percentage of vision actually lost and an award of loss of hearing is authorized when the loss is shown to be permanent and total. It contended that the worker failed to present medical evidence showing any actual loss of vision or hearing. The court agreed, finding that the evidence indicated that the worker suffered a loss of vision and hearing because of damage to his brain. The worker had already been awarded benefits for his anoxic brain damage. There was no test that could be performed to establish definitively whether the worker had an actual loss of sight or hearing.

Three dissenting judges opined that the medial evidence established that the worker was unable to see or hear and the medical evidence should have been used in determining whether he was entitled to additional compensation.

Mileage Reimbursement Doesn’t Nullify Coming and Going Rule

Potier v. Acadian Ambulance Service, Inc., No. 13-914 (La. Ct. App. 02/12/14)

Ruling: The Louisiana Court of Appeal held that a medic was not in the course and scope of his employment when he was injured in an automobile accident.

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What it means: In Louisiana, an employer’s payment of a worker’s travel expenses does not bring the worker within the course and scope of his employment while traveling to and from work if the payments were not based on actual travel expenses and were intended only as an inducement to attract qualified personnel to a particular job site.

Summary: A swing medic for Acadian Ambulance Services was injured in a one-vehicle automobile accident while he was returning home after working a shift. He sought indemnity and medical benefits. Acadian asserted that the medic was not in the course and scope of his employment when the accident occurred. The Louisiana Court of Appeal held that he was not entitled to benefits.

The medic argued that because Acadian reimbursed him for his mileage on trips to and from his assignments, it interested itself in his transportation, bringing his claim within an exception of the going and coming rule. Acadian explained that it did not provide the medic with transportation, its mileage payments were not based on his actual travel expenses, and he was not paid for his travel time. Acadian argued that the mileage it paid was for the purpose of attracting qualified personnel to work in areas where there were an insufficient number of paramedics to staff its ambulances.

The court rejected the medic’s argument that Acadian involved itself in his transportation to work and concluded that he was not in the course and scope of his employment when the accident occurred.

Multiple Preexisting Conditions Don’t Bar Award of PTD

Stewart v. Zwiefel, No. SD32927 (Mo. Ct. App. 02/10/14)

Ruling: The Missouri Court of Appeals held that a worker was permanently totally disabled only after her work injury, and the Second Injury Fund was liable for benefits.

What it means: In Missouri, the test for permanent total disability is whether the worker can compete in the open labor market. The key question is whether any employer in the ordinary course of business would reasonably be expected to hire the worker in her current physical condition.

Summary: A part-time worker for Subway sustained an injury and was permanently totally disabled. The worker had preexisting arthritis, reflex sympathetic dystrophy, degenerative joint and bone disease, carpal tunnel syndrome, and other conditions. She had previously qualified for Social Security disability and had worked sporadically in part-time positions. She obtained all of her jobs by competing in the open labor market. The Second Injury Fund asserted that the worker was PTD before the accident at Subway, so it was not liable for her benefits. The Missouri Court of Appeals held that the SIF was liable for the worker’s benefits.

The SIF argued that “many prior cases” upheld PTD awards to workers who were “limited in how many hours per week they can work and what they can and cannot do during those limited working hours.” The court pointed out that the worker competed for and won all of her jobs in the open labor market and did not receive accommodations. A key question was whether any employer in the ordinary course of business reasonably might hire the worker in her physical condition. The court said that several employers did.

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The court explained that it was within the Labor and Industrial Relations Commission’s “special province” to factually determine whether the worker was PTD before or only after her Subway accident. Substantial evidence supported a finding either way, so the commission’s decision bound the court.

No Shift Differential for Day-Shift Modified Duty

County of Nevada v. Workers’ Compensation Appeals Board, No. C074133 (Cal. Ct. App. 01/29/14)

Ruling: The California Court of Appeal held that a sheriff was not entitled to receive shift differential pay while working modified duty.

What it means: In California, a worker who returns to work in a modified position is not entitled to shift differential pay.

Summary: A deputy sheriff for Nevada County injured his shoulder while working. At the time of his injury, he was working a night-shift schedule that entitled him to a shift differential pay. He was off work and underwent surgery. He returned to work on modified duty and was assigned to the day shift. A state law guarantees certain public employees who are disabled from a work-related injury “a leave of absence while so disabled without loss of salary in lieu of temporary disability payments.” While the sheriff was off work, he received his regular full pay, including the shift differential. While he was working on the day shift, he was not paid the differential. The sheriff sought benefits and argued that he was entitled to the differential while working the day shift. The California Court of Appeal held that he was not entitled to the differential while working modified duty.

The sheriff argued that while he was working modified, light duty on the day shift he was on a “leave of absence” from his regular night shift and was entitled to no loss of salary as a result of his day shift work. The court rejected the argument, finding that a “leave of absence” is a temporary absence from employment with the intent to return. The sheriff could not have been on a leave of absence when he was back at work even if he was working light duty on a different shift.

The court found that the law did not guarantee a worker anything when he was no longer on a leave of absence and back at work. The court found nothing in the law that could be reasonably understood to mean that a leave of absence was anything less than being absent from work.

Exclusive Remedy Provision Doesn’t Apply to Providers

Hand & Wrist Center of Houston, P.A. v. Maintenance Supply Headquarters, L.P., No. 01-12-00216-CV (Tex. Ct. App. 02/04/14)

Ruling: The Texas Court of Appeals held that the exclusive remedy provision did not block a medical provider’s suit against an injured worker’s employer for payment of treatment it provided.

What it means: In Texas, the exclusive remedy provision does not apply to health care providers.

Summary: A worker for Maintenance Supply Headquarters injured his hand. Maintenance Supply directed him to Hand & Wrist Center of Houston for treatment. Maintenance Supply’s assistant operations manager signed a letter guaranteeing that it would pay for the worker’s treatment even if he tested positive for drugs or alcohol at the time of the injury. The worker was denied workers’ compensation benefits because he had a positive drug screen at the time of the injury. Maintenance Supply failed to pay for his treatment, and Hand & Wrist Center sued for breach of contract. Maintenance Supply asserted that workers’ compensation was the exclusive remedy because it had workers’ compensation coverage at the time of the worker’s injury. The Texas Court of Appeals held that the exclusive remedy provision did not block Hand & Wrist Center’s suit.

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The court explained that recovery of workers’ compensation benefits is the exclusive remedy of a worker covered by workers’ compensation insurance or a legal beneficiary against the employer for a work-related injury. Examining the workers’ compensation law’s definition of “employee,” the court concluded that the legislature had clear intent that the recovery of workers’ compensation benefits is the exclusive remedy of an employee and does not apply to health care providers. Therefore, Hand & Wrist Center was not barred from suing Maintenance Supply to recover payment for the medical services it provided to the worker.

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]

Exclusive | Hank Greenberg on China Trade, Starr’s Rapid Growth and 100th, Spitzer, Schneiderman and More

In a robust and frank conversation, the insurance legend provides unique insights into global trade, his past battles and what the future holds for the industry and his company.
By: | October 12, 2018 • 12 min read

In 1960, Maurice “Hank” Greenberg was hired as a vice president of C.V. Starr & Co. At age 35, he had already accomplished a great deal.

He served his country as part of the Allied Forces that stormed the beaches at Normandy and liberated the Nazi death camps. He fought again during the Korean War, earning a Bronze Star. He held a law degree from New York Law School.

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Now he was ready to make his mark on the business world.

Even C.V. Starr himself — who hired Mr. Greenberg and later hand-picked him as the successor to the company he founded in Shanghai in 1919 — could not have imagined what a mark it would be.

Mr. Greenberg began to build AIG as a Starr subsidiary, then in 1969, he took it public. The company would, at its peak, achieve a market cap of some $180 billion and cement its place as the largest insurance and financial services company in history.

This month, Mr. Greenberg travels to China to celebrate the 100th anniversary of C.V. Starr & Co. That visit occurs at a prickly time in U.S.-Sino relations, as the Trump administration levies tariffs on hundreds of billions of dollars in Chinese goods and China retaliates.

In September, Risk & Insurance® sat down with Mr. Greenberg in his Park Avenue office to hear his thoughts on the centennial of C.V. Starr, the dynamics of U.S. trade relationships with China and the future of the U.S. insurance industry as it faces the challenges of technology development and talent recruitment and retention, among many others. What follows is an edited transcript of that discussion.


R&I: One hundred years is quite an impressive milestone for any company. Celebrating the anniversary in China signifies the importance and longevity of that relationship. Can you tell us more about C.V. Starr’s history with China?

Hank Greenberg: We have a long history in China. I first went there in 1975. There was little there, but I had business throughout Asia, and I stopped there all the time. I’d stop there a couple of times a year and build relationships.

When I first started visiting China, there was only one state-owned insurance company there, PICC (the People’s Insurance Company of China); it was tiny at the time. We helped them to grow.

I also received the first foreign life insurance license in China, for AIA (The American International Assurance Co.). To date, there has been no other foreign life insurance company in China. It took me 20 years of hard work to get that license.

We also introduced an agency system in China. They had none. Their life company employees would get a salary whether they sold something or not. With the agency system of course you get paid a commission if you sell something. Once that agency system was installed, it went on to create more than a million jobs.

R&I: So Starr’s success has meant success for the Chinese insurance industry as well.

Hank Greenberg: That’s partly why we’re going to be celebrating that anniversary there next month. That celebration will occur alongside that of IBLAC (International Business Leaders’ Advisory Council), an international business advisory group that was put together when Zhu Rongji was the mayor of Shanghai [Zhu is since retired from public life]. He asked me to start that to attract foreign companies to invest in Shanghai.

“It turns out that it is harder [for China] to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

Shanghai and China in general were just coming out of the doldrums then; there was a lack of foreign investment. Zhu asked me to chair IBLAC and to help get it started, which I did. I served as chairman of that group for a couple of terms. I am still a part of that board, and it will be celebrating its 30th anniversary along with our 100th anniversary.

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We have a good relationship with China, and we’re candid as you can tell from the op-ed I published in the Wall Street Journal. I’m told that my op-ed was received quite well in China, by both Chinese companies and foreign companies doing business there.

On August 29, Mr. Greenberg published an opinion piece in the WSJ reminding Chinese leaders of the productive history of U.S.-Sino relations and suggesting that Chinese leaders take pragmatic steps to ease trade tensions with the U.S.

R&I: What’s your outlook on current trade relations between the U.S. and China?

Hank Greenberg: As to the current environment, when you are in negotiations, every leader negotiates differently.

President Trump is negotiating based on his well-known approach. What’s different now is that President Xi (Jinping, General Secretary of the Communist Party of China) made himself the emperor. All the past presidents in China before the revolution had two terms. He’s there for life, which makes things much more difficult.

R&I: Sure does. You’ve got a one- or two-term president talking to somebody who can wait it out. It’s definitely unique.

Hank Greenberg: So, clearly a lot of change is going on in China. Some of it is good. But as I said in the op-ed, China needs to be treated like the second largest economy in the world, which it is. And it will be the number one economy in the world in not too many years. That means that you can’t use the same terms of trade that you did 25 or 30 years ago.

They want to have access to our market and other markets. Fine, but you have to have reciprocity, and they have not been very good at that.

R&I: What stands in the way of that happening?

Hank Greenberg: I think there are several substantial challenges. One, their structure makes it very difficult. They have a senior official, a regulator, who runs a division within the government for insurance. He keeps that job as long as he does what leadership wants him to do. He may not be sure what they want him to do.

For example, the president made a speech many months ago saying they are going to open up banking, insurance and a couple of additional sectors to foreign investment; nothing happened.

The reason was that the head of that division got changed. A new administrator came in who was not sure what the president wanted so he did nothing. Time went on and the international community said, “Wait a minute, you promised that you were going to do that and you didn’t do that.”

So the structure is such that it is very difficult. China can’t react as fast as it should. That will change, but it is going to take time.

R&I: That’s interesting, because during the financial crisis in 2008 there was talk that China, given their more centralized authority, could react more quickly, not less quickly.

Hank Greenberg: It turns out that it is harder to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.

R&I: Obviously, you have a very unique perspective and experience in China. For American companies coming to China, what are some of the current challenges?

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Hank Greenberg: Well, they very much want to do business in China. That’s due to the sheer size of the country, at 1.4 billion people. It’s a very big market and not just for insurance companies. It’s a whole range of companies that would like to have access to China as easily as Chinese companies have access to the United States. As I said previously, that has to be resolved.

It’s not going to be easy, because China has a history of not being treated well by other countries. The U.S. has been pretty good in that way. We haven’t taken advantage of China.

R&I: Your op-ed was very enlightening on that topic.

Hank Greenberg: President Xi wants to rebuild the “middle kingdom,” to what China was, a great country. Part of that was his takeover of the South China Sea rock islands during the Obama Administration; we did nothing. It’s a little late now to try and do something. They promised they would never militarize those islands. Then they did. That’s a real problem in Southern Asia. The other countries in that region are not happy about that.

R&I: One thing that has differentiated your company is that it is not a public company, and it is not a mutual company. We think you’re the only large insurance company with that structure at that scale. What advantages does that give you?

Hank Greenberg: Two things. First of all, we’re more than an insurance company. We have the traditional investment unit with the insurance company. Then we have a separate investment unit that we started, which is very successful. So we have a source of income that is diverse. We don’t have to underwrite business that is going to lose a lot of money. Not knowingly anyway.

R&I: And that’s because you are a private company?

Hank Greenberg: Yes. We attract a different type of person in a private company.

R&I: Do you think that enables you to react more quickly?

Hank Greenberg: Absolutely. When we left AIG there were three of us. Myself, Howie Smith and Ed Matthews. Howie used to run the internal financials and Ed Matthews was the investment guy coming out of Morgan Stanley when I was putting AIG together. We started with three people and now we have 3,500 and growing.

“I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

R&I:  You being forced to leave AIG in 2005 really was an injustice, by the way. AIG wouldn’t have been in the position it was in 2008 if you had still been there.

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Hank Greenberg: Absolutely not. We had all the right things in place. We met with the financial services division once a day every day to make sure they stuck to what they were supposed to do. Even Hank Paulson, the Secretary of Treasury, sat on the stand during my trial and said that if I’d been at the company, it would not have imploded the way it did.

R&I: And that fateful decision the AIG board made really affected the course of the country.

Hank Greenberg: So many people lost all of their net worth. The new management was taking on billions of dollars’ worth of risk with no collateral. They had decimated the internal risk management controls. And the government takeover of the company when the financial crisis blew up was grossly unfair.

From the time it went public, AIG’s value had increased from $300 million to $180 billion. Thanks to Eliot Spitzer, it’s now worth a fraction of that. His was a gross misuse of the Martin Act. It gives the Attorney General the power to investigate without probable cause and bring fraud charges without having to prove intent. Only in New York does the law grant the AG that much power.

R&I: It’s especially frustrating when you consider the quality of his own character, and the scandal he was involved in.

In early 2008, Spitzer was caught on a federal wiretap arranging a meeting with a prostitute at a Washington Hotel and resigned shortly thereafter.

Hank Greenberg: Yes. And it’s been successive. Look at Eric Schneiderman. He resigned earlier this year when it came out that he had abused several women. And this was after he came out so strongly against other men accused of the same thing. To me it demonstrates hypocrisy and abuse of power.

Schneiderman followed in Spitzer’s footsteps in leveraging the Martin Act against numerous corporations to generate multi-billion dollar settlements.

R&I: Starr, however, continues to thrive. You said you’re at 3,500 people and still growing. As you continue to expand, how do you deal with the challenge of attracting talent?

Hank Greenberg: We did something last week.

On September 16th, St. John’s University announced the largest gift in its 148-year history. The Starr Foundation donated $15 million to the school, establishing the Maurice R. Greenberg Leadership Initiative at St. John’s School of Risk Management, Insurance and Actuarial Science.

Hank Greenberg: We have recruited from St. John’s for many, many years. These are young people who want to be in the insurance industry. They don’t get into it by accident. They study to become proficient in this and we have recruited some very qualified individuals from that school. But we also recruit from many other universities. On the investment side, outside of the insurance industry, we also recruit from Wall Street.

R&I: We’re very interested in how you and other leaders in this industry view technology and how they’re going to use it.

Hank Greenberg: I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.

R&I: So as the pre-eminent leader of the insurance industry, what do you see in terms of where insurance is now and where it’s going?

Hank Greenberg: The country and the world will always need insurance. That doesn’t mean that what we have today is what we’re going to have 25 years from now.

How quickly the change comes and how far it will go will depend on individual companies and individual countries. Some will be more brave than others. But change will take place, there is no doubt about it.

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More will go on in space, there is no question about that. We’re involved in it right now as an insurance company, and it will get broader.

One of the things you have to worry about is it’s now a nuclear world. It’s a more dangerous world. And again, we have to find some way to deal with that.

So, change is inevitable. You need people who can deal with change.

R&I:  Is there anything else, Mr. Greenberg, you want to comment on?

Hank Greenberg: I think I’ve covered it. &

The R&I Editorial Team can be reached at [email protected]