View From the Bench

Workers’ Comp Docket

A round-up of key workers' comp decisions from around the country.
By: | February 27, 2014 • 8 min read
Example Image

Positive Cocaine Test Doesn’t Block Driver’s Benefits

Hicks v. Butler Transport, Inc., No. 109,844 (Kan. Ct. App. 12/13/13, unpublished)

Ruling: In an unpublished decision, the Kansas Court of Appeals held that a driver was entitled to benefits because his employer failed to show that his drug use contributed to his injuries.

What it means: In Kansas, an employer is not liable for benefits if it can show that the worker’s injuries were “contributed to” by his drug use.

Summary: A truck driver was driving in thick fog and decided to pull over. The truck rolled over, and the driver landed on his head, neck, and shoulders. He provided a urine sample at the hospital after the accident and tested positive for cocaine. The driver sought workers’ compensation benefits. The employer agreed that the driver’s injuries arose out of and in the course of his employment. However, the employer argued that it was not liable because the driver was impaired. The Kansas Court of Appeals held that the driver was entitled to benefits.

Advertisement




The court found that the driver’s urine test showed a level of cocaine metabolite concentration significantly above the level at which impairment is conclusively presumed. In addition to impairment, the employer was required to show that the driver’s injuries were “contributed to” by his drug use. The court found that the employer did not meet its burden. The employer did not produce evidence showing the effects of the impairment level on the driver.

The driver drove the truck in foggy conditions and parked in a certain location. The employer did not show that he performed these actions improperly. The court found that the driver’s description of the accident did not show any actions attributable to cocaine impairment. The employer’s arguments that he could have performed better in the fog absent his impairment were speculative.

Worker Fails to Show Accident Was Caused by Employer’s Safety Violation

Salazar v. Dependable Roofing, Inc., No. 2013-CA-000737-WC (Ky. Ct. App. 01/03/14, unpublished)

Ruling: In an unpublished decision, the Kentucky Court of Appeals held that a worker was entitled to benefits but not increased benefits for a violation of safety laws.

What it means: In Kentucky, a worker is entitled to enhanced benefits if he proves that the employer intentionally violated a safety statute or regulation. He must show that the work-related accident was caused by the violation.

Summary: A worker for a roofing company was called to the job site in the early morning to check a roof for leaks. He claimed that the company owner requested that he cover the roof with a tarp. The owner said he instructed the worker not to climb onto the roof. The worker fell off the roof, suffering multiple injuries. Although safety equipment was at the job site, it was not being used when the worker fell. The worker sought benefits. The Kentucky Court of Appeals held that he was entitled to benefits but not increased benefits for a safety penalty.

The court explained that a worker must establish the employer’s intentional violation of a safety law to be entitled to enhanced benefits. The court found that although the worker cited to Occupational Safety and Health Administration regulations, he was not entitled to increased benefits. The worker did not show that the work-related accident was caused by a violation. There was no compelling evidence to disturb the administrative law judge’s finding that the cause of the worker’s fall was his failure to follow the owner’s instruction.

The court noted there were three conflicting medical opinions regarding the worker’s impairment. The court said it was within the ALJ’s discretion to determine which medical evidence was persuasive. The ALJ found one doctor’s medical opinion based on the worker’s subjective symptoms and functional limitations was not as persuasive as the medical assessment of another doctor.

Housekeeper’s Delay Seeking Treatment Doesn’t Topple Claim for Benefits

1568 Broadway Hotel, 113 NYWCLR 204 (N.Y. W.C.B., Full Board 2013)

Ruling: The New York Workers’ Compensation Board held that the evidence supported a finding that a housekeeper’s injuries to her back, left leg and left hip were causally related to her work accident when she slipped and fell on a wet bathroom floor.

What it means: In New York, a worker’s delay in seeking treatment for her injuries will not bar benefits where she credibly testifies that she was taking pain medication for a nonwork-related condition and, therefore, her injury was not initially painful.

Summary: The board held that the evidence supported a finding that a hotel housekeeper’s injuries to her back, left leg and left hip were causally related to her work accident when she slipped and fell on a wet bathroom floor. Although the housekeeper did not seek treatment for her injuries until more than three months after the accident, she credibly testified that she was taking vicodin and hydrocodone for osteoarthritis on her right side and, therefore, her left side was not initially painful.

Also, it was unclear why the housekeeper initially failed to provide her treating doctors with a history of a work-related injury. However, there was no doubt that the work accident occurred.

Benefits During Vocational Rehabilitation Count Toward 300-Week Maximum

Becerra v. United Parcel Service, No. A-13-227 (Neb. Ct. App. 12/31/13, unpublished)

Ruling: The Nebraska Court of Appeals held that an employer was entitled to a credit for the permanent partial disability benefits it previously paid in full against the temporary total disability benefits a worker would receive during vocational rehabilitation.

What it means: In Nebraska, benefits a worker receives while pursuing vocational rehabilitation are TTD benefits and count against the 300-week limitation on benefits.

Summary: A worker suffered an injury in an accident arising out of and in the course of his employment. The employer paid him permanent partial disability benefits and agreed that he was entitled to permanent partial disability benefits. The employer paid the full amount of future PPD benefits. Subsequently, the trial court approved a plan of vocational rehabilitation for the worker to obtain an associate degree. The employer asserted that it was entitled to a credit for the PPD benefits it previously paid against the TTD benefits the worker would receive during vocational rehabilitation. The Nebraska Court of Appeals held that the employer was entitled to a credit.

Advertisement




Compensation for partial disability benefits is limited to 300 weeks. If payments for partial disability follow payments for total disability, the employer is given credit against the 300-week total for the number of weeks it paid total disability benefits. The court found that the benefits the worker received while pursuing vocational rehabilitation were TTD benefits, and those benefits counted against the 300-week maximum.

The court rejected the worker’s argument that the employer was not entitled to a credit for the PPD benefits it already paid in full. The court explained that PPD benefits for a loss of earning power are suspended during the time a worker engages in vocational rehabilitation and is receiving TTD benefits. Because the employer prepaid the full amount of PPD benefits, the worker already received 300 weeks of benefits prior to any determination of vocational rehabilitation. The court explained that if the employer was not given a credit, the worker would receive a double payment.

Worker’s Death From Accidental Overdose Doesn’t Entitle Widow to Death Benefits

South Coast Framing, Inc. et al. v. Workers’ Compensation Appeals Board, et al., No. D063945 (Cal. Ct. App. 12/09/13, unpublished)

Ruling: In an unpublished decision, the California Court of Appeal held that a widow was not entitled to death benefits after a worker’s death due to an accidental overdose of prescription medication.

What it means: In California, a worker’s death is compensable if the industrial injury and employment constituted material factors in contributing to the worker’s death.

Summary: A construction worker suffered back, head, neck, and chest injuries when he fell from a roof while working. He was prescribed an antidepressant, pain medication, and opioids. He also took medication prescribed by his personal physician for his nonwork-related anxiety and sleeping difficulties. The worker died from the combined effects of the medications and associated early pneumonia. His widow sought death benefits, alleging that his death was the result of the work injury and the industrially prescribed medications. The California Court of Appeal held that the widow was not entitled to benefits.

The court found that the widow did not establish a causal connection between the worker’s death and the specific medication he was taking as a result of his work-related injury. An agreed medical examiner stated that the antidepressant had a “small role” in the worker’s death, but that the worker’s death was the result of an additive drug interaction between the anxiety and sleeping medications. The examiner recognized that the mixtures of drugs are difficult to quantify. The court said that although a precise percentage was not required, the widow had to show a “reasonable probability of industrial causation.” The court found the evidence demonstrated that if the work-related antidepressant played a role, it was not significant such that it constituted a material factor contributing to the worker’s death.

The court noted there was a dispute regarding whether the worker took the sleeping medication due to his industrial injury. The widow said the worker had difficulty sleeping before his work injury. The worker’s personal physician noted that the worker was not experiencing pain during the times he had trouble sleeping. The court found that the worker did not use the sleeping medication as a result of pain from his work injury.

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.

Advertisement




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.

Advertisement




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?

Advertisement




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.

Advertisement




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.

Advertisement




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]