Employees Can Sue Employers in Civil Court for Occupational Disease Claims: Missouri Appeals Court

Missouri’s Western District Court of Appeals recently decided that an employee can sue his employer in civil court for an “occupational disease” claim. The case, KCP & L Greater Missouri Operations Co. v. Cook, involved Monroe Gunter’s claim for damages stemming from a work-related injury. He claimed that he contracted mesothelioma as a result of having been exposed to asbestos during his employment with KCP&L. The court ruled that Gunter was allowed to file suit in civil court because, under Missouri law, the workers’ compensation forum is not the exclusive forum for a claim premised on an “occupational disease,” such as mesothelioma. (Note the distinction between an “occupational disease,” which develops over a period of time, versus an injury that happens instantaneously or acutely as a result of a single accident.)

This is a major change from prior law. Historically, the exclusive remedy for an employee with any employment-related injury – whether acute or gradual in onset – was to pursue a claim in the workers’ compensation forum. This is a system that clearly benefits employers (as well as third-party workers’ compensation insurers).

There are two types of employers in the workers’ compensation context: those who carry insurance policies issued by third-party insurance companies, and those who self-insure – that is, who create and pay into their own private workers’ compensation insurance policies. In every work-injury case, there are three benefits to which an injured employee is presumptively entitled: medical costs, lost wages, and permanent disability.

Two Scenarios

Consider the difference between the likely cost of a workers’ compensation claim versus the possible cost of a civil lawsuit with regard to: (1) a Missouri business with a workers’ compensation insurance policy issued by a third-party insurance carrier; and (2) a Missouri business that self-insures.

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The New “Red Flags” Rule for Healthcare Providers

NOTE: After numerous postponements of implementation of the FTC Red Flags Rule, President Obama signed the Red Flags Program Clarification Act of 2010 (“Act”) on December 18, 2010, which was effective January 1, 2011. This Act limits the scope of the Red Flags Rule by narrowing the definition of a “creditor”, which the Federal Trade Commission had previously broadly interpreted to include all health care providers, among other service professionals.

The Act amends the definition of a creditor to mean any creditor that (i) in the ordinary course of business obtains or uses credit reports in connection with a credit transaction, (ii) furnishes information to a credit reporting agency in connection with a credit transaction, or (iii) advances funds to a person on the obligation of repayment. Under this new definition, typically physicians and attorneys will not be considered creditors for purposes of the Red Flags Rule.

Certain healthcare providers, however, that use or obtain consumer reports routinely in connection with credit transactions or that furnish information to consumer reporting agencies may still meet the definition and thus be subject to the Red Flags Rule. This potentially means that hospitals or physician groups that routinely submit information about non-paying patients to collection agencies, which in turn submit such information to credit reporting agencies, will need to be in compliance with the Red Flags Rule.

In the end, the underlying reason for implementing an identity theft program, such as the one required under the Red Flags Rule, is to help prevent identity theft. Therefore, whether or not a health care provider is directly affected by the Red Flags Rule by falling within the definition of creditor, providers should still be encouraged to implement an Identity Theft Prevention Program to detect warning signs, or “red flags”, that could indicate identity theft.

Identity theft is rampant in today’s society. As many as ten million individuals per year become victims of identity theft and the number of medical identity theft cases are on the rise. In response to this growing problem, several federal agencies jointly promulgated regulations that require certain entities to implement a plan to detect, prevent, and correct identity theft. The “Red Flags Rule” applies to various types of entities, including most healthcare providers. Thus, entities ranging from a small doctor’s office to a hospital must be in compliance with the new Red Flags Rule by the date on which the Federal Trade Commission (“FTC”) will begin enforcing the Rule.   After that date, an entity may be penalized up to $3,500 per violation. Thus, healthcare providers need to take steps to comply, including creating an Identity Theft Prevention Program.

Before understanding the Rule, a healthcare provider must determine whether it is subject to the Rule in the first place. Under the Red Flags Rule, any “creditor” that offers or maintains one or more “covered accounts” is required to develop and implement a written Identity Theft Prevention Program. A “creditor” is defined as any person who regularly extends, renews, or continues credit. Healthcare providers will be considered a “creditor” if they regularly bill patients after the completion of services, allow payment plans after services have been rendered, or aid patients in obtaining credit from other sources (see note).

Under the Rule, a “covered account” is defined as (1) an account a creditor offers or maintains that involves or is designed to permit multiple payments or transactions, and (2) any other account the creditor offers or maintains for which there is a reasonably foreseeable risk of identity theft. The second portion of the definition is very broad and may include records that an entity may not recognize as a “covered account.” For healthcare providers, this definition of “covered account” generally encompasses patient and employee records. Thus, the vast majority of healthcare providers are subject to the Red Flags Rule and must comply.

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Missouri Shared Work Program

A Unique Opportunity to Reduce Employee Hours While Still Qualifying Them for Unemployment

In a struggling economy, employers have to make difficult decisions pertaining to their businesses and employees. Faced with “hopefully” temporary losses in business, many employers are forced to terminate employees losing their experience and knowledge. On the other hand, if the employer elects to reduce hours, the employees receive lesser pay and are ineligible to collect unemployment benefits.

Fortunately, employers do have a unique alternative under the Missouri Employment Security Law whereby they can retain their hourly workforce and reduce hours while at the same time allowing their employees to receive a proportional supplement of unemployment benefits. This article applies only to such programs that involve hourly-paid employees.

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HR/Legal FLSA Overview-Drilling Down and Through The Department of Labor Exempt Regulations—What Favorable Changes Are You Still Not Using?

The Fair Labor Standards Act was passed in response to the Great Depression. An important piece of New Deal legislation, the Act was concerned primarily with providing a minimum subsistence wage and protection against oppressive working hours. Congress passed overtime legislation to advance three goals: a shorter work week, compensation for overworked employees, and work spreading (sharing). The white collar exemptions essentially served as a line drawing tool between those workers in need of statutory protection and those whose skills, pay and position offered them sufficient bargaining power to protect themselves.

In the agrarian and manufacturing-oriented economy of the 1930′s and 1940′s, white collar workers had clearly defined decision-making responsibilities, were closer to management and were paid better than today. In such an economy, white collar workers were middle class in income, outlook, attitude and life.

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Amendments to FMLA Extend New Leave Rights to Family Members of Military Personnel

Within the last several days, President Bush signed the National Defense Authorization Act, which included amendments which expanded the coverage of the Family and Medical Leave Act (“FMLA”). These changes provide job-protected unpaid leave to covered workers to care for family members who are injured or become ill while serving in the armed forces, and when reservists are called to active duty in a “qualifying exigency” (a term which is likely to be defined under future regulations to be issued by the Department of Labor, but which clearly includes service in Iraq and Afghanistan). Because the law did not have a specific effective date, it is effective immediately.

Wounded Service Members

Under the FMLA amendments, an eligible employee who is the spouse, child, parent or next of kin of a service man or woman is entitled to a total of up to 26 weeks of unpaid leave to care for the servicemember if he or she is receiving medical care for, or recuperating from, a serious injury or illness suffered while serving in the military. The term “next of kin” has not previously been used in FMLA and is undefined by the statute. Exactly who qualifies as a “next of kin” is likely to be defined under new regulations to be issued by the Department of Labor (“DOL”). A serious injury or illness is one that renders a servicemember medically unfit to perform his or her military duties. The 26 weeks of leave can only be taken during a single 12-month period (i.e., can not be taken in successive years due to the same injury or illness). Leave may be taken intermittently. The employer must allow the employee to take leave in increments as small as the shortest period of time that the employer regularly tracks in its payroll system (e.g., if a time clock is utilized by an employer, the increment can be measured in minutes). If a husband and wife are employed by the same employer, they may be limited to taking a total of 26 weeks of unpaid leave between them.

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Kicking the Habit and Getting Fit Helps Employers’ Bottom Lines

Employee costs are the bottom line

The fact is that employee costs, and curbing those costs, are the “bottom line” for most employers. For years, employers have been struggling to control and minimize the rising costs of health care for their employees. Employers are increasingly forced to transfer health care costs to their employees through higher premiums, copayments and deductibles. Only in the past few years have employers realized that they can assist their employees in improving their overall wellness, while at the same time potentially reducing the employers’ health care costs. The methods that employers have begun experimenting with include implementing wellness programs, offering health risk assessments, and education.

Hard, Cruel Facts

Since 2000 U.S. healthcare cost increases have exceeded the overall inflation rate by a factor of two to five times. (National Coalition on Healthcare, Economic Cost Fact Sheets.)

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Personnel Records: What Goes Where

Confusion abounds when it comes to deciding which employee personnel records go where, who can access which records and who cannot, and how records should be segregated. Human resource employees have long understood that an employee’s workers’ compensation records should be segregated from the employee’s typical personnel file containing such things as an application for employment, resume and salary change forms.

For the small employer, however, these kinds of decisions must be addressed by management, who may not always be experienced in the nuances of human resource law. In essence, three files should be maintained for each employee:

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Employer-Sponsored Group Health Plans & HIPAA’s Third Installment

If small business employers think that the Health Insurance Portability and Accountability Act—or what we fondly refer to as “HIPAA”—only applies to health care providers, they need to think again. Small business owners need to get hip to HIPAA because those that offer employer-sponsored health plans (as most do) must also protect the privacy of employees’ medical information.

Physician practices typically understand they are “Covered Entities” under HIPAA due to their status as medical providers but many are unaware they may carry the title of Covered Entity” by way of their employer status.

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Employee’s Non-Compete Agreement Unenforceable After Transfer to Third Party

People make a business go. Thus, a company’s workforce is a valuable asset. One way for a company to maintain its workforce and protect the investment it makes in its employees is through the use of noncompete agreements. This is especially true where employees are either highly trained, such as in the medical or other scientific and professional fields, or have access to valuable company information, such as sales personnel.

Non-Compete Agreements as Assets

Non-compete agreements for these and other employees provide valuable protection not only to the employer, but can also be an attractive protection for a company’s potential purchasers. In the eyes of a purchaser, employees and the terms of their employment represent assets. Certainly, following the purchase or acquisition of a business, a major source of concern for new ownership is a smooth transition and continuation of the business. The use of non-compete agreements provides extra incentive for employees to stay, and keeps them from competing with new ownership if they go.

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U.S. Supreme Court Affirms EEOC Position That the ADEA Authorizes Disparate-Impact Claims

Prior to March, 2005, there was considerable doubt as to whether a claim of age discrimination could be brought under a disparate-impact theory. The Federal Circuits were split on whether the ADEA permitted suits for discrimination in cases where an employer’s facially neutral policy or practice discriminated against older workers. While the Second, Eighth and Ninth Circuits recognized such a theory, the First, Seventh, Tenth and Eleventh Circuits held that there was no disparate-impact liability under the ADEA.

In March, 2005, the U.S. Supreme Court resolved the issue. In Smith v. City of Jackson, Mississippi, the Court held that the text of the ADEA, its “reasonable factors other than age” provision, and the EEOC’s regulations all support the conclusion that a disparateimpact theory is cognizable under the ADEA. As a result, disparate-impact claims are allowed under both Title VII of the Civil Rights Act of 1964 and under the ADEA. The only difference is that, under the ADEA, the scope of liability is narrower, because it permits an employer to cite “reasonable factors other than age” (the RFRA defense) to justify a practice that penalizes older workers.

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