Teenage workers lose legs at work, their employer didn’t have workers’ comp insurance

[Update (10/11/2011) below]

Phyllis Zorn of the Enid (OK) News and Eagle reports that the employer of the two teenage workers who lost legs last month in a grain auger failed to maintain workers’ compensation insurance. She writes:

“Oklahoma Department of Labor has fined the company $750 for failing to comply with workers’ compensation law, the maximum fine allowed in the scenario under current law. ‘Zaloudek Grain Co. had not carried workers’ compensation insurance for the five months prior to the accident,’ Labor Commissioner Mark Costello said. ‘Zaloudek had obtained workers’ compensation insurance on Aug. 9, five days after the horrific accident.'”

Employers in Oklahoma, like employers in most States, are required to maintain workers’ compensation insurance to cover the medical expenses and lost wages of workers injured or made ill by exposures at work. In exchange, workers are not allowed to sue their employers for injuries related to their work. This “exclusive remedy” was a compromise reached 100 years ago when States began adopting mandatory workers’ compensation laws in 1911. An employer, like Zaloudek Grain, that violates the laws by failing to maintain workers’ compensation coverage falls outside that “exclusive remedy” boundary. This creates potential challenges and opportunities for the two injured workers and their families.

Without workers’ compensation insurance in place, questions arise about how the young men’s surgical, hospital and long-term rehabilitation expenses will be paid. Six weeks after the incident, one of the young workers remains in the OU Medical Center in Oklahoma City; the other worker was hospitalized for four weeks. A single night stay in the hospital is a pricey endeavor. Just imagine the bill for a month or more of hospital care. If the young men’s parents have private health insurance, its unlikely their insurance companies will agree to pay the bill for their care. The insurer will note that their dependents’ very serious injuries were work-related and therefore not covered by the health plan.

Without however the “exclusive remedy” boundary of workers’ compensation, the teen workers’ families could sue their sons’ employer for damages. Filing a lawsuit for damages and actually succeeding is another story, but one Tulsa, Oklahoma law firm says:

“Most uninsured Oklahoma employers don’t fair well and are treated quite harshly by both the Oklahoma City & Tulsa Workmens Compensation Courts as well as the Oklahoma District Courts, for failing to purchase workers’ comp insurance.”

It’s unclear to me whether Zaloudek Grain has significant assets for which the teens’ families could make a claim. What if their only asset is the grain elevator and some land? Would the sale of this property provide sufficient funds to cover the young workers’ hospital bills, long-term rehabilitation and income replacement?

A number of states have special funds established to pay medical and wage claims of injured workers whose employers failed to maintain workers’ comp coverage. The little research I’ve done suggests that Oklahoma does not have such a fund; if I’m wrong, please let me know by commenting below.

State workers’ compensation laws establish benefit schedules for different types and severity of injuries. Under Oklahoma workers’ comp law, a worker who suffers a permanent partial disability, such as the loss of a leg, is eligible for no less than $150 per week, but not more than 70% of the employee’s average weekly wage, not to exceed $323. That’d be $7,800 to no more than $16,796 per year in income replacement for these young men. No one’s living in luxury off of work-comp benefits. I’d hope that the teen workers’ families would succeed in a lawsuit to secure substantially more than this modest amount.

[10/11/2011 Update: Phyllis Zorn of the Enid News and Eagle reports on the dispute between Zaloudek Grain and CompSource Oklahoma on whether the employer’s workers’ compensation coverage was in affect on August 4. Zaloudek is suing CompSource Oklahoma for breach of contract, saying the insurance carrier wrongly cancelled their insurance policy in March 2011. CompSource says it requested audit information from the employer in February and it was not provided. The dispute is really about who is responsible for the medicare and rehabilitation care costs of the two young men.]

Comments

  1. #1 oldebabe
    September 16, 2011

    My basic question would be: why did the parents allow the teenagers to go to work at a hazardous place that had no health/accident insurance?

  2. #2 Dromgoogle
    September 16, 2011

    Possibly because the company was not broadcasting the fact that they were breaking the law by not having insurance, and because there may not be all that many jobs in rural Oklahoma to choose from?
    Let’s not play ‘blame the victims,’ eh?

  3. #3 unsafetv
    September 16, 2011

    And probably because in these hard times, people takes jobs where they can get them with little ability to be picky about working conditions.

  4. #4 GregH
    September 16, 2011

    Not only that, but why wouldn’t the owners of the company be facing criminal charges?

  5. #5 ken
    September 16, 2011

    there is no question they were injured on the job. workers comp should help them now when the need is most critical, then sue the employer on behalf of the injured. oh silly me, thinking the system should actually protect people

  6. #6 Phyllis Zorn
    September 18, 2011

    I did ask the question to the general counsel for the Oklahoma Department of Labor whether the policy picked up five days later would pay anything on the lads’ injuries. His answer was as clear as it was simple. “It is not retroactive.”

  7. #7 Celeste Monforton
    September 18, 2011

    GregH:
    Criminal charges could be brought by a govt agent, such as a local or state prosecutor or the federal justice department. I’m not familiar with the Oklahoma laws, but in order for the federal Dept of Justice to take up a case, OSHA first has to demonstrate the employer’s violation of the law was “willful” and then refer the case to DOJ to consider accepting for a criminal case. Because the maximum criminal penalty under the OSH Act is a misdeamenor (not a felony) with a maximum penalty of 6 months in prison, DOJ is not too interested in using their resources on these worker death cases. Univ of Michigan law professor Uhlmann has written on the topic: http://web.law.umich.edu/_facultybiopage/facultybiopagenew.asp?ID=385

  8. #8 George
    September 19, 2011

    As to why OSHA does not bring criminal charges against this employer, because there was no fatality involved. As horrible as two teenagers losing their legs may be, OSHA can only request criminal charges when a worker is killed as a result of a willful violation.

  9. #9 Celeste Monforton
    September 19, 2011

    George,
    Yes, thanks for clarifying that very important point about criminal violations of the OSH Act. The statute says: “Any employer who willfully violates any standard, rule or order promulgated…and that violation caused death to any employee, shall, upon conviction, be punished by a fine of not more than $10,000 or by imprisonment for not more than six months, or both…”

  10. #10 Michael Wood
    September 20, 2011

    A couple of thoughts.

    In many states, workers comp benefits would still be payable even though the employer had no policy in place. That’s one of the things that varies from state to state.

    In some states (as suggested by the original post), the lack of workers comp coverage also pierces the exclusive remedy provisions of the law so a tort lawsuit can be filed more easily (again, it varies from state to state).

    Finally, with regard to criminal prosecution, if there is arguably criminal behavior with regard to workplace health and safety, it is sometimes more useful to prosecute it under the state penal code (whether it is manslaughter or some lesser charge that doesn’t reguire a fatality) than under either the federal or state OSHA laws. But even if the workers in this case had died, the lack of workers comp coverage wouldn’t make any OSHA violations criminal. That is a separate issue (although the lack of coverage might contribute to a “pattern of neglect” argument).

    In any case, this is one of those tragedies that illustrate that workers comp coverage, whether available or not, is an imperfect remedy. The answer is preventing the injury in the first place, and that requires a recognition that agriculture and agriculture-related employers can indeed be very dangerous places.

  11. #11 GregH
    September 21, 2011

    Thanks! We’re starting to prosecute employers more for these types of violations in Canada, and on the whole we have pretty good mandatory WCB coverage. People classified as “farm workers” would be exempt from WCB coverage though, so maybe the same thing could happen here.

  12. #12 Risk Control Dude
    September 21, 2011

    Totally appalling isn’t it? $750 is probably not even the deposit on a minimum premium workers comp policy.

  13. #13 Phyllis Zorn
    February 9, 2012

    Here are some recent updates on the situation. OSHA has hit the grain company with two rounds of fines, and both families are suing Zaloudek Grain.

    http://enidnews.com/localnews/x584481908/OSHA-hits-Zaloudek-Grain-with-fines-following-accident

    http://enidnews.com/localnews/x647571346/Negligence-lawsuit

    And here’s a story about Tyler speaking to his high school classmates:
    http://enidnews.com/localnews/x584479316/Teen-speaks-on-accident-aftermath-with-students-at-Chisholm-High-School

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