Tuesday, November 3, 2015

Agreements Matter

Workers' compensation is under most people's radar. There are industry sources for news in workers' compensation. There are not a great many workers' compensation-focused news sources, but a few like WorkCompCentral.com and WorkersCompensation.com provide news and feeds for people that want to keep up with workers' compensation news. There are blog spots like Jon Gelman's and Tom Domer's that provide a vast array of workers' compensation and related material from around the web. There is the WorkCompWire and the WCI360.com which each provides links to content. But news stories about workers' compensation on general news sites and publications is just not common. 

In September, there was a rare exception in the national news. The story caught my eye and it's national coverage surprised me. It involved a fall down the stairs in 1986 up in Harrisburg, Pennsylvania. Yes, that is almost 30 years ago; this accident has become old enough to vote, to drink and to have kids. It was covered on AOL.com, PennLive.com, a local Fox affilliate, and there were links to the story on some of the national news pages. 

According to the story, Maritta Adley is 57 years old, In 1986, she was 28 years old and a police officer in Harrisburg. She had a fall down some stairs and injured her foot. It reports that after "her injury officer Adley "eventually returned to work on light duty" but that did not last. She last went to work in 1993. Unfortunately, there are people who are injured at work and do not return to work. 

Various state worker's compensation programs describe that differently. In Florida, we refer to these as "permanently totally disabled" or "PTD." But according to the Pennsylvania Workers' Compensation Law Information Center: "in Pennsylvania, under the Workers' Compensation Act, there is no such thing as permanent or total disability." 

But, according to the Information Center "Some will receive workers' compensation benefits for the rest of their lives, others will settle their claims and live off of the settlement for the remainder of their lives, while others may have their benefits limited by an Impairment Rating Examination (IRE) or because of other vocational considerations." This might lead one to re-read the recent Protz decision and the implications of impairment guides in Pennsylvania. Workers' compensation administrators will be discussing the implications of Protz at the SAWCA All Committee Conference later this month. It has some interesting implications.

According to the PennLive.com story that has captured some national attention, however, some will receive their full salary, perhaps for the rest of their lives. Ms. Adley has received her full salary, and apparently benefits, for the last 22 years following her cessation of work in 1993 (when Bill Clinton was first inaugurated President). 

The story refers to her as a "ghost employee," and says that the "city officials were made aware of" her "when they took office in 2014." Apparently, the city has tried unsuccessfully to terminate her employment before, the last time in 2003. But she remains an employee of the police force, and "currently makes more than $70,000." 

That is a significant amount of money. Our current maximum workers' compensation rate in Florida is $842, according to the Division. The most one would receive in workers' compensation in Florida is $43,784, about $25,000 less than Ms. Adley.

Another of the impacts of a Florida workers' compensation injury may be the loss of fringe benefits. Certainly, an employer may continue health insurance and other benefits for some period, but when a Florida employee becomes permanently and totally disabled, it would be common for the employment relationship to end, and for those fringe benefits to end also. Ms. Adley has been fortunate to have her employer agree to "continue her medical insurance package" for the last 22 years. 

The story will perhaps stimulate some discussions of workers' compensation. Some will see Harrisburg's decision as generous. Some have commented that the payments are too generous. There has been too little reported regarding the medical condition and the resulting impairment or disability for anyone in the general public to draw any valid conclusions about the agreement. 

But at the end of the analysis, that is the key word in the story, "agreement." See, the article says that "city officials were made aware of" her "when they took office in 2014." But what that means actually is that "the current" city officials learned of this in 2014. The story later reports that in 1993 an agreement was made to pay Ms. Adley "her full weekly salary without deductions" and to continue her health insurance. That agreement was signed by the police department's "Director of Human Resources and "the city's risk manager at the time." Those city officials knew about officer Adley many years ago. 

The recovering worker and the employer made an agreement, and people do that all the time. Sometimes they are good agreements. Sometimes they are not. Sometimes agreements look good through the prism of what people know, and later they look different in retrospect. Everyone has bought something that they later questioned. Before people make agreements, they should consider how they may feel about them in the future.

Because in the end agreements matter. Contracts and agreements are the foundation of American business. They provide predictability and stability to transactions and even to the resolution of disputes. Agreements matter, and people would do well to remember that when they consider making them.