Oklahoma Youth Safety Bill Leads the Way
Oklahoma is now the first state in the United States to mandate young worker safety education in schools, following the lead of several Canadian programs.
Advocates say the trend could spread to other states, many of which now have voluntary education programs, and as more employers begin to recognize the particular importance of training young workers on safety.
Workers aged 15 to 24 tend to get injured earlier in their jobs than older workers, according to The Center for Young Worker Safety and Health at the Georgia Tech Research Institute in Atlanta. One worker from this age group is injured on the job every nine minutes, resulting in an average of 200,000 injuries each year — with 70 of those incidents resulting in death.
Oklahoma Gov. Mary Fallin signed a bill into law in April that directs the Oklahoma Department of Labor and the Oklahoma State Department of Education to develop a program that educates students in grades 7 through 12 about workplace safety.
The curriculum will come from material developed by the National Institute for Occupational Safety and Health, entitled Youth@Work: Talking Safety, which also provides lesson plans and a teacher’s guide.
“We are teaching young workers that if they have a question to speak up, or notify the boss if they are not properly trained to do work on a particular piece of equipment,” Lester Claravall, a child labor program administrator for the department said.
“The employer has an obligation to make sure the workers are offered safety training, and we let the workers know their rights and responsibilities. If they are not trained properly, they don’t have to work and the law states they won’t get fired.”
When an inexperienced worker starts a new job, they will try to mimic what other workers may be doing, even if it’s wrong or unsafe.
Several programs in Canada also focus on young worker safety. British Columbia has a safety program within its schools, Student WorkSafe 10-12, as part of the WorkSafeBC requirements under the country’s Workers Compensation Act.
Another program, MySafeWork, is a nonprofit run by Rob Ellis and Jessica Di Sabatino, who lost a son and brother, David Ellis, in a workplace accident when he was 18. The nonprofit gives presentations to schools, corporations and community groups throughout Canada on the importance of young worker safety education.
Canada also has workplace requirements specifically for educating young workers. Under Canadian law, companies employing workers under the age of 25 must provide them with health and safety orientation and training specific to their workplace. This includes information on their rights and responsibilities, potential hazards, working alone or in isolation, workplace violence, personal protective equipment and emergency procedures.
Additionally, Canadian employers must provide young workers with extra orientation and training if they request it or if they cannot perform the work tasks safely under observation. Employers are also required to keep records of all orientation and training.
More Commitment Needed
In the United States, more employers are recognizing the need to train young workers, but many still don’t, said Dave Quezada, vice president, loss control with EMPLOYERS, a specialty workers’ comp carrier for small businesses.
According to a 2014 EMPLOYERS poll of 505 small business owners collected by SSRS SmallBiz Omnibus, 52 percent of respondents that intended to hire students for summer work said they would require students go through workplace safety training. But another 27 percent said they do not offer workplace safety training for new student workers.
“It’s disturbing that more than a quarter don’t plan to offer such training, but they really should,” said Quezada.
“Young workers should know they have a right to work in a safe place, and the right to receive training in a language they understand.”
Employers should also make sure immediate supervisors are following safety rules and instilling a culture of safety. That means making sure all workers wear hard hats, goggles, ear plugs and other safety equipment, as young workers often feel uncomfortable following safety rules when older workers don’t, he said.
Thomas Heebner, senior vice president of risk at Hub International in Chicago, said that it is well documented that young workers — particularly teenagers coming into the workplace for the very first time — are more vulnerable to accidents because have very limited knowledge of the work environment in general and they are not aware of their rights and responsibilities and what protections they have under general child labor rules.
Heebner pointed out that typically, when an inexperienced worker starts a new job, they will try to mimic what other workers may be doing, even if it’s wrong or unsafe, he said. That’s why safety training is particularly important.
“Often young workers who aren’t prepared are too intimidated to ask questions and will try to figure it out through observation or testing,” Heebner said.
The need for young worker safety training goes beyond teens and summer jobs, and is especially important for young people entering high-risk professions.
A prime example, said Tim Davidson, assistant vice president of loss prevention, safety and security at IASIS Healthcare in Franklin, Tenn., is young nurses thinking they’re strong enough to lift patients out of bed without equipment. That misunderstanding leads to numerous back injuries.
“They are not bulletproof and they don’t have to be super women.” — Tim Davidson, assistant vice president of loss prevention, safety and security at IASIS Healthcare.
IASIS owns and operates 17 hospitals in Arizona, Arkansas, Colorado, Louisiana, Nevada, Texas and Utah.
“Often nurses are trained in nursing school with the mindset of taking care of patients no matter what — to the point that sometimes they ultimately compromise their own safety,” Davidson said.
“The biggest challenges are getting new nurses fresh out of college, as well as older nurses, to utilize this equipment, or else they’re going to be the patients. They are not bulletproof and they don’t have to be super women.”
Dealing with Civil Unrest
Retailers and other companies across the country are looking for a Plan B in the wake of riots that destroyed stores in Ferguson, Mo. and now Baltimore.
Meanwhile, carriers might seek to recover their losses from damage and business disruption claims by suing cities that tell their police to stand down to give space to protesters who “wished to destroy.” What’s unknown at this point is whether carriers would prevail.
Companies need to develop contingency plans specific for each location to manage events such as riots, as well as situations that could lead to them and the resulting consequences, said Sean Ahrens, security consulting services practice leader for Aon Global Risk Consulting in Chicago.
A key part of such planning includes determining under what circumstances onsite managers or a crisis management team should close retail locations.
“Now is also the time to review contingency plans to understand what other locations can be used during a time of unrest, as well as making sure companies that supply goods to them have alternative ways to make their goods available.” — Lance Becker, vice chairman, Northeast region, Arthur J. Gallagher & Co.
“Organizations that have robust plans and contingencies may actually have shelter in place to protect employees during civil unrest,” Ahrens said.
“But if a company has no policies or procedures in place, then in the worst case scenario, they should close the store and evacuate. Ultimately, a company’s duty of care is to protect their employees from all hazards.”
Post-event, companies should also provide counseling for employees who were caught up in a riot, though a lot of them might not want to come back, he said.
Tracy Knippenburg Gillis, global reputational risk and crisis management leader for Marsh Risk Consulting in New York City, said there are a lot of factors that determine when to close a facility, such as whether it serves a critical function in the community, or whether employees would lose needed income if the store closed prematurely during peaceful protests.
“Most organizations should have their crisis management teams on alert, if not actively engaged, monitoring and potentially making decisions on delayed openings or closures over the course of events,” Gillis said.
“They should be communicating to employees what they are doing and ideally monitoring what authorities are doing, so they can make the right judgment at the right time.”
Marsh has several clients in retail, hospitality and other entertainment-related industries that were impacted in last month’s Baltimore riots. Several suffered business disruptions due to curfews imposed by the city, said Bob O’Brien, a managing director in Marsh’s national claims practice in Washington, D.C.
“Companies should practice situational awareness,” O’Brien said.
“They have to go through several steps continuously, identifying exposures to the company and their supply chain. They should be aware of what’s going on all around them that could potentially impact them if they are caught up in a freeze zone or a closure zone.”
Companies should also review their insurance coverage to make sure they have the proper terms, limits and retention, he said. After an event, they should apply all possible triggers that could impact a claim, whether direct damage or civil authority that results in service interruption and ingress/egress issues.
Companies should make sure to secure documents to better ensure payment of their claims, he said.
Arthur J. Gallagher & Co. also had clients that suffered losses and filed claims as a result of the upheaval in Baltimore, said Lance Becker, vice chairman, Northeast region in New York City.
Becker said the recent riots that impacted area businesses serve as “an education” for companies to make sure their insurance policies cover “civil authority and unrest,” which would pay for either physical damage or losses for not being able to gain entry to the store.
“Now is also the time to review contingency plans to understand what other locations can be used during a times of unrest, as well as making sure companies that supply goods to them have alternative ways to make their good available,” he said.
Carriers might seek to recoup their losses by suing Baltimore, as several news outlets have reported that the police there were ordered to “stand down” and not prevent rioters from looting, burning or destroying stores, including a CVS pharmacy and an Ace Cash Express store.
Baltimore Mayor Stephanie Rawlings-Blake denied there was a stand down order, and she also told “Meet the Press” last Sunday that she regretted saying in an earlier press conference that space was given to protesters who “wished to destroy.”
Terrence Graves, a shareholder at Sands Anderson PC law firm in Richmond, Va., said that any city that experiences civil unrest might have sovereign immunity for those sorts of actions dealing with the police force.
“If a city government — like any other governmental entity — takes action within what is considered its governmental sphere, such as making political decisions, as opposed to its proprietary sphere such as providing water services or maintaining city streets, then a city might have governmental immunity,” Graves said.
“There is an interesting test that most courts would run though in order to determine whether the city was acting as a government or as a landlord.”
Taking Down Trolls
Patent trolls are a thorn in the side of many companies.
Even when infringement claims are weak, many firms opt to settle just to avoid having to spend millions defending them in court, experts said.
To be sure, the terms “patent troll” or “non-practicing entity” (NPE) are often used to paint with too broad of a brush, as some NPEs have legitimate reasons to sue for patent infringement, said Rudy Telscher, a partner at Harness Dickey & Pierce law firm in St. Louis.
Many individuals, smaller companies and universities that innovate don’t have an interest or resources to bring products to the market, Telscher said. Alternatively, they may have tried to make a go out of commercializing their patent, but found the competition too stiff. These entities determined that they would be better off having other companies pay them a royalty to use their invention or patented technology in their own products, and if others refuse to pay but still use their patent, then the NPEs rightfully sue.
An example of true patent troll abuse stems from when firms bought broadly worded patents that were issued by the U.S. Patent Office during the dot.com bubble of the late 1990s and early 2000s.
Those patents were analyzed by the government under less strict standards than those used today, Telscher said.
Patent trolls typically sue 20 or more companies to lower their own filing costs, then settle with individual defendants.
“Patent troll companies invest significant time and money to pan for gold, by trying to find these old, broadly worded patents and then assert them against industries to get royalties not reasonably owed by using the high cost of patent litigation as a coercive weapon,” he said.
Fortunately, the Supreme Court’s 2014 Octane decision made it easier for defendants to get their court fees paid by trolls if they choose to defend patent cases, Telscher said.
Moreover, the Supreme Court’s 2014 Alice decision has been used by district courts to strike down software and other patents having claims drawn to “abstract ideas,” and its 2014 Nautilus decision has been used to strike down patent claims that are vague and indefinite regarding claim scope coverage.
“While the Supreme Court cases of the last year have deterred some patent trolls from asserting the weakest of patent cases, many entities are still filing such cases,” Telscher said.
“In no case do we give NPEs any money, since we believe paying NPEs only ‘feeds the beast,’ ” — Shawn Ambwani, chief operating officer, Unified Patents
The 2011 Leahy–Smith American Invents Act (AIA), which determined how many defendants could be sued in a single case, has also had some impact on patent infringement litigation — but not as much as defendants in such cases would have liked, said Brian Howard, a legal data scientist at Lex Machina, a Menlo Park, Calif., firm that tracks district court litigation.
Insignificant Decrease in Claims
Since the new rules generally caused plaintiffs to sue defendants in separate cases rather than in a single combined case, Lex Machina counted the combinations of defendants and cases after the AIA became effective (a lawsuit by one plaintiff against three defendants is now counted as three cases for the purposes of tracking).
The company found that the new rules did not drastically reduce patent case filings. The statistics from late 2011 to mid-2013 followed a trajectory consistent with that of 2009 to early 2011. Overall, 2014 saw a steady increase in case filings through April, followed by sharp drop in May and a flat remainder of the year, leaving total filings down 21 percent from 2013.
That was “not the dramatic reduction that many were expecting,” Howard said.
Intellectual Property Insurance Services Corp., based in Louisville, Ken., offers a patent troll defense policy, said President Bob Fletcher.
If a policyholder is sued by a patent troll, the insured can solicit counsel of their choice to determine whether they would have a 51 percent chance of winning “by a preponderance of evidence,” in which case the policy would then pay for the defense. The policy covers “non-core activities” because that is the focus of many of the “bad” broadly worded patent lawsuits.
“Let’s say a firm has an Internet connection, a computer and they email something — a patent troll would sue for infringement,” he said. “For that kind of case we would not pay a settlement but would fight it to the end, because those patents never should have been granted and we would likely win. We want to teach trolls that when a client has insurance they will not settle, which will destroy the trolls’ livelihoods.”
London-based CFC Underwriting offers a variety of insurance products based on infringements of any type of intellectual property, including patents, said Erik Alsegard, intellectual property practice leader. The policies cover lawsuits regardless of whether it is a non-practicing entity or a competitive company that is suing the insured.
Before insuring, CFC reviews how companies operate, their patent risks, whether they work with a patent attorney and, where suitable, whether they run “freedom to operate” searches to mitigate the risk of patent infringement and intellectual property claims, Alsegard said.
“However, risk management and IP searches can’t 100 percent prevent claims, so that’s why insurance is really important,” he said. “The lawmakers and the courts are trying to change the behavior of patent trolls, but it is unlikely to entirely remove this risk to operating companies as the more sophisticated entities will adapt.”
Often companies will ask their suppliers to indemnify them on patent infringement lawsuits based on the product they supply, but the ability to transfer such indemnity to a supplier will depend on the strength of each party in the negotiation.
“Smaller companies are less likely to be able to negotiate away risk through contracts,” Alsegard said. “On the other hand, if a company does have to indemnify its customers, then this contractual indemnity can be insured so in a sense the insurance works as a business enabler.”
Mary Castiglia, a senior vice president at Hub International Ltd. in San Francisco, said that in the past she had been unsuccessful getting her clients to consider coverage because it had been a “fairly cumbersome underwriting process.” But now there are more options in the marketplace and firms have eased both the underwriting and claims processes. Castiglia typically works with RPX Insurance Services in San Francisco, which offers a holistic insurance and claims-settling service solution.
“We’re starting to see more interest in the marketplace to offer this type of insurance because more people are getting hit with letters from trolls,” she said.
Unified Patents in Los Altos, Calif., protects technology companies from NPE assertions using various tools, challenging patents they consider invalid using the AIA’s new “inter partes review” process, said Shawn Ambwani, chief operating officer. Since starting the challenges in 2012, United has invalidated two patents and has settled two others in which the NPEs agreed to not sue Unified’s members.
“In no case do we give NPEs any money, since we believe paying NPEs only ‘feeds the beast,’ ” Ambwani said.
Problems for Startups
Lori Johnson, a shareholder and intellectual property lawyer in the Atlanta office of law firm Chamberlain Hrdlicka, works with several large companies that budget for patent infringement claims by trolls and other entities rather than buy insurance.
However, startups should consider buying insurance, because many troll suits target the software within their websites.
“The asserted patents may have little to do with the underlying business the startup is engaged in,” Johnson said.
“It’s very easy to name call and put everyone in the same category,” he said. “But we say, hold on a second! Let’s not throw away 225 years of patenting innovations that have built value in the economy.” — Phil Hartstein, president and chief executive officer, Finjan Holdings Inc.
Startups should also consider requesting indemnification from their web development company, she said. If the development company is using off-the-shelf software, they may feel comfortable providing indemnity, but if they’re using cutting-edge software, “it’s a red flag if they do not even want to talk indemnification.”
“Most firms don’t want to indemnify if they can help it, but if they’re not even willing to talk about it, that would make me nervous,” Johnson said. “I would recommend shopping for another web developer that might be more willing to indemnify or more capable of handling a suit.”
One NPE that is fighting against the patent troll stigma is Finjan Holdings Inc. in East Palo Alto, Calif., said Phil Hartstein, president and chief executive officer. Finjan was formed in 1997 first as a software company and then as a hardware company, raising $65 million in capital over a number of rounds between 1998 and 2006 to develop content inspection technologies.
In 2005, the company struck its first licensing deal with Microsoft, without having to litigate, Hartstein said. Finjan ultimately divested the technology company. Today, it’s a publicly traded entity that seeks first to make licensing deals with companies using its patents before litigating. Major funds and companies have invested in Finjan, including Cisco Systems Inc.
“It’s very easy to name call and put everyone in the same category,” he said. “But we say, hold on a second! Let’s not throw away 225 years of patenting innovations that have built value in the economy. Let’s focus instead on giving those that exhibit positive, ethical behaviors the freedom to continue down this road.”
Finjan has posted four core values and seven best practices based on such behaviors on its website, and is working with the American Intellectual Property Law Association and the Licensing Executives Society to build certification programs for licensing entities. The American National Standards Institute has agreed to be the governing body for the “LES Standards Pilot Program.”
“If there is an opportunity for us to participate in establishing credibility in the licensing industry by disseminating best practices, that enables us to move out of the shadows of litigation arbitrage and back into the credible exchange of ideas for invested capital,” Hartstein said.