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Column: Risk Management

Rumor Control

By: | June 2, 2014 • 3 min read
Joanna Makomaski is a specialist in innovative enterprise risk management methods and implementations techniques. She can be reached at

We all played the game as children — we called it “Broken Telephone.” Children would sit in a circle and someone would whisper a phrase into their neighbor’s ear as quietly as possible. Each neighbor would pass on what they heard until the phrase returned to the message originator.

There were no winners. The game was for sheer amusement when you heard the final, usually unrecognizable message. This game was to teach us how easily information can get corrupted if we’re not careful.


So why is it that many decades later, I often feel I am once again sitting in a circle, this time a much larger corporate circle, listening to what someone said somewhere about something, then passing it on as though it were true?

Did we learn nothing?

Based on what I have experienced, it feels we at times give too much credence to rumors spread around corporate offices.

In fact, it is not that uncommon to witness disciplinary action taken on an employee solely based on information spun in an office rumor mill.

Do rumors pose a corporate risk? Consider a common rumor — that of a pending “corporate restructuring.” We have all sat in that rumor circle at one point. The degree of anxiety and insecurity that runs rampant through an organization with that rumor is astonishing. And sadly it can quickly harm productivity, morale and ultimately profitability.

Exacerbating things is the amplification power provided by our social media and communication tools.

Gossipers no longer have to limit their sharing to just their immediate neighbor. They now have the exponential power to broadcast information to hundreds and thousands of people whether their story is true or untrue.

In fact, the fear of this risk pushed the Chinese government last year to institute harsh new measures aimed at thwarting the spread of online rumors by threatening three year jail sentences if posted rumors were proven untrue. People could be charged with defamation if their online rumors are reposted more than 500 times or visited by 5,000 Internet users.

Short of jailing our employees, should companies try to proactively manage their rumor mill? Should they manage the potentially damaging effects of rumors before they get out of control? In effect, should companies have a rumor risk management strategy?

Some common guiding principles for rumor risk management strategy include trying to keep employees informed as much as a possible — true and timely information is key.

We should try to avoid vague corporate speak or double talk as much as possible. Don’t let employees fill in the blanks for you. It is likely the blanks started the rumor in the first place.


Create mechanisms that allow employees to be linked with a source of truth. Call it a rumor control center. We know that “mystery leads the mind to dark places” so it is best they have a place to go to alleviate their anxiety.

As management, if you yourself hear a rumor, nip it in the bud. Break the chain and kill the game of broken telephone. Use it to your advantage if need be. Send correct messages into the circuit. But do act quickly, as rumors become stronger and more difficult to stop over time and can become accepted as truth.

Lastly, don’t forget to do a post mortem. Try to get at the root of the rumor and manage the situation better going forward.

Read more of Joanna Makomaski’s columns on risk management.

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Enforcing Safety

Retaliation is Futile

OSHA is cracking down on employers suspected of violating whistleblower protection provisions.
By: | June 2, 2014 • 8 min read

Between 2011 and 2013, 13 workers at The Ohio Bell Co., known as AT&T, reported being injured on the job. The company subsequently suspended those workers for up to three days without pay for violating workplace safety rules, which — presumably — was the cause of their injuries.

The company claimed it punished the employees for flaunting safety standards, but that’s not how the U.S. Department of Labor saw it. An investigation by the Occupational Safety and Health Administration (OSHA) found that the suspensions were not legitimate and were in fact acts of retaliation against the workers for reporting their injuries.


The Department of Labor filed suit alleging “the company violated the whistleblower provisions of the Occupational Safety and Health Act of 1970.” Those provisions state “No person shall discharge or in any manner discriminate against any employee because such employee has filed any complaint.” OSHA enforces 22 similar statutes under its “Whistleblower Protection Program,” and has recently become more aggressive in going after employers that raise even the smallest of red flags.

The whistleblower case against AT&T is just one of 2,957 that the Department of Labor received in 2013, up from 1,934 in 2005. The jump was spurred by a reprimand from the Government Accountability Office in 2010. An audit found that “OSHA has done little to ensure that investigators have the necessary training and equipment to do their jobs, and that it lacks sufficient internal controls to ensure that the whistleblower program operates as intended.”R6-14p33-34_05safety.indd

Since that slap on the wrist, OSHA has upped its emphasis on anti-retaliation investigation and litigation, hiring 25 new investigators and 75 support staff personnel in 2011, and requesting funding for 45 more investigators in 2012. Separate from compliance officers, these investigators are dedicated solely to whistleblower cases.

OSHA isn’t only looking into employers’ disciplinary actions; they’re scrutinizing safety incentive programs as well. Any program that rewards employees for low injury rates could be seen as a form of intimidation, encouraging workers not to report injuries for the sake of receiving a good performance review, a cash bonus or some other prize.

So how does a well-intentioned employer get its employees to adhere to safety standards without invoking an OSHA suit? And in the face of a retaliation allegation, how can it prove that its actions were fair?

Litigation on the Rise

“Theoretically, an employer can discipline an employee for being unsafe on the job, but the defense becomes technical,” said Robert Tice, an attorney with law firm Collins Einhorn Farrell. “The employer has to show that they discipline people the same way all the time whether or not they’re injured. They better show comparable employees who’ve been disciplined when there was no injury or complaint.”

“As a kid playing basketball, we had a ‘no blood, no foul’ rule,” said Bill Spiers, risk control services manager at Lockton. “Basically if there was no injury, it wasn’t a foul.” That’s exactly the mentality that can get employers in trouble. Punishing employees only when an injury is reported shows an employer to be discriminatory. Consistency is key when it comes to safety enforcement.

Employers will bear the burden of proving that the employee knew of the safety rules and discipline policy before the injury took place. That means having the policy in writing, preferably signed by the employee at the time of his or her hire, and having clear warnings posted around the workplace stating what the safety protocols are as well as consequences for breaking those protocols.


Robert Tice, attorney, Collins Einhorn Farrell

Without those, “the employer will almost always be found at fault for having an unsafe workplace” if an injury is involved, Tice said.

While most whistleblower cases OSHA sees are found to be without merit, employers should expect investigators to become more suspicious. An alert published by the labor and employment practice group of law firm Morgan Lewis in 2012 advised employers to “be prepared for longer and more invasive investigations that will include more document requests and witness interviews. An increase in meritorious findings is one of the main objectives behind revamping OSHA’s Whistleblower Protection Program.”

Employers should also review their safety rules for clarity and specificity. A 2012 memorandum issued by OSHA Deputy Assistant Secretary Richard Fairfax — called simply the Fairfax Memo — stated that “The nature of the rule cited by the employer should also be considered. Vague rules, such as a requirement that employees ‘maintain situational awareness’ or ‘work carefully’ may be manipulated and used as a pretext for unlawful discrimination.”


Jury bias adds to the challenges for employers accused of retaliation.

“Jurors seem to understand retaliation cases more than discrimination cases,” Tice said. That means that even if an employee’s initial complaint against their employer is without merit, they could still win a retaliation case if they can show they were treated worse in any way after the complaint was filed. For employers, that’s a “no-win situation.”

Nontraditional Safety Programs

The best way to avoid this conundrum, OSHA says, is to prevent initial complaints in the first place by implementing nontraditional safety programs.

Nontraditional or behavior-based programs focus less on reducing injuries and more on getting employees involved with other safety activities, like joining safety committees, participating in an internal accident investigation, self-auditing and mentoring new hires. OSHA has voiced its support for these types of programs that don’t discourage reporting of injuries.

“Traditional safety incentive programs use lagging indicators, like injury rates. OSHA leadership has spoken out against this and any measure that ties into the way they report or record injuries,” said Jon Snare, a partner in the labor and employment practice group at Morgan Lewis. “When it comes to best practices, employers may want to consider nontraditional safety incentive programs.”

“Involvement equals commitment. Ninety percent of workers will do the right thing, and positive recognition helps encourage that.” — Bill Spiers, risk control services manager, Lockton

The Fairfax Memo criticized traditional safety programs that “unintentionally or intentionally provide employees an incentive to not report injuries.” Nontraditional programs, it said, can still incentivize employees with rewards like “throwing a recognition party at the successful completion of company-wide safety and health training.”

Employee surveys can help measure the effectiveness of these programs, Lockton’s Spiers said, though he expects them to perform better than a discipline policy.

“Involvement equals commitment,” he said. “Ninety percent of workers will do the right thing, and positive recognition helps encourage that.”

Discipline with Caution

That being said, OSHA still recognizes an employer’s right to use discipline. The Fairfax Memo acknowledged that discipline can be a legitimate part of a company’s safety policy, as long as it is enforced consistently and documented diligently. Because workplace risks vary widely from company to company, OSHA issues no hard and fast guidelines for how employers should implement and enforce safety rules.

“Communication has to be the No. 1 thing,” said Michael Stack, principal at Amaxx Risk Solutions. “If you’re communicating your safety policy to employees consistently and always following it, whether someone was injured or not, then you avoid the variation that can lead someone to claim the action is discriminatory.”

“If you told me from the beginning that I’d lose a day’s pay if I remove a safety guard, I’m more likely to follow the rule.” — Michael Stack, principal, Amaxx Risk Solutions

Stack also advocated taking a strict approach with discipline, if it will be used at all, to avoid misinterpretation or variation in its enforcement. Verbal warnings, for example, are typically the first stage of discipline, but accomplish virtually nothing as far as preventing an accident or injury.

“People don’t put value in [verbal warnings],” Stack said. People are apt to blow off a verbal reprimand and continue unsafe practices until they experience more serious repercussions. “If you told me from the beginning that I’d lose a day’s pay if I remove a safety guard, I’m more likely to follow the rule.”

Discipline can be more effective if verbal and even written warnings are skipped. Handing out serious punishments right away, like docking pay or suspending employees, quickly drives home the importance of safety. Employers should be protected in using such punishment if they continually make clear to employees that those consequences exist.

Safety Culture

Even the most consistent discipline policy, though, cannot achieve the same results as a strong culture of safety, according to Stack of Amaxx.

“There’s no incentive that’s as important as the culture of safety, and that comes from the top,” Stack said. “Nobody wants to get hurt; the problem comes in when other things become more important, like emphasis on productivity or efficiency before safety. I won’t take off a safety guard if I think I’ll get hurt, but I might do it if I’m afraid of losing my job because I’m not performing efficiently enough.”


Safety policies should be viewed on the same level as HR and other work policies, Spiers said. For example, a work site manager once told Spiers that he could not “make” his forklift drivers wear their seatbelts.

“Why?” Spiers asked him. “Wearing the seat belt should be seen the same way as showing up to work on time. If your shift starts at 7 a.m., you’re there at 7 a.m. If you’re supposed to wear the seatbelt, you wear the seatbelt.”

It’s unclear exactly how the workers at AT&T incurred their injuries, when they reported them, when they were disciplined, how that discipline was delivered, and whether or not they knew of the safety rules and discipline policy in place.

But regardless of whether or not the case is found to have merit, the suit reminds employers that retaliation claims are an increasingly prominent risk. To keep them at bay, upping the emphasis on safety — not solely injury prevention — really should come first.

Katie Siegel is a staff writer at Risk & Insurance®. She can be reached at
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Sponsored: Healthcare Solutions

Achieving More Fluid Case Management

Four tenured claims management professionals convene in a roundtable discussion.
By: | June 2, 2014 • 6 min read

Risk management practitioners point to a number of factors that influence the outcome of workers’ compensation claims. But readily identifiable factors shouldn’t necessarily be managed in a box.

To identify and discuss the changing issues influencing workers’ compensation claim outcomes, Risk & Insurance®, in partnership with Duluth, Ga.-based Healthcare Solutions, convened an April roundtable discussion in Philadelphia.

The discussion, moderated by Dan Reynolds, editor-in-chief of Risk & Insurance®, featured participation from four tenured claims management professionals.

This roundtable was ruled by a pragmatic tone, characterized by declarations on solutions that are finding traction on many current workers’ compensation challenges.

The advantages of face-to-face case management visits with injured workers got some of the strongest support at the roundtable.

“What you can assess from somebody’s home environment, their motivation, their attitude, their desire to get well or not get well is easy to do when you are looking at somebody and sitting in their home,” participant Barb Ritz said, a workers’ compensation manager in the office of risk services at the Temple University Health System in Philadelphia.

Telephonic case management gradually replaced face-to-face visits in many organizations, but participants said the pendulum has swung back and face-to-face visits are again more widely valued.

In person visits are beneficial not only in assessing the claimant’s condition and attitude, but also in providing an objective ear to annotate the dialogue between doctors and patients.

“Oftentimes, injured workers who go to physician appointments only retain about 20 percent of what the doctor is telling them,” said Jean Chambers, a Lakeland, Fla.-based vice president of clinical services for Bunch CareSolutions. “When you have a nurse accompanying the claimant, the nurse can help educate the injured worker following the appointment and also provide an objective update to the employer on the injured worker’s condition related to the claim.”

“The relationship that the nurse develops with the claimant is very important,” added Christine Curtis, a manager of medical services in the workers’ compensation division of New Cumberland, Pa.-based School Claims Services.

“It’s also great for fraud detection. During a visit the nurse can see symptoms that don’t necessarily match actions, and oftentimes claimants will tell nurses things they shouldn’t if they want their claim to be accepted,” Curtis said.

For these reasons and others, Curtis said that she uses onsite nursing.

Roundtable participant Susan LaBar, a Yardley, Pa.-based risk manager for transportation company Coach USA, said when she first started her job there, she insisted that nurses be placed on all lost-time cases. But that didn’t happen until she convinced management that it would work.

“We did it and the indemnity dollars went down and it more than paid for the nurses,” she said. “That became our model. You have to prove that it works and that takes time, but it does come out at the end of the day,” she said.


The ultimate outcome

Reducing costs is reason enough for implementing nurse case management, but many say safe return-to-work is the ultimate measure of a good outcome. An aging, heavier worker population plagued by diabetes, hypertension, and orthopedic problems and, in many cases, painkiller abuse is changing the very definition of safe return-to-work.

Roundtable members were unanimous in their belief that offering even the most undemanding forms of modified duty is preferable to having workers at home for extended periods of time.

“Return-to-work is the only way to control the workers’ comp cost. It’s the only way,” said Coach USA’s Susan LaBar.

Unhealthy households, family cultures in which workers’ compensation fraud can be a way of life and physical and mental atrophy are just some of the pitfalls that modified duty and return-to-work in general can help stave off.

“I take employees back in any capacity. So long as they can stand or sit or do something,” Ritz said. “The longer you’re sitting at home, the longer you’re disconnected. The next thing you know you’re isolated and angry with your employer.”

“Return-to-work is the only way to control the workers’ comp cost. It’s the only way,” said Coach USA’s Susan LaBar.

Whose story is it?

Managing return-to-work and nurse supervision of workers’ compensation cases also play important roles in controlling communication around the case. Return-to-work and modified duty can more quickly break that negative communication chain, roundtable participants said.

There was some disagreement among participants in the area of fraud. Some felt that workers’ compensation fraud is not as prevalent as commonly believed.

On the other hand, Coach USA’s Susan LaBar said that many cases start out with a legitimate injury but become fraudulent through extension.

“I’m talking about a process where claimants drag out the claim, treatment continues and they never come back to work,” she said.


Social media, as in all aspects of insurance fraud, is also playing an important role. Roundtable participants said Facebook is the first place they visit when they get a claim. Unbridled posts of personal information have become a rich library for case managers looking for indications of fraud.

“What you can assess from somebody’s home environment, their motivation, their attitude, their desire to get well or not get well is easy to do when you are looking at somebody and sitting in their home,” said participant Barb Ritz.

As daunting as co-morbidities have become, roundtable participants said that data has become a useful tool. Information about tobacco use, weight, diabetes and other complicating factors is now being used by physicians and managed care vendors to educate patients and better manage treatment.

“Education is important after an injury occurs,” said Rich Leonardo, chief sales officer for Healthcare Solutions, who also sat in on the roundtable. “The nurse is not always delivering news the patient wants to hear, so providing education on how the process is going to work is helpful.”

“We’re trying to get people to ‘Know your number’, such as to know what your blood pressure and glucose levels are,” said SCS’s Christine Curtis. “If you have somebody who’s diabetic, hypertensive and overweight, that nurse can talk directly to the injured worker and say, ‘Look, I know this is a sensitive issue, but we want you to get better and we’ll work with you because improving your overall health is important to helping you recover.”

The costs of co-morbidities are pushing case managers to be more frank in patient dialogue. Information about smoking cessation programs and weight loss approaches is now more freely offered.

Managing constant change

Anyone responsible for workers’ compensation knows that medical costs have been rising for years. But medical cost is not the only factor in the case management equation that is in motion.

The pendulum swing between technology and the human touch in treating injured workers is ever in flux. Even within a single program, the decision on when it is best to apply nurse case management varies.

“It used to be that every claim went to a nurse and now the industry is more selective,” said Bunch CareSolutions’ Jean Chambers. “However, you have to be careful because sometimes it’s the ones that seem to be a simple injury that can end up being a million dollar claim.”

“Predictive analytics can be used to help organizations flag claims for case management, but the human element will never be replaced,” Leonardo concluded.

This article was produced by Healthcare Solutions and not the Risk & Insurance® editorial team.

Healthcare Solutions serves as a health services company delivering integrated solutions to the property and casualty markets, specializing in workers’ compensation and auto liability/PIP.
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