Hunting ADA Violations
Litigation brought by the Equal Employment Opportunity Commission in connection with violations of the Americans with Disabilities Act has risen since 2014, and outcomes show that juries usually sympathize with the worker.
Rulings favorable to the employee in these cases jumped from 4,981 in 2014 to 6,069 in 2015.
Since 2011, the EEOC filed more than 200 lawsuits involving claims of disability discrimination, through which it has recovered approximately $52 million, according to statistics compiled by the commission.
The primary driver of this activity, said Terri Rhodes, executive director of the Disability Management Employer Coalition, is increased strategic enforcement of the ADA by the Department of Labor and the EEOC.
“They have intensified an initiative to do more employer site visits, so litigation can come out of that,” she said.
Regulators aren’t just focusing on high-risk industries either. EEOC stats show that every sector is vulnerable to this sort of lawsuit, from manufacturing and construction to retail and hospitality.
“There’s also increased public awareness around disability discrimination, which lends itself to more lawsuits,” Rhodes said.
“The rise in claims is also due in part to the amendments to the ADA which went into effect in 2009,” said Justin Eller, a principal in the labor, employment, benefits and immigration practice group at Miles & Stockbridge PC.
“It broadened the definition of disability, thus making it easier to make a claim because more people are covered.”
The increased frequency of claims could also be the result of more people staying in the workforce longer. With older workers, there is an increased likelihood of medical conditions that necessitate disability leave or accommodations, Eller said.
Whatever the impetus for a discrimination claim, companies often find themselves susceptible to a lawsuit for one of two reasons: not engaging in the interactive process, or not applying processes consistently across workers’ compensation and disability management programs.
Employers’ shortcomings in these two areas may be so slight that they don’t realize they’ve fallen afoul of the ADA until a claim is filed.
For example, if an employer waits for an employee to come forward with a request for an accommodation, the EEOC may deem that as a failure on the part of the employer because it is incumbent upon the employer to reach out proactively when it recognizes a potential need for an accommodation.
“Once you’re on notice that an employee may need an accommodation, there’s an affirmative duty to start the process,” Eller said.
Even if an initial request for accommodation presents an undue hardship on the employer, there remains an obligation to continue the discussion to find a reasonable compromise.
“You can’t just deny it and move on,” he said.
Lack of consistent processes also creates vulnerable targets for injured employees who feel they were not treated fairly.
If, for example, a light duty position is offered to a worker injured on the job as part of a transitional program, a similar option must also be offered to employees with a non-occupational injury.
“Workers’ comp folk tend to forget that there are employment practices around engaging in the interactive process, as far as initiating that and making sure reasonable accommodations are made when possible,” Rhodes said.
“They also should be connecting with their HR counterparts to make sure treatment of workers’ comp claimants does not differ from treatment of those with non-occupational illness or injury.”
The DOL and EEOC don’t recognize organizational silos between workers’ comp and HR functions when it comes to disability management.
During on-site visits, the EEOC looks to see how leave policies are communicated to employees, checking for consistency in the timing and language of communication.
If workers’ comp, HR, and risk management aren’t on the same page, it raises a red flag. Discrepancies among policies mean there is a higher likelihood of noncompliant treatment of an injured or disabled employee.
Fines levied for ADA violations are “significant,” Rhodes said, “usually commensurate with the size of the company.”
If an allegation of discrimination turns into a lawsuit, employers could be looking at a price tag of “several hundred thousand dollars,” Eller said.
“[The amendments to the ADA] broadened the definition of disability, thus making it easier to make a claim because more people are covered.” — Justin Eller, principal, labor, employment, benefits and immigration practice group, Miles & Stockbridge PC
“It’s not cheap to take a case to trial. Depending on the nature and scope of the allegation, number of witnesses and other factors, there can be a very significant cost involved,” he said.
“There are hidden costs as well. From a time standpoint, litigation takes up an inordinate amount of time for the individuals involved.”
Reputation typically takes a hit, too. Some employers who believe they are in the right opt to take a case to trial in order to defend their name, but drawing attention to the allegations against them may undermine those efforts in the long run.
Staying Ahead of the Risk
Complying with the ADA can be challenging given its intersection with other employee laws such as the Family and Medical Leave Act, Genetic Information Nondiscrimination Act and state workers’ compensation statutes — especially since those regulations are always evolving.
“Staying up-to-date and modifying practices is an ongoing process that requires a lot of resources and attention, which is especially difficult for small companies,” Eller said, “but there are certainly steps everyone can take to protect their organization.”
Those steps include implementing a written policy regarding accommodation of disabilities and communicating it to all employees.
All supervisors should also be trained to identify issues and notify decision-makers in HR so that the interactive process can be kicked off proactively.
“I would make sure that when we had a situation, whether it’s a workers’ comp claim or disability, that we were all talking about what the process looks like and who needs to be engaged,” Rhodes said.
For smaller companies that lack a legal or risk management department, health insurance providers or disability carriers should be able to field questions about regulatory changes and what an employer should do to stay compliant.
Of course, sometimes an employer truly cannot meet an employee’s demands, despite its best efforts. In this case, documentation of the whole conversation from start to finish serves as the employer’s best defense should the employee file a discrimination claim.
“Document your process along the way and make sure you do that for every person,” Rhodes said.
“Not every situation is the same, but your process should be the same in every case.
“It’s not difficult to comply when you understand what actions need to be taken; the problem is that employers are caught off-guard, and it’s hard to recover once you’ve been spotlighted,” Rhodes said. &
Presumption of Responsibility
Firefighters are at greater risk of getting cancer than the general population, yet many find it difficult to obtain workers’ compensation benefits.
To provide a safety net, some states recognize cancer as a “presumed” occupational disease for firefighters, easing the path for workers’ compensation claims. A presumption law says the specific illness is a result of hazards on the job. It’s the employers’ responsibility to prove otherwise.
Some fear presumption laws are too expensive to cover and too vague medically. In Ohio, for example, legislators are on their fourth attempt to enact a “cancer presumption” law that would provide firefighters benefits from the state’s workers’ compensation system rather than their health insurance.
If S.B. 27 passes, Ohio will become the 38th state to simplify access to workers’ compensation for firefighters with certain cancers. But the legislation is not expected to pass.
Every state has recognized occupational diseases under workers’ compensation programs since at least 1971, yet not all recognize the same dangers on the same jobs. And once diagnosed, the employee still carries the burden of proving the job caused the disease.
More often than not, that process is too cumbersome and costly for a worker to even pursue.
If you have presumed diseases, “you are making a societal decision that anybody who gets that disease in a certain field is simply covered,” said Howard Sandler, president and founder of Sandler Occupational Medicine Associates, Inc., and former medical adviser to EPA and OSHA, and medical officer with NIOSH.
“That is not a scientific approach to the process of causation determination,” he added. “You are merely advising people, ‘Hey if you take this job, it’s going to cover your problems in the future,” Sandler said.
Pros and Cons
When “presumed” occupational diseases are recognized under the law, it can speed up compensation for the injured worker while reducing administrative costs to process or investigate the claim.
“I think at the end of the day it has huge advantages,” said Dr. Tee Guidotti, an occupational and environmental medicine expert, and author of “Health Risks and Fair Compensation in the Fire Service.”
“It creates a much more efficient way of dealing with the problem than adjudicating or litigating every similar case.
“When a worker in a certain occupation has the disease and meets certain criteria, you simply accept it and that tremendously simplifies the processing of the claim,” Guidotti said.
Conversely, presumed occupational diseases may increase insurance rates and scare workers’ compensation insurers away, said Kristopher Kachline, an attorney with the Chartwell law firm in Philadelphia. Chartwell represents municipalities and employers in workers’ compensation cases.
After Pennsylvania passed a cancer presumption law for firefighters in 2011, some insurance companies dropped municipal coverage and some fire departments had to move to the state’s insurance fund.
“The expectation on the employee’s side is that if they have that disease, they automatically win their claim,” Kachline said. “And, that hasn’t been the case for firefighters with cancer,” he said, because law firms such as his often will rebut the presumption in court.
Such laws make employers liable for things they probably shouldn’t be liable for, Kachline said, because it’s hard to prove causes of cancer.
Without a presumption, the employee must prove job hazards led to the occupational disease. With it, the burden shifts to the employer who must show the job didn’t cause the illness, said attorney Michael G. Dryden, chair of the workers’ compensation department for Willig, Williams & Davidson in Philadelphia.
“It’s much more fair to leave it on [the municipality’s] shoulders,” Dryden said.
Guidotti said employees can’t afford to pay for literature searches, expert opinions and re-analysis of the massive studies needed to show a link between hazardous exposures and disease. Time and money is wasted reviewing the same studies over again for every single worker.
“[Presumption laws] allow the individual to play on a level, moral playing field and it helps the system as a whole by reducing the amount of repetition and cost to the system, Guidotti said.
Sandler disagreed. Each case should be decided individually based on science, he said.
“Otherwise, you’ve now simply put in a program which disregards whether somebody is entitled or not,” Sandler said.
“First rule of medicine is ‘do no harm’; I think that means do no harm in a lot of areas, not just the patient,” said Sandler, “If you destroy a business, you are putting workers at increased risk of problems because they don’t have jobs anymore.”
Difficulties with National Guidelines
Some experts have suggested that a national schedule or master list of occupational diseases could streamline the system and remove underwriting uncertainty. But so far the details of how to establish it are elusive.
“Some of us do think it can be done, but it’s not easy,” Guidotti said.
The National Institute for Occupational Safety and Health might be a good central source for maintaining presumed occupational disease lists, Sandler said.
The idea of creating one master list as a guide for all states has come up before. In 1980, the Department of Labor issued an interim report suggesting it as one of several options. Nothing came of it.
One reason it hasn’t worked so far is no one can say definitively that a particular cancer – except perhaps mesothelioma and a couple of others – was caused by a specific exposure, said J. Paul Leigh, a professor in the Department of Public Health Sciences at University of California, Davis.
“All we can say is that there is a higher or lower likelihood that the exposure lead to the cancer,” Leigh said. “So when you talk about a master list, you are ultimately talking about a master set of estimates of the Attributable Fraction of different diseases that were caused by the occupational exposure.”
Also, the laws need flexibility so you don’t have to go back to the legislature if the science changes, said Dryden. The laws would need to change and roll with the latest science, he said
“Sometimes the legislature will adopt a certain schedule but fail to vest the power in its division of insurance to keep updating the list,” Guidotti said. “These things change over time and as new studies become available somebody has to be watching it.”
Using Data to Get Through Hail and Back
4,600 hailstorms have rained down on the U.S. as of the end of July according to the National Oceanic and Atmospheric Administration. And these storms have left damage behind, cracking unprotected skylights, damaging exterior siding, dimpling rooftops and destroying HVAC systems.
While storm frequency is almost on par with last year’s 5,400, the rest of the picture isn’t quite the same. For example, the hail zone seems to be shifting south. San Antonio, Texas, a “moderate” hazard hail zone area, typically sees four or five hail storms a year, on average. Year to date, more than 30 storms have been reported. Overall, Texas has suffered nearly 20 percent of all hail storms this year.
Liberty Mutual’s Ralph Tiede discusses the risk hail poses to large commercial property owners.
The resulting damage is different too, with air conditioning (AC) units accounting for more than a third of the insurance industry’s losses, a greater proportion than in previous years. “In some cases, we’ve seen properties that sustained no roof damage but had heavily damaged AC systems. This may be a result of smaller hail stone size coupled with high winds,” noted Ralph Tiede, Vice President of Commercial Insurance and Manager of Property Risk Engineering at Liberty Mutual.
Despite the shifting trends, however, these losses are largely preventable if commercial property owners understand their exposures and take steps to mitigate them. By partnering with the right insurer, a company can gain access to the industry-leading resources and expertise to make it happen.
Understanding the Risk through Data
A property owner might know that his property is located in an area prone to hail, but could underestimate the extent of damage a storm could cause. Exposed skylights, solar panels, satellite dishes and other roof-mounted equipment can translate to serious losses.
Three trends that have emerged this hail season.
This is where Liberty Mutual’s property loss control engineers offer critical guidance for customers with large property exposures.
“Our property loss control engineers go out and inspect locations to develop loss estimates,” said Tiede. “They’re looking at the age and condition of the roof, the material it’s made of, and whether equipment is exposed or if there are adequate safeguards in place.”
Liberty Mutual can combine this detail with the hail data it has collected for more than 14 years and use this extensive library to help customers understand their exposures. The company’s proprietary hail tool looks at customer-specific factors, such as roof type, age, condition and geocodes, to better identify potential losses from hail. The tool provides a more detailed view of hail exposure on a micro level, as opposed to more traditional macro views based on zip codes.
“This way, we’re not just looking at a location’s exposure, we’re looking at an account’s cumulative hail exposure and providing a better understanding of where the risk is concentrated,” Tiede said.
Having a good understanding of a company’s specific exposure helps the broker, buyer, and insurer develop an effective insurance program. “Two customers may be in the same area, but if one’s building has a hail resistant roof, protected skylights, and hail guards for HVAC equipment and the other’s has unprotected sky lights and no hail guards or screens on rooftop equipment, they are going to have different levels of exposure. In both scenarios, we can design an insurance program that fits the customer’s situation and helps control the total cost of property risk,” said Brent Chambers, Underwriting Consultant for National Insurance Property at Liberty Mutual.
A Liberty Mutual property loss control engineer consults with the customer on ways to reduce or mitigate the exposure from hail so that the customer can make an informed decision as to where to deploy capital. “It’s not just about protecting a building’s roof and rooftop equipment. Roof damage can lead to extensive water damage inside a building and in some cases disrupt service, both of which can be costly for a business. By focusing on locations with the most exposure, a risk manager is better able to mitigate future losses,” said Tiede.
Actions commercial property owners can take to mitigate the risk of hail-related damage.
Liberty Mutual property loss control engineers also provide recommendations specific to each location. “We know that hail guards work, so we encourage clients to use those to protect HVAC equipment,” said Ronnie Smith, Senior Account Engineer for National Insurance Property at Liberty Mutual. “Condenser coils in air conditioning systems are fragile and easily damaged, and units don’t necessarily come with built-in protection. It’s important for property owners to take this step proactively to prevent a loss.”
The average cost to fix a condenser coil is $500, but replacing a coil can run at least $500 per ton of cooling, a measurement of air conditioning capacity that refers to the amount of heat needed to melt a ton of ice over a 24-hour period. As one ton of cooling typically covers about 250 square feet of interior space, replacement costs can quickly add up.
Replacing an entire AC unit can run more than $1,000 per ton of cooling. In a 250,000 square foot property, the replacement could easily reach $1 million. Given the increase in hail-related AC damage this year, these are numbers worth knowing.
Other risk mitigation recommendations include regular roof maintenance, such as inspections and repairs to small damages like blisters and installing protective screens over skylights.
“If a roof needs replacing, we also suggest using materials that have been tested and approved by an independent certification laboratory and are durable enough to fit the location’s exposures,” Tiede said. “The last thing a commercial property owner wants is to replace a roof again six months after it’s installed. Experience has shown that ballasted-type roofs are the most resistant to hail damage.”
Using Data to Develop Solutions
When a property owner has an understanding of the size of its exposure and potential losses, it is better able to work with its agent or broker and insurer to develop an insurance program to manage and mitigate potential risks.
“The data and advice we provide help clients focus on the largest risks and better mitigate that exposure,” Smith said. “The more data you have, the more you can understand your risk on a granular level and manage it.”
This data-driven approach to preparedness makes Liberty particularly well-suited to serve large commercial properties with multiple locations in high risk areas.
Prices for roof and air conditioning repairs and replacements have risen over last year, Tiede said, and are likely to grow more expensive as older equipment becomes obsolete. Property owners will be forced to buy newer, pricier replacements than perhaps they had originally planned for.
And if this year’s storm trends are any indication, hail is sometimes an unpredictable foe.
Amidst these shifting trends, the value of an insurer’s expertise in identifying, mitigating and managing hail exposure will be immeasurable to large commercial property owners.
For more information about Liberty Mutual’s commercial property coverage, visit https://business.libertymutualgroup.com/business-insurance.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Liberty Mutual Insurance. The editorial staff of Risk & Insurance had no role in its preparation.