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. &
Workers’ Compensation Conference Program Released
Savvy employers have increasingly adopted injured-worker advocacy and engagement strategies to help employees overcome fears and challenges encountered when navigating workers’ compensation systems.
“The workers’ compensation claim process can be confusing and intimidating,” said William Wainscott, manager, workers’ comp and occupational health at International Paper.
“For the injured employee there are a lot of unknowns. An advocate helps alleviate the fears and guides them through all the issues.”
Wainscott will speak on an employer panel discussing injured-employee advocacy and engagement programs at the 25th Annual National Workers’ Compensation and Disability Management Conference® & Expo scheduled for Nov. 30 to Dec. 2 in New Orleans.
Minimizing a workplace injury’s impact on employees, their families and employers requires helping the injured worker access the right resources and understand their role in the recovery and return-to-work process, he said.
Wainscott is an NWCDC program co-chair and helped develop the conference’s 2016 agenda.
The agenda highlights other planned presentations featuring employers discussing leading-edge strategies for mitigating workers’ comp and disability challenges.
“We have put together a really strong agenda with topics that are meaningful for employers and other payer groups like insurance companies and third-party administrators,” said Denise Algire, who is also an NWCDC program co-chair and director of managed care and disability corporate risk at Albertsons Cos.
Addressing mental health factors impacting the recovery of workers’ comp and disability claimants is another focus of conference sessions developed to help meet growing employer and claims payer interest in the topic.
“Mental illness affects both workers’ comp and non-occupational disability,” Algire said.
Historically, there has been tremendous stigma around the topic, but more employers now understand that mental health issues impact absenteeism and productivity.
“There is more emphasis on this as organizations realize that the No. 1 reason for short-term disability claims is either depression or some other mental illness,” Algire added.
“So talking about it and understanding what solutions and options are available for employees, and how to implement those programs within your organization is an important conversation.”
Algire will also speak as part of the NWCDC panel discussing injured-employee advocacy programs.
In addition to Algire and Wainscott, the panel will include Kimberly George, senior VP and senior healthcare advisor at Sedgwick Claims Management Services, and Scott Daniels, director of disability at Comcast.
Daniels will also speak as part of another panel titled “Mental Matters: How Mental Health Impacts Productivity and Performance.”
That is not the only conference presentation on mental health issues.
Donna Morrison, corporate healthcare director at UPS, will join Michael Lacroix, associate medical director of behavioral health at Aetna Life Insurance and Coventry Workers’ Comp Services, to deliver a presentation titled “Advances in Behavioral Health Disability Claims Management Strategies.”
In total, the conference features 31 breakout sessions, two general sessions, and a keynote address delivered by Tim East, director of corporate risk management at The Walt Disney Co.
During his presentation titled “Fueling Injury Recovery with Engaged Workers,” East will discuss how technology trends impact workers’ expectations for how employers engage them.
Worker engagement and solutions for mental health’s impact on claim duration are not the only topics awaiting NWCDC attendees.
Other sessions will offer strategies to address opioid prescribing, Medicare set-aside requirements, Americans with Disabilities Act mandates, and insurance arrangements.
The conference will also present several case studies including:
- A look at the multidisciplinary approach applied by manufacturer Mohawk Industries to launch a health and safety program.
- The strategies Columbus Consolidated Government employed to develop an award-winning return-to-work program.
- How American Airlines fostered a claims-closure culture to resolve complex legacy claims.
Those are only a few of the topics employers and service providers will present at this year’s conference, recognized as the workers’ comp industry’s must-attend event of the year.
Think You Don’t Need Environmental Insurance?
“I don’t work with hazardous materials.”
“My industry isn’t regulated by the EPA.”
“We have an environmental health and safety team, and a response plan in place.”
“We’ve never had an environmental loss.”
“I have coverage through my other general liability and property policies.”
These are the justifications clients most often give insurers for not procuring environmental insurance. For companies outside of sectors with obvious exposure — oil and gas, manufacturing, transportation — the risk of environmental damage may appear marginal and coverage unnecessary.
“Environmental insurance is not like every other insurance,” said Mary Ann Susavidge, Chief Underwriting Officer, Environmental, XL Catlin. “The exposure is unique for every operation and claims don’t happen often, so many businesses view coverage as a discretionary purchase. But the truth is that no one is immune to environmental liability risk.”
Every business needs to be aware of their environmental exposures. To do that, they need a partner with the experience to help them identify exposures and guide them through the remediation claims process after an incident. The environmental team at XL Catlin has been underwriting these risks for 30 years.
“Insureds might not experience this type of claim every day, but our environmental team does,” said Matt O’Malley, President, North America Environmental, XL Catlin. “We’ve seen what can happen if you’re not prepared.”
Susavidge and O’Malley debunked some of the common myths behind decisions to forego environmental coverage:
Myth: My business is not subject to environmental regulations.
Reality: Other regulators and business partners will require some degree of environmental protection.
Regulatory agencies like OSHA are more diligent than ever about indoor air quality and water systems testing after several outbreaks of Legionnaires disease.
“The regulators often set the trends in environmental claims,” Susavidge said. “In the real estate area it started with testing for radon, and now there’s more concern over mold and legionella.”
Multiple hotels have been forced to shut down after testing revealed legionella in their plumbing or cooling systems. In addition to remediation costs, business interruption losses can climb quickly.
For some industries, environmental insurance acts as a critical business enabler because investors require it. Many real estate developers, for example, are moving into urban areas where their clients want to live and work, but vacant lots are scarce. Those still available may be covering up an urban landfill or a brownfield.
“We’re able to provide expertise on those sites and the development risks so the contractor can get comfortable working on it. It’s about allowing our clients to stay relevant in their markets,” O’Malley said. “In this case, the developer is not an insured with a typical environmental exposure. But if there is a contaminant on the worksite, they could inadvertently disperse it. In a high-population urban area, the impact could be large.”
Banks also quite often require the coverage specifically because developers are turning to these locations with higher potential environmental risk.
“Though it’s not a legal requirement, insurance is a facilitator to the deal that developers really can’t operate without,” Susavidge said.
Myth: The small environmental exposure I have would be covered under other polices.
Reality: Environmental losses can result from exposure to off-site events and are excluded by many property and casualty policies.
Environmental risks on adjoining properties can lead to major third party losses. Vapor intrusion under the foundation of one property, for example, can unknowingly underlie the neighboring properties as well. The vapor intrusion can then seep into the surrounding properties, endangering employees and guests.
In other words, your neighbor’s environmental exposure may become your environmental exposure.
O’Malley described a claim in which a petroleum pipeline burst, affecting properties and natural resources 10 miles downstream even though the pipeline was shut off two minutes after the rupture. The energy company that owns the pipeline might have coverage, but what about the other impacted organizations? Many other property policies exclude environmental damage.
Sometimes the exposure is even more unexpected. In 2005, for example, a train carrying tons of chlorine gas crashed into a parked train set sitting in the yard of Avondale Mills — a South Carolina textile plant. The gas permanently damaged plant equipment and forced the operation to shut down.
“It’s not always obvious when you have an environmental exposure,” Susavidge said.
“When there is a big loss or a pattern of losses, the casualty market will typically move to exclude it,” said O’Malley. “And that’s where the environmental team looks for a solution. Environmental coverage has been developed to fill the gaps that other coverages won’t touch.”
Myth: We already have a thorough response plan if there is an incident.
Reality: Properly handling an environmental event requires experience and expertise.
In addition to coverage, risk managers need experience and expertise on their side when navigating environmental claims.
“For many of our clients, their first environmental claim is a very different experience because the claimant is not always a typical third party – it’s a government agency or some other organization that they lack experience with,” Susavidge said. “Our claims team is made up of attorneys that have specific domain experience litigating environmental claims issues.”
Beyond its legal staff, XL Catlin’s claims consulting team and risk engineers come with specialized expertise in environmental issues. 85 to 90 percent of the team members are former environmental engineers and scientists, civil engineers, chemists, and geologists.
“Handling environmental claims requires specialized expertise with contaminants and different types of pollution events,” O’Malley said. “That’s why our 30 years of experience makes a difference.”
Thirty years in the business also means 30 years of loss data.
“That informs us as a carrier how to provide the right types of services for the right clients,” Susavidge said. “It gives us insight into what our insureds are likely to experience and help us determine what support they need.”
Insureds also benefit from the relationships that XL Catlin has built in the industry over those 30 years. When the XL Catlin team is engaged following a covered pollution event, the XL Catlin claims team can deploy seasoned, experienced third party contractors that partner with the insured to address the spill and the potential reputational risk. And they receive guidance on communicating with regulatory bodies and following proper reporting procedures.
“The value of the policy goes beyond the words that are written,” O’Malley said. “It’s the service we provide to help clients get back on their feet, so they can focus on their business rather than the event itself.”
For more information on XL Catlin’s environmental coverage and services, visit http://xlcatlin.com/insurance/insurance-coverage/casualty-insurance.
The information contained herein is intended for informational purposes only. Insurance coverage in any particular case will depend upon the type of policy in effect, the terms, conditions and exclusions in any such policy, and the facts of each unique situation. No representation is made that any specific insurance coverage would apply in the circumstances outlined herein. Please refer to the individual policy forms for specific coverage details. XL Catlin, the XL Catlin logo and Make Your World Go are trademarks of XL Group Ltd companies. XL Catlin is the global brand used by XL Group Ltd’s (re)insurance subsidiaries. In the US, the insurance companies of XL Group Ltd are: Catlin Indemnity Company, Catlin Insurance Company, Inc., Catlin Specialty Insurance Company, Greenwich Insurance Company, Indian Harbor Insurance Company, XL Insurance America, Inc., and XL Specialty Insurance Company. Not all of the insurers do business in all jurisdictions nor is coverage available in all jurisdictions. Information accurate as of September 2016.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with XL Catlin. The editorial staff of Risk & Insurance had no role in its preparation.