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HomeMy WebLinkAboutMMIA August 2000 NewsletterRECENT SUPREME COURT DECISIONS THAT M CITY IMPACT LOCAL GOVERNMENT OPERATIONS By Alan Hulse, Risk Management Specialist On May 2, 2000 the Montana Supreme Court issued a ruling that could have a dramatic impact on all local government public works operations. This case involved an employee of an excavation contractor who was injured in a trench cave-in. The contractor was extending a water main on behalf of a private developer when the accident occurred. They were not utilizing a trench box or shoring in the trench, and were working in the public right-of-way. There are two elements in this decision that could impact local government operations: 1. The Court stated that trenching operations are intricately or inherently dangerous as a matter of law. 2. Even though there was no contract between the local government, developer, or contractor, the local government could be held liable for injuries suffered by a subcontractor's employees if the government negligently exercised control over the subcontractor's work. Liability may be found if the contractor is working in the public right-of-way, fails to comply with OSHA Safety Standards, and an injury occurs. Even if the city/town does not directly employ the contractor, if they maintain aan element of control over the project, they may be held accountable for the contractor's failure. In this case, the court found that, even though there was no contract between the local governmental entity, developer, or contractor, evidence of retained control could be found in the water main extension documents and permits issued by the local governmental entity. This evidence of control creates an issue of fact that precludes summary judgement, leaving it for the jury to decide as to whether or not the local government should he held liable for negligently exercising control. continued on page 2 Since this case establishes trenching is an inherently dangerous activity as a matter of law, cities and towns may be held liable for a contractor's negligent failure to take reasonable safety precautions. INSIDE THIS ISSUE 2 New MMIA Employees 3 Contracting Responsibilities 4 Workers' Compensation 4 ADA Signs 5 Personnel Files 6 MMIA Staff List This newsletter is published quarterly by Montana Municipal Insurance Authority, P.O. Box 6669, Helena, MT 59604-6669. MMIA provides this newsletter as a service to its members to inform and educate local officials on liability, workers' compensation, property, and employment practices issues. The articles are not a substitute for the Memorandum of Liability Coverage or other coverage documents. All coverage determinations are made on a case-by-case basis, and can only be viewed on the unique facts of the claim presented. MMIA Newsletter 1 Recent Decisions continued from page t In order to minimize liability exposure, cities and towns should concentrate on two things whenever there are excavation activities being conducted on your behalf or in public right-of-way: 1. Review all ordinances, permits, agreements, contracts, and other documents to ensure they contain no requirements for oversight or control over excavation projects, or 2. Ensure all contractors who are performing excavations on your behalf or in public right-of-way comply with all applicable safety standards. In a separate, recent decision, the Montana Supreme Court held that if an employer has knowledge of facts, or intentionally disregards facts, that create a high probability of injury to the employee and: deliberately proceeds to act in a conscious or intentional disregard of the high probability of injury to the employee; or deliberately proceeds to act with indifference to the high probability or injury, then the employer is guilty of actual malice and thus the exclusive remedy doctrine of the work comp statutes would not apply. This would allow an employee the ability to sue his/her employer for civil damages for an on- the-job injury. This decision, coupled with the decision making trenching operations inherently dangerous as a matter of law, has direct implications on your excavation practices. Since the Supreme Court has ruled that trenching operations are inherently dangerous as a matter of law, failing to provide or require trench boxes or shoring in compliance of OSHA regulations could be construed as deliberately proceeding to act with conscious or intentional disregard to the high probability of injury. If an employee is injured as a result of a collapsed trench where applicable safety standards were not complied with, the employer could be subject to civil damages in addition to paying workers' compensation benefits. Based on these recent decisions and the current state of law in Montana, your best course of action is to adopt a zero tolerance policy for failure to comply with applicable safety standards, especially in trenching operations. This policy should apply to your employees and any contractors doing work on your behalf, or in the public right-of-way. Having a zero tolerance policy with regard to violations of safety standards is good business practice to begin with. These recent decisions give us added incentive to adopt and practice such a policy, and thus avoid having to pay large civil damage awards. p New MMIA Employees The workers' comp claims unit is pleased to announce the addition of Karl Payne as a Claims Adjuster. Karl began working with MMIA on May 15, 2000. She handles claims involving wage loss resulting from work-related injuries. Kari has been a Licensed Practical Nurse in the Helena community for the past 21 years, the last 12 years practicing as a Medical Administrator of an occupational health clinic in private industry. She is also certified as an X-ray Technician, a Pulmonary Function Technician, an Audiological Technician, certified Breath Alcohol Technician, DOT Drug Tester, and an Emergency Medical Technician (Karl states she lost her ambulance driving privileges when she failed to demonstrate the ability to back up the ambulance without hitting something). She also developed an early return-to-work program for a local private employer. Kari is married and has two teenage girls and two boys in the military. She enjoys yoga and growing herbs. She makes her own lotions, face creams, and hair care products. We are delighted to have Matt Johnson as our new Employment Practices Specialist. Matt began working at MMIA on June 21, 2000. He provides professional advice on employment practice and personnel matters to MMIA member communities, as well as assisting with the implementation of, and compliance with, all applicable federal, state, and local employment practice regulations. Matt is a 1999 graduate of the University of Montana Law School. He also has a Masters degree in Natural Resource Conservation from the School of Forestry at the University.of Montana, and a Bachelor's degree in Political Science. Prior to his employment at MMIA, Matt practiced law in Dillon, Montana where he was the Deputy City Attorney. Matt is a Montana native, growing up in the Helena area. He is married and has four young girls, and one boy. Besides being an active and proud father, he enjoys running, fly-fishing, and gold-mining. MMIA Newsletter 2 Contracting Responsibilities By Owen P. Voigt Property and Liability Claims Manager Our liability training sessions frequently include discussions about contracts. We feel a key element of a contract is the proper hold harmless/indemnification language. Black's Law Dictionary defines contract as "An agreement between two or more persons which creates an obligation to do or not to do a particular thing." Black's defines hold harmless agreement as "Agreement or contract in which one party agrees to hold the other without responsibility for damage or other liability arising out of the transaction involved." This dictionary also defines indemnify as "To restore the victim of a loss in whole or in part, by payment, repair, or replacement." When entering into a contract with someone, if something goes wrong during the performance of the contract, the parry responsible for paying particular costs is spelled out by the hold harmless/ indemnification language. If your contract does not have language to that effect, the city will probably be responsible if something goes wrong. I We receive many claims that pertain to contract issues. In one instance, a city backhoe was busy on the south side of town, and a water main broke on the north side. A private excavating company was hired to expose the water main. The street was left open, but road hazard marking was not properly placed. A man on a bicycle ran into the hole, badly breaking bones in his face. The excavating company did not have insurance. The Montana Supreme Court said the city should have made sure the street was properly marked. The city paid the loss. There was no contract between the city and the contractor. Had there been a contract with a hold harmless/ indemnification clause in it, the city could have placed the liability on the contractor. With proper contract language, and by requiring the contractor to provide proof of insurance, the city likely would not have had to pay this claim. Telephone: (406) 443-0907 Toll-Free: (800) 635.3089 Fax: (406) 443-7440 Mail: PO Box 6669 Helena, MT 59604-6669 Street: 810 Hialeah Court (59601) Web Site: www.mmia.net E-mail Addresses: Alan Hulse: alm=ia@mtnet Bob Worthington: bob-mmia@mt.net Kari Payne kp-mmia@mt.net Another issue we frequently see regarding contracts is how much insurance a contractor should provide the city when they are doing work for the city. Montana law currently states that for state court actions, the city can be liable for up $750,000 per person, and $1,500,000 per occurrence. That means if two or more people are hurt in an accident, they can collect up to $1,500,000 total. If your contractor does not have adequate insurance protection, the claimants may come after you for the money above the contractor's insurance limits, up to the $1,500,000. If the claimants are not responsible for the accident, you are 1 percent responsible, and your contractor is 99 percent liable; whatever the claimants do not get from your contractor, they will likely collect from you. Hold harmless/indemnification language is not designed for the city to get out of anything, but to ensure that you only pay what the city is responsible for, and let those who work for you be responsible for their share. Over the years, the MMIA has paid out money because cities and towns have had work done by individuals or businesses without a contract in place that spells out who is responsible for what, who pays for what, and requires the contractor to have insurance. To protect the city, have your city attorney review any agreements before you commit to them. MMIA is not an out-of-state insurance company. MMIA is owned by the cities and towns of the state of Montana. Your dollars are being spent on these claims. Help us to minimize these errors. FYI The MMIA has received several inquiries ! j regarding whether the State of Montana still i j contracts with Admed for its employee Drug! j and Alcohol Testing Program for cardholders ! j of a Commercial Drivers License. Our ! j research found that the State has changed i i providers. The current state contract for drug j i and alcohol testing is with Montana Chemnet j i Consortium out of Billings, Montana. For j i further information, contact Matt Johnson at j i 'the MMIA office. i Lunn Meyer: limmmia@mtnet Linda Coombs: Ic-mmia@mt.net Linda Moots: Im-mmia@mt.net Mark Gauthier: mg-mmia@mt.net Matt Johnson mj-mmia@mt.net Nathan Tubergen: nt-mmia@mt.net Owen Voigt: ov-mmia@mtnet Paula Vidrine: pv-mmia@mt.net Tana Rygg: V-mmia@mt.net Trish Mix: pm-mmia@mt.net Vicki Wilham: vie-mmia@mt.net MMIA Newsletter 3 Workers' Compensation By Paula Vidrine, Workers Compensation Manager Claims Involving No Medical Treatment Injuries sustained during the course and scope of employment require objective medical findings for acceptance of liability. We often receive claim reports that either do not indicate the injured worker received medical treatment, or there was no treatment obtained. In these situations, a letter is mailed to the injured worker advising that, while the incident is not in dispute, liability is being denied on the basis there are no objective medical findings to establish a compensable injury. The letter does go on to state that if medical treatment is obtained that results in objective medical findings related to the injury, reconsideration of the denial will be given. Claims Involving Death Fortunately, we seldom have work-related injuries resulting in the death of an employee, however, I was recently asked what benefits would be provided in the event of a fatality. Workers' compensation statutes provide for medical services related to the injury. Indemnity or wage loss benefits are payable to a surviving spouse, living with or legally entitled to be supported by the deceased at the time of injury, for 500 weeks or until the spouse's remarriage, whichever occurs first. After benefits to the surviving spouse cease, benefits are payable to an unmarried child under 18 years of age, an unmarried child under 22 years of age who is a full-time student in an accredited school or is enrolled in an accredited apprenticeship program, and an invalid child over 18 years of age who is dependent upon the decedent for support at the time of injury. The benefit rate to the children is divided equally between the eligible beneficiaries. In the case where the beneficiaries are a surviving spouse and stepchildren of the spouse, the benefits are divided equally among all beneficiaries. In the event there are no beneficiaries as noted above, beneficiary benefits can be extended to a parent who is dependent upon the decedent for support at the time of injury. If there is no surviving spouse, children, or parent as noted above, beneficiary benefits can be extended to a brother or sister under the age of 18 years who is dependent upon the decedent for support at the time of injury. The benefit rate is based on 66 2/3% of the average weekly wage of the decedent's wages, subject to the maximum state's average weekly wage established at the time of injury. Also, in the case of death caused by a work- related injury, reasonable burial expenses, not exceeding $4000, are payable to the estate of the employee. Web Site Update IL: We will be updating the MMIA web site. We hope to have all changes made by mid-September. Please check it out at www.mmiamet. ADA required signs available from ICMA By Matt Johnson, Employment Practices Specialist Does your city building have at least one employee entrance, or public entrance that is not wheelchair accessible? If you answer "Yes", current Americans with Disabilities Act (ADA) regulations (35.163) require that you mount ADA signs at every employee and public entrance, whether accessible or not. This will indicate where accessible entrances are located. In response to these requirements, the International City Management Association (ICMA) offers an accessible entrance sign kit to help cities and towns comply with current ADA entrance sign rules. Each kit includes 10 x 12-inch blue and white reflective aluminum signs to mark your government facility entrances, as well as mounting materials, instructions and ADA city sign guidelines. Inaccessible entrance signs have right/left arrows on each sign to direct people to the nearest accessible entrance, as required by law. All kits include free updates. Kit text materials have been reviewed by the ADA Technical Assistance Center- Region V. To obtain the number of signs needed for your kit, count the number of accessible and inaccessible entrances to your facilities that are not currently marked. Signs are $20 each. Kits can be ordered by one of the following methods: Telephone - ICMA ADA project staff toll free, at (877) 232-5487- Fax - (877) 640-1430 Send check/purchase order to - ADA Kit-ICMA Entrance Project, 56 Salem Lane, Evanston, IL 60203. Add $9.50 for shipping and handling. MMIA Newsletter 4 PERSONNEL FILES: What To Keep and Where By Matt Johnson, Employment Practices Specialist The three most significant gatherers of information an people in Montana are the Federal government, State of Montana, and the employer. Although cities and towns have an undeniable right and need to oversee and regulate their municipalities, their right to inquire and obtain information about their employees is limited by the right of privacy. There are no Federal or State requirements that an employer maintain personnel files as such. However, various Federal and State laws mandate that certain records must be kept anywhere from 1 to 30 years. Therefore, when drafting or updating policy and procedures regarding which records to maintain in a personnel file and how long those records should be kept, it is important for employers to review the various applicable laws. Even with various requirements to maintain records, keep in mind that Montana's Constitution upholds each citizen's right to privacy. Therefore, the retention of records must be strictly regulated and supervised. It is suggested that municipalities adopt written policy on personnel files. • Ensure that your policy complies with applicable laws. • Define "Personnel File" both as the term is used within your municipality, and according to applicable law. • State where, when, how often, and under what circumstance workers can review or copy their files. • Specify who is authorized to inspect personnel files. • Restrict the establishment of separate files by supervisors and managers. • Review records. Periodically, you should audit employment records and remove or correct irrelevant, outdated, misleading or inaccurate information. • Train managers on the documentation of employee actions. Municipal employers must maintain certain information in an employee's personnel file, while other items must be retained in a separate file. Records to keep in the personnel file primarily relate to Employment such as: • Application material: application, college transcripts, resume, letter of confirmation, reference checks and test documents used by an employer to make an employment decision, and job descriptions, • Disciplinary notices or documents, termination records, • Education and training records, • Employee handbook acknowledgment form, • Exit interviews, • Personnel data sheet, • Performance appraisals, letters of recognition, • Post-employment forms, • Records relating to hiring, promotion, demotion, leave of absence, transfer, layoff, rates of pay and other forms of compensation. The following items must be maintained separate from the "Personnel File". Maintaining this information in a separate file reduces the opportunity for an auditor to pursue and investigate unrelated information. It also protects employee rights to privacy. • Benefits - The benefits file should be available only to immediate supervisor or an executive official with a valid need to know the information. • Equal Employment Opportunity - In order to minimize claims of discrimination, sources that identify an individual's race and sex should be kept in a separate file. • Immigration (1-9) Forms - It is recommended that these forms be maintained chronologically by year. • Medical Records - The Americans with Disabilities Act requires employers to keep all medical records separate. An employee's right to privacy protects the employee from having these items in the personnel file. This includes all medical records including physical examinations, medical leaves, workers' compensation claims, and drug and alcohol testing. • Safety training records - OSHA may audit training records. Keeping this information separate protects the employer from an auditor pursuing and investigating other information in the personnel file. • Self-Identified Disability or Veterans Status - Laws prohibit employment decisions on the basis of certain protected classes. However, managers have the right to access an employees' file for a number of operational issues. Unless there is a need to know for accommodation purposes, these fields should be maintained separately to reduce a potential source of bias. Various mandates necessitate employer use of personnel files to hold records required by law even at the risk of violating employee privacy rights. Therefore, the personnel officer must ensure that the correct records are stored in the personnel file verses other files. Enforcing a strict procedure for handling, storing, and viewing personnel records can help limit your municipality's exposure. MMIA Newsletter 5 MMIA STAFF Who to call when you have questions (800) 635-3089 or(406)443-0907 CEO: Bob Worthington, ARM Assistant Programs Administrator: Owen Voigt, AIC/ARM Administration: Liann Meyer, Administrative AssistantlTranscriptionist Vicki Wilham, Office Manager (Premium questions) Linda Moots, Data Coordinator Matt Johnson, Employment Practices Specialist Nathan Tubergen, Controller Risk Management Services: Alan Hulse, Risk Management Specialist (Training program) Workers' Comp Program: Paula Vidrine, Claims Manager Linda Moots, Medical-Only Claims Adjuster Kari Payne, Claims Adjuster Property/Liability Program: Owen Voigt, Claims Manager (Property marketing) Linda Coombs, Sr. Claims Adjuster Tana Rygg, Claims Adjuster Mark Gauthier, Claims Adjuster Trish Mix, Claims Tech MMIA PO BOX 6669 HELENA MT 59604-6669 MMIA Newsletter 6