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May 31, 2006
The Veterans' Home of Wyoming
Senator Charles K. Scott, Co-Chairman
Representative Doug Osborn, Co-Chairman
Senator Pat Aullman
Senator John Barrasso
Representative Bruce Barnard
Representative Bob Brechtel
Representative Elaine Harvey
Representative John Hastert
Representative Jerry Iekel
Representative Burke Jackson
Representative Marty Martin
Representative
Senator Ken Decaria
Senator Mike Massie
Gerald W. Laska, Staff Attorney
Joy N. Hill, Associate Research Analyst
Please refer to Appendix 1 to review the
Committee Sign-in Sheet
for a list of other individuals who attended the meeting.
Co-Chairman Osborn called
the meeting to order at 8:00 a.m. The
following sections summarize the Committee proceedings by topic. Please refer to Appendix 2 to review the
Committee Meeting Agenda.
Representative Cohee addressed the Committee and gave a brief history
of workers' compensation in
Representative Cohee described a bill he sponsored in the 2006 budget
session, HB0102, as an attempt to clarify that the statutory liability is
limited only to those cases where an employee intended harm and not those
situations involving any lesser fault or negligence standard.
Senator Scott questioned whether the Supreme Court would pay attention
to the bill even if it passes and suggested that the "quid pro quo"
of workers' compensation might be expanded to provide additional consideration
for co-employee immunity, with employers paying extra premium for the
co-employee immunity component. Additionally,
the attorney general might be charged with defending suits against co-employees
when workers' compensation benefits are paid.
He also wondered what effect the Supreme Court decision has had, and to
what extent are suits and claims being brought and settled without reaching the
Supreme Court level.
Representative Cohee replied that all taxes affect employers' bottom
lines and that, since most employers voluntarily provide a defense when their
employees are sued, co-employee liability is a de facto tax on employers. He stated that the statutory language has
been watered down by the courts and that the legislature should be vigilant and
respond when necessary.
Marion Loomis, Wyoming Mining Association, stated that his association
is very supportive of last year’s bill, as are other associations and
companies. He presented a position
statement (Appendix 3) endorsed by many employers and trade groups. Mr. Loomis stated that the bill would address
the issue and take the law back to what the intent was in 1993. Workers' Compensation is a no-fault system,
but the latest decision goes a long way to re-introducing fault.
Patrick Day, attorney for the Wyoming Mining Association, address the
Committee and presented a written history and comment (Appendix 4). Mr. Day stated that the 1993 legislation –
which adopted the intent-to-harm standard of employee liability – reduced the
number of claims and lawsuits. The 2003
Supreme Court decision, however, re-opened the door by adopting the old
culpable negligence standard. Many, many
fact situations come under revised standard.
At least seven cases are pending now around the state. Mr. Day stated that the proposed bill would
be constitutional, and in fact the majority of the court in the 1993 Mills
decision said complete immunity goes too far but that an intentional injury
standard would be O.K. Mr. Day stated
that the typical case is filed against supervisors, foremen and safety
officers, making retention of such workers difficult if the employer does not defend
its employees.
Senator
Scott and Representative Iekel discussed generally with Mr. Day the different
degrees of intentional or negligent conduct and the possibility that the
court's decisions in this area are affected by the judicial selection process.
Senator Scott stated that it is not just coincidence that the first modern
decision authorizing lawsuits against co-employees was issued not long after
Ron Hughes,
general manager, Solvay Minerals, addressed the Committee. He stated that his company is currently
involved in a large co-employee lawsuit.
He stated that as a concerned employer, employee and citizen, he
believes in workers' compensation as intended, in which medical care and lost
wages are paid regardless of fault in exchange for tort immunity. But lawsuits against supervisors, even
against a parent company's supervisors, are a loophole in that system. Since the Bertagnolli decision lowered
the standard, there are many more lawsuits.
The trend will be to add more and more co-employees, even union
leadership, as defendants. He urged
passage of a bill like HB102.
Representative
Hastert noted that the facts in Bertagnolli show extreme disregard for safety
by the supervisor; the employee simply wanted lock-out procedures to be
followed but was forced into an unsafe assignment upon threat of
termination. He said the Court reached
the correct decision and the statute should be amended, if necessary, in accord
with the Court's decision.
John Robitaille, Wyo. Petroleum Association, told the Committee that
Workers' Compensation is a good system but these issues allow double-dipping
against employers. He supports the
legislation and offers his association’s services in getting a bill passed.
Tom Jones,
National Federation of Independent Business, noted that the same issue was
before the legislature in the 1986 special session. He stated that large companies’ situations
are very different than small businesses, that a sole shareholder of a small
corporation has no practical immunity and that the corporation may be only
significant asset for that person. He
supports the bill, which he believes is very clear and would be effective.
Bill Korhonen advised the Committee that he has been an employee of
General Chemical for many years. He
believes the Bertagnolli decision was the right decision. He knows Mr. Bertagnolli, who lost a foot and
can now only work a custodial job at $4.00/hour less than before his
injury. Mr. Korhonen does not believe
safety is helped when co-employees are as immune as employers.
Bill
Schilling, Wyoming Business Alliance, advised the Committee that his
association did and still does support the legislation, as do all the other
groups present today. They create wealth
for the state. The
Charles
Ware, Wyoming Contractors Association, stated that the vast majority of
employers are very safety conscious. His
association's training center will graduate over 2000 students this year,
schooled in safety. He supports the bill
as a good clarification between intentionality and culpability.
Kim Floyd, Executive Secretary, AFL/CIO, advised the Committee that his
union opposes the bill. In the Bertagnolli
case, a union employee was forced to work in a known unsafe area. Reading from the decision, he said the Court
found "a gross violation of long-standing safety custom and
practice.…" when a supervisor
forced an employee into an unsafe situation upon threat of firing, despite the
risk of injury or death. This is a
perfect example of why the law was interpreted the way it was. The workers' compensation system should
protect workers, not increase risk exposure.
Barry
Johnson, Barry Johnson Consulting, stated that he has studied the co-employee
issue extensively. The best argument for
the proposed bill is that employer immunity is weakened and needs to be
strengthened; the best arguments against the proposed bill is that it is likely
to be declared unconstitutional and safety is decreased if co-employees are
unaccountable for willful and wanton injury.
Tom Jubin,
Wyoming Trial Lawyers Association, stated that his association opposed HB102
and would oppose any similar legislation.
He stated that there is no reason to speculate about constitutionality
because the Supreme Court has already drawn the line: intentional and willful and wanton conduct
cannot be made immune from tort liability.
He also stated that cases against co-employees are extremely rare. But in those rare cases, Workers'
Compensation should not bar recovery from co-employees. Mr. Bertagnolli did receive workers'
compensation wage benefits but had to pay some back because of the fund's
subrogation rights, so there was no double dipping. Workers' compensation does not pay all losses,
so the quid pro quo was only for limited statutory benefits and only between
the employer and the employee.
Bertagnolli was not compensated fully by the state fund for the loss of
his leg, so he should be entitled to recover from the two supervisors who were
both directly involved in the decision to disregard safety policies. It would be bad policy to allow reckless
conduct without consequences. Workers'
Compensation should be fair, but the proposed bill would unnecessarily diminish
worker rights.
Senator
Scott asked Mr. Jubin why the attorney
general could not defend co-employees, with a possible exception for criminal
conduct. Mr. Jubin replied that the
state would be the attorney for a private party in a private dispute, and he
did not see how it could be constitutionally structured, but in any event
it would not be wise.
Mick Finn,
assistant attorney general, addressed the Committee. He stated that he was not advocating for or
against any proposal but was here to answer questions. He stated that his primary job is to collect
third party liens, which takes the vast majority of his time. He wrote an opinion letter questioning the
constitutionality of proposed 2006 HB0102 and, while he cannot predict with any
certainty what the Supreme Court will do, he believes the Supreme Court will
always rule to allow co-employees to be sued for willful and wanton
conduct. In response to a question from
Senator Scott, Mr. Finn stated that the degree of negligence is rarely clear
but is usually a jury question. He
further stated that he recalled only three out of approximately 350 subrogation
cases that involved claims against co-employees, but that he would do
additional research on that and report back to the Committee.
The
Committee generally discussed with Mr. Finn and the Director of the Department
of Employment the ability of an injured worker to receive both workers'
compensation and the proceeds of a lawsuit, the duty the repay workers'
compensation benefits, the statutory limit on the fund's subrogation rights and
the level of benefits for work injuries.
Chairman Scott requested that LSO staff draft several bills for the Committee's
consideration at its next meeting, including:
A resurrect of
2006 HB0102, amended as necessary;
A bill for a
constitutional amendment to specifically add co-employee immunity to
Article 10, Section 4 of the Wyoming Constitution;
A bill to
amend the workers' compensation subrogation statute to increase the limit
on the fund's rights from one-third to two-thirds of the tort recovery;
A bill to
extend workers' compensation insurance coverage to co-employees for up to
$1 million in liability to co-employees, unless co-employee is convicted
of a criminal offense related to the injury.
In addition, other committee members should
request bill drafts from LSO in time for consideration at the next meeting.
Cindy Pomeroy, Director, Wyoming
Department of Employment, addressed the Committee. She reminded the Committee that contractors
on public works contracts in the state are statutorily required to pay
employees a prevailing wage, as determined annually by the Department of
Employment. She had requested this
interim study topic because the Department feels it needs better data
collection to perform its task. The
Department historically performed the calculation in-house, but more recently
contracted with the
Robert Godby, Associate Professor
and Chair of the Department of Economics and Finance, next addressed the
committee and distributed a "Report on Prevailing Wage Determination and
Estimation for 2006" (Appendix 5).
He explained that the prevailing wage calculation is partly statutory
and partly regulatory, and is based on a wage survey of employers. The prevailing wage is calculated for 30 job
classifications, and the state is divided into three wage districts . If a single wage rate is paid to 30% or more
of employees in a particular classification, that wage is considered the
prevailing wage; otherwise, a weighted average is calculated as the prevailing
wage. The department's determination of
prevailing wages has not been challenged in the last two years.
Mr. Godby stated that the
department is requesting two minor changes that would require legislation: creation of one statewide wage district and
making employer participation in the wage survey mandatory.
In reply to questions from Senator
Scott, Mr. Godby explained that the effect of the prevailing wage law is to
stabilize wages. When labor is in short
supply, as in the current market, the prevailing wage tends to become a floor
and many employers pay more. Some argue
that work quality is enhanced when minimum wages are required; others argue
that quality is decreased by interference with the law of supply and demand.
Representative Hastert spoke
against any proposal to eliminate the prevailing wage law. He distributed copies of an article from the
Charlie Ware, Wyoming Contractors
Association, stated that all contractors are currently paying more than the
prevailing wage, due to market conditions.
The current calculation methodology is very good and much better than
previous methods. The biggest problem is
the small survey samples for some occupation categories.
Mr. Godby added that the low level
of participation in the survey is also a problem, as is the delay between the
autumn survey and the next year's construction season.
Cindy Pomeroy distributed proposed
legislation (Appendix 7) that would establish a single statewide prevailing
wage district for exclusively state-funded projects.
Senator Scott asked about the
effect of repealing the prevailing wage law.
Charlie Ware replied, stating that Wyoming Contractors Association would
probably oppose repeal, as other states' experience has been that wages and
quality decrease when 'little Davis-Bacon Acts' are repealed. He added that any wage inflationary effect
after a boom is temporary until the survey catches up with decreased pay rates,
and that the prevailing wage law is a good cushion during recessions.
Chairman Scott requested that LSO
staff draft a bill for consideration at the next meeting, based on the
Department's proposal, with the following additional features: authority for the department to apply for a
waiver of one highway construction survey; a 1% or 2% bid preference for
employers who participate in the wage survey.
In addition, a separate bill should be drafted providing for the repeal
of the prevailing wage law.
Representative Harvey reported
briefly on the activities of the Quality Child Care Oversight Committee. The Committee passed three motions to be
passed on to the task force: opposition
to the use of vouchers as a means of compensating providers, as
unconstitutional and damaging to a free market; consideration of a sliding fee
scale for providers' services; and consideration of liability insurance issues
regarding child care centers in private homes.
Kathy Emmons, Director, Department
of Workforce Services, distributed documents entitled "Quality Child Care
System – Project and Timelines" (Appendix 8) and "Quality Child Care
System – Oversight Committee Report May 31, 2006 – Project Information and
Status Update" (Appendix 9). She
stated that the project is still at an early planning stage, that a website has
been established and that 19 of the 23 counties are represented on the
providers' work group.
Senator Scott added that the first
meeting was substantially a discussion of the obstacles to passage of the
Quality Child Care bill, and that those obstacles should be remembered. He stated that vouchers would have worked if
limited to the poor community, but would be unconstitutional if applied to the
entire child care community.
The Committee recessed for lunch at 12:05 p.m. and reconvened at 1:35
p.m..
Dan Perdue,
Wyoming Hospital Association, distributed copies of "Wyoming Hospital
Association: Wyoming Hospitals' 2005 Year Data" (Appendix 10). He noted that uncompensated care for Medicaid
patients is up to $72 Million.
In response to questions from Senator Scott, Mr. Perdue stated that the
uncompensated figure is based on the amount billed, not costs, and that
Medicare is responsible for much more uncompensated care than Medicaid.
Senator Aullman described generally
Jim Mayberry, Safety Program
Supervisor, Wyoming Department of Health, distributed a packet of information
regarding the emergency medical system services (Appendix 11). He stated that the Legislature could help
with retention enhancements, as was done with the volunteer firefighters
retirement fund. In response to
Committee questions, he stated that volunteers are already covered by workers'
compensation, that equipment is paid for through fund raising activities, that
fewer than 40% of
Senator Scott advised that the
Committee would need very good statistical evidence of problems in the
Senator Scott requested that LSO
staff investigate the cost of a retirement system for
Dave
Harness, Director, Johnson County Ambulance, advised the Committee that there
has been a steady rise in the accident rate on I-25, especially near Piney
Creek, with 20-35 wrecks per year.
Department of Transportation representatives
Mark Gillette, Don Phillips, Mike Gostovich and Matt Carlson addressed the Committee. They distributed the following:
·
Aerial
photo, miles 42-46, with icy road accident data (Appendix 12)
·
Photos
of I-25 – Piney Creek area (Appendix 13)
·
A packet
containing an Aerial photo; accident data for miles 30-50 by location and type
before and after new signage (Appendix 14).
Mr. Gostovich described additional planned
safety improvements to be completed by 2008, including large flashing
bridge-may-be-icy signs activated by bridge temperature sensors, and remote
pan-zoom-tilt cameras for use by the district engineer to monitor
conditions. Six or seven other highway
areas are under consideration for similar treatment.
Patricia Guzman, Kid Care Manager,
Wyoming Department of Health, addressed the Committee and distributed a
document entitled "Kid Care CHIP: State Children's Health Insurance
Program – Federal Allotments" (Appendix 15). She noted that the legislature raised the
eligibility threshold from 133% to 200% of the federal poverty level. As a result, enrollment is increasing by
approximately 100 persons per month, the federal allotment of funds may be
reached by the end of 2008 and a waiting list may become necessary. She further advised that the Department is
working on a waiver application for the new parent program passed by the 2006
legislature and expects to file it next year.
Further, the federal Child Health Insurance Program statute has not yet
been reauthorized by Congress and conceivably could expire next year.
The Committee strongly advised that
the best strategy would be to submit the waiver application for the new parent
program as soon as possible, before the presidential election cycle interferes.
Jack Tarter, Director, Wyoming Veterans' Home and member
of the task force studying veterans' needs pursuant to 2005 legislation,
reported to the Committee. He stated
that $89,000 remains from the study appropriation, and that the Veteran's
Commission is ready to conduct phase two of the study, which is a statewide
outreach program to survey veterans about their care needs. The Commission also wants to develop internet
resources, a brochure and DVD information for veterans. The Commission is also developing a master
plan for contract nursing home services, and a master plan for a new state
veterans' home if it becomes necessary.
Senator Scott stated that he thought the idea of a new
veterans' home had been rejected in phase one of the study. Mr. Tarter stated that there is still some
push for a new home from a minority of the Commission members. Mr. Scott noted that, given the previous
study results, the Committee would probably not support a new veterans' home.
Chairman Scott noted that there is
little the Committee can do on the topics assigned for interim study by
management council until reports are received by the Committee from the Wyoming
Health Care Commission and Department of Health in October and November. The co-chairman will discuss the possibility
of a one-day meeting in September to consider the bills requested at this
meeting.
There being no further business, Co-Chairman Scott adjourned the
meeting at 5:00 p.m.
Respectfully
submitted,
Senator Charles K.
Scott, Co-Chairman
Representative Doug
Osborn, Co-Chairman