It's a Sunday morning. Often with the blog I'll do a weekend post looking at some big-picture issues regarding workers and the economy.

Like scary movies? Last night I saw a doozy.

Workers knee-deep in oil sludge breaking up ships. Workers knocking used computers and tv's apart, releasing lead, cadmium, mercury and a host of other toxics. Workers kneeling in mountains of scrap, sorting and looking for nuggets worth using.

Workers holding self criticism sessions in regimented lines before entering the factory. Workers paid $5 per day.

It's China, as seen in the excellent film "Manufactured Landscapes" now playing in a small handful of theaters in the Bay Area, L.A. and perhaps a few other California theaters. The film follows photographer Edward Burtynsky as he travels through China and Bangladesh, visiting coal mines, recycling dumps, gargantuan factories, the Three Gorges dam, the construction of hundreds of skyscrapers in Shanghai and other projects.

Anyone interested in understanding the unfolding world of globalization we live in should check out this movie. The film captures the essence of Burtynsky's journey as he takes large format photographs of these factories and projects, some of which are on a scale unrivaled in human history.

Do these workers have any rights? Probably not. Are they marked for early demise by their working conditions? Probably. It's quite sobering.

China advances economically, but at a huge cost to worker safety and environmental degradation.

To see more about Burtynsky, click here:
http://www.edwardburtynsky.com/

Julius Young
www.boxerlaw.com
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One of the most famous plays of the "modern" theater is Samuel Beckett's "Waiting for Godot". On a bare stage, two quirky characters hang around a sickly tree, bantering for hours about an individual named Godot. They wait for him, and he never comes, yet the vigil continues. A bizarre master and slave enter and exit, but nothing much happens. The play is perhaps a metaphor for the anxiety and search for meaning in many lives.

Like Estragon and Vladimir who wait for Godot, many of us in workers' comp have been waiting for Chang. Unlike Godot, Chang has now appeared.

What's this all about?

In that seething cauldron we call California workers' comp, one bright spot over the past few years was the decision of a San Francisco workers' comp judge that all pre 1/1/05 cases should be compensated under the old, pre-AMA rating schedule.

That ruling, in a case called Aldi decided by San Francisco Workers' Compensation Judge David Hettick, did not fly with the statewide WCAB, which overturned Aldi.The WCAB interpreted the 2004 Schwarzenegger comp reform to require a worker to show a report establishing the existence of permanent disability before 1/1/05 in order to be grandfathered in under the old schedule. At the end of this post I'll include links to a few earlier posts I did on this subject.

Statewide studies by UC Berkeley and UC Davis researchers have shown a drop off of over 50% in awards for permanent disability under the new schedule adopted by the Schwarzenegger administration.

The issue in the Chang case was similar to the Aldi case. Would the 3rd District Court of Appeal in Sacramento adopt the Aldi analysis, thereby sparing all workers hurt before 1/1/05 from the new schedule chopping block?

No way.

You can read Chang for yourself in .pdf format by clicking here:
http://www.courtinfo.ca.gov/opinions/do ... 053854.PDF

It's time to bury Aldi. The 3rd District Court of Appeal has adopted the same view as many of the other California Appellate Courts. Workers who weren't permanent and stationary before 1/1/05 are to be rated under the new schedule.

This decision isn't a big surprise, but it's a big hit for injured workers. And it locks in further huge profits for insurers, who are paying out less than 50% of workers' comp premium collected.

To see an earlier post on this topic ("Costco Gets What It Wanted"), click here:
http://www.workerscompzone.com/index.ph ... 4f787d6811

And to see what's really going on in the system, click here:
http://www.workerscompzone.com/index.ph ... 4f787d6811

Stay tuned.

Julius Young
www.boxerlaw.com
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I'm pleased to note that I've been appointed to the California State Bar's Workers' Compensation Executive Committee, effective September 2007.

A number of California's influential workers' comp judges and attorneys are on the committee. Applicant attorneys and insurance defense attorneys are both well represented on the committee.

More information about that can be seen by clicking here:
http://www.boxerlaw.com/news/julius-exe ... ittee.html

One of my law partners, Bert Arnold, is just finishing up his term on the Executive Committee.

Stay tuned. In the next post I'll be covering yet another case addressing the issue of old permanent disability rating schedule vs new permanent disability rating schedule.

Julius Young
http://www.boxerlaw.com/attorneys.html
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American workers are seeing their rights contract. California's 2004 workers' comp reform is but one example of a multi-state trend toward lesser benefits. Two-tier wage packages, shrinking healthcare coverage, no-strike contracts, vanishing pension funds....these are all examples of trends in the American workplace.

Here in Oakland trash piles up while Teamster garbage collectors remain locked out of their jobs. Waste Management has hired replacement workers.

And the U.S. Supreme Court's decision this year in Ledbetter vs. Goodyear Tire showed that the current crop of Supreme Court justices will interpret employee protections as narrowly as possible. In Ledbetter the court severely limited the time to file certain federal law discrimination claims.

Often we hear that changes are needed to help make American business competitive. Whole industries have gone offshore, but the ones that remain behind seek employee concessions and lower mandated benefits, including workers comp.

But guess what? The Chinese worker is starting to gain some rights. In June, the Chinese legislature passed a law to expand employee rights. The law will require written contracts for workers and make it harder for employers to lay workers off. Migrant workers will be given more rights. Workers whose contracts are renewed will receive more job security.

Independent unions are not allowed in China. But there is a state controlled union, the All China Federation of Trade Unions, which will be allowed to do some bargaining for wages and work conditions. China has a terrible problem with industrial accidents. Perhaps this will lead to some progress in working conditions and industrial safety.

You can read more analysis of this by looking at the New York Times article link here:
http://select.nytimes.com/search/restri ... 94DF404482

According to the New York Times piece, a number of multinational companies have complained about this new law. Nice guys.

For information on the position of some U.S. companies on this issue, compiled by the Business & Human Rights Resource Centre (which tracks the positive and negative impact of over 3,000 companies worldwide), click here:
http://www.business-humanrights.org/Doc ... rlawreform

Here's the website of the American Chamber of Commerce in China:
http://www.amcham-china.org.cn/amcham/home/index.php

Chamber of Commerce in China? Remember, in Sacramento the Cal Chamber are the folks who powered the 2004 Schwarzenegger comp reforms.

And see the excellent analysis of labor rights in China from the think tank Foreign policy in Focus:
http://www.fpif.org/fpiftxt/3824

Interesting concept, though, isn't it? Major industrial nation exports jobs and industries, shrinking rights of workers in the process. Ambitious, hardworking countries see their economies grow at breakneck pace, and workers demand more rights.

Workers' comp is intertwined with global labor and economic issues. Stay tuned.


Julius Young
http://www.boxerlaw.com/news.html
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Perhaps you haven't been paying attention. Too busy following the national immigration reform debate, which resulted in implosion of the grand legislative bargain? Or perhaps you're a techie who's been obsessed by the marketing drumbeat for the holy grail tech fetish object, the iPhone. Or maybe you've just had comp fatigue. Whatever.

I'll save you some trouble.

The second quarter of 2007 in California workers' comp was kinda weird. Yes, there was some clarity, as the California Supreme Court delivered a long awaited ruling on the application of SB 899 to apportionment.

But there was also a lot of treading water. Official studies released. Think tank research papers released. Legislative hearings. Important cases still under review by the WCAB and the appellate courts. All important stuff, but much of it just over the horizon.

Here, in no particular order, is my list of the 10 top developments in California comp this quarter. Note: after most of these developments I have included a link to a blog post on the topic.

1. Profits, and more profits. Insurers continued to reap huge profits due to the decreased costs under the reformed system. Statistics released by the Workers Compensation Insurance Rating Bureau in 2007 revealed that since the 2004 reforms insurer profits exceeded benefits paid to and on behalf of injured workers! My post on this (with a pie chart graph) is here:
http://www.workerscompzone.com/index.ph ... 4f787d6811
There was a call by one commentator to abolish the system entirely:
http://www.californiaprogressreport.com ... s_com.html

2. The California Supreme Court delivered a big win for employers and insurers in the Welcher/Brodie cases. Interpreting the apportionment changes under SB 899 in the fashion most favorable to employers, the court adopted a formula that prior percentage disability awards are to be subtracted from a later percentage award (caution: Welcher did not deal with subtracting a non- AMA rating from a "new schedule" AMA rating). The post on this can be seen here:
http://www.workerscompzone.com/index.ph ... ID=0ac5194

3. The issue of old rating schedule vs new schedule remained a hot topic. Reversing its prior rulings in the Baglione and Pendegrass cases, the WCAB ruled that to be rated under the old, pre-AMA schedule, there must have been a report describing the existence of permanent disability. The WCAB in Baglione II and Pendegrass II thus rejected the argument that a "comprehensive report" need not note the existence of PD before 1/1/05. Further, the WCAB rejected the argument that the act of starting to pay TD before 1/1/05 created a notice requirement sufficient to invoke the application of the "old schedule". An appellate decision by a 1st District Court of Appeal panel in Costco vs. WCAB (Chavez) agreed. To see the post on the WCAB's mulligan, click here:
http://www.workerscompzone.com/index.ph ... ID=0ac5194
To read about the Costco case, click here:
http://www.workerscompzone.com/index.ph ... 4f787d6811

4. A major study detailing the costs of employer fraud was unveiled by UC Berkeley researcher Frank Neuhaeuser. The study notes that as much as 23% of payroll may be misclassified or under-reported, causing a huge distortion in the system. The blog post on this is here:
http://www.workerscompzone.com/index.ph ... ID=0ac5194

5. New utilization review enforcement regulations were unveiled by the Division of Workers Compensation and are now in effect. These regulations, redrafted and watered down after repeated public comment and industry criticism, provide a mechanism from increased DWC oversight of utilization review abuses. There will be routine compliance audits and the regulations provide for special target audits in response to complaints. You can see the DWC regs by clicking here:
http://www.dir.ca.gov/DWC/DWCPropRegs/A ... ations.htm

6. A San Francisco workers' compensation judge ruled in the case of Scott Boughner vs. Comp USA and Zurich that the "new" rating schedule is arbitrary, capricious and inapplicable to Mr. Boughner's case. The ruling is currently in the appeals stage.The text of that decision can be seen in this post:
http://www.workerscompzone.com/index.ph ... 4f787d6811
The defendant in Boughner filed a petition for reconsideration with the WCAB, which can be found here:
http://www.workerscompzone.com/index.ph ... 4f787d6811
Boughner's response to Comp USA was covered in this post:
http://www.workerscompzone.com/index.ph ... 4f787d6811

7. The Division of Workers Compensation unveiled in June 2007 a further study as part of its examination of worker wage loss. This study, on uncompensated wage loss, is likely to become a key point in discussions over what reforms of the permanent disability rating schedule are needed. The DWC's own study reveals a sharp drop in
permanent disability awards, something previously noted by CWSWC researchers and UC Berkeley and UC Davis researchers. My post on this issue is here:
http://www.workerscompzone.com/index.ph ... =0ac5194d6

8. Legislative hearings were held on several bills that would make changes in the SB 899 reform act. Meanwhile, Governor Schwarzenegger threatened to terminate any bills that would tinker with the centerpiece accomplishment of his administration. As of mid July 2007, several of these bills appear likely to wind up on the Governor's desk. You can see my comments here:
http://www.workerscompzone.com/index.ph ... 4f787d6811

9. Controversy about management at the State Compensation Insurance Fund (SCIF) continued. There were major management shakeups and both criminal and legislative investigations began.

10. Newly elected California Insurance Commissioner Steve Poizner signaled his intention to become more active in workers' comp issues. Poizner called for reform of the Workers Compensation Insurance rating Bureau's rate recommendation mechanism, noting that WCIRB forecasting has been poor. Poizner called for reform of the experience modification system and noted problems with the utilization review system and the volume of fraud, including employer fraud. A link to my post is here:
http://www.workerscompzone.com/index.ph ... 4f787d6811

I'll continue to cover these stories, and more. Stay tuned.

Julius Young
http://www.boxerlaw.com/attorneys.html
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