Friday, October 29, 2010, 09:45 AM - Political developmentsDownballot political races in California get little attention.
That's especially true this year, when the Whitman Vs. Brown and Fiorina Vs. Boxer races have brought out a tsunami of ads on every entertainment device known to humans.
But downballot races are important. In workers' comp, the insurance commissioner runs a department that engages in fraud investigations. The commissioner also holds hearings on the WCIRB's requests for workers' comp rate increases.
While the Insurance Commissioner's pure premium rate decisions are not binding, they set the tone for the industry. A commissioner can grill the industry on its methodology, its assumptions about trends, and its profits.
This is exactly what happened at the October 2010 hearings in San Francisco held by outgoing Insurance Commissioner Poizner. Poizner's decision on the WCIRB's request for a whopping increase of over 27% in insurer comp rates is still pending. I have a post coming on that.
So the Insurance Commissioner post should be of more than passing interest to any stakeholder in the workers' comp system. Unfortunately, many of those I speak to simply don't get it.
Those "in the trenches" often have a limited interest in trends of the industry and policy considerations that drive the system. That's one of the reasons I've been writing the blog for the last 3 years: to widen the focus.
By all accounts, the race between Villines and Jones is tight. Villines has benefitted from large independent expenditures by the California Chamber of Commerce. Jones has been backed by many consumer groups and attorneys (including my firm). Factors that could influence the race include turnout and whether Jerry Brown has built up momentum that will pull other candidates along with him.
Dale Debber of the Workers' Comp Executive has uploaded video interviews from both candidates, which you'll find here:
http://www.wcexec.com/Exclusive-Video-I ... Jones.aspx
Tuesday, October 26, 2010, 10:31 PM - Political developmentsThe winner of the Brown vs. Whitman contest for California's governor faces some tough decisions next year.
One of the toughest may be what to do about the massive shortfall that has developed with California's unemployment benefits.
EDD's unemployment fund is a train wreck, nearing a $10 billion shortfall.
There's been a lack of political leadership to deal with the issue. And of course it's been compounded as huge numbers of folks needed to draw on the fund during these recessionary times.
The Federal government has been loaning California money to keep the UI fund going, but those funds come with interest that must be repaid to the Feds.
With the nation's crushing deficits, it's unlikely that a much more conservative Congress will go along with big bail-outs of the California UI fund. There's little political steam behind any efforts to further stimulate the economy or to rack up larger deficits. Paul Krugman and Robert Reich are not winning the battle for further stimulation.
It's hard to envision any attempt to bail out California. John Boehner and Michelle Bachmannn aren't likely to be leading that charge.
So we'll likely eventually see reduced unemployment benefits and higher taxes on employers.That will not, in the tradition of Dale Carnegie, win friends and influence people. It's no wonder that our politicians from both parties kicked the can down the road.
Bitter choices lie ahead for the next governor. Friends and allies will be taken to the woodshed.
Here's a link to the recently released report from the Legislative Analysts's Office (LAO) on possible solutions to the unemployment insurance time bomb:
http://www.lao.ca.gov/reports/2010/ssrv ... 102010.pdf
Saturday, October 23, 2010, 04:19 PM - Political developmentsMy office is in the heart of Oaksterdam.
Low key pot clubs dot the area. There's an Oaksterdam gift shop around the corner. A few blocks away is Oaksterdam University. Enrollees can learn how to grow a better stash.
You'd think a libertarian like myself would have no problem with Prop 19.
Drug laws against marijuana haven't stamped out its use any more than laws regulating sexual transactions have stamped out the world's oldest profession.
Decriminalizing marijuana and regulating its sale makes a great deal of sense. And while that probably will have less impact on large drug cartels than Prop 19 opponents would claim, it might reduce some of the narco influence.
But what would the impact on the workplace be?
Looking at my voter pamphlet, retired San Jose police chief Joseph McNamara argues that "Prop 19 keeps workplaces safe, by preserving the right of employers to maintain a drug-free workplace".
Wow, I guess most workers will just still come to the office buzzed on their double lattes and nothing more. Starbucks' business model is still safe.
But in an opposing argument, Senator Dianne Feinstein argues that "Employers who permit employees to sell cosmetics or school candy bars to co-workers in the office may now also be required to allow any employee with a "license" to sell marijuana in the office."
Now I'm getting concerned. Will this lead to girl scout cookies and almond roca sales being banned from the office? Can't have that!
Further, Feinstein argues that
"Under current law, if a worker shows up smelling of alcohol or marijuana, an employer may remove the employee from a dangerous or sensitive job, such as running medical lab tests in a hospital, or operating heavy equipment. But if Proposition 19 passes, the worker with
marijuana in his or her system may not be removed from the job until after an accident occurs".
Now I'm going to be really paranoid all the time. Maybe I should just cave in and smoke myself, to calm my nerves.
Alas, I stopped inhaling years ago. It seemed terribly boring.
So what to think?
As Greg Griggs noted in a piece in Workcompcentral yesterday, the California Chamber of Commerce thinks it threatens the workplace.
If Prop 19 becomes law, the Cal Chamber predicts the following:
-employers would have to permit employees to smoke marijuana at work
-employers would be unable to comply with Federal anti-marijuana laws and thus lose millions in federal contracts
-employers would have to provide reasonable acommodation to marijuana users
-employers would have to pay for marijuana-related accidents through 3rd party liability and workers' comp
-employers would be unable to comply with the obligation to provide a safe workplace
-employers would not be able to make workplace decisions based on marijuana use
I suspect that a fair number of workerscompzone's readers are in favor of Prop 19. It's clear that though we are long beyond the days of "Reefer Madness" scares. In my experience, comp defense attorneys hardly ask about marijuana use in depositions. It's a non-issue in most workers' comp cases.
Yet, societally, there's still a great deal of fearmongering over the topic.
On the other hand, Prop 19 is not all that well drafted. Some of the common concerns about the initiative could have been addressed by more careful drafting.
The Cal Chamber analysis explores some of the problems that could develop, some of which depend on how future courts would interpret
the language of Prop 19.
SMOKING MARIJUANA AT WORK?
Sounds far-fetched, but here is the Cal Chamber's argument:
"Current law: Current law prohibits smoking “tobacco products” in the workplace. See Cal. Lab. Code § 6404.5.
Effect of Proposition 19: Because the current anti-smoking law only applies to tobacco products, the proposition would not prohibit employees from smoking marijuana in the workplace. In fact, employers would be required to allow marijuana smoking at work because Proposition 19 would prohibit denial of “any right or privilege” granted by the Act, without defining what that means.
Just as confusing, the Act specifies that users can “possess” or “share” marijuana in a “non-public place,” but does not define what a “non-public place” is. In other contexts, California courts have interpreted “public place” narrowly, so most locations are “non-public places.” For example, recently, a California court found that even a grocery store was not a public place. Ralphs Grocery Co. v. United Food and Commercial Workers Union Local 8, 2010 Cal. App. LEXIS 1171 (2010). So, users would be able to smoke in virtually any workplace."
In defense of Prop 19 proponents. it's not clear whether courts would broadly construe "tobacco products" to include marijuana.
HAMPERING FEDERAL CONTRACTORS FROM COMPLYING WITH THE LAW?
The Cal Chamber argues that federal contractors will lose contracts because they will be unable to comply with the Drug Free Workplace Act,
41 U.S.C. Section 706; Gonzales v. Raich, 545 U.S. 1 (2005).
Again, this probably depends on the issue of whether employers can enforce a no use on the job policy. The Cal Chamber argues that they would be unable to enforce a drug free workplace policy because of Prop 19's prohibition against denying "any right or privilege".
HIRING KNOWN MARIJUANA USERS
The Cal Chamber notes that under current case law (Ross v. RagingWire, 42 Cal. 4th 920 (2008)), employers can elect to not hire marijuana users, including medical marijuana users.
But the Cal Chamber warns that:
"Employers would be prohibited from discriminating against marijuana users by taking marijuana use into account when deciding whether to hire an applicant. Any marijuana- smoking job applicant not hired could file a lawsuit claiming marijuana use was the reason, even if the employer had no knowledge of the use. Moreover, unlike alcohol use, which employers can prohibit entirely at work, under Proposition 19, employers could only take action for marijuana use that “actually impairs” work performance."
RESTRICTS MARIJUANA TESTING
The Cal Chamber predicts that both pre-employment marijuana testing and testing of current employees would become much more difficult.
Here's their argument:
 Pre-employment testing: Under the Americans with Disabilities Act (ADA) and the Fair Employment and Housing Act (FEHA), employers may test applicants for illegal drug use, including marijuana. 42 U.S.C. § 12112 et. seq.; Cal. Gov’t. Code § 12940. Other tests (such as for alcohol use or legal use of a prescription medication) are medical examinations that can only be conducted after making an offer of employment, and if the test is “job-related and consistent with business necessity.” See EEOC Enforcement Guidance: Preemployment Disability-Related Questions and Medical Examinations.
Also, cases interpreting the California Constitution suggest that an employer may conduct pre-employment drug tests, as long as the employer has a legitimate and substantial interest in determining whether an applicant is using drugs. See Loder v. City of Glendale, 14 Cal. 4th 1846 (1997); Pilkington Barnes Hind v. Superior Court, 66 Cal. App. 4th 28 (1998).
 Post-employment testing: The California Constitution protects all individuals’ right to privacy, including private sector employees. Under the Constitution, an employer who wants to test for illegal drug use must balance its interests against the employee’s reasonable expectation of privacy. See Hill v. National Collegiate Athletic Association, 7 Cal. 4th 1 (1998). If an employer has a good reason to test (e.g., the employee caused a workplace accident in suspicious circumstances, the employer observes drug activity in the workplace, etc.) and the employee has no reason to believe the employer won’t test, such as a policy stating that the employer does not conduct testing, the employer can conduct the test.
Effect of Proposition 19:
 Pre-employment testing: Proposition 19’s stated intent is to regulate marijuana “like...alcohol.” If that’s the case, an employer could only test for marijuana use after making an employment offer, and would have to show such testing is “job-related and consistent with business necessity.”
 Post-employment testing: Even if an employer knows an employee is using marijuana at work, the employer could be prohibited from testing because the employee could argue
marijuana use is private—after all, if the employer cannot discriminate based on marijuana use, why would an employee expect to be tested for it?1
Even worse, an employer could not take any disciplinary action against an employee even if allowed to test, until the marijuana use “actually impaired” the employee’s performance—for example, by causing a workplace accident. So, even if an employee in a safety-sensitive position (e.g., forklift driver, bus driver, etc.) came to work reeking of marijuana smoke, an employer could do nothing unless employee’s work was “actually impaired.” If the same employee came to work reeking of alcohol, the employer would have good reason to test, discipline and even terminate. So, by requiring “actual impairment,” marijuana would be more protected than alcohol."
INCREASED COSTS FROM MARIJUANA RELATED ACCIDENTS
The Cal Chamber argues that employers would face millions in increased workers comp costs. Here's their argument:
"Current law: Excludes from workers’ compensation liability injuries caused by “alcohol or the unlawful use of a controlled substance.” Cal. Labor Code § 3600. Marijuana is a controlled substance. See Cal. Health and Safety Code § 11054.
Effect of Proposition 19: The definition of “controlled substance” is unchanged by Proposition 19, but marijuana use will no longer be “unlawful,” so marijuana-induced accidents may not be excluded from liability. Employers could face millions of dollars in increased premium costs to insure against the cost of marijuana-related accidents.
On the other hand, if a user is injured while working and the injury is not covered by workers’ compensation, the employee could sue the employer for damages, resulting in millions of dollars in liability for the business community."
MARIJUANA REASONABLE ACCOMMODATION REQUESTS WILL INCREASE
Under the Cal Chamber analysis, marijuana accommodations will become common. The Chamber's argument is here:
"Current law: Employers are not required to accommodate employees’ use of marijuana as a reasonable accommodation under the ADA or FEHA. 42 U.S.C. § 12112 et. seq.; Ross, 42 Cal. 4th 920.
Effect of Proposition 19: Most employees will not even need to request the right to use marijuana as a reasonable accommodation—Proposition 19 would give them the automatic right to use it. But, for employees who have medical problems alleviated by marijuana who want even more rights than the proposition expressly provides—for example, extra breaks to smoke frequently throughout the day, an adjusted schedule to come in late or leave early, or special work conditions like the provision of paraphernalia or a room to smoke—the employee may request a reasonable accommodation for that purpose. Employees who say they have to smoke marijuana for medical reasons would then have a right to be reassigned to easier duties so their job does not interfere with their marijuana smoking.
Federal law does not require an employer to provide these kinds of accommodations, because marijuana is an illegal drug under the Controlled Substances Act (CSA) and the federal government continues to have jurisdiction to regulate its use. See Gonzales, 545 U.S. 1. But, whether the federal government will interfere and actually enforce the CSA is doubtful, based on the Obama Administration’s decision not enforce federal drug laws against individuals who comply with state medical marijuana use laws. See October 19, 2009, Memorandum from David W. Ogden."
AFFECT ON SAFE WORKPLACE OBLIGATIONS
The Cal Chamber argues that employers would find it difficult to comply with OSHA safe workplace rules. Here's the argument:
whether the federal government will interfere and actually enforce the CSA is doubtful, based on the Obama Administration’s decision not enforce federal drug laws against individuals who comply with state medical marijuana use laws. See October 19, 2009, Memorandum from David W. Ogden.
COMPLICATING EFFORTS TO COMPLY WITH OSHA REGULATIONS
The Cal Chamber predicts that Prop 19 would complicate an employer's ability to comply with OSHA safe workplace rules:
"Current law: The federal Occupational Health and Safety Act (OSHA) and its California analog (Cal- OSHA) require employers to furnish a safe workplace. See 29 U.S.C. § 651 et. seq.; Cal. Lab. Code §6400 et. seq. In California, this includes the duty to create an injury and illness prevention plan that addresses methods and procedures for correcting unsafe or unhealthy conditions. See Cal. Lab. Code § 6401.7.
Effect of Proposition 19: Because an employer would only be permitted to act if an employee’s marijuana use “actually impairs” job performance, an employer’s hands would be tied to take any action based on the perception that an employee’s marijuana use is a potential threat in the workplace. Employers could do nothing to prevent users from smoking marijuana and operating heavy machinery or driving on company business unless such use “actually impairs job performance”, but would still have the responsibility to provide a safe workplace for employees and customers. This would impose an impossible burden on employers."
PROBLEMS KEEPING IMPAIRED EMPLOYEES OFF THE ROAD
According to the Cal Chamber, the proposition does not address conduct before driving, making it difficult to prevent a marijuana user from driving. Here's the argument:
" Current law:
 Driving on company time: Employers may specifically prohibit employees from being under the influence of alcohol or drugs while driving.
 Department of Transportation (DOT)-regulated industries: Employers must conduct drug testing (pre-employment, random, post-accident, reasonable suspicion, and return to work) of individuals who hold safety-sensitive positions in the transportation industry, and remove those with a positive test result from such positions. See 49 C.F.R. § 40.23. Last year, the DOT issued a notice that the use of medical marijuana is not a valid medical explanation for a positive test result, ensuring medical marijuana users are not excluded from these safety provisions. See DOT Office of Drug and Alcohol Policy and Compliance Notice, October 22, 2009.
Effect of Proposition 19:
 Driving on company time: Although Proposition 19 specifically “shall not be construed to affect, limit or amend any statute that forbids impairment while engaging in dangerous activities such as driving,” the proposition does not address conduct before driving. According to Proposition 19, unless an employee is “actually impaired,” the employer can not do anything to prevent marijuana use before an employee drives. As a result, the employer could not prevent the inherent public safety threat in letting a marijuana user drive, nor preemptively reduce its liability to third parties for injuries sustained as a result of the use.
 DOT-regulated industries: Employers cannot meet DOT requirements and comply with Proposition 19’s prohibition on discrimination."
SUBJECTING EMPLOYERS TO MORE FEHA LIABILITY
The Cal Chamber is concerned that employees who use marijuana will draw their employers into frivolous lawsuits. The argument goes like this:
"Current law: If an employer takes an adverse action against a poorly performing employee, such as demotion or termination, the employee may claim the adverse action was motivated by discrimination protected by the FEHA. If the employee proves a minimal case for discrimination, the employer must demonstrate a legitimate, nondiscriminatory reason for its actions or face a trial.
Effect of Proposition 19: Proposition 19 would allow marijuana users to claim that an employer’s actions are motivated by marijuana use. Just as with the FEHA, employers would be required to prove the employee’s poor performance, and not marijuana use, justified the personnel action. Inevitably, disgruntled employees’ claims of recreational marijuana use will draw employers into frivolous lawsuits and undermine the at-will employment relationship."
Proponents of Prop 19 argue that many of these concerns are addressed by employer testing for impairment. Writing in the NORML Stash blog, Russ Belville argues that:
"So how is it that someone shows up to work high and the boss says, “OK, go right ahead and drive the forklift!” Let’s put aside for a moment that California is an “at will” employment state, meaning the employer can fire the employee at will for any reason. The answer, of course, is to test the worker for actual impairment" says Belville.
The whole basis for workplace drug testing is the idea that someone would be high on the job and that would impair their performance to the point of causing a workplace safety issue. The problem is that all sorts of things impair an employee, like drowsiness from prescription drugs, fatigue from overwork, distraction due to injury pain, and lack of sleep. Drug testing doesn’t catch those impairments and most often catch employees who have used cannabis away from work days or weeks before when it couldn’t possibly impair workplace performance", Belville notes.
"Prop 19 doesn’t say the employer can only discipline “users who are actually impaired“, it says it can discipline “consumption that actually impairs“. If wrecking the forklift is the only way you can determine whether someone is impaired, your workplace has bigger safety problems than people who might have smoked pot the night before."
Moreover, Belville argues:
"If your employee shows up reeking of pot, eyes bloodshot, and you suspect his pot use is actually impairing, you just have to prove it, that’s all. There are loads of peer-reviewed, double-blind, placebo-controlled studies that opponents of cannabis (like you) constantly cite to back up the need for workplace urinalysis. You tell us we have to pee test because these studies show recent cannabis use impairs people.
So how do these studies fail to demonstrate that recent use of marijuana is “a potential threat” and that it “actually impairs”? You can’t have it both ways! You can’t use these studies to support pee testing, then conveniently ignore them to say there’s no way to show marijuana use impairs people."
Belville continues his rebuttal, arguing that:
"If your blazed employee is about to take out the company car, test him for impairment! There are tests for this that will catch not only the stoned driver, but the guy who had a beer at lunch, the guy who’s on anti-histamines that make him drowsy, the guy distracted by his wife’s affair and pending divorce, the guy who stayed up all night last night playing World of Warcraft, and so forth. But see, that’s the problem: testing for actual impairment would catch many of the people businesses are currently allowing to operate forklifts and drive company cars and trucks. It would show people once and for all that pee testing hasn’t done anything to make us safer. It would embarrass the companies that use drug testing when their most impaired employees are never caught. It might also catch the boss after a two-martini lunch."
In closing, Belville makes an impassioned argument:
Don’t believe the lies from the California Chamber of Commerce. They represent businesses that are significantly invested, in time and reputation, in using drug testing to discriminate against cannabis consumers, to break union protections, and to fire good people for no good reason. They are terrified that their urinary tool of oppression is about to go the way of the “NO IRISH NEED APPLY” sign into the dustbin of history."
There you have it. Two very different views.
Prop 19. Nightmare for the employers and many workers. Gateway to crumbling work standards and an ultimate job killer? Poorly drafted measure that will have profound societal consequences?
Or Prop 19, no big deal? A law that employers can cope with if as long as they have testing programs available?
Readers will split on this one. I'd love to hear from some of you on this. Convince me.
Why wasn't the act drafted to specifically forbid marijuana consumption at work? And why wasn't an impairment standard specifically outlined by the drafters? When many unions and employees have fought drug testing, what confidence can one have that widespread testing will detect impaired employees? How do we define marijuana impairment anyway?
Voters appear to be moving in a vote NO direction. Otherwise I'll be joining the NO voters. Some of the Cal Chamber arguments are overblown, but there are just too many questions as drafted.
The actual text of Prop 19 can be found here:
http://ballotpedia.org/wiki/index.php/T ... f_2010%22_(California)
Thursday, October 21, 2010, 09:31 PM - Political developmentsRalph Redux.....
Ralph Paterno, that is.
Recently I kicked off my series "Comp's Got Talent" with Boxer & Gerson's own Ralph Paterno.
But I neglected to share his Sinatra-style cabaret song about Sarah Palin,
"The Lady is a Sham".
Never fear, ye tea partiers in the comp community. You'll get your day. There's music for all tastes from compsters.
Here's "The Lady is a Sham":
And here's "Carly Took My Job":
Wednesday, October 20, 2010, 10:14 AM - Political developmentsSome folks are warning us that we're headed to Fedmageddon.
That's the threat of civil war over the likely Federal Reserve decision to buy long term bonds, print money and re-inflate the economy. Time Magazine's Stephen Gandel, in his "The Curious Capitalist" blog muses over "will the Federal Reserve's Ben Bernanke cause a civil war":
http://curiouscapitalist.blogs.time.com ... civil-war/
Let's hope that the overheated rhetoric of this political season doesn't lead us into further devolution of the republic.
At a time when many voters seem to be in a blind rage against "Government", it's good to look at the facts.
It turns out that common myths are inaccurate. Government workers are not overpaid.
That's the upshot of a study by economist Sylvia Allegretto of the Institute for Research on Labor and Employment at UC Berkeley. The study is titled "The Truth about Public Workers in California: They Are
Neither Overpaid nor Overcompensated":
Allegretto's research concludes that state and local government employees are underpaid about 7% in comparison with their private sector counterparts. She concludes that when benefit packages are included in the analysis there is no difference in pay between government and private sector counterparts.
These results may not stem the concerns over the sustainability of public pension obligations. There's a new study on that from the Milken Institute. The study analyzes demographic changes and notes that to be sustainable the retirement age will have to be raised and that employee contributions will have to be increased.
You can find the study (by Perry Wong and I-Ling Shen) here, titled "Addressing California's Pension Shortfall: The Role of Demographics In Designing Solutions":
http://www.milkeninstitute.org/publicat ... cat=resrep
In Britain we're seeing mass public employee layoffs. In France we're seeing growing unrest over proposed changes in the retirement age and pension eligibility age.
We don't need a Pensionmageddon in California, but there needs to be a close look at the facts as the next governor wrestles with these issues.
In coming posts I'll be blogging on last week's hearings on the WCIRB rate increase recommendation. And I'll be continuing the Comp's Got Talent series.
Meanwhile, check out my new venture: