Synopsis: Staffing Company Risk Manager ALERT!—National Staffing Company Agrees to Implement Major Company-Wide Changes Following OSHA Beef, analysis by Joe D’Amato, J.D.

Editor’s Comment: The defense team at KCB&A has a number of WC/EPLI/GL Staffing Company legal specialists, including our law partner and defense team leader, Joe D’Amato. Joe confirms legal issues for staffing organizations have unique challenges for risk and safety managers. This new action and eventual agreement by OSHA is a must-read for anyone who uses staffers or handles risk in that growing industry.

In 2013, OSHA announced an initiative to improve workplace safety and health for temporary or staffing workers, who are at increased risk of work-related injury and illness. The initiative included outreach, training and enforcement to ensure temporary workers are protected in the U.S. workplace. OSHA and the National Institute for Occupational Safety and Health or NIOSH have issued a "Recommended Practices*" publication that focuses on insuring temporary workers receive the same training and protection permanent employees receive.

Marathon Staffing Services, a staffing service placing 15,000 workers annually throughout several states, was cited by the U.S. Department of Labor (DOL) for not providing hearing testing for employees exposed to high noise levels while working on assignment at a Massachusetts concrete manufacturing facility. As part of the company’s settlement with the U.S. DOL/OSHA, it agreed to implement “enhanced” workplace safety and heath protections for all client businesses where it places temporary workers; not just the concrete manufacturing facility were the violations took place.

The enhanced workplace safety measures are wide ranging and include:

Initial and periodic safety and health inspections or audits at client work sites to ensure working conditions meet OSHA standards;
Comprehensive safety training for Marathon’s account executives and sales representatives;
Development of written contracts with its clients specifying respective responsibilities to develop safety and health programs applicable to each workplace where Marathon will supply temporary employees and
Hiring or assigning a qualified safety and health professional to review and update a checklist to address foreseeable safety and health concerns at client workplaces.

The U.S. DOL regional solicitor for labor noted the settlement agreement with Marathon rippled beyond the case and “(o)ther suppliers and employers of temporary workers can and should take heed to ensure that all employees...work in an environment that enables them to come home each day safe and healthy.”

We are certain the cost of providing hearing tests for employees assigned to one location is incredibly minor compared to the costs of implementing major company-wide changes. An easy way to avoid costly legal entanglements with the DOL is to simply follow OSHA guidelines without deviation. If you are with or use a staffing company and need assistance in handling OSHA investigations or for OSHA compliance concerns involving the staffing industry, please contact Joe D’Amato as indicated below. Please note our thoughts on this issue are strictly legal in nature; KCBA does not provide safety advice or consulting services. If such services are needed, a licensed safety expert should be contacted.

This article was researched and written by Joseph D’Amato, J.D. He can be reached on a 24/7 basis for questions, legal concerns and comment at jdamato@keefe-law.com.

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Synopsis: The Illinois Workers’ Compensation Rules on Staffing Employees—Check Your Agreement!

Editor’s comment: Your organization may have temporary staffing workers on a temporary basis—to fill a need for a short period of time. Your company might also have staffing employees on a regular and continuing basis where the workers are vetted, hired by, paid and fully report to a staffing company and its managers but the line workers and managers work solely at your business locations. What is the rule if such a staffing worker or manager is injured in your workplace—who has to investigate, accept and pay IL WC benefits?

In such claims, the IL WC Act indicates both employers are simultaneously and continuously liable for all WC benefits. What the IL WC Act also outlines is one of the employers will have “primary liability” for a loss. In these situations, the employer directly benefiting from the services of the employee at the time of the accident will be found to be the primarily responsible party. Secondary liability will be on the company providing the worker—unless there is an agreement to the contrary.

However, if the borrowing employer does not pay or fails to timely pay benefits, the loaning or original employer must pay. The IL WC Act is clear--liability is joint and several in such situations. As a simple example, your company needs an admin staffer due to the pregnancy of a “regular” worker. You call ABC Staffing and they send a qualified admin over to take the position. ABC Staffing selected the worker, hired them and they will pay the worker from monies being sent to them from you. If/when that admin worker is injured due to a work-related occurrence, who owes the benefits? Well, if there is nothing in your agreement with ABC Staffing about primary liability, you do.

Our strong message to IL risk managers—check the agreement with your staffing agency/provider to see who has the risk. If you aren’t sure or the agreement is silent, the defense team at KCB&A is happy to assist at no charge—send us your agreement. What you don’t want is to find out after the accident who owes thousands of dollars in benefits.

Please also remember the concept of joint and several liability should protect you from third party liability if a staffing worker is injured—they should not be able to maintain a lawsuit against you in Circuit Court for what might arguably be negligence in your workplace. For example, if one of your workers inappropriately leaves an area with a slippery substance on your floor and a staffing worker falls, you and/or the staffing agency should only owe workers’ comp benefits. Depending on the agreement, you or the staffing company should be able to pay those benefits and both companies should be insulated from third party exposure. Consistent with Section 5 of the IL WC Act, you and the staffing company should be able to obtain dismissal if the staffing worker sues you for the negligence of your worker.

Again, remember the unstated rule is to insure the injured employee has WC insurance coverage from the staffing company or you as their client resulting in certain and rapid payment of WC benefits for the loss. If the staffing agency is primarily liable or not, you want a COI or certificate of insurance from them to insure there is some level of joint protection of your company and workers. There are many legal dangers for not having WC coverage for all losses. Please also note it is a crime and WC fraud to present a fake COI in this state. It is incumbent on risk managers and defense attorneys to make sure which entity has primary liability in defending or managing such claims.

Who is responsible for compliance with OSHA when staffing employees are involved?

Is it the agency supplying the employees or the client employer for whom they are working? OSHA asserts it is a shared responsibility. Because of its ongoing relationship with the worker, the staffing service has some record-keeping and training obligations. However, as you can see from Joe D’Amato’s article above, primary responsibility resides with the client employer, which typically owns, creates and controls conditions at the workplace. For example, it’s the employer that insures their machinery is properly guarded and necessary personal protective equipment is present and utilized. However, the staffing agency would maintain medical monitoring and exposure records created by a client employer on staffing employees.

The issue of “client employer” versus “temporary service agency” responsibility is focused mostly on the area of employee training. There’s no implied waiver of safety training requirements simply because a staffing employee’s work or duties are of short duration. For instance, training or safety instruction must be given to construction or manufacturing employees, even for very short-term jobs. OSHA often finds permanent employees are properly trained as required by a particular standard but staffing counterparts aren’t causing dramatically increased risk and injuries. That potential results in OSHA citations and the possibility of significant penalties.

If you have questions or concerns about liability in relation to staffing companies or employees, contact Joe D’Amato at the email above or sent a reply. We appreciate your thoughts and comments. Please post them on our award-winning blog.

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Synopsis: Colorado Supreme Court Upholds Termination of Medical Marijuana-Smoking Employee—When Are You Going to Move to Zero-Tolerance?

Editor’s comment: In Coats v. Dish Network, the Supreme Court of Colorado unanimously held an employer may justifiably terminate an employee for their off-duty conduct in using marijuana, despite the employee’s adherence to state law governing medical marijuana.

The core issue before the Court was whether the use of medical marijuana, in compliance with the State’s Medical Marijuana Amendment, but in violation of federal law, is to be considered a “lawful activity” under Colorado’s Lawful Activities Statute. Affirming the lower court’s decision by a vote of 6-0, the Supreme Court ruled against Plaintiff Coats, a paraplegic employee. The Supreme Court arrived at its conclusion by reasoning the plain language of the term “lawful” within Colorado’s Lawful Activities Statute refers only to those activities that are clearly “lawful” under both state and federal law.

Plaintiff Coats worked as a telephone customer service representative for Defendant Dish from 2007-2010, when a routine company drug test revealed the presence of tetrahydrocannabinol or THC in his blood—THC is the major psychoactive ingredient in marijuana. As the employer had a “zero-tolerance” drug policy, it subsequently terminated Coats. Coats filed suit for wrongful termination, arguing he should have been protected by Colorado’s Lawful Activities Statute, which makes discharging an employee based on “lawful” off-duty conduct an unfair and discriminatory labor practice. The THC detected in the routine drug test was the result of consumption of medical marijuana. Coats had a valid state license to use marijuana or THC in order to reduce the pain of frequent muscle spasms—a symptom not uncommon among paraplegics. Therefore, Coats argued he was terminated because of “lawful” use of medical marijuana under Colorado law.

Who Defines “Lawful?”

The Colorado Lower Court of Appeals reasoned the employer’s actions did not violate the Lawful Activities Statute because medical marijuana remains prohibited under federal law. The Court analyzed the meaning of the word “lawful”—“that which is permitted by law”—to reason for purposes of the statute, “lawful” is used in regard to activities governed by both state and federal law.

The Colorado Supreme Court adopted the Court of Appeals’ majority opinion, finding the term “lawful” to mean “not contrary to, or forbidden by law,” without restrictions. The federal Controlled Substances Act (the “CSA”) prohibits the use, possession, and manufacture of marijuana, makes the use of medical marijuana unlawful under federal law. Thus, Coats’ behavior was not a “lawful activity” under Colorado’s Lawful Activities Statute, and the highest court held Coats’ termination to be valid.

How Does This Ruling Affect Employers Across the U.S.?

The Colorado Supreme Court’s ruling indicates other states with statutes protecting “lawful” off-duty conduct should still be bound by federal law in its characterization of what constitutes “lawful” conduct. While the Coats v. Dish Network ruling is legally binding in Colorado alone, the decision may serve as persuasive authority in similar cases in other jurisdictions. Colorado is way ahead of the country on legalizing marijuana. They are one of a few states that already have statutes defining lawful off-duty conduct.

Please also remember it is not inconceivable to imagine the United States may some day decriminalize marijuana. If/when that happens, it may confuse this ruling and some states’ workplace restrictions on marijuana use. We feel Colorado and other states should avoid the term “lawful” and simply allow employers to block marijuana use at work, as IL law does.

As we indicate above, Illinois law allows an employer to bar marijuana use from your workplace. If you don’t take advantage of this provision of the law, your company may have increased risk if a marijuana user causes an accident or injury. For those reasons, we strongly recommend you get an Alcohol and Drug-Free Workplace policy in place right now—there is a new bill on Governor Rauner’s desk for his signature--it decriminalizes possession of small amounts of marijuana. Medical marijuana will also roll out across our state at some future point. This has to be a concern for all Illinois employers and you need to understand the importance of blocking the use of marijuana in your workplace. The defense team at KCB&A has a free policy for you to consider and implement—if you want to review it, simply send a reply.

We thank the reader who gave us the heads up on this important ruling. We appreciate your thoughts and comments. Please post them on our award-winning blog.

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In Your Workplace!

We are pleased to announce an upcoming half-day breakfast seminar on 7/17/2015 for our valued clients!

The topics include:

· Supervisor Substance Abuse Training (meets DOT requirements)

· The Legal aspects of Opioids and Medical Marijuana in workers’ compensation

This helpful seminar is designed to assist supervisors in addressing these critical issues in your workplace. Although the program complies with the Department of Transportation requirements, the material applies to all industries in addressing workplace substance abuse. Please let us know if you are interested in attending our upcoming seminar. Full details will be forthcoming. We will hold this seminar at one of our valued clients, Burke Beverage, Inc.:

Address: Burke Beverage, Inc., 4900 Vernon Ave, McCook, IL 60525

Registration: Please contact Sandra Castaneda, Phone: (708) 496 - 1515 ext.131

Email: scastane@MACNEAL.COM

KCBA Blog

Staffing Company Risk Manager Alert! by Joe D'Amato, JD; IL WC Rules on Staffing Companies/Employees; Colo. Marijuana Ruling and What It Means to You and more