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June 2006

State: Texas

Area of Interest: OSHA Fines Louisiana Contractor $179,900 for Alleged Safety and Health Violations Following Amputation at Texas Worksite

A Cottonport, La., based contractor has been fined $179,900 by the U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) for alleged safety violations related to the injury of a 19-year-old laborer at an Atlanta, Texas, worksite in November 2005.

OSHA cited Merrick Construction Co. for two alleged willful, 13 alleged serious and two alleged other-than-serious violations of safety standards following a comprehensive inspection prompted by the double-leg amputation of a teen worker who was performing maintenance on a tire shredding machine. The company, which also performs highway construction, reclaims rubber from tires for inclusion with asphalt products. It employs about 120 workers in the Gulf States region, with approximately 30 working at the Atlanta facility.

The two willful citations were issued for failing to provide lockout/tagout procedures for equipment during maintenance activities and for failing to train workers. A willful violation is one committed with intentional disregard of or plain indifference to the requirements of the Occupational Safety and Health Act.

Source: Occupational Safety and Health Administration

Area of Interest: OSHA Offers Best Practices Guide for First Aid Programs

The Occupational Safety and Health Administration (OSHA) today issued Best Practices Guide: Fundamentals of a Workplace First-Aid Program, a new guide to help employers and employees develop workplace first aid programs.

The new OSHA guide identifies four essential elements for first-aid programs to be effective and successful; management leadership and employee involvement, worksite analysis, hazard prevention and control, and safety and health training.

The guide details the primary components of a first-aid program at the workplace. Those elements include:

• Identifying and assessing workplace risks;
• Designing a program that is specific to the worksite and complies with OSHA first-aid requirements;
• Instructing all workers about the program, including what to do if a coworker is injured or ill. Policies and program should be in writing;
• Evaluating and modifying program to keep it current, including regular assessment of the first-aid training course.

Source: Occupational Safety and Health Administration

State: New York

Area of Interest: U.S. Labor Department Secures Back Wages for Brooklyn School-Bus Dispatcher Fired for Raising Health and Safety Issues

A former dispatcher for Student Bus Service Inc., of Brooklyn, N.Y., who was fired for complaining about working in cold temperatures inside an office trailer during 20 degree weather, has been paid $7,000 in back wages as the result of a consent judgment secured by the U.S. Department of Labor (DOL).

The employee was discharged in December 2003, shortly after complaining to management about the lack of heat in the workplace. The worker then filed a complaint with the DOL's Occupational Safety and Health Administration (OSHA), alleging that the termination violated the whistle-blower provisions of the Occupational Safety and Health Act (OSH).

OSHA's investigation upheld the complaint. The agency ordered the company to reinstate the worker and pay back wages. When the company refused, DOL attorneys filed a complaint in the U.S. District Court for the Eastern District of New York. That complaint resulted in a consent judgment signed on May 11 by U.S. District Judge I. Leo Glasser.

In addition to ordering payment of the back wages, the judgment also prohibits officials of Student Bus Service Inc. from discriminating against workers who raise safety and health complaints, requires company officials to post a workplace notice informing employees of their rights under the OSH Act, and orders company officials to remove any references to discharge or suspension from the worker's personnel file.

Source: Occupational Safety and Health Administration

State: California

Area of Interest: John Garamendi Announces Indictment of Eight Owners of a Massachusetts-Based Company on 50 Felony Insurance Fraud Charges Resulting from a $600,000 Statewide Bicycle Courier Scheme

Insurance Commissioner John Garamendi announced the indictment of eight Massachusetts residents for insurance premium fraud charges. The eight owners and employees of Massachusetts-based National Independent Contractors Association (NICA) face arraignment today on 50 felony insurance fraud charges after being indicted by a San Diego County grand jury on April 3, 2006.

The eight defendants were scheduled to be arraigned in San Diego Superior Court. The San Diego County District Attorney’s office is prosecuting this case. Defendants are charged with one count of conspiracy to commit premium fraud; six counts of premium fraud; and 43 counts of filing false injury claims in a scheme totaling more than $600,000 in losses from the San Diego District Office of State Compensation Insurance Fund (SCIF). If convicted of all charges, the defendants face up to 59 years in prison and a fine of $1.2 million.

NICA is a privately owned company founded by Thomas McGrath in the state of Massachusetts. It was incorporated in 1995 and hailed itself as an alliance of independent contractors. NICA does business throughout the country and contracts with courier, messenger and delivery service companies in order to convert their employees into independent contractors.

On October 2002, defendants McGrath and Rogantino, officers of NICA, contacted a San Diego County insurance broker to apply for and receive a workers’ compensation insurance policy from the San Diego District Office of SCIF. Over the course of the next year, NICA reported 47 claims for injured workers whom in fact were injured, however not all 47 workers were employed with NICA. In actuality, NICA employed only a few of the 47 employees. These workers’ comp claims involved bicycle, motorcycle and motor vehicle couriers.

Source: State of California

State: Florida

Florida Insurance Commissioner Kevin McCarty announced the Florida Office of Insurance Regulation (Office) has concluded an examination of American Mercury Insurance Company, a homeowners insurance company, and Mercury Insurance Company of Florida, an automobile insurer. The Office issued a consent order that requires the companies to pay over $2 million in refunds to policyholders for engaging in improper claims settlements and charging rates not approved by the Office.

The examination found a multitude of violations relating to the companies’ business practices including the unwarranted termination of policies upon the filing of a claim, failing to pay the full amount on covered claims, failing to deliver policies within 60 days, failing to provide specific reasons for denial of claims, and the use of unappointed agents. However, it was the use of unfiled forms and rates to improperly deny claims that the Office considered to be the most egregious violation.

Insurance company representatives have been cooperative with state regulators, and initiated refunds to policyholders even before state regulators left the insurance company home offices beginning in December, 2005. The insurers in question are subsidiaries of Mercury General Corporation. American Mercury Insurance Company is domiciled in Oklahoma and primarily writes homeowners coverage, while Mercury Insurance Company of Florida is a Florida-domiciled insurer and primarily writes private passenger auto insurance.

Source: State of Florida

State: Massachusetts

Area of Interest: OSHA Cites Amherst, Mass., Contractor for Belchertown Death

An Amherst, Mass., contractor faces $48,000 in fines from the U.S. Labor Department's Occupational Safety and Health Administration (OSHA) following the death of a worker at a Belchertown worksite.

T.L.C. d/b/a Northeast Environmental Solutions was cited for one alleged willful and two alleged serious violations of the Occupational Safety and Health Act following the Nov. 15, 2005, accident at 425 Warren Wright Rd.

A company employee was killed when he became caught in the rotating parts of a mulching machine while trying to clear a jam. OSHA's inspection found that employees were allowed to clear such jams while the machinery was operational instead of first shutting it down and isolating its power source.

As a result, OSHA issued the company a willful citation, with a proposed fine of $42,000, for failing to provide a workplace free from recognized hazards in that employees while clearing jams were exposed to being caught in the machine's rotating augers and agitators.

The company was also issued two serious citations, with $6,000 in proposed fines, for not instructing employees in the recognition and avoidance of unsafe conditions and for not using a safety bar to support a raised hydraulic door on the truck which contained the mulching machinery.

Source: Occupational Safety and Health Administration

State: California

Area of Interest: Insurance Commissioner John Garamendi Announces Arrest of Father and Son for Workers' Compensation Insurance Fraud

Insurance Commissioner John Garamendi announced today the arrest of Shagen Galstanyan, 51, and his son, Vahe Tergalstanyan, 23, for workers’ compensation insurance fraud. Both suspects were booked into the Riverside County Jail with bail set at $25,000 each.

Galstanyan and Tergalstanyan, residents of Glendale, were arrested on May 10, 2006 and are both being charged with making knowingly false statements and attempting to deny workers’ compensation benefits to an injured employee, Pedro Velasquez.

If convicted, both suspects are facing imprisonment in county jail for one year, or in state prison for two to five years, or by a fine not exceeding $150,000 or double the value of the fraud, whichever is greater, or by both imprisonment and fine.

This investigation was conducted as part of the Workers’ Compensation Fraud Program at the CDI Fraud Division in Rancho Cucamonga. The crimes are felonies and are being filed by the Riverside County Office of the District Attorney. Galstanyan and Tergalstanyan also attempted to conceal information about the true nature of the employee’s injury from their insurance carrier, Safeco Insurance. Safeco Insurance has not yet calculated an exact dollar loss due to the fraud, but they have been very helpful during the criminal investigation. Safeco’s Special Investigative Unit also assisted in the investigation.

Source: State of California

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