-Mike Hammond
Top 10 List
MVRMA tracks average claims cost by number and type of
claim. Of the seven categories of claim types, Employment Practices
Liability (EPL) has the highest overall average cost per claim. EPL claims
typically run three times higher than the next lowest category. During the
period 2000-2005, the average cost of EPL claims was $41,595. These claims
have low frequency but high severity.
Recently, I read an article in the HR Daily Advisor
that listed the ten most common reasons employers are being sued. If you
think David Letterman is the only one with a "Top 10 List," think again.
Employment lawyers have one too. Hopefully, we can learn something from this
list and be aware of potential problems that can lead to costly litigation.
According to the article, the most common reasons
employers are being sued are:
1. Unlawful Pre-Employment Questions
- Laws such as the Americans with Disabilities Act make it imperative that
you ask only what you are allowed and treat all applicants equally. You
should standardize the application and interview process; keep questions
objective and focused on job requirements and on skills needed to perform
these requirements.
2. Dishonest Evaluations -
In an effort to be nice, many employers will "sugarcoat" bad performance on
reviews. Then, when the inevitable termination occurs, the ex-employee uses
that paper trail to press a wrongful termination claim. Relying on objective
criteria, noting plainly when standards are not met and avoiding personal
comments is the best practice to follow.
3. Rash Disciplinary Decisions -
Employers sometimes react out of emotion when taking
disciplinary measures...a recipe for trouble. Do a thorough investigation.
Review the employee's file, gather proof he/she received a copy of the
policy violated and provide an opportunity for the employee to tell his/her
side of the story before taking action.
4. Termination Errors -
Firing an employee is something most employers just want to get over.
However, a careful review process, including making sure there were no
promises of continued employment, is the best approach. You should use a
structured termination meeting from prepared notes. Clarify the logistics of
the termination, and don't apologize or talk about others.
5. Uninformed Medical Request Decisions -
Because medical leave falls into what can be called the
"Bermuda Triangle" of FMLA, ADA and workers' compensation, it is best to
consult with HR or your labor attorney before replying to such leave
requests.
6. Uninformed Supervisors -
Be sure your supervisors are trained and updated on the
full range of your personnel policies and relevant work rules, and do it
before distributing policies to employees.
7. Uninformed Managers -
The same goes for managers, only more so.
8. Incorrect Exempt/Nonexempt Decisions -
It is imperative that those with compensation
responsibilities be trained in the requirements of the Fair Labor Standards
Act (FLSA) on this issue. This act is the Department of Labor's current top
issue with significant ramifications to employers. The longer these problems
exist, the more expensive they become.
9. Docking Employees Illegally
- Legal ways of reducing employees' pay for disciplinary reasons are
limited. Managers are advised to consult HR and your labor attorney before
taking this step.
10. Illegal Reduction in Overtime Rate -
Strict guidelines pertain to overtime pay. Employees
cannot waive their right to overtime pay in most situations.
MVRMA has developed an Employment Practices Checklist
that can be used to make sure you stay off the employment law hit list. To
obtain this checklist or more information concerning employment practices
loss control, contact our office.
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- Dinsmore & Shohl
Ohio Supreme Court Bucks United States Supreme Court
And Requires Heightened Scrutiny In Eminent Domain
Arena
On June 26, 2006, the Ohio Supreme Court issued a 54
page decision unanimously striking down the City of Norwood’s use of eminent
domain for a private developer, and calling a halt to the nearly $125
million development project planned just a few miles south of Cincinnati.
Norwood v. Horney (2006) 2006 Ohio 3799.
This case began when a private developer approached
Norwood with a plan to purchase dilapidated properties along Interstate 71
for a mixed-use development. The development would have reinvigorated a
"blighted" area and generated approximately $2 million in income. While the
developer was able to acquire nearly all of the property needed, two
property owners refused to sell. After an urban renewal study confirmed the
area was in a deteriorating condition and would only worsen with the passage
of time, Norwood took steps to implement eminent domain for the seizure of
the remaining properties. The property owners filed suit.
Both the Hamilton County Court of Common Pleas and the
First District Court of Appeals agreed the study had adequately proved the
need for economic development given the community’s deteriorating future.
However, the Ohio Supreme Court reversed those decisions, holding that
Norwood had acted improperly in using eminent domain as a tool for community
improvement.
This ruling was in direct opposition to last year's
decision by the United States Supreme Court in Kelo v. New London
(2005), 126 S. Ct. 326. There, the Court stated the seizure of
private property for an economic development project to be completed by a
private party was a valid use of the power of eminent domain under the U.S.
Constitution. However, the U.S. Court specified state legislatures should
determine what public needs justify the use of the state's taking power.
The Ohio Supreme Court rejected the Kelo
rationale, holding that "although economic factors may be considered in
determining whether private property may be appropriated, the fact that the
appropriation would provide an economic benefit to the government and
community, standing alone, does not satisfy the public-use requirement" of
the Ohio Constitution. The Court called for "heightened scrutiny" when
reviewing statutes that regulate the use of eminent-domain powers and stated
that eminent-domain should only be used as a last resort. The Court went on
to find several constitutional problems with Ohio's eminent-domain law.
These problems included: 1) that the law allowed private property to be
taken solely for economic benefit of the community; 2) that the standard for
using eminent domain to eliminate "deteriorating areas" had become so vague
that it was "a standardless standard;" and 3) that the law did not allow
property owners the right to appeal until after the property was already
taken.
This decision marks a significant departure from more
than 40 years of Ohio law, and is the first time a state supreme court has
addressed the economic development rationale post-Kelo. While touted
by public rights' activist groups as a "crushing blow" to Kelo, the
final effect of this decision remains to be seen. For example, it should be
noted the Ohio Supreme Court did not make a categorical ban on the "economic
development rationale" and still permits "economic concerns to be considered
in addition to other factors, such as slum clearance, when determining
whether the public-use requirement" has been met. It remains to be seen
whether the Ohio court will interpret the "other factor" exception narrowly
or broadly.
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- Craig Blair
As part of the annual budget process, I recently met
with each member to conduct a claims audit. The purpose of the audit was
to review the member’s claim files and discuss pending MVRMA issues,
current or past claims, settlements and open reserves. Since loss
experience is weighted three times in the pool contribution factor (PCF),
an important part of the discussion centered around the effect the
member’s losses will have on the premium for the upcoming year.
Comparing this year’s loss experience to last year’s,
approximately the same number of members had decreases as increases. Since
loss experience is the driving force behind the PCF, members whose losses
went down significantly should expect a decrease in the percentage they pay
to the pool, whereas members whose losses went up will generally pay a
larger share of MVRMA’s expenses.
During the audit, I tried to focus on what may have
caused the member’s experience to change appreciably. Where experience
decreased, it was generally because a bad year dropped off the four year
average. Increases were sometimes due to unavoidable weather related
incidents, but most times they were due to serious claims or lawsuits. Some
lawsuits are hard to avoid, and regardless of the lawsuit’s merit, MVRMA
still has to provide a defense. Historically, 65% of our lawsuits are
dismissed, but the cost of defense, which can be substantial, is still
included in the member’s loss history.
When reviewing claims, I tried to identify any trends
in the type of losses or patterns of frequency within a department. I also
offered a comparison with other members of similar size who offer similar
services to illustrate what loss experience might reasonably be expected.
Claims do vary from year to year, and while avoiding storms or the "big
claim" is a factor, MVRMA’s experience tells us avoiding adverse loss
history generally correlates to the importance a city places on safety and
loss related activities.
There are two key factors for establishing some control over claims:
education and accountability. To educate your employees, written policies
must be developed in order to establish acceptable guidelines. These
policies must then be shared with all employees, and regular safety meetings
must be held to emphasize the need for general safety and to discuss issues
that relate directly to what’s occurring within your city.
Accountability starts with internal reporting within each department.
Each employee involved in an incident should complete a report on the day it
occurs and review the report with the department head. The department head
should forward the report to the city's safety committee or other
appropriate party with whatever corrective measures have been taken. The
safety committee or appropriate party should review the report to determine
that all safety issues have been addressed. Having these procedures in place
will hopefully lessen the possibility of a similar incident occurring in the
future and will demonstrate the city’s commitment to safety in the
workplace.
If anyone needs help with written policies or setting up safety
committees or meetings, please call MVRMA’s Loss Control Manager Starr
Markworth.
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-Starr Markworth
Seminar on Generational Differences
For the first time in history, four distinct
generations - Silents, Boomers, Xers and Millennials
- are employed side by side in the workplace. With differing values and
seemingly incompatible views on leadership, these generations have stirred
up unprecedented conflict in the workplace. Effective management of this
generational divide is vital to longevity and success.
At work, generational differences can affect
everything, including recruiting, building teams, dealing with change,
motivating, managing and maintaining and increasing productivity. Think of
how generational differences, relative to how people communicate, might
create misunderstandings and cause high employee turnover and difficulty in
attracting employees and gaining employee commitment.
Research indicates that people communicate based on
their generational backgrounds. Each generation has distinct attitudes,
behaviors, expectations, habits and motivational buttons. Learning how to
communicate with the different generations can eliminate many major
confrontations and misunderstandings in the workplace.
MVRMA is co-sponsoring a program with Miami Valley
Communications Council and the South Metro Regional Chamber of Commerce on
this topic. "Connecting the Generations: The Four Generation Workplace is
Here to Stay" will be held on Wednesday, November 1 at the Holiday Inn
at the Dayton Mall. At 8:30 a.m. a continental breakfast will be available
followed by the program which will begin at 9:00 a.m. and run until noon.
This interactive workshop will give you a chance to
learn, grow, stretch, ---speak up, speak out and share your own experiences.
Everyone is affected by this new workplace phenomenon and everyone can
benefit by finding ways to resolve conflicts and create a new set of shared
concerns and values. We will:
l Examine the characteristics that distinguish
the four coexisting groups
l See the most common complaints managers
have about twenty-somethings
l Show you the things managers do that
drive their younger employees crazy
l Explore principles, tips, methods and
practices for dealing with the new multigenerational workplace
Ann Bachmann will be the instructor for this course.
She is a frequent presenter for MVRMA training sessions, including the
successful supervisory program. She consistently receives excellent
evaluations from employees who attend her seminars.
Please contact me for more information on this
exciting program either by phone 937/438-8878 or by email smarkworth@mvrma.com.
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Certificate of Insurance Guidelines
Although some of the following information is basic,
we thought it would provide a thorough review of certificate of insurance
guidelines for MVRMA cities.
You should receive certificates of insurance from
tenants, vendors and from contractors hired for activities such as tenant
improvements, alterations and additions. Consequently, it is essential that
you know how to compare the information provided in the certificate with the
applicable insurance requirement in the lease or other contract.
What is a certificate?
A certificate of insurance is a document that gives
evidence of the insured's financial ability (via an insurance policy) to
respond to a claim. Under most circumstances, no coverage benefits are
afforded to the certificate holder; the certificate merely confirms that the
subject company carries insurance.
Why are certificates needed?
Certificates give evidence that the other party has
appropriate insurance to cover the claims for which they are responsible.
When are certificates needed?
Certificates are needed when another party (such as a
contractor janitorial service, security service, etc.) performs services on
your behalf or has your property in their care, custody and control (e.g.
leasing your premises or your equipment).
Who should provide the certificate?
The other party's insurance agent, broker or risk
management department should provide the certificate to you.
What should a certificate include?
1. Name of insurance company issuing each policy.
2. Named Insured
3. Address of Named Insured
4. Description of Coverage
5. Policy Numbers
6. Policy Periods
7. Coverage Type (Occurrence vs. Claims-Made form). If
coverage is claims-made, the certificate will also include the retroactive
date and length of time allowed as extended reporting period.
8. Limits of Liability
9. Deductibles (or SIRs)
10. Description and location of operations
11. Name and address of certificate holder
12. Notice of cancellation provisions
13. Authorized signature and date of issuance
Most certificates are issued on a standard ACORD
Certificate of Insurance Form. However, if you receive a certificate that is
not on a standard form, the above list will help you in reviewing the
document for the appropriate information.
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October 11, 2006
Do You Have the Right Stuff?
Dimensions of Leadership
8:30 am - 3:30 PM
MVCC
November 1, 2006
Connecting the Generations-
The Four Generation Workplace
is Here to Stay
8:30 am - Continental Breakfast
9:00 am - noon - Program
November 7, 2006
Annual Legal Update
Time and Place TBA
November 23, 2006
Thanksgiving
MVRMA Offices Closed
December 18, 2006
MVRMA Quarterly Board Meeting
MVRMA Offices
Holiday Luncheon to follow
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At the September 25, 2006 Quarterly Board Meeting, the
Board took the following actions:
- Approved the Open Claim & Incurred Loss Report dated
September 6, 2006
- Approved the three-year contract with Godbold,
Malpere & Company to provide actuarial services
- Approved the one-year contract with Carol Riggle to
prepare financial statements for the year ending 12/31/06
- Accepted the loss funding study prepared by Godbold,
Malpere & Company for LY19 - 2007
- Approved the 2007 Preliminary Expenditure Budget and
PCF
- Accepted the Financial Audit and CAFR for the year
ended 12/31/05
- Approved the new agreement with attorney firms
Surdyk, Dowd & Turner and Dinsmore & Shohl
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