Texas Supreme Court Decision in Texas Mutual Insurance v. Ruttiger Strengthens State’s Workers’ Comp Law

The Supreme Court of Texas issued a decision today in Texas Mutual Insurance Company v. Timothy J. Ruttiger that strengthens a law affecting millions of Texans—the Workers’ Compensation Act.

The Court reversed the Houston Court of Appeals and rendered judgment that Mr. Ruttiger take nothing on his Insurance Code and Texas Deceptive Trade Practices Act claims.

Justice Phil Johnson wrote in strong terms that a bad faith cause of action is inconsistent with the current workers’ compensation system.

“[If the plaintiff were to prevail, the precedent would build] additional costs into the system by increasing litigation expense to employees, insurers and employers,” Justice Johnson wrote. “The way the dispute was resolved after Ruttiger initiated the dispute resolution process is the way the Act is designed to function.”

Lawsuits claiming “bad faith” on the part of all insurance carriers, Texas Mutual included, were on the increase when the Ruttiger case first came to the courts. In 2004, Texas Mutual disputed Mr. Ruttiger’s claim for an on-the-job injury because his employer reported that he was hurt at a non-work related softball game. Texas Mutual ultimately entered into a compromise agreement with Mr. Ruttiger over the claim. In 2006, a trial court found that the company’s adjuster had acted in “bad faith” by believing the employer instead of Mr. Ruttiger. The court awarded money to Mr. Ruttiger in excess of the amounts Texas Mutual had already paid him to cover his medical costs and replace his wages. He was also awarded extra money for his “mental anguish over having his claim disputed.”

The First Court of Appeals in Houston upheld the original decision, and Texas Mutual appealed to the Supreme Court.

“The Texas Supreme Court has today given careful consideration to the many speedy remedies and protections that the Legislature has granted to injured workers,” Mary Barrow Nichols, General Counsel and Senior Vice President for Texas Mutual, said. “It found that permitting an injured worker to additionally recover with a lawsuit of this kind is inconsistent with these remedies and protections. This decision is a significant victory for Texas employers.”

To see the full text of the decision, please visit www.supreme.courts.state.tx.us.

Manufacture a Safe Environment

Due to the nature of work, manufacturing industry employees have a high exposure to workplace hazards. In 2009, nearly five out of every 100 employees in the manufacturing sector were injured on the job, according to the U.S. Department of Labor, Bureau of Labor Statistics.

According to the North American Industry Classification System, the manufacturing industry involves the mechanical, physical or chemical transformation of materials, substances or components into new products. The manipulation of such materials creates the high risk of workplace accidents. The environment is often demanding and fast paced—two factors that can contribute to workplace accidents.

Creating a safe work environment is a key component to keeping industrial employees protected from these hazards; and an essential part of effective safety management is identifying workplace hazards.

The first line of defense is to remove the hazards of the workplace. When this isn’t feasible, creating barriers between
the employees and the hazards can keep them safe. The next tool
available to protect employees is to routinely educate them about the hazards present and how to avoid injuries. Education should be a core part of the training environment in the workplace—no matter what the industry is. It can also be helpful to provide warning signs identifying where hazards exist.

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The Importance of Being Educated (About Safety)

As we all know, children are our future. Beginning around age five, most children spend a great deal of time in school. Because of this, parents entrust teachers to not only teach their children reading, writing and arithmetic but also to keep them safe during their time away from home.

School districts emphasize the importance of safety in schools—and with school buildings housing thousands of students at one time, safety is an important component of school life. Teachers and other school personnel need to consider their own safety on the job, in addition to the safety of their students.

For teachers and all other school employees, including cafeteria workers and janitorial staff, the best way to prevent on-the-job injuries is to create a greater awareness of these potential hazards.

The most frequent injuries will be those sustained from slips, trips and falls. There are a number of safety prevention tips to help alleviate potential hazards.

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Keep Your Employees Well Grounded

We’ve all slipped on a slick floor, tripped over a child’s toy or fallen off a ladder. When it happens at home, we usually end up with minor, though sometimes embarrassing, bumps, bruises or scrapes. When it happens at work, it can be far more serious.

Falls are the third leading cause of workplace fatalities, behind automotive accidents and contact with equipment. Slips, trips and falls also carry direct and indirect costs.

Direct costs, which include medical and income benefits for the injured worker, are covered by the insurance carrier. Indirect costs, such as making up for lost production, come out of your pocket. Indirect costs can be one time to 10 times higher than direct costs.

The average non-fatal slip, trip or fall injury results in about $23,929 in direct costs. If we use a conservative one-to-two ratio, that seemingly minor injury will cost you $47,858.

So, that’s the bad news. The good news is that you can prevent most slips, trips and falls.

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Companies Benefit from Combining Work and Wellness

Unhealthy habits can affect a person’s quality of life and their general feeling of self-worth, as well as impacting their work performance and motivation. From an employer’s perspective, an unhealthy worker can result in increased health care costs and workers’ compensation claims related to health problems. According to the Wellness Councils of America, more than 80 percent of U.S. businesses with 50 or more employees have some form of health promotion program. These programs are designed to enhance the health of a company’s most important asset—its employees.

At Texas Mutual, we have a long history of supporting wellness at work.  The company provides a variety of wellness tools and resources for its employees to reduce health risks and to promote healthy behaviors, including health risk assessments, fitness centers at all locations, free yoga and cardio-focused classes located onsite, prizes, apparel, and reduced health insurance premiums. The program has resulted in a number of positive results, such as:

  • Employees scoring in the good and excellent health categories increased by 8.2 percentage points from 2010 to 2011.
  • Participants with lower health risks in the areas of body mass index, blood pressure, HDL cholesterol, triglycerides, and glucose showed lower average claims cost.
  • As overall employee health improved, sick leave usage decreased.

The following components are critical to a successful wellness program:

  • Executive and management support, including leading by example, encouraging participants, and promoting a culture of wellness.
  • Frequent communication, including advance notice of program features, consistent messaging and branding, and sharing success stories.
  • Implement and build program slowly while being sure to apply standards fairly and consistently.
  • Use program data and results to adjust and enhance the program accordingly.

The Journal of Occupational and Environmental Medicine estimates the cost of obesity on U.S. employers is $73.1 billion annually in medical costs and lost productivity. This cost is a burden that can be avoided, at least in part, with a healthier lifestyle approach. General benefits that are associated with a successful corporate wellness program also include reduced stress, improved morale, reduced health care and insurance costs, appeal to potential employees, reduced absenteeism and increased company loyalty.

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