How a 90-cent error cost company $6,000!
October 17, 2011 by Jim BurgerPosted in: In this week's e-newsletter, Latest News & Views, new court decision, Special Report, Workers' comp
PDF Workers’ comp experts agree: One of the worst moves you can make with injured employees is to let them think you’re an adversary. After all, there are plenty of lawyers looking to befriend them.
Hell had no fury like this scorned worker, whose work-related injury was apparently minor — the injury itself ended up costing the company only $208.70.
But by the time the fight was over, the company was out $21,000. And you won’t believe where the last $6,000 came from.
In Richard v. Coastal Culvert & Supply, the trouble began when the employee hurt his left knee on the job.
Numbers reversed
After 13 months of haggling over the matter, employer and employee finally settled it. The company agreed to pay the previously mentioned $208.70 plus attorney fees of $8,500, and a penalty of $6,000! The total: $14,708.70.
So the company sent the employee’s lawyer two checks — one for the 6 grand, and one for $8,707.80. Oops. That second one was supposed to be for $8708.70, but someone transposed two numbers.
Here’s where things get really nasty.
When the 90-cent underpayment came to light, the company sent another check for the difference.
But by then, four months had elapsed, creating a potential legal problem for the company and a bonanza for the employee, who wasn’t about to let the matter go.
State law says if any award in such a case isn’t paid within 30 days of its due date, there’s a penalty: either 24% of the unpaid amount (22 cents in this case) or $100 a day (!) but no more than $3,000, whichever is greater.
When the employee (and his lawyer) pressed for the penalty, the state’s comp court wouldn’t go for it. But the employee persisted and found a sympathetic ear at the appellate level.
We recognize that an underpayment of 90 cents seems insubstantial, the court wrote, but the law is the law, and it makes no distinction between small infractions and large ones.
The only thing that could have saved the company, the court said, would have been a determination that the mistake resulted from a condition beyond its control. A clerical error didn’t qualify.
Its ruling: The company had to shell out the full $3,000 penalty plus another $3,000 in lawyer fees!
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October 18th, 2011 at 8:37 am
$.90…really?
October 18th, 2011 at 8:49 am
This is absurd. There are people out there to take advantage of these kinds of things, which is sickening.
October 18th, 2011 at 9:02 am
It’s a pay day for lawyers. They have the customer’s ear and the they will nod willingly if they can get cash.
October 18th, 2011 at 9:21 am
They tried to get the $.90, but the company blew it off. I’ve been in this worker’s shoes and I just took what they offered, but it’s frustrating when a company is not willing to cooperate. They had the opportunity to close the matter and move on, but they chose not to. Don’t f*ck with lawyers.
October 18th, 2011 at 9:32 am
Do it right the first time. Don’t blame the flies if you leave the windows open.
October 18th, 2011 at 11:37 am
So this employee got his extra $6,000, but given that this is now known to everyone, no company will hire him in the future because he bickers over 90 cents. A pyrrhic victory if you ask me.
October 18th, 2011 at 12:02 pm
Excuse me, Captain Safety, but the company DID send the $0.90 after they discovered the accounting error. THEN the lawyers got involved a second time since the correction was three months late. The worker did not HAVE to bring the lawyers in, the worker CHOSE to. Doubtless it was because the worker had had so much trouble in the first place. My question is why neither the worker nor the worker’s lawyers noticed that the wrong amount had been sent… or DID they?
October 18th, 2011 at 4:53 pm
This is yet another ludicrous example of litigation gone insane, but at the same time I have to ask; why didn’t the company in question just pay the doctor bill when this mess started? Quite a disaster stemming, as it did, from a fairly minor injury.
October 19th, 2011 at 5:35 pm
The company should just smile and pay what they owe…and have 10 truckloads of Kleenex delivered in his front yard since he is such a crybaby!
October 20th, 2011 at 3:24 pm
I agree with you Jason F but he’d probably get anouther 6,000 if they dont make sure it’s bounty the quicker picker uper
November 8th, 2011 at 3:33 pm
Good God Yawl! This is terrible. We joke, but damn if it ain’t a serious thing. This employee hurt his knee, the company paid for it in spades. The employee, I assume recovered his health. Why the extra? Well, I tell you why, the employee and the lawyer has no integrity