The NOC on Wal-Mart (continued)

The Workers’ Compensation Board first noticed that Wal-Mart’s numbers seemed out of line when it compiled its report for the first quarter of 2004. "We waited until after the first quarter to act, in order to calibrate the numbers. When we got the figures for the second quarter, they were still off, so we contacted Wal-Mart headquarters in Bentonville."

Because of the concern over the second quarter numbers, the Wal-Mart legal counsel appeared before the Maine Workers’ Compensation Board last fall, and gave reassurance that the company would look into the matter. When the third quarter numbers came in unsatisfactory, Wal-Mart and the Board concluded that the figures may have been distorted by over-reporting. However, the fourth quarter numbers, which have been processed but not yet officially released, are, in Minkowsky’s words, "still troubling."

"The over-reporting issue has been resolved," he says, "but the ratio of MOPs to NOCs is still unacceptable."

Wal-Mart representatives will be attending the Board’s fourth quarter meeting, which has yet to be scheduled, but is open to the public and will take place within the next 30 days. They have offered to work with the Board and attend a workshop on Maine’s workers’ compensation laws. "It may be hard to administer their program in Maine from [Wal-Mart headquarters in] Arkansas," says Minkowsky. "Every state has different rules. However, if they are going to be conducting business here in Maine, they need to know and comply with this state’s rules."

"In the end," he asserts, "we need more than assurances, we need to see changes in the numbers. We hope to get Wal-Mart’s cooperation, but we reserve the right to conduct an on-site audit."

Paul Dionne, Executive Director of the Maine Workers’ Compensation Board, hopes that Wal-Mart’s compliance will improve, obviating the need for an audit. "We’ve been in good dialogue," says Dionne. "We’re trying to understand Wal-Mart’s philosophy of claims management . . . We would hope to see improvement within three to six months."

Minkowsky would like to see more balanced numbers for Wal-Mart in the figures for the first quarter of 2005, which are currently being processed. The Wal-Mart Corporation declined to comment on what measures it was taking to address the Maine Workers’ Compensation Boards’ concerns, or whether its initial 2005 numbers would demonstrate the improvements hoped for by the Board.

While both Dionne and Minkowsky insist that the Board is not discussing punitive measures at this time, other insurers have been disciplined by the Board since it began monitoring for compliance in 1999.

Hanover Insurance was the first company that the Board pursued for questionable claims management; when Hanover did not agree to a consent decree (essentially a guilty plea), the Board prosecuted them and won. Hanover was audited and rehabilitated, and is now in full compliance. The board brought Atlantic Mutual Insurance Company under review for similar concerns, and the company has since left the state.

Gates MacDonald, St. Paul Insurance Group, Hartford, Royal & Sun Alliance, Georgia Pacific, and Esis Ace Insurance have all pleaded guilty to questionable claims management, and are in various stages of rehabilitation through the Workers’ Compensation Board. Esis Ace has also pleaded guilty to willful violation of the Maine Workers’ Compensation Act of 1992. Under the Act, corporations are subject to a civil penalty of up to $10,000 for willful violation of the state’s workers’ compensation laws. CMI is the first insurer to be reviewed for violations of the Act’s provisions against repeated unreasonable claims controversy, which could only be measured once the WCB began reporting quarterly last year.

The Maine AFL-CIO, which keeps close tabs on workers’ compensation issues in the state, supports the efforts of the Board to bring Wal-Mart into compliance. Says Ed Gorham of the AFL-CIO’s Augusta office, "For years, workers’ compensation has been an issue in Maine. Look at Wal-Mart — there was nothing much being done or being said about [Wal-Mart’s workers’ compensation record], and it shouldn’t be tolerated or allowed."

Gorham says the Maine AFL-CIO would like to see Wal-Mart "clean up the stores so they don’t have so many injuries to begin with, and pay workers fair compensation when they are hurt. There are so many issues with Wal-Mart and their continuing pattern of disrespect for workers and workers’ rights." Wal-Mart reported more than two and half times as many workers’ compensation claims in the first three quarters of 2004 as its largest retail rival in the state, Hannaford.

In the meantime, the Workers’ Compensation Board will continue to examine each contested claim. "I’m seeing payment delays of 100, 200 days," Minkowsky confides. "I just saw one the other day that was a delay of 600 days on an accident that there was no doubt had happened in the workplace."

"Wal-Mart may try this in other states," says Minkowsky, "but if an audit reveals that they are unreasonably contesting claims, the state of Maine will not tolerate such violations." Steven Minkowsky and the WCB may be forced to teach Wal-Mart a lesson about the way life should be.

Christie Toth can be reached at cmtoth@gmail.com.