IN THE SUMMER OF 1998, Wal-Mart employee Winifred Snider was on an 18-foot ladder arranging boxes of shower curtains when a box gave way. “I fell backward and straight to the concrete floor,” she recalls. Her wrist was broken in two places. Once the cast came off Snider’s arm, doctors saw that her wrist was swollen, her skin shiny and cold, the hair standing on end. Snider was the unfortunate victim of a rare and bizarre disorder known as “reflex sympathetic dystrophy,” in which the body, in a sense, disowns a traumatized limb. A host of doctors examined her, including specialists at the UW and Harborview. They all expressed alarm at her condition. “She had the worst case of RSD I’ve ever seen,” says Dr. David Drobnicki, a rehabilitation expert in Bellingham. Drobnicki attempted to get Snider into an aggressive therapy program at the UW Pain Clinic to try to restore function to her arm and alleviate the intense pain. It would have required overnight stays and daylong treatments, and likely would have cost in the range of $17,000, Drobnicki says. But, for weeks, Wal-Mart refused to authorize this treatment. Drobnicki says the company’s headquarters staff in Bentonville, Ark., was difficult to deal with. “Every step along the way, they either lost reports or denied they’d received them,” he says. Wal-Mart ultimately agreed to pay for the recommended care, but by then Drobnicki had concluded that aggressive measures were no longer appropriate. He later wrote to Wal-Mart’s attorney: “It is my opinion that [Wal-Mart’s] delay . . . during a crucial time in this disease process negatively impacted her long-term use of the right upper extremity. . . . It may have been possible to prevent the spread of this syndrome with more timely treatment.” Barbara Drew, a paralegal who oversaw Snider’s case at the Bellingham law firm Knies and Allen, also wrote a letter of complaint to state regulators, requesting—successfully—that a fine be levied against Wal-Mart for its
handling of the claim. “In all the years I have been practicing as a paralegal representing hundreds of injured workers,” she wrote, “this has been by far the most abusive management of a seriously injured worker that I have ever witnessed.” After nearly two years off work, Winifred Snider attempted to return to Wal-Mart, but she lasted only a day. “They sat me in front of a music store on a stool,” she says. She has been at home and unemployed ever since. “I still don’t have use of my arm and my hand, it’s all deformed,” says Snider. “I’m living on 18 to 20 Advils a day and no paycheck.”
If what state regulators say is true, Snider’s experience is not unique. Officials at the Department of Labor and Industries contend that Wal-Mart mistreats its injured employees in Washington. According to a state order issued November 30, over the last seven years Wal-Mart has “repeatedly and unreasonably” delayed giving injured workers the benefits they were owed under workers’ compensation laws, and, in some cases, Wal-Mart employees were not allowed to file workers’ comp claims at all.
“Time and again,” says Gary Moore, head of Labor and Industries, Wal-Mart has shown itself “unwilling or unable to manage its workers’ comp program as required by law.” Moore’s agency has audited the company, fined it, issued “directives,” put it on probation, and now is moving to seize control of Wal-Mart’s entire injured worker program—a step it has never before taken except when an employer was going bankrupt. “This is not an action we take lightly,” says Moore. “We worked with Wal-Mart for several years to improve their program. But they failed to make the necessary progress.”
An examination of recent cases involving Wal-Mart shows that workers’ comp claims can be far from black-and-white. And in fact, Wal-Mart has frequently prevailed over L&I in disputed cases that have come before the Board of Appeals in the past.
Speaking from Arkansas, Wal-Mart spokesperson Bill Wertz maintains his company is doing better. “We feel somewhat puzzled by the department’s action and feel it is unwarranted,” he says. “It’s true we have not handled every case perfectly. We do acknowledge we’ve made mistakes in the past, most of them minor in nature.” But, he says, “We feel we’ve clearly demonstrated steadily improving performance.” The company is appealing L&I’s order to the Board of Industrial Insurance Appeals, an independent state agency with its own judges.
WAL-MART IS THE BIGGEST employer in the United States, outside of the government, and the biggest retailer in North America. It is as much a part of the culture in midsized American towns as Starbucks has become in urban centers. Its vast stores, carrying everything from drugs to hardware to CDs to groceries, helped to launch the “big-box” retail phenomenon around the world, and the company served as the model for Amazon.com’s (now discredited) ambition to sell everything imaginable online. Wal-Mart has taken heat for destroying small merchants wherever it goes, and many towns fight to keep the “big-box” giant out. The company is also a perennial target for unionization drives and lawsuits, and is well known for its tough tactics against both.
The stores do a phenomenal volume of business, requiring intensive manual labor to stay stocked. “Everything’s moved by hand,” says Chuck Gibbons, former assistant manager of the Auburn store, one of two dozen Wal-Marts scattered around the state. (The Wal-Mart nearest to Seattle is on Rainier Avenue in Renton. The company also has a Sam’s Club warehouse outlet on Aurora.) Eileen Ocello, who once worked the graveyard shift at the Port Orchard store, says, “You’re up and down all night long. First you unload the trucks, then you unload the pallets. You’re carrying 30-pound boxes of hair spray or whatever and putting them in various positions. You take down product from the risers and fill holes on the display shelves. Then you rearrange the risers and stack those three high. I hadn’t done that kind of physical labor in a long time.”
State regulators do not suggest that Wal-Mart runs a more dangerous workplace than comparable employers. Wal-Mart has been cited for safety and health violations 28 times in the last five years, a record that “is generally not remarkable or unusual for a retail establishment of that size,” according to an L&I spokesperson.
Where Wal-Mart has slipped up, say officials, is in the aftermath of an injury.
Under the workers’ comp system adopted by most states a century ago, employers are required to cover the medical bills of people hurt on the job. If injured workers require time off, they are entitled to a portion of their lost wages. Those who suffer some kind of permanent damage can receive payments in perpetuity, depending on their loss of earning power. It’s a no-fault system—the employee gets paid regardless of what caused the accident; the employer, in turn, is free from the threat of lawsuits and off the hook for pain and suffering.
In Washington, most employers pay premiums into a state fund and Labor and Industries pays out the claims. However, employers like Wal-Mart, Boeing, Microsoft, and others who have at least $5 million in assets are allowed to manage their own claims and pay them directly out-of-pocket. Big companies prefer this “self-insurance” method since it gives them much greater control over their costs.
“They have a profit incentive to deny benefits,” argues workers’ comp attorney Wayne Lieb. “Every dollar they don’t pay out is a dollar they keep.”
Regulators in Olympia contend that Wal-Mart has managed its program so badly, for so many years, that it should no longer be allowed to self-insure. L&I says the company “repeatedly failed” to respond to worker claims, or pay workers their benefits, in a timely way; that it prematurely cut off employees’ replacement wages or “miscalculated” them; that it has shown “consistently poor record keeping,” and has even failed to provide “adequate first aid facilities.”
Among all the self-insured companies in Washington, Wal-Mart is “the worst, absolutely the worst,” claims Chris Stendal, paralegal at Knies & Allen, which specializes in workers’ comp.
In some instances, L&I’s Gary Moore charges, Wal-Mart employees were not even given the chance to submit a workers’ comp claim. He says Wal-Mart personnel files show cases in which employees were hurt at a store, yet no accident report was ever sent to company headquarters—the first step in setting a claim in motion. “That’s disturbing,” says Moore.
When Eileen Ocello tore her meniscus one night while descending a ladder with an armload of shampoo, she says managers “made no overtures to help me or explain the law. All I ever got was the runaround.” It wasn’t until a year later, when Ocello could no longer bend her knee, that a new manager arrived at the store and a formal injury report was sent to headquarters, and even then, Ocello says she had to chase after a Bentonville-bound truck and place it on there herself. Wal-Mart later paid for her surgery.
BECAUSE OF PRIVACY restrictions, L&I will not release the names of any individuals whose cases form the basis of its complaints against Wal-Mart. But Seattle Weekly has examined a dozen cases that seem to echo L&I’s concerns.
For example, Chuck Gibbons of Kirkland was left hanging for months in chronic, debilitating pain while Wal-Mart resisted his back injury claim. Gibbons, who, ironically, was head of the Auburn store’s safety committee, developed a stiff neck one night in April of ’98 after hauling countless boxes of Easter candy and other holiday merchandise onto the sales floor. A few months later, Gibbons was pulling merchandise from the top of a pallet—reaching, he admits, too far from his body, away from the “green zone” that is described in the Wal-Mart safety training—when he felt a hard pull in his neck and shoulders. He sought treatment, which Wal-Mart paid for, and he never lost any work time.
But the situation changed once Gibbons left to manage a Black & Decker outlet store in North Bend. Gibbons felt his condition getting worse, and he petitioned L&I to reopen his claim. Wal-Mart opposed the move, and “from December till May [2000], nothing happened,” Gibbons recalls. Throughout this period, he contends, Wal-Mart’s Bentonville staff was nearly impossible to reach—by him, his doctor, or even L&I officials.
Eventually L&I ruled in his favor and Wal-Mart authorized an expensive diagnostic MRI. It showed Gibbons’ herniated disk had worsened, and Gibbons’ doctor recommended surgery. But Gibbons says Wal-Mart was mute. “We made eight calls [trying to schedule surgery] and never got an answer back.” A couple weeks later, Wal-Mart formally protested the claim to L&I, saying that Black & Decker should assume responsibility.
Meanwhile, Gibbons says, “I could do no lifting over my head. My personality changed because I hurt so much. I’d spend my days off sitting in a chair. I had started off with 10 milligrams a day of OxyContin [a prescription painkiller] and now I was up to 60 milligrams a day.”
Gibbons was sent to doctors chosen by Wal-Mart for a second opinion, and they, too, agreed that Gibbons’ symptoms were due to his Wal-Mart injury and that surgery was a “reasonable” course. Even so, Wal-Mart went on to appeal the case to the Board of Industrial Insurance in August of last year. “My hearing before the judge was scheduled for March 20, 2001,” says Gibbons. “So we’re sitting and waiting.”
Then, late last December, he received a letter to the judge from Wal-Mart’s attorney, agreeing to drop the appeal. “It was a nice Christmas present, it really was,” he says. Gibbons immediately started chasing down Wal-Mart claims managers in Bentonville to schedule his surgery, which he underwent in January. The procedure forced him to miss some workdays but Wal-Mart paid his time loss—65 percent of his 1998 wages, as mandated by law. “The pain is still there but it’s much less,” says Gibbons, who returned last month to his job at Black & Decker. “My meds are way down and my quality of life is totally different.”
PATRICIA MCGILL GOT HURT just five months after starting as a salesperson in the fabric department of the Port Orchard Wal-Mart. One day, at closing time, as she went to take out the trash, she slipped on some spilled dog food, fell backward, and was knocked unconscious, her head slamming into the corner of a pallet. She says store associates picked her up, placed her in a wheelchair, and called her husband, who then took her to the emergency room.
She was out for several months, undergoing physical therapy and rehab. “I had lost a large part of my memory,” says McGill. “I was having seizures. I passed out every time I stood up.” Wal-Mart covered her medical bills and a portion of her wages, and when she finally went back to the store, the company gave her light-duty work folding towels and performing craft demonstrations. “I only stayed briefly,” says McGill. “It wasn’t an acceptable job to me.”
She continued to have symptoms and at one point, experiencing vertigo, fell down a flight of stairs and shattered a tooth. After that, she says, Wal-Mart refused the dental bill and eventually put the entire claim under investigation. McGill says her doctor believed she had permanent nerve damage but that Wal-Mart sent her for several second opinions. One such physician appeared to be a moonlighting army doctor, who met her at 9 o’clock at night at an office above a bank; he told her that all her symptoms were due to depression, according to McGill, and suggested that she cheer herself up by going shopping.
“I told him, ‘Of course I’m depressed. I can’t work, I can’t function.'” She had lost her drivers’ license because of the seizures.
Months passed and McGill says she stopped receiving any response from Wal-Mart. “I couldn’t get my case manager to call me back.” McGill now works as a shelter manager for the YWCA in Tacoma, and she says her medical bills may soon be garnished directly from her wages. A hearing in the case is scheduled for May.
WAL-MART SPOKESPERSON Bill Wertz did not wish to comment on any of the specific cases cited here, except to say that they “cannot be held to be representative.”
Wertz observes that every large employer faces difficult cases such as those mentioned in this story, “cases that involve a dispute over what is really a work-related injury and what is a preexisting or chronic condition; whether proper procedure is followed; whether a person had the right authorization from a doctor to count time off or got preapproval before going through a medical procedure; or where there’s a difference of opinion among doctors. Those are legitimate issues of dispute. These situations are not unique to Wal-Mart and are not indicative of poor performance on the part of Wal-Mart.”
As Wertz’s comments attest, the no-fault workers’ comp system that was supposed to provide for swift and sure payment has instead become a battleground for trial lawyers and dueling doctors—and not just when Wal-Mart’s involved. Individual claims are often clear as mud, with symptoms and disorders that may not show up on any objective diagnostic test, and employees who may have multiple complicating factors, such as workplace disputes or abusive situations at home.
Loss of an arm and other clear-cut catastrophic events “are very rare,” notes workers’ comp attorney Wayne Lieb. The real cost drivers, he says, are the “garden-variety strains and sprains,” which “lend themselves to manipulation and argument”—on both sides.
Fraudulent claims are also a problem, as everyone in the workers’ comp world acknowledges. Just as companies have a major incentive to deny claims, injured workers—who may be at home, in pain, collecting a paycheck, and nursing a grievance against their employer—can have a strong incentive to maximize symptoms or fake them outright. In one recent case, a Wal-Mart employee claimed to have hurt himself by falling into a grease pit. L&I ordered Wal-Mart to pay the claim, but Wal-Mart accused the man of inventing the accident and got the case dismissed.
Wal-Mart’s efforts to resist questionable claims, however, may have been carried out with excessive zeal. Gary Moore of L&I charges that Wal-Mart has “unreasonably” forced its employees into legal proceedings to get what’s owed them.
Take the case of Cheryl Spruill. She was working as a stocker in the lawn and garden section of the Auburn store in spring of ’98 when a heavy piece of gardening equipment that she and her manager were carrying fell on Spruill’s chest. She was out of work for three months.
Wal-Mart accommodated her with a lighter-duty job in the beauty aids department, but, after a few weeks, Spruill chose to go to work as a waitress instead. While working at her new job, Spruill’s pain got worse and she was eventually terminated because she could not perform the work, according to Spruill. At that point she applied for time-loss from Wal-Mart on the grounds that she was still suffering the effects of her initial injury.
Wal-Mart refused, arguing that Spruill’s current symptoms were due to other causes, not the back strain she’d suffered in ’98, and that she was capable of finding other work besides waitressing. Spruill’s symptoms were highly variable and no clear physical cause or damage was ever identified.
L&I ruled in favor of Spruill. Then Wal-Mart appealed to the Board of Industrial Insurance Appeals, setting off months of costly litigation. The amount in dispute was only $1,598, but Wal-Mart hired an investigator to videotape Spruill and took extensive depositions. “They had to have paid their lawyer many times over what they would have had to pay [Spruill],” says paralegal Laurel Anderson of the Causey Law Firm in Seattle, which took Spruill’s case. “No one litigates two months of time loss.”
In January, the appeals board ruled in L&I’s favor, and Wal-Mart paid up the $1,598. Spruill is now holding down an office job. Her attorneys plan to seek additional money for her, but only after the state takes over Wal-Mart’s claims.
FOR THE MOMENT, the takeover is on hold. Earlier last month, Wal-Mart won a court-ordered stay, and Bill Wertz of Wal-Mart says his company is “now involved in negotiations with the state to see if we can work this out” before a trial. Wal-Mart will likely fight the case with full vigor.
In Washington, Wal-Mart paid about $1.5 million in workers’ comp claims last year and has 300 claims presently open. But if L&I takes over, the agency says it will charge Wal-Mart about $1 million in premiums every quarter. Even more dismaying to Wal-Mart than the cost, perhaps, is the prospect of this quintessentially all-American company, whose very logo evokes the American flag, having a large part of its operation put under direct government control.
Other self-insured employers have been subject to complaints. But Dave Kaplan, acting executive director of the Washington Self-Insurers Association, says he suspects part of the problem for Wal-Mart is that it manages its workers’ comp program out of Arkansas, rather than contracting with a local firm that is familiar with Washington laws. “It’s unusual for a self-insured employer to be handling its claims a far distance away,” he says.
Kaplan also wonders, “How much is a lack of knowledge and how much is corporate culture?” It’s not hard to see how a discount store empire founded on supercheap prices and notoriously tough deal-making might apply those same hardball tactics to its own injured associates. The Wal-Mart way looks great for those of us buying cheap shampoo, but perhaps not so great for those who slip on it.
