RALEIGH — By spring, six arbitrators who handle the claims of injured workers will likely be kicked to the curb, courtesy of a Republican-controlled General Assembly eager to put its stamp on every layer of government.
The North Carolina Industrial Commission is an agency with immense power. It weighs the credibility of workers claims of injury, often deciding whether one doctors diagnosis is more accurate than anothers. It authorizes payouts up to $1 million to citizens wronged by state officials. Commissioners dispense checks to wrongly convicted inmates for the years wasted in prison.
Despite its importance, the commission has been plagued with inefficiencies and a history of poor management. In the last year, the agency has been in the spotlight for failing to bring into compliance tens of thousands of businesses skirting their responsibility to carry workers compensation insurance. The commission operated in a silo, failing to coordinate with other agencies that could have helped detect problem businesses.
While the replacement of the commissions current leadership was expected as a new governor stepped into power, the prospect of all six commissioners being fired caught many by surprise.
Its just breathtaking, said Leonard Jernigan, a veteran plaintiffs attorney who teaches workers compensation law. Its not just about fresh faces. Theres a huge learning curve, and we could see long delays in cases.
So far, commissioners are moving ahead as usual with pending cases. A spokeswoman for Gov. Pat McCrory, who would be in charge of appointing new commissioners, said the General Assemblys bill was not his idea and he has not yet identified new commissioners. Legislators say McCrory deserves the chance to put in place people who believe in making government more efficient and cost-effective.
The Industrial Commission is but one of many agencies in which leaders are on the chopping block as Republicans flex muscle won by control of the General Assembly and the Governors office. Senators this week approved a bill that would clear out Democratic appointees of the state Utilities Commission and the Coastal Resources Commission, as well as 12 special superior court judges, eliminating more than 100 appointments made by former Gov. Mike Easley and Bev Perdue, both Democrats. Senate Republicans dismissed Democrat objections to the bill, saying their party was only doing what Democratic power brokers before them had done when they secured power in Raleigh.
The shift at the Industrial Commission means more than just new appointments for Republicans. It will likely bring a mind-shift in workers compensation cases. Conservatives have long complained that commissioners coddle injured workers, liberally awarding compensation at the expense of businesses and their insurers.
As a business owner, I feel the commission is a little tough on businesses, said Sen. Harry Brown (R-Jacksonville), a car dealership owner and one of the bills sponsors. We need to swing them back to the middle.
Workers compensation cases are largely formulaic. Compensation for time off work is calculated based on the workers wages. Lost limbs and specific disabilities all have specific dollar values assigned to them. The commissioners power is in their assessments of who is telling the truth and who might be exaggerating. They judge workers credibility, deciding whether his complaints of back pain really do make him unable to return to work. And, when doctors offer different opinions, commissioners must determine which doctors prognosis is most reliable. Who commissioners choose to believe can mean the difference between an absolute denial of a claim and tens of thousands of dollars in treatments and lost wages.
Never followed up
The News & Observer reported last April that 30,000 or more businesses in this state are breaking the law by not carrying insurance to protect injured workers. The news brought unprecedented pressure on the Commission. Former Gov. Perdue demanded the problem be fixed; legislators convened a committee to examine the problem.
Staff at the Industrial Commission have long known some employers broke the law by failing to buy workers compensation insurance. Each year, hundreds of workers injured on the job while working for an uninsured employer file claims with the Industrial Commission.
While the commission had the authority - and some say responsibility - to find these uninsured businesses and bring them into compliance, it hasnt. And, though commissioners have the power to fine or urge prosecution of businesses without insurance, they rarely have.
After the N&O report, the commission resurrected hundreds of old cases involving uninsured employers. For years, they had awarded payouts to the workers but never followed up to ensure the claim had been paid. Over the last nine months, commissioners and their deputies have threatened wayward employers with jail time if they didnt settle up. Some workers received their first ever reimbursements; others still wait. No employer was sent to jail.
The Commissions handling of the uninsured problem did not engender confidence at the General Assembly, so its not surprising the Industrial Commission landed on the list of agencies to be overhauled.
Former Rep. Dale Folwell, a Winston-Salem Republican, said failing to bring those not carrying insurance in line was putting a burden on businesses that did comply. And, it left some workers vulnerable. He has higher hopes for new commissioners.
From top to bottom, I hope we have people who dont just have their mind and their (paycheck) involved but also their hearts, said Folwell.
Folwell first began examining the workers comp system a few years ago in an effort to reduce payouts to workers. Though he shepherded a bill early last year to cut rates, Folwell never encountered leaders of the Industrial Commission.
He first met Pam Young, an Easley-appointed chairwoman of the Industrial Commission, last summer when she came to his office to ask that he make private data about businesses and their insurance carriers. Folwell agreed, figuring the measure wasnt controversial.
The data had formed the basis for the N&Os reports on the uninsured problem. Folwell spent much of his last few months in office trying to undo the privacy measure.
Folwell encountered Young a handful of times after that at committee meetings to examine workers compensation fraud.
Often times, I left those meetings thinking I must not have asked the question in the right way because I didnt get a clear answer, Folwell said.
Young is married to Reuben Young, a former Easley aide who served under Perdue as head of the Department of Public Safety. Reuben Young is also a target in the legislatures reorganization of state agencies. Perdue appointed him as a special superior court judge before leaving office in January; legislators want to eliminate all 12 special judges, though the measure has raised legal questions.
Pam Young resigned her chairmanship in January so Gov. Pat McCrory could select a leader of his choice. Young wants to stay on the commission through the end of her term in summer 2014.
Ive worked really hard addressing issues before the commission, said Young. Challenges arise and we work to address them and to be sensitive to the needs of all stakeholders.
So far, McCrory has not tapped any other commissioner to become chairman after Youngs resignation. A spokeswoman for the governor said this week that hell soon appoint one of the commissioners to take charge.
Last month after Young stepped down, all of the commissioners except her came to the last of the legislative committee meetings set up to examine workers compensation fraud. No one called on them, and some legislators said after the meeting that they hadnt realized they were there.