McCrory has been quietly skewing the workers' comp system | North Carolina | Indy Week
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McCrory has been quietly skewing the workers' comp system 

Editor's note: This story contains wording and omissions that affect its fairness and accuracy. The sentence regarding The International Worker's Compensation Fund being paid $200,000 for a North Carolina conference could be read to imply that the Industrial Commission paid that money. It did not.

When Andrew Heath's former law firm appears before the Industrial Commission, Heath recuses himself.

Scott Goodson, a deputy commissioner, did resign, but it was unrelated to his contribution to the Chad Barefoot campaign.

The North Carolina Industrial Commission is a vital judicial mechanism. Established in 1929 to adjudicate between companies and workers during an era of labor tumult, the six-commissioner body has the final word on workers' compensation disputes, wrongful conviction payouts and the distribution of the state eugenics compensation fund.

But recent appointments by Governor McCrory and changes by the General Assembly have left the independence of the commission in question. A number of sources that work in and around the commission—who preferred to remain unnamed because they feared retribution—described a political takeover and a deck that looked increasingly stacked in favor of employers and insurance companies. One source with business before the commission described an increasingly hostile judicial hearing environment for workers that will inevitably clog up the Court of Appeals, with the cost of treating injured workers shifting from employers to the taxpayers.

This summer, a small note in the General Assembly's final budget bill reclassified the Industrial Commission's 22 deputy commissioners, turning them from career civil servants into at-will employees who will either be reappointed or let go. The lives and careers of these administrative law judges were placed directly into the hands of the commission's chair, a young McCrory appointee named Andrew T. Heath. The first group of deputy commissioners will be let go on Feb. 15, 2015, and have already begun to be replaced by more pro-business-minded Republicans. The deputy commissioners were the first line of recourse for workers with compensation disputes—the commissioners travel the state deciding cases between the injured worker plaintiffs and the insurance company and employers that don't want to pay for their care. If the worker or employer appeals the deputy commissioner's decision, the case is bumped up for a final decision by the six-commissioner Industrial Commission.

The logic for reclassifying and replacing these career civil servants is quite clear: to get different results and fewer workers' comp payouts, you have to replace the referees.

"There's an effort being made on a state level to get conservative and pro-business people appointed to commissions and for the commissions to be an advocate for reduction of benefits," says Steve Embry, a veteran workers' comp lawyer and president of the Workplace Injury Law and Advocacy Group.

Chairman Heath, a protégé of former Indiana Governor Mitch Daniels and Supreme Court Justice Paul Newby, was appointed by McCrory in 2013. This summer, McCrory replaced full commissioner Pam Young with Charlton Allen, a lawyer with a documented past of racist, anti-Semitic and anti-worker views. By statute, the Industrial Commission is supposed to be composed of three commissioners with a pro-business background and three with a pro-labor background. Governor McCrory and Chairman Heath have destroyed this delicate balance. Two sources close to the Commission told the INDY that Chairman Heath has been stacking his three-judge panels, making sure there are two Republican pro-business commissioners for every one that is pro-worker.

Under Heath, the Industrial Commission now also has a legislative agenda. Previous chairs of the commission such as Pam Young and Buck Lattimore avoided having a legislative agenda. Emails obtained by the INDY earlier this year showed Industrial Commission staffers—employees of an ostensibly impartial judicial body—working intimately with Sen. Thom Goolsby to craft HB369, a law sponsored by Goolsby to prevent undocumented immigrants from receiving worker's comp benefits. Heath's law clerk wrote to Goolsby that the proposed legislation "had been discussed with, and supported by the Governor's Office"—which would seem to indicate that the head of a judicial body was working with the Governor to get legislation passed. These records were sent to the INDY with a note from Department of Commerce media liasons that the information in the e-mail about the Governor supporting the legislation was not, in fact, correct. In a written response to questions, Heath denied any impropriety, saying the legislative work was done at Goolsby's request and that his law clerk had simply made a "misstatement" to Thom Goolsby about Governor McCrory's support of the controversial legislation.

Equally troubling is political cronyism and favoritism wafting up from the Commission. Christopher C. Loutit, a lawyer with less than a year of demonstrable experience in worker's comp law, has been made Chief Deputy Commissioner, ahead of other deputy commissioners with decades under their belt. Another of Heath's appointees, Scott Goodson, broke the judicial code of conduct by donating $100 to Chad Barefoot's election campaign in March. Heath wrote to INDY he was unaware of Goodson's donation, but that Goodson had resigned.

The Industrial Commission's 19th annual Worker's Compensation Education Conference earlier this month also featured a cocktail reception put on by Heath's former law firm, which appears and argues before him in court. One source said that the three-day conference was mostly attended by insurance people, adjusters, gun-for-hire doctors and somatic disease specialists—but very few lawyers representing injured workers.

The conference was put on by a questionable Florida nonprofit, The International Worker's Compensation Foundation, of which Heath is on the board. Heath said he is not paid for his work on the IWCF. Tax documents obtained by the INDY show that the nonprofit was paid $200,000 for the three-day North Carolina conference in 2013. Two veteran worker's comp lawyers told me they had never heard of the International Worker's Compensation Foundation. A visit to the Ormond Beach company's website shows a barebones, 1998-style interface with no contact information, background or funding transparency—a message to a Bellsouth email address did not receive a reply as of press time. Steve Embry, of Workplace Injury Law and Advocacy Group, said that in their national fight against worker's comp, it's not uncommon for conservative money linked to ALEC and Koch Brothers to set up these kind of state level Astroturf organizations.

This article appeared in print with the headline "Eviscerating the Industrial Commission"

  • NC's Industrial Commission, which rules on worker's comp claims, getting remade with a pro-business look

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