Trustee or Safety Committee Selection
Administrator, Ombudspersons, Arbitrators
Plan Funding
Medical Care and Vocational Rehabilitation
Alternative Dispute Resolution
Information to Injured Workers on Their Rights
Resolution of Liens: Medical and Employment Development Department
Safety and Health Programs

Review of Collective Bargaining Agreements
Discussion of Agreements

Chapter 4: Introduction to the Case Studies

Site Selection

Large Project Carve-outs
Multiple-employer Associations

Methods

Employee Interviews

Chapter 5: Eastside Reservoir Project Carve-out

General Background
History of the Eastside Reservoir Project Carve-out
Structure of the Eastside Reservoir Project Carve-out

Project Contractor
Unions
Insurance Broker/Carrier/Administrator
Construction Contractors
Construction Contractor Employees
Joint Labor-management Workers’ Compensation Committee
Safety Committee
Authorized Providers
Ombudsperson
Mediator
Arbitrator

Conduct and Performance of Agents Involved in the Carve-out

Goals
Attorney representation
Ombudsperson
Issues Concerning the Alternative Dispute Resolution Process
Examples of Grievances, Attorney Involvement, and Case Resolution among Interviewed Workers

Chapter 6: National Electrical Contractors Association–International Brotherhood of Electrical Workers Carve-out

General Background

History of the NECA-IBEW Carve-out

Employer Association
Employers
Union
NECA-IBEW Workers' Compensation Trust Fund
Board of Trustees of the NECA-IBEW Workers' Compensation Fund
Administrator of the Trust Fund
Labor-management Safety and Health Committee
Preferred List of Medical Service Providers
Vocational Rehabilitation Providers
Workers’ Compensation Insurance Carrier
Alternative Dispute Resolution Process
Ombudsperson
Mediation
Arbitrator

Perspectives of the NECA-IBEW Carve-out

Employer Perspective
Worker Perspective
Ombudsperson Perspective

Chapter 7: Interviews with Ombudspersons

Section I: Descriptive Understanding of Carve-out Alternative Dispute Resolution

Backgrounds of the Carve-out Ombudspersons
Structure of the Employment Relationship
General Functioning of Ombudspersons’ Offices
Nature of Matters Handled by the Ombudspersons
Mediation and Arbitration
Carve-outs and Attorneys
Ombudsperson Perceptions of Larger Issues

Section II: Analysis of the Survey and Interview Data

Overview

Backgrounds of the Carve-out Ombudspersons
Structure of the Employment Relationship
General Functioning of Ombudspersons' Offices
Nature of Matters Handled by the Ombudspersons
Mediation and Arbitration
Carve-outs and Attorneys
Political or Policy Level
Practice Level
Legislative ambiguities
Ombudspersons’ Frustrations and Suggestions for Improvement

Chapter 8: Quantitative Analysis of NECA-IBEW Carve-out

Introduction

Section I: Expectations and Problems with

Early Reports on Carve-outs

Incurred

Section II: Hypotheses

Selection of Carve-out Employers
Safety

Premiums
Reported Injury Rates

Medical and Indemnity Costs
Return to Work
Dispute Resolution Costs

Medical-Legal Evaluation Costs
Legal Costs

Dispute Resolution Frequency

Section III: Data

WCIRB

Cost Data
Accident Frequency Data
Bureau Numbers
Adjusting for Change in Occupational Mix
Adjusting for Claims Mix in Individual Case Records

WCAB Data

Litigation Frequency

Section IV: Results

Selection of Carve-out Employers
Safety

Premiums
Reported Injury Rates

Incurred Costs

Paid Data

Return to Work
Dispute resolution costs
Dispute Resolution Frequency

Section V: Discussion

Future Directions for Analyses

Chapter 9: Conclusions

Summary

Structure of Carve-outs
Overview of Preliminary Results
Safety
Medical Treatment and Evaluation
Indemnity Benefits
Identifying High-quality Caregivers
Alternative Dispute Resolution

The Role of Ombudspersons
The Role of Lawyers
The Role of Arbitrators
Dispute Rates
Wrongful Termination, Serious and Willful, and Third-Party Claims
The Role of Unions

General Discussion

Carve-outs cannot fully carve out a new system for injured workers.

Limitations of this Study

Carve-outs are new.
Case studies are few and without controls.
The quantitative study is imperfect.

Recommendations

The Bottom Line
Identify High-quality Caregivers
Develop a Comprehensive Regulation

Create Ombudsperson Standards
Remove Appearance of Ombudsperson Partiality
Improve Confidentiality
Wrongful Terminations, Serious and Willful, Multiple-employer Disputes
Statute of Limitations
Attorney Fees
Liens
Technical Legal Issues
Does the carve-out worker have available the same statutory penalties against an employer or insurer as an injured worker whose claim is adjudicated under the statutory system?
Are there issues with the timing and availability of medical depositions for mediation and arbitration?
To what extent do the rules of evidence apply within carve-outs?
Should reconsideration before the WCAB be continued, or should the decision of the alternative dispute resolution arbitrator be final?
Should there be requirements for the record kept at arbitrations?

Worker Contact and Information
Reduced Reporting Requirements
The Role of Unions
The Role of Lawyers

Attorney Participation in Alternative Dispute Resolution
Referring Lawyers
Employee vs. Employer Representation

Implications of this Study

Future research

Experimentation and Learning are Crucial
Evaluating Carve-out Innovations in the Statutory System: the Role of Information and Assistance Officers
Follow-up on Injured Employee Earnings
Comparing Carve-out and Statutory System Benefit Accuracy
Scenarios
Examining Choice of Medical Providers
Examining the Proportion of Injuries Reported as Occupational
Extending the Findings Using More Claims and More Mature Data
Analyzing a Large Project with Single Owner and Multiple Unions
Employee Reactions
Caution on Generalizing

Appendix 1: Carve-Out Project Advisory Committee 206
Appendix 2: BILL NUMBER: SB 983
Appendix 3: CALIFORNIA CONSTITUTION--ARTICLE 14 LABOR RELATIONS
Appendix 4: Labor Code 3201 & 3201.5
Appendix 5: Model Standards of Conduct For Mediators
Appendix 6: The Ombudsman Code of Ethics
Appendix 7: Preliminary Evaluation of Party Negotiating Strength and Carve-out Agreement Balance

Coding Bargaining Strength
Coding Agreement Balance

Appendix 8: OMBUDSMAN SURVEY

Bibliography

Table of Figures

Table 1: Pioneer Valley Impact

Figure 1: Case Flow in Workers' Compensation
Figure 2: Distribution of Claims Types and Costs
Chart 1: Comparison of applicant and defense ratings on same claim
Figure 3: Dispute Process
Figure 4: Timing of Disputed Issues
Table 2: Reported Claims Reaching Dispute Resolution Stage Within Five Years of Injury*
Chart 2: Percent Unionization in U.S. Construction Industry
Chart 3: Real Wages and Total Compensation for American Workers
Chart 4: Construction Industry: Wage premium and Unionization
Chart 5: Construction Industry: Union Wage Premium
Chart 6: California Construction Permits
Table 3: Manual Rates—Selected Trades
Chart 7: California Construction Employment and Percent Unionization
Table 4: Construction Industry Collective Bargaining and Project Labor Agreements
Table 5: Average Dispute Resolution Times--Statutory System
Table 6: Collective Bargaining Agreement Addenda
Table 7: Several Contractor Associations and Southern California District Council of Laborers
Table 8: TIMEC and International Union of Petroleum and Industrial Workers (IUPIW)
Table 9: District 9, National Electrical Contractors Association (NECA) and International Brotherhood of Electrical Workers (IBEW), 9th District
Table 10: Cherne Construction and Several Locals of the Pipe Trades
Table 11: Signatories to Collective Bargaining Agreement and U.A. Local 250 and Southern California Pipe Trades #16
Table 12: Signatory Employers and the Southern California Carpenters
Table 13: Metropolitan Water District and Contra Costa Water District and All Craft Unions
Table 14: Level of Employer Participation among Carve-outs
Figure 5: Structure of the NECA-IBEW Carve-out
Table 15: Data* Reported by Division of Workers’ Compensation
Table 16: Claim Development—Private Self Insured Employers
Table 17: Weighted Average Experience Modification, Policy Years 1993 to 1995
Table 18: Premium as Percentage of Exposure
Table 19: Number of Claims per $1 Million Exposure (all reported claims)
Table 20: Number of Disability Claims per $1 Million Exposure
Table 21: Number of Permanent Disability Claims per $1 Million Exposure
Table 22: Total Benefit Dollars Incurred per $1 Million Exposure
Table 23: Indemnity Incurred per $1 Million Exposure
Table 24: Medical Incurred per $1 Million Exposure
Table 25: Percentage of Disability Claims Closed
Table 26: Medical Paid on Individually Reported Claims
Table 27: Average Indemnity Paid per Claim (disability claims)
Table 28: Average Permanent Partial Disability (PPD) Paid per PPD Claim
Table 29: Average Weeks of Temporary Total Disability per Indemnity Claim
Table 30: Average Total Legal Costs per Disability Claim
Table 31: Average Defense Legal Costs Paid per Disability Claim
Table 32: Average Applicant Legal Costs Paid per Disability Claim
Table 33: Percentage of Disability Claims Represented by an Attorney
Table 34: Total Medical-Legal Costs Paid (applicant, defense, and independent)
Table 35: Mediations/Mandatory Settlement Conferences
Table 36: Arbitrations/Hearings
Table 37: Overview of Quantitative Results
Figure 6: Evaluating Carve-outs involving Owner Controlled Insurance Plans
Chart 8: Comparing Balance of Agreements to Strength of Parties
Table 38: Coding Bargaining Strength
Table 39: Coding Agreement Balance