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RETURN TO WORK PLAN UNDER FIRE

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EL PASO, Texas-A $10.6 million jury verdict against Levi Strauss & Co. in a Texas workers compensation-related discrimination lawsuit may highlight potential exposures for other employers with return-to-work programs.

Some aspects of the Levi Strauss case, however, may have been unique to the community of El Paso, where the trial was held, attorneys say.

The five plaintiffs in the case before an El Paso jury claimed they were "subjected to ridicule, harassment, and degradation" because they filed workers comp claims and were forced to participate in a return-to-work program that held them out as different from their peers, according to court papers. They also alleged the return-to-work program was poorly documented and implemented.

Levi Strauss denies many of the claims and plans to appeal the jury's verdict, delivered in two parts Sept. 8-9.

The company also is attempting to remove the judge in the case from hearing a succession of related cases for 104 other plaintiffs employed at several El Paso Levi Strauss plants (BI, Sept. 15). Levi Strauss claims the judge "has a personal bias or prejudice concerning the subject matter," according to a motion filed by the San Francisco-based apparel manufacturer.

The motion alleged the judge did not act impartially but rather as an advocate for the employees in the case.

Plaintiffs' attorney Sam Legate of the El Paso office of Scherr & Legate said Levi Strauss made it easy for his clients to win their case. The company's return-to-work program was implemented on an ad hoc basis at individual El Paso plants, he said. The programs were not mapped out or based on studies or other models that have been shown to work, he said.

Furthermore, he said, Levi Strauss lacked documentation on how those programs were supposed to work. "That was our whole case right there," Mr. Legate said.

Ruben Robles, a partner in the El Paso firm of Robles, Bracken, Coffman & Hughes, which represents Levi Strauss, rebutted those charges and said the return-to-work programs were well-planned and relied on the advice of several professionals, though the programs did vary from plant to plant.

"This was a program created at each plant using the internal resources they had," Mr. Robles said. "They had human resources, they had nurses, they had coaches and certified trainers. They used all those resources to create the re-entry program."

Levi Strauss also had plenty of documentation, said Mr. Robles, explaining that it disposed of some return-to-work program materials when it ended the programs before March 1994, when the plaintiffs filed their lawsuit.

"The handout materials were not kept because obviously we didn't know we were going to get sued," he said.

Failing to keep documentation on a return-to-work program is not illegal and does not imply a program may not be a good one, said Richard Kobdish, a defense attorney specializing in employment law for the Dallas office of Fullbright & Jaworski L.L.P. But it can leave a company open to allegations that it discriminated and made up the program as it went along, Mr. Kobdish said.

"Some things should be spelled out at least in summary fashion," he said.

The five employees also argued before the El Paso jury that a $200,000 self-insured retention and escalating workers compensation costs motivated the jeans maker to retaliate against them.

But defense attorneys point out that many jurisdictions do not allow plaintiffs to use an employer's workers comp costs as a motive for discrimination and retaliation.

"All employers have a cost motive to make sure that their injury costs are as low as possible," said attorney Laura Franze, who heads the labor and employment section for the Dallas office of Akin, Gump, Strauss, Hauer & Feld L.L.P. "That doesn't mean people discriminate. If that argument is accepted, you really have shifted the burden of proof, and you're guilty until proven innocent. For that reason, that kind of evidence has been excluded by most courts, absent some other showing of bad intent."

Although the Levi Strauss case stems from work-related injuries, it was heard as a tort case in El Paso County Court under a Texas workers compensation law section that prohibits employers from discriminating and retaliating against workers comp claimants. Most states have similar statutes, attorneys say.

The plaintiffs' lawsuit also attacked the quality of Levi Strauss' return-to-work program, alleging it was a "fourth-rate program that never met its stated objectives (of returning employees to work), thus proving it was a mere pretext" to get rid of the employees.

But Levi Strauss attorneys say the jury simply was swayed by deceptive and emotional appeals and not particularly moved by the argument that the deductible and workers comp costs provided a motive for retaliation and discrimination-though plaintiff's attorneys "certainly argued the hell out of it," said Mr. Robles.

"We didn't get a fair trial," Mr. Robles stated.

Texas defense attorneys add that high unemployment and a concentration of "sweat shops" around El Paso have created an atmosphere in which area juries often hand out high awards and side with plaintiffs in employment-related cases. There also is a tendency by the area's lower court to allow plaintiffs to use workers comp costs as a motive.

Those awards and decisions often get reduced or rejected on appeal, attorneys said. For that reason, some attorneys don't expect the jury's verdict to significantly affect other employers.

"El Paso has been in the forefront of large awards in workers comp worker retaliation," said Ms. Franze, who has handled several cases in El Paso. "It would have more of an effect if it came out of Dallas or Houston. It's much more routine in El Paso."

Mr. Robles does not think technical issues such as documentation of the return-to-work program swayed the jury. Jury members seemed irritated by a policy that required injured workers to either return to work or lose their jobs once doctors gave their approval.

"I think the company was acting within its legal rights, but the jury did not like that at all," Mr. Robles said. "That was a policy that applied not only to workers comp injuries but to other illnesses as well. Once a doctor releases you, you are expected to come back to work. I think the jury felt that should have been a voluntary program."

The jury also was unhappy with a company policy stipulating that anyone away from work for more than a year must work his or her way back up to his or her previous earnings, often starting at minimum wage.

Two of the five plaintiffs were brought back at minimum wage, Mr. Robles said. Three of the five employees still work for Levi Strauss, one has retired, and another left due to a non-work-related disability.

Plaintiffs also claimed the workers were intentionally humiliated by, among other things, being blindfolded during a team-building exercise at the company not related to the return-to-work program. Mr. Robles said the blindfolding was aimed at helping employees develop trust among their co-workers. The program was voluntary, and numerous employees participated, not just workers comp claimants, he said.

The plaintiffs also claimed that Levi Strauss allowed them to be subjected to ridicule and harassment from co-workers.

Mr. Robles concedes there was some harassment for a brief period of time. It stemmed from a company policy of rewarding worker sewing teams for production amounts. Before the injured workers were brought back under the re-entry program, the company talked with co-workers and told them how important it was to be sensitive to these employees as they returned to work, Mr. Robles said. But when the co-workers perceived the returning workers were hurting their production, they did make remarks, he said.

"There were still some harsh things said by co-workers that for the most part went unreported to management," Mr. Robles said. Once the company found out, the program was changed so that re-entry worker production did not penalize the team.

In fact, the contributions of the return workers helped production quotas, and the re-entry workers were viewed positively by other team members.

"But for a period of time, somewhere between two and four weeks, there was some resentment by co-workers," Mr. Robles said.