Meeting #2

Post date: Apr 20, 2016 4:0:26 PM

Meeting Notes from the Folk Project Workers Comp Commission

April 19, 2016 (8:10 to 9:30); 25 Center Avenue, Morristown, New Jersey

Present (Committee Members): Lori Falco, Elizabeth Lachowicz, George Otto, Chris Riemer (Scribe), Barrett Wilson (Chair)

Present (Guests): Mike Agranoff, Judy Felton Storey (toward the end)

Intoduction

Barrett began the meeting by suggesting that we go around the room and follow-up on any action items from the first meeting. He offered to go first.

Action Item Review

Barrett has spoken to Jay Wilensky about his Workers Comp lawyer contact, but has not yet spoken to the person in question. He will try to make that happen before our next meeting. He's also working through the paperwork that he believes will get us a face-to-face meeting with an attorney from the Pro Bono Partnership. But he has nothing concrete to report this evening.

Mike has called Liberty Mutual, our Workers Comp insurance carrier, to follow up on a question raised by Judy at the first meeting. In the event of a WC claim, how would Liberty Mutual calculate the benefit? Since this kind of insurance is intended to cover wages lost because of a work-related injury, and since we don't actually pay wages, we have no history on which to base a lost-wage benefit.

The agent we've worked with in the past is no longer there, and the new agent was a little vague about this calculation. But she was sure it would be based on some fraction of their pay, and Mike didn't press for the details. Workers Comp may also cover medical benefits to a degree, but Mike feels we could probably get a better deal by adding a rider on our liability policy, which currently excludes "hired persons." As far as lost wages, it would be cheaper to offer these hypothetical injured parties a few bucks on our own, if in the end, all the WC policy will pay is a portion of the fee they'd have earned at one gig. Barrett wasn't sure about that self-insurance idea, since it would still leave us open to lawsuits. Mike conceeded that point, but we're open to lawsuits even if we have the Workers Comp. Anybody can sue anybody over anything.

Chris did not make the planned follow-up call to a different department in Trenton, because on re-reading the minutes it seemed unnecessary. However, he did want to address what he called "The Good Guy Fallacy." In these discussions, people sometimes feel we shouldn't worry about being sued, because we're clearly not evil and the folks in our community are not litigious by nature. That may be true, but it's not something to count on.

George had no action items from last time, but repeated his recommendation that Barrett talk to Jay's contact before talking to the Pro Bono laywers. His idea is to have an informed opinion from a WC expert, and ask the Pro Bono folks to validate it (since they are less likely to be WC experts). He also recapped his points from the last meeting, explaining that laws are not "self-actuating." The law as intepreted by lawyers and judges is more important than the law as expressed in the statutes. Chris added that we also have to be sure we're asking the right question. We've spent a lot of time debating whether performers are employees or contractors, and that's not really the point. We know they are contractors, and the quesion is whether we need to provide Workers Comp for them anyway.

Lori has not followed up with Scott Sheldon, other than to dig up some old email in which he advised that we did not need Workers Comp. Scott is an attorney, but not a Workers Comp expert. She also looked up the state law herself, and confirmed that it is (in fact) ambiguous. She found one case where a band leader named Jack Koza was sued by one of his musicians for disability, claiming that Koza was his statutory employer. Koza ultimately prevailed, but it took years of expensive litigation and wasn't settled until it reached the Superior Court of New Jersey. (Summary of this case attached below.) Lori also recapped the points in her recent email, in which the written opinion provided by the Pro Bono lawyers in 2009 was much more strongly in favor of buying Workers Comp than she had remembered.The opinion says The Folk Project "should absolutely purchase the coverage or get proof of the performers having their own coverage in place."

General Discussion

We touched on the idea of asking performers to provide proof of insurance, something that was also mentioned in the meeting minutes when we made the decision to go the WC route. In August 2009, storyteller Rivka Willick said she was always asked for proof of WC insurance for gigs paying over $500, but Mike countered that he's never been asked for the same. Chris also felt that Workers Comp is probably not the right label in this context, since it's not something you'd buy if you were self-employeed. Disability, maybe, but proof of insurance was probably all Rivka meant. Not proof of Workers Comp insurance.

Mike reiterated that he has found no organization in our industry that carriers Workers Comp. "No one is doing this!" he said. So even if a claim were filed, we are clearly following the accepted practice for music venues and musicians. Lori conceeded that the long odds are in our favor, but also felt she wasn't willing to bet the farm on it, particularly because we have no Directors and Officers insurance. If a case went badly, the personal assets of the directors would be at risk. Citing the Jack Koza case, she pointed out that watching the courts can be like a game of ping-pong, with decisions, appeals, reversals, more appeals, etc.

Elizabeth agreed that it was a ridiculous situation, especially given the likely outcome. We're paying Liberty Mutual over $2,000 a year and have never had a claim. And if we had one, it looks like the performer might get something like $30 as a benefit. Ridiculous! Mike agreed that the Workers Comp policy wouldn't do much to address the performers' problems, but it might address our problems.

Barrett felt that if we had unlimited funds, we probably wouldn't be having this conversation. That is, we would just absorb the cost of Workers Comp with a better-safe-than-sorry attitude. Mike pointed out that we don't have that luxury, and if we're going to carry WC, his venue has to budget for it. He would rather not. Chris agreed that on some level, it feels like we're being taken advantage of here, with insurance companies selling us things we don't really need. But perhaps that's in the nature of the insurance business.

There was also some discussion of finding a way to self-insure, but Lori cautioned that this isn't as simple as it sounds.

More Action Items

Here are the things we agreed to do before the next meeting:

• Barrett will follow-up again with Jay to get something more official from his WC contact. Something that we would be willing to pay for, if appropriate. He will also continue to work the Pro Bono front.

• Lori will forward her recent K&K contact information to Elizabeth, and also look more deeply into what's involved in a self-insurance model.

• Elizabeth will contact K&K Insurance with three objectives: have her name removed as a contact (in favor of current president Barrett Wilson), find out if we can get some kind of rider that will include performers under our liability umbrella and ask about the costs of Directors and Officers insurance. (Just as a footnote, Mike Del Vecchio's railroad club does have a D&O policy.)

• Chris Lori will add a soft copy of the K&K policy to the wiki, for those interested. And if he's feeling really enthusiastic, he may look for a new insurance agent who could advise us in this area. Just by way of getting a second opinion.L

Closing

The meeting wrapped at about 9:30.