MTA Weighs Payout for Virus Deaths, Nodding to Peril for Workers

(Bloomberg) -- All across the country, states and cities are starting to wrestle with how to compensate front-line workers made ill by the coronavirus pandemic.

New York, the epicenter of the crisis, is no exception. This week, the Metropolitan Transportation Authority will vote on a deal negotiated between its CEO and labor unions to pay $500,000 to families of workers who died from Covid-19, perhaps the most generous benefit to date. Thus far, the outbreak has struck down at least 79 employees of the MTA, which operates subways, buses and trains running mostly in and around New York City.

At least 18 states, including New York, Alaska and Illinois, have taken or are considering steps to ease requirements for workers compensation as the virus puts a wider range of front-line employees in danger. The coronavirus has redefined what it means to be an essential worker, moving beyond simply those in health care to include subway conductors, grocery store clerks and mail carriers. And the payouts are another burden for cash-strapped municipalities that have already seen their budgets crater.

“This is a unique illness,” said Jeff Eddinger, senior division executive at National Council on Compensation Insurance. “You might expect a health-care worker to come in contact with sick people, but a grocery store worker, that’s not normally part of their job.”

The MTA payments are New York’s recognition of the sacrifices made by transit workers, who move doctors, nurses and supermarket employees to and from their jobs. They might also help to head off lawsuits arising from claims that the MTA put its workers in harm’s way without proper protections.

Through most of March, the authority discouraged its workforce from wearing masks as the virus spread rapidly across New York City, according to union officials. The MTA backtracked after its first two employees died of Covid-19 on March 26, abandoning guidelines from the Centers for Disease Control and Prevention.

“We believe that under the horrific, extraordinary and unexpected circumstances of this pandemic, that is an appropriate thing to do given the loss of life that has occurred,” MTA Chief Executive Officer Patrick Foye, himself a Covid-19 survivor, said last week of the lump-sum payments.

Foye negotiated the compensation agreement and is urging his board to approve it Wednesday. It won’t require workers to prove that they got the virus at work -- a potentially daunting task in a city where over 14,000 have died and more than 130,000 have been infected. The MTA will also provide health insurance for three years to surviving spouses and dependents to age 26.

The money will come from the MTA’s $17 billion operating budget. The authority is expected to run an $8.5 billion deficit as ridership plummets. The authority wants an additional $3.9 billion of federal aid to deal with the lost revenue amid the virus fallout. That follows a nearly $4 billion allocation from the initial bailout package for the MTA.

Several states have enacted more generous worker protections and eased requirements in the past month. In Alaska, Governor Michael Dunleavy signed a bill that covers firefighters, emergency medical technicians, paramedics, peace officers and health-care providers. They’ll get benefits if they test positive for the virus or a doctor diagnoses them. And crucially, they won’t need to show that the exposure happened at work.

“By creating a statutory presumption, we eliminate the need for workers to prove a specific exposure at a specific time,” said Clifford Goldstein, an attorney who litigates workers compensation cases and is the head of Chartwell Law. “The burden falls on the employer to disprove that association. An employer can’t prove a negative.”

In Illinois, the state amended its workers compensation regulations to give a “Covid-19 First Responder or Front-Line Worker” the presumption their exposure happened at work. It covers police, firefighters, health-care personnel, as well as a wide variety of other occupations, like grocery clerks, delivery people, and workers at hotels, child-care facilities and schools.

Florida also changed its rules covering front-line state employees, but any state agency can opt out of the plan.

“Previously, in general, communicable diseases were not compensated in workers compensation because of the difficulty of establishing work-relatedness,” said John Ruser, chief executive officer of Workers Compensation Research Institute. With the coronavirus, “some of the states have decided that they are going to create the presumption for certain groups of workers.”

Those changes to workers compensation could help employees get the money they need quickly. If they sue, it might be hard to prove in court that they contracted Covid-19 because of conditions at work.

“It speeds things up and removes that obligation to try to show negligence,” said Mark Lanier, a prominent plaintiff’s attorney. “It’s a no-fault scheme that’s clean, quick and cool.”

Nevertheless, Lanier says the changes could prompt employers to decide “whether it’s more profitable to continue in business as they are, incurring the death rate they’ll incur in paying it off, versus the possible unknown of litigation. You don’t ever want to foster such cold calculations. But in this situation, we’re in a really difficult no-man’s land.”

At the MTA, Foye negotiated with leaders of the Transport Workers Union, which has four locals representing most of the agency’s 71,000 employees. Local 100, the biggest of the four, signed a new contract that took effect in January. It doubled the “line-of-duty” death benefit to $500,000.

Following the death of conductor Peter Petrassi on March 26, Local 100 President Tony Utano pushed for the line-of-duty benefit to apply to Covid-19 cases, and the union handed out its own masks. As the death toll rose, Foye spoke with TWU International President John Samuelsen, who said transit workers were put in harm’s way by coming to work during the pandemic.

Foye agreed to call the $500,000 payments a “family benefit” and push for its adoption by the board. He’s touted that the MTA, the largest public transit agency in the U.S., has distributed 5 million pairs of gloves to workers and 1 million masks since March 1, while taking the temperature of workers and regularly disinfecting trains and buses.

“It is to Foye’s credit that he accepted that moral argument and believed it was the right thing to do,” Samuelsen said. “It would have led to decades of acrimony and perhaps worse if the MTA took the position that the union would have to prove out every single fatality.”

The payment will provide a measure of relief for Deja Sweeney, whose father Darryl died on April 11 after working as a tower operator on the subway system. A lifelong Brooklynite, Darryl Sweeney, 58, was a black belt in judo, a skilled chess player and an avid traveler.

“It was a smart move by the MTA to show the employees they are supportive,” Sweeney said. “To be honest, I could care less about the benefit. I would rather have my dad around.”

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