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Report no injuries? Get a bonus.
That's the gist of an incentive program that prosecutors say helped inspire several former managers at the Smurfit-Stone Container Corp. in Salinas to violate workers' injury compensation rights.
David Polk, 53, and Douglas Tateoka, 61, pleaded no contest Wednesday to charges of concealing events related to on-the-job injuries and conspiring to deny injured workers their benefits. Polk also pleaded guilty to the latter charge in a separate case. The two are scheduled for sentencing May 20 in Monterey County Superior Court.
"Statewide, this is getting to be a bigger and bigger problem," Managing Deputy District Attorney Ed Hazel said of the rising number of Workers' Compensation violations. "There's the pressures of trying to keep medical and insurance costs down. Sometimes, people figure they can cut corners and take shortcuts."
Hazel said the Salinas case went beyond shortcuts, however, involving about 20 employees at the site. The Salinas paperboard and packaging manufacturer employs about 120 people, the District Attorney's Office reported.
"It seemed like there was an ongoing practice," Hazel said. "When you have a whole series [of employees] who were not afforded the rights they're entitled to under the law, it rises to criminal behavior, and that's why we filed the charges."
He said two employees reported in Oct. 2006 that workers were being discouraged from opening compensation claims at the plant. A year later, county and state investigators served search warrants at the plant and learned that injured workers were being treated outside the compensation system and discouraged from filing formal claims, Hazel said.
Some claims were ultimately opened when the injury persisted or employees insisted because they were not getting sufficient medical treatment, he said.
Part of the motivation for the conspiracy, Hazel said, was an incentive program that paid bonuses to managers and other employees if the number of reported injuries was kept to a minimum or zero.
Most of the victims have already received their benefits, Hazel said, but are also entitled to "a small amount of restitution" from the managers, who the company may or may not reimburse.
Steven Davis of Davis Chiropractic on East Romie Lane, a retired human relations manager for Smurfit-Stone, and Eugene Guzman, a physician's assistant at Pinnacle Urgent Care, were also charged with participating in the fraud.
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By Ria Megnin