Keith Olbermann vs. Wal-Mart: A case of PR Blunder?
April 14, 2008 by Fred HosierPosted in: Dubious decisions, Here comes the judge, In this week's e-newsletter, Latest News & Views, Rules made to be broken
After a cable news network anchor cried foul against Wal-Mart on the air for an entire week, the retail giant backed down on a case involving an injured worker. “Occasionally, others help us step back and look at a situation in a different way,” a Wal-Mart representative said.
Let’s pick on Wal-Mart today. What the heck, everyone else does, including MSNBC’s Keith Olbermann.
It was Olbermann’s comments that got the retail giant into hot water over its attempts to be reimbursed for healthcare costs from an injured, former employee.
The woman’s car was hit by a truck. Wal-Mart’s insurance paid for her care. Later, the woman was able to reach a settlement with the trucking company that left her with $417,000 in a trust fund for her long-term care.
But if it were up to Wal-Mart, it would get that money. The retailer sued to collect the money in the trust fund as reimbursement for the $470,000 its insurance spent on the woman’s care.
Wal-Mart won the court case. That’s when Olbermann jumped into action. He named Wal-Mart chief executive Lee Scott “Worst Person in the World.”
“Wal-Mart is suing her for all the money she has in the world,” said Olbermann. “Wal-Mart, always low prices, always low humanity. Yes, we’re going to keep doing this until Wal-Mart atones.”
Atone, we’re not sure about. But the retailer did relent. It dropped its effort to collect and said it would allow exceptions to its policy seeking this type of reimbursement.
This case was exceptional in a number of ways. Employee Deborah Shank suffered severe brain damage from the truck crash. A week after Wal-Mart initially beat her in court, her 18-year-old son died in the Iraq war.
Her memory is intermittent after the crash. She often asks about her son, not remembering he was killed. Each time, her family has to tell her he’s dead, as if she’s hearing it for the first time.
It’s not unusual for companies’ medical insurance policies to seek reimbursement in situations like these. So was this an HR Blunder? You can weigh in on that right here on our Web page.
However: Combine the power of TV news anchors – not to mention bloggers – who decide to “come to the rescue” of a person in a tough situation like this with Wal-Mart’s initial reluctance to make an exception, and you certainly have a PR Blunder on your hands that will damage a company’s reputation in the public eye.
Tags: health insurance, healthcare costs, injured employee, Keith Olbermann, Wal-Mart
April 18th, 2008 at 11:17 am
This was an incredibly new low for a company that is already known for making it’s money on the backs of its employees. I don’t know all the details of their supposed “reimbursement policy” but I’ve never heard of a company trying to take an employee’s settlement from damages awarded in a civil suit. This certainly reinforces my already low opinion of Wal-Mart.
April 18th, 2008 at 12:40 pm
Although it’s a sad case, Wal-Mart probably had a legal right to seek reimbursement. Many company health insurance policies exclude payment for automobile accidents. Automobile insurance pays for injuries. That’s one reason that it’s so expensive in New Jersey. The family should be grateful that Mr. Olbermann championed their cause. If not for the PR…..
April 18th, 2008 at 12:44 pm
WalMart was clearly in the wrong in going after the injured party’s settlement. WalMart or its insurer should be able to bring its own legal action against the trucker/trucking company for recovery of the health care costs it incurred as a result of the accident.
I am no advocate for large tort awards for “pain and suffering”, but I do have to wonder about the quality of legal work provided to the injured person if the settlement only netted $417,000, considering the long term and debilitating nature of her injuries. Without knowing more about the circumstances, it seems that the plaintive should have been awarded medical cost plus a REASONABLE life time care fund, and perhaps a REASONABLE award for pain and suffering, together with REASONABLE attorney’s fees. If that award had been made, it would also be REASONABLE for WalMart and/or its insurer to be reimbursed for the cost of medical care delivered. Perhaps there are mitigating circumstances. Was this an issue of contributory negligence on the part of the injured party?
April 18th, 2008 at 2:27 pm
I feel that if the trucking company was found to be at fault, then the employer should be able to collect medical reimbursement from the trucking company. Council for the injured lady should have taken medical expenses already rendered into consideration in this case.
If the trucking company wasn’t found at fault, then the employer shouldn’t seek reimbursement.
April 18th, 2008 at 3:32 pm
Medical plans have the option NOT to pay claims when a third party payer is involved. The go ahead and pay when the injured participant agrees to reimburse the plan from the money paid out by the third party. I think the participant should honor the agreement and reimburse the plan. I know there are a lot of issues involved including the concept of making the injured party “whole”, but when plans are not reimbursed for claims like this, everyone pays in the form of higher premiums.
April 21st, 2008 at 8:56 am
I don’t understand how her lawyer let her get in this situation. The at-fault party should have had to reimburse Wal-Mart’s expense plus provide for the victim’s future care. Subrogation for expenditure reimbursement against an at-fault is common and logical. don’t think WalMart is the real bad guy here - more likely the trucking company and/or her attorney or who ever approved/accepted this settlement without covering all bases/debts.
April 21st, 2008 at 9:21 am
Hi, I would just like to say that I am glad that Wal-Mart did reconsider. It is true that they were only doing what many other companies would have done with regard to recouping insurance expenses, since these expenses should have been paid by the other driver’s insurance as they are related to the accident. And I say shame on you to the attorney for this poor woman. He should have gotten her more money or not taken so much of the origianl $1 Million dollar settlement for himself. Then she would have had more money for her long term care and her husband would not have to be working two jobs to pay off expenses. I guess that just goes to show you that Lawyers are not always looking out for the best interest of their clients. I don’t understand why no one said anything about that lawyer that took all that money for representing the woman. He appears to be a bigger jerk than Wal-Mart will ever be with regards to this whole situation. I may be wrong but with what I have heard on the case he should have done better for the woman who will be forever disabled. He should give her back some money he got for representing her. I believe that it didn’t cost him that much to represent the woman. What do you think? I look forward to comments.
April 21st, 2008 at 2:03 pm
As a former plan administrator of a self-funded plan, understand that these situations are always very difficult but you need to protect your plan. As stated above, an insurance plan can agree to pay a victim’s claims for them with the agreement that they will be reimbursed. This is done to prevent the victim from going to collection and isn’t usually done without the participant’s consent. Without consent they could stay out of it and not pay anything. If they do, the plan should then be notifying the victim’s attorney of a lien against the settlement so that can be taken into consideration and all parties are aware of it. Typically a settlement is large enough to make all parties happy and when it isn’t, it’s been my experience that all parties take a reduction. Instead of 40% legal fees (+expenses!), the attorney would charge less, Walmart would take less, and the victim would take less. It’s usually not the intention to leave the victim with nothing. If there was a $1 million settlment, Walmart and all of their plan participants took the hit on this one with the attorney smiling and the victim still struggling. It could be possible that the woman was considered partially at fault and that can limit the amount of the settlement. It would be interesting to know the details on this and for Mr. Olbermann to know them too.
April 23rd, 2008 at 12:00 pm
I hope Keith Olbermann is planning a bid for President sometime in his future. He is very ethical.
The last post I read here by BB is typical of a business-at-all-cost tunnel mentality and highly unethical because Wal-Mart dropped the ball when they didn’t go after the other insurance company, rather than the victim. I also have to laugh at any scare tactic argument that says that the other employees pay for this type of thing through higher premiums. Wal-Mart is self insured, so they pass on whatever premiums to their employees they feel like as long as they can give their shareholder a big fat dividend. Premium increases should be inversely proportional to CEO salaries, not a piddly $147K long-term care fund or the inflation rate.
Wake up people!! When you have no more local businesses and no choice but to buy junk from China at Wal-Mart, yuo will have no one to blame but yourselves. You have all the power in your buying power. Every dollar spent counts.
April 23rd, 2008 at 1:34 pm
The decision of Walmart to pursue insurance reimbursement from the victim should not be the standard policy, but rather weighed on a case by case basis, especially when the $417K was still short $53K in medical expenses. Although Walmart was within their legal right to pursue the settlement funds, the reprecussions for the victim were so extraordinary–they should have been considered. In addition, the cost for long-term care will most likely exceed the settlement of $417K. It makes me not want to shop at Walmart, ever.
April 23rd, 2008 at 1:48 pm
I am in total agreement with KM on this! The lawyer is at fault for allowing such a settlement to proceed. Wal-Mart should have been included during settlment negotiations to subrogate against the third party to allow for recoupment of medical payment damages.
Let’s understand that there are many more victims here than just this poor woman and her family. The lawyer is the ONLY one who made out like a fat rat.
May 7th, 2008 at 9:50 am
I am in total agreement with Richard Parker! He said it all when he said ” Wake up people!! When you have no more local businesses and no choice but to buy junk from China at Wal-Mart, you will have no one to blame but yourselves. You have all the power in your buying power. Every dollar spent counts.”
It is our money and we do have a CHOICE where we spend it!!!
May 7th, 2008 at 3:15 pm
How come WalMart ends up being the bad guy? They put up the money to care for the woman up front. Keith Olberman didn’t. Where was he when this woman needed care? How come he doesn’t pony up a few thousand to help?
Subrogation is a universal feature of insurance. Why isn’t the trucking company being lambasted for not taking responsibility for the hurt it caused? Why isn’t everyone criticizing the stupid lawyer who didn’t figure the medical costs into his case? Did he forfeit his fee to help the poor woman? And as for choosing to patronize your local businesses instead of WalMart, how many mom-and-pop shops even offer health care? And for those who do, this kind of un-reimbursed medical expense fiasco could swamp them.
May 7th, 2008 at 5:00 pm
Immoral yes. Wrong no. The real person to go after was her lawyer. He either knew or should have known the insurance company for Wal-Mart would have legally attempted to get their money back. He shoul dhave assured that the guilty party would have re-imbursed Wal-Mart and provided for the injured party.
May 9th, 2008 at 12:54 pm
Wow, granted Wal-Mart is an easy target, but every group insurance policy I have ever seen contains a Subrogation clause. This allows for an insurer to recoup their cost if the liability belongs to someone else.
The injured parties medical expenses were paid by her Wal-Mart coverage. The actual liable party paid the injured person. The plan should be reimbursed.
The injured party is being paid by two separted entities for the same expense. This violates the basic principles behind insurance. You are not supposed to profit from your medical costs.
May 23rd, 2008 at 2:31 pm
KM & BB have it dead right. Anyone familiar with medical insurance, especially self-funded plans, understand the need to follow the plan and subrogate costs. Bottom line, when the plan costs increase, so does the employees’. I wonder how that lawyer sleeps at night.
October 3rd, 2008 at 11:16 am
Our hourly staff wants to change to Teamsters TrustInsurance (their choice) and it has a similar clause. Any money Teamsters Trust plan has spent will be reimbursed if the employee gets a settlement. I can certainly see both sides BUT Wal-mart was just following a policy. The attorney should have reviewed the original medical insurance plan and knew their was a clause that if another party was found at fault than Walmart would be reimbursed. The settlement should have included the money for that reimbursement. I wonder how much the ATTORNEY got.
On one hand the employer is told to establish policy and never deviate so there is no grounds to sue and on the other hand the public wants them to change their policy WHEN a hardship case comes along.
October 3rd, 2008 at 11:38 am
Everyone sees Walmart as the bad guy. The huge company is mean for trying to take away this poor woman’s settlement. Subrogation clauses are commonly found in insurance plans and rightly so. Walmart didn’t do anything wrong. They saw to her treatment to the tune of $470K when they were not at fault and it was not their responsibility to do so. I agree with Richard Parker and VS that their insurance company and lawyers should have gone after the auto insurance company upfront for reimbursement. This is standard practice.
Take the company name out of the story. Substitute in a small business with 20-50 employees and then attach those dollar amounts. Should a small business be eligible to be reimbursed? What if that $470K claim meant the business would have to double the insurance premiums for all their employees the next year or have to stop offering insurance to all their employees because it was no longer affordable? This woman has a tragic situation but would it be right for her to keep the money and allow a 20 employee group to lose insurance? Would that be fair and how would you feel if you were one of those people losing coverage because your company was unable to rightfully recoup their losses because they were being perceived as being mean by requesting the money from this poor woman with a tragic situation?
Just because they are Walmart doesn’t mean a $470K claim won’t hurt them. Not as much as a small company but all their employees and customers lose if they have to raise employee co-premiums or reduce insurance benefits or charge higher prices to cover something they were legally entitled to.
Walmart should have been involved up front before the award was ever given to her and that was the main thing they did wrong. I don’t think they should have caved. It sets a terrible precedent. Where does everyone think all of Walmart’s money comes from? It comes from average to low income people who shop there because the prices are affordable. Those are the people who will end up paying more and footing the bill. Walmart would not be so huge if they were not providing something that a huge number of people wanted. Walmart is far from perfect and they should be challenged if they do something unethical or illegal. But punishing the big, bad, mean company for picking on this poor woman is unfair and the people earning lower incomes who shop there are the one who will pay.