Trucking company owners cited for failure to carry workers’ comp

By Clarissa Kell-Holland, Land Line staff writer | Thursday, January 05, 2012

It’s a sad reality that many truck drivers find out the hard way, after an injury, that their company has failed to carry workers’ compensation insurance. Besides being injured and unable to return to work, many drivers then find out they are on the hook for mounting medical expenses, which can be financially devastating.

Some states, including Vermont, are cracking down on businesses that fail to carry mandatory workers’ compensation insurance on their employees.

Stephen Monahan, director of workers’ compensation and safety for the Vermont Department of Labor, told Land Line that this has led to many Vermont-based businesses – including trucking companies – being issued stop-work orders until a workers’ compensation policy has been obtained.

It’s been nearly a year since Monahan’s department first took action against two North Troy, VT-based trucking companies owned by members of a prominent Vermont family. State Senator Robert Starr owns Starr’s United Inc. and also serves as a director of the Vermont Truck and Bus Association. His son, Eric Starr, owns E. Starr Trucking.

An emergency stop-work was issued to both Starr’s United and E. Starr Trucking on Jan. 21, 2011. Monahan said E. Starr Trucking eventually purchased workers’ compensation on two workers in mid-April, but Starr’s United, which has 13 workers, did not.

Monahan said the company continued operating for nearly a year after the stop-work order was issued until a Vermont Superior Court judge issued a permanent injunction against Starr’s United on Dec. 20, 2011.

While E. Starr Trucking now has a workers’ comp policy, Federal Motor Carrier Safety Administration records show the company does not have current operating authority following an involuntary revocation in May 2011.

And while FMCSA records show current active authority for Starr’s United, Monahan said the company still has not obtained the necessary workers’ comp insurance in Vermont.

However, he added that Starr’s principals met with the department of labor officials in Vermont on Tuesday, Jan. 3, to “discuss coming into compliance.”

“In the last few years, particularly in Vermont, we have started aggressive enforcement of our workers’ compensation requirements, and this has meant that some trucking companies have been issued stop-work orders and had to comply,” Monahan said.

“In our experience where we’ve issued a stop order, the company against whom it was issued has managed to obtain, which usually means cash up front, a policy within 24 to 48 hours from the issuance of the order. This obviously wasn’t the case here.”

Monahan said the state has ramped up enforcement because companies that fail to provide workers’ comp insurance, which can be expensive, are not competing fairly with all of those companies that are providing it.

“I can understand that the trucking industry is trying to operate in 50 different states and workers’ compensation may be different in all 50 states,” he said. “There is an education process, but we are finding out that many owner-operators meet the legal definition of employee, which is surprising to them. They should have workers’ compensation protection.”

Another reason Monahan said the state of Vermont is pursuing enforcement action against companies that fail to carry the necessary policy is the costly effect on injured workers and the state when an accident occurs.

“We do see the tragic consequences when that insurance is not in place and there’s been an injury, often as a product of an accident. That compounds the tragedy for both the driver who is injured and their family,” Monahan said. “This is one of the reasons why workers’ compensation is important.”

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