Employees to pay $2.26 million as workers’ comp suit backfires — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Employees to pay $2.26 million as workers’ comp suit backfires

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In a highly unusual decision, a U.S. District judge issued a default judgment against 84 former factory workers who filed workers’ compensation claims against their employer, Bath Unlimited, owned by Michigan-based Masco. They claimed hearing loss and heart and respiratory problems after being laid off from a Passaic, N.J., plant in 2002.

In 2004, Bath Unlimited sued the workers and their law firm under the federal Racketeer Influenced and Corrupt Organizations (RICO) Act, claiming the complaints were fraudulent. The law firm settled in a sealed agreement. The workers, left without counsel, didn’t respond to the federal case.

Their lack of response led to the default judgment, which holds them liable for the company’s attorney’s fees, costs, compensatory damages and workers’ compensation awards that two of the workers received.

A Masco representative applauded the decision, saying, “The workers’ compensation system ... is far too important to be subjected to abuse and fraud.”

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