A legal battle with Wal-Mart over injury benefits broke this elderly store greeter’s spirit

Herman Teague loved his new job as a greeter at the Wal-Mart Supercenter just off the 101 and Raintree Drive in Scottsdale.

It wasn't about the money, about $180 a week before taxes for part-time work, or the benefits (the company provided none to him).

Teague was living off Social Security, savings, and a comfortable pension earned after working more than 30 years as a metallurgist for U.S. Steel, mostly in Wyoming. His primary health insurance was Medicare, and he also had purchased two supplemental policies.



But it had lifted Teague's spirits to be back around people, he'd tell his stepdaughter, Linda Kilfoy, and her husband, Fred. He started living with the couple just a few miles away from the Wal-Mart store after his wife, Cecil, died in 2000.

Teague had been retired for years when Wal-Mart, which is North America's biggest retailer and Arizona's largest private employer, hired him in January 2006 to say hello to shoppers entering the store.

Herm Teague made people around him feel good. He always had a friendly "question of the day" for those he knew and a smile for those he didn't. The idea of getting paid to schmooze a little with customers appealed to him.

Teague was 86 when Wal-Mart hired him, though he looked and acted like a much younger man. He had heart problems and suffered from borderline diabetes and hypertension. But his doctor declared him fit for work, and he did fine for several weeks, winning over customers and his much younger co-workers with his upbeat attitude.

But in late February 2006, Teague complained at home of having a hard time catching his breath. He was out of work for a few weeks, during which time he underwent an angioplasty, a procedure in which doctors use a balloon to open a coronary blockage and improve a patient's blood flow.

But doctors told Teague that he was well enough to return to Wal-Mart, which he did on March 6, 2006.

What happened shortly after he punched in that day would become the focus of a significant court case decided by the Arizona Court of Appeals on April 1.

And, sadly, it marked the beginning of the end of Herm Teague.

What happened was, Teague fainted a few yards from his greeter's "station" just inside Wal-Mart and the back of his head hit the concrete floor, causing a deep wound. He came to before emergency paramedics arrived and said he recalled nothing after sipping on a Coke he'd just bought at a machine near his work post.

On the face of it, you might think that an employer of any size, much less a mega-corporation that registers a profit of about $20,000 a minute, at least would have been willing to pay for the cost of Teague's emergency room services, where the bill for stitching him up came to about $3,500.

But Wal-Mart — whose famous slogan is "Save money, live better" — declined to give Teague even one cent in workers' compensation benefits for the injuries he suffered on the job. In addition to the emergency room fee, that payout would have amounted to about $400 a month until Teague was able to go back to work.

How Wal-Mart dealt with its aged "associate," as the company likes to call its employees, paints a dismal picture that lays waste to what it calls its "Grass Roots Process."

That philosophy, coined by company founder Sam Walton after he opened his first discount store in Arkansas in 1962, calls for Wal-Mart executives to "listen to your associates. They're the best idea generators."

Herm Teague's stepdaughter says she knows what grassroots advice he would have given his bosses had he been given the opportunity.

"Herm lived his life by never asking for anything that he didn't have coming to him, and I never heard him speak out against anyone, including Wal-Mart," Linda Kilfoy says. "For him, there always was a right thing to do and you do it, whether you're a person or a huge company. He would have told them, 'Do what's right, guys.'"

Instead, Wal-Mart denied Teague's claim in the summer of 2006. The company is self-insured, and manages its workers' compensation claims out of a sprawling structure in northwest Arkansas, so big that the rows between workstations have street names.

After Teague appealed to the Industrial Commission of Arizona, Wal-Mart hired one of Arizona's top workers' comp defense attorneys to litigate against Teague's claim.

In early 2007, the case wound up before an administrative law judge at the Industrial Commission. That March — a year after Herm Teague had gotten hurt — Judge Joseph Moore ruled that Wal-Mart did, in fact, owe Teague workers' comp benefits.

But this was not to be an example of David slaying Goliath.

Wal-Mart instructed its attorney, Todd Lundmark, to appeal the ruling, which put the payments to Herm Teague on hold.

Another year passed. Then, last April 1, the Arizona Court of Appeals said Judge Moore had erred in awarding any benefits to Teague.

Herm Teague, the appellate court said, had been engaging in a "personal comfort activity" when he stepped the few feet from his greeter's post to buy his Coke, and hadn't been on an official work break.

Though no one had seen Teague faint and hit his head, it surely happened moments after he'd sipped from his soda, the alleged personal comfort activity. So, the court concluded, Teague's injury hadn't "arisen out of" his employment at Wal-Mart — he'd just happened to be at work when it happened.

The ruling stunned Herm Teague's survivors. Teague had died at age 88 in Scottsdale on February 11.

"My personal opinion," says Phoenix attorney Rick Kilfoy (who is Linda Kilfoy's son and litigated the Teague case pro bono), "was that Wal-Mart saw this as an opportunity to get a court to reduce the limits of employee liability in workers' comp cases. And they hit the jackpot."

A Wal-Mart representative did not return phone calls from New Times seeking comment.

Kilfoy and others who knew Teague well say the protracted battle with the mighty Wal-Mart after his spill broke Teague's spirit. By the time he died, Teague had incurred about $200,000 in medical bills unrelated to his Wal-Mart head injury that Medicare wouldn't pay while awaiting the outcome of the workers' comp case.

"He wondered if he'd have to go to jail for non-payment of debt," says Linda Kilfoy. "It was as if someone just started kicking him. He was so embarrassed."

Herman Teague's workers' comp case would make for a cautionary tale even if it were an exception to the rule governing Wal-Mart's typical practices with employees.

But a review of the firm's history of dealing with injured employees suggests that Teague's experience hardly was exceptional.

In June 2007, the Washington, D.C.-based group Wal-Mart Watch issued a position paper on the company's dismal record in handling many workers' comp claims.

"Problems with Wal-Mart's often lengthy workers' compensation process and rates of compensation are pervasive, ranging from contesting and failing to pay out on valid claims to intimidating workers seeking compensation," it concluded, making note of a monumental class-action lawsuit filed against the company in Oklahoma last year.

That lawsuit alleges that, after plaintiffs filed claims for on-the-job injuries, Wal-Mart cut their pay, hours, or flat-out demoted them. One of the Oklahoma plaintiffs claims she was forced to quit her job as a condition of her workers' comp settlement, which is against the law.

"Wal-Mart is known for fighting even the simplest, most straightforward workers' comp claims," says Stacie Lock Temple, senior director of strategy and communications for Wal-Mart Watch, "dragging out the process and forcing its employees into lengthy arbitration or court battles."

It's not just plaintiffs' lawyers and watchdog groups who have taken notice of Wal-Mart's corporate attitude toward its injured "associates."

The state of Washington took the unprecedented step in February 2002 of ordering Wal-Mart to relinquish control of workers' comp claims for the next eight years. The state earlier had moved to revoke Wal-Mart's authority to handle its own claims after five audits showed the firm routinely failed to properly handle legitimate claims.

"Over the last seven years, Wal-Mart has 'repeatedly and unreasonably' delayed giving injured workers the benefits they were owed under workers' compensation laws," the director of Washington's Department of Labor and Industries wrote. "In some cases, Wal-Mart employees were not allowed to file workers' comp claims at all."

Wal-Mart was allowed to remain self-insured but remains barred from administering its own claims until 2010.

On the other side of the nation, the state of Maine announced in 2004 that Wal-Mart's policy of challenging its workers' comp claims was "off the charts" in comparison to other companies. In that state, a "notice of controversy" is filed each time an insurer (a self-insurer in Wal-Mart's case) challenges a claim, as is a memorandum of payouts.

Maine keeps track on a quarterly basis of how much insurers are paying in comp claims as compared with how often a claim is challenged.

"We think it keeps companies on its toes," says Cheryl Crowley of the Maine Worker's Compensation Board. "Not every claim is a good one, certainly, but certainly not every claim is controversial, either."

In the first three quarters of 2004, Wal-Mart contested a remarkable 94 percent of its workers' comp claims in Maine. By contrast, that state's largest grocery chain filed notices of controversy on just 17 percent of its claims.

Wal-Mart responded after word of its intransigence in handling workers' comp claims became public. By the end of 2006, the company denied 51 percent of injury claims in Maine, a dramatic decrease.

Unfortunately, according to an employee at the Industrial Commission of Arizona, this state is far behind Maine in tracking specific outcomes of workers' comp cases.

No one at the agency was able to provide New Times with how many of Wal-Mart's Arizona employees (more than 32,000 as of May 1, about 25,000 full-time) have filed injury claims, how many of the claims were denied by the company and were appealed by workers to the commission, and what happened after that.

Things have been on a bit of an upswing lately for Wal-Mart's public image, with glowing news accounts of the company's emphasis on "greening" itself, and its allegedly improved record in providing affordable health insurance to more of its employees.

Still, Wal-Mart continues to take hits via books, magazines, a blistering documentary (Wal-Mart: The High Cost of Low Prices), activist groups, and in courtrooms, where juries in a number of big-money cases have come down against the super-firm.

One common theme centers on how the company marches into a community, erects one of its 200,000-square-foot superstores and, by virtue of its generally lower prices, is able to unfairly wipe out competition (especially mom-and-pop stores) because of its reliance on cheap foreign labor and goods.

Another premise suggests that Wal-Mart has failed miserably in offering affordable healthcare programs to a majority of its workers. This has forced thousands of employees to enroll in taxpayer-funded public health programs to ensure medical care for themselves and their families.

Evidence amassed in researching this story reveals that Wal-Mart ranks at or near the top, in every reporting state, of those employers who foist a chunk of the cost of providing worker healthcare onto the public.

The state of Arizona can provide some figures on the latter point. In 2005, almost 3,000 Wal-Mart employees and 487 dependents were enrolled in AHCCCS (Arizona Health Care Cost Containment System), which is this state's Medicaid program. This cost Arizona taxpayers an estimated $12.2 million in that fiscal year alone.

All this seems to matter little to millions of loyal Wal-Mart shoppers, who continue to pour into the stores in record numbers.

On May 13, Wal-Mart announced record first-quarter sales and earnings, listing net sales of $94.1 billion and net income of $3.02 billion, a 6.9 percent increase.

Lee Scott, the company chief executive officer, gave a slew of reasons for the upsurge, including one buried deep in the self-congratulatory glow: "A reduction of worker's compensation accruals."

CEO Scott may as well have been talking about the Herman Teague case.

Herm Teague was born in Clarkdale, Arizona, near Cottonwood, in 1920, two years after Wal-Mart founder Sam Walton's birth in Oklahoma.

A young man with a bent toward science, Teague also excelled at athletics at what is now Cottonwood Mingus High School before enrolling at the University of Arizona.

He interrupted his studies to enlist in the Army Air Force after the Japanese bombed Pearl Harbor in December 1941 and flew more than 20 missions as a B-24 pilot in the Pacific theater.

After his honorable discharge, he returned to U of A and completed his degree in metallurgy. He married his high school sweetheart, Betty, with whom he had three children.

Teague's field eventually led him to Lander, Wyoming, where he became the general foreman responsible for ore processing and shipping at a mine owned by U.S. Steel.

Wyoming suited Teague just fine, as he was a devoted hunter and fisherman — and an inveterate storyteller, to boot.

He liked to tell his closest friends, "Don't stop me if I've told you this story before because I want to hear myself tell it again."

Teague's first wife died in 1978, and he married Cecil Slagle the following year.

The new couple spent winters in Arizona after he retired from U.S. Steel in 1982. When he became a widower again in 2000, Teague remained active with the Shriners of North America, played golf, and explored his beloved Wind River Mountain range in Wyoming on horseback with friends.

By the time he reached his mid-80s, Herm Teague still was sharp mentally and didn't want to fade away into senior-citizen oblivion. That's what led him to the job at Wal-Mart.

On the day he got hurt at the store, Teague had clocked in at 12:31 p.m. He went to his assigned post and greeted people, as usual.

About an hour later, he asked fellow employee Josh McKay to help him purchase a Coke out of a nearby machine because he was having a hard time seeing what he was buying.

McKay later testified that Teague complained about feeling poorly and appeared pale. McKay handed the older man the soda and then went outside to gather up shopping carts.

Administrative law Judge Joseph Moore would ask Teague later whether he remembered choking on that Coke.

"Oh, yeah," Teague said, adding, "I don't remember when I fell. Everything just went black. The next thing I knew, I woke up and I was on the floor."

Wal-Mart employees found Teague unconscious and bleeding on the concrete floor, and called 911. Doctors at a nearby hospital stitched him up. Then they ordered a series of tests to determine what had caused him to faint for the first time.

The tests revealed that he needed a pacemaker, which was implanted the next day, March 7.

Teague remained in the hospital for a few days before he was released.

He never set foot in that Wal-Mart again.

Herm Teague and his family didn't worry much at first about things like workers' compensation claims.

Foremost, of course, was Teague's recovery from his spill and from the more worrisome heart issues. He resolved to return to work at Wal-Mart as soon as he could, to the job he had been enjoying so much.

But then the medical bills started to pour in, and Teague realized that Wal-Mart wasn't going to cover the costs of the injuries he'd suffered on the job. He filed the proper paperwork requesting workers' comp benefits, and awaited Wal-Mart's reply.

The company's answer: No way.

"We never expected them to say no, never," Linda Kilfoy says. "We live in this wonderful country, with good benefits for a lot of people, and Herm continued to think that if you get hurt on the job, which he did, and don't ask for anything that's not coming to you, which he never would have done, then your boss takes care of you."

Teague enlisted his step-grandson, attorney Rick Kilfoy, to help him appeal Wal-Mart's denial at the state Industrial Commission. Wal-Mart retained Todd Lund­mark, a workers' compensation specialist who had co-authored a handbook on the topic.

The burden of proof before the judge was Teague's.

Under the law, he was forced to undergo physical exams by two doctors of Wal-Mart's choosing, which he did in January 2007.

One of those physicians, Ernie Riffer, concluded that Teague's fainting spell and subsequent head injury "in no way related to his employment. [It] was related to his coughing and choking primarily. It was compounded by his underlying cardiac condition."

The second Wal-Mart doctor agreed with his colleague.

Teague didn't have the money to bring in experts to testify at the Industrial Commission, Rick Kilfoy says. But the lawyer still was confident the old guy had a fighting chance.

"If he had been on a couch at home when he fainted instead of standing up on a hard surface at work, he wouldn't have hurt himself when he fell," Kilfoy says. "He was a few feet from where he typically greeted people, and he took a second to get a soda. He wasn't on a break, and there was nothing in writing at Wal-Mart that kept him from grabbing a Coke."

Herm Teague was the first witness to testify at the Industrial Commission hearing.

It humiliated Teague even to be there, his stepdaughter says, and he kept his answers terse, not having much more to add than he'd sipped from his soda, fainted, and came to on the floor at Wal-Mart in a pool of blood.

Wal-Mart assistant manager Janice Kursch­ner testified that she had assisted Teague on the floor after he'd fainted. She said it was "unusual" for someone to drink a soda while on duty.

"They're not to have anything on the floor except water," Kurschner testified.

So, Wal-Mart attorney Lundmark asked her, it wasn't okay for Teague to consume a soda near the machine?

"Normally, no," she said, "because we need somebody on the door at all times. So he had technically walked away from the station."

Rick Kilfoy asked whether "company employees [are] expressly precluded from purchasing and consuming sodas from that soda machine."

"No, sir," Kurschner replied. "They can do it on their breaks and lunch."

Kilfoy told the judge that Teague's employment with Wal-Mart "contributed to, if not caused, his injuries."

In his closing remarks, attorney Lund­mark focused on a 1970 Arizona case in which a woman working as a stock clerk for a school district injured her lower back while arising from a toilet at work.

Going to the bathroom, Lundmark argued, even at work, is considered a "personal comfort activity" by the courts as compared with a more-typical work-related injury, such as blowing out a knee while lifting a large object.

It turned out that the stock clerk, whose name was Sacks, had pre-existing back problems, akin to how Herm Teague had heart problems before fainting on the job.

In the Sacks case, an appellate court upheld an administrative law judge's ruling that her back injury had happened "in the course" of her employment with the school, but had not arisen "out of" her employment.

Under Arizona law, that's a huge distinction.

The court in that case said, "The mere fact that the accident occurred on the premises of the employer during working hours does not make it compensable."

But in March 2007, Judge Moore ruled against Wal-Mart, contrasting the Sacks case with the case at hand.

"Here," the judge wrote, "the employer contributed to the personal comfort of customers and employees by placing the vending machine on the premises . . . Employees had not been expressly prohibited from purchasing beverages from the soda-dispensing machine and had not been expressly prohibited from consuming such beverages at times during their work shift that were other than break times."

Even so, the Teague case was far from resolved.

Rather than take their small defeat and move on, Wal-Mart commissioned its attorney to file a special action with the Arizona Court of Appeals. That put any workers' comp payments to Herm Teague on hold.

What really continued to eat at Teague were the mounting medical bills that Medicare was refusing to pay because of the still-pending comp case.

"He had doctors turning him away because they weren't sure if they'd ever get paid," Linda Kilfoy says. "Even the hospice, when he was near the end, called us and asked what was going on with the payments. I had to call the Wal-Mart insurance people and their lawyers to see what could be done. They said they didn't know who I was or what I was talking about."

Rick Kilfoy says he noticed a distinct deterioration in Teague's demeanor and physical appearance as time wore on.

"Even though we had won at the administrative-court level, Herman was very, very depressed and worried at the whole thing. Without being cliché about it, I think the ongoing battle and the mess with Medicare and so on was breaking his heart."

Teague spent his last months going back and forth between Arizona and Wyoming, where he still had dear friends.

He died in February, not knowing the outcome of his workers' comp case or what was going to happen with his substantial medical debts.

On April 1, presiding Court of Appeals Judge Susan A. Ehrlich, writing for a unanimous 3-0 panel, overturned Herm Teague's award.

"There was no evidence that Mr. Teague's work substantially contributed to his injury to such a degree that it overcame the personal contribution of his pre-existing cardiac conditions," Ehrlich wrote. "Without an increased risk from work, the circumstances of Mr. Teague's injury do not rise to the level of work connection necessary for compensability."

Herm Teague's body was taken to Wyoming for burial. His family and friends held a memorial service at a favorite restaurant outside of Riverton, the town where he had lived for so long while working for U.S. Steel.

People flew in from several states to pay tribute to a man for whom a court battle with his employer over a piddling sum of money would've been the last thing he'd have wanted.

"God knows they spent a lot more in attorneys fees than they would have spent on Herm," Rick Kilfoy says of Wal-Mart.

Kilfoy's mother, Linda, sums up the story like this:

"This had to do with how in the world do you keep a big corporation, the biggest of the big, from taking advantage of hard-working innocent people? Maybe you just can't."

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