Spherion Corp. Steals $426,000 From Widow
Thomas Amschwand knew he was dying and did everything in his power to make sure his wife would be able to collect his $426,000 life insurance policy. Yet when the 30-year-old succumbed to heart cancer, his employer, Spherion, a temporary staffing company, told his widow Melissa that she would receive nothing.
Spherion had switched life insurance providers without informing Thomas. Under the new policy, employees had to work for one full day to activate their coverage. Spherion never mentioned this to Thomas, and repeatedly assured him that he didn't need to do anything to retain his coverage.
His widow said he easily could have worked a day if that was what it took to activate the new policy. Spherion could have waived the one-day-of-work provision, as it did for other employees but not for Amschwand.
When Thomas died, because the policy had never been formally activated, Spherion refunded his insurance premiums and told his widow she would receive nothing else.
The story has played out often under the federal Employee Retirement Income Security Act. Designed to protect employee benefits, the law has been used by employers as a shield against suits.
Federal appeals courts, interpreting Supreme Court decisions dating to 1993, consistently have said companies that offer health, life and retirement benefits under ERISA cannot be sued for large amounts of money, or damages. Instead, they can be sued only for typically smaller sums such as Amschwand's insurance premiums.
Several federal judges have bemoaned the unfairness even as they have felt constrained to rule in favor of employers.
"The facts ... scream out for a remedy beyond the simple return of premiums," Judge Fortunato Benavides of the New Orleans-based 5th U.S. Circuit Court of Appeals said in the Amschwand case. "Regrettably, under existing law it is not available."
The Supreme Court recently refused to hear Melissa's case. Congress has refused to act. Insurers continue scrape up lucre, and consumers are left to suffer.
Employers use federal law to deny benefits [AP]
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Situations like this are where consumer activism really shines. With a court system, legal system, and mass media co-opted by corporate interests I sometimes wonder where we'd be without the power of the Internet.
This really p*ssed me off. So the first time in my life, I wrote the U.S. Senator who started looking into this (Patrick Leahy).
Granted there was a gotcha clause, who's to say some corporation would just outright refuse to pay on a legitimate claim in the future?
@homerjay: It would be nice to hear from people who have been placed through them the names of the companies for whom they were working.
Nice to know where to put the pressure.
This is very disturbing. I will definitely take every opportunity to share this story.
They had a clear chance to do the right thing and instead chose to celebrate loop-holing their way into doing something evil (by the books, but evil none-the-less).
I started looking online to see if I could figure out who their customers are. The first one I found? Sprint.
I'm not optimistic. :-(
This is HORRIBLE. I can't even find the right words.
The post says that they waived the one-day requirement for other employees. That's GOT to be the smoking gun... right? Or is there some kind of "pre-existing condition" clause that made only him being required to do the one-day garbage?
Best wishes for the widow, how absolutely crushing.
This totally blows me away. I had no idea a company could be so devilish and still be within the laws. Has CNN or a local media news outlet been notified of this? Maybe some bad press will apply enough pressure, in addition to consumerist.
And I just spent a good 15 minutes typing up a well-worded letter to my Representative, only to have it wiped out when I hit submit due to some error :(
Booo!
It's out there... [ap.google.com]
The question is how to make the publicity more costly for the company than paying this woman what she should get. And of course, getting Congress to fix the law.
When we the people allowed the Supreme Court to decide the presidency, the door was opened for big business to begin it's evil reign. It has led to the utter chaos we're in now. Insurance companies can collect and collect but then refuse to pay out. Companies can refuse to pay employees benfits and retirement as they go through bankrupies and pay CEOs millions and millions. We as a nation need to open our eyes and realize the axis of evil rules Washington and we as honest citizens are considered at best, sheep to be fleeced, at worst, terrorist. Democracy and freedom no longer belong to the average citizen, only to big businesses, oil companies, Congress, and the president. This is a sad story but it is only one of many we will never see on the 6:00 o'clock news.
Since they waived the one-day-of-work provision for other employees but not Amschwand, it seems like that's the place to start hitting them.
It doesn't say, but I assume he did work there before getting sick. So how do they get to deny him based on having not worked a day? His employment didn't start when they switched insurance companies. It started when he first started there. I guess the issue here is, did they receive documentation in the mail outlining the new rules? If not and their only notification was through the company via the phone, clearly there is an issue here. Aren't employees supposed to be notified of things like this in writing?
And this doesn't seem to be a case of the dispute of the benefits and it's rules. This is a dispute involving someone taking premium money, but not actually setting up the benefit. Isn't this insurance fraud?
@nsv: There is no "hitting them." The case has progressed through the legal system and ended with the Supreme Court failing to act. All the pressure in the world won't do any good if their clients also fail to act, or if their potential employees do not sign up with the company, and neither is going to happen. Employees need the money and clients will enjoy the cost savings.
@rbcat: Ah crap, that'll teach me to read while I should be sleeping.
While I don't look to our legal system for logical decisions, I don't understand how this was allowed to happen. If nothing else, the rules should apply or not apply to all employees the same way. If the provision doesn't apply to all employees why would it apply to him?
Here in austin Spherion is very big in staffing. This town has a lot of temp to hire companies. Spherions big company here..... Dell Inc. They supply they call centers and manufacturing here.
With this bold act, Spherion has pushed back the frontiers of Douchebaggery.
Hopefully someone on the internets can think of a way to shame Spherion into doing the right thing, since the Supreme Court and Congress are unwilling. '
Dell is a major user of Spherion staffing as a holiday filler (for busy order times) and as a temp to perm situation. They are based in Florida so let's put our heads together and figure out how to make this better.
My recommendation would be to as others have said write the companies that use them and tell them how bad they are.
@angelmom1: So this all started when the supreme court ruled in favor of Bush in 1999? Before that, corporations were our friends? Did you notice that the article says these supreme court rulings go back to 1993?
And since the election was in dispute, who would you have preferred settle the dispute? The UN?
I'll never consider Spherion as a source of staff augmentation again and will do everything in my power to ensure that hiring managers in my company are aware of this situation. I went to Spherion's Facebook page and attempted to post a simple request for an explanation and the message said "Some content in this message has been reported as abusive by Facebook users." This was the post. Judge for yourself:
Title: Explanation Requested
[ap.google.com]
My guess is they have all reviews blocked.
@angelmom1: The Supreme Court DID NOT decide the presidency. They ordered Florida to manually recount the votes. Your opinion doesn't mean you get to rewrite what actually happened.
Meanwhile, this situation sucks. I sincerely hope the widow finds some recourse against Spherion, and they get theirs where it hurts. It also appears that their blog allows comments. Perhaps its readers would like to know what happened, and its bloggers can be given their shot to answer. I'm not optimistic that will actually happen though.
I hope the same judge(s) rule in favor of justifiable homicide if some of the victims go seek justice their own way.
They're moderating comments at the blog, so spamming their site with links to this article probably won't work.
whoops, thats the exact same story
my bad
@angelmom1: the problem isn't with the courts, its with our legislature. From the article: "The facts ... scream out for a remedy beyond the simple return of premiums," Judge Fortunato Benavides of the New Orleans-based 5th U.S. Circuit Court of Appeals said in the Amschwand case. "Regrettably, under existing law it is not available."
Judge Benavides's wikipedia page shows he was nominated by Clinton and is viewed as fairly moderate. He doesn't seem like someone who would be unwilling to rule in favor of "the little guy" when it is appropriate to do so.
There are two ways to resolve disputes like this- either through the legislature or through the courts. When courts resolve controversies like this, sometimes they rectify oversights in the law. Othertimes they position their personal views over those of the people even when the law is clear. If Judge Benavides is to be believed (and I know of no reason not to belive him), the law here appears to be clear and until our representatives change the law, we shouldn't get upset at the court. Hence the phrase "bad law leads to bad rulings."
I worked for them in college. They tried to suspend me because I shared the fact that I got a raise to my co-workers who did the same job and started at the same time as I did. They told me I wasn't allowed to openly discuss my paid wage. Turns out one of my co-workers knew this was false and called them on it. So I had to back in and listen to them tell me that I "shouldn't" discuss my wage instead of saying "couldn't"... Yeah that place sucked.
I worked for Spherion briefly--they are a CLASS ACT. One of the temps in the same group as me was reported for sexual harassment, and Spherion would not fire him despite Dell's urgings. They would, however, happily drop me and refuse to rehire me after I took a few days off to fly home and see my sister graduate from high school. This with A MONTH OF NOTICE and multiple people saying "oh, it's fine." It's nice to come home and find yourself jobless. Screw them, they deserve whatever they get.
Spherion bought up lots of smaller staffing firms to become pretty big, pretty fast. I know they offered greencard processing to some employees, then forget to file paperwork, etc., in order to keep extending their employment with them no matter how much abused. They had crappy benefits and lied about bonuses and other incentives. Really low life company.
But they were able to hire lawyers who found a loophole in ERISA. Congress must change this among other loopholes, like with COBRA. So Vote for the person who will support workers, not just corporations.
My wife worked for Spherion for a while, until she hurt her back moving shipping materials and went on workman's comp. They put her on an office job as soon as she was able -- which she was great at -- but then stopped giving her hours (effectively dismissal) as soon as her back was better, over the protests of the manager for whom she had been assigned to do clerical work in the interim.
Can't say I'm too fond of them.
This is absolutely despicable. What can we do to help? If the Supreme Court won't step in, what avenues are available to this poor woman?
@pengie: All Dell would have had to do was say they didn't want the employ on their property and Spherion would have had to remove that employ. They could still keep him on staff for assignments at other companies just not at Dell. If you work for a temp agency that's the price you pay. The employer your agency contracts to can decide they don't want you at any time for any reason and your ass is out the door.
Spherion, the insurance company, and the courts made very poor decisions. People wonder why there's no workplace loyalty any more. So many of our leaders have lost their integrity there's no one left for us little guys to put our faith in.
Messrs. Atkinson and Havel,
As of today, I am a former Spherion client. This decision to drop Spherion is due to the publicity generated by the poor handling of the life insurance case of the late Thomas Amschwand. You can read more about this at:
Spherion Corp. Steals $426,000 From Widow
Although the headline might be a bit of hyperbole, it does come pretty close. I plan to do two things. I will buy a few shares of stock so I may exercise my rights as a shareholder in your company, and I will notify appropriate news outlets and bloggers about the treatment of Mr. Amschwand's widow.
Sincerely yours,
David Barak
Questions or having online trouble? Contact us at 800 SPHERION (800 774-3746) or via email. help@spherion.com
Members of the Press
(800) 422-3819
Kip Havel kiphavel@spherion.com
Investor Relations
Randy Atkinson investorrelations@spherion.com
Corporate Headquarters
2050 Spectrum Boulevard
Fort Lauderdale, FL 33309
(954) 308-7600
E-mail help@spherion.com
This is the lowest of low. Utterly disgusting. I would go midievil of this company if this happend to me. The loss would be staggering and monumental.
Eoghann: The Supreme Court DID NOT decide the presidency. They ordered Florida to manually recount the votes.
Actually, no. In Bush v. Gore, SCOTUS ordered Florida to STOP its recount. "In a per curiam opinion, by a vote of 7-2, the Court in Bush v. Gore held that the Florida Supreme Court's method for recounting ballots was unconstitutional, and by a vote of 5-4, held that no alternative method could be established within the time limits set by the State of Florida."
Not that it has much bearing on this particular case, but if you're going to correct someone, you might as well do it correctly.
And IANAL, but is there any piece of paper where the company said there was nothing further for the deceased to do to trigger insurance benefits? Because then we're talking fraud, and the widow might have an actionable cause. Right now, with SCOTUS refusing to review, she's SOL.
@landsnark: Unfortunately $426,000 isn't "PR" money, and while Spherion will probably gain our wrath and contempt, the average person and company that uses their business remains unaffected and will probably not pay attention to things like this.
As for "Deciding the Presidency", our trend down corporate favoritism started way before Bush, and even Clinton. That's not to say it won't get worse, just as electing a democrat won't make it better.
I'd say 90% of congress is in Bed with corporate interest in one way or another, and anyone who has any fiscal or regulatory responsibility is screened very thoroughly by the Business interests in Washington.
The supreme court isn't really the best bet when dealing with an insurance company. The commissioner of insurance is far more effective at getting insurance companies to pay out. Some companies even lose their license to sell insurance in a state over this sort of thing. The courts only care about the letter of the law and the letter of the contract. The commissioner of insurance cares about the intent of the insuring company. She may still get the shaft but it's a different avenue to explore.
I know it won't happen, but I would love to see all Spherion employees who are outraged by this walk off the job for one full day - and then tell the company they are assigned to why they were gone when they come back. If enough people did this, Spherion would not fire them - And it really hurts staffing companies when the employees they snd out don't show up.
Oh, and of course they should all do this all on the same day.
Mr. Roy Krause
Chief Exec. Officer, President
Mr. Mark W. Smith
Chief Financial Officer, Principal Accounting Officer and Exec. VP
Mr. William Grubbs
Chief Operating Officer, Exec. VP and Head of Commercial Staffing and Professional Services Unit
Mr. John D. Heins
Chief HR Officer and Sr.
Ms. Loretta A. Penn
Chief Service Excellence Officer and Sr. VP
Here in Nashville, Dell has not used Spherion for at least a year now; they don't use temps here anymore, period. The local Spherion offices have closed and their monthly job fairs are gone.
I had first heard of this case yesterday afternoon when it was posted in Yahoo headlines. I can't believe that this occurred in 2001 and I hadn't heard about it until now. Either way I am grateful that I am now aware of this case although completely disturbed, I am hooked on following this story and case.
So based on what I've read and researched, the Supreme Court ruled that this case could not go forward due to ERISA law set in 1974 and would not even be subject to review.([www.dol.gov])
nsv & concerned citizen - the work one day rule is waivable, and the reason why Aetna did not pay out the life insurance premium although they have a clause which allows this stipulation to be waived for ill patients is because SPHERION failed to include Thomas Amschwand on the exception list. They also failed to inform Mr. Amaschwand that the insurance policy had a.) changed and b.) of the new clause for the life insurance to take effect and c.) gave incorrect information when the Amschwands asked "is there anything further to do."
With all the above facts, I found it completely shocking and reprehensible that Spherion was able to shirk their responsibility of performing their due dilgence yet still have the gall to hide behind such an official law. In my personal opinion, their HR department is responsible for gross negligence. Unfortunately, there is a law protecting Spherion although I'm sure that it was never intended for a circumstance such as this.
His widow, Melissa Amschwand has since moved on, and started a foundation to benefit cancer patients and I wrote to her, asking what someone like me, just a member of the public could do to help and she wrote me back! I am happy to share this with you. I will be writing to my senator as well as Sepherion as well as enlightening those around me.
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Thank you so much Virginia. I really appreciate your support more than words can express. It is a travesty of justice that employers like Spherion are not held accountable for the promises they make to their employees. Hereʼs what you can do to help:
1) Please share this story with all of your friends and loved ones. Urge them to purchase individual policies for life and disability.
2) Tell all your friends and loved ones to write their U.S. representatives and senators and ask for a change in the ERISA law. Otherwise, they may find themselves vulnerable and exposed just like me. Your friends can find their senators and representatives listed at [directory.usayfoundation.org] They just need to look under their own state. If you like, you can simply copy and paste the article in your email to your friends and just ask them to forward to their congresspersons and ask for a change in the ERISA law.
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I'm sure all the executives above firmly believe what Spherion did is right and would not be at all embarrassed if their friends and relatives knew about what happened.
Maybe we should start putting up fliers in Ft. Lauderdale that look like this:
Ask me about Melissa Amschwand.
I'm sure all the executives above firmly believe what Spherion did is right and would not be at all embarrassed if their friends and relatives knew about what happened.
Maybe we should start putting up fliers in Ft. Lauderdale that look like this:
Roy Krause, CEO Spherion Corp.
Ask me about Melissa Amschwand.
@mypetfly - good for you!
Spherion temps walking out on the same day would only cause problems for the temps. When you work for a temp agency, you agree to a 2 day notice when leaving a job, and if you leave without notice or don't tell them you'll be absent, you receive only minimum wage for the hours of that week you DID work, and are subject to firing.
I don't think it would matter how many people did it at the same time, it's policy, and temps sign an agreement before being allowed to work.
I work for Spherion. Do I agree with what they did? No. Will I quit my job tomorrow because of this? No. Have you tried getting a new job recently? Most major companies are in hiring freezes and are relying on temps to get non-manager level work done.
I'm a college student. I work for Spherion over the summer, and they have always been good to me - finding me jobs quickly, communicating effectively.
But I do know that the people who work in my local office would notify anyone of changes in policy, if they were made aware. How do you know that the person who told Amschwand his life insurance was all set didn't know any more her/his-self? They SHOULD have informed him, but it is not necessarily the entire company that is bad.
@twophrasebark: That sounds like a great idea. I'd be up for it if I lived in the same city as this douche bag...
Hope someone kneecaps the execs of this crap-hole company...
And, as a faithful Bush basher, I'd be pleased as punch to lay into Georgie if I could, but according to the article, even he is against this bug business ploy... (unless I'm reading this wrong...)
"The Bush administration has argued that the appeals courts are misreading the precedents and has asked the high court at least twice to clarify the earlier rulings. So far it has refused."
Spherion is a staffing company. Every one of their customers should drop them the minute they hear about this. Its not like they're the only game in town. Staffing companies are a dime a dozen.