AUGUSTA — The executive director of the Maine Workers Compensation Board is under fire from labor advocates for removing an injury claims resolution officer from cases involving the NewPage paper mill in Rumford.

Paul Sighinolfi said he took “unilateral” action soon after he was appointed by Gov. Paul LePage in 2011, after receiving complaints from the mill manager that the officer was biased against the company in handling claims by its employees.

Sighinolfi said he decided to address the perception of bias by establishing a four-person rotation to hear claims involving the mill, including the officer in question. But that officer, Glenn Goodnough, was never given cases involving NewPage.

The discovery of Goodnough’s removal has outraged labor advocates, several of whom confronted Sighinolfi during a board meeting March 11 after learning that the hearing officer had not adjudicated any of the approximately 40 hearings involving NewPage since the rotation was established in 2011. About 4,150 hearings were held in Maine during that period.

Several union officials likened Goodnough’s removal to last year’s controversy over the governor’s intervention in the work of unemployment claims hearing officers.

LePage and several supervisors in the state Department of Labor summoned the officers to a lunch meeting at the Blaine House and chastised them for their adjudication of unemployment benefits disputes. The U.S. Department of Labor Solicitor General later found that the meeting was inappropriate and could have been construed as a directive to find more unemployment cases in favor of employers.

Maine has eight hearing officers who adjudicate worker compensation claims. Each is appointed by the governor to a seven-year term – the length is designed to protect them from political influence – and approved by a seven-member board of directors, divided between labor and business members. The executive director, appointed by the governor, has the board’s tie-breaker vote.

Officers are assigned to cases in specific geographic areas, partly to reduce travel for the parties involved. Each dispute has three levels, the third being a formal hearing overseen by an officer. Either party can appeal a hearing officer’s ruling, but state law makes it difficult to overturn an officer’s fact findings.

According to an annual report by the Maine Workers Compensation Board, there were 13,187 cases involving injuries that caused workers to lose one or more days of work in 2012, down by 349 cases from 2011. The report doesn’t identify companies. However, each county is assigned “a disabling rate” for such cases. Oxford County has the fourth-highest rate in the state, slightly above the state average.

NewPage is the largest employer in Oxford County, according to 2012 Maine Department of Labor rankings.

NEWPAGE AND LEPAGE OFFICIALS MET

Sen. John Patrick, D-Rumford, a worker and member of Local 900 of the United Steelworkers union at the mill, said union members had heard that Goodnough had stopped handling NewPage cases, but they didn’t know for sure until Sighinolfi unexpectedly confirmed his decision during the last board meeting.

“We were all wondering what the hell was going on,” Patrick said. “I was livid when I left (the meeting). How big and how deep is this thing?”

Sighinolfi downplayed the significance of his decision. He said there was precedent for establishing a rotation of claims officers if a major employer complained. He also suggested that the attack against him was politically motivated, and said LePage had no knowledge of his decision.

“It was done completely on my own,” Sighinolfi said. “I suspect that somebody will suggest there was gubernatorial involvement. That couldn’t be further from the truth. He didn’t know that I did this; in fact, he still probably doesn’t know.”

However, Tony Lyons, a spokesman for NewPage, said company officials expressed concern about worker compensation claims and other matters during a meeting in 2011 with Sighinolfi and the LePage administration’s senior staff. Shortly after the meeting, the rotation of hearing officers was established, Lyons said.

“We’ve seen fairer, more consistent rulings since then,” he said.

Sighinolfi said he didn’t think Goodnough was doing anything wrong, and would have taken disciplinary action if he had.

“Was he making bad decisions? I think the answer is no,” Sighinolfi said. “There’s a decisional range, from conservative to people who are liberal. There was a concern that he was being too liberal. Anytime there’s a perception of things not being entirely fair, perception turns into reality.”

Asked about Lyons’ account, Sighinolfi acknowledged that the meeting was held and that senior members of LePage’s staff attended. Sighinolfi would not say whether anyone at the meeting told him to reassign Goodnough.

“I told them that I’d look into (NewPage’s bias allegations) and I did,” he said.

Adrienne Bennett, the governor’s spokeswoman, said Thursday that neither the governor nor his staff directed Sighinolfi to establish the rotation. She said they were informed after it was implemented and the administration had no objections.

“It’s (Sighinolfi’s) prerogative to do this,” Bennett said.

OFFICER BACK IN NEWPAGE ROTATION

Goodnough, who has been a hearing officer for 20 years, would not discuss his removal in detail. He said he had never been removed from cases before, and confirmed that he was put back into the NewPage hearing rotation after the board meeting March 11.

He said Sighinolfi told him there were complaints in 2011.

“I don’t want to go into it further because I’m going to be hearing NewPage cases,” he said. “I would say that our role is similar to that of a judge. I decide cases based on the law and the facts in a case. That’s my job.”

Critics of Sighinolfi’s decision have described Goodnough’s disappearance from the rotation as suspicious. They say the director should have documented the change and notified the board. They also contend that the decision sent a message to other hearing officers to decide more cases in favor of NewPage.

Matt Schlobohm, a lobbyist for the Maine AFL-CIO, a federation of labor unions, said the move was comparable to an individual choosing their judge in a court case.

“For us, this is very troubling and inappropriate,” Schlobohm said. “There are distinct and disturbing parallels with the (unemployment hearing officers) and it appears that this administration, once again, is willing to tip the scales of justice in favor of a major employer at the expense of the worker.”

NEWPAGE INSURANCE PREMIUMS RUN HIGH

Worker compensation insurance funds wage replacement and medical benefits for employees who get injured on the job. Businesses pay higher premiums as claims ruled against them increase.

Lyons, the spokesman for NewPage, said the mill in Rumford paid $5 million for worker compensation insurance in 2011, twice as much as any of the other eight mills in the NewPage Corp. He said the high costs make it difficult to lure capital investments from the company.

“We’re not just in competition with other paper mills, we’re competing against other NewPage mills,” he said.

Lyons said the company approached previous administrations with worker compensation complaints, but he did not know whether any other hearing officer had been moved into a rotation or removed from cases involving NewPage.

Paul Dionne, who was executive director of the Maine Workers Compensation Board under Govs. Angus King, an independent, and John Baldacci, a Democrat, said he didn’t recall moving hearing officers to accommodate any company’s complaint.

“We got complaints from both sides,” said Dionne, who was the director for 18 years before LePage replaced him three months after taking office. “In my experience, the hearing officers were very objective.”

The Portland Press Herald requested data showing the results of complaints reviewed by hearing officers, but Sighinolfi said the agency doesn’t track “winners and losers” in worker compensation cases.

TENSIONS, ACCUSATIONS AT BOARD MEETING

It’s unclear whether the rulings in cases involving NewPage have since tilted toward the employer. Patrick said the union is evaluating all of the cases since 2011.

“We’re going to be looking into it because (Sighinolfi) has determined that he’s going to be the judge, jury and executioner for cases involving one specific company,” he said.

According to an audio transcript of the board meeting March 11, Sighinolfi said a representative from NewPage had turned over evidence of biased decisions by Goodnough, which he reviewed before establishing the rotation. However, he told the Press Herald that his decision was based on his own random sample of Goodnough’s cases.

Asked Thursday to reconcile the two statements, Sighinolfi said he reviewed NewPage’s evidence and did a random review of Goodnough’s cases.

He defended his decision at the board meeting. During a contentious exchange, labor advocates told him he was wrong to keep the decision from the board. Jim McAdam, a Portland-based labor attorney, told Sighinolfi that his decision effectively reprimanded Goodnough.

“Quite the contrary,” Sighinolfi said.

McAdam responded, “You’re saying that (Goodnough is) doing something wrong. You’ve given a message to all the other hearing officers that if you don’t rule 100 percent in favor of employers, especially this mill, then you’re going to be censured.”

Steve Mistler can be contacted at 791-6345 or at:

smistler@pressherald.com

Twitter: @stevemistler