Tumwater resident Jessica Dana, 20, is pretty typical for her age: She has a job, she likes to work out and she likes to spend time with her family.
She also has accumulated 45 racing trophies, representing racing accomplishments in quads, go-karts and super-late-model racing cars, the kind of vehicle that generates 600 horsepower and can race around an oval short track at 140 miles per hour.
Her love of motorsports and her success at racing brought her some national attention.
She defeated four-time Sprint Cup champion Jeff Gordon in a go-kart race in North Carolina and was one of nine young women who recently took part in NASCAR’s “Drive for Diversity.”
She finished second during a race at that event in Hampton, Virginia, in fall 2012, and then came home, likely dreaming of bigger and better things for a race car driver from Tumwater.
Her father, Troy Dana, described her as a typical teenager before her racing career at 17 got more serious. But then she would get behind the wheel of the car and become a remarkably focused athlete.
“It was a neat transformation to see,” said Dana, 51.
And then like all race car drivers, Jessica Dana had to make a pit stop.
Except the “pit stop” in this case took nearly two years to complete because the Danas were busy taking on the state Department of Labor and Industries, disputing financial penalties imposed on them and challenging the assertion that they were a for-profit business with employees, but rather a hobby race team with volunteers.
L&I, which is headquartered in Tumwater, is known for administering workers’ compensation insurance.
Soon after returning from the Drive for Diversity event, L&I sought $31,000 in workers’ compensation premiums, penalties and fines from Jessica Dana Racing LLC.
The case against the Danas eventually was dropped, but the damage was done: Everything associated with Jessica Dana, the race car driver, had been put on hold.
Ask her now about racing and she’ll tell you that she still races, but all that career momentum has gone.
“This 2-year process with L&I robbed me of a great number of opportunities,” she said. “It is still difficult to accept.”
SENATE BILL 5507
Jessica projects a quiet determination, but her father, Troy, is angry about those missed opportunities. Flashes of that anger showed Feb. 11 during public testimony in support of Senate Bill 5507.
If signed into law, the bill would require that L&I pay businesses that successfully appeal penalties assessed by the state agency in an equal amount, plus reasonable attorney fees and costs.
Sponsors of the bill are mostly Republican, including Sens. John Braun, Ann Rivers, Jan Angel and Mark Schoesler.
The Danas, who initiated the bill, addressed the Senate Commerce and Labor Committee, with Jessica explaining that she is “committed to leveling the playing field for businesses, hobbyists and L&I.”
During his testimony, Troy Dana revisited how it all began: Soon after returning from Drive for Diversity, L&I branded their hobby race team an “auto and truck repair shop” that allegedly employed unregistered employees.
But he also said that as soon as L&I had presented him with a bill of $31,000, they suddenly reduced it to $10,000. He was encouraged to pay and to pay quickly, or it might go back up to $31,000, Dana told the committee, recalling what an L&I official had said to him.
“Business owners across the board are forced to make this decision: Do I pay the L&I ransom, or do we fight? And if we fight, we’re probably going to lose anyway,” he told the committee.
In addition to using the word “ransom,” Dana also referred to L&I employees as “drones,” drawing a rebuke from Republican Sen. Michael Baumgartner, the committee chair, asking Dana to be careful with his language.
He apologized and then said he had resolved to take on L&I at the time.
But the L&I investigation into Jessica Dana Racing LLC doesn’t stop with the Danas: It also includes Neil Derline, 59, of Elma, who eventually became a crew chief to guide Dana’s racing efforts.
Troy Dana, a commercial real estate broker best known for currently trying to sell the former Olympia brewery, realized that as his daughter’s interest in racing grew, he needed someone with more knowledge about racing.
For one, he found himself overpaying for race car-related equipment for a sport that is already expensive. It costs about $5,000 per race, and any winnings or sponsorship money goes right back into the vehicle, Dana said.
Through a friend of a friend they met Derline, who has been involved with racing since the early 1970s, later giving up racing himself to focus on being a mechanic and crew chief.
Derline also used to drive a log truck until he injured his back in a rollover accident in 2003, which led to him receiving L&I benefits for time away from work.
Meanwhile, he volunteered his expertise to Jessica Dana Racing.
In 2013, L&I began investigating him for fraud, claiming that he was working for the Danas while still collecting benefits.
Derline’s attorney, Douglas Wyckoff of Olympia, who successfully defended Derline against L&I, thinks that Derline’s ex-wife triggered the fraud investigation with her own complaint.
Derline also shares that belief, although the origins of the complaint were never disclosed to him.
Wyckoff, who represents injured workers, said he was perplexed by the case, largely because he couldn’t understand why L&I seemed to go all in on a case that had some holes in it. For example, Derline had no records of any income from Jessica Dana Racing because he was a volunteer.
“At some point, the adults are going to walk in the room,” Wyckoff thought about the case at the time.
After L&I issued its order against Derline, it was appealed to the Board of Industrial Insurance Appeals. The case then got assigned to a judge who hears testimony and then issues an opinion.
The losing party can seek a review of the decision before the three-member board, but L&I didn’t even take that step. They just gave up, he said.
And related to Derline’s win, he went from getting benefits for time away from work to permanent L&I benefits, Wyckoff said.
As for the Danas, he said it was odd how they got dragged into the whole thing.
“They never could get a straight answer” from L&I, he said.
Both Derline and Troy Dana incurred legal fees. Derline’s were not immediately available, while Dana thinks he spent about $10,000. Dana was represented by Aaron Owada of Lacey.
LABOR AND INDUSTRIES
Tammy Fellin, legislative director for the Government Affairs & Policy Division at L&I, testified against the bill, wanting more specifics about the penalties that L&I would pay.
As proposed in the bill, money would come out of a medical aid and accident fund, something that workers and employers already pay into via workers’ compensation premiums, Fellin said.
For fiscal year 2014, workers’ compensation insurance covered 169,000 employers and 2.6 million workers. Workers’ compensation premiums paid by employers totaled $1.51 billion, while workers paid $343 million into the system. Combined, it totals $1.85 billion.
Total benefits paid, which includes injured workers’ medical treatment, partial wage replacement and disability and pension benefits, were $1.48 billion in fiscal year 2014, according to L&I data.
Under questioning from the committee, Fellin touched on the Derline and Dana cases.
“We were provided a complaint about an injured worker who was working, both collecting some benefits from the department and working,” she said.
But she also said there has been a change at L&I.
“At the time, our policy did not allow for a for-profit company, such as an LLC, to have volunteers,” Fellin said.
Troy Dana disputes that Jessica Dana Racing LLC was ever a for-profit company and defends creating the limited liability company because, in the event his daughter’s racing career took off, he was told by an attorney to protect his daughter’s “brand” with the LLC.
Committee Chairman Baumgartner asked Fellin whether the policy change had come about by statute.
She said it was a change in internal policy.
Committee member Sen. Steve Conway, a Democrat, said that after listening to the Dana’s testimony, it sounded at best like a customer relations issue between L&I and a business.
He wanted to know more about who business owners can turn to if they get tripped up by L&I requirements.
Fellin said the agency has two small-business liaisons who can help navigate the process on behalf of business owners. She also said that if they decide to appeal, file the appeal.
“Protect your appeal rights,” she said.
L&I, based on a three-year average, averages 1,586 audits of businesses per year in which penalties are assessed. Of those, 569 requested a reconsideration; 358 appealed to either the Board of Industrial Insurance Appeals or superior court; 47 were partial victories for the employer; 13 were won outright by the employer, according to L&I data.
Senate Bill 5507 advanced to the Rules Committee on Feb. 19, which will decide if it will be placed on the Senate floor calendar for a second reading.
‘YOU GO, GIRL’
Commitee member Sen. Karen Keiser, a Democrat, urged Jessica Dana not to give up on her racing during the Feb. 11 hearing.
“You can do it,” she said. “You go, girl. You can get it done and NASCAR is going to come calling.”
But Troy Dana said it’s not that easy.
“You can’t pick up where you left off in this sport,” he said.
If the bill fails, he is exploring the idea of collecting signatures to get an initiative, similar to the bill, before voters, Dana said.