Firm denies workers' comp in racial killing Company denies family benefits, says attack on mom was race-related, not a job issue

Carol Frazier, looks at family photos with her daughters Taneya Talley, center, and Shameana Talley at their home in Vallejo, Calif., on Wednesday, Nov. 26, 2008. Frazier's other daughter Taneka Talley was fatally stabbed to death in 2006 but Talley's insurance company is refusing to pay benefits to her son claiming the murder was racially motivated. less Carol Frazier, looks at family photos with her daughters Taneya Talley, center, and Shameana Talley at their home in Vallejo, Calif., on Wednesday, Nov. 26, 2008. Frazier's other daughter Taneka Talley was ... more Photo: Paul Chinn, The Chronicle Photo: Paul Chinn, The Chronicle Image 1 of / 7 Caption Close Firm denies workers' comp in racial killing 1 / 7 Back to Gallery

Taneka Talley was stabbed to death in March 2006 while she was working as a clerk at a Dollar Tree store in Fairfield. Her killer's only motive, prosecutors say, is that she was African American.

That's also the reason the store's workers' compensation insurer is denying $250,000 in death benefits to Talley's 11-year-old son.

The boy's grandmother, the child's legal guardian, said Specialty Risk Services is taking the position that a racially motivated killing is personal, not work-related - even though the man charged with killing Talley had never met her before. The insurance company, Dollar Tree and their lawyers aren't talking publicly about the case but are defending their position before a state appeals board that hears workers' compensation disputes.

"I think it's unfair. It's discrimination," said Carol Frazier of Vallejo, who gained custody of her grandson, Larry Olden, after her daughter's death and is challenging the insurer's refusal to pay in a case that eventually could go to court.

"They're saying (the killing) didn't arise out of her employment, except that in this case she wouldn't have been killed if she hadn't been at work," said Frazier's attorney, Moira Stagliano. "This person didn't know her, just walked into the store and picked her out."

The opposition by Dollar Tree and its insurers to paying benefits to Talley's son represents an attempt to set new limits on California's workers' compensation system, under which a company provides benefits to employees or their survivors for work-related deaths or injuries regardless of whether the firm was at fault.

Businesses have long assailed the system as overly generous to employees and as expensive, complaints that led to passage of state laws in 2003 and 2004 tightening limits on what medical treatment is covered by compensation payments.

The man accused of stabbing Talley, Tommy Joe Thompson, 45, of West Sacramento, is tentatively scheduled to go to trial Dec. 10 in Solano County Superior Court on a charge of murder. If convicted, he could be sentenced to life in prison.

Talley, of Fairfield, was 26 and working full time at the Dollar Tree on North Texas Street to support herself and her young son. She was stocking shelves just after 9 a.m. on March 29, 2006, when a man walked in and stabbed her, authorities said. The killer fled.

Thompson was arrested that evening. He had previously served a prison sentence for beating his young son in 1994, records show.

At a hearing in March in which Thompson was found mentally competent to stand trial, a defense psychiatrist, Herb McGrew, testified that Thompson had told him he stabbed Talley because she was black. Thompson is white.

"You know that he got up that morning, and he said, 'I'm going to kill a black person,' " said Deputy District Attorney Dane Neilson, according to a transcript of the hearing. "She was, unfortunately, the first person he saw, correct?"

"Correct," McGrew replied.

An insurance company lawyer later cited that exchange in a letter to Stagliano defending the denial of benefits to Talley's son.

"The doctors testify that Mr. Thompson's motivation in stabbing Taneka Talley was purely race motivated," attorney Kelly Hamilton wrote. "As such, it is our belief that our denial in this matter is proper."

The compensation law doesn't consider an on-the-job injury to be work-related if the motives were entirely personal - for example, if an estranged lover or spouse comes to the workplace and attacks an employee because of a private grudge.

The line can be hard to draw when one worker assaults another for personal reasons or when the injured employee was on a personal errand or instigated the assault. But Stagliano said Talley's death was definitely job-related.

"Taneka Talley was at work, doing her job, when she was killed," the lawyer said. "If she had not been in that store, she would not have been available to (the killer), and she would still be alive.

"It's shocking that Dollar Tree and its insurance carrier are using the alleged racist motivation of a killer as an excuse to get out of paying benefits," Stagliano said.

Frazier, who works for the Richmond Parks and Recreation Department, said her daughter had a $15,000 life insurance policy. It covered burial expenses, she said, but is nowhere near enough to care for a growing boy who needs new clothes every six months.

"His mother worked hard on her job for him to get a good education, to go to college," Frazier said.

Larry, now in sixth grade, is "a very good student, he loves sports, really good in basketball - a normal little boy," she said. "He misses his mom."