Monday, November 20, 2017

Holly Folk’s, The Religion of Chiropractic: Populist Healing From the American Heartland (UNC Press 2017), Immerses the Reader in the Origins of the Field (Part 3)

            While Folk’s book concentrates on the origins of chiropractic, which are found in the late nineteenth century, the author helpfully explores, in her final chapters, the modern history of the field and how it has evolved in the decades since World War II. 

            The author, in this respect, treats the American Medical Association’s efforts to portray chiropractic as a deviant pseudoscience.  Although successful in the 1950’s, by the 1970’s, chiropractic gained important victories.  By 1974, all states licensed chiropractors, chiropractic colleges could be accredited by the Federal government, and Medicare started to pay for chiropractic treatment. In 1992, notably, chiropractors began being commissioned as military healthcare providers.  The author also notes that “the acceptance of chiropractic into American healthcare was abetted by increased dialogue between some medical doctors and chiropractors.”

            Folk also reviews a renowned Illinois case where a chiropractor in that state led a team of his colleagues in filing an anti-trust suit against the AMA.  In 1987, the chiropractors prevailed, with the federal judge “focus[ing] on the organized campaign the AMA had run against the chiropractic profession, which was in violation of anti-trust law through the Sherman Act.”  The Court of Appeals affirmed (1989) and the Supreme Court (1990) denied certiorari.

            In her conclusion, Folk seems sympathetic to the critique that few studies exist on the efficacy of chiropractic. Indeed, some assessments may be found which discredit chiropractic, including those from the Cochrane Collaboration. These studies debunk the idea that conditions like asthma, allergies, or menstrual pain can be treated via manipulation.

            The author posits, “chiropractic is now believed to have a poor track record for healing the structural damage to the spine.  Rather, the treatment seems to be most effective for self-[remedying] conditions, like most cases of lower back pain.”  She also posits, “chiropractic treatment may actually be a form of ‘condition management,’ whose real benefit is helping patients wait out the natural healing process. Such an assessment is not too different from what chiropractors claim to be doing.  A minimally invasive touch-based therapy administered in time of acute pain may affect the body’s overall stress response and improve subjective well-being:  in this respect, chiropractic is true to its claim that ‘it works.’”

            The reader of Professor Folk’s book will not be equipped with better tools to cross-examine the chiropractor as to the mechanics of treatment, the mysteries of chiropractic signs (many of which have exotic names), or challenge the doctor with regard to duration-of-disability opinions.  Yet, the reader will be superbly briefed in understanding chiropractic philosophy and where it came from.  As Folk insists, “to really understand chiropractic is to know its origins, terminology, scientific theory and therapeutic logic in the way that chiropractors themselves do.”

November 20, 2017 | Permalink | Comments (0)

Holly Folk’s, The Religion of Chiropractic: Populist Healing From the American Heartland (UNC Press 2017), Immerses the Reader in the Origins of the Field (Part 2)

            Folk’s book, full of details and historical and cultural context, provides an epiphany with every turn of the page. The reader will, in this regard, recognize many original theories and principles of chiropractic which have survived to the present.  The reader will also visit the aggressive pushback by allopathic physicians against their chiropractic competitors (lawsuits were rampant) and the similarly still-surviving antipathy (see above) between the two groups.   

            Folk persuasively asserts that the origins of chiropractic can be traced to other folk practices of the day, like magnetism.  (Indeed, D.D. Palmer, before he discovered chiropractic, was a “magnetic” healer.)  Chiropractic, like other competing alternative therapies, was a method of care embraced by many in the late 19th century who could not accept central tenets of modern medicine, particularly the idea that germs, and other pathophysiological phenomena, caused illness.  Many people, particularly in the Midwest, and in rural areas, rebelled against doctors as elitists. D.D. Palmer, indeed, “capitalized on anti-authoritarian sentiments by presenting his treatment as an alternative to those of a dangerous, elite medical establishment.”

            The Palmers, meanwhile, elevated the idea of manipulating the spine to the level of metaphysics. They asserted that a “vital force,” that is, an “autonomous, purposeful force … in the universe,” is transmuted, via manipulation, to produce curative effects relative to human illness.  Chiropractic had a resoundingly spiritual outlook, which leads Folk to make reference in her title to the “religion of chiropractic.”

            The “vital force” effect was not limited to musculoskeletal pain.  Indeed, spinal misalignment allegedly caused any number of maladies.  Folk quotes D.D. Palmer as declaring, for example, “Cancers are but the symptoms of impinged nerves….  Cancers are the result of nerves being impinged in the foramen.”   

            The reader will also learn of the traditional view, highly offensive the profession, that chiropractors are poorly educated and operating on the margins of professional respectability.  Here, Folk brings up the drama, Come Back Little Sheba, first a play, later a movie, starring Shirley Booth.  Burt Lancaster in that film plays a chiropractor who is married to Lola, the Shirley Booth character. “Doc’s” life is depicted as having been ruined by getting Lola pregnant, marrying her, and being obliged to drop out of medical school and instead become a chiropractor.  As it turns out, Lola miscarries.  His personal and professional life thus ruined, Doc turns bitter and becomes an alcoholic binger. 

            The Palmers were colorful individuals and geniuses at marketing their newfound healing practice.  Folk, in this regard, refers to the Palmers’ relentless self-promotion as undertaken in an aggressive “entrepreneurial style.”  They advertised heavily, had their own press operation, and published periodicals full of testimonials.  Some of this promotion was even reduced to playful verse:   

No drugs or poisons deadly,
With their disastrous medley,
Into your stomach should be poured;
But by manipulation deft,
Not an ache or pain is left,
And your former vigor is restored.

November 20, 2017 | Permalink | Comments (0)

Holly Folk’s, The Religion of Chiropractic: Populist Healing From the American Heartland (UNC Press 2017), Immerses the Reader in the Origins of the Field (Part 1)

            Prior to Act 44 of 1993, which brought to Pennsylvania workers’ compensation our regime of medical cost containment, chiropractors frequently testified as witnesses in workers’ compensation cases. They would most typically testify for the injured worker, as the treating physician, but a few chiropractors undertook independent medical exams (IMEs) as well.  

            As a new defense lawyer, I found it challenging to try to prepare for a principled cross-examination of a treating chiropractor.  During law school, we had been trained to go to Falk Medical Library, at the University of Pittsburgh Medical School, to undertake research.  There, we could use the hardcopy medical literature indexes to learn about unfamiliar medical issues.  By doing so, we would better equip ourselves, or our bosses, with questions for cross-examination.  When I tried to find materials at Falk about chiropractic treatment, studies about chiropractic, examination “signs,” and the like, I came up empty.  Meanwhile, I could find little easily-accessible information by traditional research methods.  

            I knew, of course, the basics: chiropractic had been subject to discrimination in the past, including under the Pennsylvania workers’ compensation laws.  Yet, in the early 1980’s, our Supreme Court had directed that such care was to be compensated and included on employer lists of approved physicians.  I also knew of the familiar difference between “straights and mixers.”  Straights devoted themselves almost exclusively to manipulation, while mixers tended to integrate their care with other modalities, such as counseling about diet and the use of vitamins.  And, of course, I knew of the great hostility that existed for decades between general physicians (allopathic doctors) and chiropractors.

            Since I have been a judge, I observed that hostility articulated dramatically by a neurosurgeon who carries on a minor side business in IMEs.  Challenged by claimant’s counsel that his opinions were far different than the treating chiropractor, the doctor declared, in his deposition, “Please, do not degrade the institution of American medicine, and its great achievements, by using, in the same sentence as ‘doctor,’ the word ‘chiropractor.’”

            For the last two decades, a phenomenon has occurred – at least in my region, chiropractors rarely testify anymore.  A major reason is that the 1993 introduction of utilization review seemingly ended what many carriers viewed as overtreatment by chiropractors.  In this regard, it was not uncommon, before 1993, for such providers to prescribe, for a back-pain sufferer, three to five adjustments per week. Such prescriptions could never survive utilization review.  In addition, at least at the time, it was said that chiropractors felt that, for the treatments that they were able to provide, the Pennsylvania fee schedule (paying at 113% of Medicare), compensated them fairly.   

            Of course, other reasons exist for why chiropractic involvement in litigated cases is rare. Litigation itself has diminished in the wake of compromise settlements (authorized in 1996).  Further, top-notch physiatrists, orthopedic surgeons, and neurosurgeons now hang out IME shingles.  Injured worker lawyers want, and need, experts with similar punching power.

            As a new lawyer desiring more information about chiropractic, I would have benefited from Holly Folk’s new book, The Religion of Chiropractic: Populist Healing From the American Heartland (2017).  Folk, who teaches liberal studies at Western Washington University, concentrates on the historical origins of chiropractic and the profession which, a little more than a century ago, soon blossomed around it.  Folk’s study is largely an account of chiropractic’s founders, D.D. Palmer and his son, B.J. Palmer, of Davenport, Iowa.  Veterans of the field will, of course, recognize Palmer as the school usually associated, in the modern day, with the better-educated chiropractic professionals.  It was none other than these two creators of the field that founded the school. 

November 20, 2017 | Permalink | Comments (0)

Monday, November 13, 2017

Injured Worker Became Involved in Virginia Politics in Wake of Uncompensated Injury

            In the late 1960’s and early 1970’s, workers’ compensation reformers advocated for a uniform extraterritoriality provision for state workers’ compensation laws. Their goal was to ensure (1) that no worker who sustained an injury would ever be denied a forum in which to prosecute his or her case, and (2) that games-playing would not defeat the effort. In the end, unfortunately, only a few states adopted the law, including Pennsylvania, Delaware, Kentucky, Alabama, and New Mexico. Unfortunately because in Pennsylvania the law has been a success, and it defines the reach of the law with certainty.   

            Many states have extraterritoriality provisos other than that of the model law but, surprisingly, New York and New Jersey keep their rules in the court precedents.

            Extraterritorial jurisdiction, in any event, does indeed have its vagaries. A worker’s frustration with the same has now made a remarkable headline. See Daniel Marans, How A Literal Shock Inspired A Former Marine To Run For Office As A Democratic Socialist: A workplace injury and its aftermath were a political wake-up call for Virginia state delegate-elect Lee Carter, Huffington Post (Nov. 12, 2017), https://www.huffingtonpost.com/entry/lee-carter-delegate-democratic-socialist_us_5a074548e4b05673aa5997fd.

            As reported in the Huffington Post, the newly elected Manassas, VA, state delegate, Lee Carter, first became interested in politics after his back injury claim (caused by an electric shock) was dismissed by the Virginia Commission for lack of jurisdiction. Carter, an ex-Marine in his late 20’s, prevailed last week in his run as a Democratic Socialist, unseating a conservative Republican.

            Carter, whose residence is in Virginia, was working for his Georgia-based company in Illinois when he sustained his injury.  He incurred medical bills and, apparently, three months of disability. For reasons not stated in the article, his employer’s workers’ compensation carrier denied his claim. (Group health insurance apparently paid many of his medical bills).

            Carter, we are told, “decided to file a workers’ compensation claim against the company with the state of Virginia…. He reasoned that while Illinois was a resolutely pro-worker state and Georgia was equally pro-business, Virginia was the ‘Goldilocks’ option ― the perfect balance that might make the Bella Rose Group likely to strike a deal with him…. ‘I figured let’s go with the least contentious state,’ Carter said.”

            Of course, that is not how any type of legal system works and, indeed, “Carter called at least four Virginia-based lawyers in search of representation but they all refused, citing the complicated question of whether his claim was even in Virginia’s jurisdiction.”

            In the end, the Commission dismissed the case for lack of jurisdiction, finding that Carter’s contract was made in Georgia, and that the employer had no place of business in Virginia. (Carter, notably, told the reporter that the four lawyers did not suggest that he prosecute his claim in a different state – which is an unlikely omission; meanwhile, Virginia lawyers have told the reporter that the agency’s ruling is reasonable under the law.)

            Carter’s problems became more complicated in the wake of his injury: after he returned to work, his employer was unable to accommodate his part-time schedule and he was ultimately fired – an act which Carter characterizes as retaliation for pursuing, however fecklessly, workers’ compensation.

            Indeed, “the first bill Carter plans to introduce in Richmond is a measure to strengthen protections for workers against employer retaliation for filing workers’ compensation claims…. ‘It’s kind of messed up,’” he told the reporter, "'that it was easier to run a two-year election and get 11,000 people to vote for me than it was to figure out the workers’ compensation system ….'”       

            Huh? The frustrating aspect of this article is that lawyers gave Carter advice that he did not have a cognizable claim in the state.  He chose to ignore this counsel, prosecuting his claim on the same theory as did some fairy-tale heroine in choosing her most preferred bowl of porridge. 

            And, of course, instead of advocating for a strengthened anti-retaliation law, our own hero should now be arguing for Virginia’s adoption of the model extraterritoriality statute.  

 

           

           

November 13, 2017 | Permalink | Comments (0)

Wednesday, November 8, 2017

The Opioid Abuse Crisis and the Marketing of Oxycontin (Recent New Yorker Article)

            Last week, in open court, I watched a CCTV videotape of a well-dressed, middle-aged man enter a bus, take a seat, and promptly take consecutive hits of Fentanyl-laced heroin. Within moments he experiences a massive, though apparently silent, fatal reaction and dies on the spot.  His head thereupon hangs between his legs until concerned passengers notice and come helplessly to his aid. (That this is what the video showed was not disputed.)

            I didn’t, and don’t, know all of this individual's circumstances, but the shocking visual was just one more, highly vivid, example of the opioid abuse crisis that is so often in front of us in the workers’ compensation field.   

            A quick but thorough history and analysis of the role Oxycontin in the crisis can be found in a recent New Yorker article, Empire of Pain: The Sackler Family’s Ruthless Promotion of Opioids Generated Billions of Dollars – and Millions of Addicts (10.30.2017 edition), written by Patrick Keefe.

            As obvious from the title, a focus of the article is how Oxycontin was marketed.  On this point, the author quotes a lawyer characterizing how sales representatives pushed the drug in Kentucky. Purdue Pharma allegedly “pinpointed ‘communities where there is a lot of poverty and lack of education and opportunity …. They were looking at numbers that showed these people have work-related injuries, they go to the doctor more often, they get treatment for pain.’”

            Keefe’s article can now be read online for free. 

            Much has been written on this issue (the author helpfully cites what seem to be the leading texts), but Keefe’s focus on the marketing angle and the role of Purdue Pharma's owners is striking. See https://www.newyorker.com/magazine/2017/10/30/the-family-that-built-an-empire-of-pain.

 

 

November 8, 2017 | Permalink | Comments (0)

Sunday, November 5, 2017

A Note About the 2017 Iowa Amendments: The Shoulder as Subject of Scheduled Loss

            It is old news now, but the pro-business changes to the workers' compensation law in Iowa enacted, on March 30, 2017, are quite remarkable. These changes, found in H.B. 518, affect both benefits and procedure.

            Among the most remarkable changes were (1) the now-familiar creation of a rebuttable presumption that drugs or alcohol in one’s system caused the injury; (2) making partial disability awards, payable upon a worker’s return to work, based strictly on impairment, without reference, as before, to earning capacity; (3) inclusion in the disability analysis of the injured worker’s remaining work years as a factor to evaluate disability; (4) clarifying that an employer faced with a claim is not liable for its employee’s preexisting, previously compensated injuries; (5) disallowing lump sum commutations without the consent of the employer; and (6) prohibiting injured worker lawyers from collecting fees out of claimant’s disability checks when benefits have been voluntarily paid. See NCCI Legislative Activity Report, pp.1-7 (Apr. 7, 2017), https://www.ncci.com/Articles/Documents/II_LegislativeActivityWeeklyReport_2017-13.pdf. See also Clyde McGrady, Iowa Passes Bill to Slash Workers' Comp Benefits, CQ Roll Call Insurance Briefing, 2017 WL 1149131 (Mar. 28, 2017).

            Of particular interest – certainly to a Pennsylvanian like myself (we have a wage-loss system) – is yet another change: the “scheduling” of injuries to the shoulder, making benefits payable, based upon percentage impairment, for a maximum of 400 weeks. No industrial disability analysis is employed. This is a clever, yet simple, way of reducing litigation and benefits – simply take a whole category of injuries … and establish proxies for the same.

November 5, 2017 | Permalink | Comments (0)

Thursday, November 2, 2017

Wyoming Workers' Compensation Symposium #2

I'm pleased to announce that the second of our four University of Wyoming College of Law Symposia to be conducted during the 2017-2018 school year will be held on Friday, November 10, 2017 from 1-2:30 pm Mountain Time in Laramie, Wyoming. The event will be live-streamed and is free, though registration is requested. The topic of the presentation will be Scope of Coverage and Causation in Workers' Compensation Claims. We're excited to be continuing the series and hope you can join us.

I’ll be appearing with Wyoming practitioner Justin Kallal, a 2001 graduate of the University of Wyoming College of Law. https://kallallaw.com. The format will consist of a 40-minute presentation by me of treatise/hornbook law followed by a presentation by Mr. Kallal on nuances of Wyoming law. We will try to reserve 10-15 minutes at the end for questions.

The event site is here: http://www.uwyo.edu/law/events/workers-comp-symposium/index.html.  Registration is requested.

Michael C. Duff

 

 

 

November 2, 2017 | Permalink | Comments (0)

A Sociologist Takes on Legal Financial Obligations: "A Pound of Flesh" (2016)

                Lawyers and mediators in the workers’ compensation system struggling with settling cases often encounter major roadblocks: legal obligations from other spheres of the injured worker’s life. These obligations must be satisfied before the settlement can be approved – or sometimes even considered. The ubiquitous legal obligation in my state, Pennsylvania, is the child support arrearage. If the proposed settlement (or award, for that matter), is $5,000.00 or more, that arrearage must first be addressed.

             Another class of legal financial obligation, or “LFO,” can also impede negotiations. These are the obligations that are imposed on criminal defendants in addition to jail time. They regularly include fines, court user fees, restitution, collection charges and, if in arrears, interest on all of these. In my practice, I have, only a few times, run into an LFO in this category affecting a workers’ compensation settlement. However, many of the working poor (a major constituent in the litigated cases in my state), are said to be saddled with these obligations.

            If such individuals have criminal pasts and have been penalized with such sanctions, so be it. Yet, as sociologist Alexes Harris points out in her new book, A Pound of Flesh: Monetary Sanctions as Punishment for the Poor (Russell Sage Foundation 2016), the enforcement of such sanctions on the poor can prevent them from ever getting back on their feet and restored to employment and citizenship. This is so because they were poor in the first place, come out of jail penniless, and then struggle to make ends meet. The upshot of this highly leveraged situation is that are simply unable to meet their LFOs. They are then relentlessly summoned back into court, further fined, or even imprisoned for failure to pay.

            The author asserts that the poor who have committed criminal acts are in effect permanently punished. She compares the situation to the debtors’ prisons of old or, more chillingly, to institutions such as the Angola Correctional Institution in Louisiana, where poor African-American convicts would labor on prison farms.

             A Pound of Flesh is an excellent tour de force of the subject for lawyer and judge. Of particular interest is how the author observed court hearings on LFOs. Of further interest are her interviews with prosecutors, public defenders, judges, and the all-important court clerks in charge of enforcing these obligations. The author disapproves of the considerable discretion that such “street level bureaucrats” often exercise in the determination of who is excused from payment – and who must be returned to jail.

November 2, 2017 | Permalink | Comments (0)

Friday, October 27, 2017

On Polemis, Arbitration, Murphy Oil, and Workers’ Compensation

My first-year torts class has arrived at the dreaded “proximate cause” portion of the course. The issue in the cases we are reading is whether a negligent defendant, who is the “cause-in-fact” of harm, should be held liable when a long chain of unforeseeable events produces plaintiff’s harm. You negligently knock over a domino that in turn knocks over a series of dominos culminating (somehow) in the sinking of a cargo ship in a harbor eighteen miles away. You could not foresee the result. Are you liable?  You don’t think so, but the owner of the ship will be disappointed to hear that she can’t recover from you, the “but for” cause of her harm.

One of the most famous of these “proximate cause” cases is Polemis. The facts are straightforward (I’ll omit locations, it was a common law case from the old British Commonwealth). Some workmen, agents of the “lessee” of a ship, knocked a board into the wooden hold of the ship. Unknown to anyone, benzene vapors, effusing from cargo, had been building in the hold. The dislodged board created a spark, which ignited the vapors. The ship was consumed with fire and suffered extensive damage. The lessors/owners of the ship wanted to be compensated for the loss because it arose from the negligence of the lessees. The lessees argued they should not be liable because the damage was not foreseeable. The court disagreed. Because negligence caused the falling board, and the harm produced followed “naturally” (if not foreseeably) from the negligent act, the lessees were “on the hook.” In negligence law, this is known as the “direct cause” test, and many courts have subsequently come to reject it in favor of a standard requiring foreseeability to trigger liability.

My insight this week arose from a deeper appreciation that the underlying facts in Polemis were arbitrated.  The arbitrators decided the case assuming that certain legal rules applied and said they would decide otherwise if a court were to determine that the arbitrators’ understanding of the law had been wrong, which sounds reasonable. If such a case were to be decided under the Federal Arbitration Act (FAA), Polemis would never have breathlessly opined (perhaps to my students’ delight) on the nature of proximate cause. Under the FAA, decisions of arbitrators may be overturned only for fraud, corruption, partiality, misconduct, and “exceeding powers” (which does not include errors of law). Thus, the Polemis court, under the FAA, would have had no occasion to expound on direct cause. Such a discussion would have exceeded the Court’s jurisdictional powers. The Polemis discussion might have been limited to whether the arbitrators were “corrupt.” (One presumes, a short discussion). What would the litigants have known about the state of proximate cause law? Very little. I suspect the judiciary of the day would have been shocked had the claim been made that private arbitration of disputes arising under public laws should be immune from judicial review for errors of law. One can support efficient fact-finding without agreeing to the banishment of judicial review.    

Perhaps we are about to lose all judicial review for errors of law in labor and employment law cases. The Supreme Court, in Murphy Oil, is poised to decide whether arbitration agreements forbidding class actions by employees in any forum, violate private sector labor law’s (the National Labor Relations Act’s) requirement that employers not “interfere with, restrain, or coerce” employee concerted activity undertaken for “mutual aid or protection.” If the Court rules (as I expect it will) against the National Labor Relation Board’s (NLRB’s) view that such arbitration agreements violate labor law, we could see, and soon, significant curtailment of employee class actions of any kind. Indeed, although I do not think the matter is squarely before the Court this time around, I am left wondering whether private arbitration agreements may waive employee access to the NLRB itself. (Waivers of NLRB jurisdiction have been forbidden historically except in extraordinary circumstances. Given the explosive growth of the FAA, and the corresponding proliferation of mandatory arbitration, I am no longer willing to state the principle with confidence.) I have felt for some time that the only thing preventing employers from expanding arbitration agreements (thereby denying judicial review) beyond the roughly 50% of the work force (60 million workers) already covered has been some lingering NLRA questions as to their lawfulness.  Those questions may soon be resolved.

The implications of these developments for workers’ compensation seem clear. If the FAA supersedes even federal labor law (which gave birth to much of arbitration law, after all), I am hard pressed to see why an agreement requiring arbitration of all employment disputes, including workers’ compensation claims, would not be enforceable.  Many of the arguments I can raise easily against this radical proposition have been advanced unsuccessfully in other labor and employment law contexts (including ERISA, by the way), which is why I have begun writing a difficult article on the arbitration and workers' compensation. It will not do to say, “my state would not allow it.” The FAA is federal law. To say that we may soon have an important federalism question upon us is an understatement. Loss of judicial review of workers’ compensation cases is hard to imagine. Loss of a public forum for claims is even harder to contemplate.

Michael C. Duff

October 27, 2017 | Permalink | Comments (0)

Friday, September 8, 2017

First-Ever Wyoming Workers' Compensation Symposia

I'm very pleased to announce that in two weeks' time--on September 22--I'll begin facilitating the first-ever workers' compensation symposia series at the University of Wyoming College of Law. My plan is for this year's presentations to be the prelude for creation of the first-ever Wyoming workers' compensation treatise:

WORKERS' COMPENSATION SYMPOSIA

Workers' Compensation Symposia

Hosted by the College of Law, The Workers' Compensation Symposia consists of a series of presentations exploring Workers' Compensation laws and issues relating specifically to Wyoming. 

The Conference will take place at the University of Wyoming College of Law | Room 178 | 1:00 - 2:30 PM


Friday, September 22, 2017

Friday, November 10, 2017

Friday, February 9, 2018

Friday, April 13, 2018

Live-Streaming Option Available 

 

Michael C. Duff

September 8, 2017 | Permalink | Comments (0)

Wednesday, September 6, 2017

Protecting Migrant Workers from Workplace Injuries

I've been a bit distracted of late as the fall semester has gotten underway at the University of Wyoming College of Law. I'm teaching first year Torts and an upper division course in Labor Law. Despite my distraction, a piece over at the Workplace Prof Blog caught my eye, so I'm taking the liberty of reblogging:

Tequila Brooks has just posted an essay over at Intlawgrrls on Making the human rights case for including compensation for workplace injuries in free trade agreements. Here's an excerpt:

For many undocumented workers in the U.S., suffering a workplace injury can lead to detention, deportation and worse, as reported by Michael Grabell and Howard Berkes in their August 16, 2017 Pro Publica article, They Got Hurt at Work. Then They Got Deported. Although public policy and extensive case law in the U.S. guarantee workers’ compensation coverage for undocumented immigrants, insurers have found a way to avoid paying claims by reporting injured workers to federal immigration authorities.

...

Currently, the U.S. NAFTA re-negotiation goals do not mention incorporation of workers’ compensation or protection of migrant workers – but they should. Labor provisions in FTAs contain mechanisms that can enhance member states’ ability to protect human rights. While imperfect, the NAALC and labor provisions in other FTAs provide a forum for public petitions and inter-governmental dialogue on important cross-border labor issues. They have the as yet under-utilized potential to address the kinds of failures in justice administration immigrants encounter. NAFTA re-negotiators should remember that there is nothing more fundamental to a worker and our shared global economy than the integrity of her body and mind – and act accordingly to ensure that workers’ compensation is included among the labor rights protected in any re-negotiated agreement.

 

Michael C. Duff

September 6, 2017 | Permalink | Comments (0)

Monday, August 28, 2017

A New Crash Course on the Longshore Act Published

             Veteran Longshore Act practitioners have authored a new article which provides us with a crash course on the history and legislative/judicial highlights of the law.  See Kathleen K. Charvet, Heather W. Angelico, & Michael T. Amy, Gilding the Lily: The Genesis of the Longshoremen’s and Harbor Workers’ Compensation Act in 1927, the 1972 Amendments, the 1984 Amendments, and the Extension Acts, 91 Tulane Law Review 881 (May 2017), available (for $5.00), at https://tlsstore.law.tulane.edu/Product/gilding-the-lily-the-genesis-of-the-longshoremens-and-harbor-workers-compensation-act-in-1927-th.

            The authors explain how the law was first enacted in 1926 in the wake of intransigent problems in making the new state workers’ compensation laws fit cases of injuries sustained by longshoremen and similar occupations. They further explain that the law has been interpreted several times over the decades. As they set forth their explanation, they highlight the key U.S. Supreme Court decisions that have interpreted the law.

        Of note is the authors’ observation that, originally, the law was intended even to cover seamen. However, organized maritime labor opposed any bill that would eliminate the possibility of damages for negligence, so that plan was dropped. And, of course, in the modern day such claims are governed by the FELA-like Jones’ Act.

            Reflecting on the many jurisdictional complexities that have existed over the years, the authors conclude their much-appreciated lecture by positing, “In light of Supreme Court decisions regarding status and situs and the various diverse federal statutes incorporating the LHWCA, it may be time to consider if principles of federalism and uniformity might be advanced by a single comprehensive federal workers’ compensation system for all maritime, offshore, and overseas employees….” 

August 28, 2017 | Permalink | Comments (0)

Chicago Lawyer McCready Addresses Employee Representation under FECA

             Some things never seem to change.

           One of those is the determination of Congress to keep lawyers away from representing injured federal workers who are seeking benefits under the Federal Employees Compensation Act (FECA).

           In a new article, a Chicago lawyer who represents such workers briefs us on how that goal is achieved.  See Michael P. McCready, Why do so Few Lawyers Handle Federal Workers’ Compensation Cases?, 77-June Oregon State Bar Bulletin 34 (June 2017).

            Before setting forth a helpful briefing on the law and procedure of initial FECA claims, McCready proceeds through the four principal means: First, contingent fees are disallowed. Second, and as a result, the lawyer must charge a retainer, which most injured workers find laughable as a request. Third, even if the claim is successful, the injured worker must still approve the bill.  Fourth, the compensation owed is sent directly to the injured worker (without deduction of any fees), hampering collection efforts from one’s own client.

            The federal government voices reasons for this paternalistic approach, but the author, characterizing FECA as a sad system, asserts that “what they have done is essentially cut lawyers out of the federal system and deprived federal workers the ability to have legal representation for their injuries.”

           In his conclusion, the author asserts, “In our practice only 1 in 10 injured federal employees who contact our office retain us for representation. If federal compensation lawyers were able to charge a contingency fee and have the check mailed to their office, that number would be closer to 9 in 10.”

August 28, 2017 | Permalink | Comments (0)

Monday, August 14, 2017

Workers' Compensation Opt-Out, Opt-In, Exclusivity, and State Constitutionality

Workers’ compensation commentators have again been discussing the possible (or probable) revival of workers’ compensation opt-out, a development that I predicted in 2016 (more accurately, I have argued there is no reason to believe that national supporters of opt-out would be permanently deterred by a single “loss” on narrow Oklahoma state constitutional grounds).

The current discussion appears to center on the revival of opt-out without an exclusive remedy provision. That, of course, would simply mark a return to the predominant workers’ compensation model from 1911 to 1917. Most systems were “elective.” (see here at page 93). Employers were permitted to decline participation, but in event of declination were liable in negligence and unable to avail themselves of the affirmative defenses contributory negligence, assumption of the risk, and the fellow servant rule.  

The actual national legal problem with “opt-out” was not resolved in the Oklahoma constitutional case. The original elective systems—like the current Texas system—were “opt-in.” Employers were presumptively “out” unless they wanted to be “in.” The defunct Oklahoma system was “opt out.” Employers were presumptively “in” unless they wanted to be “out.” The problem was that in telling employers how to be “out” the Oklahoma “opt out” statute created a hybrid workers’ compensation/employee benefits regime that creates a very difficult ERISA preemption problem. With due respect to the Oklahoma Supreme Court, I continue to think that it never properly had jurisdiction of the case (my Fed Courts professor would be proud of me for sticking to my guns!). In any event, future challengers of opt-out on ERISA grounds are very likely to utilize declaratory judgment mechanisms rather than a sloppy removal and remand process (think of the Airline Deregulation cases). Such challengers would have a much cleaner appeal of a federal court’s determination that an opt-out law was just a plain old workers’ compensation law (and therefore not covered by ERISA). I realize that federal district judges don’t want to hear workers’ compensation cases, but the decision about ERISA coverage will be made over their heads.

If “opt-out” is addressed solely on state-law grounds, the determination of its viability on state constitutional grounds would depend heavily on the details of individual state constitutions. (see here at pp. 161-184). The lawfulness of the differential treatment of opt out versus non-opt out employers and employees will turn on the structure of states’ equal protection, due process, right to remedy, access to courts, and special laws’ constitutional provisions. There is tremendous variability with respect to these provisions, but the key point has to do with the level of scrutiny applied to an opt-out law: does the enacting state or the challenger have the burden of persuasion in justifying/challenging the statute and what level of explanation will be required by courts? For example, if a state claims that opt-out is more “efficient,” will the challenger have to demonstrate the claim is untrue, or will the state have to prove the claim is true and show that there was no better way to achieve the efficiency? If heightened constitutional scrutiny is imposed, the latter will be true.

One is still at a loss to know what “opt-out without exclusive remedy” means. If it means merely that employers have the choice not to participate in workers’ compensation without a state attempting to dictate the details of ERISA-governed plans, that will return us to 1911. Why might employers be willing to do this? I have had a continuing sense that it has a lot to do with the Federal Arbitration Act. (see here at page 3). Employers going bare in Texas can compel their employees to sign arbitration “agreements” as a condition of employment, and the evidence has become very clear how poorly employees do in such a regime. Still, opt-out without exclusive remedy in this sense could avoid many of the state constitutional problems that plagued the Oklahoma model, particularly if both employers and employees were able to elect participation (no exclusive remedy). As a matter of state law, that would leave employees with the historical common law remedy for injury. Whether this would be good for employees in the long run is a separate question. While it is true that many states have significantly weakened, or eliminated, the affirmative defenses that originally led to the Grand Bargain, it is also true that prima facie cases are not easy to establish (especially the nature of the employer’s duty of care) and court-based litigation is a long and expensive process.

It goes without saying that I continue to think that opt-out relating to employee benefit plans (with or without exclusive remedy) would be in great jeopardy of violating ERISA.

Michael C. Duff

August 14, 2017 | Permalink | Comments (0)

Thursday, August 10, 2017

Duff on Wyoming Workers' Compensation Judicial Review under the Substantial Evidence Standard

I am deeply indebted to my Harvard torts professor, David Rosenberg, for instilling in me early-on the notion that no legal rule has been so ineluctably established that it can't be challenged. It is in that spirit that I have questioned the coherence of the substantial evidence "regime" under which Wyoming courts review workers' compensation cases. The article is here, and the abstract follows:

In Wyoming, as in almost all states, facts in contested workers’ compensation cases are developed within an administrative agency. When agency factual findings are challenged in court, the level of judicial deference applied to the agency is important and may be outcome determinative. Wyoming courts claim to apply the “substantial evidence” standard of review, often expressed as evidence that a “reasonable mind could accept” as supporting an agency determination. The Wyoming Supreme Court, however, also sometimes upholds workers’ compensation agency decisions that are deemed “not contrary to the overwhelming weight of the evidence.” It is unclear whether this latter formulation is an odd version of the substantial evidence, or is another standard altogether.

The U.S. Supreme Court’s landmark opinion in Universal Camera stands for the proposition that the decision of an administrative agency should be supported by more than just any evidence. While most agree that courts are not authorized to substitute their judgment for the decision of administrative agencies, Universal Camera established a court should not be required to acquiesce to an agency when it cannot in good conscience agree with it. The “overwhelming weight” standard seems in significant tension with this latter principle because it has at times been applied extremely deferentially by Wyoming courts. This article demonstrates, however, that the overwhelming weight standard was mistakenly adopted by the Wyoming courts in the nineteen-seventies based to a substantial degree on an outdated administrative law encyclopedia entry. The article argues that the standard should either be abandoned or much more clearly explained, especially in light of its questionable origins. The overwhelming weight standard, the article contends, is inconsistent with a contemporary legal understanding of substantial evidence. Furthermore, the overwhelming weight standard threatens to routinely deprive injured workers of benefits. Such an outcome is especially inappropriate in Wyoming, the constitution of which ensures that labor has “just protection” under law; provides citizens a fundamental right to access courts to assert claims for personal injury; forbids laws limiting damages for injury and death; and voids any agreement by an employer with an employee waiving a right to recover damages for death or injury. The article underscores that highly deferential judicial standards of agency review shift power to the executive branch, a policy choice should be made cautiously and explicitly, not arrived at accidentally.

 

Michael C. Duff

August 10, 2017 | Permalink | Comments (0)

Saturday, August 5, 2017

Airline Deregulation Act & Air Ambulance Services as Analogue to ERISA Preemption

It is one thing for a federal law containing federal remedies for wrongs to preempt state law. It is quite another for a federal law containing no substantive remedies to supplant state law containing substantive remedies. ERISA preemption poses problems in the legal world precisely because so many forms of employee welfare benefit plans cannot be substantively regulated by the states. As a result of ERISA’s substantive emptiness in this respect, employee welfare benefits go substantively unregulated. ERISA preemption is one of the underappreciated reasons (except by “insiders”) for the United States’ inability to achieve modern health care regulation. But except for some esoteric scenarios – such as those in play in the Oklahoma opt-out scenario – ERISA does not cause workers’ compensation regulators too many headaches. The reason? Plans created solely for the purpose of complying with state workers’ compensation laws are not covered by ERISA, and therefore may be regulated by the states.

The Airline Deregulation Act covers air ambulance services. It emptily preempts attempts by state workers’ compensation regulators to set rates—any rates—applicable to the ambulance carriers, who are apparently under the ADA’s jurisdiction. The ADA provides that states “may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier ...” 49 U.S.C. § 41713(b). (The “related to” phraseology is reminiscent of ERISA’s preemption provision). In keeping with the Airline Deregulation Act's (ADA’s) aim to achieve maximum reliance on competitive market forces, Congress sought to ensure that the states would not undo federal deregulation with regulation of their own by including a preemption provision prohibiting states from enacting or enforcing any law related to a price, route, or service of an air carrier.  Dan's City Used Cars, Inc. v. Pelkey, 569 U.S. 251 (2013).  Thus, the ADA’s purpose is explicitly de-regulatory, while it might be argued that ERISA’s preemption of employee welfare benefit plans was less deliberately de-regulatory and motivated more by a desire to avoid conflict between regulatory regimes.

Although the recent air ambulance controversy in Texas, the Air Evac EMS matter, was temporarily grounded in state immunity questions, it underscores two pivotal points respecting all preemption litigation. The first pivotal point has to do with courts’ grappling with preemption provisions that are occasionally startlingly broad. It is interesting to observe avowed judicial textualists arguing that courts should not greet clear statutory language with an “uncritical literalism.” I thought the whole point of textualism is that text should be given its literal meaning if it can be ascertained. One may be perplexed by the phrase “related to,” but the consternation comes from knowing exactly what the words mean.

The second pivotal point has to do with the forum for the resolution of preemption questions. I think it is fair to say that one who intends to rely on preemption as a defense to the imposition of a substantive state remedy would prefer that a federal court decide the case. After all, state courts do not routinely hear preemption cases and may have great respect for their state legislatures’ policy objectives. The problem is that with very few exceptions (one of which is ERISA) preemption claims are “defensive” and may not be used offensively as a vehicle to create federal jurisdiction where none would otherwise exist. Thus, under the “well-pleaded” complaint rule, the plaintiff is master of both the complaint and the forum (federal-state) in which the controversy will be heard. Accordingly, a state court may be placed in the position of deciding (to borrow from a recent example) whether federal immigration law preempts state law. The defendant will not be surprised to hear that the state court’s answer is “no.” (Echoes of the Erie Doctrine here?). So, there is a struggle by the defendant to get into federal court and no effective, predictable way to appeal a determination that the matter must be heard in state court. (The primary exceptions to the rule are ERISA and section 301 LMRA preemption).

But what if one is not the defendant? The gambit in the Air Evac EMS case was for the plaintiff-parties to seek federal preemption by way of declaratory relief in federal court under the authority of Shaw v. Delta Airlines. Does this mean that in every case in which a party would be disallowed a federal court forum as a defendant, it could escape the outcome by becoming a plaintiff in a declaratory action? If so, I am left wondering if the same course might have been followed by Dillard’s. In any event, no doubt to the confusion of many onlookers, the preemption question in Air Evac EMS has not even been reached. There was simply resolution of a threshold jurisdictional question of whether the out-of state plaintiffs could sue state officials under the 11th Amendment. The answer is yes. To explain why will require another post, however, and I have miles to go before I sleep.    

Michael C. Duff  

August 5, 2017 | Permalink | Comments (0)

Monday, July 31, 2017

Interesting Permanent Impairment Decision in Maine

News outlets have been reporting on the case Bailey v. City of Lewiston, decided by the Maine Supreme Judicial Court on July 20. As background, Maine uses permanent impairment ratings as a mechanism to determine caps on receipt of permanent partial disability benefits (called permanent “incapacity” benefits in Maine). When a worker’s permanent incapacity rating exceeds 15%, there is no cap on the number of weeks the worker may receive partial benefits (calculated in Maine as a percentage of the difference between pre-injury average weekly wage and post-injury earning capacity). When impairment is rated at 15% or below, a worker in Maine is limited to 260 weeks of partial incapacity benefits. (The structure is somewhat reminiscent of the Pennsylvania impairment/benefit mechanism at issue in Protz).

The employee in question, Bailey, suffered a respiratory work injury which developed into a reactive airways deficiency syndrome. By administrative award, he began to receive partial incapacity benefits in 2004. In 2007, his employer, the City of Lewiston, Maine, sought review of his award of indemnity benefits and determination of his level of permanent impairment. The administrative official denied any decrease in benefits, but also found that Bailey had reached maximum medical improvement (MMI), and had sustained permanent impairment of 32%. Because the 2007 award established permanent impairment in excess of 15%, Bailey was eligible for partial benefits without a cap.  In 2013, the employer again filed a petition seeking review of Bailey's incapacity, and a second petition seeking to re-determine Bailey’s permanent impairment, introducing an updated medical examination claiming to show permanent impairment had decreased to 0%. An administrative official rejected Bailey's claims that the doctrine of res judicata precluded the employer’s petition to determine the extent of his permanent impairment, concluded that the new medical report constituted a change of circumstances warranting a new permanent impairment rating, and reduced Bailey's permanent impairment level to 0%. The effect of this determination was to immediately end Bailey’s entitlement to further indemnity benefits. Bailey appealed to Maine’s workers’ compensation appellate division, Download Bailey appellate division decision, which concluded that the 2007 determination of permanent impairment as of the date of MMI was final, and therefore that res judicata principles barred re-litigation of that issue. The division also concluded that there existed no significant change of circumstances warranting disturbing Bailey's date of MMI. The employer appealed.

The Maine Supreme Judicial Court sweepingly (perhaps too sweepingly) affirmed the appellate division. The Court stated, “[h]ere, the Appellate Division's conclusion that re-litigation of Bailey's permanent impairment level was barred by the doctrine of res judicata is supported by the statute's plain language and legislative history.”  That broad issue was not what the parties were disputing, however. The precise issue below was whether a decrease in an employee’s permanent impairment, subsequent to the permanent impairment existing as of the date of MMI, may retroactively reinstate a cap on benefits. The Maine Supreme Judicial Court’s opinion may easily be read as establishing that any finding of permanent impairment is res judicata. MMI, however, means (in shorthand) that an employee’s anatomical condition is not reasonably likely to improve; it has nothing to do with whether an employee’s condition might worsen. The Court’s opinion strongly suggests that an injured worker may not petition for additional permanent impairment benefits even if a work-related injury worsens. But as claimant’s counsel, Jim MacAdam (for whom I once worked), has noted to me, such an outcome would be contrary to a long line of Maine precedent. Jim’s compelling example (an actual case) is of an injured worker suffering a work-related knee injury and undergoing a meniscus excision (3% permanent impairment), which leads to a partial knee replacement (10% permanent impairment), to a full knee replacement (15% permanent impairment), and ultimately to a leg amputation (25% permanent impairment). It is difficult to argue that permanent impairment should be based on the earlier phases of the injury. But such a limiting argument, if it is going to be made, should be addressed in the open. The appellate division found only that the date of MMI, and the degree of permanent impairment as of that date, were res judicata as applied to the cap. Nothing more. I certainly understand why the employee intends to move for reconsideration.

My academic interest in this case is that it continues to reveal the clunky interplay of permanent impairment and disability, two distinct concepts that resist continuing legislative efforts to bash them together.    

Michael C. Duff     

July 31, 2017 | Permalink | Comments (0)

Friday, July 28, 2017

The Changing Nature of the Workforce: Wall Street Journal Essayist is a Calming Voice

            A staple of workers’ compensation journalism – and seminar topics – is the dramatic change that has been occurring, and will continue to occur, in our country’s job-makeup picture.

            At the College of Workers’ Compensation Lawyers Symposium (Phoenix, AZ, March 2017), for example, Peter Rousmaniere showed slides demonstrating how work injuries and deaths have continually declined in number, due in part to the changing character of the national workforce. One of his slides, for example, showed that in three high-risk occupational categories, sharp reductions of the same, as part of the overall employment marketplace, had taken place between the years 1950 and 2005. Another slide demonstrated impressive evidence of our country’s continuing shift from a manufacturing economy to a service economy. Mr. Rousmaniere’s complete slides can be viewed at this URL: http://www.americanbar.org/groups/labor_law/committees/wccom/archive/2017papers.html.

            In some regions, of course, even the service industry is taking a hit. The New York Times recently featured a story about how Johnstown, PA, has suffered in this regard. Rachel Abrams & Robert Gebeloff, In Towns Already Hit by Steel Mill Closings, a New Casualty: Retail Jobs (June 25, 2017), available at https://www.nytimes.com/2017/06/25/business/economy/amazon-retail-jobs-pennsylvania.html.

            Perhaps the newest issue to be addressed in this discussion, meanwhile, is how artificial intelligence may render obsolete even more jobs. See, e.g., Elizabeth Kolbert, Our Automated Future: How Long Will it be Before You Lose Your Job to a Robot?, The New Yorker (Dec. 19 & 26, 2016), available at http://www.newyorker.com/magazine/2016/12/19/our-automated-future.

             For the workers’ compensation field, an implication of this type of data – and stories – is that the fewer injuries which will take place, because of the changing workforce, is a smaller volume of cases for litigation and treatment by the system in general. While a country with fewer injuries is an inarguable good, of course, a reduced practice has practical implications for lawyers and agencies.

            Often the message that jobs are being eliminated is delivered to workers’ compensation lawyer audiences with the provocative (and perhaps mischievous) suggestion that even our professional jobs in the field are on the way out. To me, such predictions recall the Saturday Night Live skit from 1977 where a priest, played by Dan Aykroyd, eliminated a key confessor task by having it automated via with the “Penance 1000” computer. See https://www.google.com/?gws_rd=ssl#q=saturday+night+live+penance+dan+akroyd&spf=1501273234428.) The provocateurs’ suggestion is, after all, that justice – like a holy sacrament – can at some point be administered without human involvement.

            In any event, in a new Wall Street Journal article, the author, an artificial intelligence expert, portrays as exaggerated recent reports that score of workers will soon be jobless because of advances in the field. In his opinion, hype attends many of these analyses. As the subtitle of the article declares, “Smart machines will replace some jobs, but they will create many more.” Jerry Kaplan, Don’t Fear the Robots, The Wall Street Journal (July 22, 2017), available at https://www.wsj.com/articles/dont-fear-the-robots-1500646623 (subscription required).

             Kaplan asserts that the alarmists are ignoring the historical record. He notes, among other things, that 57% of the jobs under taken by workers in 1960 – e.g., office clerks, secretaries, gas pumpers, bowling alley pin-setters – no longer exist today. The alarmists recognize this phenomenon, but they argue, erroneously in his view, that the “coming wave of artificially intelligent computers and robots can do virtually any job that a human can do, so everyone’s job is on the chopping block.” Kaplan believes that this anxiety is nonsense. The core of his critique is that these innovations are simply the latest “wave of automation, and like previous waves, they reduce the need for human labor. In doing so, they make the remaining workers more productive and their companies more profitable. These profits then find their way into the pockets of employees, stockholders and consumers (through lower prices.)”

           It is the extra money that is created through automation that will create new jobs. People will now have more money for vacations, apparel, eating out, going to concerts, and the like. This foreshadows, Kaplan asserts, “increased demand for flight attendants, hospitality workers, tour guides, bartenders, dog walkers, tailors, chefs, ushers, yoga instructors and masseuses, even as artificial intelligence reduces the need for drivers, warehouse workers and factory operators.”  Kaplan concludes, “If history is a guide, this remarkable technology won’t spell the end of work as we know it. Instead, artificial intelligence will change the way we live and work, improving our standard of living while shuffling jobs from one category to another in the familiar capitalist cycle of creation and destruction.”            

 

July 28, 2017 | Permalink | Comments (0)

Bronchetti and McInerney on Increased Access to Health Insurance Impacting Claims for Workers' Compensation

Paul Secunda of Marquette Law alerted me to an interesting new Upjohn Institute paper today recently posted on the Social Science Research Network authored by Erin Todd Bronchetti (Swarthmore) and Melissa McInerney (Tufts). The paper is titled, "Does Increased Access to Health Insurance Impact Claims for Workers' Compensation? Evidence from Massachusetts Health Care Reform."  From the abstract:

We study over 20 million emergency room (ER) discharges in Massachusetts and three comparison states to estimate the impact of Massachusetts health care reform on claims for Workers’ Compensation (WC). Prior evidence on the relationship between health insurance and WC claiming behavior is mixed. We find that the reform caused a significant decrease in the number of per-capita ER discharges billed to WC. This result is driven by larger decreases in WC discharges for conditions for which there is greater scope to change the payer or the location of care. Conversely, we estimate smaller impacts for weekend versus weekday admissions and for wounds compared to musculoskeletal injuries. Our findings are consistent with the reform lowering WC medical costs for employers/insurers, primarily by inducing injured workers to seek care at less costly sites. The results suggest much smaller impacts on the propensity to bill WC for a given injury. 

The findings appear to lend solid empirical support to anecdotal reports showing reductions in workers' compensation claiming when general access to health insurance is expanded. By implication, one might expect increased workers' compensation claiming when access to health insurance is restricted, but as the authors note, findings in this area have thus far been mixed.

Michael C. Duff

July 28, 2017 | Permalink | Comments (0)

Thursday, July 27, 2017

Uber “Injury Protection Program” or Uber Opt-Out?

This past May, Uber initiated what it calls a “driver injury protection program” for its drivers. As anyone who has read my posts knows, I am an “independent contractor” skeptic. I simply do not find credible most of the companies claiming to have independent contractors but no employees. While Alaska seems to find the employee/independent contractor analysis too difficult to perform, I’ll bet most of my readers do not. Section 220(2) of the Restatement 2d of Agency states:

In determining whether one acting for another is a servant (employee) or an independent contractor, the following matters of fact are considered:

(a) the extent of control which, by the agreement, the master may exercise over the details of the work;

(b) whether or not the one employed is engaged in a distinct occupation or business;

(c) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;

(d) the skill required in the particular occupation;

(e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work;

(f) the length of time for which the person is employed;

(g) the method of payment, whether by the time or by the job;

(h) whether or not the work is a part of the regular business of the employer;

(i) whether or not the parties believe they are creating the relation of master and servant; and

(j) whether the principal is or is not in business.

For those keeping count, those are ten factors. Any second-year law student can do an analysis of these factors. I have written probably a hundred briefs using the factors. In most cases, one gets a pretty good idea, pretty darned quickly as to whether the employee analysis tips one way or the other.

What is really going on is that companies do not like to be told they cannot dictate to states who is, and is not, an employee. The great irony is that it was employers who insisted upon common law factor tests after courts in the 1940s, most notably the U.S. Supreme Court in NLRB v. Hearst Publications, Inc., began to apply the “economic realities” test – what I describe to my students as the “oh, give me a break” test. Courts saw very well the reality of the situation – that a “contractor” obviously was a servant of a company just looking at the reality of the situation. Business went into convulsions over the opinion, complaining loudly that common law tests (such as the one now reflected in the restatement provision set forth above) must be used instead of any “realities” test. Thus, many statutes—including the National Labor Relations Act, which was at issue in Hearst-- were amended to ensure that common law tests be used. But, you know how it goes, you like the test until it produces outcomes you do not like.

So, the Driver Injury Protection Program (which for many reasons is not workers' compensation), asks us to buy into the assumption that drivers are independent contractors, without the mess and bother of analysis. And, I suppose, if states are going to exempt Uber by fiat from workers’ compensation laws (leaving state constitutional “special laws” considerations to one side—see page 71 here), something is better than nothing. It is probably worth mentioning, however, that, sooner or later, the federal courts will get cases in which aggrieved “contractors” will argue that the Program is governed by ERISA. ERISA, of course, applies to the “welfare benefit plans” of “employees.” Guess what the federal courts apply in addressing who is, or is not, an “employee” under ERISA? The Darden factors, named after the 1992 U.S. Supreme Court case, Nationwide Mutual Insurance Co. v. Darden, in which a rather muscular version of the factor test was established for determining who is an employee under ERISA. (Given that the asset value of just ERISA-governed health plans is roughly $9 trillion dollars, it is pretty important to know who qualifies as an employee in that environment).

In the end, I admit to being morally intransigent on this issue. It is not that economic activity is emerging that simply defies application of Section 220(2), or similar tests. It is rather that arguments that should not even be taken especially seriously have been sold to willing politicians. To me, opt-out is opt-out and, in the end, the wrong party is very likely to bear the cost of injury.

Michael C. Duff

July 27, 2017 | Permalink | Comments (0)