Wednesday, April 1, 2020

Center for Progressive Reform Post on Workers' Compensation and Coronavirus

I'm cross-posting here from the Center for Progressive Reform Blog my discussion--geared for a general audience--some of the interplay between the coronavirus and workers' compensation. I've joined the CPR as a member-scholar and aim to regularly highlight workers' compensation and workers' rights issues:

Front-line health care workers and other first responders are in the trenches of the battle against the COVID-19 virus. The news is replete with tragic stories of these workers fearing death, making wills, and frantically utilizing extreme social distancing techniques to keep their own families sheltered from exposure to the virus. Should they contract the virus and become unable to work, they may seek workers' compensation coverage, which is the primary benefit system for workers suffering work-related injuries or diseases.

I go on to discuss issues that will be familiar to this audience.

Michael C. Duff

April 1, 2020 | Permalink | Comments (0)

Saturday, March 28, 2020

Covid-19, Strikes, and Intentional Employer Misconduct: A Descent Into the Maelstrom?

I have recently been working on a law review article about work stoppages and strikes in the “new” economy. Some readers may not be aware that Section 7 of the National Labor Relations Act protects the right of both union and non-union employees to engage in concerted activities for their “mutual aid or protection.” The lead case involving non-union employee protection, Labor Board v. Washington Aluminum Co., concerned employees who walked off the job claiming their workplace was too cold (the facts arose in wintertime Baltimore). The employer fired the employees for striking, but the U.S. Supreme Court ordered the employees reinstated. While the employer could lawfully have “replaced” the employees during the walk-off, it could not lawfully fire them.

With increasing reports of strikes, see here, here, and here, generated when employers order employees to work amid real or imagined Covid-19 fears, the principles of Washington Aluminum are likely to become highly relevant. One of those principles is that fear of dangerous working conditions does not have to be “reasonable” for concerted work stoppages prompted by it to enjoy protection; the fear just has to be held in “good faith.” I’ve written a short piece on Washington Aluminum principles that is available here.

One complication in this area involves work disputes between companies and their putative independent contractors. Independent contractors who strike arguably violate antitrust law as a “conspiracy in restraint of trade.” As Professor Sanjukta Paul of Wayne State University Law School has observed, the threat of FTC prosecution of antitrust law violations committed by independent contractor-workers is real (it has been deployed, for example, against workers in the deregulated trucking industry). This is a very complicated area of law likely to cause great confusion. For example, I read today about a threatened strike by Instacart workers scheduled for this Monday (3/30/20) over hazard pay and safety gear. It would not surprise me to see FTC activity should that type of protest activity become widespread and I am quite concerned about the potentially severe liability relatively unsophisticated workers might be walking into. (I agree with what I understand Professor Paul to be arguing – it is high time that we reassess, once again, the relationship between antitrust and labor law. Do we really want to punish peaceful labor activity?)

Workers’ compensation is implicated in this maelstrom. Some front line employees are clearly signaling to their employers that they believe Covid-19 has rendered their workplaces ultrahazardous. If subsequent expert opinion and adjudication agrees with employees’ assessments, will employers forcing employees to work have engaged in “intentional” or “serious and willful” misconduct opening themselves up to payment of enhanced workers' compensation benefits or tort in the event of Covid-19 illness found to be work-related? One wonders if this complicated liability picture—in addition to “bubbling” wildcat strikes—was behind the decision of the Big 3 auto manufacturers to temporarily scale back auto production until March 30.

Michael C. Duff

March 28, 2020 | Permalink | Comments (0)

Thursday, March 26, 2020

Gig Battles Roll On in Midst of Covid-19 and Uncle Sam to the Rescue

According to the New York Times, platform companies continue to battle AB-5 in California, “investing tens of millions of dollars in a November ballot initiative that would effectively exempt them from it . . . “[and as] the companies’ legal challenges play out, the state is failing to approve many unemployment claims from drivers, potentially leaving thousands in the lurch as their earning power collapses.”

Similar scenes are playing out in New York where it has already been determined in prior rulings “that three Uber drivers were eligible for unemployment benefits, along with all ‘similarly situated’ drivers.” Dara Khosrowshahi, CEO of Uber, of course, regrets all of this, saying that the “situation certainly demonstrates the downside of attaching basic protections to W-2 employment,” and in a letter to the president “asked that any economic stimulus or coronavirus-related legislation provide “protections and benefits for independent workers,” along with “the opportunity to legally provide them with a real safety net going forward.” The hubris and irony are breathtaking, and the line I’ve set in bold reflects the disaster capitalism/shock doctrine “way”: Use the disaster to push for (in this case) “portable benefits,” a boondoggle likely to be of epic proportions.

Fortunately, Shannon Liss-Riordan, the notable scourge of platform companies’ backflipping tactics, will have none of it, and has already filed complaints seeking to force the companies to follow the state’s new law immediately, giving drivers access to unemployment benefits and sick days. As she put it, “It is very unfortunate that such a crisis may be necessary to prompt these companies into actually complying with the law and extending employment protections to their drivers.” The moral of the story may be that crises can work in more than one direction. If a company seizes on a disaster to push its agenda before the tactical ground has been properly prepared, it may provoke a response it did not anticipate. At the moment, at least, failure to comply with AB-5 makes you a lawbreaker (though the scofflaws would like you to forget it). And, if Liss-Riordan obtains a declaratory judgment and injunction quickly, the offending companies may swiftly find themselves on the precipice of being in contempt of court.

Look closely for other disaster maneuvers. Folks have asked me over the years why I’m so focused on workers’ compensation opt-out and mushrooming application of compulsory arbitration across legal regimes. It’s because this formerly-blue-collar professor knows how the game is played and who is playing it. Opt-out is a shock doctrine maneuver: the economy gets really bad, really fast (the Black Swan) and "players" start making arguments for dismantling liability. All you need is a social bankruptcy blueprint (and, as this bankruptcy teacher well knows, such blueprints are amazingly political). Once we've determined that you are a "secured" creditor and the other fellow isn't, the rest is easy. And rust never sleeps--those unsuccessfully seeking special treatment in the past will be back.

Along these lines, consider that in the new stimulus bill Gig workers’ unemployment relief appears to have been included. While this is an outcome I applaud (for the sake of workers), consider that companies that have never contributed a dime to the unemployment funds are, in effect, being publicly subsidized at a higher rate than those that did. Socialize risk. Privatize benefits. Just imagine if Uber was the last entity standing.  

Michael C. Duff

March 26, 2020 | Permalink | Comments (0)

Tuesday, March 24, 2020

Reporting to Work During Pandemic as Special Mission

I have great concern that the end of the pandemic will be rife with confusing politics. No sitting president wants a paralyzed economy leading into the election for a second term. Furthermore, that president's adversaries may be seen as having a motive for over sensationalizing the scope and depth of the emergency for political purposes (such thoughts would not be thought in normal times, but these are not normal times). As usual, workers are caught in the middle.

Potential problematic scenarios will abound. Suppose the economy is "re-opened" but employees have doubts about whether it is in fact safe to return. Or suppose the employee does in fact return and becomes sickened by coronavirus. The traditional increased-risk causation analysis would hold that coverage is not established unless the risk of obtaining the illness in the workplace exceeds the background risk of the general public (or something to that effect depending on the law of a particular state). There has been a good deal of discussion as to whether increased risk jurisdictions and/or insurance carriers should simply relax causation standards in these situations in favor of coverage where causation is at least arguable. (See here behind paywall).

Or suppose the employee can establish that the virus was contracted on the way to (or returning from) work. Normally we would say the resulting illness was not compensable by operation of the going and coming rule. But in a positional risk jurisdiction, or in an increased risk jurisdiction possessing something like the street risk rule, the situation is likely to become more complicated. In this regard, I was struck this morning by a FECA (the workers' compensation-type statute covering federal employees) memo written by the Department of Labor in connection with the garden-variety flu (I'm not sure when it was written/updated). While making clear that the flu is not automatically covered and that work causation must be established (FECA operates mainly under positional risk principles), the memo went on to state: "In the event of a pandemic situation where only certain essential personnel are required to come to work, it is conceivable that an employee's circumstances could be considered a special mission, thus bringing them under the coverage of the Act during their commute to and from the office." (The DOL has written another memo specifically addressing COVID-19 -- that memo does not seem to include the special mission language and suggests an increased risk requirement for COVID-19 coverage).  

This all makes me think of dangerous return to work scenarios. I anticipate claimants compelled to return to work may be arguing for some time that their commutes are "special missions" because the commute is not normal and exposes them to risks in excess of those to which the general public is exposed (especially in the context of scenarios in which there are societal disputes about whether continued quarantine is warranted). In general, a special mission is defined as a situation in which an employee takes an off-premises trip that would normally be outside the course of employment. Then the trip may be brought within the course of employment for any number of reasons including (for purposes of this discussion) a special inconvenience or hazard exceeding a normal commute. 

One should also bear in mind that on some accounts the flu epidemic of 1918 did not really end until 1920.

Michael C. Duff

 

March 24, 2020 | Permalink | Comments (0)

Saturday, March 21, 2020

Damon Silvers on Coronavirus and the Gig Economy

Damon Silvers, my classmate at the Harvard Law School a long time ago (we were 1Ls in 1992), and now Special Counsel to the AFL-CIO and professor, has a thought provoking piece up on the UCL Institute for Innovation and Public Purpose blog (via the Medium). Here is an excerpt:

In the United States, platform workers are generally not eligible for unemployment insurance. And so, what the coronavirus pandemic exposes is that: rather than gig economy jobs feeling modern, these workers are much more like dock workers or a farm labourer in the 19th century, if they are too sick to work, they don’t get paid.

 

Perhaps nothing is more telling in this regard than the contrast between how Uber is treating workers they admit are their employees and how they are treating their drivers. Uber employees have paid sick days and are being told to work from home. While, drivers are offered unspecified financial support if they are actually sick but are clearly expected to keep driving until they get sick.

 

Throughout the San Francisco Bay, the centre of the greatest accumulation of technology-related wealth and expertise in the history of the world, hundreds of thousands of people are suddenly living in a kind of Dickensian fear, the fear of no work and nothing to fall back on as the economy contracts around them.

 

Last week, as it became clear that we were not going to contain the coronavirus in a handful of locations in the United States, something else became clear as well. That we had designed our economy, or had allowed it to be designed, as a kind of ideal incubator of an epidemic. Because we are an economy whose health insurance systems have all been redesigned to make sure the patient pays first dollar. In our privatised health care system most health insurance plans, including those offered through the Affordable Care Act (“Obamacare”) require workers to pay an amount in health care costs before the insurance coverage begins (“deductibles”) and to pay some of the cost of each health care treatment (“co-pays”). And we are an economy where a sizable percentage of the workforce doesn’t have paid sick days. So, millions are seriously incentivised not to seek medical treatment when they are not feeling well, and to go to work sick as long as they can.

 

The rest of the piece us here.

I think it is fair to say that Damon and I share many views on the problems besetting the modern economy. But I also think we have some profound differences as to the solutions to those problems. But that is a long conversation for another time. It is perhaps enough to say that I have limited confidence in the long term viability of world super-states. I think something else is coming.

Michael C. Duff

March 21, 2020 | Permalink | Comments (0)

Thursday, March 19, 2020

Disaster Unemployment Assistance As Potentially Prompt Help for Gig Workers Impacted by Virus

Stephen A. Woodbury, senior economist at the W.E. Upjohn Institute for Employment Research, has posted a very encouraging short post on possible relief for Gig workers:

Disaster Unemployment Assistance would make these self-employed workers, contract workers, and gig workers eligible to receive UI benefits. It is almost certainly the most effective fiscal policy tool available to the federal government to quickly blunt the economic damage resulting from the COVID-19 pandemic.

 

DUA is normally paid to workers who lose their jobs, but do not qualify for regular UI benefits, following natural disasters such as hurricanes, floods, tornadoes, and geological disasters like earthquakes and volcanic eruptions. The program is initiated by a Presidential disaster declaration and administered by the state UI agencies, which in turn are overseen by the U.S. Department of Labor.

 

DUA requires no new congressional legislation—it is authorized by the Stafford Act of 1988—and the administrative structure needed to make it run already exists. Because DUA is funded by the Federal Emergency Management Agency, it side-steps the eligibility problem faced by self-employed workers under the regular state UI program.

 

A Federal Emergency Management Agency (FEMA) publication on the Stafford Act is here.

Michael C. Duff

March 19, 2020 | Permalink | Comments (0)

It Wouldn’t Have Taken Much To Disrupt a Gig Economy—But Much is What We Have

From the New York Times:

The coronavirus pandemic is exposing the fragile situations of gig economy workers — the Uber and Lyft drivers, food-delivery couriers and TaskRabbit furniture builders who are behind the convenience-as-a-service apps that are now part of everyday life. Classified as freelancers and not full-time employees, these workers have few protections like guaranteed wages, sick pay and health care, which are benefits that are critical in a crisis.

While gig economy companies like Uber and DoorDash have promoted themselves as providing flexible work that can be lifelines to workers during economic downturns, interviews with 20 ride-hailing drivers and food delivery couriers in Europe and the United States over the past week showed that the services have been anything but that.

Instead, as the fallout from the coronavirus spreads, gig workers’ earnings have plummeted and many have become disgruntled about their lack of health care. Many others are also feeling economic pain from the outbreak — layoffs have hit workers in retailing, airlines, hotels, restaurants and gyms — but even as public health agencies have recommended social isolation to insulate people from the virus, gig workers must continue interacting with others to pay their bills.

And buried in another Times article about qualifying for unemployment benefits:

Gig workers are also unlikely to qualify because they’re largely considered self-employed. But certain self-employed people may end up being eligible for a refundable tax credit, depending on what lawmakers in Washington decide to do.

I think we’re about to get a crash course on just how big the Gig economy is and on some deeper implications of a no-employee world. I hope that solutions forged in the current disaster capitalism won't permanently sacrifice employee status for millions as the quid pro quo for affording critical, but in the end, temporary benefits.  

Michael C. Duff

March 19, 2020 | Permalink | Comments (0)

Wednesday, March 18, 2020

COVID-19 and Labor and Employment Law Production in Times of Historical Emergency

One of the difficulties I have teaching “younger” students about workers’ compensation (and other bodies of labor and employment law) is that the rationales for the law have often arisen from extraordinary historical times not remotely similar to any they have experienced. The COVID-19 tsunami may have instantly provided them with a comparable context of historical emergency.

Workers’ Compensation arose during an historical period in which the rate of accidents was almost unbelievably high. According to John Fabian Witt, a leading historian of workers’ compensation history (and pre-history),

By one contemporary estimate, no fewer than 42 percent of railroad workers involved in the day-to-day operation of trains in the state of Colorado were injured on the job each year . . .  The most extraordinary rates of death and injury appear to have occurred in the anthracite coal mines of eastern Pennsylvania during the 1850s and 1860s, where each year 6 percent of the workforce was killed, 6 percent permanently crippled, and 6 percent seriously but temporarily disabled. But by some measures, accident rates in many industries had increased in the intervening half-century. Indeed, the year of the Jamestown Exposition was, according to a leading historian of mining safety, “the worst year in the history of industrial accidents.” Eighteen disasters, including an explosion in a West Virginia mine that December (which killed 361 miners), produced a total of 918 mining fatalities for the year. And by comparison to the early twenty-first century, accidental death rates for the population as a whole were astronomical. In 1900 the annual U.S. accidental-death rate of 1 in 1,000 was as great as that of the most dangerous occupations a century later. John Fabian Witt, The Accidental Republic at 3.

Witt has also explained that medical improvements spurred by the Civil War “helped prompt the development of modern organizational structures in hospitals and gave rise to the modern nursing profession.” The 1870s and 1880s also witnessed the widespread introduction of germ theory and antiseptic surgery into American hospitals, fundamentally transforming medicine and improving the survival rates for surgeries so dramatically that American industrial death rates pre and post-Civil War cannot be reliably compared. Injury survival changed at a systemic level the value of accident cases because the background rule had been that tort claims died with the victim. More survival meant more potential claims meant more eventual liability. (Witt, Accidental Republic at 25). When courts and legislatures latch on for dear life to the “exclusive remedy rule” they are echoing the magnitude of the prior historical urgency behind workers’ compensation law. It can all be difficult to explain to a young student who may never have worked and has had no personal connection to workplace injury. But that same student may now understand the idea of a national emergency.

Similarly, the teaching and learning of traditional (National Labor Relations Act) labor law cannot be accomplished in depth without possessing a background understanding of the stock market crash of 1929, mass unemployment, and the resulting desperate strikes and workplace organizing of the 1930s. Then, as one moves forward in time, traditional labor law cannot be understood without grasping the tremendous (nearly hysterical) premium placed on “industrial peace” during World War II. Strikes were virtually unthinkable. Thus, we continue to receive the echoes of the urgency of “industrial peace” in contemporary labor law cases, and that may feel to a young student to be oddly out of place. Now, if I say that “industrial strife” was once deemed a potential national emergency, my words may carry more meaning.

In short, extraordinary times produce new law—in labor and employment law as well as in other fields. This is remarkable in its own right, but it is also important to keep in mind that, the further we move out in time from the remarkable events and emergencies that jump-started particular laws (or even whole areas of law), the more difficult it can be to replicate the policy urgency that gave them birth. In short, statutes age. It will be for those of us living through these extraordinary times to provide context and explanation to future lawyers of the reasons for the law production that will now emerge as we attempt to struggle with unprecedented problems by deploying heretofore undreamed of solutions.

Michael C. Duff  



March 18, 2020 | Permalink | Comments (0)

Sunday, March 15, 2020

Workers’ Compensation Protected by Potential for Arbitration Swarm?

Last month, DoorDash made news when thousands of the company’s worker-“Dashers” decided to pursue misclassification claims in arbitration, one-by-one, a concept known as “swarming.” (Companies appear to be popping up to assist plaintiffs’ counsel in setting up swarming practices). This maneuver apparently so overwhelmed the “platform”-- after all, most of these cases are supposed to just go away when claimants become disheartened by being forced into arbitration -- that when the Dashers put up their 1.2 million dollars in filing fees, for arbitration of 6,000 individual claims, management blanched at the prospect of plunking down its 11 million dollar share of filing fees under the arbitration agreement. Eventually the delay forced AAA—the “chosen” arbitration outfit—to cancel the arbitrations. Amusingly, the Dashers then sued DoorDash in federal court to compel arbitration. (The hearing transcript in which DoorDash’s counsel was required to explain why arbitration should not be compelled—after no doubt having made the argument repeatedly in his career that low-wage workers’ arbitration agreements must be enforced—is a gem, and I recommend every word of it to you).

The gist of what seems to be going on in this new twist in the arbitration-shenanigans wars is that new methods of advocacy appear to be arising that may improve the odds of workers winning in arbitration. The plaintiffs’ counsel in the DoorDash arbitrations has suggested (see here at pages 17-18) that many of the 6000 cases are very strong. (Several look to me like they have problems, but most don’t). The Gibson Dunn firm (or, rather, its client DoorDash) was apparently in no position to individually arbitrate 6000 claims. At one point—again, somewhat amusingly—DoorDash suggested that the arbitrations be put on hold because of the pendency of a related court class-action suit. Got that—efficient arbitration should wait for inefficient class action litigation(!). Judge Alsup (District Court for the Northern District of California) was not pleased.

This all has me thinking about the arbitration of workers’ compensation cases. There is simply no question that employers could compel employees to arbitrate workers’ compensation claims if they wanted to do so. If anyone wants to call me on the phone and argue the point I’ll happily engage in a “live” debate (well, probably from home since I’m presently in a spring-break/virus “pause”). But read Kindred Nursing Centers first. The point I want to make is that at some juncture the efficiency of arbitration—even for those writing the rules—may break down. At some point, AAA fees may get so expensive that your transaction costs get out of whack, and your local workers’ compensation board looks like a pretty good deal. Furthermore, even if you win or achieve positive outcomes in most cases, you won’t win them all, and eventually the swarm may come to town.

Postmates finds itself in a similar bind. As reported in JD Supra, “Judge Saundra Brown Armstrong of the United States District Court in Oakland has refused to stay her order requiring Postmates to conduct more than 5,000 individual arbitrations, which Postmates argued would require it to pay more than $10 million just in arbitration filing fees.” One management-side firm estimates that fees for an individual arbitration are typically about $60,000. In my neighborhood, $60,000 x 5000 = $300,000,000. Think it will all settle?    

I suppose I should also mention that DoorDash has decided not to retain AAA any longer and has enlisted a cheaper arbitration outfit. As explained in the American Prospect, “Now the International Institute for Conflict Prevention & Resolution, known as CPR, was the forum of choice. And the new forum was offering a whole new program: Plain-vanilla arbitration was available to the Dashers, as it always had been. But so was something called the “CPR Employment-Related Mass Claims Protocol.”  Judge Alsup would really like you to know about it (see page 26 of the transcript). You really can’t make this stuff up. Well, you could, but it wouldn’t be as entertaining.

Michael C. Duff

March 15, 2020 | Permalink | Comments (0)

Thursday, March 12, 2020

Disasters and Fissures: Coronavirus, Google, the Unworthy Sick, and Workers’ Compensation Causation

UPDATE: They've apparently heard the complaint, as reported in Business Insider. 

Thought provoking piece in today’s The Guardian highlighting yet another dimension of the fissured workplace. If you are a “contract” worker, you might have to show up for work at the Google office during the Coronavirus. Say what?:

The day before, Google had asked all its North American employees to begin working from home due to the coronavirus – a policy that has since been expanded to the rest of its global workforce. But [Josh] Borden, a triage analyst who has worked for Google for about four years, is one of the approximately 135,000 people who make up Google’s “extended workforce”: temps and subcontractors who perform work for, but are not technically employed by, the $830bn company. And though Borden and his co-workers perform computer-based tasks that could just as easily be completed from home as those of other technical workers, Google does not allow them to access their work from home.

 

“The FTEs [full-time employees] almost all seem to be heeding the recommendation to work from home, while we are sitting here in the Petri dish, with the choice of not getting paid, or maybe getting sick and then putting our family and friends at risk too,” Borden said. “I’ve heard from multiple people that they feel like we’ve been forgotten and abandoned – and that our health and safety is clearly less important than the Googlers’.

 

“Our second-class status now has literal health implications,” he added.

If I were to turn this situation into a workers’ compensation law school essay question, I would expect some discussion of causation. The risk of contracting coronavirus might be viewed as neutral under general principles of workers’ compensation causation—neutral because the contract worker at the Google offices may have no greater risk of contracting the virus than a member of the general public. But the Petri dish analogy in the article excerpt is interesting. If the employer de facto constructs a Petri dish and then inserts (or allow to be inserted) contract employees into the dish, perhaps we shift back along towards the increased risk pole of the workers’ compensation causation continuum.

Indeed, I’m reminded of my law school days (c. 1993-1995), when I clerked for the Commonwealth of Massachusetts Department of Industrial Accidents Reviewing Board. During that stint, I became familiar with Section 28 of Chapter 152 of the Mass General Laws: “If the employee is injured by reason of the serious and willful [sic] misconduct of an employer or of any person regularly intrusted [sic] with and exercising the powers of superintendence, the amounts of compensation hereinafter provided shall be doubled.” I had a case one year involving an employer that repeatedly (and clearly knowingly) exposed its employee to mercury. Bad things happened to the employee. Section 28 was applied.

Of course, none of this matters if the worker is not an employee—he or she will not be covered by workers’ compensation. But, if you go sticking workers in Petri dishes, you might appreciate having recourse to the exclusive remedy rule.

Michael C. Duff

March 12, 2020 | Permalink | Comments (0)

Tuesday, March 10, 2020

No Grand Bargain: A Counter Perspective on “Portable Benefits”

I was quoted the other day in Bloomberg News on the subject of “portable benefits”—benefits paid to “gig workers” in lieu of “real benefits” because, well, it’s better than nothing. It may not surprise you to learn that, contrary to the positive tone of the article, I said I thought the entire idea smacked of statutory evasion and obfuscation. The trade of well-defined statutory benefit coverage for portable benefits is no grand bargain—and how many grand bargains do we have to have? Heck one of the ones this audience is familiar with has probably been inadequate for years. You want to bargain to a point below that?

The argument that is supposed to cause me to accept in principle the desirability of portable benefits consists essentially of the following steps:

  1. A new type of work has surfaced that is fundamentally different from all work that has heretofore existed – gig work.
  2. Because gig work is so different, workers who perform it are unclassifiable as “employees” or “independent contractors” or, in any event, are not classifiable as “employees.”
  3. Because gig workers are not employees, they are not entitled to employee benefits.
  4. Because gig workers are not entitled to employee benefits, we must invent new types of benefits that the gig workers can carry around with them from gig to gig.

Of course, I reject the very first premise upon which the three that follow depend. I invite those thinking about these issues to closely scrutinize the nature of the so-called gig work. If it looks like the workers are taxi drivers, it is probably because they are taxi drivers. If those workers delivering your food look like delivery people ultimately under the control of the “platform” for whom they are delivering, that is probably because they are. Compel discussants to explain, in excruciating detail, the nature of the “new” work (that has never before existed in the history of humanity and which is apparently under no one’s control but the poor schmuck who is in physical motion) and then ask yourself why that work can’t be subject to a straightforward control test. Or at least ask yourself why the IRS (despite all protestations) will continue to use its 20-factor control test, thank you very much. I’ll bet you already know why.

Did the world of work change much between 1911 (when we instituted workers’ compensation systems) and, say, the first ten years of the 21st century, when the gig economy magically arose? Of course it did, but we still found it possible to classify most of that century of work as “employment.” My brother-in-law once was a bona fide “coder” who worked for companies where he was very clearly “gigging.” (He has for the last few years very clearly been a managerial employee). As an experiment, I used to subject his description of his duties to the traditional, 10-factor test. He came out an independent contractor every time because he was one. So, no, I don’t blindly accept tautological notions that a gig worker is a gig worker. I think almost all of it is a scam perpetrated by deadbeats. I simply don’t believe we even have a clear idea of a gig worker. Harsh? You bet.

Now some might say – so what? If you can put a buck of benefits in a worker’s hand right now that buck is worth more than the two bucks staying in the bush while this battle is fought out repeatedly in litigation. It’s bread and butter. I suppose that if I’m robbed I’d rather get half my money back than none. (A 2018 Edison Marketplace research poll showed that workers whom the publication defined as being “Gig workers” were off the charts in terms of economic anxiety). The answer to this objection, of course, is that public policy does not deal solely with a current rash of theft but also with underlying processes of thievery. Temporary relief from theft can be pretty unsatisfying, and seems at odds with the whole idea of a stable safety net. (Remember that phrase?)

Still, I suppose I could play along. Please tell me—with precision—the value of benefits that will be provided by statute to this unfortunate twilight group (soon the majority of workers?) We can't presently provide substantial benefits, lament the Gig companies. That, in itself, would prompt litigation because we would look like employers. Then, I answer, how are we supposed to have this conversation? You want to create the twilight category first on the representation, ipse dixit, that protection from litigation will lead to comparable benefits? Sorry, that's not a negotiation, it's -- a romantic song? Also assure me that states’ attempts to provide portable benefits in excess of some future federal model will not be preempted by substantively empty federal law. (You know that grift). Tell me that a mechanism will be provided allowing workers wrongfully deprived of their defined statutory benefit to recover any shortfall (and it would be nice if the mechanism included allowance for funded attorney representation). And, while you are at it, tell me how benefits for work injuries could even fit into the model since, as we all know, litigation on causation and extent of incapacity—among other things—is part and parcel of workers’ compensation reality. Tell me, more broadly, how any benefit requiring regular adjudicated entitlement will be determined in this brave new world of portability. I’ll wait.

Michael C. Duff  

March 10, 2020 | Permalink | Comments (0)

Saturday, March 7, 2020

Is Wyoming’s Proposed Workers' Compensation PTSD Bill a “Special Law”?

A bill has been proposed in the Wyoming Senate that would provide first responders with workplace mental injury coverage. I support the bill, but it does seem at least problematic on “special laws” grounds. As Professor Justin Long at Wayne State has written:

Since the nineteenth century, most states have had constitutional clauses prohibiting “special laws.” These clauses were ratified to protect the people of each state from domination by narrow economic elites, who would use their economic power to win grants of privilege from the state legislatures. To fight the corrupt favors garnered by private interests in this way, state constitutional drafters wrote clauses requiring their legislatures to pass only “general laws” that would apply equally to all members of the regulated class.  

Readers may recall that the Oklahoma opt-out law was struck as unconstitutional on special laws grounds (and no others).

In Wyoming special laws are unconstitutional under Article 3, Section 27 of the State constitution. Board of County Commissioners v. Geringer, 941 P.2d 742, 748 (Wyo.1997). “We also know that ‘[a]ll laws of a general nature shall have a uniform operation.’. . . This rule demands that these statutes be applied uniformly throughout the state, * * *.”

The reason the special laws issue occurs to me is that under the proposed Wyoming law there would be an unusual tripartite legal structure applicable to so-called “mental-mental” workplace injuries (mental disability produced by strictly mental workplace stimuli). The default rule under §27-14-102(xi)(J) is that mental-mental injuries are excluded from coverage. But because of the categorical workers’ compensation exclusion of such injuries, and in light of the Wyoming’s constitutionalization of the workers’ compensation quid pro quo (Art. 10, Sec. 4 of the Wyoming constitution), those suffering from mental injuries tortiously inflicted by an employer are not bound by the exclusive remedy rule. Collins v COP Wyoming, 366 P.3d 521 (Wyo. 2016). If the new PTSD bill is enacted, first responders may be entitled to coverage for “mental-mental” workplace injuries. Under the text of the bill, a covered injury does not include:

(J)  Any mental injury unless it is:

 

 (I)  Caused by a compensable physical injury, it occurs subsequent to or simultaneously with, the physical injury and it is established by clear and convincing evidence, which shall include a diagnosis by a licensed psychiatrist, or licensed clinical psychologist or psychiatric mental health nurse practitioner meeting criteria established in the most recent edition of the diagnostic and statistical manual of mental disorders published by the American Psychiatric Association. In no event shall benefits for a compensable mental injury under this subdivision be paid for more than six (6) months after an injured employee's physical injury has healed to the point that it is not reasonably expected to substantially improve;. or

 

 (II)  Experienced by a first responder and established by clear and convincing evidence, which shall include a diagnosis by a licensed psychiatrist, licensed clinical psychologist or psychiatric mental health nurse practitioner meeting criteria established in the most recent edition of the diagnostic and statistical manual of mental disorders published by the American Psychiatric Association. The mental injury shall not be considered a compensable injury if the mental injury is directly attributed to disciplinary action, work evaluation, job transfer, layoff, demotion, termination or similar action taken by an employer . . .   (Emphases supplied)

 

Thus, three different categories of  claimants would be established under this statutory structure.  Those who are first responders (potentially covered by workers’ compensation), those who are not first responders, but who are negligently injured (potentially covered in tort), and those who are neither first responders nor negligently injured (no recovery under workers’ compensation or tort).  

This structure jars me. It may be rational, but it seems at a minimum to require transparent justification. Although I have not done a close study of how many states have attempted to implement PTSD coverage in this fashion, I think that moving from categorical mental-mental exclusion to coverage of PTSD for first responders (only) is a more difficult road for a legislature than moving from law that already provides general mental injury coverage for all claimants (even if subject to strict causation requirements) to PTSD coverage for first responders. In the latter types of jurisdictions, the primary legal obstacle may be how to deal with PTSD as a potential gradual injury where the statute in question requires “accidents.”

Michael C. Duff

March 7, 2020 | Permalink | Comments (0)

Thursday, March 5, 2020

Was Worker Safety Advocate Pressured by ABA to Withdraw from Conference Panel After Releasing Report Critical of Amazon?

The story, authored by Eli Rosenberg, ran in yesterday's Washington Post:

A workers advocate faced pressure to withdraw from an American Bar Association conference panel on worker safety in the weeks after she helped author a report critical of Amazon, a sponsor of the conference, according to emails obtained by The Washington Post.

 

Debbie Berkowitz, a former federal regulator who now works for the National Employment Law Project, received an email in early December from Jonathan D. Karmel, a labor lawyer who is co-chair of the ABA’s Occupational Safety and Health Law Committee, asking whether she would serve on the panel to balance the views of another speaker, Heather MacDougall, who is Amazon’s vice president of worldwide employee health and safety. Berkowitz was listed on a draft of panelists, and she was told the ABA could pay for her hotel.

 

Within a few weeks, she learned her appearance was drawing opposition from others involved in the conference. In an interview, Berkowitz said Karmel told her that one of his co-chairs was concerned her appearance could upset Amazon. The emails obtained by The Post identify the objecting co-chair as Steven R. McCown, a corporate lawyer. The emails show that organizers were discussing whether they should run concerns about Berkowitz by MacDougall.

 

Facing McCown’s opposition, Berkowitz was asked whether she wanted to switch panels, and she declined. Feeling she was under pressure, Berkowitz withdrew altogether, she said.

 

The rest of the story is here.

As someone who is perpetually and reflexively hostile to Amazon (and to anyone else I believe intends to harm workers as a matter of course), I would count it as a badge of honor to be disinvited to corporate programs masquerading as open discussion. I'm scheduled to appear at an ABA workers' compensation event in New Orleans at the end of this month. I doubt that I'm important enough to generate opposition from powerful interests, but perhaps I should have considered refundable tickets since I have a habit of speaking my mind. 

Michael C. Duff

March 5, 2020 | Permalink | Comments (0)

Tuesday, February 18, 2020

More on California ABC and the FAAAA/Trucker Preemption Issue

The general challenge to California’s AB 5 is now on its way to trial absent a successful pre-trial motion by California state authorities. But readers may recall that a California federal district court recently upheld a challenge of the law as applied to truckers on Federal Aviation Administration Authorization Act of 1994 (FAAAA) preemption grounds in California Trucking Association (CTA) v. Becerra. It may be some time before we know the outcome of that case, but it seems clear the dispute will be analyzed by the 9th Circuit under its previous opinion in Dilts v. Penske Logistics, LLC, 769 F.3d 637 (9th Cir. 2014) (cert denied in 2015), which addressed whether California laws on meal and rest breaks were preempted by the FAAAA. The heart of that case concluded:

California's meal and rest break laws plainly are not the sorts of laws “related to” prices, routes, or services that Congress intended to preempt. They do not set prices, mandate or prohibit certain routes, or tell motor carriers what services they may or may not provide, either directly or indirectly. They are “broad law[s] applying to hundreds of different industries” with no other “forbidden connection with prices[, routes,] and services.” . . .. They are normal background rules for almost all employers doing business in the state of California. And while motor carriers may have to take into account the meal and rest break requirements when allocating resources and scheduling routes—just as they must take into account state wage laws . . . or speed limits and weight restrictions . . . the laws do not “bind” motor carriers to specific prices, routes, or services . . . Nor do they “freeze into place” prices, routes, or services or “determin[e] (to a significant degree) the [prices, routes, or] services that motor carriers will provide,” . . . Further, applying California's meal and rest break laws to motor carriers would not contribute to an impermissible “patchwork” of state-specific laws, defeating Congress' deregulatory objectives. The fact that laws may differ from state to state is not, on its own, cause for FAAAA preemption. In the preemption provision, Congress was concerned only with those state laws that are significantly “related to” prices, routes, or services. A state law governing hours is, for the foregoing reasons, not “related to” prices, routes, or services and therefore does not contribute to “a patchwork of state service-determining laws, rules, and regulations.” . . . It is instead more analogous to a state wage law, which may differ from the wage law adopted in neighboring states but nevertheless is permissible . . .

The analytical problem with the preemption provisions in the FAAAA, the Airline Deregulation Act (upon which the FAAAA provision was modelled), and ERISA (the granddaddy of all the sweeping preemption provisions) is, of course, their breadth, and it matters not whether that breadth results from laziness or lobbying. (Jim Wooten at University of Buffalo has done masterful work on the mysterious emergence of the ERISA preemption provision). In the context of the FAAAA, the Court in Dilts further observed:

. . . generally applicable background regulations that are several steps removed from prices, routes, or services, such as prevailing wage laws or safety regulations, are not preempted, even if employers must factor those provisions into their decisions about the prices that they set, the routes that they use, or the services that they provide. Such laws are not preempted even if they raise the overall cost of doing business or require a carrier to re-direct or reroute some equipment . . . Indeed, many of the laws that Congress enumerated as expressly not related to prices, routes, or services—such as transportation safety regulations or insurance and liability rules . . . are likely to increase a motor carrier's operating costs. But Congress clarified that this fact alone does not make such laws “related to” prices, routes, or services. Nearly every form of state regulation carries some cost. The statutory text tells us, though, that in deregulating motor carriers and promoting maximum reliance on market forces, Congress did not intend to exempt motor carriers from every state regulatory scheme of general applicability . . .

 

Nor does a state law meet the “related to” test for FAAAA preemption just because it shifts incentives and makes it more costly for motor carriers to choose some routes or services relative to others, leading the carriers to reallocate resources or make different business decisions . . .

 

. . . In short, even if state laws increase or change a motor carrier's operating costs, “broad law[s] applying to hundreds of different industries” with no other “forbidden connection with prices[, routes,] and services”—that is, those that do not directly or indirectly mandate, prohibit, or otherwise regulate certain prices, routes, or services—are not preempted by the FAAAA. (emphases supplied)

The argument CTA seems to be making is that the independent contractor model is not merely a cost-saving aspect of the trucking industry but is, rather, essential to it and therefore not “several steps removed from prices, routes, or services.” Moving down the slippery slope, the implicit argument is that the ABC classification will cause carriers to exit the market. (But the proponent of preemption defense usually has the burden of proving its applicability—so it is not clear to me how receptive will be to a mere assertion of horribles). In other words, this argument has limits, and it is worth noting that the Third Circuit expressly rejected it very recently in Bedoya v. American Eagle Express, Inc., 914 F.3d 812 (3rd Cir. 2019) (cert denied)—see pp. 23, 24 in this linked slip opinion. The U.S. Supreme Court in a 2013 FAAAA opinion, Dan’s City Used Cars, Inc. v. Pelkey, 569 U.S. 251, stated,

. . . the breadth of the words “related to” does not mean the sky is the limit. We have refused to read the preemption clause of the Employee Retirement Income Security Act of 1974 . . . which supersedes state laws “relate[d] to any employee benefit plan,” with an “uncritical literalism,” else “for all practical purposes pre-emption would never run its course.” . . . And we have cautioned that [the FAAA preemption provision] does not preempt state laws affecting carrier prices, routes, and services “in only a ‘tenuous, remote, or peripheral . . . manner.’”

At the end of the day that is the question: how “remote” is “intrastate-ABC worker law” to carrier prices, routes, and services when taking due regard of a state’s traditional police powers?

Michael C. Duff

February 18, 2020 | Permalink | Comments (0)

Sunday, February 16, 2020

Wyoming’s Continued Struggles with Air Ambulances and Federal Preemption

There is a very close relationship between two federal preemption provisions that are having an impact on state employment law and state workers’ compensation systems. One such provision, in the Airline Deregulation Act (49 U.S.C. § 41713), prevents state workers’ compensation systems—including Wyoming’s—from regulating payments to air ambulance operators for transportation of injured workers. A second such provision, under the FAAAA (49 U.S.C.§ 14501(c)), is (temporarily) interfering with California’s application of the ABC employee test to workers of truck carriers. ADA preemption was “created” in the late 1970s and modelled on the ERISA preemption provision (29 U.S.C. § 1144). FAAAA preemption was modelled on ADA preemption and enacted in the mid-1990s. This post is specifically about ADA preemption as it concerns air ambulance services in Wyoming, but each of the preemption provisions just mentioned creates regulatory “dead zones” in which no substantive federal regulation on certain important state problems exists, and no state regulation on those problems is possible. This is a real federalism mess.

A proposed Wyoming bill related to air ambulance coverage of injured workers has emerged (the bill would tentatively locate the law at W.S. 27-14-401). Under 27-14-401(j) “Emergency and medically necessary air ambulance transport services for an employee shall be covered under W.S. 42-4-123, subject to availability and any limitations specified by the department under W.S. 42-4-123(a). The department of workforce services shall pay reimbursement for services under this section to the department of health as specified under W.S. 42-4-123.

Current 42-4-123 (effective as of 4/1/2020) requires the state department of health, with approval of the governor to apply to HHS for a Medicaid waiver “to make coverage of air ambulance transport services through Medicaid available to all Wyoming residents, except that coverage may be limited to specified groups of Wyoming residents as necessary to obtain approval.” The same 42-4-123 created an “air ambulance transport services program” under the auspices of the state department of health. Following transportation, “the air ambulance provider shall provide services under this section if the provider otherwise makes air ambulance transport services available to persons in Wyoming who are eligible for Medicaid independent of the coverage provided by this section” and “shall accept payment under this subsection as full satisfaction of all charges, costs and fees relating to air ambulance transport services” though “an air ambulance provider shall [in specified instances I won’t discuss here] collect a copay or other cost sharing requirement for services covered under this section . . .

The state structure goes on from there, but this is enough of an exposition to facilitate discussion. The first time I saw 42-4-123, I surmised the model was an attempt to maneuver the federal government into indirectly limiting the cost of an air ambulance trip, and I wondered why CMS would grant such a waiver. It turns out, as explained in CMS's letter of last month, that it won’t:

Section 1115(a) of the [Social Security] Act cannot be used to circumvent other federal statutes, including the preclusion clause set forth in the Airline Deregulation Act of 1978, which specifically precludes state regulation of matters related to air carrier rates, routes, and services. As noted above, the Secretary may approve a demonstration project under section 1115(a) of the Act if, in his judgment, the project is likely to assist in promoting the objectives of title XIX . . . While the proposed Wyoming Medicaid Coordinated Air Ambulance Network demonstration is expected to serve Medicaid beneficiaries, those services are already authorized in Wyoming’s Medicaid state plan. Using the Medicaid administrative structure to provide services to other individuals in the state as a mechanism to avoid the application of federal aviation law is a clear departure from the core, historical mission of the Medicaid program to provide health coverage to the Medicaid eligible population. (Emphases supplied)

Perhaps even more to the point,

Furthermore, CMS will not approve a demonstration project under section 1115(a) of the Act unless the project is expected to be budget neutral, that is, the demonstration project may not result in Medicaid costs to the federal government that are greater than what the federal government’s Medicaid costs in the state would likely be absent the demonstration. The state's proposed approach to budget neutrality as provided in its application does not indicate that the proposed Wyoming Medicaid Coordinated Air Ambulance Network demonstration is or would ever be budget neutral. (Emphases supplied)

Translation: what the federal government allows for charges under Medicaid for air ambulance transportation is a function of many complex variables, and that cost function “might” be thrown into disarray by allowing an air ambulance carveout Medicaid expansion for a state’s entire population. (It might be worth mentioning here that the Wyoming legislature has rejected Medicaid expansion).

I think there is something to the air ambulance industry’s argument that Wyoming’s proposed approach would essentially ration air ambulance services for its citizens. As a Wyoming Public Radio/NPR story explained last summer before CMS rejected the model:

Wyoming officials propose to reduce the number of air ambulance bases and strategically locate them, to even out access. The state would then seek bids from air ambulance companies to operate those bases at a fixed yearly cost. It’s a regulated monopoly approach, similar to the way public utilities are run . . . “You don't have local privatized fire departments springing up and putting out fires and billing people . . . The town plans for a few fire stations, decides where they should be strategically, and they pay for that fire coverage capacity.” . . . Medicaid would cover all the air ambulance flights in Wyoming — and then recoup those costs by billing patients’ insurance plans for those flights. A patient's out-of-pocket costs would be capped at 2% of the person's income or $5,000, whichever is less, so patients could easily figure out how much they would owe. Officials estimate they could lower private insurers' average cost per flight from $36,000 to $22,000 under their plan.

Injured workers would be captured within the same structure and might be disparately impacted under it. This would raise difficult workers’ compensation quid pro quo questions. On the one hand, Wyoming workers traded tort rights for workers’ compensation benefits, and paying $5000 out of pocket for work-related injury expenses would violate that principle. On the other hand, the quid pro quo did not contemplate a federal benefits structure like Medicaid into which medical costs could be substantially subsumed. The quid pro quo moreover takes on a different complexion if the only remedy to which any state citizen is entitled is a federalized Medicaid recovery (leaving to one side the Wyoming state constitutional requirement, in Art. 10, Sec. 4, that the only exception to the right of tort damages for physical injury is workers’ compensation benefits). In fairness, the Wyoming model—notwithstanding the recent bill, the timing of which I don’t quite understand—never had a chance to get off the ground, so it was not yet clear precisely how the statewide model would interact with Wyoming’s monopolistic workers’ compensation system. Given CMS’s position, the model seems a dead letter now (and I think the statute, if challenged, would still have had to fight off ADA preemption arguments).


Michael C. Duff

February 16, 2020 | Permalink | Comments (0)

Tuesday, February 11, 2020

Federal Judge Denies Injunctive Relief in Case Challenging California’s AB 5

In a 24-page decision that went much as I expected, a Federal district judge in the Central District of California concluded that California Assembly Bill 5 2019 (AB 5) was rationally-related to a legitimate state interest, did not deprive gig economy workers of the right to pursue their chosen occupation, and did not unconstitutionally impair Gig employers’ contracts with workers. The core of the challenge sounds in equal protection, and the court found plaintiffs Lydia Olson, Miguel Perez, Postmates, and Uber unlikely to prevail on its merits. With respect to the request for injunctive relief:

 When “an injunction is requested which will adversely affect a public interest . . . the court may in the public interest withhold relief until a final determination of the rights of the parties, though the postponement may be burdensome to the plaintiff.” . . . Considering the potential impact to the State’s ability to ensure proper calculation of low income workers’ wages and benefits, protect compliant businesses from unfair competition, and collect tax revenue from employers to administer public benefits programs, the State’s interest in applying AB 5 to Company Plaintiffs and potentially hundreds of thousands of California workers outweighs Plaintiffs’ fear of being made to abide by the law.

Accordingly, injunctive relief was denied. “For the reasons stated below, the Court does not find likelihood of success on the merits or that sufficiently serious questions have been raised as to the merits of these claims.” (This case is not directly related to the “trucker preemption” matter under the FAAAA concerning which I’ve written in these pages).

The decision is complex and well worth reading in its entirety. One section of interest:

 . . . evidence submitted by Plaintiffs indicates that according to academic studies, “a majority of workers do not value scheduling flexibility” and only a “substantial share”—by inference, less than a majority—“are willing to give up a large share of their earnings to avoid employer discretion in setting hours.” McCrary Decl. at ¶ 26. This statement by Plaintiffs’ expert indicates that of the 395,000 or more drivers for Uber and/or Postmates, a majority may favor—or at least be neutral to—the application of AB 5 to their worker classification. To be sure, Olson, Perez, and individual amici attest that being classified as employees would be financially devastating and upend their schedules and expectations. See, e.g., Perez Decl. ¶¶ 8, 18–20; Olson Decl. at ¶¶ 10, 12; see also Br. of Amici Curiae U.S. Chamber of Commerce, Engine Advocacy, and TechNet at 10 (citing U.S. Dep’t of Labor, Contingent and Alternative Employment Relationships, Bureau of Labor Statistics, (May 2017) (79 percent of independent contractors prefer their work arrangement). The Court does not doubt the sincerity of these individuals’ views, but it cannot second guess the Legislature’s choice to enact a law that seeks to uplift the conditions of the majority of non-exempt low income workers rather than preserve the status quo for the smaller subset of workers who enjoy independent contractor status. (emphasis supplied)

My translation? Even if a minority of the population has sincere reasons for not wanting to be protected by the rules of the road it does not follow that the state must eliminate the rules of the road. (I have recently written about this idea in these pages). Or put somewhat differently, the state (a.k.a. the democratic polity) is entitled to exercise legitimate police power to protect its citizens. While the 14th amendment places limits on the exercise of legislative power, those limits are very sharply circumscribed—as challengers of workers’ compensation laws know only too well. This was a principle that became well-established during the era of enactment of workers’ compensation statutes; it is one of the central theses of  New York Central R. Co. v. White, 243 U.S. 188 (1917).

It was also interesting to see Chamber of Commerce types have to grapple with a proposition that has bedeviled claimants challenging workers’ compensation laws: “The burden is on plaintiffs to negate ‘every conceivable basis’ which might have supported the distinction between exempt and non-exempt entities.” I have written in these pages about how difficult it is to overcome this standard.

Lydia Olson, et al.—which is ultimately about the state’s power to impose the ABC employment test on classes of putative employers—now moves on to the merits phase. As I have said in these pages, I don’t see how plaintiffs can prevail under existing law. But it appears likely that they have advanced and structured the case for review by the current U.S. Supreme Court. And we have some recent history of the ad hoc flexibility that body has afforded the 14th amendment in key moments, so this is not an irrational strategy.

Michael C. Duff

February 11, 2020 | Permalink | Comments (0)

Sunday, February 9, 2020

ABC Employee Test for App-Based Companies in PA?: More Reaction to Regulatory Arbitrage

A recently-offered Pennsylvania bill doubling-down on the ABC employee-status test for app-based companies like Uber and Lyft has created in me the strong impression that one school of national opinion seems to be coalescing around a presumption that the Gig economy writ large is not benign but a form of regulatory arbitrage (to borrow a term from the Gig-economy “friendly” Harris-Krueger/Hamilton Project Report). As in New York, the proposed Pennsylvania legislation requires alleged employers to affirmatively disprove the employee status of their workers. But unlike the New York bill (or California’s AB-5), the Pennsylvania bill, House Bill 2215 of 2020, introduced about three weeks ago, targets app-based enterprises like Uber and Lyft.

Under the “Application-Based Company Worker Misclassification Act,”

A person providing labor or services for remuneration to an application-based company shall be considered an employee rather than an independent contractor unless the application-based company demonstrates that all of the following conditions are satisfied:

(1) The person is free from the control and direction of the application-based company in connection with the performance of the work, both under the contract for the performance of the work and in fact.

(2) The person performs work that is outside the usual course of the application-based company's business.

(3) The person is customarily engaged in an independently established trade, occupation or business of the same nature as that involved in the work performed..

Moreover, the Act would impose a variety of civil and criminal penalties for misclassification, though good-faith defenses are available. In short, the Pennsylvania bill is the polar opposite of the Handy, Inc. bills about which I’ve written in these pages, both in substance and in spirit.

Obviously, it is unclear whether the Pennsylvania bill will become law. But what interests me is the sharp and focused tone of the proposed legislation. It is not merely abstractly altering the legal test for employment but additionally contemplates deliberate gaming of the system. Intentional violations of the Act would be misdemeanors; non-intentional violations would be summary offenses. It would be a specific violation of the Act for an app-based company to fail to properly classify an individual as an employee for purposes of the Pennsylvania Workers’ Compensation Act (or to fail to provide workers’ compensation coverage).

My hunch is that organized labor was involved in drafting and sponsoring the bill. Complete acquiescence to the Gig economy in the end would yield fewer “employees.” Because only “employees” have the right to collectively bargain, or to protest adverse working conditions, dissolution of employee-status necessarily means dissolution of union representation. Recently, the Trump National Labor Relations Board determined in an administrative memo (the conclusion has not been tested in the courts) that certain Uber drivers were independent contractors rather than employees. In the recent past, the NLRB, an extremely “political” agency at its apex, has continued to utilize the common law, under the Section 220 of the Restatement Second of Agency test, when analyzing employee status (it is bound to do so because the common law definition is the default under federal statutes). Under the NLRA workers of Gig-type employers have, in recent years, been found employees: in two informal NLRB adjudications/internal memoranda Download Handy Advice Memo, Download Postmates Advice memo, and in one formal NLRB adjudication. The NLRB has rejected the argument that intentional misclassification of workers, without more, violates the National Labor Relations Act. But “employees” acting in concert in protest over working conditions remain protected against employer retaliation. Gig employers taking adverse action against concerted worker protest on the theory that those employees are unprotected as non-employees under state law do so at their peril. Still, the NLRB’s Uber Memo is signaling its proclivity to withdraw federal law protection from Gig workers. Evisceration of employee status at the state level could provide cover for an NLRB “vanishing employee” agenda. Unions would obviously fight such developments on multiple levels. Collective employee protest against employee misclassification under state law could feed into the strategy, but a shrinking base of “employees” would not help organized labor’s cause.  

Emerging ABC-type laws (in New York and California, in particular), which at first blush seem most closely connected to employment law (including workers’ compensation law), raise other complicated labor law issues. Some provisions would, in addition to modifying employee-status law, confer collective bargaining rights on Gig workers--an idea that some in the European Union have been championing. Assuming Gig workers are employees, these provisions could be preempted under Machinists’ labor law field preemption. On the other hand, if Gig workers are not employees, but are independent contractors, conferral by states of collective bargaining rights on them is fraught with antitrust complexity (though states—as opposed to cities like Seattle—enjoy broad antitrust immunity). Organized labor involvement in “local” laws (including what I am speculating is its involvement in the Pennsylvania bill) is evidence that the legal battles playing out extend well beyond the domain of workers’ compensation. It will take effort for workers’ compensation specialists to discern the sometimes hazy lines of conflict bubbling up in their neighborhood.

Michael C. Duff

February 9, 2020 | Permalink | Comments (0)

Saturday, February 1, 2020

ABC Employee Test for Workers’ Compensation in NY?: The Lottery Class Resists

I think about the question of employee status, under workers’ compensation statutes and elsewhere, as in part a contest between the actual working class (and its advocates), and a class of purported “exceptionals” who hyper-focus and insist upon preserving their “liberty” to “hit” the lottery by becoming part of the one percent. Why would someone opt for a world bereft of law and without limits? Well, you might get lucky. You might not be the one to suffer a workplace injury (among other things). And so, even though as a matter of pure probability you will almost certainly never become part of the one percent utterly without need of the social contract, you identify with them: those who must be motivated by noblesse oblige and are rightfully—you contend—beyond the law. You argue that you have no need of nanny-state protections like “employee status.” Now I am not for demonizing your irrational exuberance, but neither am I for subsidizing it. Hence my resistance to a world without employees and full of lots (and lots) of underinsured, “independent” contractors.

A bill currently sits in the New York Senate, Senate Bill S6699A sponsored by Robert Jackson of the 31st Senate District. The bill reads in relevant part (that is, as it relates to workers’ compensation),

4. Subdivision 6 of section 201 of the workers' compensation law is amended by adding a new paragraph E to read as follows:

                        1. (A) The term “employment” includes, unless specifically excluded by a provision of this subdivision, any service by a person providing labor or services for remuneration unless the hiring entity demonstrates that all of the following conditions are satisfied:

                (i) the person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and

                (ii) the person performs work that is outside the usual course of the hiring entity's business; and   

                (iii) the person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

            (B) For the purposes of this section, any person providing labor or services for remuneration pursuant to subparagraph (A) of this paragraph shall be considered an employee rather than an independent contractor. 

5. This act shall take effect immediately.

This is essentially the ABC test/California’s AB-5, and represents the continuation of a struggle unlikely to abate soon. One of the public comments on the bill, located on the NY Senate’s website, argues that the proposed law is likely to harm the very people that it seeks to help. The commenter contends that the bill alarms “freelancers and self-employed people” who are not exploited but are “happy, productive people who have chosen freelance for a reason.” Artists, writers, and digital developers are cited as examples. Forcing enterprises to provide them with workers’ compensation coverage will purportedly interfere with their happiness (presumably by compelling the enterprises to stop using their services).

The commenter in my view precisely states the issue, but may misapprehend the analysis of the overall situation. If you think that most of the economy is, or will soon be, comprised mainly of, artists, writers, digital developers, and other such generally happy and productive people, then the actions of the California Assembly, and now potentially the New York legislature, seem incomprehensible. Why pass laws that would damage the economic fortunes of most workers (by forcing companies to go out of business rather than succumb to regulation)? Yet what would help most workers? This bill? Or the current state of affairs allowing enterprises to so easily categorize their workers as independent contractors? Is the greater evil that certain enterprises could be forced to prove that the economic reality of the working conditions they supply do not amount to an employment relationship; or is it that many workers who should be classified as employees are not because of artful manipulations of the current legal system? Maybe legislatures, particularly in very large states, are becoming suspicious that most workers are not participating in some golden-age, creative-class adventure; and that the ever-encroaching Gig economy has little to do with a new economy, and everything to do with the very old game of regulatory evasion. 

Here is a factual portrait of our economy: according to a recent Brookings study, more than 53 million people—44% of all workers aged 18-64—are low-wage workers and earn median hourly wages of $10.22 and median annual earnings of $17,950. Please don’t try to persuade me that these workers are philosophically in favor of low-paying, precarious, but “flexible” work. Pundits can call it what they want. I call it unacceptable. And this explosion of staggering inequality has occurred during the Gig economy. Legislators are entitled (indeed have the duty) not to be willfully blind to the obvious. So, yes, a golden age of flexible, creative work may be just on the horizon, and laws making it harder to “de-employee” society may turn out to be mechanisms frustrating the development of such an Age of Pericles. Or current law facilitating bad actors’ bad actions in obliterating the employment relation to avoid as much regulation as possible may be the veritable “man behind the curtain.”  

There is no denying that the lottery class prefers an employee-less world that preserves the maximal liberty of those for whom members of the class de facto work to “produce” according to whim—jeux sans frontiers. The question I have for this class is whether it collectively imagines that others will abandon the rule of law to preserve its “right” to try to hit the lottery. The lottery class should not be surprised if the slumbering giant of our democracy chooses instead to deploy the “disruption” of the rule of law.

Michael C. Duff

February 1, 2020 | Permalink | Comments (0)

Saturday, January 25, 2020

William Meredith and the Foundations of Canadian Workers' Compensation

I have begun work on a project in which I seek to compare the monopolistic workers' compensation systems in the United States and Canada. The Workers' Compensation system in Canada has separate legislation and policies for each province or territory, but the majority of Canadian workers are covered in some form by workers' compensation when they are at work. To help get me started with the project, researcher Terry Bogyo kindly directed my attention to the 1913 report of Sir William Ralph Meredith, a storied figure in the history of Canadian workers' compensation, to the Lieutenant-Governor of the Province of Ontario. The report makes for extraordinarily rich reading, I dare say to any student of workers' compensation. It is interesting to note that Meredith deemed the German system superior to the English, which is contrary to the American view of the time, which fastened on to the English system. In this regard, the report reveals interesting differences of opinion between Meredith and P. Tecumseh Sherman, a principal draftsman of the prototypical American statute adopted, more-or-less, by most American states. (I discuss some of this early history here). I am especially struck by the extent to which the dialogue of the era was explicitly moral. If you will indulge me, I offer the following passage of the report as evidence of this epochal morality. The statement was in response to a counter-proposal to Meredith's proposed bill that had been offered by the Canadian Association of Manufacturers:

A just compensation law based upon a division between the employer and the workman of the loss occasioned by industrial accidents ought to provide that the compensation should continue to be paid as long as the disability caused by the accident lasts, and the amount of compensation should have relation to the earning power of the injured workman. To limit the period during which the compensation is to be paid regardless of the duration of the disability, as is done by the laws of some countries, is, in my opinion, not only inconsistent with the principle upon which a true compensation law is based, but unjust to the injured workman for the reason that if the disability continues beyond the prescribed period he will be left with his impaired earning power or, if he is totally disabled without any earning power at a time when his need of receiving compensation will presumably be greater than at the time he was injured, to become a burden upon his relatives or friends or upon the community.

And again, commenting on the inadvisability of a proposal for a one-time, lump-sum, fixed permanent partial award, Meredith wrote:

The limitation to $1,500 of the amount of compensation in case of permanent partial disability is, I think, unreasonable . . . The payment of lump sums is contrary to the principle upon which compensation acts are based and is calculated to defeat one of the main purposes of such laws – the prevention of the injured workman becoming a burden on his relatives or friends or on the community – and has been generally deprecated by judges in working out the provisions of the British act . . .

I wonder if Meredith would be considered a wild-eyed dreamer (or worse) in today's mean, mean times.  

Michael C. Duff

January 25, 2020 | Permalink | Comments (0)

Friday, January 24, 2020

More From "Safe Workplace" America: Fracking and Radioactive Brine

Safer workplaces or concealed injuries? Absolutely terrifying. How much of a pay premium should a brine hauler demand to do this work? The recent Rolling Stone piece, "America’s Radioactive Secret: Oil-and-gas wells produce nearly a trillion gallons of toxic waste a year. An investigation shows how it could be making workers sick and contaminating communities across America," is a must read item:

“The workers are going to be the canaries,” says Raina Rippel of the Southwest Pennsylvania Environmental Health Project, a nonprofit public-health organization that supports residents impacted by fracking. “The radioactivity issue is not something we have adequately unpacked. Our elected leaders and public-health officials don’t have the knowledge to convey we are safe.”

 

But knowledge is out there. Radium can be detected in urine; a breath test can pick up radon. Because radium builds up in bone, even a body buried in a cemetery could convey details of someone’s exposure, says Wilma Subra, a Louisiana toxicologist who first started tracking oil-and-gas radioactivity in the 1970s.

 

“There is a massive liability that has been lying silently below the surface for all these years,” says Allan Kanner, one of the nation’s foremost environmental class-action lawyers, whose recent cases have included PFAS contamination and the Deepwater Horizon oil spill. “The pieces haven’t all really been put together, because the industry has not really been telling the story and regulators haven’t been telling the story and local doctors aren’t informed, but at some point I expect you will see appropriate and reasonable litigation emerge on this.”

 

If so, it could have a devastating impact on the fossil-fuel industry, especially if tighter regulations were put in place and oil-and-gas waste was no longer exempted by the EPA from being defined as hazardous waste. “The critical component of the profit margin for these companies is that they can get rid of the waste so cheaply,” says Auch of FracTracker Alliance. “If they ever had to pay fair-market value, they wouldn’t be able to exist.”

The rest of the piece can be found here.

Michael C. Duff

January 24, 2020 | Permalink | Comments (0)