Workers’ Compensation Law Prof Blog

Compensability of Injuries from Hate Crimes and other Neutral Risk Assaults

           When Pittsburgh, PA resident Richard Baumhammers, in 2000, went on his hate-filled shooting spree and assassinated, among others, an Asian gentleman as he labored at a Chinese restaurant, the issue arose as to whether his death was work-related.  Plainly the worker was killed in the course of his employment, but did his injury arise out of his employment? 

            According to the Larson treatise, we should treat such a casualty as one from a “neutral risk,” that is, one neither intimately connected to the employee’s work (professional risk), nor uniquely connected with the employee’s private life outside of work (personal risk).  Injuries from the former are almost always compensable; injuries via the latter are not. The Larson treatise further posits that most courts hold that injuries from neutral risks, sustained while the worker is otherwise in the course of employment, should be deemed compensable – the work-connectedness is satisfied by the employee’s presence at work and lack of culpability.  It is hardly a reach in such cases to say that the injury arose out of the employment.

            Baumhammers’ assassination of the worker seems to have been a perfect example, however rare, of a neutral risk injury. A mentally ill gunman, seething with hatred of Asians, enters a venue where he is sure to find an Asian to murder, and carries out the act.  The worker has no prior relationship with the assailant.  But for the circumstances and obligations of the employee’s work, he would never have been subject to this risk of injury.  He was totally free of culpability in being victim to a random hate-crime atrocity.  Under the majority view, his injury arose out of his employment.

            As the talented Post & Schell attorney Kyle Black explains, however, this is not the analysis undertaken under the Pennsylvania Act. In his new article, Mr. Black explains that the analysis is driven by statute, specifically a proviso of Section 301(c)(1).  That proviso creates an affirmative defense, the “reasons personal” exception (also known as the personal animus exception), under which an employer contesting a claim may seek to show that the injury was for “reasons personal.” See 77 P.S. § 411(1); Torrey-Greenberg Treatise, § 4:106.  Mr. Black's article is “Don’t Take it Personally”: Explaining the Correct Interpretation of Pennsylvania Workers’ Compensation Act Section 301(c)(1)’s “Reasons Personal” Exception – and Why it’s More than Just a Matter of Semantics, PBA Workers’ Compensation Law Section Newsletter, Vol. VII, No. 128, p. 47 (December 2016). [Available from this writer: [email protected]] 

            A number of states have a similar statute, as long discussed in the Little, Eaton & Smith workers' compensation law school text (West 6th ed., pp.260-261).     

             Amazingly, a fundamental ambiguity has existed in this statute since at least 1959, specifically over whether the reasons must be reasons personal to the employee or to the assailant.  Often, a mutuality of personal animus exists, so in most instances the uncertainty of language is probably irrelevant.  But what of neutral risk cases, where the assailant, like Baumhammers, has reasons personal (hatred of Asians), but the employee has no familiarity with the assailant and is completely free of culpability?  In such cases, the difference matters. 

            Mr. Black has written the definitive brief on this issue, methodically considering statutory construction, effectuation of  the Act’s humanitarian purpose, similar statutes, and the approach of other jurisdictions. He ultimately submits that the Section 301(c)(1) exception should be read to exclude only injury and death caused by an act of a third person intended to injure the employee because of reasons personal to the employee.  Under this interpretation, the Baumhammers hate-crime victim, who was in the course of his employment, who had imported no risk, and who otherwise lacked culpability, would have been deemed to have sustained a work-related death.  The employer, in this regard, would have been unable to show that his death was for reasons personal to him.

New Scholarship and Advocacy on the Compromise Settlement Ban in Black Lung

            Compromise settlements are famously prohibited under the Black Lung Act, but the author of a highly accessible and passionate article is none too pleased about it.  See Patrick R. Baker, The Black Lung Benefits Program: Debunking the Myths Surrounding Settlement, 10 Appalachian Natural Resources Law Journal 1 (2015-16).

            The article is accessible in that it is well-written and commences with a helpful history of the law and its several amendments.  Meanwhile, the author explains the no-settlement proviso and the leading Fourth Circuit case that has put sharp teeth in the ban.  It’s passionate in the sense that he finds the complete restriction on settlements, in the present day, nonsensical.  He makes the case that, in light of the ban, the system is “broken” – a term he uses twice here to characterize the law.  (As to the leading court case, see Ramey v. Director, OWCP, 326 F.3d 474 (4^th Cir. 2003)). 

            The author believes the law should be changed to allow compromise settlements.

            The author, a law professor at the Appalachian School of Law, recognizes that the ban on settlements stems from the paternalistic spirit that imbues this niche workers’ compensation law – just as it does the many state programs.  He asserts, however, that the unfortunate reality is that the inability to settle causes most employers to fight claims, with the net effect that litigation takes forever.  Indeed, many ill miners actually die before their claims are ever adjudicated.  How, he asks, can a remedial statute like the Black Lung Act aid its intended beneficiaries – coal miners – if they can never live to achieve a recovery?  Securing some level of recovery, in his view, would be better than this fate. 

            The author recognizes that the idea of settlement of these claims makes many nervous, because by its nature Black Lung is a progressive disease which inevitably worsens.  It is hence difficult, at least in theory, to come up with a settlement amount which will accurately, or adequately, compensate the miner for the condition. 

            To this concern the author has very pragmatic answers.  First, settlements could be allowed on an interim-style basis – a compromise settlement could be reached, with the miner able later to prosecute a claim for (presumably) a material worsening.  (Thus, we are talking here about settlements without final release, an idea foreign to the Pennsylvania practitioner, but not unheard of among state programs.)  Second, settlements are now common in other areas “involving personal wellbeing and health,” so why not with Black Lung?  Third, coal miners are, in the present day, much more sophisticated than they were decades ago, and are in a good position to make a decision to settle.  They are no longer at risk of “bargaining away their rights for some company script.” 

            The author, despite his disdain for excessive and misguided oversight, does not totally abandon paternalism.  In this regard, he supports review and approval of proposed settlements by the Department of Labor, pointing out that the Virginia Workers’ Compensation Commission undertakes precisely such oversight of proposed settlement of state claims. 

            P.S.: The author, throughout his enlightening article, cites another recent essay that addresses structural difficulties in the Black Lung Act.  See Brandon Kenney, Recalibrating the Black Lung Benefits Program: Removing Systematic Procedural Barriers from Administrative Proceedings, 18 University of Pennsylvania Journal of Constitutional Law 329 (2015). 

 

Florida Bill Proposes Eliminating Mandatory Workers’ Compensation – Duff’s Pithy Policy Primer

A Florida representative has recently offered a Bill that would formally undo the Florida workers’ compensation quid pro quo. This is a logical extension of recent developments in the state. Inexorably, the courts have been forced to grapple with the inadequacy of workers’ compensation when viewed in the context of the original workers’ compensation for tort quid pro quo. In Florida, such inadequacy, or modification of the quid pro quo, is much more likely to yield to constitutional challenge than in other states, for reasons I have explained elsewhere.

This leaves reform-minded legislatures with a handful of options. One is to formally undo the original quid pro quo and make workers’ compensation entirely elective, the approach that has just been proposed in Florida. This option is probably politically impossible, but we shall see how events unfold. It also reopens employers to negligence suits, unless those claims are also banned, which would trigger high constitutional scrutiny in most jurisdictions.

Another option is to acknowledge an benefit adequacy baseline and bring benefit levels up to that baseline. Policy makers resist this approach because it establishes precedent from which future arguments of inadequacy may be fashioned.

Yet another option is to deny outright a legal requirement for adequacy. Such denial is an attack on the constitutional basis of the original quid pro quo, and will be more or less successful depending on the due process and equal protection provisions of a particular jurisdiction’s constitution (whether federal or state). Severe erosion of benefits and opt-out schemes implicitly attack the quid pro quo because at the root of these gambits is the practical denial of a required benefits floor. A state like Texas—which maintains the opt-in, elective feature of the original workers’ compensation statutes in the early 20^th century—avoids this problem because it preserves the right to a negligence suit (leaving the compulsory arbitration to one side). The proposed Florida Bill would similarly avoid the problem. The attack on adequacy is also ultimately an attack on the fundamentality of all personal injury remedies.

A final policy approach is to muddle the question of adequacy entirely by creating multibenefit hybrid alternative plans delivering both workers’ compensation and “other” benefits and claiming that the plans satisfy an employer’s workers’ compensation obligations. The problem with that approach is that such plans are not maintained solely for the purpose of complying with a workers’ compensation statute and are therefore governed by ERISA, whether intentionally or unintentionally. Because of that ERISA-governance, states would lose the ability to regulate the plans by operation of ERISA preemption, and indeed the opt-out laws themselves are likely preempted. Once this is fully realized nationally opt-out will fizzle unless ERISA is amended.

At bottom, given current developments, I would prefer a frankly elective system allowing for negligence suits much less encumbered by the contributory negligence and assumption of the risk doctrines of the early 20^th century to a straightjacketed workers’ compensation statute. Workers would presumably do much better in a comparative negligence regime than in the tort regime of the early 20^th century. If I were an injured worker, I would not want an inadequate workers’ compensation benefit to be my exclusive remedy. The Florida proposal is accordingly less objectionable to me than some others I have seen. Still, under a negligence system there would be many losers unable to make out a claim because the employer was simply not at fault. While larger tort damages might encourage adequate investments in safety in the aggregate, the previous clause would be of cold comfort to a grieving widow, widower, surviving child, or long-suffering injured worker denied a remedy. A truly adequate, state-based system still seems to me the best of existing imperfect systems. I’m open to other (good faith) ideas.  

Michael C. Duff

 

LexisNexis’ Workers’ Compensation Emerging Issues Analysis (2016): Get it, Read it, Own that “Holistic Vision”!

            For the fourth year in a row, LexisNexis has published its marvelous yearbook, the Workers’ Compensation Emerging Issues Analysis.  Edited, as before, by Thomas Robinson and Robin Kobayashi, it is divided into two parts – the first a collection of essays, mostly concerning the field as a whole; and the second reporting on critical legal issues, statutory and regulatory developments, and essential court cases. 

            Plainly this is the best annual one can buy on workers’ compensation.  If you’re like me, you’ll pore over – and then devour – this 324-page manual just like you did when, as a kid, the Sears Christmas Wish Book arrived in the mail. 

            I’ve submitted for many years that the best workers’ compensation lawyers view the system broadly, in all its aspects, and stay cognizant of developments on a national level.  Nothing is more jarring for me than encountering the lawyer who is uninformed about items like workers’ compensation insurance and alternative approaches to workplace injury – like the Texas system! 

            On this precise point, the book’s contributor of a summary on the Rutgers Demise of the Grand Bargain seminar has this alarming thing to say about our field: “[T]here is perhaps no more practical, and less theoretical quotidian legal specialty than workers’ compensation, with its arcane practices rooted in oral tradition and habit.  A truly national, holistic vision is difficult ….” 

            But there’s no reason for such self-loathing …. This is the book that will help the reader achieve a broad understanding and that elusive “holistic vision.” Whatever you do … don’t miss it!  To order:    http://www.lexisnexis.com/store/catalog/booktemplate/productdetail.jsp?pageName=relatedProducts&skuId=sku8841495&catId=52&prodId=prod19890471.

Professor David Engel's "The Myth of the Litigious Society": A Tort Book for the Workers' Comp Community as Well

            Do Americans really sue at the drop of a hat for personal injury?  Do we live in a hopelessly “litigious society”?  Most lawyers (myself included) have unthinkingly uttered this latter phrase, and I certainly have grown accustomed to hearing such declarations – and taking them for granted as true.

            Professor David M. Engel, who teaches torts at the University of Buffalo School of Law, will have none of it.  In his excellent new book, The Myth of the Litigious Society: Why We Don’t Sue (Univ. of Chicago Press 2016), he seeks to refute the proposition that we live in a litigious society.  Engel cites studies that show that the vast majority of personal injury victims in fact “lump” their injuries and make no claim whatsoever.  The small number of victims who do consult a lawyer, meanwhile, in fact do not file complaints.

            But why is this so?  Engel draws on research from several disciplines to theorize why most injury victims, even those with plainly cognizable causes of action, fail to seek redress.  He insists at the outset that many injury victims are not thinking logically in the first place, and the idea that logical explanations for restraint are the source of the answer is mistaken.  One must consider, instead, the effects of the subconscious on such decision-making. 

            And powerful societal forces affect that thinking. The tort reform movement of the last few years, for example, has encouraged people to automatically think of tort claimers as being of questionable character and lacking in personal responsibility.  In addition, it is not always apparent to the layperson that one’s injury has been inflicted upon him or her – that is, caused, by another via some culpable act or omission.  Also, many injured individuals may not conceive of their injuries as being injuries in the first place.  Meanwhile, studies show that family, friends, and co-workers often dissuade victims from pursuing injury claims.

            It is notable Professor Engel’s book is about tort.  Indeed, he states in the initial chapter that an individual’s mere acceptance of voluntarily-paid workers’ compensation insurance benefits is not the type of “claiming” that he is writing about.  Instead, claiming involves the injured individual taking some sort of initiative and prosecuting an action.

            Of course, Professor Engel might well have considered the contested workers’ compensation claim.  Here is a situation which does, indeed, involve the injured worker’s initiative and (usually) the retaining of a lawyer.  The issue then would become: why do so many workers not pursue their workers’ compensation denials? 

            And, as a matter of fact, Engel’s analysis of the tort situation translates into the workers’ compensation sphere.  Most of the factors that he identifies as leading to the self-repression of claims are present in our field as well.  That makes The Myth of the Litigious Society an excellent book for the workers’ compensation lawyer or judge.  One will find enlightenment on this issue on every page.  The book is also a joy to read – Professor Engel tells a good story – and flawlessly edited.  Meanwhile, at 232 pages the book is accessible, and I was able to read it through twice and was pleased at my time expenditure. 

            I’ll never hear, “our litigious society,” the same way again.     

Opt-Out, Workers’ Compensation Federalization, and the End of the Beginning

If I could not see a plausible road to the federalization of workers’ compensation last September and October—and I could not—I certainly can’t see such a road in the wake of the events of November. Think of the case that was being made in support of federalization at that time: Cost shifts occasioned by innovations like opt-out will place pressure on other, federal benefits systems, with unpredictable and pernicious results. Let’s just say that those kinds of arguments are likely to have less impact on the incoming administration than on the outgoing.

Furthermore, if the policy hope of federalization proposals was that an eroding, unstable state benefits structure might be buttressed with a stable, politically unassailable federal regime, what hope can such a policy garner now? We are about to embark on a period in which we will be arguing in the context of Social Security and Medicare about the desirability of “individual accounts” financed by “premium supports” (my favorite buzz phrase of the very new season). What this boils down to is the distinction between defined benefit and defined contribution models. Will everyone have a right upon retirement to a sum-certain (a defined benefit) and medical care, as long as we have made minimum threshold contributions to the system during our lives? Or will “entitlement” depend upon the wealth of individual contributors to the system, such that the wealthy will receive a lot of a benefit and the poor will receive not much (and possibly a plainly inadequate quantity) of the benefit.

This leads me back to workers’ compensation opt-out, which I would argue is in reality a first attempt at workers’ compensation “federalization.” Be careful what you ask for. I have taught both administrative law and traditional labor law and am keenly aware of the reality that often federalization—a federal structure that preempts state and local law—means empty preemption. ERISA is a wonderful example of empty preemption. While marvelously protective of employee rights in certain respects, notably I connection with defined benefit pensions (which are increasingly rare birds), ERISA has also created many regulatory dead zones—gaps in which no state regulation is allowed, but where no federal substantive regulation is present. The result is a gap—“emptiness.”  ERISA preemption has had much to do, for example, with why states have not been permitted to innovate in health care delivery reform. To the extent state laws regulate employer-provided health plans (which is most health plans), they are preempted by ERISA. Were that not the case the national health care scene would look dramatically different.

This leads to my final point. What opt-out is really “about” is empty ERISA preemption. But the reason empty preemption is so dangerous in the opt-out context is that ERISA is premised on the notion that employer benefits—especially employee welfare benefits—are entirely voluntary. An employer need not provide ERISA-governed benefits, if an employer does provide benefits it has exclusive control of the level of benefits it will provide, and an employer can terminate its benefits at any time under the Settlor Function doctrine (a trust law concept). This, of course, is at complete odds with the idea of a statutorily-mandated benefit. My great concern is that, in the chaotic reconfiguration of benefits we are about to witness, the distinction between mandatory and voluntary benefits will be entirely lost, and that people will forget the connection between workers’ compensation “benefits” and the right to a remedy for personal injury, which I will argue to my dying breath should be a Constitutional right (it is at least as important as property rights, in my opinion). If this loss of the distinction is codified in some mega-federal statute, it will be big trouble. I am becoming by degrees a staunch proponent of fighting out everything that needs to be fought out in the workers’ compensation realm on a state by state basis; a tedious process, but one less likely to leave workers’ compensation rights distorted, or lost in the shuffle.

In recent months, some folks have been inwardly laughing at me (politely, I am sure) as I have written about the stakes at play and their connection to Magna Carta. I suspect at least some of them are not laughing anymore, and my students will hear much about this theme as I teach my ERISA and Workers’ Compensation Law courses in the upcoming spring semester.        

 

Michael C. Duff