Workers’ Compensation Law Prof Blog

Bob Wilson and Tom Robinson Address Predicted Resurrection of Opt-out in New LexisNexis Annual

            The editor of the Larson treatise, Thomas A. Robinson, has once again published his essential compendium of articles which he has written and/or published throughout the past year. 

            The first two articles Robinson offers (now six months old, I believe) are addressed to the for-now defeated opt-out scheme.  The first is by Bob Wilson and the second by Robinson himself.  Of course, under opt-out, large employers can opt out of the workers’ compensation system, yet retain tort immunity. They do so by setting up their own purportedly ERISA-governed plans, which need not necessarily provide the same benefits as the state’s workers’ compensation law, with any disputes being handled via compulsory arbitration – the arbitrators being picked by the employer.

            Of course, in the renowned case Vasquez v. Dillard’s, the Oklahoma Supreme Court struck down the law as unconstitutional, since it gave special treatment to the large employers who sought its sanctuary.  See David B. Torrey, The Opt-out of Workers’ Compensation Legislation: A Critical Briefing and the Vasquez v. Dillard’s Case, 52 Tort Trial and Insurance Practice Law Journal 39 (2017), https://www.americanbar.org/content/dam/aba/publications/tort_insurance_law_journal/tips_vol_52_no1/tips_52_1_02_torrey.authcheckdam.pdf.

            On this topic, the popular Sarasota blogger, Bob Wilson, reports that “opt-out is going to return.”  He was writing in response to the announcement by opt-out guru, Bill Minick, at the WCI Orlando Conference (August 2017), that he was going to be promoting a new manifestation of opt-out.  Wilson reports that, in light of Vasquez, “the backers of opt-out seemed to have learned a lesson…, and are now proposing an opt-out scheme that operates without the layer of protection afforded by the exclusive remedy provisions.” 

            Opt-out is to be resurrected, Wilson admonishes, and “we should pay attention.”

            Wilson believes, like others, that workers’ compensation is over-regulated - and poorly so to boot.  He says that opt-out will return in legislative proposals because of these facts and because the “system … cannot seem to respond to other external stimuli.”  “Employers,” he submits, “will eventually look to escape an overly complex system where regulators cannot even agree on a simple standardized reporting form….  Opt out will again soon be an issue we are debating, but with a change in focus on their side, it will be a concept worthy of a larger debate.”

            Mr. Robinson, for his part, opines that giving up the exclusive remedy defense won’t be enough to save opt-out schemes, at least as recently envisioned. He points out that what sank Oklahoma opt-out was not freedom from tort liability, but the constitutional defect of the law treating certain constituencies in a special, more advantageous manner.  In the end, however, Robinson (who is not, like Wilson, sympathetic to opt-out), worries that opt-out may return: “In the race to the bottom that seems so much the rage in today’s state houses, I feel that several states are at least willing to entertain the notion of a 19^th century wrestling match as to how injured workers might be covered (or excluded) for work-related injuries and diseases.”

            Wilson, in his otherwise insightful essay, makes a remarkable statement by asserting that the system “cannot seem to respond” to external stimuli except for threats of its very overthrow.  Such a claim flies in the face of twenty-five years of business-friendly, retractive reform of workers' compensation laws.  Didn't the U.S. Department of Labor start to mobilize in the last days of the Obama Administration with an eye to addressing injured worker complaints about retraction?  (As a player, I do agree with Mr. Wilson that the system is imperfect; I blanch daily at episodes of inefficiency and utter waste.)  As an example of system responsiveness, when physician-office dispensing of narcotic medication surfaced as a problem in Pennsylvania, interest groups in short order won a change to the law (December 2014), which brought the unsatisfactory situation under control.     

            Neither Wilson nor Robinson, meanwhile, mention the real force behind opt-out: the desire for profits fueled by unrestrained market forces.  Wilson and Robinson do not comment at all on this phenomenon.  The cause and effect is obvious.   

            First, since 1980, retraction, for the most part, has been the major feature of legislation in state workers’ compensation laws. Opt-out, a complete rejection of the social compact, is the most dramatic manifestation of this trend. 

            Second, opt-out efforts is another manifestation of tort reform, as has been current in products liability.  All agree, in this regard, that the main drivers of opt-out proposals are, as in other insurance fields, reducing costs to business and eliminating litigation.

            Third, retrenchment in workers’ compensation, of which opt-out is a prime example, is another example of a larger, pervasive, attempt by employers to escape the public system and avoid traditionally acknowledged social responsibilities. Arbitration clauses increasingly found in employment contracts are another example. Opt-out lacks the communitarian spirit that imbued the National Commission report, with its admonitions that all be bound by the law. Opt-out casts this idea aside in favor of pure self-interest.

            Fourth, opt-out proposals reflect an ultimate negation of rights. Opt-out, in fact, considers work injury recovery as not a right, but as just another employee benefit which can be pared off at will - one where costs can be reduced via the employer’s complete control over medical care, restricted compensation triggers, and freedom from challenges in disputed cases. The idea that a worker’s injury recovery possesses an element of justice, one that derives from the Constitution, the common law, and social concerns, is forgotten.

            In any event, Professor Michael Duff seems to have a most insightful legal perspective.  Writing (like Wilson and Robinson) in August 2017, after Mr. Minick’s proposals were floated, he wrote, on this blog:

One is still at a loss to know what “opt-out without exclusive remedy” means. If it means merely that employers have the choice not to participate in workers’ compensation without a state attempting to dictate the details of ERISA-governed plans, that will return us to 1911. Why might employers be willing to do this? I have had a continuing sense that it has a lot to do with the Federal Arbitration Act….  Employers going bare in Texas can compel their employees to sign arbitration “agreements” as a condition of employment, and the evidence has become very clear how poorly employees do in such a regime.

[S]till, opt-out without exclusive remedy in this sense could avoid many of the state constitutional problems that plagued the Oklahoma model, particularly if both employers and employees were able to elect participation (no exclusive remedy). As a matter of state law, that would leave employees with the historical common law remedy for injury. Whether this would be good for employees in the long run is a separate question. While it is true that many states have significantly weakened, or eliminated, the affirmative defenses that originally led to the Grand Bargain, it is also true that prima facie cases are not easy to establish (especially the nature of the employer’s duty of care) and court-based litigation is a long and expensive process.

See Michael C. Duff, Workers' Compensation Opt-Out, Opt-In, Exclusivity, and State Constitutionality, http://lawprofessors.typepad.com/workerscomplaw/2017/08/workers-compensation-opt-out-opt-in-exclusivity-and-state-constitutionality.html (blog post, Aug. 14, 2017).

Is This a Rubber-Stamp World?: Did Aetna’s Former Medical Director Never Look at Patient Records?

According to CNN, Aetna’s former medical director, Ken Iinuma, admitted in a deposition that “he never looked at patients' records when deciding whether to approve or deny care” surprises me for reasons that I suspect are different from the reasons the public seems shocked (California has reportedly opened an investigation). The public may shake its collective head in disbelief that life and death decisions regarding insurance coverage (or the lack thereof) could be made in a paper-review. Those of us who have been involved in medicolegal practice of one kind or another realize this is probably the rule rather than the exception. Because of the sheer volume of insurance-coverage determinations made within large organizations, it is not surprising that individual medical records are not made by top decision makers. Aetna will no doubt argue to California that its internal administrative process ferrets out bad decisions (or at least highlights questionable front-line decisions) long before the file makes its way to a top decision maker. This is, after all, the way that legal organizations like workers’ compensation commissions reach decisions. Deep scrutiny of all files would be expensive and time consuming. True, one might hope that a doctor (with due respect to you nurses) would take the time to at least peek at underlying records when denial of treatment will likely lead to death.

But that is not what surprises me. I am surprised by the nakedness of the admission of the doctor (perhaps unsurprisingly no longer an employee of Aetna), though I would have to read the entire deposition transcript to learn if things were really as stark as they seem. Sometimes the most damning admissions emerge because an inside player has lost the ability to discern when things look bad to the outside world. This method of paper denial had apparently become so routine to the doctor that he, perhaps momentarily in a moment of fatigue, failed to appreciate the perception of decisions under such processes as mere rubber stamps.

At another level, the public might be shocked because it believes a doctor is a doctor first and an employee of an organization only secondarily. Surely, the doctor would not sacrifice his professional ethics at the altar of crass employment.

I think that the potential for relinquishment of professional judgment undergirds much of what workers’ compensation has become. Were the late 19^th-century architects of workers’ compensation naïve in believing that the ADR-system they apparently thought workers’ compensation would become could operate without lawyers? My profession takes a lot of heat for its perceived unfettered embrace of adversarialism. But as all of you in “the business” know, acquisition of medical evidence can be a de facto arms race. There is plenty of blame to go around for the present state of affairs. Perhaps the public will now have to wake up to a reality that many of us have long known.

Michael C. Duff         

Why Lawson v. Grubhub, Inc. Did Not Change the Independent Contractor World (and No One Case Could)

In a recent case, Grubhub v. Lawson, Case No.15-cv-05128-JSC, 2/08/2018 (N. D. Cal.), a GrubHub delivery driver was found to be an independent contractor of GrubHub, and not its employee. Predictably, almost immediately after the decision issued, several news stories emerged suggesting that the outcome could broadly impact the “Gig” economy. see, e.g., here, here, here, and here.  Anyone thinking such a thing (whatever the facts of the current GrubHub case) has little grasp of the law of agency. An individual is covered as an employee under an employment statute – including workers’ compensation statutes – if he or she fits the statutory employee definition. The analysis will always be fact-dependent and complicated.

Although the historical story is (or should be) well-known, it bears repeating. (I cover it all in my workers' compensation textbook). In the mid-twentieth century, many statutes defined “employee” very broadly because their aim was to presumptively cover workers to achieve broad social objectives. These broad definitions, which sometimes subsumed entirely the independent contractor legal category, differed from those that had been decided upon – especially in torts cases – in roughly the late 19^th century. The 19^th century cases were meant to protect employer/principals from liability occasioned by the tortious conduct of their employee/agents. They tended to presumptively not cover individuals as employees. In reaction to judicial expansion of the employee-definition under labor and employment laws, legislatures began to insist upon a return to the earlier, common law distinction between “employees” and independent contractors. That earlier distinction is captured in a generally-accepted, common law, multifactor formulation set forth under the Restatement Second of Agency, Section 220(2). Before I set out the factors, I’d like to say a few words about the slightly-different-than-early common law policy embedded in them.

It is fair to say that the history of employment legislation is simultaneously a history of displeasure with the legislation. A quick search in the Hein Online database of law review articles yielded a law review article from 1941 expressing dissatisfaction with the then-extant California independent contractor standard in workers’ compensation cases. Comment, Agency, Independent Contractors in California, 30 Cal. L. Rev. 57. (The article taught me, among other things, that the California presumption that those engaging in work for another are “employees” was the law of the state as early as 1926. Hillen v. Industrial Acc. Comm., 199 Cal. 577).  

The point is that the law has always had to deal with two fundamental tensions in employment law. First, a profit-maximizing employer has both the economic incentive and the legal expertise to characterize almost any employee as an independent contractor. A second tension is that such stratagems frequently cannot be immediately dissected. Many workplaces are simply too complex to determine, without analysis, who is legitimately an independent contractor, and who is not. The Section 220 analysis (below), which tends to be the default analysis when statutes have not clearly defined employment status, strikes a balance in distinguishing between “employees” and independent contractors. The analysis first weighs which party—the employer or the worker—has control over the details of the work in a workplace. If a contractor is truly a contractor, he or she should probably have complete control of the details of work. But for decades it has been understood that control of details of the work often does not resolve the question.  Without trying to catalogue the other factors narratively, I will set them out below and invite the reader to reflect on how each of them causes a factfinder to pause and ask the question, “Is this individual really an independent contractor?”:

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The Occupation of Long-Distance Mover: A New Occupational Memoir Educates and Enlightens

            Movers are not infrequent visitors to workers’ compensation hearing rooms. The unusual patterns of their often-rigorous work seem to give rise to many opportunities for work injuries. Surely many moves become standard, but I have always been impressed that moving such things as pianos and wardrobes up and down residential staircases, and building the tiers of furniture within the truck, must constitute one of the most challenging types of physical work. Strength, coordination, and skill are all involved.

           In a recent case that I entertained, a local mover, named Aaron, had sustained two recognized injuries and had ultimately been laid off from his light duty. He was seeking reinstatement of disability benefits but, during the proceedings, thought better of his occupation, retrained as an x-ray technician, and compromise-settled. He was, after all, pushing the ripe old age of 40.  

             In a thoughtful new memoir, The Long Haul: A Trucker’s Tales of Life on the Road (W.W. Norton & Co. 2017), the author, Finn Murphy, tells stories of his life as a mover. He started as a college student undertaking local moves, but for many years has worked as a contractor for a Connecticut-based North American Van Lines firm undertaking high-end, cross-country moves. Now in his late fifties, he leases the truck from North American and receives jobs from the firm, but each effort is his to captain. In this regard, the loading and unloading, retaining of helpers at start and end, and assuring customer satisfaction, are all his responsibilities. He must, in addition, handle the operation so that he can achieve a profit out of his commission when the job is completed.

            One learns much about the moving business, and the occupation of mover, in this entertaining new book, but injuries do not turn out to be a dominant theme. On the other hand, the whole narrative takes for granted that moving is extremely physical work and full of hazards. Indeed, on the author’s first day, he lacerates his arms while carrying heavy items down the customer’s stairs. A few hours later, he is goaded into too many beers at lunch and ends up falling through the customer’s attic rafters, through the drywall of the ceiling, and into the master-suite bed. Somehow, he isn’t fired.

            And, of course, the driving itself can be hazardous. In one harrowing account, Murphy tells of coming upon a truck accident on I-80, near Clarion, PA, where his counterpart has apparently been killed after hitting deer. The nature of the work, meanwhile, can be mentally stressful, with demanding, often difficult customers (“shippers,” in his parlance), suicidal motorcyclists, traffic in general, deadlines, and the challenge of finding good unloading help at destination. At one point, after a day’s work well done, he ponders, “Are these briefs moments of euphoria worth the pounding loneliness, the physical abuse, and the lack of direction my job entails?”

              Injuries are not the theme, but Murphy’s philosophical views, based on his many years on the road, are certainly hard to miss. In fact, it may be that this memoir is a sociological tract as well as an occupational history. He has, for example, many complaints to share, both big and small. As for the big, he complains of globalization and (among other things) its contribution to destroying downtowns throughout the country and promoting commercial sprawl. As to the small, he assails the trend of truck stops discontinuing their restaurants and replacing them with Subway outlets – he even seems bitter about the Subway shredded lettuce, which he says is tasteless and, in any event, always landing on the floor of his truck cab.

            Murphy has an independent streak, and in political terms he seems a fierce egalitarian. He certainly avoids references to party politics (wisely, none appears; he apparently wants everyone to stick with his book until the end), but he is openly contemptuous of the bigotry that many of his wealthy customers display toward his Latino and other leveraged helpers. In one disturbing scene, for example, one rich customer’s wife openly videotapes the move, presumably to document theft and better file any subsequent insurance claim. Meanwhile, he senses that many of the shippers he services have wealth which is the result of ill-gotten gains. He depicts one banker he moved as relocating to yet another suburban castle so that, in the new area, he can once again rip people off. (I don’t know how Murphy could really know this, and here the author certainly displays some class resentment.)          

            The author speaks at length about the rudeness of many shippers, who unwisely commence their relationship with their movers by showing utter hostility. Does it really make any sense, he asks, to entrust all your worldly belongings to people who are not only strangers to you, but who you have mistreated as well? Better, Murphy counsels, to provide coffee and donuts – and a nice tip.      

            Murphy also reveals that a hierarchy among over-the-road truck drivers exists. He asserts that most truckers look down on movers who, in the trade, are called “bedbuggers.” This is so even though many movers – particularly our author, moving the high-end jobs – make more than the unionized drivers of the major carriers, and certainly more than the increasingly-leveraged independent truckers. (Murphy says he can make $250,000.00 per year.) Ironically, over-the-road movers seem, in turn, to look down on their local-driver counterparts. In one scene, one such high-end driver brusquely turns down, at the end of the day, the opportunity to join the local drivers for a beer.

            Murphy’s egalitarianism is evident when he talks about a sensitive issue: the labor pool which takes care of unloading many of his interstate jobs. He asserts that the majority of such workers in the present day are Latinos, in part because many whites turn down such work. Yet, he complains, Latinos are unfairly vilified in our national political discourse. Murphy also confesses, however, that when hard-working labor from Mexican-Americans is not available, he has secured day labor from soup kitchens, parole offices, and even corner bars. In a break from Murphy’s robust egalitarianism, however, he will not be soliciting these types of gentlemen for his high-end jobs.

            The author also notes that many African-American men achieved entry into the middle-class, over the decades, by devoting themselves to long-haul trucking. Speaking of such individuals, he states, “The work is so hard and held in such low esteem that there’s not a lot of room left over for bigotry. Anyone who will do this job is accepted.” To Murphy, who takes pride in his work, and considers himself a professional, this striving and achievement is deserving of the greatest admiration.

Workers' Compensation Cases on Appellate Review: “Substantial Evidence” and “Not Contrary to the Overwhelming Weight of the Evidence”

            In a new article, A Tale of Two Standards: Why Wyoming Courts Should Apply the Actual Substantial Evidence Standard When Reviewing Workers’ Compensation Cases, 18 Wyoming Law Review 1 (2018), Professor Mike Duff investigates an odd phenomenon of the Wyoming Supreme Court surrounding its proper standard of review.

            In this regard, the court uses, seemingly on an interchangeable basis, the phrases “substantial evidence” and “not contrary to the overwhelming weight of the evidence,” in characterizing its review function. Duff characterizes the Wyoming conceptualization of “substantial evidence” review as that which is familiar to us from federal administrative law, that is, that if, after whole record review, evidence is present that a reasonable mind might consider sufficient to support a fact, then the court will sustain the same.  But with workers’ compensation cases, the court will also say that it must uphold decisions by adjudicators as long as “deemed ‘not contrary to the overwhelming weight of the evidence.’” Duff asserts that in practice, the high court, having adopted this formulation, is extremely (and overly) deferential to the fact-finder. Indeed, he suggests that a review of certain cases suggests that the court is undertaking “any evidence” review – and is not undertaking substantial evidence review at all.

            Duff criticize this regime on a number of grounds. He first undertakes some good old-fashioned sleuthing and discovers that the court, some years ago, adopted this formulation from a chapter of the encyclopedia American Jurisprudence (AmJur). That text equated “substantial evidence” and “not contrary to the overwhelming weight,” but on the authority of two very weak cites. The book, notably, has since abandoned this approach. Meanwhile, the only state court which also applies the phrase (Missouri) actually uses it not as a mandate of extreme deference but, instead, one to accommodate increased scrutiny of fact-finding. Finally, the Wyoming legislature, with its 1979 amendment to its APA, has indicated that substantial evidence review is supposed to mirror the federal example. And, of course, the whole philosophy of that regime (now over a half-century old), is increased scrutiny of fact-finding to ensure that the agencies of the administrative state do not abuse their power.

            Cleaving to a more deferential standard – which isn’t meaningfully supported by precedent in the first place – makes no sense to the author. He recommends that the court overrule its precedent which adopted the overwhelming weight standard or, in the alternative, explain the precise difference to the bar and the public.

            In any event, Duff asserts that extreme deference is inappropriate in the workers’ compensation context, where the dispute being resolved by the administrative agency is over an essential right – that is, the right, however modified, to recover for one’s personal injury at the hands of another.

            Professor Duff’s article (along with a helpful abstract) can be read here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3013847.

 

Columbia University History Professor Writes about Sir William Beveridge and his U.K. Reforms

            Professor Susan Pedersen, a historian specializing in British history at Columbia University, has written an essay-style review of the new book, Bread for All: The Origins of the Welfare State (2017). We are talking about the British welfare state here, and Pedersen reports that the author, Chris Renwick, “tops and tails” his account “with the well-known figure of Sir William Beveridge.”

            This item immediately caught my interest, as one recalls that it was the famous report by Beveridge that prompted reforms in England immediately after World War II which terminated workers’ compensation as a stand-alone program.  That development constitutes an irony of sorts, since the nation whose laws largely inspired U.S statutes chose to eliminate workers' compensation as familiarly understood ... while the American states have continued chugging along with the same model for another 70 years.  (Aspects of  industrial injury compensation, notably, remain in the country.)      

           Pedersen, in her London Review of Books (lead article, 2.8.2018) essay, notes the "amalgamation of programs," but enriches our understanding. Here is a sample:

Social Insurance and Allied Services, the improbably named 300-page tome released by His Majesty’s Stationer’s Office on 1 December 1942, didn’t just propose amalgamating the patchwork of existing programmes – accident insurance, health insurance, unemployment insurance, widows’ and old-age pensions – into a single scheme, although it did do that. (In brief, Beveridge categorised the whole population in terms of individuals’ relationship to the labour market, identified the factors that might prevent them from working, and proposed a single contributory scheme that would provide adequate subsistence during any of those non-working life-stages or crises – except motherhood, about which I shall say more later.) But this new and universal scheme, as historians of social policy never tire of telling us, built on and did not break with the two key principles of its interwar precedents – first, that any systems of cash support should be contributory and not tax-funded, and, second, that labour market participation was the foundation for entitlement….”

The full review can be read here, I think for free: https://www.lrb.co.uk/v40/n03/susan-pedersen/one-man-ministry.

Professor Burton Criticizes Proposed New York “Proposed Guidelines for Determining Impairment”

            Professor John F. Burton has recently published a sharply critical paper addressing the proposed New York Workers' Compensation Board's Workers’ Compensation Guidelines for Determining Impairment. That proposed document was published on November 22, 2017, and is apparently being considered right now by the Board. It is notable that these proposed guidelines are intended to replace the currently existing guidelines (promulgated in 2012) which bear a markedly different title, to wit, the Guidelines for Determining Permanent Impairment and Loss of Wage Earning Capacity.

            Burton assails the new proposal, insisting that it departs, without reason, from the 2012 guidelines and misses the point that the calculation of permanent partial disability under the Act is intended as a measure of disability, and not just impairment. The proposal directs the evaluating physician, “For a non-schedule permanent disability [presumably like the back], evaluate the impact of the impairment(s) on claimant’s functional and exertional abilities.” Burton, however, complains, “But ‘functional and exertional abilities’ are surely not the only relevant factors that determine the ‘impact of a workplace injury on a claimant’s injury on a claimant’s ability to work.’”  

            Professor Burton, who has other complaints as well, recommends that the Board withdraw the proposed guidelines, and he makes other constructive suggestions for how the agency should proceed.    

            You can find the entire document here: Burton Analysis of November 2017 NY WC Impairment Guidelines.

 

 

 

Yet Another Essential Read: Professor John F. Burton's Major Essay, "National Developments in Workers' Compensation: Nullifying the Grand Bargain?"

 

            Professor John F. Burton, Jr., the Dean of American workers' compensation law, has recently published an essential essay on the field, "National Developments in Workers' Compensation: Nullifying the Grand Bargain?"  Professor Burton's essay appears in the new issue (Winter 2017) of Workers' First Watch, the periodical of the Workers' Injury Law & Advocacy Group.   

             The professor has asked us to post his exciting article on this website, and we are pleased to do so.  You can read the article here: Workers' First Watch -- National Developments in Workers' Compensation.

            I will be blogging on his article over the next few days, so stay tuned! 

 

            

    

    

An Essential Read! Professor Emily Spieler's tour de force Rutgers University Law Review Article on Workers' Compensation

            Professor Emily Spieler (Northeastern University School of Law), the renowned expert on workers’ compensation law and insurance, has authored a sweeping new article addressing the program, in which she highlights its controversies and explains – and assails – the retractions of the last few decades.

            For the reader new to workers' compensation, Spieler’s article is a crash-course relative to the history, purposes, and controversies, past and present, which have surrounded the field. For the old hand, meanwhile, the author’s insights, whether one agrees with them or not, will awaken myriad new reflections relative to the program. 

            Her article is Emily A. Spieler, (Re)assessing the Grand Bargain: Compensation for Work Injuries in the United States, 1900-2017, 69 Rutgers University Law Review 891 (2017).

            The full article can be read here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3079871.    

            My summary and review, meanwhile, can be read here: http://www.davetorrey.info.

 

 

 

 

 

 

 

 

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