Wednesday, March 14, 2018

White May Not be the Case to Cite for the Workers’ Compensation Quid Pro Quo; but it was All About the New York Act

I (and many others) have argued that, in the Supreme Court’s decision, New York Central Railroad Company v. White, 243 U.S. 188 (1917, the Court implicitly held that a state’s workers’ compensation benefits regime must be “reasonable” to avoid triggering heightened constitutional scrutiny. More narrowly, the Court said that what was not at issue in the case was the sweeping away of common law tort remedies in exchange for unreasonable workers’ compensation benefits. Logically, of course, that meant (and appears still to mean) that inadequate benefits might not pass constitutional muster. But it also seems to mean that the workers’ compensation system the court had before it in White—the version of the New York statute reenacted in 1914—was reasonable and adequate. Before looking at what the New York Act provided, however, it is worth mentioning that participation in that iteration of the Act was entirely voluntary both for “nonhazardous” employers and for many employees. Thus, it is difficult to say whether the limited scope of the scheme then at issue influenced the Court’s view of it. The same can be said of the Court’s companion opinion in Mountain Timber Co. v. State of Washington, 243 U.S. 219 (1917). Thus, I think the case to cite for the “signing off” on the quid pro quo may be Ward & Gow v. Krinsky, 259 U.S. 503 (1922), decided under a later version of the New York Act. Krinsky is the first Supreme Court case of which I am aware approving a broad compulsory workers’ compensation scheme (binding all employers employing more than four employees). And Krinsky cited White with approval. So, implicitly, the question is why the White court deemed the 1914 Act adequate or reasonable with respect to the employee benefit side of the equation. (Virtually all forms of compulsory workers’ compensation were upheld against employers against 14th Amendment challenges under the theory that the laws were within a state’s “police powers.”)

So, you say, what did the New York Act provide? I’m glad you asked:

Here is a brief summary: 

Total permanent disability: 66 2/3% of average weekly wages during the continuance of total disability. Loss of both hands, or both arms, or both feet, or both legs, or both eyes, or of any two thereof generally constituted permanent total disability. In all other cases permanent total disability was determined in accordance with the facts.

Temporary total disability: 66 2/3 % of the average weekly disability wages during the continuance thereof, but not in excess of $3500. (about $88,000 in 2018 dollars).

Permanent partial disability: 66 2/3% of the average weekly wages paid to the employee for a period of time named in the schedule as follows (most but not all scheduled injuries reflected here). For loss of a:

Thumb. 60 weeks; First finger. 46 weeks; Second finger. 30 weeks; Third finger. 25 weeks; Fourth finger. 15 weeks; Phalange of thumb or finger. One-half of the amount above specified for those digits. Great toe. 38 weeks; Other toes. 16 weeks; Hand. 244 weeks; Arm. 312 weeks; Foot. 205 weeks; Leg. 288 weeks; Eye. 128 weeks.

Loss of use. Permanent loss of the use of a hand, arm, foot, leg, eye, thumb, finger, toe, or phalange was considered as the equivalent of the loss of such hand, arm, foot, leg, eye, thumb, finger, toe, or phalange.

Amputations. Amputation between the elbow and the wrist was considered as the equivalent of the loss of a hand. Amputation between the knee and the ankle was considered as the equivalent of the loss of a foot. Amputation at or above the elbow was considered as the loss of an arm. Amputation at or above the knee was considered as the loss of the leg.

In case of an injury resulting in serious facial or head disfigurement the commission could, in its discretion, make an award not exceeding $3500. ($88,000 in in 2018 dollars).

Benefits for non-scheduled injuries were calculated by multiplying 66 2/3% times the difference between average weekly wages and wage-earning capacity thereafter in the same employment or otherwise payable during the continuance of the disability, but subject to reconsideration without explicit textual limitation.  

Temporary partial disability: Calculated in the same manner as for permanent non-scheduled injuries with the caveats that any combination of earnings from work and disability payments could not exceed the average weekly wage at the time of injury and maximum partial benefits were limited to $3500.

In most cases, the maximum weekly benefit obtainable under any species of disability was $15. ($377.26 in 2018 dollars). 

Death Benefits. An abbreviated account of death benefits is that the surviving widow received 30% of the average wages of the deceased until remarriage.  Each surviving child received 10% of the average wages until attaining the age of 18.

Medical Benefits. The employer was required “to promptly provide for an injured employee such medical, surgical, or other attendance or treatment, nurse, and hospital service, medicines, crutches, and apparatus as may be required or be requested by the employee, during 60 days after the injury.

One of the more notable aspects of this scheme was that, outside the contours of specific scheduled benefits, there was no time limitation for receipt of permanent partial benefits. With respect to scheduled benefits, however, the amount provided was the sole remedy. The 60-day window for provision of medical benefits is striking to our eyes. It seems clear enough, however, that the employee was unlikely to get a better deal elsewhere.  A tort suit, even if theoretically available, would take much too long.

Thus, the quid pro quo question (to the extent it is historically couched in terms of White and its progeny) boils down to an assessment of the degree to which any proposed modification of workers’ compensation benefits is worse than the New York scheme (The Supreme Court has never commented on the question of adequacy since White).  

Michael C. Duff

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