Workers’ Compensation Law Prof Blog

New Article Explores Potential Employee Status of Gig Workforce Members via Analogy to ... Exotic Dancers

            In a new article, the author, a  law student, tries to predict how South Carolina courts would rule when a platform intermediary worker alleges, in some employment law context (like workers’ compensation), that he or she is an employee. He undertakes this effort by examining the recent South Carolina precedents treating the employment status of exotic dancers in that state’s gentlemen’s clubs.  Axton D. Crolley, Strippers, Uber Drivers, and Worker Status in South Carolina, 69 South Carolina Law Review 945 (Summer 2018).

              The effort is not as cleverly provocative as it might seem; those cases, one decided under the Workers’ Compensation Act and the others under the FLSA, all involved defendant arguments that the exotic dancer plaintiffs were independent contractors and not employees. However intriguing the subject occupation, the cases are apparently the latest in the state to explore this essential dichotomy.

            As for the workers’ compensation case, which animated many an industry listserv – and clucking of disapproving tongues – a couple years ago, see Lewis v. L.B. Dynasty, 770 S.E.2d 393 (S.C. 2015) (exotic dancer, severely injured by stray bullet in the midst of work, was employee, not independent contractor, of hiring club; this was so notwithstanding the fact that dancer undertook her performances at several unrelated clubs).        

            Of note is the fact that South Carolina law is like that of  most states, as control, or the right to control, forms the basis of the critical analysis. The author, indeed, reports that it was the courts’ consecutive discernments of sufficient control on the club’s part that yielded, in all three cases, the legal conclusion that employment on the part of the dancers existed.

             The author feels constrained to predict that, given this analysis, a South Carolina court would consider workers like Uber drivers to be employees, not independent contractors. The author, seemingly sympathetic to his state‘s desire to create a “business-friendly” environment, is dissatisfied with this prospect.

            In his view, to limit the number of platform intermediary laborers from being deemed employees, South Carolina courts should emphasize, in the control analysis, the already existing sub-criterion of the worker’s “economic reality.” He suggests that when this constituent aspect of the South Carolina control analysis is emphasized, workers like Uber drivers are less likely to be found employees.

Recent Death of Senator John McCain Recalls the USS Forrestal Fire, Navy Efforts at Safety Aboard Warships

 

            The media is full of news accounts right now of the death (Aug. 25, 2018) of Arizona Senator John McCain, a dynamic figure and a hero of the Vietnam War. McCain’s death brought to this writer’s mind the 1967 fire aboard the aircraft carrier U.S.S. Forrestal (named for the first Secretary of Defense, James Forrestal, a heroic figure in his own right), a disaster in which 134 officers and sailors died, with McCain, then a young naval aviator, barely escaping death.

            An account of the fire and its aftermath can be found in the top-notch Sailors to the End (Perennial 2002), a book at once riveting and educational, by author Gregory A. Freeman.  I have recommended this book in the past to colleagues in the workers' compensation and industrial safety fields.

            Freeman explains how the Forrestal was, on July 29, 1967, preparing to launch attacks into North Vietnam when one of its jets accidentally fired a rocket into an aircraft occupied by McCain, its pilot. A huge fire ensued, and McCain barely escaped before a 1000-pound bomb on his plane exploded, causing a chain reaction with other bombs on nearby aircraft. The crew struggled for days to extinguish the fires but, in the end, the tragedy took the lives of 134 men.

            This writer has been told by navy officer colleagues that the Forrestal fire is a subject of study by new naval officers as shipboard safety consciousness is considered.

            And, indeed, according to one new internet account, the fire “was taken as a teachable moment for the Navy, demonstrating how much care has to be exercised to prevent such a catastrophe and what damage control training was required to be able to defeat the flames and explosions when everything goes wrong.” https://hotair.com/archives/2018/08/26/lt-cmdr-john-mccain-literal-fire/.

"Workforce ... or 'Taskforce'"? Jeremias Prassl, in New Book, "Humans as a Service," Explains the Law and Machinations of Gig Work via Labor Platform Intermediaries

            In a new book, British Law Professor Jeremias Prassl analyzes the gig economy with a focus on the workers who actually labor in the gig workforce – and with an eye on the dignity and rights of such workers.  Humans as a Service: The Promise and Perils of Work in the Gig Economy (Oxford University Press 2018).    

            Prassl accepts that new forms of business enterprises, like Uber, Lyft, and Taskrabbit have changed the nature of business, but he rejects the proposition that work itself needs to be examined differently. He shows that models of work in the gig economy find predecessors in the history of work relationships. As a result, caution is required in the analysis of whether the gig economy has truly changed the nature of work. Prassl, after showing that the purported innovation of platforms reflects old models of work, that enterprises like Uber retain control over its workers, and that much gig economy lingo is in fact “doublespeak” that clouds the critical analysis, argues that familiar Anglo-American precepts of employment law should apply to work in the gig economy.

            Much is to be learned by the workers’ compensation specialist from Prassl’s book. He explains the nature and economics of the gig economy; how gig economy enterprises disingenuously seek to rebrand work as some innovation, the better to ward off regulators; and how laughable the idea is that most workers in the gig economy are autonomous entrepreneurs. Prassl also explains in detail that gig economy enterprises resemble the commercial labor intermediaries that have been with us since the 19th century, abetted in the present day by advanced communications.

           On this point, Prassl asserts that, just as other labor intermediaries are subject to employment law, so should gig workforce enterprises. Prassl concludes his book by emphasizing that the wealth of enterprises like Uber comes at a societal cost – it is fine, for example, to create fleets of independent contractors to prowl the streets en masse 24/7, but when unemployment or injury occurs, it is the taxpayers who will likely pay the cost.  

            Prassl’s book is, to my knowledge, the first by an employment law scholar to comprehensively take on the issue of work in this specialized sector of the gig economy. His insights and manner of argument will be familiar to the lawyer-reader, but this book is also a manifesto at once exposing and rejecting a modern example of the unsatisfactory commodification of labor.

            For me, the analysis brought context and will inform my reasoning as a judge – and as a member of the public.  I read it twice to make sure I have a mastery of the text.  Fortunately it is nicely written and flawlessly edited.  My full review (a kind of Cliff's Notes) may be found at www.davetorrey.info.

 

New Scholarship by Professor Gary Spitko on Platform Labor Intermediaries, Quality Control, and the Franchisor-Franchisee Analogy

            A significant legal literature is developing addressing the gig workforce and employment law.

            In a new article, an example of such scholarship, the author argues that one aspect of platform intermediary oversight of its workers, to wit, service quality standards – as enforced chiefly by consumer follow-up ratings – should not be held by courts to reflect control sufficient to establish an employer-employee relationship.  Gary Spitko, A Structural-Purposive Interpretation of "Employment" in the Platform Economy, 70 Florida Law Review 409 (March 2018), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2945130.  (The author teaches at Santa Clara University School of Law.)

            Quality control standards, the author argues, “promote trust between the platform consumers and provider” and “benefit the platform operator, consumer, and provider.” This critical aspect of value attendant to platform-provided services will be defeated if quality control is to equal control sufficient to establish employment. Indeed, were this to be the law, the platform “operator is more likely to forgo the right to impose such standards.”

            The author says that the franchisor-franchisee relationship serves as an example of a business relationship whereby one enterprise exerts quality control standards but does not, under most analyses, become the employer of the franchisee. (Of course, in my state, Pennsylvania, our middle-level appeals court came to this conclusion in a leading workers’ compensation case where it held, specifically, that the employee of a franchisee – which failed to secure insurance – was not the "statutory employee" of the franchisor.  See Salad Works, LLC v. WCAB (Gaudioso & UEGF), 124 A.3d 790 (Pa. Commw. 2015)).

             The author’s footnotes are a treasure-trove of citations to recent articles (2016-2017) on the gig economy and employment law, as well as the law surrounding the franchisor-franchisee relationship. 

My Newest Workers' Compensation Article on the Scope of the Grand Bargain

I have just reached agreement with the Tulsa Law Review to publish a workers' compensation article in its spring 2019 issue. Here is the abstract:

During the second and third decades of the twentieth century, the U. S. Supreme Court issued a handful of opinions rejecting 14^th Amendment constitutional challenges by employers to implementation of workers’ compensation statutes in the United States. Unknown to many, the statutes were largely the fruit of privately-sponsored investigations, principally by the Russell Sage Foundation and the National Association of Manufacturers, of European workers’ compensation systems during the first decade of the twentieth century. Some of those systems had been in existence since the 1870s and 1880s, and many employers preferred them to newly-emerging American employer liability statutes that retained tort liability while eliminating many or all affirmative defenses. The Minnesota Employees’ Compensation Commission and the National Civic Federation (NCF) catalyzed the national conversation on workers’ compensation from 1909-1911, and it was an NCF lawyer who was substantially responsible for a draft that became the first workers’ compensation statute upheld by the U.S. Supreme Court as constitutional.

Contrary to the view held by some, the foundational Supreme Court opinions constitutionally authorizing the workers’ compensation “Grand Bargain”—statutory benefits for tort damages—set no workers’ compensation benefit floor. The article parses the opinions to emphasize the point, and then goes on to explore the context of what seems a strange omission. Ultimately, the article concludes that the Court “deferred,” sub silentio, to the private bodies of experts who had been investigating, reporting, and deliberating upon the European systems. The difficulty with the Court’s approach is that little has been left to posterity explaining what scale of employee benefits the Court might have deemed inadequate or unreasonable as an exchange for employee tort damages. The pregnant silence on federal constitutional boundaries continues to impact current discussions on limits to legislative reductions of workers’ compensation benefits. This absence of an explicit benefit floor should give pause to proponents of schemes seeking to export the workers’ compensation model to other legal regimes.    

    A link to a reasonably polished draft but not finalized version of the piece can be found here.

 

Michael C. Duff

 

A Creative Commons Workers’ Compensation Law Treatise for Students, Newer Practitioners, and Others

I’m excited to announce that the Center for Computer Assisted Legal Instruction’s (CALI) eLangdell textbook division has agreed to publish the first Wyoming Workers’ Compensation treatise. This creative commons/open source concept will allow anyone to access the treatise online at no charge. A bound .pdf can be obtained very inexpensively from Lulu Publishers for those requiring a hard copy.

This will be the first state-specific title eLangdell has published. The core of my advocacy for the project was two-fold.

First, as law schools continue their collective push to become “experiential,” working harder and harder to get students as close to “practice-ready” as possible by graduation, state-specific materials will assume increasing importance. I teach my workers’ compensation course from the multistate text I personally authored. I believe my text does a pedagogically sound job of exposing beginning students to core legal principles. But I could not (and no author could) load up the textbook with the local law of any particular state without driving it to an unreasonable length, expense, and level of complexity not conducive to second and third-year law student learning. A separate, pedagogically-sensitive supplement of local law, on the other hand, gives an instructor a resource to efficiently focus on local rules, where quirks require it. I believe these kinds of back up local law texts will become the norm in the law school market.

Second, in Wyoming a substantial number of students will become involved in workers’ compensation cases early in their careers. I was disappointed at the paucity of Wyoming workers’ compensation secondary materials able to assist newer practitioners in quickly bringing together fundamental principles of Wyoming workers’ compensation law. As I did some preliminary marketing research with my assistants, I was surprised to learn of the number of states that did not possess a treatise. It is my hope that instructors in states without a treatise—both adjuncts and full-time faculty—will be persuaded by my model to explore writing and publishing similarly efficient and accessible workers’ compensation materials that will be helpful to both students and newer practitioners. CALI/eLangdell apparently believes this market may have legs.

I’m about a third of the way through the writing of the manuscript. I will keep folks apprised of the progress of the manuscript and distribute links to the finished text.        

 

Michael C. Duff

Thinking Clearly about the Quid Pro Quo

I wanted to make some comments about the recent Kansas quid pro quo case, Johnson v. U.S. Food Serv. I won’t repeat the facts here—it is enough to know that a permanent impairment benefit was significantly reduced under the 6^th edition of the AMA Guides as compared to what it would have been under the earlier 4^th edition of the Guides; and the Kansas intermediate appellate court plurality reviewing the award found the reduction to be a bridge too far – a violation of the quid pro quo (I have written on such incremental-erosional theories here).

Attentive readers will have noted that the underlying challenge was brought under both Kansas state quid pro quo law and a 14^th amendment (of the U.S. Constitution) due process theory.  Although the opinion discusses the old (1917) N.Y. Central R. Co. v. White case (in general terms), the court did not find that the benefit reduction violated federal due process.

I’ve spent a good chunk of my summer reading and very closely analyzing cases like White, Mountain Timber, the Arizona Copper/Liability cases, and Krinsky (I’m currently shopping an article around to the law reviews on the deep back story of these cases – stay tuned). I’ll save you a lot of time by giving the shortest version I can of what the cases said:

“Yes, states may implement workers’ comp (or employer liability statutes) despite what some employers argue about 14^th amendment deprivations of property or interference with contract.  Thank goodness (!), however, we don’t have to decide the boundaries for how low employee benefits can go in the quid pro quo (before there might be a constitutional problem) because what we are looking at here obviously does not approach that floor.”  Crickets.

The federal courts of the era certainly did not set up a 14^th amendment, substantive due process analysis that might be used to delineate benefit floors. Nothing like substantive due process analysis/theory yet existed in the 1910s. In fact, the whole idea of applying “strict scrutiny” for legislative infringement of “fundamental” rights ( a step of modern federal substantive due process analysis) did not begin to  crystallize until the U.S. Supreme Court’s opinion in  United States v. Carolene Products Co. (1938). Of course, even to get that far under the modern theory, the exchanged tort rights must be deemed “important” or “fundamental” to escape deferential rational basis review, something that has only infrequently happened.  See the now-overturned Smothers v. Gresham Transfer case here. (This will be the real challenge for all federally-based, and most state-based, claimant challenges in the future).

Consider that the 1914 NY workers’ compensation statute upheld in White provided no ongoing medical benefits for a work-related injury (beyond the first 60 days for first aid). The same was true for many states Download EarlyWorkmensCompensationmedbenefits (probably emulating the 1897/1906 English Act – which became moot in England because national health insurance was established in the UK in 1911, which universally thereafter covered all medical expenses of injured workers—had been the case in Germany since 1884). Kansas provided Download KansasDOLsummaryofearlystatute, total benefits of 50% of the average weekly wage (subject to a pretty low cap) or partial benefits of 50% of wage loss (subject to the same cap), and disability payments in both cases expired after eight years. These are the kinds of austere statutes the U.S. Supremes upheld, and I sometimes think that as a claimant I might prefer to argue they were wrongly decided. (citing Magna Carta). 

Moving beyond the vague federal law, Kansas’s quid pro quo doctrine, uniquely among the states, directly equates substantive due process with quid pro quo, and assigns fundamental, or quasi-fundamental, status to workers’ compensation rights (and implicitly tort rights). Along with Florida, Kansas has some very favorable state constitutional language providing plaintiffs with—at least potentially—some real leverage. But (regrettably, as I see things) what happens in Kansas, probably stays in Kansas. To prevail on quid pro quo grounds most other places, claimants will likely have to avail themselves of other state-based constitutional arguments.   

Michael C. Duff

Excellent Article on the Idea of Applying Workers' Comp Type Structures to Med Malpractice

I suspect there is much concerning which Prof. Alexander Volokh and I would disagree, but I cannot heap enough praise on his excellent article, "Medical Malpractice as Workers’ Comp: Overcoming State Constitutional Barriers to Tort Reform," published in the Emory Law Journal earlier this year. I would argue that he has framed the issues surrounding state law constitutionality of tort substitutes (like workers' compensation)  just right. I came across the piece as I was working on my article on workers' compensation benefit adequacy and the prehistory of the 1917 White case, about which more later.  Here is a link to Prof. Volokh's article.  The abstract is below:

This Article discusses the intersection of torts, administrative law, and constitutional law—a surprisingly understudied area, given its importance for modern-day tort reform efforts. In several states, based on perceptions of a medical malpractice liability and insurance crisis, reformers have sought to abolish tort liability for medical malpractice—replacing it with an administrative compensation system not based on negligence and roughly similar to workers’ compensation.

Tort reformers have, in the past, been hindered by state courts that have struck down damages caps and similar reforms on state constitutional theories. Some of the main theories have been state constitutional jury trial rights, access-to-courts rights, and due process/equal protection.

Surprisingly, it turns out that workers’-comp-like administrative systems, though more radical than damages caps and similar reforms, seem to have a better chance of being held constitutional—in part because of their similarities with workers’ comp, which also abolished certain tort actions and replaced them with a non-negligence-based administrative system, and which has been universally held to be constitutional.

This Article analyzes the constitutionality of this sort of administrative compensation system under the Florida, Alabama, and Georgia constitutions, focusing on jury trial rights, access-to-courts rights, and due process/equal protection.

 

Excellent stuff!

 

Michael C. Duff