Workers’ Compensation Law Prof Blog

New Jersey’s New #MeToo Law and Possible Salutary Impacts on Workers’ Compensation

As the old saying goes, a person is capable of not understanding a great deal when his or her paycheck is caught up in the not understanding. So I fully appreciate why many have difficulty understanding that compulsory arbitration of workers’ compensation claims could be required at any time by any employer in the United States. But it is a fact. An employer could simply say, “as a condition of employment you agree to have any workers’ compensation claim resolved in arbitration.” If you refuse to sign such an agreement, you are not hired. Employment at will principles hold that an employer can refuse to hire anyone for a good reason, a bad reason, or no reason at all. Any law that any state enacted regulating the content of or circumstances surrounding the arbitration agreement is preempted. (See below)

There is good news afoot, however, from the perspective of state-based workers’ compensation systems. A number of states, in the wake of #MeToo, have been enacting laws in opposition to, among other things, secret arbitration awards required by arbitration agreements. (Private employers have been implementing similar restrictions, but I don’t take that especially seriously since private policies can be changed the instant an issue leaves the public spotlight). An obscure portion of the tax code—the so-called “Harvey Weinstein” provision—now prevents employers from taking sexual harassment allegation costs as a tax deduction if they compel nondisclosure as a condition of a sexual harassment settlement. Aside from this kind of “bold” policy move, I’m most interested in state laws that set up a direct challenge to the Federal Arbitration Act. To repeat myself, any state law dictating the content of an arbitration agreement is almost certainly prohibited by the FAA.

I’d like to focus on the just passed New Jersey law. It provides the following:

• A provision in any employment contract that waives any substantive or procedural right or remedy relating to a claim of discrimination, retaliation, or harassment shall be deemed against public policy and unenforceable
• No right or remedy under the [NJ] “Law Against Discrimination,” or any other statute or case law shall be prospectively waived
• Collective bargaining agreements are exempted
• Any employment contract or settlement agreement concealing details relating to a claim of discrimination, retaliation, or harassment (NDAs) are against public policy and unenforceable against a current or former employee who is a party to the contract or settlement
• But if the employee publicly reveals sufficient details of the claim so that the employer is reasonably identifiable, then the NDA is also be unenforceable against the employer
• This law is not to be construed to prohibit an employer from requiring an employee to sign a “non-compete” or “proprietary secrets” agreement
• A person attempting to enforce a provision deemed against public policy and unenforceable under this law shall be liable for the employee’s reasonable attorney fees and costs
• No person may take retaliatory action (failure to hire, discharge, suspension, demotion, discrimination) against a person, on grounds that the person does not enter into an agreement that contains a provision deemed against public policy unenforceable under the law
• All state law tort remedies are available to prevailing plaintiffs, who also are entitled to attorneys, fees

What is most interesting about this law is that the heart of it is almost certainly "obstacle preempted" by the FAA. Proponents of the state law will note that the NJ language does not specifically reference arbitration. But those proponents must not (fully) realize that Justice Elena Kagan scuttled such arguments in the Kindred Nursing Centers case:  

The FAA thus preempts any state rule discriminating on its face against arbitration—for example, a “law prohibit[ing] outright the arbitration of a particular type of claim.” . . . And not only that: The Act also displaces any rule that covertly accomplishes the same objective by disfavoring contracts that (oh so coincidentally) have the defining features of arbitration agreements.

The first and second bullets of the NJ law are obviously (at least to my eyes) not long for this world, but what about the fourth?—“contracts” requiring NDAs (non-disclosure agreements) are against public policy and unenforceable against a current or former employee. Proponents doubtless say that an NDA prohibition does not touch the substance of the arbitration agreement, but rather the dissemination of its outcome. But what the provision really says is that if the parties’ arbitration agreement contains an NDA it is unenforceable; it is a nullity.  The conditions precedent for entering into an arbitration agreement are dictated by a state. Again from Justice Kagan:

[T]he Act cares not only about the ‘enforce[ment]’ of arbitration agreements, but also about their initial ‘valid[ity]’—that is, about what it takes to enter into them. Or said otherwise: A rule selectively finding arbitration contracts invalid because improperly formed fares no better under the Act than a rule selectively refusing to enforce those agreements once properly made.

So why even pass dead-on-arrival laws of this type? I think it is state-level signalling -- it is ultimately a message to Congress. It is all well and good, this signal may be communicating, to pass a #MeToo bill applicable only to Congress (some are confused on the limited scope of this law which is applicable only to federal legislative branch employees), you’d better also get moving on “national fix” legislation (see proposals here, here, and here). But I would also ask why arbitration is unjust (and obviously not voluntary for most employees) only with respect to sexual harassment claims. What about other forms of gender discrimination (both under federal and state law), racial discrimination (both under federal and state law), age discrimination, disability discrimination, wage and hour claims (state and federal), and—oh yeah, workers’ compensation claims—the arbitration frontier we haven’t quite gotten to yet? Will the signal work? I don't know. What I do know is that many billable attorney hours will be racked up drafting motions to hold state law employment cases in abeyance and to compel arbitration. 

Michael C. Duff

Walmart and Amazon are the Top Two Employers in the U.S. -- Good News for Injured Workers or More of the Re-Dangerous?

According to a new Wall Street 24/7 study, Walmart employs 1.5 million Americans, more than any other employer in the United States. Amazon comes in second at 400,000 employees. Walmart is the largest private sector employer in my home state of Wyoming and, curiously, is exempted from the state workers' compensation system. I note in passing that "Christie Walton, the daughter-in-law of Walmart founder Sam Walton, is a longtime Jackson resident. Her son Lukas Walton also calls Jackson Hole home and is an heir to the family fortune, with an estimated net worth approaching $16 billion." Wyoming is a de facto opt-out state for non-extrahazardous employers (as opportunistically defined by the Wyoming legislature) and, as local claimants' attorneys will attest, this is not good news for injured workers. If you are injured at work in a Walmart warehouse in Wyoming your remedy is limited to an ERISA governed "private" plan of the type that made national news a few years ago in Oklahoma. In short, you recover for a work injury what the company says you will recover (a sum with which you will fictively be said to have "agreed"), unmoored from the state workers' compensation benefit floor. My narrow state concerns aside, Walmart as lead employer brings me little comfort considering the matter from a national perspective. 

As for Amazon, consider this excerpt from a December 2018 piece in EHS Today:

Amazon workers suffer injuries – and sometimes lose their lives – in a work environment with a relentless demand to fill orders and close monitoring of employee actions,” National COSH stated.

Since 2013, the following seven workers were killed in Amazon warehouses:

• Jeff Lockhart, 29, a temporary employee, found collapsed and dead from a cardiac event after an overnight shift at an Amazon warehouse in Chester, VA on Jan. 19, 2013.
• Roland Smith, 57, a temporary employee, was killed after being dragged and crushed by a conveyor belt at an Amazon warehouse in Avenel, N.J. on Dec. 4, 2013. OSHA cited five companies for serious violations, including the contractor responsible for operating the facility for Amazon – Genco – and four temporary staffing agencies.
• Jody Rhoads, 52, was crushed and pinned to death by a pallet loader at an Amazon warehouse in Carlisle, Pa., on June 1, 2014. (This is the same facility where Shoemaker was killed in September 2017).
• A worker for a company from whom Amazon was renting forklifts was crushed to death by one at an Amazon warehouse in Fernley, Nev., on Nov. 4, 2014. According to news reports, he was loading the forklift onto a flatbed truck when it began to roll forward. He tried to stop it but the forklift fell on him.
• Devan Michael Shoemaker, age 28, was killed on Sept. 19, 2017 when he was run over by a truck at an Amazon warehouse in Carlisle, Pa.
• Phillip Terry, 59, was killed on Sept. 24, 2017, when his head was crushed by a forklift at an Amazon warehouse in Plainfield, Ind.
• Four weeks later, on October 23, Karla Kay Arnold, 50, died from multiple injuries after she was hit by a sports utility vehicle in the parking lot of an Amazon warehouse in Monee, Ill.

I want to repeat some commentary from my blog entry of March 26, 2017 in response to the argument that work is becoming safer. In short, I argued that although work was becoming safer, it could easily become dangerous again, or "re-dangerous.":

Leaving all that to one side, however, I wanted to say a word about the predictive power of injury models generally. President Trump’s proposed budget calls for a cut of $2.5 billion at the Department of Labor. One need not be a soothsayer to understand that OSHA, SSI, and Medicaid (among other programs) are on the verge of being pared down to virtual non-existence. I am similarly unenthusiastic concerning all federal programs dealing with workplace safety. Let us speak plainly. American manufacturing left the country to avoid regulation and unionized labor costs. As private sector union density approaches 6%, and safety regulations evaporate, it is not so hard to imagine an American workplace that is “re-dangerous.” Cars were no doubt being made dangerously in China, and if their manufacture is re-shored I should not be surprised to rediscover dangerous conditions. No doubt, robots and the like may improve the situation. But as last Friday’s Bloomberg piece—Inside Alabama’s Auto Jobs Boom: Cheap Wages, Little Training, Crushed Limbs—made abundantly clear, models of future injury rates will have to take into account the re-dangerous.   

 Michael C. Duff

New National Employment Law Project Report on the "Gig" Economy

As I have been arguing for years, the Gig Economy is not the exception, it is "the plan." From the just-released, very useful National Employment Law Project report:

Ride-hailing giant Uber and aspiring “Uber of home services” Handy, along with other tech-companies-cum-service-providers, have been conspiring with powerful corporate allies and lobbyists on a far-reaching, multi-million-dollar influence campaign to rewrite worker classification standards for their own benefit— and to workers’ detriment. Their goal: to pass policies that lock so-called “gig” workers who find jobs via online platforms into independent contractor status, stripping them of the basic labor rights and protections afforded to employees and allowing the companies to evade payroll taxes and worker lawsuits. This report sketches the policy campaign, the cast of characters involved, when and where they have mounted efforts, what might be driving them, and the tactics they are using to advance their cause. It concludes with some examples of successful resistance to these efforts, from which lessons can be drawn for the fights to come.

The report has very useful timelines and charts showing the steady advance of the Uber/Handy Inc. model. A number of folks argue the recent statistics show the Gig/independent contractor economy is not as large as I think it is (by actually talking to my working class family and friends on the ground). We will see, but I think we are just getting started.  In a key part of the report the "nothing to see here" argument is addressed as follows:

According to the latest estimates, gig workers comprise only a small share—about one percent—of the U.S. workforce. In many cities, that share is likely larger—a recent analysis found that if Uber classified its drivers as employees, it would be the single largest private-sector employer in New York City.

 

Many gig workers, who are disproportionately black and Latino, work in occupations that have long been plagued by industry efforts to erode labor standards—in the form of misclassification and legal carve-outs. In parts of the economy such as the taxi industry and the domestic work sector, the impact of the encroaching gig model reverberates far beyond those engaged by these companies, applying downward pressure on job quality for a much larger set of workers. And gig companies have been joined by more traditional companies to push polices designed to scale up their model across the U.S. economy. Tech-mediated gig work is the latest iteration of a 50year-old pattern of workplace fissuring.

As Neil Young once said so eloquently, "Rust Never Sleeps." You can find  and download the full report here.

 

Michael C. Duff 

 

A Few Remarks on Workers’ Compensation and “Medicare for All”

With “Medicare for All” likely an entrenched topic of conversation during the upcoming national campaign season, I was pleased to see William Rabb’s piece last month in WorkCompCentral (behind a paywall here) on the role that workers’ compensation might play in a national single-payer system.

The first thing to bear in mind is that the original workers’ compensation statutes—the English Act of 1897 and the first U.S. workers’ compensation statute (N.Y.) upheld by the Supreme court in 1917—contained no provision for ongoing payment of medical benefits. (Most of the early U.S. systems paid for on-site first aid, and perhaps emergency medical care for a few weeks; New York paid for 60 days). The English passed national health care in 1911; and the Germans (who created the second of the great workers’ compensation systems originally considered by the United States) included workers’ compensation benefits as part of a comprehensive national benefit delivery system under Otto von Bismarck’s original 19^th century scheme. In Europe, the birthplace of workers’ compensation, payment of medical expense occasioned by workplace injury was divorced from indemnity payments very early on. So whatever else might be said about the feasibility of operating a work-injury system in which a national health entity paid for health care costs, while a state-based workers’ compensation program paid indemnity-only benefits, it would be historically inaccurate to claim such a system would violate the “original intent” of workers’ compensation.

Second, some of the discussants in Mr. Rabb’s piece were concerned that operation of an indemnity-only workers’ compensation system would reduce the premium revenue of insurance carriers, causing them to invest less in workplace safety, presumably because their policies would cover less. In other words, the less a carrier would be required to pay an insured under a policy, the less motivation the carrier would have to assure that high-cost claims would not be filed in the first place by encouraging employers to operate safely. Here, however, I think it must be remembered that insurance follows liability, liability does not follow insurance. Even if insurers find workers’ compensation less profitable—because the insurable risk has been limited to indemnity payments or because workplaces have become safer overall—the employers’ risk will never be zero because employers’ liability will never be zero (no tort reform of which I am aware has ever suggested the possibility that a state could lawfully deny any remedy for physical injury). A number of models were experimented with at the inception of workers’ compensation for exactly this reason. Mandatory workers’ compensation was first applied only to extrahazardous employments, and a number of states experimented with mixes of elective and mandatory systems—originally some states permitted both employers and employees to opt out. Much experimentation can be anticipated during transitional eras, and how to deter unsafe employment practices without simultaneously chilling socially useful activity is the durable problem of all injury law.

The preceding points get to the heart of what the discussion about the interplay between workers’ compensation and “Medicare for All” is really about – federalism. Workers’ compensation was explicitly excluded from ERISA (the federal statute minimally regulating voluntary employee benefit plans), way back in 1974, from federal benefit initiatives since then, and has been excluded from both the Sanders and Jayapal bills, to name the two proposals with which I am somewhat familiar. I would suggest that a large driver of the federal instinct to exclude workers’ compensation from benefit design centers on immunity from tort liability (exclusivity), or more precisely on a recognition of the delicate state-law balance between limitation of tort remedies on the one hand and providing adequate statutory benefits on the other. This has been seen historically as quintessentially a state law question.

Under present law, a plaintiff may not sue in tort an ERISA-governed employee benefit plan, or providers thereunder, as a result of ERISA preemption. And, as we know, employees generally may not sue their employers for work-related injuries arising from employer negligence. The difference is that ERISA tort immunity derives from federal public policy based on employers’ voluntary provision of employee benefits; workers’ compensation immunity derives from a state-based exchange of an ancient common law right and remedy for a putatively adequate statutory substitute.

“Medicare for All” changes the federal law assumptions upon which ERISA is built. The whole point of ERISA is to encourage voluntary provision of benefits by employers by not mandating any specific benefit levels and by sheltering operation of plans from most legal liability. Medicare for All would be the product of a mandatory system of taxation. It remains to be seen what preemption structure would accompany Medicare for All, but it would obviously change the state tort law dynamic. Tort law damages for medical expense might become completely unavailable if an injured plaintiff received free or very low cost medical care as a matter of right. And this has workers’ compensation theoretical implications. Just as the dynamic of the quid pro quo is (or should be) impacted by the replacement in modern negligence law of contributory negligence and assumption of the risk defenses by comparative negligence (theoretically raising the “tort value” of a claimant’s workers’ compensation claim), the severe reduction of employee injury-related medical expense might similarly change the current conception of the quid pro quo. The reduced contours of theoretical employer tort liability would diminish theoretical tort damages for employees. Within the next few years, in other words, the quid pro quo might effectively be stood on its head.  

Which brings me back to another discussion featured in the Rabb article—the question of monopolistic systems, where a state itself is the exclusive insurer of workers’ compensation benefits (as in my home state of Wyoming). It strikes me as very plausible that monopolistic systems would be the result of workers’ compensation no longer being profitable for private insurers. Employers’ liability (perhaps solely for indemnity benefits in some brave new world) does not disappear simply because carriers will not insure it. Either states will become insurers of last resort or the policy justifications for exclusivity will vanish. 

I suspect that deliberations of this type will intensify in coming months, as they should in my estimation.

Michael C. Duff           

Democracy, Deodands, and the British Birth of the Grand Bargain

While I generally accept Price Fishback and Shawn Kantor’s narrative holding that workers’ compensation arose in the U.S. as a Grand Bargain between multiple stakeholders, around 1911, the labor law professor/historian in me has doubted organized employee participation in the process. Although individual employees could have voted for workers’ compensation statutes (or not) as individual state citizens, organized employee groups were simply too weak in 1911 to have played more than a symbolic role in the negotiation. Moreover, unions of the progressive period (influenced substantially by Samuel Gompers and the American Federation of Labor) were—given their voluntarist leanings—lukewarm at best about government-run social insurance, generally, and about workers’ compensation in particular. They did not press for workers’ compensation, though they were later to acquiesce in its implementation. So, I have asked myself, where, if anywhere, was the worker side of the Grand Bargain negotiated?

The answer appears to be that the workers in the Anglo-American legal structure pressed their end of the bargain in the United Kingdom during the last quarter of the 19^th century. In working through the wonderful book, The Wounded Soldiers of Industry (written by P.W.J. Bartrip and S.B. Burman in 1983 and previously discussed on this blog by my colleague Judge David Torrey here), I have been struck by some powerful facts.

First, the United Kingdom maintained a legal society, from roughly the 11^th century, that did not accept that accidental injury should go unrecognized even where “recognition” did not necessarily entail compensation of the accident victim. The institution of the “deodand” (gift to God) was a kind of forfeiture (“noxal surrender”) of a physical item (or its monetary equivalent) that had caused the accidental death of a victim, often, though not necessarily, for distribution to the decedent/victim’s family. (This strikes me as an unusual form of social apology meant to somehow preserve order). Deodands had become kind of a joke by the 18^th century. Not much value was involved when the instrument of death was an axe, a large cauldron of water, or even a horse-coach, so why bother (then, as now, there were many ways to die accidentally). But suppose I told you that the instrument of death was a locomotive, a large industrial machine, a transoceanic ship, or land surrounding a coal mine. And suppose I further told you that “coroners’ juries” comprised of the local citizenry decided the value of the deodand; and that they were not infrequently angry about the accident. Small wonder that one of the main motivations behind Lord Campbell’s Act (the Fatal Accidents Act), enacted in 1846, and known by many lawyers as the statutory beginning of wrongful death and survival tort actions, was the elimination of deodands. In fact, another Lord, Lyttelton, was the true progenitor of the bill that could potentially compensate the widows and orphans (even though for other reasons they would quite likely lose their tort cases). For Campbell, victims’ rights may have been an afterthought. For more see Wounded Soldiers, Chapter 4; see also Harry Smith’s, From Deodand to Dependency, 11 American Journal of Legal History 389 (1968).   

Second, the British Trade Unions Congress (TUC) was formed in 1868, and increased in membership from 255,000 in 1872, to 750,000 in 1873, to 1,200,000 in 1874. In 1874, trade unionists began to be elected directly to parliament, and by 1880 the first of the British employer liability statutes was passed in the U.K., in no small measure as a result of constant pressure applied by the TUC. (An employer liability statute made it easier for a plaintiff to prevail in a tort case by eliminating the affirmative defenses of assumption of the risk and the fellow servant rule; employer liability statutes still exist in the United States in the form of the Federal Employers’ Liability Act and the Jones Act). It appears therefore to have been the expanding might of the British labor movement that provided industry with a stark choice between potentially increasing negligence liability and what would become (in 1897) a workers’ compensation statute.

Finally, the British expanded the right to vote in 1867 (doubling the electorate from 1832 levels), and by 1884 the electorate had tripled (including large infusions of industrial and agricultural workers). It was only after 1884 that the majority of U.K. adult males had the right to vote for the first time in British history (women won the right to vote in 1918). Is it really any wonder that exploding democracy, both at the ballot box and within workplaces, led to workers’ compensation acts in 1897 and 1906, and to universal health care in the U.K. by 1911—especially in a society with a deodand legacy evincing social guilt over the fact of accidental injury? By the time American investigators began actively exploring, in about 1908, solutions for the burgeoning industrial work injury crisis their remedial options were quickly understood to be comprised of a choice between two workers’ compensation models. They could select the British Grand Bargain (consisting of a statute that would be entirely recognizable to most modern American workers’ compensation practitioners—despite exclusivity being deemed unnecessary given the enormous time and expense of suing in torts, even where cases had merit). Or investigators could choose German-style workers’ compensation embedded within a broad social insurance regime embracing more aspects of public life than the American constitution seemed (and perhaps still seems) able to accommodate. (I provide an account of the process and developments here).

Michael C. Duff  

The (Latest) Big Uber Settlement and Teaching Employee Status to Workers’ Compensation Students

As fate would have it, news of Uber’s recent 20 million dollar settlement with “misclassified” (mal-classified?) drivers has reached my “ears” just as my workers’ compensation class is embarking on the course’s “employment relationship” material. As I see it, the employee-status/definition landscape is beginning to stabilize in the sense that state employment blocks, or zones, are starting to emerge, which should assist in settlement of jurisdiction-specific employee misclassification suits. You’ve got the ABC test (though often not in workers’ compensation contexts) – primarily California, New Jersey, and Massachusetts. You’ve got the default Restatement 2d of Agency, Section 220(2) test, and you have the spreading Handy Inc. zones, mainly in the south and Midwest. Under federal employment law you have either an economic realities test or some expanded variant of a common law-like factor test.

California (always a barometer of future developments and reactions thereto) – will probably codify the ABC test in an array of employment law contexts post Dynamex. Whether that test will migrate to its workers’ compensation regime (still utilizing the Borello/Restatement 2d of Agency 220(2) 10-factor test with an emphasis on the right to control) remains to be seen. An interesting California bill, AB 71, offered by Republican Assemblywoman Melissa Melendez, would retain the 10-factor test, but, in a twist, create a presumption of employee status when the worker is performing work (or working for someone who is performing work) for which a contractor’s license is required under California law. This compromise approach, like the ABC test, would place the burden on the employer/carrier to prove that the individual is not an employee, but would retain the multiple factor scope of analysis beyond what is required under the ABC test (The worker is free from the control and direction of the hirer in relation to the performance of the work, both under the contract and in fact; the worker performs work that is outside the usual course of the hirer’s business; and the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hirer).

The default position, and probably still the dominant test in most of U.S. labor and employment law (and hence my default position as a teacher) is the Restatement 2d analysis itself. Most of my readers know the test well, so I will not discuss it in detail here. From a teaching perspective, one of the difficulties is to distinguish for students the “right” of an employer to control work from the actual exercise by the employer of that right. When a fact-finder marches through indicia of control, it is not always clear whether an ultimate determination is that the exercise of control has been proven or, rather, that sufficient exercise of control was evinced to show that the employer must have had the right to control. The current version of the Restatement of Agency (now 3rd) retains a 10-factor test for distinguishing between employees and independent contractors, at 7.07. I find the Restatement 3rd’s treatment of the distinction between the right to control and exercise of control no better than the Restatement 2d’s. (The 10-factor test is discussed in comment f).   

What I tell students is that there is always going to be dissatisfaction, on all sides, with a test (like the Restatement 2d of Agency test) that cannot produce predictable outcomes. But the very reason factor tests exist is that a clear rule either cannot, or for political reasons has not, been developed. I say “political” because these disputes often mask the uncomfortable truth that there was never overwhelming support for the policies embedded in the statutes under discussion. Although I do not agree with their position, I fully understand and acknowledge that significant interests in our society, though not popular majorities, opposed (and many have never ceased opposing) ideas like workers’ compensation, compulsory wage and hour laws, antidiscrimination laws, the right of employees to organize unions, and so forth, as impinging on fundamental liberty. Battles over employee-status reveal the never-completely-healed fault lines of the original struggles for these statutes and polices.

The way some federal statute drafters escaped from the wet blanket of employee definition was (predictably enough) to develop a statutory employee definition that was more likely to produce findings of employee status, for example the Fair Labor Standards Act’s “economic realities” test. The very first prong of that test will have the tendency to explode the putative existence of many independent contractor relationships: “the extent to which the worker's services are an integral part of the employer's business: ‘Does the worker play an integral role in the business by performing the primary type of work that the employer performs for his customers or clients?’” Think Uber could ever argue its’ drivers are independent contractors if the fact finder was focused on that prong? You will also note that regardless how aggressively a state attempts under its employment laws to facilitate the narrowing of employee definition, the IRS retains its 20-factor test (a net from which relatively few will wriggle free) and ERISA utilizes common law Darden factors to sweep up many employees states might seek to exclude as independent contractors.

The foregoing leads inexorably to the phenomenon of last year’s Handy, Inc. laws (discussed on this blog) many of which applied to workers’ compensation statutes. These laws make it much easier to classify someone as an independent contractor who would almost certainly be classified as an employee in, say, California or under federal law. I ask students to consider such laws as exemplars of frustration, but also as potential agents of deregulation. Injury costs never disappear, they shift (I’m willing to wait for the empirical data some claim to require in order to become assured of this somewhat “Pythagorean” axiom). If a Handy statute cuts off a workers’ compensation claimant’s recovery, the cost will shift somewhere. I also wonder about one of the problems that led to the creation of aggressive ERISA preemption in connection with discretionary employee benefits: races to the bottom can have the effect of creating significant national disuniformity for employers and insurance carriers calculating future labor costs. Unless one envisages a deregulated (dystopian?) Handy Inc. or opt-out future, the disuniformity should be taken seriously. Employers in Handy states remain fully bound to most of the “heaviest” employment law they will encounter, and their HR departments, one imagines, must be pretty confused. My law students certainly did not produce this confusion, but I suspect they may be among its beneficiaries.

Michael C. Duff   

Database of State Tort Law Reforms

I'm cross posting this entry from an entry in the TortsProf Blog last month. Because the allowable constitutional scope of state workers' compensation reform tracks the allowable constitutional scope of state tort reform, it is useful to have sources tracking tort law reform, and the Database of State Tort Law Reforms is a very good one: 

Ronen Avraham has posted to SSRN Database of State Tort Law Reforms (6.1).  The abstract provides:

This manuscript of the DSTLR (6th) updates the DSTLR (5th) and contains the most detailed, complete and comprehensive legal dataset of the most prevalent tort reforms in the United States between 1980 and 2018. The DSTLR has been downloaded more than 2700 times and has become the standard tool in empirical research of tort reform. The dataset records state laws in all fifty states and the District of Columbia over the last several decades. For each reform we record the effective date, a short description of the reform, whether or not the jury is allowed to know about the reform, whether the reform was upheld or struck down by the states’ courts, as well as whether it was amended by the state legislator. Scholarship studying the empirical effects of tort reforms relies on various datasets, (tort reforms datasets and other legal compilations). Some of the datasets are created and published independently and some of them are created ad-hoc by the researchers. The usefulness of these datasets frequently suffers from various defects. They are often incompatible and do not accurately record judicial invalidation of laws. Additionally, they frequently lack reforms adopted before 1986, amendments adopted after 1986, court-based reforms, and effective dates of legislation. It is possible that some of the persisting variation across empirical studies about the effects of tort reforms might be due to the variations in legal datasets used by the studies. This dataset builds upon and improves existing data sources. It does so through a careful review of original legislation and case law to determine the exact text and effective dates. The fifth draft corrects errors that were found in the fourth draft, focuses only on the most prevalent reforms, and standardizes the descriptions of the reforms. A link to an Excel file which codes ten reforms found in DSTLR (6th) can be found here: http://www.utexas.edu/law/faculty/ravraham/dstlr.html. It is hoped that creating one “canonized” dataset will increase our understanding of tort reform’s impacts on our lives.

 

Michael C. Duff

 

Workers’ Compensation Teaching: The Odd Lot Doctrine & Work Search

A common problem in workers’ compensation is the partially incapacitated worker who is unable to return to the “injury employment” as a result of an unambiguously work-related injury. For some period of time, the worker may be deemed by all parties to be uncontroversially entitled to temporary total benefits. After some passage of time, however, payment of (frequently voluntarily provided) total benefits may be controverted, often when maximum medical improvement is established. The existence of a substantial, work-related, permanent partial disability may be evident. But the worker is usually required to provide some evidence of the inability to find work within work-caused medical limitations to remain eligible for total benefits. To quote the Larson’s treatise formulations, “If the evidence of degree of obvious physical impairment, coupled with other facts such as claimant’s mental capacity, training, or age, places claimant prima facie in the odd-lot category, the burden should be on the employer to show that some kind of suitable work is regularly and continuously available to the claimant.” If, on the other hand, “the claimant’s medical impairment is so limited or specialized in nature that he or she is not obviously unemployable or relegated to the odd-lot category, it is not unreasonable to place the burden of proof on that claimant to establish unavailability of work to a person in his or her circumstances. This ordinarily would require a showing that the claimant has made reasonable efforts to secure suitable employment.”

Unfortunately, regardless the number of times the word “obvious” is invoked as a modifier, the issue is often not obvious at all: when is an impairment “obvious” and how many “other facts” must be established to place the employee prima facie in odd lot status? When is a worker “not obviously unemployable”? The distinctions are of consequence and not mere verbal antics. To the extent a dispute erupts over the adequacy of a claimant’s work search, one party or the other may effectively be placed in the position of attempting to prove a negative: why is the worker not obtaining work? In my workers’ compensation textbook, I juxtapose two work search cases: one from Wyoming, Moss, and one from Maine, Avramovic. Wyoming formally recognizes the odd lot doctrine. Maine apparently does not: its statute allows for “100% partial” benefits, and Maine courts appear not to have used the phrase “odd lot” for decades (similar ends seem to be achieved through payment of “100 percent partial” benefits). The paradox I pose for students is whether claimants are better off with or without a rigid rule on “odd lot.” In the Wyoming case, decided under a facially strong odd lot rule, the worker performed what I consider an excellent work search, had strong medical evidence in his favor, received the litigation benefit of a state supreme court “calling out” its own administrative fact finder as blatantly unfair, and nevertheless lost the case. In the Maine case, the state supreme court reversed a hearing officer’s finding that a work search was inadequate because the official did not tightly conform to a 9-factor work search test. Perhaps when the stakes are higher (an odd lot permanent award versus a presumably more reviewable partial award) the prospects for claimant litigation success diminish.

Under the Longshore and Harbor Workers’ Act, the rule seems to be that a partially incapacitated employee unable to perform her “usual employment” is prima facie totally disabled. Elliott v. C & P Telephone Co., 16 BRBS 89, 91 (1984). The claimant having satisfied her initial burden, the employer must show that “there exists a reasonable likelihood, given the claimant’s age, education, and background that he would be hired if he diligently sought the job.” Importantly, “the employer must show the precise nature, terms, and availability of the jobs.” If the employer satisfies that burden, the employee can still prevail by showing that she diligently tried and was unable to secure such employment. Obviously, federal systems (typically liberal construction) are different from state systems, and this burden shifting mechanism quite evidently privileges full benefit coverage.    

Given the variability of work search systems, It is difficult to explain to students the essence of work search and the odd lot doctrine. Is work search a mitigation doctrine? Is it an attempt to determine whether an employee has voluntarily withdrawn from the workplace? Seen through the eyes of an angry worker (I feel both under compunction and emboldened to speak of such things because I spent 15 years as a blue collar worker before attending law school: 1977-1992), it is hard to explain why, after having been ripped involuntarily from remunerative employment, he or she must jump through hoops to qualify for the princely sum (if lucky) of around the state average weekly wage. As I tell my students, you do not have to agree with this “angry injured worker” perspective, but you do have to understand it in order to be an effective advocate on any side of a workers’ compensation dispute.

Michael C. Duff