Wednesday, January 22, 2020

Skeptical Ruminations on Walmart "Mass Workers’ Compensation Settlements"

I am not implacably opposed to all that is new. Indeed, I think we need a new, New Deal, and I am not so confident to claim that I know exactly what that should look like. But I’m also a product of my experience. And as someone who has battled companies like Walmart in the trenches, while employed as a trial attorney with the National Labor Relations Board fighting for employees’ union organizing rights, I’m also not about to give certain actors the benefit of the doubt. So when I see a story like the one I saw in WorkCompCentral recently (behind paywall here), about how Walmart has devised an efficient “mass settlement” program—a bunch of employees, judges (!!), and lawyers gathered in the same Walmart facility at the same time to settle cases—and how the company is “all in” on settling cases, I’m not going to lie, my first reaction was “uh oh.”

Nevertheless, the way I try to react to all new things I hear about is to apply simple cost-benefit analyses having an emphasis on the bottom-line benefit for working people. That is how I would have approached the original New Deal. Want to sell me on the virtues of arbitration, workers’ compensation opt-out, Walmart mass settlements, the Gig economy, or any other innovation? It’s simple – just show me how working people are better off under the arrangement. Notice I didn’t say “just show me the change is pareto efficient.” Imagine I have two marbles, and you have a mountain of marbles. Then we make a trade. Now I have three marbles and you have an even bigger mountain of marbles. That trade was pareto efficient – someone (in this case both transacting parties) was made better off, and no one was made worse off. But did I mention that at the time we made the trade I was in dire poverty, and that the trade did nothing meaningful to alleviate my poverty? When pareto efficient, wheeling and dealing (a.k.a. innovation coupled with economic rent seeking) is made in a preexisting context of social contract erosion, it is hard to see how something good has happened.

These days, I have become aware that it is increasingly rare for the economically powerful to even attempt to demonstrate why their schemes are better for ordinary people. I’m constantly telling people that my late dad was the type of Republican who would try to demonstrate how his viewpoint would actually be better for ordinary people. I always respected him for that quality. And even though we frequently disagreed, I thought that if he and I were in a room for long enough we might actually be able to come up with something workable (temporarily, at least). So, my bottom line on Walmart mass settlements is this: show me how much injured workers are receiving in these settlements, and describe for me the process under which the deliberations are carried out. Transparency is everything. If you won’t show me, I don’t believe you. Or to put it in lawyer-speak, I will draw an adverse inference, and assume the arrangement will be worse for working people, not better.

Michael C. Duff

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