Friday, April 10, 2020

And Now For Something Completely Different: Black Swans and other Workers’ Compensation Tales

I had kind of a love/hate relationship with Harvard Law School when I was a student there. Because I am rather an instinctive anti-factionalist—I don’t align well with political parties or other true believers—a lot of my time on that campus was unhappy. After working in the rain as a laborer for 15 years before law school, deepening an authentic love for my working class brothers and sisters, I didn’t care much for flowery speeches that did not (eventually) lead to more “real” money in the pockets of working people. But, for all that, I did learn a few things at the Harvard Law School. The somewhat controversial torts professor David Rosenberg had a big influence on me. I agreed and disagreed with him in all kinds of areas, but I heard him and engaged with his ideas. He used to do an in-class performance in which he would roll up his pant-leg, somewhat John Cleese-like (I’m presently in a very Python-esque frame of mind), and implore us not to allow legal doctrine to “stick to us.” Then, he would colorfully high-step around the room.

When I talk and think about the fragility of legal structures—including workers’ compensation—I tend to operate in Rosenberg’s spirit. We all have a recency bias. It is a survival mechanism. We tend to believe that tomorrow will be like today. But anyone who has talked to me for longer than 15 minutes knows that I don’t place recency on a pedestal. I have written over the years about the dangers to workers’ compensation of arbitration, of “opt out,” and of de facto deregulation of employment law (including workers’ compensation) through incessant tinkering with employee/independent contractor law. Also perpetually in the back of my mind lurks the idea that those employers who don’t want to pay “anything” for their workers, who embrace the strongest, thickest notions of profit maximization, are always experimenting with how to take the next major step in dramatically reducing costs. Then, when the Black Swan, the truly unexpected event, emerges, the structures that have been developed and experimented on are ready for roll-out. Does this seem paranoid? I don’t care.

There are always countervailing forces. When, in the early-20th century, during the ravages of unprecedented industrial killing and injuring fields, some captains of industry were arguing that any regulation of the injury “externalities” created by their operations violated the Constitution, workers’ compensation and liability laws arose as such a countervailing force. Now, in the throes of widespread disease and illness, some would be satisfied with spitting out a few thousand dollars per worker as an adequate remedy for what will likely be long-term, catastrophic impacts on life-chances. It matters little to me where larger visions are born. Robert Snashall, former chair of the New York Workers’ Compensation Board, proposes:

As part of the next Federal Relief Package, a Covid-19 Federal Death Benefit Fund be created and administered by the September 11th Victim Compensation Fund (VCF) with procedures adopted by the VCF; The family of any worker who dies from Covid-19 be allowed to file a claim for death benefits subject to a maximum specified dollar amount; Such death benefit claim shall be afforded a presumption that the Covid-19 is related to the decedent’s work duties; and, Such benefit claim must be reviewed and processed by the VCF and the final death award be paid within 90 days subject to any reasonable analysis and adjustment by the VCF.

Josh Hawley, conservative senator from Missouri, proposes that businesses be provided with refundable payroll tax rebates reimbursing about 80 percent of payroll costs and additionally be given rehiring bonuses for businesses for the duration of the crisis. He argues that such reimbursements “will prevent unemployment offices from being overwhelmed, keep Americans from going into debt and give families a sense of confidence that a job is waiting for them when the crisis is over.”

As an advocate for the interests of the working class, I react to Snashall and Hawley—without regard to their apparent political affiliations, which, in the current political climate, has come to mean almost nothing—in the same way I react to Mark Warner’s portable benefits schemes: what is the “cash value” to workers of these proposals? Ultimately, I embrace a broader utilitarianism than this, but there are always (well-paid) advocates for the “other side.” And rest assured that, although current constitutional law would suggest that Congress has the authority to implement many big ideas, “law” can change very quickly during historical emergencies. Do not be surprised to hear more and more about how big fixes will deprive certain propertied persons of property without due process of law.

But no matter where you are “coming from,” I would respectfully suggest that it is getting harder and harder to rationally accept that we are simply in the midst of a tricky day. Sitting here, quarantined on the high prairie in the middle of a health crisis and an almost unbelievable financial crisis (discussion of which is beyond the scope of this post but I’ll just note that I also teach bankruptcy), this humble observer thinks that tomorrow will usher in something completely different. What will workers’ compensation look like tomorrow? Probably not like it does today.

Michael C. Duff

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