Sunday, April 5, 2020
To say that this is a challenging semester in which to be teaching law is an understatement. Each of us is facing unprecedented obstacles; and in my little corner of the world I am presented with the dilemma of trying to keep law students, whose lives have been turned upside down, dialed in to learning. This semester I’m teaching workers’ compensation law and bankruptcy, bodies of law that are likely to be tested in unforeseen and perhaps unforeseeable ways.
These developments have caused me to hew even more closely to general bedrock workers’ compensation principles that students can have confidence will apply in most places. With respect to causation/coverage, workers’ compensation deals with “injuries by accident arising out of and in the course of employment.” My class had already unpacked most of the major issues tending to emerge from that deceptively simple formula before we all went into quarantine.
Now, post-quarantine, we are embarking on categories of benefits (assuming causation) that are arrayed from determinations of an injured worker’s extent of incapacity (or "disability" or work-related "impairment" if you prefer). Total benefits present little conceptual difficulty. I engage in the obligatory hemming and hawing at the puzzling reduction of benefits from the “average weekly wage” to the typical two-thirds of that figure (one-half under the original 1897 British Act). “We don’t want injured workers—dazzled at the prospect of receiving the full state average weekly wage, the cap in many states—to simply stop working. We also don’t want them to engage in riskier behavior as the economists (but no one who has ever personally engaged in dangerous work) tell us they will.” It is difficult to explain a state like the one in which I teach, Wyoming, that limits receipt of “permanent” total benefits to 80 months (with the possible extension of an additional four years at the discretion of the relevant state agency). Is that an adequate quid pro quo for the loss of a tort suit? Is it adequate under anyone’s definition of adequacy? [Think of the 25-year-old rendered a quadriplegic by a work-related injury]. Surely, tort damages would have factored in all wages a worker lost – and that fails to consider pain and suffering or punitive damages. Puzzled looks from students (though harder to see on Zoom) – I move on.
In the wonderful world of permanent partial benefits, things quickly break down pedagogically. It is pretty easy to explain to students the wage loss model: injured workers are compensated for a percentage of the difference between their pre-injury and post-injury wages. Simple enough. How do we choose the percentage? Why do some jurisdictions employing this model pay benefits only for a limited period and not for the duration of the disability? “It’s too expensive.” Would a handful of very successful tort suits be less expensive? As Oliver Wendall Holmes explained, “The life of the law has not been logic: it has been experience . . . ” I move on.
Earning capacity models are similarly pretty simple to explain conceptually: instead of compensating for actual and determinable wage losses compensate instead for the difference between pre-injury wages/earning capacity and post-injury earning capacity. What is the measure of post-injury earning capacity? Prima facie it is the amount a worker is able to earn in the first post injury employment. If there is no post-injury employment, we guess with (dueling) labor market evidence (of often shaky provenance – I used to depose “experts” with 9 credits of undergraduate work). Furthermore, if there is post-injury employment, it may for a variety of reasons be an unreliable indicator actual post injury earning capacity. Do you think my sharp upper-division students are satisfied with this discussion? I move on.
At this point, many students will be receptive to the idea that perhaps a simplified proxy for wage losses (which must be continually monitored) and loss of earning capacity (which is, even in theory, imprecise) is desirable. Then I am required to expose them to “impairment-based” models of disability; to the arbitrary world of “scheduled” injuries in which a hand is worth 104 weeks of benefits and an arm at the shoulder worth 208 weeks at $300 per week (to borrow just a couple of examples from the Colorado structure). What is behind this odd architecture? Well, I agree with John Burton’s assessment (derived, as he has explained to me personally, from his understanding of Arthur Larson’s teaching) that schedules, and the permanent impairment determinations that drive them, are proxies for work disability. But as any sharp law student can quickly see—we advanced thinkers spend much time and energy forgetting this later on—there is very little explicit relationship drawn (or even attempted to be drawn) between actual disability wage losses (in either the aggregate or as applied in a particular case) and partial disability benefits paid. In other words, upon what—precisely—are the proxies based? Or to put it in law student terms, where do the numbers 104 and 208 come from?
This was Professor Burton’s problem when commenting on New York’s proposed changes to its scheduled loss of use (“SLU”) Guidelines back in 2017. Burton had no difficulty showing that “there [was] no indication that the proposed Guidelines considered any evidence on factors (1) that may affect the consequences of workplace injuries on the extent of the resulting impairment or (2) that may affect the impact of impairments on the resulting work disability. In short, there [was] no evidence that the proposed Guidelines [were] evidence-based.” The problem is that very little in the realm of impairment-based workers’ compensation seems ever to have been evidence-based. And in terms of the proxy-nature of permanent impairment—that is, the idea that it is and has been a proxy for disability—it is difficult to know what to make of the 1917 Bureau of Labor Statistics summary of American statutes that showed, even then: scheduled payments in addition to all other payments, scheduled payments as a supplement to temporary total disability, and scheduled payments supplementing wage-loss or earning capacity models. (See here at pp. 58-72). My sharper students have over the years proposed refinements along the lines of John Burton’s proposal in his commentary on the 2017 proposed New York Guideline changes: “the Workers’ Compensation Board should commission a wage-loss study of injured workers who received permanent partial disability (PPD) benefits in New York to determine if the current PPD benefits are adequate and equitable.”
Until one can say that, nationally, the bottom-line receipt by injured workers of permanent partial benefits is “adequate,” it is hard to conclude (to echo the 1972 National Commission) that the system we have is acceptable. And the argument that the system may be unconstitutional (as asymmetrical quid pro quo) will continue to resonate with worker advocates until we are either willing to make the quid pro quo comparison in good faith, or come up with a different system in which none of what I’m talking about matters. Law students have "gotten" this in the past. I just hope it all comes through over Zoom and that they can still engage, during these trying times, with what I so earnestly want to teach.
Michael C. Duff