Tuesday, May 21, 2019

Reflections on a Maine Workplace Manslaughter Case

Last summer, well-known podcaster Joe Rogan debated fellow podcaster, and sometimes-libertarian, Dave Rubin about the necessity of having and enforcing building code regulations. (see the 6 minute YouTube video here – salty language alert). Rogan, who is not generally unsympathetic to libertarian positions, reacted with incredulity when Rubin suggested that high-tech apps (Yelp was the particular flavor mentioned), and rapid dissemination of a contractor’s non-compliance with best building practices, would be sufficient (for market-competitive reasons) to deter risky building practices. Why was Rogan incredulous? Because he has had family involved in the construction industry (apparently inter-generationally) and knows better (at a visceral level).

As a Maine lawyer, I was horrified to read last December of the death of 30-year-old Alan Loignon, who fell from the third-story roof of a home in the Munjoy Hill section of Portland, Maine (not far from where I first handled cases as a new workers’ compensation lawyer many years ago). According to the Portland Press Herald, in a story on May 20, the responsible contractor on the job, one Purvis,  

argued that he is not an employer and instead hires independent subcontractors, and while he encourages workers to use the extensive collection of safety gear he provides, he cannot force them to comply. Purvis said he has battled OSHA for a dozen years over this point, and has refused to pay the roughly $44,000 in fines the safety agency has tried to levy against him.

Purvis further lamented,

Every single day, I show up at the job site … and I tell them, please, be safe, everything you need is here . . . I can’t sit there 24/7 and watch subcontractors. It’s either they’re going to wear (the safety gear) or they won’t. It’s like wearing a seat belt, it’s either you do it or you don’t . . .  I can supply everything to be OSHA approved, but I can’t sit there and watch these guys all day long. That’s their job. They’re self-employed.

In addition to being wrong as a matter of both Maine law and OSHA regulation, Purvis’s account runs counter to my experience. Like Rogan, I’ve been around the block a time or two. In a prior life, when my boss required me to put something on, I put it on. But that perhaps was not really the way it happened – when my boss did not really care if I put safety equipment on, I was much less likely to put it on – especially if it took a few minutes to do so. Frankly, fairly or unfairly, I don’t believe Purvis’s account, and it doesn’t sound like anyone else does, either..

For an exercise in frustration, I would again direct the reader to a book I’ve mentioned previously: Bartrip & Burman’s, The Wounded Soldiers of Industry. The first three chapters of the book chronicle all the things we knew by 1830 didn’t work in deterring workplace injury: voluntary compliance, regulation without teeth, inspectors without authority. Oh yes – it was also claimed, back in the day, that it was the workers’ failure to provide for their own safety that was the true cause of workplace injury. One can perhaps sympathize with the decision of my former home state of Maine to conclude that some disregard of workplace safety by contractors is simply beyond the pale and rises to the level of actionable manslaughter (Maine Title 17-A §203).  

Michael C. Duff

May 21, 2019 | Permalink | Comments (0)

Friday, May 17, 2019

Wyoming’s Next Air Ambulance Gambit Falls Outside of the Confines of Workers’ Compensation

Last legislative session the Wyoming legislature decided to fight the air ambulance dispute out on a broader front. It sensibly abandoned the attempt to limit workers’ compensation reimbursement of air ambulance services and began wrestling with air ambulance expense on a universal, state-wide basis by passing a new law. There are a number of interesting features to the effort.  

First, air ambulance matters are to be administered through the state Department of Health (the Department). The Department is authorized to apply to make coverage of air ambulance transport services through Medicaid available to all Wyoming residents, an interesting form of limited Medicaid expansion (Interestingly Wyoming has rejected ACA Medicaid expansion). I do not know enough about CMS regulations to opine whether such a limited expansion is legally possible, though it strikes me as problematic. If the model were approved by the feds, the Department would create an “air ambulance transport services program.” Under the law,

There is created the air ambulance coverage account. Premium assessments collected by the insurance commissioner and state agency reimbursements paid to the department of health under this section shall be deposited into the account and used by the department to cover air ambulance transport services under this section and to implement this section. Other funds used to provide air ambulance coverage, including federal funds, may be deposited into the account. The account may be divided into subaccounts for purposes of administrative management. Funds in the account and any amounts earned from those funds are continuously appropriated and shall not lapse at the end of any fiscal period. For accounting and investing only, subaccounts shall be treated as separate accounts.

The details are reportedly being hashed out by state officials at the moment, but overall this looks from a distance like a form of state fund that would somehow commingle federal and state monies to provide universal air ambulance coverage for state residents. Air ambulance transport services covered by any program administered by the state (including workers’ compensation) are exclusively covered under the section. Then other agencies (including the Department of Workforce Services that administers workers’ compensation) pay reimbursement to the general air ambulance coverage account. As a component of reimbursement, the Department would require state agencies to pay, on a proportional basis, administrative costs necessary to implement the program.

I think legislators are on the right track here in creating a broader coverage program outside of workers’ compensation, provided it is adequate and comprehensive. But next we run into some familiar trouble. Under the law, residents or air ambulance providers would make claims for payment of air ambulance transport services to the Department. An air ambulance provider shall provide services if the provider otherwise makes air ambulance transport services available to persons in Wyoming who are eligible for Medicaid. Under W.S. 42-4-123(c), an air ambulance provider who provides services shall accept payment under this subsection as full satisfaction of all charges, costs and fees relating to air ambulance transport services, except as provided in 42-4-123(d). That subsection, in turn, states:

An air ambulance provider shall collect a copay or other cost sharing requirement for services covered under this section, as established by the department and consistent with federal requirements, based on the following:

 (i)  For persons who are eligible for Medicaid independent of the coverage provided by this section, any copay or other cost sharing requirement shall be consistent with the copay or cost sharing requirement specified for other services under Medicaid;

 (ii)  For persons who are not eligible for Medicaid independent of the coverage provided by this section, any copay or cost sharing requirement shall be proportionate, based on income and shall not be greater than fifty percent (50%) of the allowable costs for air ambulance transport under this section, as determined by the department. 

On one reading the legislation continues to reference “rates, routes, and services of an air carrier.” Morales v. Trans World Airlines, Inc., 504 U.S. 374, 378 (1992). Indeed, this state law explicitly caps rates to 50% (of whatever—it does not matter to what the cap references). Also, tethering rates to federal reimbursement rates is still accomplished through state legislation, so I really cannot imagine a federal court analyzing preemption issues any differently than they have been doing. Indeed as a Kansas state appellate court stated last summer in EagleMed v. Travelers Ins.,

In the alternative, Travelers contends that the Division of Workers Compensation should apply the Medicare fee schedule for air ambulance providers to EagleMed's bills in order to resolve the fee dispute between the parties. In 1965, Congress enacted the Medicare program as Title XVIII of the Social Security Act to provide health insurance coverage to the elderly. Congress later expanded the Medicare program to provide health insurance coverage to certain disabled persons . . .

Based on our review of the record on appeal, we find nothing to suggest that the four injured workers are eligible for Medicare coverage either because of age or because of disability. We also find that the issue of whether to use the Medicare fee schedule to establish the amount air ambulance services may charge to non-Medicare patients is related to the prices charged by air carriers. Moreover, this appears to be a public policy decision that should not be decided by state agencies or state courts. Thus, we also find this issue to be subject to federal preemption.

Barring Supreme Court re-visitation of ADA preemption, or Congressional modification of the Airline Deregulation Act, I would expect most courts to react in similar fashion to anti-preemption arguments premised on state regulation of rates connected to federal benefit reimbursement rates. My guess is it would not take air ambulance companies’ counsel long to write the brief challenging the Wyoming law if it is implemented and applied to one of their number. It is also possible that the state is merely setting up a kind of sub-monopolistic fund meant merely to partially compensate its residents for the staggering costs of air ambulance transportation. But even if that is so, the balance will have to come from somewhere, and the legislation still references rates. This may be a good lesson to state legislatures on the meaning of reference preemption. See District of Columbia v. Greater Washington Bd. of Trade. Still, I sense progress.

Michael C. Duff

May 17, 2019 | Permalink | Comments (0)

Thursday, May 16, 2019

More Federal "Guidance" on Gig Economy Workers - Stale and Not Illuminating

As a professor of traditional labor relations law in addition to workers' compensation law (and as co-author of a labor law textbook), I took notice when people started messaging me that the law of employee status in labor law had changed. It hasn't. The National Labor Relations Board (NLRB) applied the traditional Restatement Second of Agency 10-factor test to conclude in an Advice memorandum that the particular workers analyzed in the memorandum--three separate "units" of Uber drivers were independent contractors.  The cases were consolidated in Region 20 of the NLRB (San Francisco) and the charges were filed in 2015 and 2016. The fact that it took well-nigh three years to get a "recommendation" out the door telling regional offices whether they may even pursue such cases says quite a lot. The cases were slow to coordinate (personnel shortages at the agency?) and no doubt there was a good deal of internal debate and dissension. The fact that the cases were not instantly dismissed suggests they were placed in process on the watch of the "Obama board" and difficult to perfunctorily shake.

I worked in two separate regional offices during my career with the NLRB from 1997-2006. As I tell my labor law students, to death and taxes as among life's certainties, one could perhaps add competing, irreconcilable NLRB "Advice" memoranda. (There is nothing "advisory" about Advice memos - NLRB regional offices must follow them). What are these memos? When a new political party takes power, the new General Counsel (a political appointee) and his/her coterie issue various directives to NLRB regional offices saying, in effect, to pursue/not pursue issues of interest to the new politically-motivated (elections, regardless who wins, have consequences) cast of analysts. The selected issues have usually been contested for years and the internal vacillation is anticipated by career folks (making labor law kind of a nightmare to teach in law school). Are inflatable rats protected labor speech or secondary boycott activity? Are graduate students employees? Are college football players employees? Is McDonald's headquarters a joint employer with its franchisees? The statute (in this writer's opinion, intentionally) provides no guidance.   

What then is the impact of the Uber Advice memo? Agencies' decisions not to issue complaints alleging violations of law are nearly unreviewable by the courts. So anyone alleging at the NLRB that an Uber driver was fired for engaging in union activity will not receive the benefit of the awesome remedial arsenal of the NLRB (insert wry smile here--no mitigated back pay or notice posting? A tragedy!). Similarly, anyone trying to gain governmental certification of a bargaining unit of Uber drivers may be out of luck (though there is an interesting question as to whether categorical exclusion of Gig workers under federal law would give states labor relations jurisdiction they would not otherwise possess -- maybe the drivers can be union-certified under California law: the rule of unintended consequences).  I also suppose in passing that if the NLRB takes the position the drivers are not employees it will not be able to pursue in federal court secondary boycott injunctions against the organizations representing the drivers when those organizations show up at the doorsteps of neutral employers.

In terms of black letter law the only thing worth noting is that the NLRB is predictably following the D.C. Circuit Court of Appeals and, I think, is even hyper-emphasizing “entrepreneurial” opportunity as a factor in determining employee status, a development that I and others have previously derided at some length.  

Michael C. Duff

May 16, 2019 | Permalink | Comments (0)

Tuesday, May 14, 2019

Why Federal Equal Protection Challenges to Workers’ Compensation Statutes Don’t Work

I do not believe that interference with workers’ compensation rights are subject to vindication under the equal protection clause of the United States Constitution (even when the interference is vicious or unfair) because the obstruction does not disadvantage a suspect class or impermissibly interfere with fundamental rights as currently conceived in American law. Thus, for anyone seeking to challenge a workers’ compensation law because it singles out workers’ compensation claimants for unfair treatment, I recommend either selection of a different federal theory (I’ll be discussing federal due process analysis and expanding upon 9th Amendment theory in upcoming posts) or mounting a challenge under state constitutional provisions. (I think there may be some room to argue for intermediate scrutiny, but such approaches have not yet been successful – I write about them here.) Every couple of years I feel it necessary to go through this exercise for the benefit of those healthy individuals whose hobby is not federal constitutional law.

The appropriate standard of review outside of the categories I have mentioned above is whether the difference in treatment between classifications (workers' comp/non-workers' comp) rationally furthers a legitimate state interest. In general, the Equal Protection Clause is satisfied so long as there is a plausible policy reason for the classification, see United States Railroad Retirement Bd. v. Fritz, 449 U.S. 166, 174, 179 (1980). But states are not required to convince the courts of the correctness of their legislative judgments. Rather, “those challenging the legislative judgment must convince the court that the legislative facts on which the classification is apparently based could not reasonably be conceived to be true by the governmental decisionmaker.” Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456, 464 (1981); Nordlinger v. Hahn, 505 U.S. 1, 11 (1992); Armour v. City of Indianapolis, 566 U.S. 673, 685 (2012). A legislature need not “actually articulate at any time the purpose or rationale supporting its classification.” Nordlinger at 15. Rather, the “burden is on the one attacking the legislative arrangement to negative every conceivable basis which might support it.” Madden v. Commonwealth of Kentucky, 309 U.S. 83, 88 (1940); Armour at 681. A law is constitutionally valid if “there is a plausible policy reason for the classification, the legislative facts on which the classification is apparently based rationally may have been considered to be true by the governmental decisionmaker, and the relationship of the classification to its goal is not so attenuated as to render the distinction arbitrary or irrational.” Nordlinger at 11. And there is such a plausible reason if “there is any reasonably conceivable state of facts that could provide a rational basis for the classification.” FCC v. Beach Communications, Inc., 508 U.S. 307, 313 (1993). A classification is generally valid as long as a rational basis is plausible, even if the legislature did not expressly endorse it. See Beach Commc’ns at 313–15; Indiana Petroleum Marketers & Convenience Store Ass’n v. Cook, 808 F.3d 318, 322 (7th Cir. 2015). Rational-basis review tolerates overinclusive classifications, underinclusive ones, and other imperfect means-ends fits. Heller v. Doe, 509 U.S. 312, 319–320 (1993); Gregory v. Ashcroft, 501 U.S. 452, 473 (1991); Vance v. Bradley, 440 U.S. 93, 107–09 (1979). The standard also imputes “a strong presumption of validity” on the contested classification. Beach Commc’ns at 314–15. To over-come that presumption, a challenger must negate “every conceivable basis which might support” the classification. St. Joan Antida High School, Inc. v. Milwaukee Public School District, 919 F.3d 1003, 1010 (7th Cir. 2019).

My advice: Pick another theory.

Michael C. Duff

May 14, 2019 | Permalink | Comments (0)

Friday, May 3, 2019

DOL’s FLSA “Gig” Economy Letter Ignores History and is Dwarfed by 9th Circuit’s Jan-Pro Case

I have been asked a couple of times this week to comment on the apparent narrowing of the FLSA employee standard in a recent Wage and Hour Opinion letter. In a nutshell, the letter tells me nothing I did not already know. “Virtual Marketplace Companies” badly want advance governmental imprimatur for the argument that, although they employ labor, they are not employers. The letter is not really worth analyzing because it is cautiously cabined and advisory: the facts underlying the analysis were spoon-fed to the Wage and Hour analysts in a manner most likely to lead to the foreordained conclusion that the workers in question are independent contractors. It is however telling that the anonymous solicitor of the opinion frames the questions in terms of all “virtual” companies connecting “service providers to end-market consumers to provide a wide variety of services, such as transportation, delivery, shopping, moving, cleaning, plumbing, painting, and household services.” The bloom is off the rose with respect to the hegemonic designs of this deregulatory project. Silicon Valley Gig work is a quaint anachronism. And it should be remembered that is some states these marketplace contractor laws have been applied to workers' compensation.

Anyone wanting to read the actual employee-status intent of Congress in enacting the Fair Labor Standards Act (the statute at the center of the current Wage and Hour letter) would do much better reading David Weil’s Administrator’s interpretation (Weil was a former Democratic Wage and Hour administrator). While Weil’s analysis is also a political document, it contains a far more comprehensive account of the FLSA employee question, including this nugget from the Congressional history as quoted in footnote three of the Supreme Court’s opinion in U.S. v. Rosenwasser:

Sen. Rep. No. 884 (75th Cong., 1st Sess.) p. 6, states that the term “employee’ is defined to include all employees. * * *’ Senator Black said on the floor of the Senate that the term ‘employee’ had been given ‘the broadest definition that has ever been included in any one act.’ 81 Cong.Rec. 7657. (emphasis supplied)

Also from Rosenwasser,

The term ‘employee’ is defined in Section 3(e) to include ‘any individual employed by an employer,’ with certain exceptions not here pertinent being specified in Section 13, and the term ‘employ’ is defined in Section 3(g) to include ‘to suffer or permit to work.’ A broader or more comprehensive coverage of employees within the stated categories would be difficult to frame. (emphasis supplied)

All I can say is that I would feel pretty confident litigating an FLSA “virtual marketplace” employee case, even if Chevron deference were applied by the courts to the DOL interpretation. Unless the worker in question is in fact a computer (or perhaps a robot), I’d like my chances under current law.

Meanwhile, the 9th Circuit’s opinion in Vazquez et al. v Jan-Pro Franchising brought application of the ABC test to Jan-Pro franchisor-franchisee “arrangements” closer to a day of substantive reckoning. The Jan-Pro structure is an elaborate scheme which, at the end of the day, unsurprisingly classifies janitors as independent contractors who, accordingly, are denied statutory labor protection. After a tortuous procedural journey worthy of study in any first year civil procedure class (there was ancillary litigation in both Massachusetts and Georgia), the 9th Circuit concluded that none of the prior litigation was entitled to preclusive/res judicata effect (the specific litigation under review in the 9th Circuit involved California state-law plaintiffs and had been severed from earlier diversity of citizenship rounds of litigation). Accordingly, with the California-based litigation remaining “live,” the substance remaining was whether employee-status questions would be controlled by Dynamex (establishing the ABC employee standard for California wage orders), which had been decided well after the onset of the Jan-Pro litigation. The 9th Circuit answered in the affirmative. The Court first reminded readers that, “[t]he principle that statutes operate only prospectively, while judicial decisions operate retrospectively, is familiar to every law student.” The Court concluded on this point that “[g]iven the strong presumption of retroactivity, the emphasis in Dynamex on its holding as a clarification rather than as a departure from established law, and the lack of any indication that California courts are likely to hold that Dynamex applies only prospectively, we see no basis to do so either.”

The second major issue was whether applying Dynamex (the ABC employee status standard) retroactively would offend due process because, among other reasons, Jan-Pro had relied on the old standard. (An exception to the retroactively rule at times under California law). The Court found that a state court modifying common law was entitled to deference exceeding that afforded during rational basis review of a legislative enactment (that is a lot of deference). The 9th Circuit further concluded that the California Supreme Court’s reasoning was “neither arbitrary nor irrational,” a predicate finding required to establish a due process violation. The Circuit stated,

By applying Dynamex retroactively, we ensure that the California Supreme Court's concerns are respected. Besides ensuring that Plaintiffs can provide for themselves and their families, retroactivity protects the janitorial industry as a whole, putting Jan-Pro on equal footing with other industry participants who treated those providing services for them as employees for purposes of California's wage order laws prior to Dynamex. And retroactive application ensures that California will not be burdened with supporting Plaintiffs because of the “ill effects” that “result[] from substandard wages.”

Due process was not deemed offended, and the case was remanded for decision on the merits, but with a wrinkle only occasionally seen in federal circuit court cases: the Circuit offered “observations and guidance” to the district court on remand to the district court. The first interesting thing about the “guidance”—from this tort professor’s perspective—is the Court’s caution to separate carefully issues of “control” in the tort vicarious liability context from those in the employer-employee context. As I often tell my students, vicarious liability has historically possessed a “push” dynamic (push servant status away) while statutory coverage has possessed a “pull” dynamic (pull servant status in). For more, see here, and here. The second interesting thing about the “guidance” is that the Court signaled that Jan-Pro, under Prong B of the ABC test (concerning which the employer has the burden), has not under the existing record established that “it was not engaged in the same usual course of business as the putative employee.” I read the opinion as saying to the district court, develop the record more if you like, but you probably do not have to do so under Prong B. Granting MSJ in favor of plaintiffs is supportable right now.    

Given the extent of economic activity encompassed by the 9th Circuit opinion, and the non-binding nature of the DOL’s Wage and Hour Letter, it is not difficult for this writer to see that the former development has much greater impact on the so-called Gig economy than the latter. All Dynamex pipeline cases (cases currently in process that arose before Dynamex was decided) may have instantly experienced a large increase in value.

Michael C. Duff

May 3, 2019 | Permalink | Comments (0)

Sunday, April 28, 2019

The Origins and Effects of My Workers’ Compensation “Viscerality”

I am about to use a largely academic word—viscerality—to explain my atypically (for a law professor) non-academic relationship to workers’ compensation law. Please be patient with me. Viscerality is “a quality of being related to the physical as opposed to the virtual or imaginary world or reality.” For a legal academic, I have an unusual relationship to the world of work injury. I performed fifteen years (long years) of physical labor after high school before attending law school in 1992. In a nutshell, I lifted heavy things in warehouses, and in and around airplanes. I have been hurt—small breaks, deep cuts, purple bruises, vexing strains, and a balky back—and I’ve witnessed good friends getting hurt (some of them seriously). I’ve been in a warehouse when a man (not my close friend, but horrific just the same) was crushed to death by a forklift. My grandfather died of black lung when he was 52 and I was 10.

This background of viscerality rendered me a “difficult” first-year law student; and perpetually causes me to be astonished at a legal world in which it is assumed without (real) debate that a “contract” or “property” right is more important than the right to a remedy for physical injury. The places from which I hail might assign a different priority, if only they could. Because of physical injury rights’ relative unimportance (in the schema of official power), the legal boundaries within which workers’ compensation functions are only lightly policed by state courts (and really not at all by federal courts). In most places, adjustments to the workers’ compensation system need only be vaguely articulable as rational—if any legislative explanation of modification of the rules is “not irrational” it is upheld, and the burden is on the challenger to show irrationality. (I would not like the state of affairs even if legislatures more frequently represented citizens).

But in my old neighborhood such a “not irrational” standard would be unacceptable. And I’ve never really left my neighborhood (even though I now live 1800 miles away from it, as the crow flies). I continue to see the problem as someone from my neighborhood might. An intruder in my house is a threat to my personal security. I might want a gun to repel the intruder. A world in which those who could cause me grievous physical injury need incur no great cost (when all the paperwork has been completed) is a world in which I will sleep lightly. What is your definition of personal security? I fear more than guns. Personal security was the first of the absolute rights discussed in William Blackstone’s Commentaries (always close at hand to the early American lawyers). This son of East Boston, Mass (and of other working class places) would fear no dialogue with them.  I plan to take my viscerality more deeply into the 9th Amendment this summer. Wish me luck.

Michael C. Duff

April 28, 2019 | Permalink | Comments (0)

Saturday, April 13, 2019

Managing Cynicism: Teaching Law Students about Dueling Doctors in Workers’ Compensation

It does not take a law student embarked on my workers’ compensation course long to realize that, in many of the litigated cases we read, the opinions of the doctors involved are diametrically opposed. And opposed despite the underlying complexity of the medical issue under dispute—it is nearly self-evident in many of these cases that it would be impossible to determine whether disability was, for example, work-related “to a reasonable degree of medical certainty.” The second and third year law students making up my class have been exposed to talismanic expositions of the adversarial system in which they will work—“not a perfect system but the best we have,” & etc. (We’d have to ask Leibniz if it is the best of all possible worlds). But come on. Every case? Completely opposed opinions? I try to reassure them: this is not true in every case; by definition, we are reading litigated cases. Difficult cases. The problem is that so many of the litigated cases my class reads reveal absurdly opposed opinions at which all but the most sophisticated of repeat players might blush.

This, to me, is the Achilles heel of the system. We resort to expert opinion to answer what is essentially unanswerable: in many cases we cannot (in reality) disentangle work-related from non-work-related causes. We can’t do it in tort law either – we use terms like “but for” and “proximate” causation as if we know what the terms mean. As a student of David Hume, I know better. When there are multiple causes we resort to the “substantial factor” test and pretend we can say that a cause has made an “important” (“more than a mere scintilla”?) contribution to a harm. We also have incredible difficulty explaining the origins of pain. In an odd way it is actually comforting to think that unexplained pain is either the product of employee faking and malingering or is always real but denied unreasonably by the unfeeling agents of profit maximization.

In close cases involving the exercise of judgment, in connection with essentially unanswerable questions, who will make the bottom-line decision of compensability? Students understand the legislative urge (when viewed from 40,000 feet) to break free of the dueling-doctor-dyad in an attempt to achieve the holy grail of “neutrality.” It is somewhat harder to explain why the structures we pretend are neutral often aren’t. The IME, QME, Medical Panel, EMA often look from the outside like parties with allegiances (financial or otherwise), particularly from the perspective of an injured worker. And if the “neutral” opinion of that expert is binding, or may be disregarded only if there is “clear and convincing” evidence to the contrary, it is hard to explain why the selection of that individual (the de facto decision maker) must not only be actually free from impropriety but must also be free from the appearance of impropriety viewed from the perspective of a truly disinterested third-party. This is an ethical concept lawyers and judges know well, but which seems conveniently de-emphasized in “modern times” when assessing conflicts of interest in many professions (workers’ compensation is hardly alone in this regard).  

So what is a professor of workers’ compensation to say about these matters? Three thoughts come to mind at the moment. First, any time entitlement to a public benefit is being determined one must be clear-eyed about who is in reality making decisions and apply the same conflicts rules upon that person that we would impose upon any public official. Naïve? So was the notion of due process in 1215—I’m glad no one gave up on that ideal in the 13th century because it might be too hard to achieve (whether we can keep it is another question). Second, we must work hard to maintain a balanced perspective about what interests cheat. All interests cheat—but some cheating has greater impact on the system as a whole, and that is what should be focused upon. And, by the way, most people don’t cheat. If I didn’t believe that, how could I believe in the ideal of the rule of law? Because I do believe in the ideal of the rule of law, I like to think I’m a pretty good choice for a law professor. Third, we may at some point have to (again) admit that a benefits system resting upon slender reeds of causation will not work in the long run. Depending on what happens with health care in the next couple of years, the stakes of the causation determination may diminish. Thinking along these lines when considering the fatiguing spectacle of dueling doctors seems much better than descending into cynicism.    

Michael C. Duff    

April 13, 2019 | Permalink | Comments (0)

Sunday, April 7, 2019

Workers' Compensation Opt Out and Exclusivity

In a recent post on the Arkansas opt out bill (that looks like it is going away) I mentioned that the drafters had not repeated the mistake of including exclusivity in the bill, as the Oklahoma drafters had in that state's now-struck opt-out bill. A colleague wrote and asked me to expand on the point. Here was his question:    

I understand that workers cannot sue in tort for matters relating to ERISA plans. But in these Arkansas arrangements, what about suing employers for workplace injuries? If my employer has one of these proposed Arkansas plans and I am injured at my employer’s worksite, why couldn’t I sue the employer for damages related to my work-related injury?

The exclusive remedy provided under the Arkansas workers’ compensation law limits itself to “the provisions of this chapter.” Wouldn’t that language exclude the new opt out law, which has no similar language granting exclusivity to the rights of employees under the new law? So as an employee, would I have access to the benefits provided under the ERISA plan, and also the right to sue in tort?

This is an excellent question.  Here was my response:

A few points. Damages overall would be severely limited under opt-out bills purporting to establish ERISA-governed plans. Med-Mal suits against hospitals, doctors, etc., are of course immediately knocked out by ERISA. And, if the employee accepts the plan’s indemnity and medical benefits—most employees would have no choice, truncated as those benefits may be—he/she would have to reimburse the ERISA plan from any tort recovery. Even without ERISA, damages would be folded into the medical and indemnity benefits paid under the alternative plan. The employer would argue, even under state law, that all/most damages are/will be offset, rendering settlement for the plaintiff’s lawyer a nightmare.

Then we have the Texas phenomenon. In Texas, an employee can’t even get a tort recovery with which to reimburse the ERISA plan because employment is very commonly conditioned on signing an arbitration agreement that covers tort suits. As you know, the FAA preempts states from prohibiting arbitration as a condition of hire. Whatever you get in arbitration will be much less than a traditional tort recovery, and you would still have an obligation to reimburse the ERISA plan for its outlays. I’m convinced that the grand strategy here (it's already been implemented for some time in Texas) is to create an interlocking system of alternative benefit plans and arbitration agreements in every arena of labor and employment law. You may have been following arbitration closely in the context of #MeToo. Here, I discuss the phenomenon and in the first paragraph address workers’ compensation and arbitration agreements.

So—bottom line—I think the opt-out architects are starting to realize that there is no point insisting on exclusivity in an opt-out plan (and we saw from the Oklahoma experience how bad from a public relations/political perspective the optics were–not explicitly cutting off a tort right may also take away some state constitutional arguments) because tort is already so badly hamstrung. I also don’t think it is an accident that these opt-out laws appear in states where tort reform is hot. That’s why I try to keep track of tort reform developments: the less afraid you are of tort, the more willing you might be as a rational actor to risk giving up exclusivity.

I'll add one additional point that I did not mention to my colleague. When I participated on an opt-out panel at the National Press Club a few years ago, I had the good fortune of sharing a stage with erudite Workers' Injury Law & Advocacy Group official Chuck Davoli and opt-out architect Bill Minick of Partnersource. The room was a bit tense and the views of the panel participants diverged substantially, as one would anticipate. And I left out one interesting participant: Bruce Wood of the American Insurance Association, whom my blogmate Judge David Torrey featured on this blog a couple of years ago. The AIA has been sharply critical of the opt-out model, and once you understand the vastly reduced liability created by tort reform, arbitration agreements, and ERISA opt-out plans containing no substantive benefit floors, you can see why. Heck, any employer could self-insure in this environment. All you need is a low cost third-party administrator and you are good to go. And the costs that don't get covered?  They "go" somewhere else. Get the picture?

Michael C. Duff  

April 7, 2019 | Permalink | Comments (0)

Friday, April 5, 2019

Further Remarks on the Arkansas Workers’ Compensation Opt-Out Bill (That May Be Going Away)

While rumor has it the Arkansas opt-out bill, Download Ark Opt Out Bill (002), does not have time to be enacted into law, it has nevertheless provided me with a wonderful opportunity to get a look into the architects’ minds. This is a useful exercise because, as I have said repeatedly, opt-out is not going away. A section by section dissection of the bill would have you, my dear readers, heading for the exits. But I think a “moderate delve” may be tolerable.

The first major thing to note is the unusual posture of the bill. It was “dropped” into legislative session with very little time left to enact it. Under Section 5 of the bill:

(a) The state shall seek a federal waiver for regulatory authority to regulate issuance of a universal workers' compensation insurance policy under this chapter;

(b) The universal workers’ compensation insurance policy issued under this chapter shall be to one (1) company with no more than 500 employees;

(c) No additional universal workers’ compensation insurance policy shall be issued until the General Assembly grants authority to universal workers’ compensation carriers to issue universal workers' compensation insurance policies to an authorized employer.

It is hard to escape the conclusion that the drafters immediately feared the statute would not survive ERISA scrutiny (I share their assessment—I think much of the content of the bill would be preempted by ERISA, both under Section 514 and Section 502) and would not even take the chance of rolling out the system in the absence of a federal “waiver.” This is quite interesting. I am not sure what the drafters are contemplating the federal government could waive. Surely it cannot mean that the state authorities anticipate that the federal executive branch will “waive” the congressional determination that state laws “relating to” employee benefit plans are preempted by federal law. (Agencies may, of course, at times waive requirements that have been established administratively, a process roughly equivalent to prosecutorial discretion). But I would be very surprised to learn that anyone with legal training in the Department of Labor believes the agency possesses the authority to disregard a congressional directive. In any event, the drafters seem to contemplate holding the state statute in a kind of “abeyance” during which permission will be sought from the Feds—post enactment—before proceeding further (so don’t worry legislators if you don’t quite understand the details). A bit weird and this presents—uumm—a bit of a federalism tension.

The second major thing to note is that the bill is very poorly written. It is so poorly written that I feel confident it was drafted in great haste; why, I don’t know. Regardless, it is a very difficult bill to read—in sections it is impenetrable.

There are a few major substantive issues worth mentioning here.   

Direct/Indirect Consequence

Substantially fewer benefits are available to a “covered employee” for a “covered disability” that is not the direct consequence of a “covered injury” by accidental cause than for a “covered” disability that is the direct consequence of a covered injury by accidental cause. Yep, that will sure simplify the causation analysis. I refuse to scrutinize the distinction at length (there is a lot of imprecision created by overuse of the term “covered”), but anyone who imagines there would be clearer legal outcomes utilizing a direct/indirect “consequence” standard instead of the “injury by accident arising out of and in the course of employment” standard is wrong. But that is not the point. The point is that the state is purporting to authorize and regulate ERISA plans in lieu of workers’ compensation. And in an ERISA regime, it would be a Plan Administrator (not a judge or other public official) making these kinds of causation/“consequence” determinations. The private administrator’s determinations would almost always have to be challenged in federal court under an arbitrary and capricious standard of review (for you non-lawyers, that means the party appealing usually loses).

Covered/Non-Covered Medical Expenses

Although the bill lays out how rates of medical expense compensation will be determined—there is a lot of tethering to CMS Medicaid fee schedules, for example—the statute does not unequivocally state what medical conditions are covered in the first place. See Section 11-16-204. But in Section 11-16-205 there is a somewhat elaborate mechanism whereby the covered employee and “authorized medical care practitioner” together may determine that “noncovered medical care is preferred” but the provider nevertheless (despite the noncoverage of the preferred treatment) “desires compensation under this chapter.” Did I mention that the practitioner is permitted to balance bill the “covered” employee for noncovered medical care?

My admittedly jaundiced eye sees a scenario in which the doctor tells the injured worker, “look you need procedure x, but they will only pay me for procedure y under the terms of the plan. So sign this acknowledgement of financial responsibility if you want me to proceed further.” Frankly, it is a chilling prospect.  I guess you should not deliver painkiller to the injured worker until all of the correct signatures have been obtained at the scene.

Preference for Lump Summing and Actuarial Benefit Caps

Although biweekly indemnity benefits are permitted, it caught my eye that maximum benefits are frequently expressed in aggregate terms:

“Indirect consequence” injury=max of 156 weeks at the normal benefit rate (75% of preinjury AWW); all compensation (presumably also medical benefits) 234 weeks x national (Longshore) AWW

Direct consequence” injury=max of 520 weeks x normal rate; all compensation 780 weeks x the Longshore rate

Injury by co-employee=max of 2600 weeks x normal rate; 3900 weeks x Longshore rate

In short, there is a lot of math to do, and the obvious expectation is that the opt-out insurance carrier will lump sum claims at present value. It is not clear to me that under the bill injured workers could obtain legal representation to check all that math (and other things). Unless I am missing something—and it is possible that I am—there is no explicit mention of attorneys’ fees (or even attorneys) in the bill. (In a few places in the bill curious reference is made to attorneys-in-fact acting as employee representatives). Perhaps the bill means to incorporate by reference sections of the existing Arkansas Workers’ Compensation Act.

No Permanent Partial Incapacity Benefits

While 11-16-209 of the bill provides compensation for scheduled losses, I find no provision in the bill for partial benefits. None at all. If the drafters thought they were making such provision in 11-16-201, the section should be redrafted for clarity. Again, perhaps this is an incorporation issue?

I could dance all night, but will stop here. It hardly seems necessary to conclude that a system of the kind presented here (again, allowing for the possibility that I am not getting the entire intended statutory picture) is one in which employers: have control of causation determinations, have the ability to shunt significant responsibility for medical costs on to employees (and others), do not appear to assume responsibility for partial incapacity benefits at all (except arguably by proxy through use of scheduled benefits), and make it difficult for employees to ascertain to what benefits they are entitled even while making no provision for employee attorney representation. Such a system would obviously reduce employers’ operating costs substantially. I think ERISA, as currently written, would prevent wide scale adoption of such systems (seeking both to spur creation of and to regulate ERISA-governed plans). In another post, I will discuss similarities between the Arkansas and Wyoming constitutions that I think create additional state law obstacles to enactment of such systems.    

 Michael C. Duff


April 5, 2019 | Permalink | Comments (0)

Thursday, April 4, 2019

Background Helpful for Understanding ERISA Issues under the New Arkansas Workers' Compensation/Opt-Out Bill

I'm reprinting commentary I wrote back in 2016 concerning the former Oklahoma opt-out bill. Although I'm just getting back into this, I think the analysis remains accurate: 

This summer, I’ve been doing a lot of work on the subject of workers’ compensation “opt-out.” Over the last couple of years or so this has been a hot topic in workers’ compensation circles, though it has cooled off recently while the Oklahoma Supreme Court deliberates in a pending case, Vasquez v. Dillard’s, Inc., implicating some of the underlying issues in this area. Essentially, opt-out is about certain folks figuring out that if you combine “regular” workers’ compensation benefits with non-workers’ compensation benefits you arguably wind up with a multi-benefit “employee welfare benefit” plan governed by ERISA (the Employee Retirement Income Security Act of 1974), a federal statute. Why does that matter? Because states have limited or no control over the substance of benefits provided by ERISA-governed “employee welfare benefit plans.” Employee welfare benefit plans need do no more than deliver what they unilaterally promise to deliver. That promise has no connection to any state-imposed benefit floor. Why would a state cede control of statutory workers’ compensation benefits? As they might say in the French Foreign Legion, “that’s a long story.”

This is not the first time the law has encountered the idea of substituting ERISA-governed plans for state-mandated employment benefits. Back in the 1990s, for example, some employers resisted New York’s efforts to require the payment of state-mandated pregnancy benefits by arguing that New York could not interfere with their ERISA-governed “multi-benefit” plans, which did not cover pregnancy benefits. The Supreme Court said to the employers, in Shaw v. Delta Airlines, “well, yes employers, you can have multi-benefit ERISA plans, but states can force you to comply with the substance of certain mandatory state benefit laws that ERISA carves out from coverage (workers’ compensation, unemployment compensation, and disability insurance).”

The matter has been complicated in recent years. Oklahoma has enacted (and other states have considered enacting) a law facilitating an ERISA multi-benefit approach without requiring that multi-benefit plans comply with traditional workers’ compensation law (significantly changing the Shaw v. Delta Airlines scenario). This state-sanctioned “opt-out” from traditional workers’ compensation law is rife with complexity. Back in 1974, Congress wanted very strict legal uniformity with respect to ERISA plans (See Fort Halifax Packing Co. vs. Coyne) because prior abuses nationwide had prevented employees from receiving benefits they thought they had earned.

In furtherance of this drive for uniformity, with very few exceptions, ERISA preempts attempts by states to regulate employee benefit plans. However, benefit plans created “solely to comply with workmen’s compensation laws” are not governed ERISA. Usually, there is a clear line of demarcation between ERISA and workers’ compensation plans. However, it is not easy to classify an “alternative benefit plan” authorized by a workers’ compensation opt-out law. Is it a plan excluded from ERISA because created to comply with a “workmen’s compensation law?” Or is it an ERISA-governed plan? . . .

I am convinced . . . that, if alternative plans are indeed ERISA-governed plans, the very law authorizing their creation is preempted, under Section 514(a) of ERISA (29 U.S.C. 1144(a)). . . . This is perhaps the one moment in workers’ compensation law when I get to utter something resembling the Heisenberg Uncertainty Principle: the moment an employee plan ceases to be a workers’ compensation plan and becomes an “alternative” plan the state opt-out law creating the alternative plan is probably instantly preempted. The rule is simple: any state law (including an opt-out law) referencing an ERISA-governed employee benefit plan is preempted. (See, e.g., District of Columbia vs. Greater Washington Board of Trade).

As I have noted, the “buzz” around opt-out appears to be on hold pending decision of Vasquez v. Dillard’s Inc. That case will likely be decided on state constitutional grounds and may do little to clarify opt-out/ERISA issues. But, I think opt-out, involving as it does the tension between ERISA and state attempts to innovate with workplace injury remedies, is merely a harbinger of things to come. The simple federal-state employee benefit model that has been in place since the mid-1970s will likely be repeatedly tested, and in the not-distant future.   

I will also note that the Arkansas bill does not repeat the Oklahoma statute's error of explicitly retaining exclusivity. There is no need for exclusivity because ERISA-governed plans are almost always immune from tort suits

I'll be doing a more detailed analysis of the Arkansas bill in the next couple of days.

Michael C. Duff

April 4, 2019 | Permalink | Comments (0)

Wednesday, April 3, 2019

Arkansas Reviving Frankenstein's Monster -- the Return of Workers' Compensation Opt-Out

I've just caught wind today that a bill, SB673, has been filed in the current Arkansas legislative session that would (as far as I can tell on first inspection) revive the workers' compensation opt-out "experiment." The proposed system is termed, "the Universal Workers' Compensation Act" (apparently because the plans provided under it would be multi benefit in scope).

As in the Oklahoma model, the phrase opt-in may be a more apt description. [On re-reading, I have changed my mind - this seems to be opt-out because the default position appears to be that an employer is "in," but I may change my mind again.] And, actually, the bill seems to want to dispense with the causation element in workers' compensation altogether (A 24-hour plan? They must be pretty sure of tremendous cost savings elsewhere):

11-16-102. Purpose and intent. 

(a) The purpose of this chapter is to establish a statutory alternative authorizing and encouraging employers to secure coverage for compensation for injury or death of employees without regard to work-relatedness under the authority granted to the General Assembly by Arkansas Constitution, Article 5, § 32.

Furthermore, the bill concedes that it purports to authorize plans governed by ERISA:

(b) To accomplish the purpose described in subsection (a) of this section, it is the intent of the General Assembly that this chapter provide comprehensive plan design for employees within a plan under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq., as it existed on January 1, 2019, to be unencumbered by state laws that impact the 11 plan design and financing of this chapter.

The "ERISA as it existed on January 1 language" is interesting. Does someone know something I don't about coming changes to ERISA -- probably someone does. Concern about Medicare for All?

Ordinarily I would make a series of points here explaining various ERISA preemption problems under the bill. And that will come when I have had a chance to study the bill more closely (though rumor has it it may be passed and signed before I have a chance to do so). Extremely curiously, Section 8 of the bill suggests that Arkansas may be conceding that the bill would be preempted by ERISA in the absence of federal approval. It strikes me as a very odd provision:

SECTION 8. EMERGENCY CLAUSE. It is found and determined by the General Assembly of the State of Arkansas that there is a need for federal approval; that Section 5 of this act mandates the state seek federal approval to implement; and that Section 5 of this act is immediately necessary because the state needs time to seek federal approval. Therefore, an emergency is declared to exist, and Section 5 of this act being immediately necessary for the preservation of the public peace, health, and safety shall become effective on: 
(1) The date of its approval by the Governor; 
(2) If the bill is neither approved nor vetoed by the Governor, the expiration of the period of time during which the Governor may veto the bill; (3) If the bill is vetoed by the Governor and the veto is 1 overridden, the date the last house overrides the veto.

The compensation rate under the bill appears to be 75% of the claimant's average weekly wage capped at 2x the "National Average Weekly Wage."  I will have much more to say later. (I'm confident).

Michael C. Duff

April 3, 2019 | Permalink | Comments (0)

Monday, April 1, 2019

Are Tennessee Undocumented Workers Covered by Workers’ Compensation? It's Complicated. . .

In a remarkable case just decided by the Tennessee Supreme Court, Sandoval v. Williamson, the Court concluded that a provision in the Tennessee Workers’ Compensation Act, “which does not allow for additional [partial] benefits . . . for any employee who is not eligible or authorized to work in the United States” is not preempted by federal immigration law.

The facts are straightforward. An acknowledged undocumented worker, Sandoval, suffered an injury while working for his employer, and the parties settled a permanent partial disability claim under Tenn. Code. § 50-6-207(3)(A) (although the details of the settlement are not reported, the scope of indemnity liability is 2/3 of the employee’s pre-injury average weekly wage for the period of compensation [impairment rating times 450 weeks]). However, Sandoval “failed to return to work” at the end of the initial compensation period and under § 50-6-207(3)(B) filed for additional benefits to which he was arguably entitled (under an all-too-familiar but bewildering extended partial benefit formula – a complaint for another time). But, as mentioned above, the benefit “extension” does not apply “to injuries sustained by an employee who is not eligible or authorized to work in the United States under federal immigration laws.” § 50-6-207(3)(F).

There are a couple of odd features to this case/statute. First, it appears that under the statute an undocumented worker is eligible for a partial benefit the statute calls an “original award,” (and maybe for a total benefit, too), but an undocumented worker—even the same worker—is not eligible for “increased benefits.” Now it may be the drafters had in mind a structure in which the original injury (being the product of already unlawfully-performed work that is in effect a fait accompli) should be recognized; but that subsequent benefit eligibility tacitly condones ongoing unlawful presence. The problem from a policy standpoint is that the chosen structure over the long term simply creates cheaper workers’ compensation claims and a corresponding incentive for employers to hire undocumented workers. (Breyer’s dissent in Hoffman Plastic rings just as true to me now as it did when I first read it). I also think the statutory structure sets up an interesting equal protection problem. Imagine two similarly situated injured workers (same injuries & etc.), one lawfully-present and one not. The lawfully-present worker receives an original award and increased benefits. The undocumented worker receives only the original award. As a state, if you want to exclude all undocumented workers from receipt any receipt of benefits, that may or may not be constitutionally permissible (even if demonstrably bad policy—the costs will simply shift somewhere else), but can you really constitutionally provide part of a benefit to one classification of worker without some explanation other than “we’re trying to comply with federal immigration policy”?

Which I imagine is why the claimant was placed in the unusual position of having to argue “offensively” with respect to preemption. Usually, it is insurance carriers and employers arguing that a state’s policy of permitting compensation of undocumented workers is preempted by federal immigration policy. The claimant in such cases is defending the state’s allowance of compensation.  Here, the claimant argued that a state’s decision not permitting compensation of undocumented workers was preempted by federal immigration policy. I think Tennessee’s exclusionary policy is—I’ll be nice—ill-advised. And it may even provide some creative plaintiff/claimant with an interesting equal protection argument (personally, I’d file a negligence suit in connection with an employee hurt in the workplace by arguable employer negligence yet denied the “increased benefit”). But I’m ultimately pleased to see the Tennessee Supreme Court join the overwhelming weight of national authority in holding that federal immigration policy does not preempt state workers’ compensation law. In the long run, that view will be (I am convinced and delighted to say) more protective of injured undocumented workers (in the name of simple justice) and of state workers’ compensation autonomy, an autonomy I continue to support in light of the overall reality of federal policy vacuums that I doubt I’ll outlive.

Michael C. Duff    

April 1, 2019 | Permalink | Comments (0)

Saturday, March 30, 2019

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

March 30, 2019 | Permalink | Comments (0)

Friday, March 29, 2019

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

March 29, 2019 | Permalink | Comments (1)

Wednesday, March 27, 2019

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 


March 27, 2019 | Permalink | Comments (0)

Tuesday, March 19, 2019

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 19th 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           

March 19, 2019 | Permalink | Comments (0)

Sunday, March 17, 2019

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 19th 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 11th 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 18th 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  

March 17, 2019 | Permalink | Comments (0)

Wednesday, March 13, 2019

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   

March 13, 2019 | Permalink | Comments (0)

Friday, March 8, 2019

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


March 8, 2019 | Permalink | Comments (0)

Thursday, March 7, 2019

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

March 7, 2019 | Permalink | Comments (0)