Tag Archives: grand bargain

Broken Trust – Breaking The “Grand Bargain” Of Workers’ Compensation

Today’s post comes from guest author Catherine Stanton, from Pasternack Tilker Ziegler Walsh Stanton & Romano.

More than 100 years ago, Workers’ Compensation was established as a “grand bargain” between workers and employers. The state legislature enacted laws where injured workers gave up their right to sue if they were hurt on the job as a result of their employers’ negligence in exchange for a no fault system of medical and wage loss benefits. 

Included in this bargain was the right of the injured worker to obtain financial compensation for a permanent injury to an extremity, such as arms, legs, hands, feet, fingers and toes. Unfortunately, this “grand bargain” – at least as it pertains to injured workers – has been under attack for the last 10 years in New York under the guise of rising costs to employers.

During the New York State budget negotiations, the Business Council created a false narrative that injured workers’ benefits for extremity injuries were archaic and didn’t account for modern medicine. They claimed that benefits paid were creating a crisis in New York and forcing businesses to flee the state. As a result of their lobbying, the New York State Legislature directed the Workers’ Compensation Board in April 2017 to create a task force consisting of labor, medical providers, and insurance groups to issue proposed revisions that account for advances in modern medicine that enhance healing and result in better outcomes. What we have subsequently found out is that the Workers’ Compensation Board, without direction or authority, has been secretly working for the last couple of years to not only revise the current guidelines, but to scrap them altogether. These provisions would essentially eliminate most schedule loss of use extremity benefits to injured workers. As an attempt to not fuel the fire, they released their proposed revisions at 11:00 p.m. on the Friday of Labor Day weekend.

The Workers’ Compensation Board has been heavily criticized for their Anti Injured Worker Proposals by a number of labor unions, NYCOSH, physician groups, Workers’ Compensation practitioners, and injured workers themselves. As a result of the outrage, the New York State Assembly’s Committee on Labor held hearings at which a number of people from the taskforce testified. When representatives from the Board were asked why there were secret meetings years before the Legislature directed them to review the issue, their weak response was that “they” couldn’t understand some of the large discrepancies between the findings of the treating doctors and the insurance doctors. However, that argument holds little weight because the scenario they cited was the exception rather than the norm. They also pointed out that they relied heavily on the New York State Orthopedic Group for input.  Yet, when the Chair of the task force, Dr. Jeffrey Lozman, an orthopedist, and Dr. John M. Olsewsky, President of the NYS Society of Orthopedic Surgeons, testified, it became clear that their recommendations were largely disregarded in a way that would negatively impact injured workers.

It is clear that the New York State Workers’ Compensation Board is pushing the Business Council’s agenda. What is unclear is why the Board seems to be taking sides when their mission statement is to “protect the rights of employees and employers by ensuring the proper delivery of benefits to those who are injured or ill, and by promoting compliance with the law.”

Injured workers don’t have the means to fight, and but there are still steps you can take to defeat these harmful proposals. There is a 45-day comment period set to expire on October 23, 2017. You can contact your state legislator and the New York State Workers’ Compensation Board to voice your opposition. For additional information please go to:  www.nyworkerscompensationalliance.org/protectinjuredworkers

Workers’ Compensation was set up to help you if you are ever injured on the job. These benefits are your right. They are your protection. Just because you might not need the benefits now, doesn’t mean you or a loved one won’t need them down the road. Only by working together can we fight to make sure that these benefits as we know them remain in place. While a single voice might not make a difference, a loud collective voice stands a better chance. Go to the link and voice your disapproval. Have your family and friends do the same.

 

Catherine M. Stanton is a senior partner in the law firm of Pasternack Tilker Ziegler Walsh Stanton & Romano, LLP. She focuses on the area of Workers’ Compensation, having helped thousands of injured workers navigate a highly complex system and obtain all the benefits to which they were entitled. Ms. Stanton has been honored as a New York Super Lawyer, is the past president of the New York Workers’ Compensation Bar Association, the immediate past president of the Workers’ Injury Law and Advocacy Group, and is an officer in several organizations dedicated to injured workers and their families. She can be reached at 800.692.3717.

What Do You Mean, I Can’t Sue My Employer?

OSHA find the owner of the Didion Milling Plant in connection with an explosion that killed 2 workers and injured several more.

Today’s post comes from guest author Thomas Domer, from The Domer Law Firm.

I sat down this morning with a television reporter interviewing me about a horrific explosion in Wisconsin that killed 5 workers and injured many more.  The explosion on May 31, 2017 at the Didion Ethanol Plant in Cambria, Wisconsin occurred when corn dust exploded, destroying the entire plant.  OSHA hit the company with a $1.8 million fine, calling it a preventable explosion.

The reporter’s question to me was “Why can’t the employees sue their employer?”  The answer goes back over 100 years in Wisconsin to the “Grand Bargain” that was struck between management and labor.  Sometimes referred to as the “great tradeoff,” employees traded away their right to sue their employer, even for egregious safety violations, in return for wage loss and medical benefits to be paid regardless of fault.  The goal was to relieve the injured employee from the burden of paying for medical care and replace lost wages.  At the turn of the 20th Century, Wisconsin workplaces were often dangerous places, and employers had little incentive to make them safer.  Injured workers could rarely afford the kind of legal cost for recovery efforts in court and employers benefitted by use of contributory negligence, assumption of risk and co-employee negligence as bars to an employee’s recovery in court.

The administrative system that was established by worker’s compensation was created to provide a direct remedy to the employer and to limit (by Exclusive Remedy) litigation against the employer.  The system was supposed to insure a method of providing benefits to an injured employee during the period of disability and to ensure the employees were not reduced to poverty because of injuries.

Speed, dependability, and financial assistance were components of the new system, and by making employers responsible for injury, the law offered strong incentives to make workplaces safer.  Unfortunately, that has not occurred.  The latest statistics indicate that over 100 people die annually in Wisconsin and over 5,000 annually across the nation.

Revealing to a grieving widow that the remedy available is limited to four times the deceased worker’s annual income is precious little consolation for loss of a spouse’s life and lifetime income.

Portability, The Gig Economy And Workers Compensation

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

Changing employment laws to encourage so-called “portable benefits” is an idea that goes hand in hand with finding new ways to classify gig economy workers. These proposals are being pushed in a  growing number of states. These proposals also enjoy support from Democrats and Republicans in Congress. These proposals could also radically alter workers’ compensation in the United States.

The idea of third classification of worker between employee and independent contractor is to give so-called “gig economy” workers some protections and benefits without employers having to bear the full costs of employment – including unemployment, workers’ compensation and health insurance. Sometimes this third class of workers is described as “dependent contractors.

Portable benefits are usually discussed in the context of contractors because traditionally benefits such as unemployment, workers’ compensation and health insurance have been provided by employers. So-called portable benefits, are detached from employers. The Affordable Care Act increased portability of health insurance benefits through the use of exchanges Portability of health insurance was touted as a way to help create new businesses because potential entrepreneurs were not tied to an employer for health insurance.

The idea of portable benefits and a new classification for gig employers is also touted as a way to reduce litigation against companies such as Uber for how they classify employees. But former National Labor Relations Board member Craig Becker pointed out that creating a new class of workers may actually create more litigation when employers try to re-classify employee as dependent contractors. Becker and others pointed out that this is what happened in Italy when Italy created a third class of worker that was neither employee nor independent contractor.

Becker and others point out that the drive to create a new class of workers is being driven by tech companies such as Uber as a way of reducing labor costs. The real risks of creating a new classification of workers is shared even by some who promote the sharing or gig economy. Gene Zaino, founder and CEO of MBO Partners, a firm that provides services to independent workers, stated that any new classification of independent workers should only include workers who earn more than $50 per hour. Under such a scheme lower-paid workers would still retain the benefits and protections of the employment relationship.

Though states are pondering portability and dependent contractor laws, there is a push for federal legislation so that laws can remain uniform across the country. Any federal push for portable benefits for so-called independent workers would clash with state-based workers’ compensation laws. Workers’ compensation is traditionally a state law concern because when workers’ compensation laws were enacted the power of the federal government to implement laws regarding workplace safety were limited. During the New Deal-era, that interpretation of the interstate commerce clause changed to allow broad regulation of the workplace.

Advocates for state-based workers’ compensation laws likely have little constitutional grounds to overturn any federal legislation that would substitute “portable benefits” for so-called “independent workers” for state-based workers’ compensation benefits. Some critics who argue, correctly, that many state-based laws inadequately compensate injured workers could also be open to or even welcome a federal substitute for  insufficient state workers’ compensation laws.

Alabama Court Strikes Down Anti-Worker Provisions Of State Workers’ Compensation Law

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

An Alabama trial-court level judge ruled the Alabama Workers Compensation Act was unconstitutional in a recent decision. Though the decision isn’t binding on a state level and it was recently stayed or delayed indefinitely, it is an important and interesting decision for many reasons.

The Alabama workers’ compensation statute was found to be unconstitutional because it capped benefits at $220 per week for permanent injuries and it limited attorney fees for plaintiff attorneys to 15 percent. Jefferson County Circuit Court Judge Pat Ballard found that Alabama’s cap on permanent damages violated equal protection of the laws because it created two classes of workers without any rational basis because some workers were fairly compensated for permanent disability while others were not. Ballard also found that the attorney fee cap violated constitutional due process rights.

Ballard’s reasoning about equal protection and due process mirror recent state supreme court decisions in Oklahoma and Florida striking down anti-worker reforms to the workers’ compensation laws in those states. Florida struck down attorney fee caps for plaintiff’s attorney because they impaired the ability of injured workers to find counsel. Oklahoma struck down the so-called Oklahoma option because it impermissibly created two separate systems for workers’ compensation, one of which could make it almost impossible for workers to collect benefits.

While it is encouraging that courts are protecting the rights of injured workers, the decisions in Oklahoma, Florida and Alabama have all been driven by anti-worker legislation in those states. Unfortunately, that trend is continuing in 2017.  Possible Democratic presidential candidate and New York Governor Andrew Cuomo pushed through anti-worker reforms to New York’s workers’ compensation act.

The recent attack on workers’ compensation has been bi-partisan. A newly- elected Republican legislature in Iowa passed anti-worker workers’ compensation reforms which were signed into law by that state’s Republican governor. The Iowa reforms include a cruel measure that caps benefits for senior citizens who are injured on the job. That provision may be ripe for an equal protection challenge.

Relying on appellate courts to protect the rights of injured workers’ is a risky strategy. Workers compensation laws were passed by state legislatures in response to pressure from unions and other workers advocates during the early 20th century when appellate courts were generally hostile to employees. While it seems that trend may have reversed in the early 21st century, appellate judges certainly can’t be accused of pro-worker bias.

Good legislation also prevents the need for worker advocates to look to the judiciary to protect the rights of workers. Part of the reason, Judge Ballard ruled against the Alabama Workers Compensation Act was because the maximum benefit rate had not increased in 30 years. In Nebraska, our maximum benefit rate increases automatically under a formula determined by the Department of Labor. Nebraska’s current maximum rate is $817 per week for temporary and permanent disability.

Theodore Roosevelt Pushed For Protection Of Workers

Today’s post comes from guest author Brody Ockander, from Rehm, Bennett & Moore.

Workers’ Compensation benefits are often confusing and seemingly unfair at first glance to many of my clients. As a result, I often find myself explaining to these clients how we, as a country, got to where we are with workers’ compensation laws and why the benefits are more limited than other civil lawsuits.

In explaining work comp laws, I usually give a brief description of the work comp system that was first developed in the early 20th century and a description of the “Grand Bargain”, the premise that employers pay for some benefits of their injured employees in exchange that the employee cannot sue that employer for negligence in civil court.

I, and many scholars, could go on and on about the history of the Grand Bargain and how it was strengthened/reworked in the 1970’s. Also, scholars can (and have), go on about the recent “reform” to workers’ compensation laws that have eroded workers’ rights in domino-fashion in many states by anti-worker legislation.

Nevertheless, I think the most poignant description of why we need to protect workers, and continue to protect workers, is this quote from our 26th president, Theodore Roosevelt, in calling for further reform of laws that Congress passed for employers’ liability laws:

In spite of all precautions exercised by employers there are unavoidable accidents and even deaths involved in nearly every line of business connected with the mechanic arts. This inevitable sacrifice of life may be reduced to a minimum, but it can not be completely eliminated. It is a great social injustice to compel the employee, or rather the family of the killed or disabled victim, to bear the entire burden of such an inevitable sacrifice. In other words, society shirks its duty by laying the whole cost on the victim, whereas the injury comes from what may be called the legitimate risks of the trade. Compensation for accidents or deaths due in any line of industry to the actual conditions under which that industry is carried on, should be paid by that portion of the community for the benefit of which the industry is carried on–that is, by those who profit by the industry. If the entire trade risk is placed upon the employer he will promptly and properly add it to the legitimate cost of production and assess it proportionately upon the consumers of his commodity. It is therefore clear to my mind that the law should place this entire “risk of a trade” upon the employer. Neither the Federal law, nor, as far as I am informed, the State laws dealing with the question of employers’ liability are sufficiently thorogoing.

— Theodore Roosevelt: Sixth Annual Message, December 3, 1996.