Category Archives: Courts

Will The Supreme Court’s Attack On State Courts Affect Workers’ Compensation?

Posted on July 6, 2017 by Jon Rehm

One of the biggest and least understood developments of the current session of the Supreme Court session is how the Supreme Court has undercut the power of state courts to decide cases. This development may also impact the traditionally state law centered world of workers’ compensation.

In Bristol Meyer-Squibb v. Superior Court the Supreme Court held that non-California residents could not join a class action against Bristol Meyer-Squibb in California state court. In Tyrell v. BNSF the Supreme Court held that North Dakota residents could not sue the BNSF in Montana state court in an FELA case.

Despite Bristol-Meyer and the BNSF having a substantial number of employees and doing a substantial amount of business in California and Montana respectively, the Supreme Court held that it would violate due process to subject defendants to litigation in those states. State court litigation should be limited to states where a defendant is incorporated, where they are headquartered or where the events in the case took place..

Bristol-Meyer and Tyrell both rely on the Daimler v. Bauman case that was decided in 2014. In her dissent in Daimler, Justice Sonia Sotomayor wrote that the effect of Daimler was “to shift the risk of loss from multinational corporations to the individuals harmed by their actions.” Essentially Sotomayor believes that the rule that a corporation can be sued in any state court where they have substantial contacts has been repealed. Sotomayor was the lone dissenter in both the Tyrell and Bristol Meyers case.

The constitutional basis for limiting state court jurisdiction is the due process clause of the 14^th Amendment. The use of the due process clause to weaken the ability of states to regulate corporate conduct has echoes of the so-called Lochner era where state laws that impeded on contracts were overturned unless they were based on general police powers.

So-called forum shopping gets a bad rap from tort reformers. Terms like “judicial hellhole” have coined by pro-corporate legal advocacy groups. But the ability to pick a forum to bring a legal case is inherent in a federal system like we have in the United States. Lawyers have a duty to bring cases in a forum where they think it is most favorable to their client. Corporate and management interests also engage in forum shopping. In November business interests persuaded a business-friendly federal judge in Texas to block enforcement of the so-called blacklist rule that would have prevented employers who violated workplace safety and fairness laws from receiving federal contracts.

Workers’ compensation laws were enacted during the Lochner era and were held to be constitutional because they were enacted under state police powers under the 10^th Amendment. But the mere fact that workers’ compensation laws were enacted under 10^th Amendment authority of the states does not mean corporate friendly federal courts can not find a way to strip states of jurisdiction over certain workers’ compensation claims. This is particularly true for workers who may be able to claim workers’ compensation benefits in multiple states.

In Magnolia Petroleum v. Hunt, the Supreme Court ruled that an employee who was injured in Texas but lived in Louisiana could not claim workers’ compensation in his home state of Louisiana because he had already accepted benefits in Texas. The court held that the Hunt could not collect benefits in Texas because of the full faith and credit clause of the U.S. Constitution.

Justice Hugo Black’s dissent in the case that pointed out that the only reason that Hunt received workers compensation benefits in Texas was signing a form in the hospital after the accident. Black also forcibly denounced the idea that Hunt was double- collecting benefits in Texas and Louisiana for two reasons. First, Louisiana offset the benefits that Hunt received in Texas. Secondly, Black stated “the aggregate of the awards from both states, if added together, would be far less than the total loss suffered by respondent. The Texas allowance scarcely amounts to a “recovery” in the sense of giving full compensation for loss, and has been described by a Texas court to be “more in the nature of a pension than a liability for breach of contract, or damages intact.”

Black’s description of the benefits available to injured workers who could claim benefits in two states is as true as it is now as it was 73 years ago when Magnolia came out.

In Magnolia, Black also drew parallels between how the due process and full faith and credit clauses could be used to protect corporate interests.

“For more than half a century the power of the states to regulate their domestic economic affairs has been narrowly restricted by judicial interpretation of the federal Constitution. The chief weapon in the arsenal of restriction, only recently falling into disrepute because of overuse, is the due process clause. The full faith and credit clause, used today to serve the same purposes, is no better suited to control the freedom of the states.”

Three years later Magnolia was distinguished by the McCartin decision. In McCartin the Supreme Court allowed an employee to collect benefits in Wisconsin who had first collected benefits in Illinois to collect benefits in both states because unlike Texas, Illinois had no laws stating accepting workers’ compensation benefits in Illinois ruled out a claimant from receiving benefits in another state.

In 1980, the Supreme Court applied McCartin in Thomas v. Washington Gas and Light to rule that an injured employee could collect benefits in Washington D.C. and Virginia.

But the decision in Thomas was far from the enthusiastic endorsement of multi-jurisdiction workers’ compensation claims voiced by Justice Black in his dissent in Magnolia. Three concurring Justices criticized McCartin but upheld the award of benefits to Thomas based on the legal doctrine of stare decisis. Two justices, including William Rehnquist, dissented ruling that Magnolia should still govern multi-jurisdictional claims. Current Chief Justice John Roberts clerked for Rehnquist and holds a great deal of respect and affection for his former boss.

Considering how eager the majority of the Supreme Court is to limit the jurisdiction of state courts, I would be very concerned if the constitutional of multi-jurisdictional workers compensation claims were reviewed by the Roberts’ court.

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

Posted on May 25, 2017 by Jon Rehm

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 20^th century when appellate courts were generally hostile to employees. While it seems that trend may have reversed in the early 21^st 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.

Gorsuch, Chevron and Workplace Law

Posted on February 9, 2017 by Jon Rehm

Judge Gorsuch

Employers and their attorneys are widely hailing President Trump’s nomination of 10^th Circuit Court of Appeals Judge Neil Gorsuch to the U.S. Supreme Court. Part of the reason that management-side lawyers are praising Gorsuch is his position on Chevron deference. Gorsuch’s views on Chevron could affect how workplace laws are interpreted and how they apply to workers.

Chevron deference is a legal rule that a court will give the benefit of the doubt about the interpretation of the law to how the executive agency charged with enforcing that law understands the law. Gorsuch has criticized Chevron on separation of powers basis, stating that Chevron deference gives too much power to the executive branch at the expense of the legislative and judiciary branches. Recently, government agencies have been interpreting employment laws in a way that is more favorable toward employees. Recent rules issued by the Equal Employment Opportunity Commission regarding the Americans with Disabilities Act are a prime example.

Many workers who get hurt on the job are told that they must come back to work with no restrictions. Chevron deference could be a powerful legal tool for workers faced with such policies. The new EEOC regulations on the ADA outlaw 100-percent-healed policies or policies that require plaintiffs to return to work without restrictions. In the EEOC guidance on the issue, the EEOC cites Kaufman v. Peterson Health Care VII, LLC 769 F. 3d 958 (7^th Cir. 2014) as an example of policies that they believe to be unlawful under ADAAA. This case represents a subtle but real shift from current 8^th Circuit law as stated in Fjellestad v. Pizza Hut of America, 188 F. 3d 949, 951-952 (8^th Cir. 1999) where the 8^th Circuit joined other federal circuits that held that failure to engage in an interactive process in accommodating a disability was not per se discrimination, and that there was no duty to engage in the interactive process. The EEOC’s interpretations of the new regulations still require that a plaintiff be able to perform the essential functions of the job with or without reasonable accommodation.

But as indicated by Kaufman, courts may be less likely to dismiss cases before trial, or in legal terminology, to grant summary judgment, on the issue of whether a plaintiff could perform the essential functions of the job with or without accommodation if the defendant does not engage in an interactive process or summarily decides that an employee should not be allowed to return without restrictions.

The fact that there is a split between regional appellate courts, a so-called circuit split, over “100 percent healed” policies increases the chances that the U.S. Supreme Court will decide whether 100-percent-healed policies violate the ADA. Another issue where there is a circuit split that the U.S. Supreme Court will decide is the legality of mandatory arbitration clauses in employment agreements.

Many workers unwittingly give up their rights to have employment-law disputes heard in court when they agree to mandatory arbitration clauses as a term of employment. In D.R. Horton Inc., 357 N.L.B. No 184 (2012) the National Labor Relations Board ruled that mandatory arbitration clauses prohibited Fair Labor Standards Act collective action cases because they interfered with protected concerted activity under 29 U.S.C. §157 and 29 U.S.C. § 158. In Lewis v. Epic Systems, 823 F. 3d 1147, 1154 (7^th Cir. 2016), the 7^th Circuit struck down a mandatory arbitration clause partly based on giving Chevron deference to the NLRB’s decision in D.R. Horton. The 9^th Circuit agreed with the 7^th Circuit in Morris v. Ernst and Young, LLP, No 13-16599 (Aug. 22, 2016). Unfortunately for plaintiffs, the 8^th Circuit disagreed with the D.R. Horton decision in Owen v. Bristol Care, 702 F. 3d 1050 (8^th Cir. 2013).

If confirmed, Gorsuch would be unlikely to give much weight to the opinions of the EEOC or NLRB in interpreting employment laws. Chevron deference is an unpopular concept with pro-business conservatives. Recently, the GOP-controlled House of Representatives passed legislation that, if enacted, would abolish Chevron deference.

Conversely, Chevron deference is a popular concept with progressive employee and civil-rights advocates, as it allowed the Obama administration to expand employee protections in the face of a hostile Congress. But with the advent of the Trump administration and his immigration policies, progressives have a newfound appreciation for separation of powers.

Also, employee advocates probably will not like many of the new rules and regulations issued by Trump appointees such as Labor Secretary nominee Larry Puzder. A prospective abolition of Chevron could be helpful to challenging rules made by a Trump administration. An example from the last Republican administration is instructive. In 2007, the U.S. Supreme Court in Long Island Care at Home Ltd. v. Coke, 551 U.S. 158 (2007) gave Chevron deference to Bush administration rules to exclude home health aides from coverage under the FLSA. It was nine years later that the rule was overturned, giving Chevron deference to Obama administration rules regarding home health aides and the FLSA.

Why an Obscure Securities Law Case Could Affect SSDI

Posted on January 23, 2017 by Jon Rehm

Social Security Disability Insurance (SSDI) cases are largely decided by administrative law judges (ALJs). A decision questioning the role of ALJs in another area of the law could cause some major complications for SSDI applicants and SSDI beneficiaries.

The 10^th U.S. Circuit Court of Appeals recently set aside a conviction for securities fraud by the Securities and Exchange Commission (SEC) because the ALJ who decided the case should have been appointed under the Appointments Clause rather than hired by the SEC. The 10^th Circuit’s decision directly conflicts with a recent decision made by the District of Columbia Circuit Court of Appeals, which means the U.S. Supreme Court could take up the issue.

This matters to SSDI applicants, their attorneys and even present SSDI beneficiaries because the vast majority of administrative law judges, roughly 1,200 of 1,400, have been hired by the Social Security Administration to hear Social Security Disability appeals. Similar to ALJs from the SEC, ALJs who hear SSDI appeals are hired on merit and are federal employees.

If the U.S. Supreme Court followed the recent 10^th Circuit decision and applied it to ALJs who heard Social Security Disability appeals, at least 1,200 ALJs would have to be appointed by the president and confirmed by the Senate. This could lead to further delays and uncertainty related to SSDI appeals. If the 10^th Circuit decision were applied to SSDI judges, it is uncertain as to whether awards of disability would still be valid if they were made by unconstitutionally chosen ALJs. In 2014, in National Labor Relations Board v. Noel Canning, the Supreme Court held that the NLRB’s decision made by commissioners who were appointed by constitutionally invalid recess appointments was invalid.

The Social Security Administration has recently moved to abolish the treating physician rule in an effort to decrease claim payments. Uncertainty over whether the awards of SSDI benefits are constitutional would add additional hurdles to those needing SSDI benefits. If you are applying for Social Security Disability or thinking about it, contact an experienced attorney. Also, contact your lawmakers to express your concerns about the SSDI system to them.

Workplace Safety and the Legacy of Martin Luther King, Jr.

Posted on January 12, 2017 by Jon Rehm

Rev. Dr. Martin Luther King Jr. speaking. (Photo by Julian Wasser//Time Life Pictures/Getty Images)

“It was horrible,” said the woman.

One minute she could see a sanitation worker struggling to climb out of the refuse barrel of a city garbage truck. The next minute mechanical forces pulled him back into the cavernous opening. It looked to her as though the man’s raincoat had snagged on the vehicle, foiling his escape attempt. “His body went in first and his legs were hanging out,” said the eyewitness, who had been sitting at her kitchen table in Memphis, Tennessee, when the truck paused in front of her home. Next, she watched the man’s legs vanish as the motion of the truck’s compacting unit swept the worker toward his death. “The big thing just swallowed him,” she reported.

Unbeknownst to Mrs. C. E. Hinson, another man was already trapped inside the vibrating truck body. Before vehicle driver Willie Crain could react, Echol Cole, age 36, and Robert Walker, age 30, would be crushed to death. Nobody ever identified which one came close to escaping.

The horrific deaths of Cole and Walker on Feb. 1, 1968, set off the Memphis sanitation workers’ strike, where 1,300 mostly African-American public employees struck to protest poor working conditions, including the defective garbage truck that crushed Cole and Walker. Martin Luther King Jr. gave his famous “I’ve Been to the Mountaintop” speech in support of the striking sanitation workers in Memphis the night before he was assassinated.

On Monday, Martin Luther King Jr.’s birthday is celebrated as a holiday. But the rightful veneration of Dr. King should not, for the lack of better terms, wrongfully sanitize or whitewash the fact that what he fought for would be opposed by many who invoke his legacy today. The Memphis sanitation strikers are asking for the same thing that striking fast food and service workers are asking for in the Fight for 15 campaign. Most establishment types and so-called moderates in Memphis refused to support the striking sanitation workers. Today’s so-called moderates argue that paying employees a living wage is too radical and counterproductive. History has a way of repeating itself.

Nearly 50 years later, I still represent sanitation workers who are injured from defective equipment. However, bloody crush injuries like the ones that killed Cole and Walker are much less common. Part of the reason for the increase in workplace safety over the last 50 years was the passing of the Occupational Safety and Health Act. Dr. King was willing to risk bodily harm and ultimately ended up being killed supporting workers who were protesting unsafe work conditions. The passage of OSHA is a small but important and overlooked part of Dr. King’s legacy. History is repeating itself again as the business establishment applauds the expected rollback of OSHA enforcement under expected future Labor Secretary Andy Puzder.

Dr. King also deserves credit for his role in passing laws like Title VII that prohibited discrimination against African-Americans, which has allowed an increasing number of African-Americans to join the professional class and otherwise realize their potential as human beings. Dr. King’s legacy can also be seen in the expansion of rights for disabled Americans, and the fact that gays and lesbians are able to get married, and the real possibility that Title VII may end discrimination against lesbian, gay, bisexual and transgender people.

But by some economic measures, African-Americans are worse off now than they were 40 years ago. This fact can likely be attributed to overall increases in economic inequality over the last 40 years. The U.S. Department of Labor pointed out in a recent study that the gutting of state workers’ compensation laws has exacerbated inequality. Lawyers, legislators, academics and pundits have gradually forgotten about the risks faced by workers like Echol Cole and Robert Walker and how civil rights leaders including Martin Luther King Jr. saw the fight for workplace safety as a matter of basic human dignity and integral to the fight for civil rights.

The offices of Rehm, Bennett & Moore and Trucker Lawyers will be closed in observance of the holiday on Monday. We will re-open at 8:30 a.m. Central Time on Tuesday, Jan. 17. We encourage readers to think about Martin Luther King Jr. on the federal holiday and every day and continue to be both motivated and challenged by his words and works.

More Takeaways from the Demise of the Oklahoma Option in Workers’ Compensation

Posted on December 8, 2016 by Jon Rehm

The Oklahoma Supreme Court’s decision to strike down the so-called “Oklahoma Option” in Vasquez v. Dillard’s was one of the biggest events in the world of workers’ compensation. Vasquez represents a growing trend by advocates for injured workers recognizing that workers’ compensation is a matter of constitutional law. But the Vasquez decision is important for other reasons.

Opt-Out is Still Viable

Though some commentators declared the defeat of the Oklahoma option was the death of opt-out, many justices on the Oklahoma Supreme Court who overturned the Oklahoma option would disagree.

A concurring opinion contrasted the Oklahoma opt-out system with the Texas opt-out system. In Texas, employers are not required to have or “subscribe” to workers’ compensation. But if Texas employers do not subscribe to workers’ compensation, injured Texas employees can sue their employer in tort with all affirmative defenses stripped away. This encourages employers to carry workers’ compensation insurance. Nebraska has a similar law for agricultural employers who are exempt from having to carry workers’ compensation.

Oklahoma’s “opt-out” created separate workers’ compensation systems: the state system under the Administrative Workers’ Compensation Act (AWCA) or the private systems under the Oklahoma Employee Injury Benefit Act (OEIBA), where employees were eligible for the same benefits but where employers could draft their own rules for eligibility. Regardless of whether an employee was covered under the AWCA or the OEIBA, employers still had to be covered under one system or another, and employees could not sue their employer in tort for work injuries. What doomed the Oklahoma option was the fact that unfair procedures under the OEIBA created separate but unequal workers’ compensation systems.

The contrast between the now defunct Oklahoma option and the still-viable Texas opt-out system was reinforced when the Vasquez court rejected Dillard’s argument that Vasquez’s claim was pre-empted by the federal Employee Retirement Income Security Act (ERISA) law. Under the Oklahoma option, plans under the OEIBA were to be governed by the ERISA law. However, since OEIBA served as workers’ compensation and ERISA plans that serve as workers’ compensation plans do not pre-empt state workers’ compensation laws, the OEIBA was not pre-empted by federal law. In contrast, state law claims against employers on disability insurance plans who are “nonsubscribers” in Texas are pre-empted by ERISA.

Few, If Any States, Are Going to Implement the Oklahoma Option

The Oklahoma option was struck down on equal-protection grounds based on the Oklahoma state constitution. Most other states have similar provisions in their state constitutions. In Nebraska, that provision is found at Article III, Section 18 of our state constitution. This provision concerns itself with disparate treatment in much the same manner as does the language of the 14^th Amendment of the U.S. Constitution, which prohibits a state from making or enforcing any law that denies any person within its jurisdiction “the equal protection of the laws.” Distinctive Printing & Packaging Co. v. Cox, 232 Neb. 846, 443 N.W.2d 566 (1989). Even in a state without an equal protection clause in the state constitution, separate but unequal workers’ compensation systems could be likely be struck down on equal-protection grounds under the U.S. Constitution.

Injured Workers Are a Protected Class

Injured workers are sometimes subject to retaliation for bringing workers’ compensation claims. In 2013, the U.S. Supreme Court distinguished “discrimination” or “protected status” from “retaliation” or “protected activity” cases under Title VII and held that there was a higher burden of proof for employees bringing a retaliation case than for an employee bringing a discrimination case. However, if injured workers are thought of as a protected class, then discrimination in the form of termination should be thought of as a form of discrimination, and those claims should be subject to a more relaxed burden of proof than required in the Nassar case.

How Do Nebraska Workers’ Compensation Judges End Up on the Bench?

Posted on August 11, 2016 by Brody Ockander

There are seven judges who are active in the Nebraska Workers’ Compensation Court. These judges are solely workers’ compensation judges and do not hear any other cases outside of the Nebraska Workers’ Compensation Court. Four of the judges have offices in Lincoln, and three have offices in Omaha, but the seven judges cover the entire state. Trials are conducted by these judges in the county where the work-related injury occurred. If the injury occurred outside of the state, the hearing is held in Lincoln or in any other venue to which the parties agree.

How do these judges end up on the bench? The workers’ compensation judges in Nebraska are not elected, unlike in some states. Instead, like all state-court judges in Nebraska, a pool of judicial candidates is screened and narrowed by a judicial nominating commission. These commissions are made up of both lawyers and laypersons from both political parties and also independents. After the narrowing process, the governor appoints a judge from that limited group. After the appointment, every six years, the judge will be up for a vote of the general public as to whether the judge should be retained on the bench. If the vote is to retain the judge, then that judge remains for another six-year term.

A system like this does a good job of narrowing the candidates for the governor to a group of the most qualified. Further, this process usually limits politics in the judiciary and it is greatly preferable to the states where judges are simply elected. Here is a good video explaining why.

Overtime and Minimum Protections Laws Upheld for Home Health Aides

Posted on June 29, 2016 by Jon Rehm

On Monday, the U.S. Supreme Court refused to review a federal circuit court’s decision upholding a rule by the U.S. Department of Labor that would extend overtime and minimum wage protections to home health aides. This decision is a win for workplace fairness and safety.

This blog has been following this issue since a federal district court struck down this rule early in 2015. Though this rule may not have an impact on workers’ compensation directly, the fact that home health aides are covered by wage and hour laws would make it more likely that they would be treated as employees and more likely to be covered by workers’ compensation laws as employees.

The fact that home health aides appear poised to gain overtime and minimum wage protections should also improve pay and benefits for Certified Nursing Assistants (CNAs) who perform similar to work to home health aides. Higher pay for CNAs could lead to better patient care and fewer injury claims.

The Supreme Court’s refusal to hear the appeal relieves uncertainty over whether the rule applies or not. The U.S. Labor Department declared the rule was effective on Oct. 13, 2015. Since the court challenge failed, the rule should be effective. If you have questions as to whether you are covered by the rule or not, please visit the Labor Department’s site about wage and hour protections for home care workers.

Workers' Compensation Watch

Published by Rehm, Bennett, Moore & Rehm

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Category Archives: Courts

Will The Supreme Court’s Attack On State Courts Affect Workers’ Compensation?

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

Gorsuch, Chevron and Workplace Law

Workplace Safety and the Legacy of Martin Luther King, Jr.

More Takeaways from the Demise of the Oklahoma Option in Workers’ Compensation

How Do Nebraska Workers’ Compensation Judges End Up on the Bench?

Overtime and Minimum Protections Laws Upheld for Home Health Aides

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