Employee advocates, me included, are still trying to process just how bad this latest session of the Supreme Court was for workers. There were bad decisions in wage and hour, whistleblower, forced arbitation and labor law. In lower profile decisions, the court may have encroached into how work injury cases are litigated and rejected a constitutional challenge to state level reforms.
The Supreme Court may have handed employers/insurers a way to mount constitutuonal challneges to some state workers’ compensation laws in Lucia v. SEC. (Lucia is of more immediate concerns to Longshore and FECA practitioners who have their cases heard by ALJs ). In many states, like Iowa, workers’ compensation cases are heard by Administrative Law Judges that are hired as civil servants rather than appointed by the Executive. SEC v. Lucia could help employers/insurers to make persuasive appointments clause arguments under state constitutions that such arrangements are unconstitutional.
Advocates for injured workers have taken some solace in a string of good outcomes in front of state courts in Kansas, Pennslyvania, Oklahoma, Florida and Alabama. But even that run of state-level wins has come to a halt for now.
The Oklahoma Supreme court rejected a constitutional challenge to Oklahoma’s mandated use of American Medical Association Guides (AMA Guides) to Permanent Impairment, Sixth Edition. Thomas Robinson pointed out the case was distinguishable from a Pennsylvania case strking down a law mandating the use of the “latest” guides because the Oklahoma legislature expressly adopted the AMA 6th to determine how they would pay scheudled member disability.
Oklahoma isn’t the only state where consitutional challenges to anti-workers changes to workers’ compensation laws have failed recently. The Supreme Court denied certiorari — refused to hear an appeal — from a New York Court of Appeals decision overruling a contracts clause and takings clause challenge to New York’s workers’ compensation law by workers’ compensation insurer, Liberty Mutual. Liberty Mutual was challenging the end of employer contributions to New York’s Special Fund for Reopened Cases that was part of reforms to New York’s workers’ compensation laws made in 2013. The Fund for Reopened cases allows employees to be compensated for cases where claims were at least 7 years old and no benefits had been paid for three years. Essentially the Fund ensures that the costs of old work injuries don’t get unfairly shifted on to workers and other payors. By abolishing the employer contribution, New York state essentially stuck workers’ compensation insurers with the cost of old injuries without being compensated by employers.
Essentially the Supreme Court refused to consider overturning state-level workers’ compensation reform based on the federal constitution. I think there is some consolation in the fact that the successful challenges to workers’ compensation were made on due process and equal protection grounds, while the unsuccessful New York challenge was based on the takings and contract clause. Historically the contracts clause was used to strike down pro-worker laws enacted by states starting in the late 19th century. (I also find some personal consolation that the successful constitutional challenges to comp reform have been mounted by plaintiff’s lawyers from small firms, while the New York challenge was unsuccessfully argued by a former United States Solicitor General.)
The demise of the Fund for Reopened Cases was prompted by an earlier reform that abolished the Second Injury Fund in New York because insurers pushed former Second Injury Fund cases into the Fund for Reopened Cases. Second Injury Funds were intended to encourage hiring of injured employees by ensuring that new employers were not stuck with the entire cost of aggravation of old injury by a previously injured worker. New York is far from the only state that has abolished second injury funds. Insurance thought-leader types seem to believe that Second Injury Funds aren’t necessary because of the Americans with Disabilities Act. Anyone with any experience litigating ADA cases for employees would beg to differ.
Fundamentally, the failed New York and Oklahoma court challenges are illustrative of disturbing larger trends in the arena of workers’ compensation. First, constitutional challenges are not a foolproof method of defeating workers’ compensation reform. Secondly even when court challenges do succeed they represent the inverse of the conditions that made workers’ compensation laws possible. Workers’ compensation laws were enacted by legislatures in the face of a court systems that as a whole was either indifferent or hostile to the interests of workers hurt on the job. Now advocates for injured workers look to courts for relief from hostile legislatures. Looking to state appellate courts as an antidote to workers’ compensation reform may become less of an option as anti-worker Governors appoint anti-worker judges. Ensuring the workers’ compensation system protects injured workers will probably depend on the same type of mass politics that lead to the enactment of workers’ compensation laws. That kind of politics is probably beyond the scope of the relative small number of attorneys who represent injured employees, but those of who represent injured workers’ need to ally with broader worker movements and make sure that workers’ compensation is a high priority for other worker advocates.