Will worker-friendly prosecutors be stymied by the 8th Amendment?

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Newly elected Queens County NY District Attorney Tiffany Caban vows to crackdown on wage theft

Newly elected Queens County District Attorney Tiffany Caban vowed to step up criminal enforcement  of wage theft.  But prosecutors wanting to use the criminal justice system to push for workplace justice may be blocked by arguments adopted by the Colorado Supreme Court recently.

The Colorado Supreme Court held that a $841,200 fine to an employer for not having workers’ compensation insurance violated the excessive fines clause of the 8th Amendment. Colorado imposes a fine of between $250-$500 per day for every day an employer does not have workers’ compensation insurance.

The Colorado court found lower courts erred as a matter of law in not applying Supreme Court precedent stating that fines could be challenged if they were clearly excessive. The Colorado court found that there was an insufficient record to determine whether the fine actually was clearly excessive and sent the case back to the trial court for a factual determination.

While not controlling in other states or jurisdictions, the Colorado decision would likely be persuasive in jurisdictions, such as Nebraska, that impose daily fines on employers for not having workers compensation insurance.

But even if Nebraska did adopt the Colorado fine decision, I question somewhat the practical effect of the decision. Employers are rarely fined for not having coverage. Colorado employers still bear the burden of contesting their fine on a violation by violation or day by day basis. But this would also place a burden on prosecutors to prove violations on a day by day or violation basis. I believe this would discourage prosecution under Nebraska’s law as Nebraska law vests sole authority to prosecute fine cases to the Attorney General. The law also give doesn’t make prosecution mandatory.

My view is that the Colorado decision would be less persuasive in challenging penalties and fees awarded to employees under Neb. Rev. Stat. 48-125.

The Supreme Court has held that while civil fines are still fines under the 8th Amendment, fines do not include punitive damage awards in civil cases. Fines are limited to money paid to or taken by the government.

Neb. Rev. Stat. 48-125 awards penalties and attorney fees to employees where there is no reasonable controversy of fact or law as to an award of medical or disability benefits. No reasonable controversy is a difficult standard for an employee to meet. Penalties and fees under 48-125 serve as a substitute for a bad faith action in Nebraska.

Since penalties and fees are awarded directly to parties and they serve as a substitute for damages that could be awarded in a civil case, there is a good argument that penalty and fee awards under 48-125 would be immune from an 8th Amendment challenge.

On the flip side, since Nebraska doesn’t allow for punitive damages in civil cases, a narrow reading of Supreme Court precedent on fines might open up an 8th Amendment challenge. The fact that Nebraska doesn’t allow for punitive damages would give Nebraska employers a stronger argument to challenge an award of penalties and or fees under 48-125 as excessive.

Previously I wrote about how employee benefit plans under ERISA can complicate the resolution of workers compensation claims.   Employees have  the ability to have a court fine an insurance plan for not providing a copy of the benefit plan. This leverage may be lessened if more courts adopt the reasoning of the Colorado Supreme Court about fines.

Lawyers for injured workers should be proud of the success we have had making constitutional challenges to anti-worker changes to state workers’ compensation laws. But last year I wrote that the defense bar could also mount constitutional challenges of their own. They succeeded in Colorado. Hopefully legislators in Colorado will fix a decision that makes it harder to punish deadbeat employers who don’t provide workers compensation insurance to their employees.

One way to make fines pass constitutional muster would be to allow injured workers to share in the fine. This would probably mean changing fine statutes to allow for private prosecution, but if it was coupled with what amounts to a bounty it could mean more aggressive prosecution employers who didn’t get workers’ compensation insurance. In states like Nebraska, that don’t allow for punitive damages, I also think an award of a set general damage to a plaintiff where the employer didn’t have insurance would help penalize scofflaw employers.

On Monday, I wrote about my reluctance to criminalize workers’ compensation fraud. Allowing employees expanded civil remedies against employers who don’t carry insurance may be more effective in combating this form of workers’ compensation fraud. It may also be more permissible from a constitutional perspective.

But from a practical standpoint I am well aware of the leverage that criminal prosecution gives to an employee-side attorney in a wage and hour case. I represented an employee who was paid nothing for several weeks of sales work, Nebraska doesn’t have a so-called outside sales exception, so the emplyoer had no defense to not paying my client. Furthermore, Nebreska has tough language in our wage and hour act stating that county attorneys shall prosecute violations of the law. I hope newly elected pro-workers prosecutors will be willing to partner with civil attorneys in cracking down on wage theft.

The offices of Rehm, Bennett & Moore, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

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