Category Archives: Constitutional law

Free to work where you want, but not free to claim workers’ compensation where you want

Posted on December 5, 2019 by Jon Rehm

Americans enjoy the freedom to travel, live, work and enter into contracts throughout the United States. But when an employee is injured on the job they are often forced to claim workers’ compensation benefits in a distant and or unfamiliar state.

Article IV of the United States Constitution explains this dilemma for injured workers. But Article IV may allow some employees to be more fairly compensated for their work injuries as well.

The privileges and immunities clause

Article IV, Clause 2 of the Constitution, the so-called privileges and immunities clause, gives Americans the right to freely travel, work, contract and buy property in any state without discrimination by state governments.

But states are allowed to discriminate some based on laws enacted for the health and welfare of its citizens enacted under their 10^th Amendment police powers. Workers’ compensation laws are enacted by states under their 10^th Amendment police powers. This means that states can decide which employers and employees are subject to their workers’ compensation laws.

In practical terms, this often means injured workers are forced to claim workers’ compensation benefits in a state where they don’t live. Fortunately states cannot discriminate against non-residents when it comes to access to courts. But if the privileges and immunities clause guarantees equal access to state courts regardless of state citizenship, is it constitutional to force someone to travel thousands of miles to pursue a workers’ compensation case? Arguably it’s not. It’s arguably also unconstitutional to deny a workers’ compensation claimant the right to a video or telephonic hearing if they are required to incur heavy travel expenses.

Full faith and credit clause and workers’ compensation

Article IV, Clause 1 requires states to give full faith and credit to the judgments of other states. In some circumstances this means that an injured workers can only claim and collect workers’ compensation benefits in one state even if they would be eligible for benefits in multiple states. If a state workers’ compensation law holds that you can only collect benefits in that state, then you cannot collect benefits in multiple states.

But if state law is silent about the receipt of benefits in multiple states you can collect benefits in multiple states. As one Supreme Court justice pointed out, workers’ compensation benefits are limited and they don’t always adequately compensate an injured worker. Double collection of benefits isn’t necessarily a windfall. But as I pointed out in a post in 2017, the Supreme Court isn’t overly supportive of injured workers claiming benefits in multiple states. The last decision on this issue came out nearly 40 years ago, the Supreme Court has become even less friendly to workers since then.

Workers compensation in a new “Lochner era”

Posted on August 12, 2019 by Jon Rehm

Last week I wrote about a 4th Ciicruit Court of Appeals decision, U.S.v Hill, that upheld a federal hate crime conviction of an Amazon employee who assaulted his co-worker because he believed the co-worker was gay.

That post focused on how workers’ compensation laws could apply to a violent hate crime on the job. But in the big picture, Hill is an important case beause of its disucssion of the interstate commerce clause. The commerce clause is important to many areas of law including workers’ compensation

The Constitution gives Congress power to regulate commerce between states. The federal role in regulating interstate commerce has been argued in the federal appellate courts for nearly 200 years. The 4^th Circuit does a good job of summarizing those arguments in U.S. v. Hill. (If you are lawyer or law student with a long flight coming up you can read the Lopez and Morrison decisions for even more background)

Workers’ compensation laws were enacted in the early 20^th century when there was a relatively narrow definition of what constituted interstate commerce. Therefore Congress couldn’t enact general workers’ compensation laws, states had to enact workers’ compensation laws for them to be constitutional.

But the definition of interstate commerce was broadened in the 1930s during The New Deal. That broader definition of interstate commerce allowed Congress to enact the Occupational Health and Safety Act in the 1970s. That broad definition of interstate commerce also underlined federal efforts to impose minimum standards on state workers’ compensation laws. The threat of federal intervention in the 1970s and 1980s actually lead to states making their workers’ compensation laws more generous to employees. This stands in stark contrast to pro-corporate “reforms” that started in the 1990s once threats of federal intervention receded.

Federal hate crime laws are also based on relatively broad readings of the interstate commerce clause. The 4th Circuit broadly read the interstate commerce clause in the Hill case. But starting in 1995 with afore mentioned Lopez case, the Supreme Court has effectively narrowed the reach of the interstate commerce clause without formally overturning New Deal and post-New Deal case law broadly interpreting interstate commerce clause. The trial court and disenting judge in the 4th Circuit relied on that narrow reading of the commerce clause in Hill.

If you read the 4^th Circuit’s and trial court decision in U.S. v. Hill along with Lopez and Morrison, most people would agree that the Supreme Court’s law on interstate commerce is a jumbled mess. The last time workers’ compensation laws were broadly improved on a national basis it happened under the threat of federal intervention. Employers likely wouldn’t have been able to challenge federal intervention in the 1970s or 1980s based on the interstate commerce clause. I’m much less sure of that in 2019. If workers’ advocates want federal intervention to improve state workers’ compensation laws, they may need to find other ways to make that intervention pass constitutional muster.

Lawyers who represent injrued workers tend to be skeptical of “federalization.” We have our reasons. Federal law can create serious hassles for medical charges related to air ambulances, negotating insurance liens under ERISA and Medicare Set Asides are a persistent headache as well.

But while federal law can cause hassles for injured workers and their lawyers, states gutting workers’ compensation laws is an a direct and existential threat to the well being of injured workers and their attorneys. The threat of federal intervention in state workers’ compensation laws in the 1970s and 1980s meant that workers’compensation plaintiff’s lawyers didn’t have that ever present sense of dread about the future of their practice.

Trial lawyers have had some luck fighting back against workers’ compensation reforms in state courts. But relief from the federal courts seems to be less likely. University of Michigan law professor Sam Bagenstos published a law review article about a return to the so-called Lochner Era when it comes to labor and employment law. This means case law will tend to favor employers. The Supreme Court’s interstate commerce clause decisions seem to algin with Lochner era. Ultimately, appellate courts probably aren’t going to preserve let along substantially improve workers’ compensation laws. Those improvements will have to be made in the political arena.

A quarter-step forward but two steps back on fee scheduling air ambulance charges in workers compensation

Posted on January 3, 2019 by Jon Rehm

Congress may have implemented a partial legislative fix in response to a growing number of state and federal court decisions, the most recent out of the 4^th Circuit Court of Appeals, holding federal law regulating aviation preempts workers’ compensation fee scheduling of air ambulance bills.

The FAA Reauthorization Act authorized the Secretary of Transportation to appoint an advisory committee to suggest rules about charges for air ambulance services. But this “fix” may actually give air ambulance companies more power to avoid having their charges “fee scheduled” under state workers’ compensation laws.

The main controversy about air ambulance charges is that users, including injured workers, can be stuck with paying the difference between what insurance paid and what is billed. In workers’ compensation, when a provider accepts the “fee schedule” then an employee can not be billed further by the medical provider.

But since many courts hold that a state cannot regulation air ambulance charges, state fee schedules do not apply to air ambulances in that situation. This is because when a state law conflicts with a federal law, the federal law preempts the state law. Charges for air ambulances are often in the tens of thousands of dollars because of the cost of helicopter flight.

On a negative note for workers, the fact that the Department of Transportation is issuing rules regarding air ambulance charges could strengthen the case that the regulation of air ambulance expenses preempt state workers’ compensation fee schedules.

In another downside for workers, the air ambulance industry will get three members of the advisory board that will be helping to draft the rules, while there will be one “consumer representative” as well as two other representatives generally representing the health insurance industry. There is a chance that consumer interests could get short-shifted by the Department of Transportation.

One upside for workers is that the legislation indicates that it should breakdown air ambulances expenses between transportation and non-transportation expenses. Non-transportation expenses could be more likely to be subjected to fee schedules which would reduce the cost of air ambulance services.

Recent case law would indicate there was an emerging majority view that the fee scheduling of air ambulance charges under state workers’ compensation laws would be preempted by federal law. The 4^th Circuit Court of Appeals upheld a federal court in West Virginia that held that state regulation air ambulance charges would be preempted by federal law. The 4^th Circuit joined the 10^th Circuit, 11^th Circuit and courts in Florida, Kansas, Kentucky, North Dakota, Texas and West Virginia in holding that workers compensation fee scheduling of air ambulance services are preempted by federal law.

Three things disturbed me when I read over the recent 4^th Circuit decision and the West Virginia federal decision it upheld. The first thing that bothered me was any lack of discussion by the court about how fee schedules fit into the beneficent purpose of workers’ compensation laws. Legal analysis oftentimes requires balancing of different interests, but there was no more than cursory balancing of interests in the latest air ambulance case.

Fee schedules were generically described as a “regulation” in the most recent air ambulance case. The deregulation of air service was described by the District Court as an unvarnished good. Recent press coverage has demonstrated how business interests have worked to influence the federal judiciary. The recent air ambulance cases show a strong anti-regulatory bent and how that influence may manifest in court decisions.

Finally, the District court upheld a contracts clause challenge to state workers’ compensation fee schedules. I don’t know if the contracts clause argument would have succeeded without the pre-emption argument, but the contracts clause has historically been used to strike down workplace safety and workplace rights laws. As a plaintiff’s attorney, I don’t like seeing the contracts clause being used to weaken workers’ compensation laws. Again, this could show how business interests are influencing the federal judiciary.

But if Congress has legislated on air ambulance fees and the DOT will be regulating the area, there is some possibility that Congress or the DOT could change those rules and regulations in a way that would help workers, by say, ruling that air ambulances have to accept workers’ compensation fee schedules if one is in place. Ideally air ambulances would be excluded by Congress from the definition of common carrier as argued by proponents of the West Virginia fee schedule for air ambulances.

Will there be a fix for legislation like the Protz fix?

Posted on December 27, 2018 by Jon Rehm

Doing the math: How the AMA 6th costs workers with a wrist injury

In a dubious triumph for bi-partisanship, Pennsylvania reduced workers’ compensation benefits for many if not most workers with permanent injuries in 2018. 2018 was a bad year legally for workers rights and the so-called Protz fix was emblematic of the year for a few reasons.

But 2018 also showed some glimmers of hope for workers such that there may be fixes for legislation like the Protz fix.

Legislatures take, courts make and vice versa

Pennsylvania Governor Tom Wolf signed HR 1840 which legislatively overturned the Protz decision which held Pennsylvania’s language using the “most recent” edition of the AMA Guides to Permanent Impairment to determine compensation for permanent injuries was unconstitutional. Pennsylvania “fixed” the Protz decision by expressly adopting the AMA 6^th.

The AMA 6^th has been criticized, correctly in my view, because it is bases impairment on inability to do general life activities versus working activities. A recent study confirms this suspicion long held by plaintiff’s attorneys. From a practical point of view, the AMA 6^th usually leads to an injured worker receiving less compensation than they would under previous editions of AMA impairment “cookbook.”

When I started practicing in 2005 a worker who had a carpal tunnel surgery usually had a 5 percent impairment under the AMA 5^th. Now, that same injury is typically a 1 percent impairment under the AMA 6^th.

For a worker in Nebraska earning $15 per hour, the difference between the two impairments on a wrist injury amounts to $2800. After the Protz “fix” was passed, the Pennsylvania Compensation Rating Bureau filed for a 14.74 decrease in workers’ compensation insurance rates.

My big takeaway from the Protz decision and the subsequent “fix” is just how much work needs to be done politically to make sure injured workers are fairly compensated for their injuries. The Protz “fix” passed easily. Plaintiff’s lawyers resorted to constitutional challenges because many state legislatures have weakened workers’ compensation laws. Protz shows that appellate victories can be fleeting because legislatures can easily overturn those decisions.

Does the plaintiff’s bar need to worry about “constitutional challenges” of their own?

2018 also saw some disturbing court decision that could impact workers’ compensation. In SEC v. Lucia the United States Supreme Court held an investment adviser convicted of securities fraud by the Securities and Exchange Commission (SEC) was unconstitutionally convicted because the Administrative Law Judge (ALJs) who tried his case was hired in violation of the appointments clause. Iowa is one of many states 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.

Protz relied on an argument about unconstitutional delegation of legislative powers which is fundamentally a conservative argument which was used to strike down New Deal legislation. Workers’ compensation reforms have also been challenged on a contracts clause basis which is another conservative argument used against pro-workers legislatsion in the past. Maybe these arguments appeal to conservative pro-business types, but they could be used against advocates for injured workers and their clients.

But there are some reasons for hope that emerged in 2018.

2018: Reasons for hope for injured workers

But 2018 did see gains for Democrats in state and federal elections. To be blunt, pro-worker is often a code for “Democrat”. While there are some exceptions, most conservatives are terrible for workers. Democrats generally oppose extreme conservatives, so they serve some purpose. But in Pennsylvania the so-called Protz fix was signed by a Democratic governor and supported by Democratic state legislators. In my experience, many Democratic elected officials aren’t going to support workers unless they get prompted, but they are usually lack the same ardor to gut workers’ rights.

More hope can be found outside the realm of electoral politics. In 2018 citizens started taking direct action. Some of the biggest gains made for workers in recent memory happened during teachers’ strikes in Arizona, Oklahoma and West Virginia this year. The chattering classes asked “Why don’t these striking teachers just vote for the right people?” Well, they tried and it didn’t work. Rank and file teachers in Arizona, Oklahoma and West Virginia found a better way to advocate for themselves.

The teachers strikes took place in the wake of the Janus decision that dealt a blow to public sector unions. Workers’ rights were also dealt a blow by the Epic decision that, among other things, allowed employers the right not to join class and collective action cases through so-called arbitration agreements. Workers for Chipotle and Uber have come up with the ingenious hack of filing in mass for individual arbitrations.

I see the challenge for 2019 for lawyers for injured workers’ is finding away for this newly emerging energy and creativity from workers in support of their own rights focused on improving workers’ compensation. I’ve written before about state senators Dan Quick of Nebraska and Lee Carter of Virginia who used their bad experiences with workers’ compensation to try to improve the workers’ compensation laws in their state.

So while lawyers for injured workers may be on the defensive in the legislative and judicial arena, we may have newfound allies that could help us reverse the steady erosions of workers’ compensation laws.

Kansas court holds adoption of AMA 6th violates due process

Posted on August 6, 2018 by Jon Rehm

The Kansas Supreme Court undid one small part of Sam Brownback’s legacy

The Kansas Supreme Court ruled on Friday that adoption of the American Medical Association Guides to Permanent Impairment, Sixth Edition (AMA Sixth) to pay permanent injuries under their workers’ compensation act violated constitutional rights to due process because it gave injured workers an inadequate remedy for work injuries.

The decision in Johnson v. US Food Service came on the heels of a recent Oklahoma decision that upheld the constitutionality of the AMA Sixth in that state’s workers’ compensation law. Injured workers in Kansas were likely helped by the Kansas applying heightened scrutiny in assessing a due process violation rather than applying what amounts to rational basis scrutiny like the Oklahoma court did in upholding their use of the AMA Sixth.

The Kansas court also seemed to be persuaded by findings of fact and legislative history about the problems with the AMA Sixth in how it compensates work injuries. The court was particularly persuaded by findings that the AMA Sixth lead to lower impairment ratings because it measured impairment based on inability to do general life activities rather than activities related to working. The Kansas decision throwing out the use of the AMA 6^th will likely be persuasive to trial courts in other states when deciding whether impairment under the AMA 6^th sufficiently compensates injured workers.

The decision was also premised on the fact that injured workers give up the right to a trial by jury to pursue a tort claim against the employers to receive workers’ compensation benefits. According to the Kansas court, compensating employees under the AMA 6^th when combined with other recent changes to Kansas workers’ compensation law meant that employees were giving up too much in exchange for not being able to sue their employers and have a trial by jury.

Last month, I posted “Appellate courts aren’t going to save workers’ compensation.” Maybe I was too pessimistic in that assessment considering Johnson case. But a closer reading of the Johnson case shows my thesis is still sound. The Kansas court went through an exhaustive list of anti-worker reforms made by the Kansas legislature in 2011 and 2013 to that state’s workers’ compensation laws. With the exception of using the AMA 6th, those anti-worker reforms are still law in Kansas. I hope the decision in Johnson will help advocates for injured workers rollback other negative changes made to workers’ compensation law in Kansas. But the changes to Kansas’ workers’ compensation laws came through the political arena and victories in the political arena are the only sure way to insure fair compensation for injured workers in Kansas and in the rest of the country.

I agree with the outcome and most of the reasoning supporting the Johnson decision. But I disagree with the court’s literary flourish arguing that injured workers aren’t heard in adminisatsrive hearings or bench trials. The majority of my court room experience comes in what amount to bench trials in the Nebraska Workers’ Compensation Court. In my experience the injured worker gets to tell their story and — just as important – management witnesses are forced to answer for their treatment of injured workers as it relates to issues being tried. At least in Nebraska, trials in worrkers’ compensation cases can address that emotional need for justice outside fiancial compensation. But for most people, the finanical outcome of a case is more important than the process used to obtain the outcome.

Thomas Robinson, editor of the leading treatise on workers’ compensation law, stated the Kansas court’s focus on assigning fault for an injury misses the point of workers’ compensation which means defined compensation for a work injury regardless of fault. I agree with this point. I’ve written about the role of fault in the suppodedly no fault world of workers’ compnesation. I will be interested to read Robinson’s take on fault and workers’ compensation.

Appellate courts aren’t going to preserve workers’ compensation

Posted on July 5, 2018 by Jon Rehm

The Supreme Court rejected a challenge to a “reform” of New York workers’ compensation laws made by Liberty Mutual

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, O klahoma, 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 19^th 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.

Immigration, SEC cases send mixed signals from Supreme Court

Posted on June 28, 2018 by Jon Rehm

Like Justice Stephen Breyer, many of us have pained looks when thinking about the Supreme Court this week

In a case with implications beyond securities law, the Supreme Court ruled in Lucia v. SEC last week that an investment adviser convicted of securities fraud by the Securities and Exchange Commission (SEC) was unconstitutionally convicted because the Administrative Law Judge (ALJs) who tried his case was hired rather than appointed in violation of the appointments clause.

Lucia is not a high-profile case like Tuesday’s decsion in Trump v. Hawaii that upheld the so-called Muslim ban. To some extent the cases may seem contradictary. But the cases can be reconciled in a way that reveals some disturbing truths about the American political system. While Lucia is an important case in its own right, it makes Trump v. Hawaii more understandable.

In January 2017, I wrote about how a companion case to Lucia could potentially wreak havoc with Social Security Disability (SSDI) cases. Like the SEC, the Social Security Administration appoints administrative law judges to adjudicate social security disability claims. ALJs are government employees who are hired by agency rather than appointed by the President or agency head. The Supreme Court held that since ALJs at the SEC had significant discretion in deciding important matters they were officers for the sake of the appointments clause so they needed to be appointed rather than hired as employees.

SSDI hearings may be distinguishable from SEC hearings in that they are less formal and less adversarial. A parrty challenging the constituionality of SSDI on appointments clause grounds might have a hard time showing they had standing to make a challenge. But other forms of administrative hearings are more formal and adversarial and involve parties with standing to make challenges.

In Nebraska, the Department of Labor hires ALJs to hear unemployment appeals. In many states, like Iowa, workers’ compensation cases are heard by ALJsthat 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. Employees/plaintiffs have had a recent string of good decisions with state supreme courts challenngng laws they believe harm workers. Employers may decide to press their luck in the states with Lucia case as persuassive authority. The same challenges based on Lucia could conceivably be made about unemployment insurance at a state level.

Finally there was some irony in Lucia. Though ALJs hired by the SEC could only make recommendations to the commission, the court found that the commission usually deferred to the recommendation of the ALJ which was part of the reason why the ALJ was an officer rather than an employee. In Masterpiece Cakeshop an ALJ had decided that bakery had violated Colorado public accommodation laws in refusing to bake a wedding cake for a same-sex marriage. The comments made by the Colorado civil rights commissioner that caused the decision to be reversed by the court were made after the ALJ’s decision. But in Masterpiece the argument that the commission was probably just deferring to an ALJ decision was absent. But Masterpiece and Lucia can be somewhat reconciled logically as they both show how the Roberts court is skeptical of administrative agencies when they interpret laws and adjudicate disputes.

In his dissent in Lucia, Justice Stephen Breyer stated the Supreme Court threatened to undermine the whole system of administrative adjudication with its decision. The most high profile of these administrative systems is the Immigration Court which is backlogged with cases. President Trump proposed “solving” the backlog of cases by just doing away with due process altogether in deportation hearings.But if four-flushers and flim-flam men deserve due process in administrative hearings, then so do those accused of either entering or living in the United States without authorization.

The skepticism shown by the Roberts court towards admisnisative agencies that regulate the economy was absent the Department of Homeland Security (DHS) and other intelligence agencies in Trump v. Hawaii. Instead the Roberts court was beyond deferential to the Executive branch in a matter they deemed to be “national security.” To those raised during the Cold War and post-9/11 era such deference to the executive on matters of national security seems natural. But as Justice Sotomayor poitned out in her dissent, the Judiciary, Legislative and Executive are equal branches of the government.

But are the branches of the government are equal when the Executuve commands a massive standing army and massive foreign and domestic intellignece agencies? The power of the Executive in this area is even greater when combined with business interests that former President Dwight Eisenhower described as the military-industrial complex in 1961. William Jennings Bryan made a similar warning in 1900 in what was called his “Imperalism” speech. The corrosivve effects of the military-industrial complex or empire on our democratic form of government can be seen in how the Roberts court was willing to kow-tow to the Trump administration on matters of “national security” while the corut is more than willing to second guess Congress and administtrative agencies on matters relating to regulation of the economy.

What the big California worker classification case means and could mean

Posted on May 7, 2018 by Jon Rehm

The California Supreme Court made big news in the world of workers’ compensation and employment law last week when it adopted the employee-friendly ABC Test for the purposes of California’s minimum wage law. The decision was seen as a set back for gig economy companies like Uber who classify their workers as independent contractors.

The bigger story as pointed out by CNN Money reporter, Lydia DePillis , and widely acknowledged by attorneys and legal academics is the patchwork of different state labor laws and how they will impact the gig economy and workers. My room temperature take is that employee classification laws aren’t even consistent within states. Nebraska has adopted the ABC test for the purposes of unemployment and for our wage payment act by statute. But Nebraska imposes the more employer-friendly right of control/economic reality test by case law for the purposes of workers compensation.

Labor Secretary Alexander Acosta has called for an update of labor and employment laws to aid the gig economy. Experienced workers’ compensation attorneys may view the fight over the classification of gig economy workers as a potential threat to their practices but as essentially an old issue that has new prominence because of the rise of companies like Uber. But worker classification legislation is only part of the story about how the rise of the gig economy could change workers’ compensation laws. Advocates for injured workers need to understand how so-called “portable benefit” schemes could change workers’ compensation laws. If enacted, portable benefits laws could radically alter the grand bargain behind workers’ compensation laws. They could also provide more uniformity of laws regarding employee benefits and protections like workers’ compensation

A portable benefit is defined as a benefit that is paid into an employer-sponsored plan that can be transferred to a new employer or to an individual who is leaving the workplace.[At least when it comes to health insurance, portability has some real benefits for workers’ rights. Employees aren’t tied to a potentially abusive employer just for the sake of keeping their health insurance. Candidly any portable benefits scheme that expands health insurance coverage would also help workers who do not have health insurance. The pro-worker potential of portable benefits was recognized by the National Employment Law Project who issued a report with the Roosevelt Institute about how portable benefits could be implemented.

But other portable benefit plans developed by Washington D.C. think tanks run the gamut from the really bad to the just bad.

MIT economist Jonathan Gruber, who was influential in the design of the Affordable Care Act, wrote a paper for the Aspen Institute that proposed catch-all individual security and retirement accounts as alternatives or replacements for workers’ compensation and unemployment insurance. Without anything in the way of attribution, Gruber breezily states that higher workers’ compensation benefit payments create a “moral hazard” which leads to more injuries and longer durations of injuries. Gruber then goes on to propose that injured workers exhaust their individual security accounts before they collect workers’ compensation benefits and that workers’ compensation benefits be subject to federal taxation. It is important to note that Gruber doesn’t limit his proposal for portable benefits to gig economy workers.

Economists Seth Harris and Alan Krueger have proposed a somewhat more worker-friendly portable benefits scheme designed for gig economy workers to be paired with a new type of employee classification between employee and independent contractor for workers in a paper did they did for The Brookings Institute. The Harris-Kruger plan would allow gig economy employers to “opt-in” to state workers’ compensation laws. But even the more worker-friendly Harris-Krueger portable benefits scheme was created mainly to reduce litigation costs for gig economy companies. Former National Labor Relations Board member and associate counsel for the AFL-CIO, Craig Becker, pointed out that creating a new class of workers may create more litigationwhen employers try to re-classify employee as a new class of worker.[5] 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. Legislation has been introduced in California that is along the line of the Harris-Krueger plan.

Many plaintiff’s lawyers seem to, or at least want to, believe that since workers’ compensation laws were enacted under 10^th Amendment police powers then workers’ compensation laws are a matter of “state’s rights” and so-called federalization is uncalled for and unconstitutional. Congress has broad authority under its taxing power to effect economic activity that is beyond even the broad scope of its power to regulate individual commerce. The individual mandate of the Affordable Care Act was found to be constitutional under congressional taxing authority even though the mandate exceeded congressional authority to regulate interstate commerce. Recently passed changes to tax law have encouraged workers to take independent contractor status.

Besides workers’ compensation, the other mandated benefits that stem from the employee-employer relationship — unemployment, Medicare and Social Security — are all effectuated in whole or in large part through federal taxes. If a portable benefits are implemented on a nationwide basis, it will likely happen through the tax code and they could be enacted in a constitutionally valid way. Any discussion about the impact of the gig economy on worker classification laws should include discussion about portable benefits proposals.

Workers' Compensation Watch

Published by Rehm, Bennett, Moore & Rehm

Published by:

Category Archives: Constitutional law

Free to work where you want, but not free to claim workers’ compensation where you want

The privileges and immunities clause

Full faith and credit clause and workers’ compensation

Workers compensation in a new “Lochner era”

A quarter-step forward but two steps back on fee scheduling air ambulance charges in workers compensation

Will there be a fix for legislation like the Protz fix?

Kansas court holds adoption of AMA 6th violates due process

Appellate courts aren’t going to preserve workers’ compensation

What the big California worker classification case means and could mean

The privileges and immunities clause

Full faith and credit clause and workers’ compensation

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this: