Category Archives: Workers Compensation

Compstitutional Law 101: Part 2: Will Sveen signal a move to judicially dismantle the “grand bargain”?

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Watch out for what these three could say in Sveen v. Melin

WILG is hosting a summit on the constitutional challenges in workers’ compensation on April 18th, I won’t be able to attend, but this post and my last post are my contribution to this ongoing discussion.

Stating that “a seemingly obscure case could have far-reaching implications” is one of the most overused clichés in legal blogging and journalism.  But a case involving a dispute over the proceeds of a life insurance policy might impact the constitutional basis for workers’ compensation and other state laws protecting employees.

In March, the Supreme Court heard oral argument in Sveen v. Melin (paywall). In Sveen, a former spouse was challenging a Minnesota law automatically removing a spouse as beneficiary of an insurance policy upon divorce. The grounds for the challenge is the so-called contracts clause of the United States Constitution which prohibits states from passing laws that impair the obligation of a contract.

Pro-corporate legal commentators have long lamented the demise of the contracts clause at the expense of laws enacted by states under 10th Amendment police powers. When these pundits and academics write about a “contracts clause revival”, they are really writing about diminishing the rights of states to enact laws under their police powers.

One of the most important set of state laws enacted under police powers are workers’ compensation laws. In New York Central Railroad v. White  state workers’ compensation laws were found to be constitutionally enacted under a state’s 10th Amendment police powers.  State laws regulating workplace safety and the ability to injured employees to seek legal redress were one of the primary drivers for the broad recognition of police powers in the late 19th century. A good discussion of the background behind the expansion of state police powers is found in the 1898 Supreme Court case of Holden v. Hardy.  In short, the Supreme Court found that state workplace safety laws were a response to the new industrial economy of the late 19th century and valid exercises of state police powers.

University of Chicago Law Professor Richard Epstein argued that minimum wage laws violated the contracts clause.  It’s not much of an intellectual stretch to argue that mandatory workers’ compensation laws would violate the contracts clause using Epstein’s interpretation of the contracts clause. A gig economy employer like Uber subjected to a state workers’ compensation law might argue that they should not be subjected to such a law under the contracts clause.

On April 2nd the Supreme Court reversed 70 years of precdent in narrowly construing exceptions to the Fair Labor Standards Act in the Navarro case. Navarro will likely have the effect of pushing plaintiffs to file more wage and hour cases under state laws. A revived contracts clause could cut off or curtail opportunities for justice for victims of wage theft in state court.

A potential contracts clause revival should concern advocates for injured workers for other reasons. In recent years, attorneys for injured workers have had a fair amount of success in overturning anti-worker changes to workers’ compensation laws based on state constitutions. That avenue would likely be blocked with a full-blown contracts clause revival.

In the late 19th and early 20th century, state laws regulating workplace conditions were struck down under 14th Amendment substantive due process. But substantive due process also allows claims for a broad variety of civil rights that are disliked by judicial conservatives, so the substantive due process clause is disfavored by courts.  The contracts clause allows courts to strike down worker-friendly state laws without creating a mechanism for expanding rights for suspect classes of individuals like prisoners or victims of police brutality. In New York Central v. White, the Supreme Court considered and rejected arguments overturning workers’ compensation laws on substantive due process grounds and contracts clause grounds.

Finally, a broad interpretation of the contracts clause would allow the Supreme Court to overturn state workers’ compensation laws while still maintaining the narrowed interpretation of interstate commerce the Roberts court appear to be endorsing in NFIB v. Sebelius. As I wrote in a post last week, a narrow construction of the commerce clause could be a high hurdle in enacting worker-friendly chagnes to workers’ compensation laws on a federal level.

Sveen v. Melin will likely be decided this spring. If the Supreme Court strikes down the Minnesota law based on the contracts clause, I will be interested to read the language of the opinion. I will also be interested in reading any concurring opinions from hard core conservatives like Gorsuch, Thomas and Alito as those opinions could be a clue as to where the court could be going on contracts clause jurisprudence. It is unlikely that Sveen v. Melin will be grounds to invalidate state workers’ compensation laws. Supreme Court decisions are limited to actual cases and controversies that are presentd to them. But Sveen could be another step in undercutting New Deal and Progressive Era refroms.  The Supreme Court has been chipping away at New Deal era laws in cases like Navarro and the Tackett decision in 2015. A bad decision in Sveen might accelerate the rollback of pro-worker laws.

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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Compstitutional Law 101: Part 1: Air ambulance cases call into question federal role in workers’ compensation

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Air ambulances are crucial to seriously injured people in rural areas

WILG is hosting A Constitutional Challenges Summit on April 18th in Washington D.C. I won’t be able to travel to the event, but this post and my next post are my contribution to this important disucssion.

Two seemingly obscure court decisions (sorry for the cliché) involving payment of air ambulance bills in workers compensation cases raise big questions about the role of federal law in traditionally state-based workers compensation laws.

Thomas Robinson, editor of the leading treatise on workers’ compensation laws, summarized Texas state court and 10th Circuit Court of Appeals decisions  invalidating Texas and Wyoming laws that held that air ambulance bills for workers hurt on the job should be paid under workers’ compensation fee schedules. Both courts held that since air taxis are regulated by the Federal Aviation Act, that federal law would preempt state workers’ compensation acts.

Many lawyers who specialize in workers’ compensation are skeptical of federal intervention in workers compensation. In the world of workers’ compensation so-called “federalization” is often viewed negatively. Robinson worried that the “wall” against federal intervention in the workers’ compensation system was not strong enough and wondered if there were any barriers to federal intervention in state-based workers’ compensation laws.

Anybody who reads this blog on a regular basis knows that I am a skeptic of those are who skeptical of federal intervention in the workers’ compensation system. My fundamental gripe with the “state’s rights” crowd is that workers compensation laws were enacted in the 1910s when a very pro-business Supreme Court used a narrow definition of interstate commerce to limit the power of the federal government to regulate the workplace. Workers’ compensation laws had to be enacted under state law through their 10th Amendment police powers.  But the power of Congress to regulate interstate commerce was expanded by the Supreme Court in the New Deal era which allowed the federal government to mandate matters such as wages and workplace safety.

So when Robinson asked if there were any barriers to federal intervention in state workers’ compensation laws, my first reaction was to say no. But the more I looked at the issue, the more I question that reaction.

Robinson described the wall against federal intervention in state workers’ compensation laws as the McCarran-Ferguson Act.  McCarran-Ferguson, passed in 1945, gives the states to regulate “the business of insurance” “without interference with from federal law unless federal law specifically provides otherwise. Since workers’ compensation is at heart an insurance scheme, McCarran-Ferguson provides a barrier against federalization of workers’ compensation.

McCarran-Ferguson was enacted primarily in response to Untied States v. South-Eastern Underwriters a 1944 decision which held that insurance contracts were interstate commerce. Southeastern Underwriters overturned roughly 80 years of precedent that insurance contracts were not interstate commerce because insurance contracts, even if involving interstate parties, were not actually commerce.

The issue of what constitutes commerce figured prominently in NFIB v. Sebelius, the 2012 case upholding the individual mandate in the Affordable Care Act. In that case, the individual mandate was upheld as constitutional based on the federal power to tax rather than the power to regulate interstate commerce. Much of the same reasoning found in the dissenting opinion in Southeastern Underwriters about what constitutes commerce was found in Chief Justice Roberts’ analysis of the commerce clause in NFIB v. Sebelius. According to Roberts, requiring a person to buy health insurance or any product did not constitute commerce, so Congress cannot enact such a requirement under its power to regulate interstate commerce.  Justice Roberts expressly rejected a cost-shifting argument made in support of the individual mandate being constitutional under the commerce clause.  Supporters of federal minimum standards for state workers’ compensation laws, like me, argue that deficient state laws shift the costs of work injures onto the taxpayers and/or the worker themselves

But under the reasoning in NFIB v. Sebelius, a cost-shifting argument in favor federal standards in workers compensation could run into tough questioning from the Roberts court if power to enact those standards is based on the commerce clause. In view of NFIB v. Sebelius, I believe the air ambulance cases are narrow exceptions to the federal deference to state law in matters of workers compensation.

But I believe state laws regarding workers compensation are subject to indirect federalization through constitutionally-favored tax legislation. In the recently passed tax bill, workers were given incentives to declare themselves independent contractors. As evidenced by NFIB v. Sebelius, the Roberts court seems more inclined to find laws constitutional under taxing authority than the interstate commerce clause. 

Gig economy companies and their lobbyists are pushing for legislation like the NEW GIG Ac t (10) which allows companies to use the tax code to classify workers as contractors without running into legal trouble. For the foreseeable future, I believe the so-called federalization of workers’ compensation will take place in fights about tax law.  The sad fact for employee advocates is that laws enacted under the taxing authority of the federal government are likely to be upheld as constitutional. Unfortunately, any worker-friendly reforms made at a federal level would face a skeptical audience with the Roberts court if they were enacted through the interstate commerce clause.

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.

This entry was posted in Constitutional law, preemption, Workers Compensation and tagged , .

Proposed Changes To Iowa Workers Compensation Cruelly Target Elderly Employees

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elderly employeeAnti-worker changes could be coming to Iowa workers compensation. To me the cruelest reform would be the proposal to end permanent total disability benefits at age 67 and limit workers who are over 67 who become permanently and totally disabled to 150 weeks of benefits. One memorable client of mine demonstrates the callousness of the proposed Iowa reforms.

My client Doris Newkirk was 83 years old when she was injured working as a hostess at Lone Star Steakhouse in west Omaha in June 2006. She was near a bathroom door when a large male co-worker came barreling into the bathroom and caused Doris to fall back and injure multiple parts of her body. Like many retirees, Doris worked because she needed the money. After her injury she was unable to work. Fortunately Doris was able to receive permanent total disability benefits to make up for the income she lost because she wasn’t able to work. Those permanent benefits started in September 2007 and continued for five years and 10 ½ months until her death on July 21, 2013.

If Nebraska law limited those injured over the age of 67 to 150 weeks of permanent total disability benefits, Doris wouldn’t have been paid anything for the last three years of her life. To her credit, Doris travelled from Omaha to Lincoln in her late 80s to testify against similar legislation when it was proposed in Nebraska. According the Business and Labor committee clerk at the time, the state Senator who introduced the bill at the behest of insurance interests made a motion to kill the bill after listening to her testimony.

Workers compensation is a cost of business. But according to CNBC, Iowa has the second lowest cost of doing business in the country. Iowa, like Nebraska, generally ranks well in national surveys of business climate. Iowa’s weakest area when it comes to business climate,  according to CNBC, is quality of workforce. Unlike Nebraska, Iowa lacks vocational rehabilitation for injured workers. If Iowa is looking to reform its workers compensation system, they should consider investing in vocational rehabilitation so injured workers can fully regain their ability to contribute to the economy in Iowa.

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.

This entry was posted in Elder Law, Employment, employment law, Iowa, Nebraska, Workers Compensation and tagged , , .