Tag Archives: anti-trust

Anti-trust and workers’ compensation

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Anti-trust law wasn’t created just to address monopolies, it was also designed to address unfair business practices. That’s why a different type of anti-trust law could benefit injured workers

A federal judge in New York sustained a challenge mounted by a group of Democratic attorney generals to a narrow interpretation of the joint-employer rule proposed by Labor Secretary Gene Scalia.

The joint-employer rule seeks to make businesses liable for violations Fair Labor Standards Act by their franchisees. The federal judge held the Department of Labor’s interpretation of the rule was “Arbitrary and capricious.” You can read more about how federal courts view workplace regulations here.

But the reason, I am writing about this decision is to start discussing the role anti-trust law plays or could play in workers’ compensation and employment law. Put another way, this post seeks to introduce my fellow solo and small firm workers’ compensation plaintiff’s lawyers to the scholarship of Sanjukta Paul, Marshall Steinbaum, Veena Dubal and others.  While discussions of anti-trust center on the rise of the gig economy and worker classification, I think a new way of thinking about anti-trust law goes to the core issues of workers’ compensation.

What is anti-trust law

To the extent that plaintiff’s lawyers think at all about anti-trust, anti-trust is thought about as a way to maintain competitive markets. But, as scholars point out, when anti-trust law was created in the late 19th century, anti-trust was thought of a way to fight economic concentration and support fairer business practices.

The innovation of anti-trust law was that it regulates what Sanjukta Paul describes as “coordination rights.” Coordination rights are the ability of different individuals and enterprises to work towards common ends. Coordination can be cooperation among equals or it can involve one party controlling another.

How anti-trust applies in workplace law.

Going back to the example of the joint-employer controversy, the Trump administration sought to give franchisors more ability to command franchisees without being responsible for complying with wage and hour laws. By case law, this relationship is already codified in existing anti-trust law. This relationship, according to scholars, is what enabled the rise of gig economy companies like Uber and Lyft. Uber and Lyft can largely control drivers without defining them as employees and having to worry about violating anti-trust law.

Of course, workers who are classified as contractors are not covered by workers’ compensation. But the issue of worker classification in workers’ compensation pre-dates the gig economy. Issues about who is covered by workers’ compensation are as old as workers’ compensation statutes themselves.

Most states have a law like Nebraska’s statutory employer law (Neb. Rev. Stat. 48-116) Our statutory employer statute seeks to prevent employers from avoiding workers’ compensation by use of subcontractors. Our statute expressly mentions the use “artifice and schemes” to avoid liability. In other words, the drafters of Nebraska’s workers compensation laws were regulating the coordination rights of employers. 

Statutory employer statutes within workers’ compensation laws are anti-trust laws. Workers compensation and anti-trust laws developed at roughly the same time out of the same impulse to reform a newly industrializing society. It’s not surprising that workers’ compensation laws would include anti-trust concepts or would address coordination rights in a practical way.

Workers’ compensation and coordination rights

But the use of anti-trust law in workers’ compensation extends beyond employee classification issues. Employers often co-ordinate with insurers/claims administrators, nurse case managers and doctors to limit workers’ compensation workers compensation benefits for employees. I sometimes refer to these efforts as the workers’ compensation legal-medico complex. The workers’ compensation legal-medico complex is one example of entities exercising their coordination rights.

In practice the workers compensation medico-legal complex can exercise their coordination rights with impunity. Plaintiff’s lawyers have very limited success in using the civil RICO statutes in fighting these practices.

But a renewed and reformed anti-trust law could give injured workers another outlet to fight coordination between insurers, employers and medical providers. The Federal Trade Commission was created at about the same time as workers’ compensation laws. A re-oriented FTC or a state equivalent could crack down on employer-centered coordination of workers’ compensation claim management as an unfair trade practice.

However a re-orientation of anti-trust would require near political and intellectual revolution. The Epic Systems case decided by the Supreme Court in 2018 limits the ability of workers to coordinate through collective action litigation. The case also seeks to limit protected concerted activity under the National Labor Relations Act strictly to formal union activity rather than more informal collective action. Gig economy companies have also successfully used anti-trust arguments to fight efforts to allow gig workers to unionize.

I am not going to address how anti-trust evolved its anti-worker bent. I think Professor Paul does a good job of describing the intellectual and legal history of the (d)evolution of anti-trust law. Her work is worth reading by plaintiff’s attorneys. The more familiar plaintiff’s become with anti-trust concepts the more likely it is that, to quote Marshall Steinbaum, that we can open up a second front of anti-trust law in the fight over worker classification. I think anti-trust law would also be a way to make workers’ compensation work for injured workers rather than the employer-oriented legal-medico bureaucracy.

The offices of Rehm, Bennett, Moore & Rehm, 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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Why health care is consolidating and what it means for injured workers in Nebraska.

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Nebraska State Senator Adam Morfeld spearheaded the expansion of Medicaid in 2018. The Ricketts administration has yet to implement the expansion approved by voters

Health care is consolidating; hospitals are merging with other hospitals and hospitals are acquiring formerly independent medical practices. This consolidation is driven by the implementation of the Affordable Care Act. (ACA)

Health care consolidation is likely a net negative for injured workers in Nebraska. Injured workers ultimately bear the costs of increased medical costs under the ACA, while not enjoying the benefit of the Medicaid expansion under the ACA,

Why is health care consolidating?

The simple answer is that the Affordable Care Act (Obamacare) was a driving factor behind health care consolidation because its designers assumed health care consolidation would lead to lower costs. As Joe Paduda at Managed Care Matters points out, the overwhelming weight of the data about health care cost and consolidation has shown the opposite.

Consolidated health care systems function as monopolies in the communities they serve. In theory monopolies are supposed to be illegal. But as commentators like Matt Stoller have observed, judges and regulators have effectively gutted anti-trust law in the last 40 years with more or less bi-partisan consensus. Stoller also believes consolidation leads to more corporate crime, which in the world of workers’ compensation would mean fraudlent billing practices.

In my mind, the ACA’s creation of health care monopolies wouldn’t have been feasible if anti-trust law had not been defanged. Opponents of the ACA would have had grounds to challenge the ACA on anti-trust grounds as well as the other legal arguments they used to limit the effectiveness of the ACA.

What does health care consolidation mean for workers’ compensation?

Consolidated hospitals have the power to push up medical costs in workers’ compensation. Paduda points out this is particularly true in states, like Nebraska, that haven’t expanded Medicaid. Workers’ compensation is viewed as a cash cow for hospitals, particularly rural hospitals, that are hurting for revenue

For workers, I believe if workers’ compensation insurers have to spend more money on medical care, they are going to look to cut costs on the indemnity or disability side of workers’ compensation. In short, more money for hospitals and less money for injured workers. This may lead to more pressure to reduce workers’ compensation benefits in an economic downturn.

As I mentioned earlier, the consolidation of health care is partially the result of the Affordable Care Act. The ACA has had some positive effects on injured workers. A study of the ACA showed the shifting of injuries from health insurance to workers compensation.

Expanded health insurance, particularly if not tied to an employer, also allows injured workers to treat for work injuries that have been denied by workers’ compensation insurers.

Expanded health insurance also means that more workers’ will have relationships with primary care doctors and more control over their own medical care in a work injury. But in communities with limited health care choice, injured workers may be pushed towards employer-friendly occupational medicine doctors employed by that particular health care system. The right to chose a doctor becomes moot when there isn’t an effective choice of doctors.

The offices of Rehm, Bennett, Moore & Rehm, 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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