The Biden order concerns anti-trust law which regulates business practices. I believe the proposals will have some benefit to workers hurt at work. But I also believe that more aggressive measures not mentioned in the Biden order would have a stronger impact on injured workers. Unfortunately, from a practical perspective, executive orders and administrative rule making could be blocked by Federal courts.
Non-compete agreements for fast-food and other low wage workers
The Biden order does not address these practices. But I think the order makes some nods towards the coordination rights theory of anti-trust by limiting how employers share information about benefit levels. But the main thrust of the Biden order is to ensure competition between businesses.
But even this less aggressive view of anti-trust is anathema to proponents of the “consumer welfare” school of anti-trust who hold that monopoly or oligopoly is fine so long as consumers get cheap or free stuff.
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.
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.
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.
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.
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.