Friends, Romans, Countrymen, Lend Me your Ears

I did not make up that title folks. That is a direct quote from Marc Antony's speech in Julius Caesar, by Billy Shakespeare (or whomever wrote those great works). He goes on to note a bit ominously that "I come to bury Caesar, not to praise him." And, yet, praise him Marc does, carefully and methodically (while denying he is). He admits, that "Brutus says Caesar was ambitious," as if that might be derogatory, and praises Brutus as a "honorable man." There you have it in parallel. I come perhaps not to praise, and yet I will. Is the praise as sincere as directed at Brutus, or better? I too note that there has been ambition, and I question if that is really a bad thing. Let's dive in.

This week, the Workers' Compensation Research Institute (WCRI) hosts its 38th Annual Issues and Research Conference in Boston. This conference is a great destination for the actuarially inclined. There will be analysis, statistics, and evidence. But, for each of us, the program includes much more than numerical and trend analysis. There will be other items such as COVID-19 disruption with Robert Hartwig (he never disappoints), effects of provider consolidation with Bogdan Savych, and the Future of the Workplace with Denise Algire along with an intriguing panel. In all, a well-rounded program with something for all of the workers' compensation community.

 

The program concludes Thursday just before lunchtime with a panel dedicated to the Report of the (1972) National Commission on State Workmen's Compensation Laws. John Ruser (WCRI CEO) will navigate a panel with Alan Pierce (attorney), Bruce Wood (attorney), and yours truly (reformed attorney), with perspectives on this document. As I write this, I wonder whether it is this document or the Commission to which I address my Shakespearean references. Perhaps I "come to bury" the report, not to praise it.

 

When I think of the National Commission Report, I think of ambition. What a project to undertake, in a two-year time frame! I have studied workers' compensation for decades and would find such an undertaking monumental. Notably, Congress directed the scope of inquiry, which was a benefit in any such undertaking. I find items in that tome to praise, but also find room for criticism. In fairness, the report was written by a group that was not very diverse in terms of gender, race, industry, occupation, and more.

The report was written when the AMA Guides were in their infancy, as was the idea of federalized workplace safety, OSHA. The report has been criticized as coming from the perspective perhaps of too many academics, only large employers (2), lawyers (45% of Commissioners), and the usual higher learning institutions. Some have criticized that no service sector or professional employers were involved. Of course, the concept of employee leasing did not exist in that era. Others have noted the involvement of vested interests, and perusal of the Commission members is a worthy consideration whether you share that perspective or not. More still have criticized that the only representation of workers was two AFL/CIO Directors. To have a national conversation on workers' compensation and involve no injured workers seems strange.

If none of that persuades or dissuades you, the report was written in 1972, during the Nixon administration. There was no "gig" economy and no Internet (though they did hook some computers together in 1969, according to Britannica). People back then belonged to unions more than they do now (a lot). Americans were more apt to work in manufacturing than they do now. There was no Americans with Disabilities Act, no Family Medical Leave Act, and even the ground-breaking Title VII of the Civil Rights Act of 1964 was not even a decade old. 

WalMart was just a decade old in 1972, with 51 stores. There was no social media, Amazon, Tesla, personal computers, robotics (well very little), artificial intelligence, cell phones or apps. The first human had just recently been to the moon and the CT scan had been invented, but not widely deployed. At that time, no one had yet been in a magnetic resonance imaging (MRI) machine. The rest of that decade brought the first vaccines against measles, chickenpox, pneumonia, and meningitis. It was a time  of great progress in science. But, perhaps I come not to praise the 1970s, but to bury them.

In short, it seems it was a different era. The United State's competitive place in the word market had not really been challenged. It was a time in which people proudly owned an American made televisions, stereos, or even cars. I recall neighbors being critical of those who purchased German or Japanese cars. There was often derision of many foreign-made items. There had as yet been no North American Free Trade Agreement, nor any of the complaints or accusations regarding off-shoring of jobs. The ideas of on-demand inventory and "just in time" were alien. It was 50 years ago, and simply stated it was a different age.

History delivered the intrepid Commissioners to a moment, and they worked mightily to deliver a set of recommendations on sixteen subjects that were dictated by the 1970 Act. They addressed those sixteen from the perspective of "five major objectives: "Broad coverage of employees and work-related injuries, substantial protection against interruption of income, provision of sufficient medical care, encouragement of safety, and an effective system for delivery."  I come not to praise the Commission, and yet I admire it for its ambition, drive, and speed (20 meetings and a voluminous report in only two years from the call to study).

Anyone that labors in this industry, and hears the periodic threat of federalization, should really take the time to read the whole report. For more on Federalization, see A Move Towards Federal Influence (June 2017), and Is Federalization in the Wind (October 2021). The Commission Report is available on John Burton's website. Professor Burton chaired the Commission back in 1972, and is rumored to be the sole surviving member. Our discussion Thursday will begin with a video clip in which he discusses the report, that effort, and the goals and perspectives that came to the table. Whether one agrees with various views, he is uncontestably one of the very few who have truly studied the phenomenon of workers' compensation. 

Without a doubt, workers' compensation had its critics in 1972. In fairness, it has its critics today. A great many point to the Commission Report as evidence of lethargy in the great socialization, lamenting that each and every recommendation has not been embraced and ensconced. But, an objective eye will likely see that much has been embraced. Calculations of benefits are more generous and uniform today. Interaction of programs with others like Social Security are more uniform today. The delivery of medical care is exceptional today, and in many instances more so than non-work injuries receive through health insurance. 

 

Admitting, again, that there is much to study in those recommendations, and much to praise, it is possible that the conclusions of that group "a long time ago, in a galaxy far, far away" are today a bit dated, a bit disconnected from the world in which we live, work, and struggle. (quote is from Star Wars, Lucasfilm, which had coincidentally also not been seen in 1972). In that vein, any analysis of the Report must acknowledge that there has been great change in the half-century and much of it traces roots to the Report. Whether the progress is or is not "enough," is best left to the reader. But, criticizing the states for not uniformly and universally adopting those recommendations is likely a bit harsh.

That all said, we must learn from history. There is a benefit to study of the evolution of our society generally, and workers' compensation deserves our attention. 

Some critical foundational points bear mentioning. It is impractical to review everything in the report here. It provides over 100 pages of information, recommendations, and observations.

First, the National Commission was enabled by the same law that created OSHA, the Occupational Safety and Health Act of 1970. The statistics cited in the report itself regarding workplace safety support that we have come light years in the last 50 years. Workplace death had decreased, as has the frequency of workplace injury, according to the Bureau of Labor Statistics (the frequency chart is a must see). While too many continue to suffer injury or death, the progress is nothing short of astounding.

Second, the Commission Report notes that the "distinguishing feature of workmen's compensation is that it assures benefits for many who could not win suits for damages under the common law." To prevail in such a suit, one must prove fault or negligence. Commission Report, Chapter 1. It notes later in that chapter that when proof of negligence was required, "the ability of an injured workman to win a claim against his employer was minimal" in the nineteenth century. That challenge largely drove the passage of workers' compensation laws.

Things did not improve markedly by "the opening of the 20th century," when "shortcomings" remained regarding such legal claims. The Report says that the legal "system was wasteful, partially because of high legal costs." Elimination of "wasteful litigation" was a prime driver in the evolution of workers' compensation. The Commission concede the Constitutional guarantees of due process, but contend that "the constitutional limitations of due process have little or no relevance to workers' compensation." An intriguing observation to say the least. Some would also find irony in the "wasteful litigation" perception of tort that drove us to workers' compensation.

Third, as to coverage, there is criticism of these workers' compensation systems, but perhaps we should see praise instead? The report noted that 85% of American workers were covered by workers' compensation (Introduction and Summary). In 1972, the vast majority of workers had this safety net beneath them. These state systems had provided an imperfect and sometimes convoluted process of recovery available to 85% of workers, and were criticized because it was only 85%. The Commission was critical of a solid "B" grade, and is to be admired for its advocacy of greater coverage; however, a solid "B" is a B nonetheless and thus workers' compensation was even then a great success compared to the eras of virtually no recovery for the injured workers of this country.

The Commission starts from some interesting foundations.

It notes that

"The basic purpose of workmen's compensation is to protect the employee."  Thus, the Commission endorsed a "traditional practice of resolving doubts in favor of the employee." Despite this, the Commission concluded that "we do not believe that workmen's compensation should be converted into a general insurance scheme." Commission Report, Chapter 2.

This perhaps deserves criticism. The basic purpose of these systems is to provide benefits mutually to both employers and employees in exchange for mutual renunciation of rights. To say that the purpose more favors one or the other side of the equation is unfounded, and some would argue potentially demonstrates a bias of perspective. 

Despite its mention of not advocating evolution to "general insurance," in its advocacy for full coverage of all employees, the Commission suggested that all homeowner's insurance policies include a provision for "workmen's compensation protection" so that any domestic employee injuries would be covered (the report specifically mentions babysitters). Commission Report, Chapter 2. Perhaps, in the 1970s, more households engaged domestic help than we see today? Or, perhaps I do not comprehend how many of you have such domestic assistance in your homes.

The Commission advocated strongly for "second injury" funds. These were seen as critical in its analysis. These funds were to encourage employers to hire those with existing physical challenges through reimbursements for part of workers' compensation benefits paid in the event of an accident. These existed in many states, but fell out of vogue with the passage of the Americans with Disabilities Act and similar legislation. If employers were forced to hire, some saw less use of incentives to hire. Notably, one of the Commissioners was deeply involved in "Second Injury Funds."

The Commission is also noted to have observed that "In no other social insurance program, such as social security or unemployment compensation, did workers surrender any right of value in exchange for benefits." Commission Report, Chapter 1. However, one might as readily note that in no other program did employers surrender any right of value either. The Commission's focus here, again, is on the employee. Whether that evidences bias or is mere hyperbole is left to the reader. Regardless, the focus would perhaps be better on balance, a recognition that employers need employees just as employees need a place to work? Symbiosis and balance may be critical, and the "basic purpose" may be to balance each so that both may prosper?

There is criticism by the Commission of the manner in which high-earning employees see their benefits more constricted through processes such as the maximum compensation rate. The Commission was, however, "not totally unsympathetic" with a "philosophy (that) justifies income redistribution at the expense of high-wage workers." Commission Report, Chapter 1. Thus, in support of minimum benefits for some, the Commissioners were willing to concede some acquiescence in the socialistic tone of "From each according to his ability, to each according to his needs," Karl Marx, Critique of the Gotha Program. In this, perhaps there is more Commission recognition of the needs of the lower wage earner than there is of equity in the broadest context. Remember "if you prick us, do we not bleed" (The Merchant of Venice, Billy Shakespeare).

Continuing that social theme, the Commission argued that "workmen's compensation benefits should not be tied solely to lost remuneration." Commission Report, Chapter 1. The tenor of that discussion is one of equity and fairness. From the foundation of a social safety net that replaces wages in the event of a work injury, the Commission evolves periodically to more socialistic suggestions of levelled support and benefits. There are suggestions that post-work-injury benefits might well be more robust and focused on the worker's need instead of wage replacement (assuming the pre-injury wage was insufficient or "below poverty" and that this replacement system should thus augment earnings to address such societal inequities that are not related to the work, the injury, or even the employer).

The Commission periodically eschews the concept of balancing the relationship of the Grand Bargain. It acknowledged costs, but noted in one section "Arguments concerning the proper allocation of the costs should not be permitted to thwart the achievement of these primary objectives" (coverage of all workers). Commission Report, Chapter 2. This, unfortunately, may seem to some to have a tone of Farragut's "damn the torpedoes" or perhaps even Aiken's "don't confuse me with the facts, my mind is made up." This is, after all, a conglomeration of state systems that embody mutual renunciation of rights. The costs of work accidents should be borne by the industry that causes them, or more pertinently by the customers and consumers of that industry. However, the costs are necessarily a matter about which consideration and analysis must occur.

The Commission also noted that there are challenges in law drafting and that consistency is a challenge. In one segment it noted "arising out of and in the course and scope of" constraints were seen as lacking uniformity, "but we believe it is impossible to devise a tidy rule which will end the controversies." Commission Report, Chapter 2. The fact is that nothing is impossible, and perhaps "tidy" is in the eye of the beholder? In the end, in any balancing, there will likely be anecdotal outcomes in any system of legality that challenge our individual or collective perceptions of "fair" or "just." The more tidy the rule or law, the more likely that it will lack exceptions for the situations that are truly exceptional. The less discretion for the judge, the more likely untoward outcomes. The Commission notes that some degree of judicial sympathy perhaps drove outcomes in workers' compensation in the 1970s. Should sympathy or the law determine whether benefits are due? Sympathy for whom?

In the end, I go to Boston not to Praise the Commission. I see no reason, conversely, to bury the Commission or its report. Both are history, reference, and guidance. I see value in study of the conclusions and findings, though also harbor some sympathy for the criticisms some voice. The analyses of this report and this effort should be unbiased and objective. The contribution of the Commission in starting the grand conversation should be noted and appreciated. We should continue the conversation and remain introspective.

However, the world has changed more than a bit since 1972. The Commission's advocacy for nationwide uniformity in order to prevent competitiveness among states largely ignores the great off-shoring of jobs. America competes today in a market of global competition in which a great many countries offer workers far less (if any) protection against injury and illness. Can the goal be anything short of just compensation for injury? I would posit that the answer to this is a resounding "no." However, in our critique and criticism, we must view workers' compensation through the prism of today's worker, today's industry, today's technology, and not become entranced with the observations of another era, long passed.

I come to Boston to discuss and consider. Is there value in the National Commission Report beyond historical reference? Is there value in a new National Commission? If one were to be named, could it be more diverse in perspective, more practical in its approach, and more willing to acknowledge the fantastic progress and benefit that a century of workers' compensation has brought to both the American worker and employer? I hope to hear your thoughts on these questions.