Substantive Due Process Challenges to alleged Workers’ Compensation Benefit Inadequacy

Many thanks to the Workers Injury Law & Advocacy Group for reviewing my forthcoming (Marquette Benefits & Social Welfare Law Review) article, Worse Than Pirates or Prussian Chancellors: A State’s Authority to Opt Out of the Quid Pro Quo, in its current (Summer 2016) issue of “Workers’ First Watch” magazine.  In the article, I generally discuss the limits of state legislative reductions in workers’ compensation benefits. To put the question bluntly, is there a lower limit to the level of workers’ compensation benefits a state may pay injured workers? As you have heard me say before, when workers’ compensation systems were first upheld by the U.S. Supreme Court, the underlying assumption for workers giving up their tort rights in exchange for WC benefits (the quid pro quo) was that the benefits would be adequate (I’ve had some folks try to argue that point with me but in my opinion the 1917 White case makes that pretty clear).

The Supreme Court has not definitively ruled again on WC adequacy. It is hard to determine whether the White case was what we might now, under modern jurisprudential parlance , think of as a substantive due process case. But in any event the legal question is pretty stark. How low could a state go? Could it eliminate workers’ compensation altogether? If you say no, why not? Could a state eliminate negligence cases? Why not? and if you are not clear about why states could not eliminate remedies how can you be clear about the limits of benefit or damage reductions?

These are not purely “academic” questions. A Florida plaintiff is poised to petition for cert at the U.S. Supreme Court on exactly this theory: that the Florida workers’ compensation system has eroded so much that the original quid pro quo has been “violated” so that the bargain is no longer adequate or reasonable. See Daniel Stahl v. Hialeah Hospital (I’ve seen the petition but don’t yet see a docket entry). And I would suggest that ultimately this fundamental question is behind the “opt out” question in the Vasquez case in Oklahoma. Opt out plans may very well be ERISA-governed and ERISA employee welfare benefit plans may not be required to provide any specific level of benefits, an outcome not seeming consistent with an “adequate” quid pro quo. And all of this is quite aside from the disparate treatment of employees that is the present focus of the Vasquez litigation. (The briefs may be found here)


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