Rousmaniere on the Grand Bargain: Not So Rock Solid

The Kansas Court of Appeals in Pardo v. UPS this past June unanimously struck down a provision in the state’s workers’ compensation law as unconstitutional. The court said that the law deprived the injured worker of a remedy for his injury.

The decision prompts the question: How is the Grand Bargain spelled out and safeguarded for the worker? I am surprised there are not more challenges on behalf of workers. 

Francisco Pardo, a UPS driver, incurred a work injury, and was rated 10% permanently disabled. He received a settlement. Later, he had another injury, to the same left shoulder. The doctor who issued the first rating found that the second injury merited its own 5% rating. But the AMA Guides 6^th Edition mandated by the state allows for only one rating to the same body part in a lifetime. Pardo won nothing for the second injury. 

The court said that “Section 18 of the Kansas Constitution Bill of Rights guarantees an individual's right to a remedy: ‘All persons, for injuries suffered in person, reputation or property, shall have remedy by due course of law.’”

The court continued, “The quid pro quo exchange that supports the (Workers’ Compensation) Act's constitutionality requires that a claimant have the opportunity to recover for permanent partial impairment... The Sixth Edition (of the AMA impairment guides) and the exclusive remedy provision of the Act remove any opportunity for Pardo to attempt to recover for his new and distinct work-related injury. This simply is not an adequate substitute remedy…” 

This Kansas case echoes the 2016 Florida Supreme Court decision on Westphal v. City of St. Petersburg, where the court cited a passage in the Florida constitution. Here are the court’s words: “The courts shall be open to every person for redress of any injury, and justice shall be administered without sale, denial or delay.”

These Kansas and Florida quid pro quo cases help to frame three issues that get to the essence of the Grand Bargain. One is, on what basis is the worker’s access to a remedy in workers’ comp backed up by a rock solid constitutional provision? We assume this is the case. But is it?

Second, what yardstick is available to find that worker protections are adequate?

Third, how do states get away with workers’ comp laws that expressly deprive access to benefits for a work injury? For example, many states bar benefits for mental conditions such as post-traumatic stress disorder if the condition is not accompanied by a physical impairment.

University of Wyoming School of Law Professor Michael Duff has looked recently into how a state constitution may ensure for the worker a quid pro quo. There is a gradation in legal reasoning, he says, from strong to weak.

Kansas adheres to what Duff calls the quid pro quo reasoning most favorable to workers. This is where a state constitution, such as in Kansas and Florida, expressly guarantees a person’s access to a remedy for a loss.

Duff describes two weaker, from the worker’s interest, legal formulations of the Grand Bargain. One is where the state legislature justifies its exclusive remedy law on the grounds of “overwhelming public need.” A third, and weakest, formulation is where the legislature wills creation of exclusive remedy simply on the ground of legislative supremacy to do what it wants with the law of injury. According to this theory, Duff says, the legislature “has plenary authority to modify workers’ comp in essentially any way it likes.” 

Next, how is adequacy of remedy determined?  

Go back to the foundation 1917 U.S. Supreme Court decision which approved state laws mandating workers’ comp, New York Central Railroad Company v. White. The majority decision did not create a bright line. It said, regarding the New York law under review, “the amounts (of compensation) fixed are apparently moderate and reasonable, and the means of collection, through administrative proceedings subject to judicial review of law questions, are apparently economical, expeditious, and fair…”

Who says what is “apparently moderate and reasonable” for benefits and “apparently economical, expeditious, and fair” for procedure? The state supreme courts do.

And third, how can a state make it impossible for a worker to qualify for workers’ compensation benefits yet preclude the worker from bringing a tort suit? 

Workers’ comp scholar John Burton calls this a “dual denial doctrine that precludes both workers’ compensation and tort remedies.”

Apparently, there’s been scant litigation over dual denial situations. Consider again mental conditions. Burton writes that in the 1990s many states passed laws that removed the compensability of mental claims unless a physical injury were also present. Does this mean that a worker can bring a tort suit against her employer if her properly-diagnosed condition of PTSD is barred from workers’ comp coverage?

Also, consider laws that bar certain kinds of latent disease claims. Pennsylvania allows disease claims when filed within 300 weeks of the last exposure to the source of the disease. What about a disease that well-established medicine says can be latent for 1,000 weeks? According to Duff, in the absence of constitutional provision as in Kansas and Florida, a state legislature can create this bar.

In sum, how many breaches of the Grand Bargain exist right now, and why are there not more challenges.Rousmaniere on the Grand Bargain: Not So Rock Solid.

ABOUT THE AUTHOR

Peter Rousmaniere is widely known throughout the workers’ compensation industry, both for his writing and consulting experience. Based in the picture perfect New England town of Woodstock, VT, he is a regular on the conference circuit, and is deeply in tune with trends and developments within the industry. His passion is writing and presenting on issues largely related to immigration, and he maintains a blog on the subject at www.workingimmigrants.com.

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