A Florida representative has recently offered a Bill that would formally undo the Florida workers’ compensation quid pro quo. This is a logical extension of recent developments in the state. Inexorably, the courts have been forced to grapple with the inadequacy of workers’ compensation when viewed in the context of the original workers’ compensation for tort quid pro quo. In Florida, such inadequacy, or modification of the quid pro quo, is much more likely to yield to constitutional challenge than in other states, for reasons I have explained elsewhere.
This leaves reform-minded legislatures with a handful of options. One is to formally undo the original quid pro quo and make workers’ compensation entirely elective, the approach that has just been proposed in Florida. This option is probably politically impossible, but we shall see how events unfold. It also reopens employers to negligence suits, unless those claims are also banned, which would trigger high constitutional scrutiny in most jurisdictions.
Another option is to acknowledge an benefit adequacy baseline and bring benefit levels up to that baseline. Policy makers resist this approach because it establishes precedent from which future arguments of inadequacy may be fashioned.
Yet another option is to deny outright a legal requirement for adequacy. Such denial is an attack on the constitutional basis of the original quid pro quo, and will be more or less successful depending on the due process and equal protection provisions of a particular jurisdiction’s constitution (whether federal or state). Severe erosion of benefits and opt-out schemes implicitly attack the quid pro quo because at the root of these gambits is the practical denial of a required benefits floor. A state like Texas—which maintains the opt-in, elective feature of the original workers’ compensation statutes in the early 20th century—avoids this problem because it preserves the right to a negligence suit (leaving the compulsory arbitration to one side). The proposed Florida Bill would similarly avoid the problem. The attack on adequacy is also ultimately an attack on the fundamentality of all personal injury remedies.
A final policy approach is to muddle the question of adequacy entirely by creating multibenefit hybrid alternative plans delivering both workers’ compensation and “other” benefits and claiming that the plans satisfy an employer’s workers’ compensation obligations. The problem with that approach is that such plans are not maintained solely for the purpose of complying with a workers’ compensation statute and are therefore governed by ERISA, whether intentionally or unintentionally. Because of that ERISA-governance, states would lose the ability to regulate the plans by operation of ERISA preemption, and indeed the opt-out laws themselves are likely preempted. Once this is fully realized nationally opt-out will fizzle unless ERISA is amended.
At bottom, given current developments, I would prefer a frankly elective system allowing for negligence suits much less encumbered by the contributory negligence and assumption of the risk doctrines of the early 20th century to a straightjacketed workers’ compensation statute. Workers would presumably do much better in a comparative negligence regime than in the tort regime of the early 20th century. If I were an injured worker, I would not want an inadequate workers’ compensation benefit to be my exclusive remedy. The Florida proposal is accordingly less objectionable to me than some others I have seen. Still, under a negligence system there would be many losers unable to make out a claim because the employer was simply not at fault. While larger tort damages might encourage adequate investments in safety in the aggregate, the previous clause would be of cold comfort to a grieving widow, widower, surviving child, or long-suffering injured worker denied a remedy. A truly adequate, state-based system still seems to me the best of existing imperfect systems. I’m open to other (good faith) ideas.
Michael C. Duff