Workers' Compensation

The Adversaries and Frenemies of Workers’ Compensation

Coming down on the side of a system that endures

“You have enemies? Good, that means you stood up for something.” – Eminem

By Karen C. Yotis, Esq. and Robin E. Kobayashi, J.D.

When it comes to workers’ compensation, some folks are just gonna hate. And others, well, they’re not happy either, but at least they talk about different ideas instead of sitting around complaining all the time. It’s a big, complicated system out there, and in spite of the naysayers, something about it just continues to work. That’s the fresh message of positivity that Judge David B. Torrey conveys in his paper “The Durability of Workers’ Compensation Law Against Its Adversaries,” originally published in an IAIABC publication and reprinted in The Centennial of the Pennsylvania Workers’ Compensation Act (© 2015 The Pennsylvania Bar Association). Torrey weaves historical highlights of the grand bargain together with its political realities and ends up with a thought-provoking primer about the way workers’ compensation developed in this country and the direction it’s likely to take going forward.

Torrey, who serves as a Workers’ Compensation Judge in Pittsburgh, PA, points out that with workers’ compensation there are cynics, and then there are true adversaries to the system. He defines a cynic as one who is more likely to seek reform within the system. An adversary, on the other hand, views the system as a complete failure and often wants to abolish it.

“[T]he [workers’ compensation] program has endured for a number of good reasons,” says Torrey. He calls out and identifies all of the entrenched interests that support the status quo—including insurance companies, state boards, doctors and lawyers—and acknowledges the difficulties inherent in overthrowing the combined strength of these special interests.

Torrey identifies a host of groups that he classifies as adversaries or “enemies” to the system. Beginning with a historical perspective, he first describes the earliest adversaries who challenged the constitutionality of the workers’ compensation system over 100 years ago. They lost . . . all the way up to the U.S. Supreme Court.

Torrey also recounts the various types of federalization adversaries who have pushed for a national takeover of the workers’ compensation system or at least uniform federal standards for state workers’ compensation laws. The federalization adversary decries a patently unjust lack of systemic uniformity, particularly in benefit levels among the various states. These “parity adversaries” also view the “race to the bottom”—in which states cut worker benefits to attract big business—as patently “unacceptable.”

Torrey also mentions the workplace safety adversaries, who criticize financial incentives for safety (such as the experience rating in which increased premiums are assessed against an employer as a penalty for rising injured worker claim costs) as ineffective. A segment of this adversarial contingent calls for improvement of workplace safety by replacing a completely dismantled workers’ compensation system with a restored framework of employer tort liability.

Torrey also describes the characteristics of “Illness Culture” adversaries who tend to be mainly medical experts that blast workers’ compensation as an “illness-inducing maze that masquerades as social insurance.” Illness Culture proponents go so far as to qualify injured workers—especially in the back injury context—as basket cases who use their pain as a “surrogate” to mask the stress in their lives that they are unable to handle. The illness culture believes that workers’ compensation generates a benefits-dependent ecosystem which is in itself “pathological” and points a finger of blame at the physicians, drug companies, and medical device makers who “victimize the feckless patient” with needless treatments that have not been shown to scientifically provide a cure.

Torrey even points to the various ways that members of the public and the media have become adversaries of the workers’ compensation system. This cabal includes the injured worker who feels he’s received the short end of the stick, the aggrieved spouse and others who file lawsuits against employers or insurers, as well as New York Times reporters and other media types who publish articles exposing the demise of the Grand Bargain or write books about workers’ egregious experiences.

Despite this criticism aimed at the (state-based) workers’ compensation system, Torrey cautions members of the workers’ compensation community to avoid having an “existential crisis” over the cacophony. “Workers’ compensation in fact has significant purposes, and it is this characteristic that has lent the system its durability,” argues Torrey.

According to Torrey, the “significant enduring value” of workers’ compensation is that it “continues to serve its century-old purpose of benefitting both employers and employees.” These are the “two pivotal groups” that benefit the most from an enduring system, and not the entrenched special interest groups usually given the credit (or blame) for stomping out efforts at reform.

Torrey points out that, to date, neither of these two groups accomplished any significant long-term change. Torrey calls out organized labor as not taking a stand against the state-based system by putting its support behind any other type of a replacement structure. When discussing Oklahoma’s recent opt out legislation Torrey emphasizes how the legislature preserved the system by refusing to abolish workers’ compensation outright. There are some who would strongly disagree with Torrey’s take on employers—particularly the large and multistate employers—who are wielding their political power to create opt out systems in Tennessee and South Carolina and possibly other states. While opt outs in Oklahoma are too new to judge (and lawsuits challenging the constitutionality of the law are still pending), we do have a long standing “nonsubscriber” system in Texas.

Torrey most definitely recognizes the shortcomings of workers’ compensation. His article is replete with bare truth statements like, “legitimate injuries are…not compensated promptly” and also “workers’ compensation by design metes out ‘average justice’, and workers experiencing above-average harm get the short end of the bargain.” Yet Torrey reminds us about the majority of injury claims that are promptly handled by employers and carriers and about a system that manages to compensate workers while it shields them from the harsh realities of tort litigation. The plain truth is that the current state-based workers’ compensation system helps injured workers—many of whom live paycheck to paycheck—to avoid financial hardship. For Torrey this is a key component underlying the enduring nature of the workers’ compensation system.

Yet Torrey is nevertheless a “believer” that workers’ compensation serves its purpose by promoting safe workplaces. Citing a 2005 study concluding that the experience rating of workers’ compensation actually does reduce injury rates, Torrey takes a clear stand when he admits that this is “a real and not merely a theoretical proposition.”

For more than 100 years, the workers’ compensation system has survived a barrage of critics, cynics and adversaries. Yet despite its flaws and failures, Torrey demonstrates the numerous ways in which it has shown “remarkable durability.” And if his predictions run true, the grand bargain will not only continue to survive. It may surprise us all and actually begin to live up to its true potential.

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