Opinion Mondays: While We’re Adjusting Our COVID-19 Masks, Is the Grand Bargain Being Altered?

In a document published in February, the Congressional Research Service observed: “Workers’ compensation has been called a grand bargain between employers and workers … [under which] workers receive guaranteed, no-fault benefits for injuries, illnesses, and deaths, but forfeit their rights to sue their employers …” [emphasis added]. Most of us would nod our heads and move on. In doing so, we would, of course, be wrong. There aren’t just two parties to the bargain; there are three, and, as we’ve seen in recent weeks, that third party — the state that administers the “system” — wields the most power, since it writes the rules. The scenario begs the question: in a number of important states, while we’ve been adjusting our masks, is the grand bargain being altered by governors and state houses?

Claimants’ Groups, With Some Justification, Have Been Complaining for Years

The push and pull between employees — I prefer that term to “workers” since, in the workers’ compensation scheme, it is usually more accurate — and employers has been lamented in recent years by claimants’ groups, who see the shifting tide of legislation as generally being against, and not in favor of the injured employee [for a somewhat exhaustive discussion of this issue in one of my earlier blog posts, click here].

For example, some states have moved in recent years to a requirement that the claimant show that the employment is the “major contributing cause” of the injury. Others require some or all elements of the claim to be proven by “clear and convincing” evidence, not just by a preponderance of it. Other states — California, for example — have broadened apportionment rules, allowing reduction in benefits if a portion of the disability can be attributed to the injured worker him/herself. Some states have eliminated second injury funds. Many argue that such elimination causes those with disabilities to be the last hired and first fired. Then there was Oklahoma’s attempt to allow some employers to “opt out” of coverage altogether.

Claimants’ groups, therefore, generally see the recent COVID-19 activity among some governors and state legislatures as welcome, but rare, relief. For once, they argue, the pendulum isn’t swinging in favor of the employer. They point particularly to last week’s executive proclamation issued by California Governor Gavin Newsom, establishing a COVID-19 presumption of compensability for our most populous state.

California’s Governor Issues Broad Executive Order

The California presumption is the broadest of the recent gubernatorial edicts; it covers virtually all workers, not just “first responders” and healthcare workers, as has been the case in some other states. Like the other presumptions, the California version is rebuttable — there was some earlier thought that when issued it would be conclusive — and it purports to be temporary. It will apparently last 60 days. I say “apparently,” because the beginning date isn’t clear to me (at least not yet). Any executive order can, of course, be extended by another executive order, so I wouldn’t wager that it will end any time soon.

The “Grand Bargain” is Intensely Political

As my friends can attest, when it comes to politics, I have a tin ear. For example, three or four weeks ago, I enjoyed a lively and heated discussion with a state legislator in one of the states that has passed COVID-19 legislation. I asked him how he could support a presumption of compensability that favored some who worked on “the front lines” of the disease and not others. He pointed out that it basically came down to votes, that a substantial plurality within his legislative body did not want to provide the presumption to anyone, but that there was sufficient support behind first responders [my comment, not his: “they are generally well organized at the political level”] that the bill favoring them could pass. He utilized the old adage: “It’s better to accept ‘the good’ than it is to seek ‘the perfect.'”

That is why, when it comes to attracting or keeping businesses in a state, the legislators will generally favor the employer. When it comes to a pandemic, with citizens screaming, “Do something,” a governor will step to the microphone and announce his (they’ve all been male governors so far) action as “the least we can do.”

States Don’t Want the Burden of COVID-19 Any More Than They Have to Accept It

A colleague of mine, who is much more politically astute, told me recently that the states — or at least her state — is in a panic. What has them worried?

• The economy has turned down,
• Employment taxes are down,
• Income taxes are going to be way down,
• The unemployment rate is up,
• Public hospitals postponed elective services to allow extra beds for COVID-19 and yet the beds are empty,
• They’re already burdened by unfunded liability for expensive pensions provided for public employees (you know, the type the rest of us can only dream of)
• The list goes on.

COVID-19 Presumptions Don’t Cost the State Anything

How can a governor or legislature show the people that he or it cares? How about a presumption of compensability? It costs the state nothing. It places the politician on the side of the people — even if, as I have argued ad nauseam only some front line employees are favored with the presumption. Moreover, it pushes a significant part of the cost off on one of the other parties. Don’t you see, that’s actually how the grand bargain works! The state — the third party to the deal — moves the fulcrum one way or another, from the employee to the employer, or vice versa, as a cost shift mechanism. If the employer bears too much of the cost, then industry/commerce may leave the state. If the employee bears too much, then the state itself may have to pick up the slack in terms of public benefits, and that costs the state true money. Those with keen political skills, like Governor Newsom, see the presumptions as a popular and effective way to ease what might later be an expensive burden on Sacramento.

Why Not More Presumptions?

One of my more cynical colleagues allowed in a recent conversation that we soon might see another wave of rebuttable presumptions, such as presumptions for:

• Carpal tunnel syndrome for office workers,
• Measles, chicken pox, “pink eye” for nursery care workers
• Lower pack pain for those involved in heavy lifting or digging with shovels, etc.

I retorted, “Really?”

He chuckled, “No, Tom, I’m kidding. The stakes aren’t big enough with any of those issues to allow a governor or a state legislator to stick his or her neck out. It takes a pandemic!”

Maybe so, but while we’re adjusting our masks, our legislators and governors may get used to changing the rules even more than they have in the past. Governors particularly, appear to be enjoying the attention. Feel free to disagree. Remember my memoirs will be entitled, “Often wrong, but never in doubt.”