I (and many others) have argued that, in the Supreme Court’s decision, New York Central Railroad Company v. White (1917), the court implicitly held that a state’s workers’ compensation benefits regime must be “reasonable” to avoid triggering heightened constitutional scrutiny.
More narrowly, the court said what was not at issue in the case was the sweeping away of common law tort remedies in exchange for unreasonable workers’ compensation benefits.
Logically, of course, that meant (and appears still to mean) that inadequate benefits might not pass constitutional muster. But it also seems to mean that the workers’ compensation system the court had before it in White — the version of the New York statute re-enacted in 1914 — was reasonable and adequate.
Before looking at what the New York act provided, however, it is worth mentioning that participation in that iteration of the act was entirely voluntary both for “nonhazardous” employers and for many employees. Thus, it is difficult to say whether the limited scope of the scheme then at issue influenced the court’s view of it.
The same can be said of the court’s companion opinion in Mountain Timber Co. v. State of Washington (1917). Thus, I think the case to cite for the “signing off” on the quid pro quo may be Ward & Gow v. Krinsky (1922), decided under a later version of the New York Act.
Krinsky is the first Supreme Court case of which I am aware approving a broad compulsory workers’ compensation scheme (binding all employers employing more than four employees). And Krinsky cited White with approval. So, implicitly, the question is why the White court deemed the 1914 act adequate or reasonable with respect to the employee benefit side of the equation.
Virtually all forms of compulsory workers’ compensation were upheld against employers against 14th Amendment challenges under the theory that the laws were within a state’s “police powers.”
So, you say, what did the New York act provide? I’m glad you asked. Here is a brief summary:
In case of an injury resulting in serious facial or head disfigurement, the commission could, in its discretion, make an award not exceeding $3,500.
Benefits for non-scheduled injuries were calculated by multiplying 66 2/3% times the difference between average weekly wages and wage-earning capacity thereafter in the same employment or otherwise payable during the continuance of the disability, but subject to reconsideration without explicit textual limitation.
One of the more notable aspects of this scheme was that, outside the contours of specific scheduled benefits, there was no time limitation for receipt of permanent partial benefits. With respect to scheduled benefits, however, the amount provided was the sole remedy.
The 60-day window for provision of medical benefits is striking to our eyes. It seems clear enough, however, that the employee was unlikely to get a better deal elsewhere. A tort suit, even if theoretically available, would take much too long.
Thus, the quid pro quo question (to the extent it is historically couched in terms of White and its progeny) boils down to an assessment of the degree to which any proposed modification of workers’ compensation benefits is worse than the New York scheme (the Supreme Court has never commented on the question of adequacy since White).
Michael C. Duff is associate dean for student programs and external relations, and
Centennial Distinguished Professor of Law at the University of Wyoming College of Law. This entry is republished from the Workers' Compensation Law Professors blog, with permission.
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