Articles

Workers' Compensation

by John F. Simmons

Workers’ Compensation is a system that arose in response to serious disabling injuries that were suffered by workers as a result of the pre-OSHA safety conditions that prevailed in the early part of the twentieth century. Under the contemporary concepts of negligence (things might be different now), these workers usually were unable to successfully sue their employers, and therefore had no recourse against anybody. Workers’ compensation was a reaction to the social problems caused by the fact that such injured workers were unable to support themselves or their families.

Workers’ compensation is a no-fault system. With very few exceptions, the fault of the employer or the fault of the worker is not a relevant consideration. The relevant question is whether the injury arose out of, and in the course of, the employment. If it did, then benefits are payable.

Workers’ compensation may be thought of as a compromise between the interests of the worker and the employer. Because fault is not relevant to the worker’s right to collect, it is much easier for the worker to prevail than it would be if he had to prove that his employer was negligent. The trade-off is that his benefits are limited. Where negligence is proven in an ordinary negligence case, for example an automobile accident or a slip and fall, the injured plaintiff’s damages are limited only by the jury’s good judgment and by the court’s rarely exercised power to set aside an award it considers to be truly outrageous. Such cases can be difficult to evaluate, and there is always the danger that the jury may determine that the damages are considerably higher than the defendant or its insurer had anticipated. In a workers’ compensation claim the benefits are fixed in accordance with a schedule. The schedule is based upon the worker’s average weekly wage. A worker who is totally disabled receives, subject to certain maximums and minimums, two-thirds of his average weekly wage. If a worker is less than totally disabled, he gets the applicable percentage of what he would have received had he been totally disabled. For example, if the average weekly wage is $600, a totally disabled worker is entitled to a weekly benefit of $400, or two-thirds of that amount. If he is twenty-five percent disabled, he gets a weekly benefit of $100, which is twenty-five percent of what he would have received had he been totally disabled.

Often after an injury, a worker is not able to work at all for a period of time. This worker is said to be temporarily totally disabled. Benefits begin after the disability has lasted for one week. If the disability lasts for a total of six weeks, the employer or insurance company must pay the first week of benefits as well. The employer or its insurer must also pay reasonably necessary medical expenses. In most cases, the worker reaches what is called maximum medical improvement, which simply means that he is as good as he is going to get. If "as good as he is able to get" is not good enough to return to any work at all, the worker is deemed to be permanently totally disabled and is entitled to his benefits for as long as that condition remains, limited only by the duration of his life. If after maximum medical improvement the worker has some, but less than total, residual disability, he is said to be permanently partially disabled. From the point of maximum medical improvement he is entitled to permanent partial disability benefits. Permanent partial disability benefits are payable only for a period of three hundred weeks. From that total of three hundred weeks, the employer is entitled to subtract the weeks paid for temporary total disability.

The relevant consideration in determining the extent of permanent partial disability in most cases is based on the worker’s loss of earning power. How does the injury affect that particular worker’s ability to earn a living? Obviously, this will vary from worker to worker depending upon such things as age, education, and experience. A poorly educated bricklayer, who has no skill but the ability to carry heavy objects, may be totally disabled by the same back injury that would be only a painful inconvenience to a lawyer, who is able to earn his living with his wits instead of with his back.

An exception to the foregoing occurs when the injury is what is called a schedule injury, sometimes also called a member disability. The discussion above is applicable if the injury is characterized as an injury to the body as a whole. This generally means an injury to the trunk. A back or neck injury would be common examples of a body as a whole injuries. If the injury, however, is limited to an extremity, such as a leg or a finger, then benefits are calculated in a different way. The average weekly wage is still the basis of the benefits, but where the injury is to an extremity instead of the body as a whole, then the relevant consideration is the extent of the physical impairment and not how that impairment affects the ability to earn a living. While a lawyer and a bricklayer who have the same weekly wage and who have the same back injury might be entitled to vastly different benefits, those same individuals who suffer the same injury to the little finger will receive exactly the same benefits regardless of how it affects their differing abilities to earn a living. According to the Nebraska schedule, the total loss of use of one leg entitles the injured worker to benefits of two-thirds of his average weekly wage for a period of 215 weeks. If he loses fifty percent of the use of the leg, he gets the same weekly benefit but it is paid over 107½ weeks, half of what he would get had he lost the entire leg. Needless to say, there is often the serious conflict in litigation over the question of whether a given injury is to the body as a whole, or to a specific member.

Workers’ Compensation is not an optional system. Benefits are payable by almost all employers, including such things as charities, governmental bodies, and volunteer fire departments. The employer is required to, under criminal penalties, maintain workers’ compensation insurance to fund any benefits which may be payable. An employer may be able to self insure if it can prove to the Workers’ Compensation Court that it is sufficiently financially responsible.

Workers’ Compensation is not optional for the employee either. It occasionally happens that a serious injury is caused by the fault of the employer, such as an OSHA violation of some sort. Under those circumstances, seriously injured workers often think themselves better off if they could file an ordinary negligence lawsuit against the employer because of the much greater awards that are possible if negligence is proven. This, however, is not an option for the injured employee. If the injury arose out of, and in the course of the employment, his remedy against his employer is exclusively under the workers’ compensation laws no matter how negligent the employer may have been. Such factual situations occasionally result in what is called an "upside down" lawsuit in which the worker is trying to convince the court that his accident did not arise out of his employment and the employer is trying just as hard to prove that it did. It should be mentioned in this respect that if a compensable injury is caused by the wrongful act of someone other that the employer or a fellow employee, the worker can sue the responsible party, but if the employer or insurer has paid workers compensation benefits it may be entitled to part of the recovery from the third party.

Disputes arising under the Workers’ Compensation Act are litigated before the Workers’ Compensation Court. The judges are appointed by the governor in the same fashion as other judges and maintain offices in Lincoln and Omaha. The injured worker, however, is entitled to have his case heard in the county where the accident happened, and the judges of the Workers’ Compensation Court, therefore, travel the state.

Trials are not subject to the rules of evidence which are applicable in ordinary civil courts. The most obvious impact of this rule is that written reports and notes from doctors are admissible without the doctor’s testimony. Therefore, it is quite common for all of the medical evidence in a workers’ compensation case to be offered and received in less than five minutes, whereas the same evidence in a district court trial could easily take days. In light of the fact that tens or even hundreds of thousands of dollars in benefits are on the line in many workers’ compensation cases, one is tempted to wonder how such a marked discrepancy came to be tolerated. Either the law is much too demanding in ordinary civil trials or not nearly demanding enough in workers’ compensation trials. Nevertheless, the result of this discrepancy allows workers’ compensation cases to be tried in a rather summary fashion. In Western Nebraska the courts typically do not allow more than two hours unless special arrangements are made.

A party who is unhappy with the result has the right to a rehearing before a panel of three judges of the Workers’ Compensation Court. The statute does not specifically forbid the judge who made the initial decision from being on the rehearing panel, but in practice this does not occur. The hearing before the rehearing panel is not a new hearing at all but is simply a review of the evidence that was offered before the first judge. The rehearing panel can reverse only if it thinks the first judge was wrong on a point of law or clearly wrong on the facts. The "clearly wrong" standard is hard to meet and unless there is truly a significant legal question in the case, the decision of the first judge is likely to be upheld.

A dissatisfied litigant can appeal the decision of the rehearing panel to the Nebraska Court of Appeals or Supreme Court in the same fashion as appeals are made in other cases. If, at any stage the appeal is by the employer and the employer is not successful, the court may award the employee an attorney’s fee.

Settlements of workers’ compensation cases may be made only with the approval of the Workers’ Compensation Court. A worker does not compromise his position by accepting benefits or by anything that he signs, even if it is a release that would be perfectly valid in an ordinary civil case.