Lee Davidson of Salt Lake City's Deseret Morning News looks at the workers' compensation benefits that will be paid to survivors of the Crandall Canyon Mine disaster, asking, "How much is a miner's life worth?" The article illustrates several realities about the workers comp system: it was neither designed as a mechanism to make an injured worker (or his or her survivors) whole, if any measure can indeed ever make someone whole after a serious injury or death; nor was it designed as an enforcement measure to ensure compliance with safety standards. Rather, it is a no-fault social insurance that serves as a safety net in the event of a work-related injury, illness, or death. But because it is the "exclusive remedy" in work-related occurrences - meaning that the employee cannot sue the employer - sometimes it doesn't seem to be a sufficient remedy, particularly when matters involve multiple deaths and real or perceived flouting of safety standards. And as Davidson points out, benefits pale in comparison to those awarded in many civil suits. On the other hand, there is certainty and immediacy to the benefits, rather than the uncertainty, waiting, and burden of proof involved with litigation - that's the trade off. It may not seem equitable in every individual case, but in the aggregate, it is a system that has worked well for nearly a century.
Some state laws do allow for exceptions to exclusive remedy in cases of employer or insurer misconduct, although the bar is pretty high. One such reason under many state laws would be if willful intent could be established, but this generally requires establishing a standard of intent that goes beyond recklessness. By the same token, while no-fault generally extends to workers, there are exceptions that may result in denial of benefits, such as intoxication. The bar for these exclusions can be pretty high, too - we recently discussed an Ohio case of a teen worker at Kentucky Fried Chicken, in which benefits were upheld despite violation of company safety rules. In some states, such as Arizona, even intoxication is insufficient reason to deny benefits. Exceptions notwithstanding, workers comp is no-fault in nature. Occasionally, suit can be brought against a third party, such as a manufacturer of faulty equipment that resulted in the accident. This is called subrogation and is often initiated by an insurer or employer to recoup costs.
Is the stick big enough?
The article also raises the issue of whether the financial cost to employers is sufficient to ensure concern for safety. Workers comp has two pricing mechanisms to address the cost of risk. One, as the article points out, is that rates vary depending on the specific industry and job classification. Obviously, the risk for a clerical worker at an ad agency is not the same as the risk for a construction worker. Industries with high rates of injuries, such as roofers and miners, pay substantially more for comp. Secondly, a company's unique loss experience is factored into the rates just the way that it is in auto insurance for most drivers. An employer with poor loss experience will pay a significantly higher rate than a competitor with favorable loss experience. But beyond pricing for loss, workers comp generally does not encompass any penalties or damages for safety violations. Penalties would be the province of OSHA, or in this case, the Mine Health & Safety Administration (MHSA).
Certainly, a case could be made that that regulatory actions need to carry more weight - Crandall Mines had many prior citations, but apparently of insufficient magnitude to effect a change. In the case of mining, many think this is a fox guarding the hen house scenario. There is no disputing that many OSHA fines are little more than slaps on the wrist to large corporations and some serial safety violators. Often, media will report on the imposition of a fine but won't follow up to see the frequency with which federal penalties get reduced or go unpaid entirely. Obviously, to have a deterrent effect, measures need to have strong teeth. For example, criminal penalties for serial safety violations that result in deaths might be warranted. We like incentive programs that align interests, but recognize that sometimes you need to carry a big stick.
In most instances, workers comp does the job that it was intended to do, but in some instances, it does not seem sufficient or fair. The regulatory and legal hair splitting in this post certainly offer cold comfort to survivors. We would hope that events of this nature might serve as a catalyst for more and better safety, but that is what we hoped for after tragedies in West Virginia, too.