The following article was written by Richard Berman, a Florida Workers’ Advocates member, and was originally published in the Workers Injury Law & Advocacy Group (WILG) newsletter. Mr. Berman sits on the Florida Workers’ Advocate Board with our attorneys, Glen Wieland and Al Hilado.
By now, most of us are familiar with the tragic explosion that occurred at a chemical plant in Texas in 2013 that caused the deaths of fifteen first responders and injured hundreds of employees, including brain injuries. It has since been determined that there had been numerous complaints about the severe chemical smell, and that the plant had previously been fined by the EPA. The blast was so severe that it actually registered as an earthquake! Nevertheless, the Federal government, through FEMA, denied emergency relief to the victims, despite the fact that the Federal government had determined that the chemical industry had a safety crisis in Texas.
The thought occurred to me that we have now gone full circle. You see, the workers compensation system was created as a direct result of the Triangle Shirtwaist Factory fire that occurred in New York in 1911. At that time, no work comp law existed. The Triangle Shirtwaist Factory had no escape routes. On that tragic day, a fire started that quickly spread throughout the factory and engulfed everyone who worked there. The only options were to be burned alive or jump from the windows. One-hundred and forty-five immigrant teenage girls perished that day. Their families had no recourse. As a result, the workers compensation law was born upon the premise that employers were required to take care of their employees who were injured while performing their work duties. That way, in the event of an injury or death, their families would not be evicted from their homes and they would be able to obtain adequate medical care and eventually return to work. The work comp law was a bold, new piece of social legislation. The fundamental purpose of workers’ compensation is to relieve society of the burden of caring for injured employees by placing the burden on the industry involved. The law has been described as the “Grand Bargain” because, in return, the employer was immune from suit in the event the employer was negligent in the cause of the employee’s injury or death. In truth and concept, it was a fair deal for both.
However, since 1979, the insurance industry and big business have been chipping away at the “Grand Bargain” in a persistent attempt to reduce benefits and increase profits, issues that were never part of the consideration when the “Grand Bargain” was created. In 1990 the work comp law in Florida was amended to reduce benefits and make it more difficult for employees to prove their claim. By 1994, before the 1990 “reforms” ever had an opportunity to be effective, the law again was re-written almost in its entirety. This time, employees were no longer entitled to full medical care; they had co-pays, apportionment of benefits, and were required to prove that the accident was the “major contributing cause” of their injury and need for treatment.
Since the inception of the work comp law in Florida, and for the next sixty years, the law was to be interpreted liberally in favor of the employee and provided a “presumption” that every injury sustained by an employee was compensable. In 1994, the liberal interpretation and favorable presumption were repealed and the concept of “major contributing cause” was adopted. Major contributing cause requires an employee to prove that an injury on the job is more then 50% responsible for the need for medical care. Florida borrowed this concept from Oregon; however, the Oregon Supreme Court quickly determined it to be unconstitutional, while Florida persists. As of 2003, under Gov. Jeb Bush, the law was re-written in favor of the insurance companies, so that they now completely control all of the medical care provided to injured workers and wage benefits have been arbitrarily shortened and deleted. Those benefits that remain for injured workers in Florida are regularly “denied and delayed.”
In addition to all of this, Florida had an “excess profits law” for 30 years. The excess profits law allowed and assured that an insurance company could make a “reasonable” profit that was determined by a statutory formula. Once their profit exceeded the “reasonable” level, the “excess” profit was required to be returned to their insured: the employer who had presumably paid an “excessive” premium. Over a ten year period, from 2003 through 2013, carriers in Florida returned to their insureds approximately $400,000,000.00 in excessive profits. Despite the dramatic reduction in benefits to injured workers, as well as the increased burdens of proof required, the Florida Legislature repealed the “excess profits law” in order to allow the insurance companies to keep any and all profits, no matter how great, which, in the past, were considered to be excessive. As a result, the insurance industry is now able to, and continues to, increase rates and “creates” false “crises” in order to increase their profits beyond reason.
So here we are back at my original thought: we have come full circle. Why do I say this? In Texas, the legislature adopted a new scheme referred to as “Opt Out.” This allows an employer to “Opt Out” of workers comp completely and operate without any workers comp coverage for their employees. While “Opt Out” allows employees and their families to sue the employer for negligence, this idea is antithetical to the entire concept of the social legislation that was created in 1931 to protect injured employees and their families from financial ruin in the event of an injury or death sustained during the course of their employment, and to place the burden upon the industry involved. The families of the first responders who perished in the Texas explosion, and the multitude of workers who were severely injured, have received virtually nothing and are without recourse. The “Grand Bargain” has disappeared. You see, the Texas employer “opted out” and simply purchased a $1,000,000.00 liability insurance policy, which will cover less then a fraction of the damage caused by the explosion, leaving the dead and injured out in the cold. Unfortunately, “opt out” is sweeping the nation, and has already replaced the work comp systems in multiple states. It seems that the lesson we learned over one-hundred years ago has been lost and forgotten, along with our injured workers. Texas 2013? Triangle Waist Shirt factory 1911? Yes, we truly have come full circle.
Richard B. Berman, Esq.
June 9, 2015