(c) 2022 Jon L Gelman, All Rights Reserved.

Monday, May 13, 2013

The Attack on the Citadel: A Potential National Loss

Workers’ Compensation is conceptually changing, and its extinction is becoming more apparent rather than its transformation. Over the past decades, the “grand bargain” of Workers’ Compensation had evolved to ease the American industrial/manufacturing revolution forward, without burden from the economic complexities and ramifications of the Civil Justice System. 

The Promise” made in 1911, with the adoption of the compensation system, is now past history. The demands of the globalized marketplace have eroded the fortress of workers’ compensation that protected the rights, safety and lives of American workers.

Dynamic developments, occurring at an ever increasing pace, have altered the landscape and accelerated a devastating attack on the citadel of workers’ compensation. The root of the cause is economic.

Repeated over and over, in jurisdiction after jurisdiction, is a common theme, reform/elimination of the workers’ compensation system to merely increase an economic advantage over other businesses, other states and other nations. The “system” has become the scapegoat.

Blessed by Madison Avenue marketing concepts, legislators and public are sold on simple catch phrases that grab the mind set of voting constituencies. Common marketing elements of “fraud” and “complexity” pervade the advertising campaigns. The workers’ compensation system is being dismantled piece by piece, until it effectively needs replacement.

Skipping ahead from the past decades of statutory and regulatory changes, the assault has now moved to the final step of elimination, which is embodied in the Oklahoma Opt-Out legislation enacted last week. The law replaces the traditional workers’ compensation system with mandated ERISA benefits and arbitration, and providing for a promised economic incentive of a projected 50% cost savings.

In 1960 a dynamic change in law was the focus of an article by Dean William Prosser of Emory University, who wrote, "The Assault Upon the Citadel," 69 Yale L.J. 1099 (1960)], describing  that the citadel of privity was attacked as a barrier to products liability cases. Ultimately what followed was, Prosser, "The Fall of the Citadel,"  50 Minn. L. Rev. 791 (1966). See also, Henningsen v. Bloomfield Motors, Inc., 32 NJ 358 (1961). 

That change in the law provided great benefits in establishing safer products and improving the lives and health of the nation. Furthermore, it elevated the quality of American products worldwide.

The ongoing attack on the citadel of workers’ compensation leaves the American worker without traditional protections upon which this democracy was so successfully built. Left out of the proposed equation are the injured American worker and his or her family. To maintain the critical balance of the needs of Industry, Labor and the national interest, a more creative approach is necessary, and hopefully will be advanced.