The Missouri’s Worker’s Compensation Act, which takes away injured workers’ right to a jury trial and substitutes very limited and unfair administrative claims instead, is an unconstitutional, inadequate and harshly unfair system in drastic need of completely being overhauled or eliminated entirely.
The benefits provided by the Missouri Worker’s Compensation Act have been eroded over the years to such a degree that the little legitimacy this system ever had is now clearly gone. The Act was originally but unsuccessfully challenged as unconstitutional because it deprived citizens of their constitutional right to a jury trial under both the Missouri Constitution and the United States Constitution. The severity of that improper deprivation has been increased over time. Worker’s rights have been repeatedly cut and diminished in so many ways that it’s now time to finally acknowledge the unconstitutionality of this system and do away with it, restoring to workers their rights guaranteed by both of those Constitutions.
To understand this important point, it’s necessary to understand how the system used to work before worker’s compensation was enacted, how the worker’s compensation system originally worked, and how it’s been changed over time to reduce benefits to workers.
History of The Workers Compensation Act in Missouri
Before the worker’s compensation system was enacted in Missouri, a worker who got injured at work through no fault of his own could recover in court from the employer if the employer or any other employee was at fault. While workers got nothing when it was their own fault, they could recover fair verdicts from juries when the injury was not their fault.
Original Court System:
- Jury trial
- Absolutely no limits or caps on how much a jury can order paid
- Injured worker has to prove fault or carelessness (negligence) of the employer
- Injured worker had to prove that injury was not their fault
Enactment of the Missouri Worker’s Compensation Act
Missouri’s worker’s compensation system, which took away the right to a jury trial and substituted the decision of an administrative law judge, was first put in place in 1929.
Under this Act, the general rule is that a person who gets hurt at work cannot sue his employer in court for those injuries, but instead has to file a worker’s compensation claim and get benefits that way. The whole worker’s compensation system is based on taking away from the employee the right to sue the employer in court and instead substituting the right to file a worker’s compensation claim.
Original Worker’s Compensation System:
- No jury – judge decides case
- Very strict limits on maximum recovery – body parts chart literally says how much each body part is worth
- Injured worker gets very limited benefits, even if the injured worker was completely at fault
The Worker’s Compensation Act was immediately challenged as being unconstitutional, because the Bill of Rights to Missouri’s Constitution specifically says:
“That the right of trial by jury as heretofore enjoyed shall remain inviolate.”
Missouri Constitution, Article I, Section 22A. The challenge to the constitutionality of the worker’s compensation system was based upon the fact that it completely does away with the workers right to a jury trial.
Despite the crystal clear wording of the Constitution, the Missouri Supreme Court held that the system was not unconstitutional even though it took away the right to a jury trial. The Supreme Court essentially said that even though the Worker’s Compensation Act didn’t permit jury trials, this was acceptable because the claim it substituted instead was essentially the same thing, and sometimes more favorable. (A workers compensation claim can be more favorable to the employee, for instance, in a situation where an employee is injured due to their own carelessness. In that case, the employee would always win under the original Worker’s Compensation system, whereas under the old court system they would not have recovered anything.)
The simple fact of the matter, though, is that it’s not up to the Supreme Court to decide on what is an appropriate substitute for a constitutional right. The Constitution says the citizen has a right to a jury trial, so the citizen gets a jury trial. Period. No matter how well-intentioned, any law that takes away the citizen’s constitutional right to a jury trial on their negligence claim was, and is, clearly unconstitutional.
Because the Missouri Supreme Court allowed it, the worker’s compensation system remained in place. For almost 100 years now, claims relating to work injuries got filed in the Division of Workers Compensation, and workers who tried to sue their employers in court routinely got their cases thrown out of court.
Changes To The Worker’s Compensation System Over Time
Over time, insurance industry lobbyists got the Legislature to put more and more loopholes into the worker’s compensation system, all designed to minimize payments and benefits to workers, cut down on claims, and increase insurance companies’ and employers’ bottom lines. The unfairness of the Act is clear to anyone who carefully reads and understands it.
Yet because this is such an arcane topic, the general public is completely unaware of how unfair the system is, until they or a family member or friend get hurt and experience it first-hand.
How Is The System Unfair?
As originally enacted, there were no penalties on employees if they were at fault in causing their injuries. That, in fact, was the main selling point of the Worker’s Compensation act in the first place: even though the amounts payable under the Act were very low, the trade-off was that the injured employee got paid no matter what.
But after successfully taking away the employee’s right to a jury trial, the insurance lobbyists started cutting into what little benefits the injured employee did get under that Act. There are many examples of this unfairness, too many to explain in detail here, but here are a few.
What Are Penalties Applied to?
Before we start to talk about the fairness of the penalties in the Act, it’s important to understand what the penalties are applied to. Many people mistakenly think that the penalty percentages are only applied to a worker’s claim for a lump sum payment, after her medical bills and wages have been paid. This is incorrect – the penalties are applied to all benefits under the Act.
Let’s illustrate how severe this is. In a typical situation under the Act, when a worker gets hurt at work, she gets 3 type of benefits:
1. medical bills are paid in full (though the employer gets to pick all of the doctors and control all treatment);
2. temporary total disability (66% percent of the worker’s average pay while completely unable to work (in the objective opinion of the doctor hand-picked by the comp carrier), but subject to a “cap” or maximum amount, regardless of how much was earned before); and
3. permanent partial disability (essentially a lump sum based on the body parts chart published by the Missouri Division of Worker’s Compensation, based on the Act, times your average weekly wage. This, too, is subject to a “cap” or maximum amount, regardless of how much was earned before).
So, for example, take the case of a worker who falls on ice at work, and is seriously injured, breaking several ribs, one of which punctures her lung, collapsing it. She has chest surgery, is in the hospital for 2 weeks, incurs medical bills of $40,000, and is out of work for 3 months, losing $10,000 in wages based on her $40,000 salary. (The carrier is supposed to automatically pay her those wages at $512 per week (2/3 of her weekly rate) while she’s out of work.) Let’s assume that her lump sum “permanent partial disability” claim is arguably worth $26,700 (15% of the 400-week “body as a whole” level, calculated at $445 per week because her actual income of $769 per week is over the maximum permitted PPD rate.)
So in this case, the total benefits payable under the Act are $73,356:
Medical Expenses: $40,000
Temporary total disability (TTD): $6,656
Permanent partial disability (PPD): $26,700
It’s important to realize that she didn’t actually get $73,356. The carrier paid the vast majority of it ($40,000) directly to the hospital. They also paid her weekly wages of $512 (which was significantly less than the net she got on her usual weekly gross of $769, causing her to get behind on her bills). And the PPD portion of her claim is always a grey area, subject to negotiation at the conclusion of treatment and after the employee has recuperated as much as possible.
So when this article talks below about, for example, a “50% penalty”, we’re not talking about the comp carrier deducting 50% from the PPD and offering a lump sum payment of $13,350 to settle the claim. We’re talking about the insurance company claiming 50% of the whole $73,356, and demanding that the injured employee pay the insurance company $9,978. (Their math is calculated as 50% of $73,356, so the amount the carrier should have paid is $36,678. Since in this example they already actually paid $46,656 ($40,000 in medical bills plus $6,656 in TTD), under this framework the employee owes the insurance company $9,978).
Insurance companies sometime claim these penalties early on, before the case is even in the Division of Worker’s Compensation and refuse to even pay the medical bills (or only pay 50% of them). That frequently leaves the employee with many thousand of dollars in unpaid medical bills, short on cash because the insurance company isn;t paying their TTD wages due to a unilaterally claimed penalty, and desperate for money at the time they need it most.
Examples of Unfairness in the Worker’s Compensation Act
1. Unfairness In “Safety” Penalties
A prime example of unfairness is the Act’s provisions relating to penalties applied to the person who causes an injury. Let’s compare the penalties the Act puts on unsafe employees to the penalties it puts on unsafe employers. This is a quote from the current Worker’s Compensation act, section 287.120:
4. Where the injury is caused by the failure of the employer to comply with any statute in this state or any lawful order of the division or the commission, the compensation and death benefit provided for under this chapter shall be increased fifteen percent
5. Where the injury is caused by the failure of the employee to use safety devices where provided by the employer, or from the employee’s failure to obey any reasonable rule adopted by the employer for the safety of employees, the compensation and death benefit provided for herein shall be reduced at least twenty-five but not more than fifty percent; provided, that it is shown that the employee had actual knowledge of the rule so adopted by the employer; and provided, further, that the employer had, prior to the injury, made a reasonable effort to cause his or her employees to use the safety device or devices and to obey or follow the rule so adopted for the safety of the employees.
So where an employer does something wrong, there is no penalty unless it’s actually a violation of a specific law or a lawful order. No matter how absurd and unreasonable their conduct, the employer pays no penalty unless it’s a violation of law. Think about that for a minute. How many laws actually apply to your workplace? In most workplaces, very few laws apply to govern how things must be done. (And lobbyists have worked on reducing those, too.) This language makes it almost impossible for an employee to get any penalty applied to an employer no matter how outrageous the employer’s conduct.
On the other hand, when an employee does something wrong, it’s held against them, regardless of whether or not it’s a violation of law. The penalty is assessed against the employee in either one of these situations:
(i) the employee fails to use a safety device (regardless of whether or not the safety device was required by law); or
(ii) The employee fails to follow “any reasonable rule” adopted by the employer for purposes of safety.
The second provision is an intentionally broad and vague catchall, frequently used by employers and insurance companies to withhold benefits from workers. It’s the exact opposite of the kind of severe, limiting language applied to employers in the paragraph just above it.
As these quotes make clear, the Act doesn’t even pretend to apply penalties evenhandedly to the employer and the employee, and instead uses language that is far more favorable to the employer. As a result, the almost all of the penalties applied by the Division of Workers Compensation are penalties applied to employees, not to employers.
But the biggest difference between these provisions is the amount of the penalty. In the rare case where a penalty is applied to an employer, the penalty is just 15% of the benefits payable. But the far more frequently applied penalty on the employee starts at a minimum mandatory 25%, going all the way up to 50% of the benefits payable. The legislature isn’t even pretending to make these rules seem evenhanded or impartial.
It should also be noted that in every case I’ve seen where an insurance company claimed that the employee violated the safety rule (no matter how absurd that claim), the carrier always (i) refused to wait for a judge to decide whether a penalty should be applied, and instead unilaterally withheld benefits from the injured worker and (ii) applied the maximum 50% penalty. I have never seen an insurance company claim a safety violation by the employee and not do both of these two things.
2. Unfairness in Intoxication Penalties
Another example of severe unfairness in the Worker’s Compensation Act deals with intoxication. Under the Act, If the employee is intoxicated and that intoxication actually caused his own injury, then all benefits are forfeited, with a 100% penalty on the employee (Section 287.120.6(2)). That’s harsh, but perhaps understandable and maybe justified.
On the other hand, in a situation where a drug test on the injured employee shows extremely minute, trace amounts of drugs in violation of an employer’s policy, and everyone agrees that the employee was not intoxicated at the time of injury, under Missouri law there is still a 50% penalty on the employee, no matter how serious the injury. (Section 287.120.6(1)). Again, that penalty applies to all benefits, including paying only 50% of the medical bills which were not in any way related to or caused by earlier drug use.
While it’s understandable to want to penalize workers for violating company policy, it’s difficult to understand why any penalty should be applied to an injury which is completely unrelated to that policy violation.
When a worker breaks an ankle because somebody else wasn’t paying attention and drove a forklift over his foot at work, do we as a society really want to reduce all of the victim’s benefits by 50% because a blood test revealed that he had smoked a joint 3 weeks earlier? That seems completely unjustified and outrageous. Imposing a mandatory 50% penalty for an injury which is completely unrelated to the safety violation is absurd.
This scheme of penalizing employees for conduct which is completely unrelated to their injury makes absolutely no sense at all, unless you taken into consideration the real goal: reducing payments to injured employees, by any means necessary.
Those sections quoted above deal with drug use by the injured employee. But what about the situation where the company policy was violated not by the injured employee, but rather by a co-worker? What happens under Missouri law when an intoxicated co-worker injures the claimant?
Suppose an employee repeatedly complains that a co-worker is intoxicated at work, and the employer knows all about it yet does nothing? If the statutory goal is to deter intoxication and drug use, then logically penalties should be applied against the employer to give it an incentive to assure its workers are drug and alcohol-free. But that’s not the law. In Missouri’s, there is absolutely no penalty applied to the employer in that situation. They simply get away scot-free. There is not even an attempt at consistency or equal treatment of both employers and employees.
3. Eliminating And Limiting Claims By “Strict Construction”
In 2005, the Missouri Legislature modified the Worker’s Compensation Act in many different ways, all in an effort to cut down on how much injured workers would get paid, or eliminating claims completely. Missouri’s benefits levels were already very low compared to most other states, but the Legislature (or more accurately the lobbyists for the Missouri Chamber of Commerce) wanted to reduce them further.
One change was to modify the Worker’s Compensation Act by saying that the whole Act should be “strictly” construed. This was the exact opposite of what the law had said all along. For decades, Missouri’s law said that the Act should be “liberally construed with a view to the public welfare.” Section 287.800. Courts had interpreted that language to essentially mean that if a decision could go either way, the Act was construed in favor of providing benefits to the injured worker. By changing the standard, the legislature made it harder across the board for employees to recover, which was their intention.
4. “Prevailing Factor”
Another change the Legislature made in 2005 was to say that employees could get no benefits under the Act unless the work injury was the “prevailing factor.” That amendment also modified long-standing Missouri law, to the great detriment of employees. Up until that time, the Act said that if a work injury was a “contributing factor” in causing a need for medical treatment, medical treatment and benefits must be provided to the employee. The 2005 amendment changed that, specifying the treatment and benefits only were to be provided to the employee if the work injury was the prevailing factor, and giving a severe definition to what “the prevailing factor” means:
An injury by accident is compensable only if the accident was the prevailing factor in causing both the resulting medical condition and disability. “The prevailing factor” is defined to be the primary factor, in relation to any other factor, causing both the resulting medical condition and disability. Section 287.020.3
This language change also severely curtailed claims. Now, there’s no recovery in worker’s composition unless the work injury was the primary factor in causing both the medical condition and disability.
5. Insurance Companies Never Have To Pay Interest To The Employee In Workers Compensation Claims, No Matter How Long The Company Drags Things Out, Giving Them A Strong Incentive To Do Just That
“Prejudgment interest” is interest which is given to a claimant to compensate them for the amount of time between the date of the incident giving rise to the claim and the date the claim is finally adjudicated.
There is absolutely no mechanism in the Missouri Worker’s Compensation Act for an injured employee to ever get prejudgment interest on the amount of their claim. This severely penalizes employees with worker’s compensation claims.
In other words, no matter how long an insurance company or an employer drags things out and delays proceedings, they get to keep all of the interest that they earn on the money they will eventually pay to the injured worker. This system actually encourages and rewards insurance companies and employers to deny, delay and deny claims no matter how meritorious, all to the severe detriment of Missouri employees.
Now compare that to cases and claims litigated in Missouri’s court system instead of the Division of Worker’s Compensation.
When two businesses have a contract dispute resulting in a court judgment in Missouri, courts here are required to automatically add pre-judgment interest to the verdict amount. Unless the contract specifies otherwise, the court is required to use the very favorable interest rate of 9% per year to the verdict amount, from the date of the breach of contract all the way through the end of the trial. See Section 408.040.
On the other hand, when an injury victim files a lawsuit in court, their treatment is far less favorable. Under Missouri law the court only adds interest to the verdict amount if both (i) that person did all sorts of technical things before trial (including sending the other side all kinds of evidence, including stating a dollar amount that they’re willing to settle for), and (ii) the final verdict is more than the injured person offered to settle for before trial. To add insult to injury, on top of all of these procedural hurdles, even though businesses get 9% on their contract verdicts, Missouri law discriminates against court injury claims by specifying that the interest rate is a far less-favorable floating rate, which is currently only 5.25% per year. Section 408.040.
Even If The Substitute Remedy Put In Place By The Worker’s Compensation Act Was Sufficient At One Time, It No Longer Is
The cumulative effects of this repeated erosion of employees rights under the Worker’s Compensation act is that it is now glaringly obvious that the substitute remedy created by that Act is not a sufficient replacement for the constitutional rights that Act took away. While that substitution was never sufficient, appropriate or legitimate, is now even more patently inadequate.
Missouri officials should acknowledge the illegitimacy and insufficiency of this Act and at a minimum eliminate all of the anti-employee amendments that have been inserted throughout the decades, or more appropriately simply scrap the entire Act, either judicially or legislatively. That would not doubt be severely disruptive, but that is less onerous than continuing this charade of pretending that the Act is fair to both sides, to the great detriment of thousands of injured workers who are being unfairly and unconstitutionally treated.