The Multinational Monitor

JANUARY 31, 1986 - VOLUME 7 - NUMBER 2

H I G H - T E C H   H A Z A R D S

Workers' Compensation

Shortchanging the Victims

by Russell Mokhiber

Throughout this century, in industry after industry, from coal to steel to textiles to asbestos, workers' compensation laws have been passed by state legislatures with the support of corporate employers as a means of limiting corporate liability.

Most workers' compensation laws contain a trade-off. The laws make employers strictly liable for workrelated injuries and death. The employer's negligence by law is not an issue in workers' compensation cases. If a worker is injured or killed on the job, the employer is required, by these no-fault laws, to pay benefits to the employee or survivors. The employee or survivors relinquish the right to use the common law to sue the employer for full compensatory damages and punitive damages.

In short, the victim gets a quick cash settlement and the corporation is relieved of a potential jury trial on the issues of whether the corporation is culpable and what the corporation should pay.

But most workers' compensation schemes are rigged against the worker. Many workers' compensation laws cap the amount of dollar damages the administrative body hearing the case can award to the victim. In some cases, the limitations placed on the types of injuries for which the employer is required to pay are unfair to workers.

For example, under workers' compensation laws in California and New Mexico, women are not allowed to recover for loss of their reproductive organs because, according to those laws, a hysterectomy doesn't affect their ability to work.

"As long as they are 'productive,'" said Amanda Hawes, an attorney representing electronics workers in compensation cases in San Jose, California. "It doesn't matter if they are 'reproductive.' It's disgusting."

Many corporate leaders recognized early on the benefits to industry of these workers' compensation schemes. In a 1935 corporate memorandum, Vandiver Brown, the chief attorney for asbestos producer JohnsManville, gave special recognition to one speaker at a symposium who stated that "the strongest bulwark against future disaster for industry is the enactment of properly drawn occupational-disease legislation," which would "eliminate the jury" as well as "eliminate the shyster lawyer and the quack doctor since fees would be strictly limited by law."

Dr. Olds Sappington, an industrial hygienist based in Chicago, agreed with this assessment of laws that were being passed to compensate for asbestos disease (silicosis), Writing in the April 1935 issue of Industrial Medicine Dr. Sappington observed that "From the manufacturers point of view the best possible thing that can happen to him is to be in a state where there is compensation for silicosis and to provide adequate manufacturing equipment and protective equipment for his employees... The worst possible thing that can happen to the industrial defendant is to be in a state where there is no compensation provided for silicosis and also not to provide adequate manufacturing equipment and proper ventilation."

Corporate officials in the asbestos industry were fearful of a flood of asbestos lawsuits if a system of laws was not passed to limit their corporate liability to workers exposed to the deadly mineral. Dr. Anthony J. Lanza, who, during the early 1930s served as the assistant director of the medical department at asbestos producer Raybestos Manhattan, wrote in 1938 of the scope of the problem, and how the workers' compensation laws on asbestos changed the liability situation in the industry from wide open to severely limited. During the late 1920s, asbestos corporations were facing "damage suits under the common law... instituted against employers by employees alleging pulmonary dust diseases in industrial centers all over the United States to an amount in excess of 100,000,000 dollars," Lanza wrote. A few years later, workers' compensation laws for asbestos were passed with the helping hand of industry. In New York, a limit of $3,000 for permanent disability or death was law. In Pennsylvania, the limit was $3,600. Lanza wrote that the lawsuits brought outside the workers' compensation system "confused and terrified industrialists and insurance officials" and inspired "dread" among them.

Because of a handful of resourceful and unrelenting lawyers, the workers' compensation provisions that precluded asbestos workers from recovering full compensatory and punitive damages in court from asbestos manufacturers has been overturned. That struggle is definitively laid out in Paul Brodeur's recent book Outrageous Misconduct: The Asbestos Industry on Trial (Pantheon Books, New York, 1985). Brodeur concludes that "because the lawmakers who drew up the statutes were prevailed upon by industry and its insurers to keep the cash benefits to a minimum... workmen's compensation proved to be a boon for employers, who were allowed to compensate a worker's loss of life and limb at bargain prices during a time when the injury-and-death rate had soared in coal mines, steel mills, textile factories, and other corners of the nation's workplace."

But in other industries, the limited liability exposure of corporations is still tightly locked in by these compensation laws. In the Carolinas, the heart of textile country, the companies, not the state, pay workers' compensation claims-in particular those for bysinossis, or brown lung, a respiratory ailment that afflicts cotton workers.

The textile companies have successfully fought off brown lung claims for years. A 1980 study of brown lung compensation by the Charlotte Observer newspaper found that of an estimated 10,000 cotton workers potentially eligible for brown lung compensation, only 1100 had filed and of that number, only 320 had been approved. The study also found that the settlements averaged $13,000 to 14,000, but the average worker lost more in wages than he gained in compensation. A 1980 U.S. Department of Labor study of 270 Carolina workers who filed brown lung claims showed that the average employee lost seven years of work due to brown lung-years in which a worker would have earned $56,000.

In short, the history of the workers' compensation system in the United States is a dim one for workers. It is a system, as Brodeur rightly concluded, that was "erected largely for the purpose of protecting American manufacturers and their insurers from common-law actions brought by injured workers."

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