“Roughly Right” vs. “Totally Wrong” about Injured Workers

By Donald M. Kreis

Lydy v. Trustaff, Inc./Wausau Insurance Company, 2013 VT 44

Civilization as we know it came to Vermont in 1915.  That’s when Vermont joined the cavalcade of states adopting workers’ compensation statutes.

Let’s say you were a young single mother working in a textile mill and, one day, your long hair got caught in the fundamentally unsafe machinery of your employer and you were literally scalped.  Before workers’ comp, courts everywhere applied the common law “assumption of the risk” doctrine to hold that such a worker (or her surviving kids) could not sue her employer for negligence.

Workers compensation—now the law in every state—replaced this harsh principle with a grand bargain of sorts.  Injured employees became entitled to recover for work-related injuries, but only pursuant to a carefully limited scheme of benefits so that employers would not be subject to wheel-of-fortune jury verdicts of the sort that were allegedly common in garden variety negligence actions.

Just how skittish the SCOV is about tinkering with that almost-century-old bargain, even to account for realities that have since become ubiquitous in Vermont workplaces, is amply demonstrated by today’s case.

The facts, though compelling, are inconsequential to the decision.  Claimant is a nurse who was attacked by a patient at the nursing home where she worked.  Eventually, the resulting injury required claimant to stop working and she became entitled to “temporary total disability payments” under the Vermont Workers’ Compensation Act, 21 V.S.A. §§ 601 et seq.

The amount of those payments is tied by statute to the “average weekly wage” earned by claimant over the 26 weeks preceding her injury.  The question raised by this case is a straightforward one: Does “average weekly wage” include the cost of employer-paid health insurance benefits?

The Vermont Department of Labor, which administers the workers’ compensation system, has been consistently answering that question in the negative for 20 years.  Only now—in an era of stagnant wage growth but soaring prices for health insurance—has a claimant had the moxie to appeal this issue to the SCOV.

In such circumstances, appellate courts can and do act like they have been waiting for 20 years for a chance to tell the lower courts, or agency decisionmakers, that they’ve been getting it wrong all this time.  But not here.

Instead, we get a history lesson.  Yes, the Legislature explicitly declared in 1915 that “wages” for purposes of determining workers’ comp benefits include “other advantages which can be estimated in money.” Yes, the phrase is ambiguous and could reasonably be deemed to include employer-paid health insurance.  But, the Court notes, nobody was getting health coverage at work back in 1915; the idea didn’t come along until the 1920s and wasn’t a common feature of employee benefits until  the boom after World War II (when labor was in short supply and employers were looking to attract workers without violating federally imposed wage caps).  Thus, reasons the SCOV, employee –provided health insurance was “well beyond the scope of even the most forward-thinking legislature to consider when defining ‘wages’ in 1915.”

“It is better to be roughly right than totally wrong,” counters Justice Robinson in dissent, joined by Chief Justice Reiber, conceding a lack of reliable legislative direction here and quoting one of American law’s most memorable voices, that of U.S. Supreme Court Justice Thurgood Marshall.  It was not a randomly chosen quote; Marshall was dissenting from a U.S. Supreme Court opinion, construing an analogous federal statute (covering injuries to harbor workers), relied upon heavily by the majority here.

The dissent is willing to guess, roughly, that the Legislature in 1915 would have expected today’s decisionmakers to include the value of health benefits in “wages” given the magnitude of such insurance benefits:  an average of $4,664 for single coverage and $11,429 for family coverage.  The dissent scoffs at the majority’s notion that, because one’s need for health insurance is unpredictable, such benefits are too intangible to count for workers’ compensation purposes.  The dissenters point out that a worker who receives a free ski pass from her employer can count that toward her average weekly wage, regardless of how often she actually skis.

As is common, when the yellow “ambiguity” light goes off here on the SCOV dashboard, the SCOV declares it is time to “look to legislative history.”  Oddly, though, the SCOV then proceeds to look everywhere but to the actual history of the enactment in question.  Instead, the SCOV’s analysis focuses largely on the above-referenced decision of the U.S. Supreme Court and analogous cases from other states.

The purpose of this analysis ultimately becomes clear:  The SCOV has a particular narrative arc in mind.  Specifically, the SCOV singles out a 1985 decision of the Colorado Court of Appeals concluding that employee-paid health benefits are part of wages for workers’ comp purposes.  “Unlike the Colorado Court of Appeals, this Court will not judicially legislate what would amount to a large increase in compensation costs,” the SCOV declared, noting that the Colorado Legislature ultimately embraced the state court’s determination but took other steps to “offset any potential windfall to the claimant.”

The trouble with this analysis is that Courts can’t really avoid legislating.  Called upon to interpret statutes, they perpetually fill in gaps, resolve ambiguities, address unforeseen circumstances and otherwise make public policy just as legislatures do.  Indeed, the Court has arguably legislated here, simply by characterizing what this claimant sought as a “potential windfall” and by invoking a 2008 finding by the Legislature that “the comparatively high cost of workers’ compensation insurance in Vermont remains an issue of great concern to many Vermont employers.”

“It is not a matter for the judiciary,” proclaims the penultimate sentence of this decision.  One hears, perhaps, a faint echo of the sentiment that made it necessary for legislatures to adopt workers’ compensation in the first place, back in the dawn of modern civilization.