HD 7816 U6 N25 Cornell University Library HD7816.U6N25 Summary of report on workmen^^^ ON „i,,i„,i,i,i„ii,ii,i,i„„ IlilUlllilll' , 3 1924 002 406 597 ^ REPORT Workmen's Compensation Acts in the United States. The Legal Phase National Industrial Conference Board April, 1917 THE MARTIN P. CATHERWOOD LIBRARY OF THE NEW YORK STATE SCHOOL OF INDUSTRIAL AND LABOR RELATIONS AT CORNELL UNIVERSITY (A) SUMMARY OF REPORT ON Workmen's Compensation Acts in the United States. The Legal Phase This summary presents a brief survey of a report issued by the National Industrial Conference Board on "Workmen's Compensation Acts in the United States — The Legal Phase." The report shows the general tendencies of workmen's compensa- tion legislation in this country, and points out marked differ- ences both in the form of the various state acts and in- their interpretation and administration.* Historical Systematic compensation for work injuries dates from the adoption of a national scheme by Germany in 1884. Today fifty-one foreign countries and provinces, including every European nation, with the exception of Turkey, have some form of workmen's compensation legislation. In the United States, workmen's compensation laws have been enacted by thirty-seven states and four territories, and a Federal com- pensation law for civilian employees of the government was adopted in September, 1916. In five states these laws were enacted too recently to permit of analysis for this report. The Compensation Principle This legislation varies widely in form, but its fundamental principle is universal. The basis of compensation is no longer a fault actually proved against the employer, but simply the fact that the injury was received by an employee while at work. A narrow view still regards the new system as a modification of the former employer's liability system based upon negli- gence. The broader conception is that workmen's compensa- tion definitely supplants the old liability of the employer and becomes a vital part of the labor contract. This view rests upon the assumption that the circumstances out of which work *The full report on "Workmen's Compensation Acts in the United States — TTie Legal Phase" may be obtained from the executive offices of the National Industrial Conference Board, 15 Beacon Street, Boston, Mass. Price, onsjiqUv.-n!lBtpaid. injuries arise are only to a limited extent within the control of employer or employee; and that accident originates, broadly speaking, in conditions of production rather than in conduct of persons. Under this view, compensation acts aim to meet a public necessity, not to redress a private wrong. Relief is afforded in terms of wage loss. The worker, in return for cer- tainty of limited relief, loses his former rights of action; the employer forfeits his old rights of defense and becomes a limited insurer for work injuries occurring in the industry which he controls and operates. Constitutional Questions Decisions of state courts on the constitutionality of work- men's compensation acts often have conflicted. Very recently, however, appeals to the Supreme Court of the United States from decisions of state courts have afforded a basis for a search- ing legal test of the constitutional questions involved. The most important of these decisions, all of which were rendered in March, 1917, were in the cases of: 1. The New York Central R.R. Co. V. White. 2. Mountain Timber Company v. The State of Washington. 3. Hawkins v. Bleakly, Auditor of the State of Iowa. In the New York case, which sustained an award of the Work- men's Compensation Commission of the State of New York for death of an employee of the New York Central R.R. Co. from an injury arising during the course of his employment, the Supreme Court emphatically upheld the right of a state under its police power to substitute a better scheme of compensation for work injuries in place of the old employer's liability. The Court further remarked : "It perhaps may be doubted whether the State could abolish all rights of action on the one hand, or all defenses on the other, without setting up something adequate in their stead. No such question is here presented, and we intimate no opinion upon it. The statute under consideration sets aside one body of rules only to establish another system in its place." To an objection that the New York statute invalidated con- stitutional freedom of contract, the Court held that compensa- tion for loss of human life or limb is a matter in which the public has a direct interest as affecting the common welfare. The broad underlying principle of workmen's compensation was therefore clearly sustained by this decision. The chief distinction between this New York case and the Washington case was that the Workmen's Compensation Act of the State of Washington provided for a state accident fund and for compulsory payment into that fund by employers in certain classified hazardous occupations. This compulsory requirement, it was urged, violated the "due process of law" and "equal protection" clauses of the Fourteenth Amendment of the Federal Constitution on the ground that an employer was compelled to contribute, whether or not his own employees were injured, for relief of disabled employees of more negligent competitors. Answering these objections the Court held that "the matter of compensation for accidental injuries with resulting loss of life or earning capacity of men employed in hazardous occupations is of sufficient public moment to justify making the entire matter of compensation a public concern, to be administered through state agencies"; and, further, that it was impossible to foresee when or in what plant or industry injuries might occur, and that it was reason- able to impose the burden of relief upon the industry through a system of occupational taxes instead of upon the particular employer in whose plant accidents might occur, just as states frequently lay taxes on dogs to remunerate owners of sheep killed by dogs, the tax being imposed regardless of whether or not all the dogs taxed actually kill sheep. The distinguishing feature of the Iowa case was that this act was elective, whereas those of New York and Washington were compulsory upon employers. An important issue involved in this case, aside from those covered by the New York and Washington cases, was a contention that the act denied the employer "equal protection of the law" because one section provided that where both employer and employee rejected the act, the liability of the employer should be the same as though the employee had not rejected it. The Court held that this involved no arbitrary discrimination, since the act further provided that if the employee rejected it the employer accepting it possessed against him all the usual common-law defenses. As a result of these various decisions, analyzed at some length in the coriiplete report, the constitutional questions involved in workmen's compensation acts have been greatly clarified. The general power of a State to enact compensation legislation is no longer open to question. Lack of Uniformity in State Laws More than two thirds of the employees of this country are now included under compensation laws of one sort or another. There is, however, no uniform basis for determining just what employees or classes of employees shall be included. In numerous industries, particularly agriculture, compensation acts do not apply to the small employer. The effect of this is, of course, to exclude a considerable proportion of the country's workers from the benefits of workmen's compensation. Do- mestic and casual labor is usually excluded. Agricultural labor is specifically included under compensation legislation by only one state. New Jersey ; in twenty-three states it is specifically excluded. Moreover, although private insurance experience shows many forms of agricultural employment to be more dangerous than mechanical trades, agriculture is nowhere designated in com- pensation acts as a "dangerous" or "hazardous" occupation. In eight states workmen's compensation acts are compulsory upon the employer. In twenty-four states he has an election, but if he does not accept he must forfeit some or all of his common-law defenses in any action for negligence. In twenty- three states the employee likewise has an option; in Texas he is bound by his employer's choice. In Arizona compensation is compulsory for the employer but not for the employee. In fifteen states acceptance by both employer and employee is presumed unless either definitely rejects. In several states, however, there must be a formal notice of acceptance. Neither employer nor employee may raise objections on the other's behalf; they cannot attack the validity of an act which affects the right of the other party but not their own. In twenty-five states the employer affected by compensation acts must either insure his liability or demonstrate his financial capacity for self-insurance. In certain states contribution to a state insurance fund is obligatory. In all cases the employer is primarily liable for the payment of compensation unless he either is required or elects to pay a fixed premium into a state insurance fund. His personal liability is not relieved by insurance with private underwriters. Interpretation In this country "occupational diseases" are not, as a rule, included under the term "accident" in compensation acts, but m the administration of these acts an increasing tendency by admmistrative boards and by courts to include many forms of disease contracted during employment is evident. Thus, in one instance compensation was allowed for death from Bright's disease attributed to poisoning of the blood stream as a result of an infected heel blister; in another, for death following an inflammation of a pre-existing cancer due to an accidental blow; again, for death from pneumonia where the power of resistance had been reduced by occupational strain. The Supreme Court of the State of Massachusetts has specifically held that the term "personal injury" includes occupational disease. The Supreme Courts of Connecticut, Michigan, and Ohio, on the other hand, have held that the compensation acts of their respective states do not include such disease, although all these acts employ the term "injury" and not "accident." Another source of conflict lies in the significance given to the term "accident." In the English compensation act, often used as a basis for American legislation, the liability is expressed by the phrase "personal injury by accident arising out of and in the course of employment." In the compensation acts of certain states this language is followed identically; in others, the words "by accident" aire omitted, thus broadening the liability; in some cases, the words "out of" are also omitted, further extend- ing the liability to cover injuries received in the course of employment, although the occupation may have no direct connection with the injury. For instance, the Ohio Industrial Commission awarded compensation to the dependents of a stenographer who, while taking dictation from her employer, was murdered by a jealous suitor; the New York Industrial Commission awarded compensation for the death of a street railway process server from gangrenous diabetes alleged to have resulted from having his toes trodden on by a fellow-passenger in a street railway car of the company which employed him. Many of these inconsistencies are due to the absence of ade- quate and standardized information in the reports of the various boards upon whom the practical administration of these acts devolves. The need of greater uniformity in legislation is clearly brought out by the report. Among various other topics treated in the full report are the questions of "misconduct" by employer and employee; the "notice of injury"; the extraterritorial application of com- pensation acts; the position of nonresident alien dependents. A discussion is given of the administration of workmen's com- pensation acts in the various states and a brief reference to federal legislation for compensation of employees of interstate carriers. The report is copiously annotated. Conclusions and Suggestions There can be little argument over the fundamental principle of compensation, namely: the substitution of a definite and certain measure of relief for the former uncertainties of redress through litigation. The compensation principle is in line with the best conceptions of equitable industrial relationships. How- ever, in its practical application by a large number of inde- pendent jurisdictions and in its interpretation by various boards and courts, there has been, as this report clearly shows, a vast amount of conflict. This ought steadily to diminish. To secure greater uniformity it is obvious that an organized effort toward concert of action by state boards and commissions is essential. It is therefore suggested : First: The States should promptly undertake, under expert guidance, the establishment of a permanent, scientific, uniform system of compensation statistics. This would properly include provision for separate publication of judicial decisions relating to the compensation principle, together with extensive memo- randa of contested cases determined by administrative boards. Second: Availability of such data would be a great step toward the establishment of definite insurable standards of liability and of equitable premium rates. Third : Compilation of systematic and uniform accident data would exercise a powerful influence on legislative ideas of the relative hazard of occupations and permit the just extension of the compensation principle to many workers now arbitrarily excluded from its terms. Fourth : Clear discrimination, in legal definition, between the terms "occupational disease," "accident," and "injury" would greatly^ tend to clarify liability, harmonize administrative decisions, and minimize the number of contested claims. Fifth: Experience endorses direct settlement between em- ployer and employee of all claims, this practice to be conditioned by adequate safeguards for protection of the employee. Sixth: In view of the general conclusion of state courts and the Supreme Court of the United States, that the compensation system is intended to be substitutional for and not supplemental to employer's liability, an exclusively compulsory compensation system is advocated, as tending to eliminate many technical questions relating to whether or not employer or employee made an election. The elective system is in reaHty intended to compel, under the penalty of abrogated defenses, an adoption of compensation, and in the majority of cases merely leaves to employer and employee an option without a choice. Appendix A Dates when Workmen's Compensation Laws Were Enacted and Became Efiective in UNITED STATES AND TERRITORIES (Note — Most workmen's compensation laws have been amended or superseded since first enacted.) Approved Effective Administrative Provisions Liability Provisions Alaska Arizona .... California Colorado . . . Connecticut Delaware .... Hawaii . . Idaho Illinois . . Indiana .... Iowa Kansas ... Kentucky (a) Louisiana . . Maine ... Maryland Massachusetts Michigan . . Minnesota . . . Montana (b) Nebraska . . . Nevada .... New Hampshire New Jersey . New Mexico . . New York (c) . . Ohio ... Oklahoma . . . Oregon .... Pennsylvania . . Philippine Islands Porto Rico . . . Rhode Island . . South Dakota . . Texas Utah Vermont .... Washington West Virginia . . Wisconsin . . . Wyoming . . . United States . . April June April April May- April April 29, 1915 8, 1912 8, 1911 10, 1915 29, 1913 2, 1917 28, 1915 March 16, 1917 June 10, 1911 March 8, 1915 April 18, 1913 March 4, 1911 March 21, 1914 June 18, 1914 April 1, 1915 April 15, 1912 July 28, 1911 March 20, 1912 April 24, 1913 March 4, 1909 April 21,1913 March 24, 1911 April 15, 1911 April 4, 1911 March 13, 1917 June 25, 1910 June 15, 1911 March 22, 1915 Feb. 25, 1913 2, 1915 1, 1905 13, 1916 29, 1912 March 10, 1917 April 16, 1913 March 15, 1917 April 1, 1915 March 14, 1911 Feb. 22, 1913 May 3. Feb. May June Dec. April April 1911 27, 1915 30, 1908 July Sept. Sept. April Jan. Jan. July July May Sept. July Jan. Jan. Jan. Oct. April July Sept. Oct. Oct. Dec. July Jan. July June Sept. Jan. July Nov. June Dec. July Oct. July Sept. 28, 1915 1, 1912 1, 1911 10, 1915 1, 1914 1, 1918 1, 1915 1, 1917 1, 1912 1, 1915 4, 1913 1, 1912 1, 1915 1, 1915 1, 1915 15, 1912 1, 1912 1, 1912 1, 1913 1, 1910 1, 1914 1, 1911 1, 1912 4, 1911 10, 1917 1, 1910 1, 1912 1, 1915 4, 1913 2, 1915 1, 1905 1, 1916 1, 1912 1, 1917 1, 1913 March 15, 1917 April Oct. Oct. May- April Aug. 1, 1915 1, 1911 1, 1913 3, 1911 1, 1915 1, 1908 July Sept. Sept. Aug. Jan. Jan. July Jan. May Sept. July Jan. Jan. Jan. Jan. April July Sept. Oct. Feb. Dec. July Jan. July June Sept. Jan. Sept. June Jan. Dec. July Oct. July Sept. July July Oct. Oct. May April Aug. 28, 1915 1, 1912 1, 1911 1, 1915 1, 1914 1, 1918 1, 1915 1, 1918 1, 1912 1, 1915 1, 1914 1, 1912 1, 1915 1, 1915 1, 1916 15, 1912 1, 1912 1, 1912 1, 1913 1. 1911 1, 1914 1, 1911 1. 1912 4, 1911 10, 1917 1, 1910 1. 1912 1, 1915 30, 1914 1, 1916 1, 1905 1, 1916 1, 1912 1, 1917 1, 1913 1, 1917 1, 1915 1, 1911 1. 1913 3, 1911 1, 1915 1,1908 (o) Act declared vmconstitutional; substitute act now in force approved March 23. 1916; adminis- trative provisions effective April 1, 1916; liability provisions effective August 1, 1916. (6) Act declared unconstitutional; substitute act now in force approved March 8, 1915; admmis- trative provisions effective March 8, 1915; liabiUty provisions effective July 1, 1915.. _ (c) Act declared unconstitutional; substitute act now in force approved Dec. 16, 1913; admmis- trative and liability provisions effective July 1, 1914. 7 Appendix B Dates when Workmen's Compensation Laws Were Enacted in FOREIGN COUNTRIES AND PROVINCES Alberta Argentina . Australia . . Austria . . Belgium . British Columbia Bulgaria . . . , Cape of Good Hope Colombia . . . Cuba .... Denmark . . . Finland . . France . . Germany . . . Great Britain Greece Hungary . . . Italy . Japan .... Liechtenstein Luxembourg Manitoba . . Mexico (Nuevo Leon) Montenegro Netherlands New Brunswick March 5, 1908 Sept. 27,1915 Dec. 24, 1912 Dec. 28, 1887 Dec. 24, 1903 June 21, 1902 March 7, 1909 June 6, 1905 Nov. 15, 1915 June 12, 1916 Jan. 7, 1898 Dec. 5, 1895 April 9, 1898 July' 6, 1884 Aug. 6, 1897 March 6,1901 April 9, 1907 March 17, 1898 March 28, 1911 -'KpnJ—WriSm- April 5, 1902 March 16, 1910 Nov. 9, 1906 March 3,1911 Jan. 2, 1901 May 9, 1903 Newfoundland New South Wales New Zealand Norway . Nova Scotia Ontario . . Peru . . . Portugal . Quebec . . Queensland Roumania Russia . . San Salvador . Saskatchewan . Serbia . . . South Australia Spain . . . Sweden . . . -Switzerland . . Tasmania . . Transvaal . . Union of South Africa Venezuela Victoria . . West Australia Feb. Nov. Oct. July April May Jan. July May Dec. Feb. June May March July Dec. Jan. July June Jan. Aug. July Feb. Feb. Feb. 18,1908 5,1900 18,1900 23, 1894 22, 1910 1, 1914 20, 1911 24, 1913 29,1909 20,1905 7, 1912 15, 1903 12, 1911 23, 1911 12. 1910 5,1900 30,1900 5,1901 13, 1911 13. 1911 20,1907 1, 1914 23,1906 20, 1914 19, 1902 Cornell University Library HD 7816.U6N25 3 1924 002 406 597