Privatization of public law dispute resolution in workplaces has been under intense scrutiny in the context of arbitration. Another kind of workplace dispute privatization is presently underway, or under serious consideration, in several states. In connection with state workers’ compensation statutes, one state has implemented, and others are considering, a dispute resolution model in which employers are explicitly authorized to “opt out” of coverage. “Alternative benefit plans,” created under such statutes, permit employers to, among other things, unilaterally and without limitation designate private fact-finders, whose conclusions are subject to highly deferential judicial review. This model is arbitration on steroids. While there may be doubts in some quarters about the neutrality of arbitrators, reasonable doubts about the loyalties of an employer-appointed fact-finder are inevitable. Such a design would mark a decisive break with the quid pro quo/Grand Bargain of the early twentieth century, and there is a risk of some states getting caught up in a “race to the bottom,” where states not recognizing a right to a remedy for physical injury become havens of low-cost labor, and thus exert pressure on states that safeguard traditional rights to follow suit.
In response to this newest wave of innovation, the Supreme Court may be forced to intimate an opinion on the constitutional right to a remedy for personal, and especially physical, injury (whether within or outside of the workplace). The Court has not squarely addressed the issue since 1917, when it decided New York Cent. R. Co. v. White, a case originally upholding the constitutionality of workers’ compensation systems. In White, the Court hinted, but did not clearly establish, that the right to a remedy for physical injury may not be abolished without substitution of a reasonable remedy.
Workers’ compensation opt out is in reality part of a larger discussion about “tort reform.” This article discusses various theories of restraint of state legislatures implementing reforms in personal injury remedies. Ultimately the article concludes that the judiciary should apply heightened scrutiny when considering constitutional challenges to significant reforms of such remedies. No civilized society would subject significant legislative reductions to remedies for personal injury to merely cursory judicial review.
Michael C. Duff,Worse than Pirates or Prussian Chancellors: A State's Authority to Opt-Out of the Quid Pro Quo, 17 Mar. Ben. & Soc. Welfare L. Rev. 2 (2016).