What If There Was No Worker's Comp?

It’s not that difficult to imagine a legal system in Mississippi without a

workers’ compensation Act. After all, Mississippi did not adopt its workers’

compensation Act until 1948. Accordingly, there are still plenty of

grandparents walking around that were born before workers’ compensation

laws existed in Mississippi. (Some of them are still practicing law.)

It’s not even necessary to look back 80 years to evaluate a legal system

that does not mandate statutory benefits for work injuries. The State of Texas,

for example, has legislated "opt-out" options for employers that choose to

become "non-subscribers" and carry no workers’ compensation insurance.

Other states allow local governments or specified types of employers to opt-

out of full workers’ compensation obligations. Texas seems to be making it

work as about 25% of the private sector employers have opted out of workers’

compensation.

Negligence

A worker in Mississippi before 1948 (or the employee of a Texas opt-

out employer today) would have the option of suing his or her employer for

damages. The typical cause of action would be for negligence and the injured

worker would have the burden of proof to establish, by a preponderance of the

evidence, that the employer breached a duty and that the breach caused

damages to the worker. If the injured worker can establish by clear and

convincing evidence that such an employer acted with actual malice, gross

negligence evidencing a willful, wanton or reckless disregard for the safety of

others or committed actual fraud they could potentially recover punitive

damages under §11-1-65 Miss. Code Ann.

The advantage to employers that are not required to obtain

compensation insurance or not required to qualify as self-insurers (meaning no

need to maintain reserves sufficient to pay anticipated claims) is that they save

significant money by not paying premiums, administrative expenses or reserve

maintenance amounts. Such employers may be sufficiently confident in their

safety and human resource programs that they feel little risk from a negligence

lawsuit.

How Did We Get Here?

German Chancellor Otto von Bismarck introduced the "Sickness and

Accident Laws" in 1884 which is generally considered the first modern

workers’ compensation system identified as "Workers’Accident Insurance."

In 1897, the United Kingdom replaced the Employers Liability Act of 1880

with the "Workman’s Compensation Act." These early iterations of

compensation laws were designed to provide some recovery to injured

workers who would otherwise become the obligation of the state.

In the United States, the federal government established a workers’

compensation program for its civilian employees in 1908 and the individual

states began following suit shortly thereafter. By 1911, nine states had passed

workers’ compensation legislation and by 1921 all but six states and the

District of Columbia had a workers’ compensation act. The state of Wisconsin

has the distinction of becoming the first state to successfully pass a workers’

compensation act. The state with the dubious honor of being last in the nation

to adopt such laws is ... Mississippi.

One might think that Mississippi’s adoption of workers’ compensation

laws was routine given that pretty much the entirety of the civilized western

world and every other state in this nation had adopted such laws. Not so -

even though there was a 40 year track record in the United States evidencing

the impact and effect of workers’ compensation, Mississippi employers

actually largely opposed adoption of the Act and considered it to be

"communism" or "socialism." There were other reasons for Mississippi’s

reluctance.

Recall that in the early 1900's, Mississippi was still a very poor and

very agricultural state. Mississippi was, and remains, extremely rural and

largely devoid of the huge industrial complexes that are more common in large

population centers and big cities. Pubic welfare concerns such as the Triangle

Shirt Waist factory fire in 1911 (which claimed the lives of 146 workers and

exposed harsh working conditions and lack of safety measures) focused public

outrage and demand for protections such as workers’ compensation laws. The

fire at the Triangle Shirt Waist factory occurred in Manhattan. Most people in

Mississippi at the time likely heard nothing about the event or, if they did,

were not particularly moved by the deaths of factory workers in New York.

So how did the Mississippi Legislature finally pass House Bill 351 of

the 1948 regular session? It wasn’t easy. Mississippi employers did not want

any type of compulsory statute. The initial version of the Act mandated

participation of every employer who had in service 8 or more workman or

"operatives" regularly employed in the same business under any contract of

hire. This compulsory obligation triggered claims of violation of due process

by both workers and employers.

Early efforts in the United States to pass workers’ compensation laws

had been defeated on due process and other constitutional grounds before

Wisconsin succeeded. At least four states had earlier compensation laws

deemed unconstitutional. Similar challenges were made in

Mississippi but both workers and employers eventually had to give ground to

reach a compromise.

The Great Trade Off

The Great Trade Off, the Grand Bargain or the Grand Exchange are all

descriptions of the fundamental nature of workers’ compensation laws

everywhere. Injured workers obtain partial wage loss replacement and

medical care (or survivor benefits to their dependents in the cases of death) in

a no-fault system. In exchange, the employers are insulated from tort liability

to injured workers - even if the employers’ acts and omissions contributing to

the injury were grossly negligent or substantially certain to cause harm.

There are other purposes and advantages to workers’ compensation

laws such as promotion of industrial safety, placing the cost of industrial

injuries on industry as opposed to the state, and the prompt provision of

medical treatment. That said, the primary trade off is that the injured worker

loses the constitutional right to a trial or the recovery of damages. Loss of

access to the court system and the protection of employers from punitive

damage exposure, jury verdicts and massive litigation expense is a huge

concession. For example, a worker that is rendered paralyzed by the

negligence of a third party might receive millions of dollars in damages

associated with their economic loss, non-economic loss (pain and suffering),

disfigurement, loss of income and loss of household services. The same

individual, if rendered paralyzed on the job in Mississippi, would receive

medical treatment and a maximum recovery of $283,828.50 for a 2025 date of

injury.

The trade off for the loss of due process and fundamental property rights is

supposed to be a guarantee of prompt, albeit limited, compensation for work

injuries regardless of fault and prompt and speedy medical care for work-

related injuries.

Workers’ compensation systems have to function for all of the

participants, as intended, to be successful.

Why the System Works for Injured Workers

A huge portion of the workforce does not have health insurance or

savings to obtain medical care. Most workers cannot continue paying their

bills if they are not able to work due to injury. Almost all short term and long

term disability plans exclude workplace injuries from coverage. The upside of

civil litigation is that the damage recovery can far exceed the limitations of

statutory workers’ compensation benefits. The downside is the delay

associated with having to pursue litigation to conclusion that can take years. If

the primary income provider for a family is off work and needs medical

treatment, no-fault compensation benefits paid promptly can be the difference

between survival and financial ruin. The no-fault aspect of workers’

compensation is designed to provide benefits for work-related injuries even if

the injured worker is at fault for the accident. The compensation laws are

typically focused on whether the injury was work-related without regard to whether the accident was anyone’s "fault."

For a large portion of Mississippi’s population, workers’ compensation

benefits are reasonable. Mississippi is one of the poorest states in the country.

The average weekly wage in Mississippi is currently $983.00 which is well

below the national average and ranks between 49th and 50th depending on the year. Even worse, more than 25% of Mississippians have an average weekly wage of $687.00. The currently weekly maximum compensation rate in Mississippi is $630.73. Two-thirds of Mississippi’s current average weekly wage for all workers is $655.36 ($983.00 x 2/3 = $655.36). For those 25% to 30% of Mississippians earning an average of

$687.00 per week, their compensation rate would be $458.02 ($687.00 x 2/3 =

$458.02). That number looks a great deal like a paycheck after withholdings

and deductions.

Workers’ compensation indemnity benefits therefore can provide a

reasonable solution, in the short term, for work injuries. That said, disabling

injuries are devastating for high wage earners because the state weekly

maximum is just that - a weekly maximum amount regardless of how much

someone was earning. In addition, the scheduled maximums for certain

injuries and the overall maximum of 450 weeks are arguably insufficient to

compensate totally disabling permanent injuries.

Why the Employer Wants Workers’ Compensation

The short answer is tort immunity. Employers grumble and complain

about workers’ compensation premiums and self-insured retentions or fund

expense but they are able to statistically predict their exposure. The

Mississippi Workers’ Compensation Commission provides its annual report of

occupational injuries and illnesses which is available to the public. In 2024

there were 9,125 claims filed statewide. Of those, 2347 claims were

controverted. The breakdown of gender, type of injury, mechanism of injury,

time of injury, employment activity and county of occurrence are all provided.

This data allows for very accurate analysis of cost risk for a workplace injury.

Premiums are determined based on that risk as determined in the underwriting

process.

Workers’ compensation removes the unknown to a large extent and

allows employers to incorporate the risk of workplace injuries into their

budget with some reasonable accuracy. Workers’ compensation removes the

risk that a devastating work injury could result in a financial verdict against

the employer that means bankruptcy.

Another advantage to employers is that the workers’ compensation

goal of returning the injured worker to the workforce as quickly as possible

benefits the employer’s business. The sooner an injured worker can be healed

and come back to work the better it is for production and, ultimately, revenue.

In addition, safety programs designed by workers’ compensation carriers and

third party administrators greatly assist smaller employers in adopting policies

and procedures that help avoid work accidents. Employers and carriers are

logically working together to avoid or limit compensable injuries and claims.

Constitutional Challenges to the Act

The Mississippi Workers’ Compensation Law has survived several

challenges to its constitutionality.

In 1954, the Mississippi Supreme Court decided Walters v. Blackledge

wherein a widow and her minor children brought an action directly against the

employer to recover for the death of the deceased employee. The employer

raised the exclusive remedy defense provided under the Act. The trial court

found that the Mississippi Workers’ Compensation Law was unconstitutional

and violated Sections 1, 14, 24 and 31 of the state Constitution.

On appeal, the Mississippi Supreme Court noted that early workers’

compensation acts had been declared unconstitutional by some of the state

courts. However, because the United States Supreme Court had upheld the

constitutionality of the New York workers’ compensation act, the Mississippi

court felt that the issues had been decided and fundamental rights of freedom

and liberty to the individual must give way to public benefit.

The Mississippi Supreme Court reviewed the claims that the Act

violated the due process clauses of the state and federal Constitutions in that it

abrogated the employee’s common law right of action for damages for

personal injuries. The argument was that compensation laws arbitrarily

established a measure of damages that bore no relationship to the actual loss

sustained. The loss of the right to trial by jury and access to the courtroom

(per the Grand Bargain) was asserted to be unconstitutional. Further challenge

was to the loss of the ability to sue a co-worker that may be responsible for

injury and restricted employment contract rights.

The Supreme Court found that, " ... the certain remedy afforded by the

compensation act is deemed to be a sufficient substitute for the doubtful right

accorded by the common law." This rationale highlights the importance of the

injured workers actually obtaining the "certain recovery" provided by a no-

fault/strict liability system. Logically, the further Mississippi’s workers’

compensation system departs from the provision of certain remedy in favor of

litigated challenges and outcomes, the more likely it is that the

constitutionality of the Act will be challenged.

The Mississippi Supreme Court in Blackledge also found that the Act

did not violate an employee’s right to contract. It was asserted that employees,

and employers, had lost the ability to make their own arrangements by way of

employment contract secondary to the compulsory application of the law to

qualifying employers. Essentially, the Court found that the police power of

the state was sufficient to pass and enforce such laws for the good of the

general welfare of the people of Mississippi.

Forty-three years after the Blackledge court found the Act to be

constitutional, the Mississippi Supreme Court evaluated a declaratory

judgment action challenging constitutionality of Mississippi’s compensation

system in Warren v. Mississippi Workers’ Compensation Commission. Six

plaintiffs brought suit directly challenging the Act based on the familiar

allegation of deprivation of due process secondary to the loss of access to the

courts. However, new allegations that delays under the workers’

compensation administration and inherent prejudice of Commissioners

through political appointment effectively rendered the Act unconstitutional.

In other words, the plaintiffs in Warren were asserting that the speedy

and certain remedy of the Act had been removed as a practical matter through

inefficient administration. The trend toward litigating the compensability of

injuries and the multi-tiered appellate process led to real life examples where

injured workers did not receive benefits for 6-7 years. Additionally, the reality

that the Full Commission is the " fact finder" whose determinations receive

deference on appeal (and not the Administrative Judge that heard the case)

allegedly resulted in a system that manipulated outcomes as opposed to fairly

applied statutory law.

The Mississippi Supreme Court looked carefully at §71-3-85 Miss.

Code Ann. and its provision that one member of the Commission represent

employers, one member represent employees and one member be a licensed

attorney provides sufficient guarantee for a fair system. The assertion being

that the licensed attorney would be obligated to follow the law regardless of

affiliation or motivation to favor injured workers or employers. Bill Waller, Jr.

was an expert for the plaintiffs and admitted on cross-examination that he did

not believe the Commissioners who were sitting at the time Warren was

decided were biased or unfair. Accordingly, the Court found that the mere

possibility of prejudice and manipulation was insufficient to support striking

down the Act.

The Court also looked at the allegation that an average workers’

compensation claim that progressed all the way to the Supreme Court took an

average of 7.3 years to reach final disposition. The parallel was drawn to

normal tort litigation that often takes years to conclude and that compensation

claims had, as a practical matter, become litigated lawsuits. The Court noted

the delays in the system caused by both attorneys and circumstances but found

that the plaintiffs failed to meet their high burden of demonstrating that the Act

should be struck down based on "delay."

Finally, there was challenge included concerning attorney fees because

fees to the injured worker’s representative are limited by statute while fees to

the employer and carrier are not limited. The implication was that the system

limited access to competent representatives for the injured worker to those

willing to work for a statutorily capped fee while simultaneously encouraging

litigation by allowing defense attorneys to earn fees unrestricted by any

limits. The Court found that the plaintiffs provided no proof that injured

workers were being deprived of representation as a result of the statutory cap.

Ultimately, the Mississippi Supreme Court again gave full consideration as to

whether rights were being violated to the extent that the Act should be deemed

unconstitutional and answered the question in the negative.

Where We Are Now

The lessons to be gleaned from Blackledge and Warren are found in the

Court’s analysis and explanation that while rights were certainly being lost,

there was a justification given the availability of swift and certain remedy

without regard to fault. Additionally, while the Court was concerned with the

delays in litigated cases they were not deemed to be the fault of the

Commission itself as much as the litigation of the parties.

The appellate delay was addressed in 2010 when the circuit court level

of appeal was removed. Admittedly, the circuit court level of appeal was often

lengthy and frustrating to all parties. Additionally, the creation of the

Mississippi Court of Appeals (which recently celebrated its 30th

year anniversary) effectively created a dedicated court available to hear workers’

compensation appeals from the Full Commission. As a result of these

changes, it is unlikely that a challenge to the Act based on delay to reach final

adjudication would be successful.

As a practical matter, the Commission remains vulnerable to politics.

The Full Commission remains the fact finder. The Commissioners are

appointed by the Governor and confirmed by the Senate to serve six year

terms. Accordingly, the makeup of the Commission will logically reflect the

political affiliations in power at any given time. That said, the Court has

repeatedly found that the Act provides a certain "check and balance"

maintained by an attorney neutral. There have nevertheless been challenges

over the years to the unbiased nature of the Commission wherein it has been

asserted that the negative outcomes to injured workers by way of outright

denials or limitations of recovery were statistically unsupported. Such

challenges brought by peer review or other process have not resulted in any

conclusion that the Act is unconstitutional. The ongoing determination of the

Commissioners to decide the cases on the facts and the law without regard to

any pre-determined political outcome, is always going to defeat a claim of bias

in the system.

The 2012 Amendments

The legislative amendments to the Act of 2012 pose perhaps the

greatest risk to the constitutionality of the Act at this time. Due process and

claims of prejudice have been rejected by the Mississippi Supreme Court.

However, as noted above, the Court’s analysis has always hinged on the

certain remedies guaranteed to injured workers which, while not perfect, were

sufficient to justify the loss of due process and other rights.

In 2012, the Legislature passed what many call "workers’

compensation reform" which necessarily suggests that the Act required

reformation. The well-known changes removed the obligation repeatedly

underscored by the Mississippi Supreme Court that the Act must be liberally

construed to achieve its beneficent purpose. The Court’s logic was that the

benefits, even in close cases, must be provided for the Grand Trade Off (and

constitutional fairness) to be obtained.

In 2012, the Legislature also mandated post-accident drug screening

(regardless of the absence of probable cause or reasonable suspicion) that a

refusal to take a drug test or a positive drug test result created a legal

presumption that an injury was due to intoxication and therefore not

compensable. This provision was popular because it allegedly encouraged

safety by removing drugs and alcohol from the workplace. Sure it did. As a

practical matter, a great many injured workers since 2012 have not asserted

workers’ compensation claims because they believe they would fail a drug

test. It is curious that a compulsory workers’ compensation system would

force someone to subject themselves to a potential criminal prosecution in

order to obtain benefits presumably guaranteed by statute.

Mississippi has now approved medical marijuana. That said, workers’

compensation insurance companies were specifically excluded by the

Legislature from the obligation to provide medical marijuana to injured

workers. Accordingly, an entire class of people in Mississippi - injured

workers - may not obtain medical marijuana treatment for work injuries even

if they qualify.

These changes reflect an ever increasing atmosphere of litigation and

erosion of the no-fault system. Challenges to whether a worker was in the course and scope of employment can, and have, resulted in injured workers being deprived of their

tort remedy through the employer’s immunity and simultaneously being

deprived of compensation benefits. As recently as last year. See, the Rambo

decision. Interjecting a concept of employee fault (rule violation) into a no-

fault system will logically cause the system to fail.

It is submitted that the 2012 changes and continued attempts to limit

Mississippi’s Act will result in constitutional challenges.

Why We Need the Act

Well ... for the presenters, it is how we earn a living. Looking around

the room at the Mississippi Workers’ Compensation Educational Conference

quickly reflects how many people of varying disciplines depend on the Act.

The Commission directly employs 50-55 people. As noted, there is an

average of 2,000 to 2,500 controverted claims every year in Mississippi.

Those claims have attorneys involved representing claimants, employer and

carriers. Those claims, as well as the non-controverted claims all have

medical providers. 9,000 to 11,000 claims per year represent a lot of medical

treatment and a lot of medical records. That many claims requires claim

investigation by a lot of claim professionals employed by carriers and third

party administrators. Vocational counselors, investigators (surveillance),

staffing companies and a great number of other people dependent on the

compensation system underscore its economic impact for the state.

In other words, a whole lot of us really need this Act to keep on working for

us to ... keep on working.

If the Act Goes Away

As a practical matter, Mississippi’s Act can only go away if its deemed

unconstitutional or if the Legislature passes an opt-out amendment. If the Act

were deemed unconstitutional, it is far more likely that only a certain

provision would be attacked rather than the Act itself but there is authority that

if any provision is deemed unconstitutional, the entire Act is deemed

unconstitutional. That said, it is not unthinkable that the next time the

Mississippi Supreme Court contemplates the constitutionality of the Act in

Mississippi it determines that the swift and certain remedy and the attendant

fairness of the Grand Bargain no longer exists. Recall that it was the Supreme

Court that repeatedly emphasized the need for liberal application of the Act to

ensure its remedial benefit to the workers. The Legislature specifically

rejected that language in 2012 and the "balance" to that "check" may well be

coming. If that happened, work injuries would return to the common law tort

arena. Employers would be sued directly for negligence. Injured workers

would lose the ability to obtain medical treatment other than at their own

expense. Injured workers would lose partial wage loss replacement while

unable to work. Employers would lose immunity and face potential financial

ruin from a jury verdict system.

The already burdened civil justice system in Mississippi would have

thousands of new cases interjected into court dockets. A whole lot of people

would be out of work.

Conclusion

The discussion today is part history lesson and part reminder.

Understanding why we have the Act and understanding the challenges to the

Act helps clarify the reason the loss of personal liberties has been deemed

permissible. The best way to ensure the validity and success of the Act is to

understand that the Act was never designed to foster adversarial positions. To

the contrary, all participants working together to restore the injured worker to

health and vocational opportunity remains the fundamental goal. That means

claimant attorneys fairly pursuing and presenting evidence that accurately

reflects the injured worker’s condition and employability. That means

employers and carriers not litigating every issue and frustrating every medical

treatment (utilization review). A genuine focus on getting the injured worker

to maximum medical improvement and helping them get back to work

organically removes so much delay and frustration from the system. The sheer

amount of gamesmanship associated with selecting physicians for treatment,

EME’s and IME’s is astounding. The amount of money spent lobbying the

Mississippi Legislature each and every year in an effort to obtain more and

more advantage is ultimately counter-productive and destructive.

There is a reason that Nissan has a plant in Canton, Mississippi. There

is a reason that Toyota, Continental and others built here in Mississippi. There

is a reason that Amazon is building. Our Act is not perfect but it represents a

good balance for employers and injured workers while simultaneously

assisting to present Mississippi as a favorable place to do business. That

means more and better jobs. Let’s don’t mess it up.