HISTORY OF WORKERS' COMPENSATION LAW
part 1 of 5

Before the industrial revolution and the development of factories, mills, and plants with their gigantic machinery, agriculture dominated economic life. No doubt injuries occurred but they were relatively few compared to when workers in large numbers were placed in proximity with dangerous machinery and implements of industrial production. If a worker on a farm was hurt, the employer would routinely provide medical help and some financial help through the period of disability. Workers were closer to their employers then and often lived on the farm. If their employer did not help, the workers' only recourse was to sue in common law court, a process that was time consuming and not always successful. In the meantime public charity would bear the burden of the injury.

The predominant claim in a common law suit by a worker was that the employer was somehow negligent, and therefore injury resulted. However, the employer had several advantageous defenses: contributory negligence, assumption of risk and the fellow-servant rule. In contributory negligence the employer would claim that the worker was partly to blame or the injury occurred from the worker's own actions. Alternatively, an employer could say that the worker knew the dangers of that employment before coming to work and so there was an assumption of risk that would bar liability. Finally, a number of injuries were not by the employer's actions or employment conditions at all, but due to other fellow workers who may have caused the accident. In these cases the fellow-servant rule prevented blame from being attached to the employer.

These defenses were quite effective for employers during the industrial age as well, so that 80% or more of the cases brought against employers were lost or uncompensated. Similar inequities were seen in Europe where the industrial revolution was also running at full steam. But there in 1884, Otto VonBismark, the first chancellor of the German empire, championed the idea of workmen's compensation legislation. For the first time, injuries were not compensated on the basis of the employer's negligence, but on their relationship to the job. Within a short time England followed suit and abolished common law workers' suits, instead establishing a formal workmen's compensation system. Liability depended not on who was at fault for the accident but, according to English legal scholars, whether the personal injury by accident arose out of and in the course of employment.

In the early years of the 20th century American legislators also clamored for a similar change of law. By 1911 Massachusetts, which debated the question for nine years, finally passed a workers' compensation law with ten other states changing to a similar system at about the same time. The change was not easily made and understandable opposition came from employers as well as insurance companies who had made large profits from common law coverage. But the Supreme Court of the United States upheld these acts and they gradually became established in every state and for federal employees. Clearly, workers' compensation laws were meant to be a humanitarian measure to create a new type of liability - a liability without fault. Industry was to be responsible but society as a whole, through increased costs of production, would share the loss.

In reality, workers' compensation laws are a compromise for both employee and employer. The employee is denied the right to sue at common law for indefinite damages, but instead receives a certain percentage of wages during the period of disability, and medical care at the employer's (insurer's) expense. The employer, at least in theory, does not have to defend against fault and is only liable for limited, statutorily set damages. With the rise of workers' compensation claims in the past fifty years, with employers feeling more and more that they are being accused unfairly of fault, and with alternative remedies now available in addition to workers' compensation (sexual harassment claims, discrimination suits, Americans with Disabilities Act), the premise behind that initial compromise may need to be re-examined.

NEXT>>

back to the top...

Return to Online Library...