Bringing Back The Deadly Workplace By Stopping Product Liability Actions

From July 1906 through June 1907, five-hundred twenty-six workers died on the job in just Allegheny County, Pennsylvania. Here’s the “death calendar,” noting the deaths per day for the holiday months of November 1906 and December 1906:

workplace injury death calendar

(This chart and the next come from the CDC’s Improvements in Workplace Safety — United States, 1900–1999.)

A substantial risk of death was simply a fact of any sort of industrial work with heavy machinery in the Gilded Age. In 1913, there were approximately 23,000 industrial deaths, for a rate of 61 deaths per 100,000 workers. To put that in perspective, the current death rates due to all accidents is 38.0 per 100,000, and the rate due to suicides is 12.1 per 100,000. Thus, the risk of dying on the job a century ago was higher than the combined risk of dying in any sort of accident or by suicide today.

Workplace deaths were so common that they even drove art and literature. It’s been largely forgotten in our time, but Christ in Concrete, about an Italian-American community’s struggles during the Roaring Twenties in the face of multiple fatal and catastrophic construction accidents, was published the same year as Grapes of Wrath, to similar praise. The author’s father, a construction worker, was killed on the job on Good Friday in 1923, when the author was 12. In the book, as was common at the time, the nominal presence of workers compensation is of no help, as the construction company blames the workers and the company’s insurer disclaims coverage.

The current rate of occupational fatalities is about 4 per 100,000 — a drop of over 90%. There are of course a wide variety of causes for the decrease, including some totally unrelated to industrial work (like, as the CDC notes, “societywide progress in injury control,” such as “use of safety belts and other safety features in motor vehicles and improvements in medical care for trauma victims”), but one big reason can’t be ignored: money. After decades of efforts by workers’ rights activists, Wisconsin was the first state to pass a first mandatory workers compensation law in 1911, and Mississippi was the last, in 1948. Employers weren’t too interested in safe workplaces until they were on the hook for the workers’ wages if they were hurt.

But employers weren’t the only ones who needed to have an incentive to care about safety. No one is in a better position to make a complex piece of machine safer than the machine’s manufacturer, and the rise of product liability law — particularly ‘strict liability’ — in the 1960s gave injured workers a way to go beyond the modest benefits of workers compensation to obtain recoveries closer to their true damages. (If the workers succeeded in their product liability claims, they would then have to pay back the workers compensation, through a process known as “subrogation.” Keep that in mind, it becomes important in a minute.)

This is why, even in the 1980s — presumably long after the deadly situations described by books like Christ in Concrete — workplace deaths continued to decline, and from 1980 to 1995 the rate of machine-related deaths fell by half:

graph on occupational death causes This would all seem to be cause for celebration — the parties in the best position to make workplaces safer are given a financial incentive to actually do so, resulting in safer workplaces and compensated injured workers — but it seems some people think we need to roll the clock back.

Forbes has a new tort blog authored by Michael Krauss, a law professor at George Mason University, and last week he decried the great injustice of allowing workers to recover compensation against the manufacturers of dangerous equipment:

[The] interaction of [workers compensation] and products liability is toxic. A United States Department of Commerce Interagency Task Force on Product Liability, covering claims from mid–1976 into early 1977, found that at least 10 percent of all products liability claims arose from workplace accidents, though of course only an infinitesimal percentage of product use is at the workplace. Because machines tend to be involved in the most serious workplace injuries (for less serious injuries, workers are typically content with WC payouts), the 10 percent figure in fact vastly understates the problem. Reliable estimates suggest that up to 40 percent of all dollars paid in products liability damages may in fact be for workplace injuries.

It’s hard to know where to begin with this dubious support for the claim that the relationship between workers comp and products liability is “toxic.” Three points jump out at me.

First, the source of those “reliable estimates” that 40% of product liability damages are paid in workplace injury cases isn’t listed anywhere, so they may as well been made up out of thin air.

Second, what does he even mean by the claim that “only an infinitesimal percentage of product use is at the workplace?” Are we supposed to assume that the risks of all products are the same, as if a paper plate carried with it the same risks as a metal smelting cauldron or an industrial lathe? The world’s largest consumer products company is Procter & Gamble, which owns, for example, Old Spice, Gucci, Charmin, Bounty, and Dawn. Compare the risks of those products to, say, the risks of the “heavy equipment” made by Caterpillar, Komatsu, Volvo, and Hitachi, like bulldozers and excavators. Is there any reason to believe that the risks of these products are all the same, that a person opening up a roll of paper towels at home is at the same risk of serious injury as a person walking around a construction site surrounded by 100,000lbs bulldozers?

Third, I don’t think Krauss understands what people do at their jobs, and where the risks really are. It only sounds absurd to hear that 10% of product liability claims could arise in the workplace if you’re assuming that an “occupational injury” has to involve industrial equipment — truth is, as shown in the graph above, by sheer numbers the most dangerous piece of workplace equipment is an automobile. Every year, more workers are killed on-the-job in automobile accidents than are killed by falls or by being struck by an object.

Thus, when we’re talking about product liability claims and injuries in the workplace, we’re often talking about defective cars. Which raises an obvious question: when a worker is seriously injured or killed by a defectively designed or manufactured car (or defective safety harness, or defective ladder, or the like), then who should pay for the harm? The employer or the manufacturer of the defective product?

This strikes me — and I bet most non-lawyers — as a no-brainer: of course the manufacturer should pay. That’s how the law typically works in this situation. The employer is injured, they file a claim with the workers compensation insurance carrier, the insurance pays for lost wages (but typically only a portion, and typically no award for family member’s losses or for pain and suffering) and then the worker (or their family) hires a plaintiffs’ lawyer to pursue the manufacturer for additional damages. If the lawsuit against the manufacturer is successful, then the workers compensation insurer is reimbursed (through ‘subrogation’).

It’s one of the few areas in which the law is compassionate and rational: an innocent worker who has been hurt receives compensation from an insurance company to help provide for their family, and then the truly culpable party is held accountable to the worker, who in turn pays back the insurance company.

Krauss, however, thinks that’s “toxic,” and is hopeful that a recent Pennsylvania Supreme Court case, Bowman v. Sunoco, Inc., 65 A.3d 901, 909 (2013), holding that negligent parties can glom onto employment agreements to avoid responsibility (and leave employers holding the bag) will thwart this process. Why anyone would want that is beyond me — at best, it’s a step backwards.

  • Civil Litigator

    I just found this blog and posted on an older story, but this one is near and dear to my heart. Please make note in your analysis, should you continue it, that ERs also pay a hefty cost in loss of the skilled worker or machinist when they are injured at the workplace to the point of being unable to return. As the manufacturing process becomes more technically inclined, it is more difficult to train and re-hire for an injured skilled worker. That cost is NEVER allowed to be re-captured by the ER, though in my opinion, it should be. At most, they can subrogate the indemnity payments and healthcare costs. But when you spread that re-training cost out over time, it can literally become the difference between a successful business, and a business failure.

    • Over the past couple decades, the insurance companies have done an excellent job in framing both safety and civil liability as an issue of how much money lawyers make. Truth is, if someone is seriously injured, that has an enormous economic impact on a wide variety of people and entities, including their employer and even the local government, which has just replaced a taxpaying worker with a disabled resident. Yet, these “externalities” are routinely ignored whenever we talk about safety.