Tag Archives: Grand Bargain

What Do You Mean, I Can’t Sue My Employer?

OSHA find the owner of the Didion Milling Plant in connection with an explosion that killed 2 workers and injured several more.

I sat down this morning with a television reporter interviewing me about a horrific explosion in Wisconsin that killed 5 workers and injured many more.  The explosion on May 31, 2017 at the Didion Ethanol Plant in Cambria, Wisconsin occurred when corn dust exploded, destroying the entire plant.  OSHA hit the company with a $1.8 million fine, calling it a preventable explosion.

The reporter’s question to me was “Why can’t the employees sue their employer?”  The answer goes back over 100 years in Wisconsin to the “Grand Bargain” that was struck between management and labor.  Sometimes referred to as the “great tradeoff,” employees traded away their right to sue their employer, even for egregious safety violations, in return for wage loss and medical benefits to be paid regardless of fault.  The goal was to relieve the injured employee from the burden of paying for medical care and replace lost wages.  At the turn of the 20th Century, Wisconsin workplaces were often dangerous places, and employers had little incentive to make them safer.  Injured workers could rarely afford the kind of legal cost for recovery efforts in court and employers benefitted by use of contributory negligence, assumption of risk and co-employee negligence as bars to an employee’s recovery in court.

The administrative system that was established by worker’s compensation was created to provide a direct remedy to the employer and to limit (by Exclusive Remedy) litigation against the employer.  The system was supposed to insure a method of providing benefits to an injured employee during the period of disability and to ensure the employees were not reduced to poverty because of injuries.

Speed, dependability, and financial assistance were components of the new system, and by making employers responsible for injury, the law offered strong incentives to make workplaces safer.  Unfortunately, that has not occurred.  The latest statistics indicate that over 100 people die annually in Wisconsin and over 5,000 annually across the nation.

Revealing to a grieving widow that the remedy available is limited to four times the deceased worker’s annual income is precious little consolation for loss of a spouse’s life and lifetime income.

Fault: Creeping Back Into Workers’ Compensation

Workers’ Compensation is a compromise. As originally crafted in 1911 and as interpreted, Wisconsin Workers’ Compensation is a compromise in which both employers and employees surrender certain advantages in order to gain others that are deemed more important. Employers give up the immunity that would otherwise apply in cases where they were not at fault and employees surrender their former right to full damages in the few instances when they could recover under tort law and instead accept more modest assured benefits for injuries and deaths (without having to prove fault).

The concept of negligence should play no role whatsoever in the workers’ compensation system. The doctrine of liability without fault is part of the compensation system; the 1911 legislature attempted to guarantee payments by the employer for injuries arising out of and in the course of employment. The economic burden shifted from the employee to the consuming public.  

Traditionally, the only vestiges of fault and negligence that remained in Wisconsin involved penalties involving employer or employee safety violations. If an employee was hurt because of the employer’s safety violation, the benefits to which the worker was entitled were increased by 15% and paid directly by the employer. Similarly, if the employee committed a safety violation causing injury, benefits from the insurance carrier or self-insured employer could be reduced by 15%. 

Recent revisions in the law, effective March 2, 2016, chip away at the “Grand Bargain,” the legislative deal made in 1911 where workers surrendered all rights to sue their employers for negligence in return for which the employer paid for work-related injuries regardless of fault. 

An employee who had sustained a work-related injury and would return to work for an employer has always received the protection of the Workers’ Compensation Statute. Even if the employee was terminated for good cause during a post-injury healing, he was entitled to continued receipt of Temporary Total Disability benefits (2/3 of time-of-injury wages). However, effective March 2, 2016, a new Statute now states that if an employee is discharged or suspended for misconduct or substantial fault, as these terms are defined by the Unemployment Compensation statutes, the employee’s Temporary Total Disability benefits could be suspended. The legal standard for what constitutes “sufficient grounds for termination for misconduct” and “substantial fault” will be defined by the Unemployment Compensation Law (These are employer-friendly changes that were implemented in the UC system in 2014). 

Going forward, administrative hearings in both the Unemployment Compensation and Worker’s Compensation forums will occur. The issue of whether a decision binding on one forum will be binding on another remains to be seen.  A worker could face the “double whammy” of being denied benefits in both the workers’ compensation and unemployment compensation case.

Additionally, the new law indicates that an employee who violates an employer’s drug and alcohol policy at the time of injury (where the violation is causal to the injury) is not entitled to anydisability benefits under the Workers’ Compensation system. This harsh 100% penalty is a substantial change from the now pedestrian 15% diminution that formerly applied to injuries before March 2, 2016.

Lastly, the new law allows apportionment of Permanent Partial Disability in cases of traumatic injuries between that permanency caused by the work injury and that “caused by other factors.” The statute is silent as to the meaning of the term disability, or “other factors,” and the problems raised by the possible interpretations of these terms will be determined in subsequent court decisions.

The net result will clearly be more disputes in the supposedly “no fault” compensation system—likely resulting in more litigation and potentially raising the cost of workers’ compensation for all stakeholders.


1. 2015 Wis. Act 180 (effective March 2, 2016) made significant changes to the workers’ compensation law—for employers and employees.  This blog will explore those changes in a series of upcoming posts.