Tag Archives: texas

What the Recent Deep Freeze Portends

I guess you could say growing up in Minnesota and spending most of my life in a climate that is exposed to winter weather almost half of the year has made me an expert in how winter weather can affect the insurance industry.

There is no denying that the recent Arctic outbreak was severe and historic meteorologically. The list of records and stats is very impressive and too long to list here, so I’ll just reference a good tweet thread by Alex Lamers, who is a meteorologist at NOAA weather prediction center.

The main point the insurance industry needs to understand with this extreme cold is that it occurred in the middle of February, which makes it climatologically that much more impressive, because the cold was topping records and stats that usually occur in late December or early January. The other impressive nature of this Arctic outbreak is the duration, which when combined with the time of year makes it that much more important an event.

We know the Deep South can get severe cold, but the prolonged nature of the cold this late into the winter season is a tail event meteorologically.

You might have seen several different sources of winter storm loss trends shared across different insurance publications, but one needs to use caution in truly understanding winter storm losses. The best example I like to use is the superstorm of 1993, which lasted from March 11 to 14 and which is often used as a benchmark winter storm loss event for the insurance industry.

It is classified as a winter storm due to its large impacts on the Northeast states with winter weather as the storm developed into a powerful nor’easter. However, over 40% of the loss came from severe weather that occurred in Southern states from a very strong cold front. The largest event loss (35%) impacts occurred across the state of Florida from numerous tornadoes. Although many in the insurance industry reference the inflation-adjusted loss of over $3 billion for the 1993 superstorm, social economics mean the loss was much larger.

BMS RE view of Winter Storm seasonal losses that exclude events with severe weather. You can easily see the current deep freeze will clearly be in a league of its own in terms of true winter weather losses

BMS has taken steps to truly understand trends in winter weather events that only look at flooding, freezing temperatures, ice, snow and wind as possible causes of loss, as shown above.

Only two recent periods meteorologically would be comparable cold weather-related loss events, Dec. 17-31, 1983 and Dec. 21- 26, 1989. Today, these events would have resulted in $2 billion and $1 billion in insured losses, respectively, after adjusting for inflation, with no way really to understand how social-economic factors might have played a role if that type of cold occurred today. The current loss development with the 2021 Arctic blast seems to be several times the magnitude of any cold-weather loss the insurance industry has ever experienced.

See also: Increasing Regulation on Climate Change

This is largely a result of the insurance industry taking the brunt of a compounding event, which will be one of the topics at this year’s Virtual Reinsurance Association Cat Risk Management Conference. This winter storm is the latest example of a compounding event to affect the insurance industry, resulting in much higher losses than what should likely be expected from an event.

The cold was historic. It was also the trigger for power outages that resulted in the inability to heat and move water, which resulted in water outage. This compounded into many other impacts, like internet outages and even trash collection delays, making the already miserable situation even worse, and likely a worse insurance industry loss.

If the power had stayed on and the demand could have been met, the losses would not be nearly this bad. Time and time again, we see the long-term lack of electricity compounds the overall insured loss. Hurricane Maria’s impact on Puerto Rico or the compounding impacts of the Tohoku Earthquake in 2011 come to mind as recent examples where the lack of power for a prolonged period had very large compounding impacts on insurance industry loss.

Therefore, is it time for the insurance industry to take a much larger role in the vested interest in helping ensure power grids around the world are reliable during times of disasters? Some might say the opposite is happening due to environmental, social governance impacts. The American Society of Civil Engineers rated U.S. infrastructure a D+.

Maybe in the future, the insurance industry can be at the table during discussions around critical infrastructure, which seems to have a clear impact on insured losses.

Autonomous Trucks, Arriving in Texas

The world of self-driving trucks continues to expand as new technologies are being tested and more companies are emerging with revolutionary autonomous fleets of semi-truck tractors that increase safety and efficiency. There’s no denying that these 80,000-pound tractor trailer rigs, which number over 2 million in the U.S., will disrupt the trucking industry as fleets convert to autonomous units. It won’t be long before it will be normal to see these special trucks on the highway. Experts say seven years or less. Already, Australia’s Rio Tinto has 73 huge autonomous mining trucks hauling iron 24 hours a day.

In 2017, the Texas legislature passed a pair of bills legalizing both driverless cars and trucks, allowing these new self-driving trucking operations to deliver cargo to every corner of the Lone Star state. Unlike other states, such as California, self-driving developers don’t need special permits to test in Texas. Executives with several autonomous trucking firms say that they are working closely with Texas authorities, who, supporters say, are big boosters of trucking tech. Even the U.S. Postal Service has tested transporting mail there via robotic trucks. Texas has also kicked off a number of U.S. Department of Transportation (DOT) projects to promote advanced truck tech with funding from a federal grant that will enhance the safety of all autonomous vehicles in the state.

A year-old startup company in Dallas, called Kodiak Robotics, will be running its driverless trucks on roundtrip hauls of more than 400 miles between Dallas and Houston. For now, Kodiak will have a “safety driver” available in the cab to make sure the robotic trucks don’t misbehave, but eventually the truck fleet, often traveling in convoys, will be monitored remotely through advanced camera technology similar to military drones. The latest technology has extended the autonomous vehicle industry’s Lidar remote sensing standard of 270 yards to nearly 1,100 yards. There are also a bevy of sensors that monitor thousands of data inputs each second to help navigate and control every function of the truck. The technology is also self-learning. The benefits are pretty obvious. Autonomous trucks can transport goods 24/7 with no mandatory 11-hour-per-day operating limits. They are fuel-efficient with little down time; there are no cell phone, passenger or other driver distractions; and the driverless trucks obey all traffic laws. Increased trucking safety and efficiency are clearly the goals.

See also: The Real Story on Transportation  

It’s no surprise that other big firms like Daimler (Mercedes), Waymo (Google), Volvo, Volkswagen, UPS and Tesla are all vigorously testing automated trucks. Keep in mind, the stakes are high. Trucks are the backbone of the U.S. economy, moving over 10 billion tons, 70% of all the country’s freight, and generating more than $700 billion in revenues in 2017. Trucking is the largest industry in 29 states, with Texas demonstrating steady revenue growth of 2.1% annually for the past five years. With no sign of trucking being slowed by technology, experts focus on the existing and future physical and mental demands of long-haul truckers. In turn, trucking operations using workers’ compensation insurance, or the Texas ERISA-based alternative injury benefit plan, expect that truck driver injuries or illnesses will decline.

According to the U.S. Department of Labor, Bureau of Labor Statistics (BLS), vehicle crashes are the leading cause of workplace deaths, with frequency of motor vehicle accidents on the rise over the past five years. In 2017, there were 2,077 workers’ compensation fatalities involving motor vehicles, accounting for 41% of all work-related deaths that year. The National Highway Traffic Safety Administration says over 90% of such accidents are due at least in part to driver error. There’s no doubt that truck drivers are highly skilled, to drive their semi-trucks safely, but trucking firms report that nearly 70% of their highway big rig accidents are largely attributed to drivers’ unsafe actions. How will autonomous trucks deal with errant drivers?

Besides the long hours behind the wheel, other causes of injuries to drivers include the fact that semi-trucks are like mobile warehouses, with drivers performing a wide variety of duties in and around the tractor trailer and its cargo, often in adverse weather or road conditions. Drivers, particularly with an aging workforce, are understandably more susceptible to back, shoulder and knee claims. It’s a tough, demanding job. Lost-time injuries and the inability to assume meaningful transitional return-to-work duties are a challenge with trucking company fleet scheduling demands. Smaller trucking firms may have no other transitional duties available.

The nation’s 3.5 million commercial truck drivers in 2017 experienced 47,860 injuries or illnesses out of a total of 882,730 total occupational injuries. The National Safety Council states that motor vehicle claims are by far the most expensive workers’ compensation claim, on average at over $100,000 each. The National Council on Compensation Insurance (NCCI) says that, over a five-year period, these roadway claims accounted for 28% of claims above $500,000.

According to Commercial Truck Insurance HQ, a company that assists in obtaining various trucking related casualty insurance quotes, typical truck driver workers’ compensation insurance (NCCI category 7219) costs between 8% and 15% of a truck driver’s salary. With an average driver’s salary of $57,000 in 2019, this is an annual employer workers’ compensation premium of $4,580 to $8,550. With prior accidents or injuries, some trucking firms can experience annual per driver premium rates as high as $24,960 in Texas and $31,200 in California. Unlike for the majority of the country’s labor force, a reduction in frequency and severity of truck driver claims can translate into significant cost savings to the various employers that manage their truck hauling and delivery services.

Despite operating challenges like slick roadways, construction zones, severe weather, stalled vehicles or obstructions in the roadway, extreme precautionary measures are woven into the autonomous technology to ensure that safety is the top priority. Lane departure – often a beef with auto vehicles trying to pass trucks on the freeway – is better than ever. Trucks in caravans are expected, for the most part, to stay in the right lanes. Other enhancements include: forward collision mitigation; active breaking; and anti-rollover stability. Enhanced health and wellness is expected for drivers who are assigned to ride along in the cab and who will be able to use mobile devices at will or even eat or sleep in the cab as the autonomous unit travels.

What about vehicle liability? It’s assumed by legal and insurance analysts that the firms operating the driverless vehicles are most likely the deep pockets in the event of a serious accident or injury. Liability insurers are banking that trucking firms will have a lower frequency and severity of vehicle liability claims, as well. Overall, experts claim the savings to trucking firms using autonomous vehicles will ultimately be in the tens of billions of dollars. This helps both truckers and their employers as the new technology rolls out.

Assuming safety improves for both truck operators and other vehicles on the highway interacting with these trucks, the next big question has to do with truck driver jobs. The trucking industry currently has over 3.5 million Class 8 heavy-duty (GVWR of 33,001 pounds or more) truck drivers, but it has steadily lost its most experienced baby boomer drivers due to retirement or disability. While truckers were highly unionized until the 1970s, about 13% of the drivers are in unions, and over 10% of truck drivers, about 350,000, are solo operators who own their own trucks. The average age of truck drivers is 55, with 94% male, averaging only $45,000 per year in annual salary. Sadly, truck drivers also suffer a higher degree of chronic disease, including obesity, diabetes and high blood pressure. Adding to severe driver shortages is the fact that younger generations of employees are not interested in being in a sedentary, and often lonely, job. Long-haul truck drivers average 240 nights a year away from home, sleeping in the cab, motels or at truck stops and eating at diners or fast food restaurants. Over 100,000 truck driver positions are expected to be open in 2020 alone, with greater shortages predicted for the future. A bigger question will be the nature of work that new drivers will experience. What can a truck driver/operator expect as a job description in the future?

See also: Rapid Evolution of Autonomous Vehicles  

So how does all of this new technology affect workers? Are truck drivers going to be out of a job? Employers say that their intention is to have truck drivers in the cab to assist in loading and delivery, security, as well as logistics, route planning, and communications. So far, trucking companies state that their drivers for the foreseeable future will remain in the truck cab, much like an airline co-pilot, with the ability to take over the driving in the case of emergencies.

Automation and robotics have had a huge impact on our country’s workforce, but additional advancements are well on their way. It’s expected, for instance, that ride-sharing programs like Uber and Lyft will be displaced ultimately by autonomous vehicles operating 24/7. This technological leap in transportation should ultimately translate into massive productivity increases. But qualified drivers are needed in the interim to see us through this transition phase before autonomous vehicles, including trucks, are the norm. Our nation’s most important economic asset – employees – may struggle as employment opportunities shift direction, but autonomous driving technologies will change the employment landscape, creating efficiencies and enhancing workplace safety in ways we’ve never witnessed.

‘Opt Out’ Will Return; Pay Attention

I had the opportunity to participate in a high-octane session at the 72nd Annual WCI Conference in Orlando, FL. With the somewhat imposing title of “The Grand Bargain or Contract of Adhesion: The Ongoing Debate Over Benefit Adequacy, Procedural Efficacy and Blanket Immunity in Workers’ Compensation,” it was a 90-minute discussion about both specific state legal challenges and the future viability (constitutionality) of workers’ comp overall. It featured Florida defense attorney H. George Kagan, Wyoming law professor Michael Duff, Georgia Administrator and Judge Elizabeth Gobeil and me. It was moderated by Florida plaintiff’s attorney Paolo Longo. While we covered a variety of challenges that the industry continues to face, there was one that I regret we did not have the opportunity to address. That one issue is the concept of allowing employers to opt out of workers’ comp altogether.

Since the Oklahoma Opt Out scheme was torpedoed by the state Supreme Court’s upholding of an earlier decision declaring it unconstitutional, many have assumed that this chapter has closed for the industry. We are quite content to put our heads back in the sand and wait for the next crisis before we stir from our slumber. You may pick up from my tone that I believe this to be a mistake. I am predicting here that the “threat” of Opt Out will return, faster than expected, and with an improved concept that will quickly gain traction. I’m telling you, we need to pay attention and be prepared, as this next round will be a more formidable challenge.

The advocates of Opt Out have, quite simply, made a few key changes in their pitch and approach, and the changes, for the sake of argument, have merit. The Achilles heel of Oklahoma Opt Out was “exclusive remedy”; the approach had been allowed to develop a closed and tightly controlled system that maintained the benefits of liability protection afforded to employers within the highly regulated workers’ compensation system. This was found to provide inconsistent benefits to some workers, and, combined with the one-sided controls granted employers within Opt Out, was deemed an unconstitutional restriction on employees’ rights of due process. Today, the backers of Opt Out seem to have learned a lesson and are now proposing an Opt Out scheme that operates without the layer of protections afforded by the exclusive remedy provisions.

See also: What Schrodinger Says on Opt-Out 

In other words, they are saying, “Allow us to accept the risk of full liability and set up our own alternative plans to mitigate that risk.” Although I am known for my opposition to Oklahoma Opt Out and am not a fan of Texas non-subscription, I believe this concept is more intellectually honest than its Sooner State predecessor and therefore worthy of inclusion in the debate about the future of workers’ compensation.

With my involvement with “national conversations” on comp over the last year and a half, one thing has become firmly etched in my mind. There is a feeling of frustration simmering in the industry over the regulatory complexity and paperwork required in helping injured workers. There is tremendous appeal in the idea of bypassing all the oversight and just doing the job that needs to be done. After all, in some systems, treatment of the injured worker now seems to be a secondary goal; we can get to it when all the appropriate paperwork has been completed in triplicate and submitted to the various participants that are required to have it.

By saying, “We accept the risks of open liability and can control those risks by doing the right thing by our employees,” backers change the argument significantly from that where exclusive remedy protected the employer either way. The new approach is going to have tremendous competitive appeal to employers and the legislators whose ears they reach.

There are, of course, concerns with this concept. One of the oft-understated purposes of the “Grand Bargain,” which created a system that was supposed to be no-fault in nature, is that it assures treatment and benefits for the careless and negligent worker. People who represent the injured workers’ interests hate to discuss this, but many accidents occur not because the employer was negligent but because the employee screwed up. The employee may have been simply careless or willfully bypassed safety practices. Either way, the injury is often the fault of the worker who suffers it. Workers’ comp, with few exceptions covers that. Employers who find no liability in an accident may not.

For example, let’s say you run a delivery service. You maintain a strict “no texting while driving” policy for your drivers, even going so far as to install apps on company-provided phones that will not allow texting when movement is detected. However, one of your drivers pulls out a personal phone (banned by company policy), over which you have no control, and drives headlong into a tree while texting his BFF. Were you negligent? If you did not have workers’ comp, would you need to be concerned with the liability of pain and suffering, loss of consortium and all the other threats of a negligence suit? Unlikely. Without the threat of a suit, would you be compelled to provide medical and indemnity benefits to this worker? Equally unlikely, I would suspect, especially in an Opt Out world.

Believe me, there is a real attraction to being released of financial responsibility for things that were not your fault. This really becomes a discussion at a societal level. Are we willing to start assigning blame, potentially placing the burden on taxpayers for injuries that occur while someone is working for the benefit of an employer? Are we ready to return to the days before workers’ comp existed?

Another issue, of course, will be how the concept is actually created in legislative form. Saying you will accept the risk of open liability is different than legislating that element. As with all things, the devil will be in the details of any specific proposal.

These questions will certainly be a part of the debate. In the meantime, the simplicity of bypassing an over-regulated system is going to provide tremendous appeal for some. At our Orlando session, George Kagan observed that Florida legislators have enacted so much legislation for workers’ comp that it would make the “central planners of the Soviet Union proud.” Employers will eventually look to escape an overly complex system where regulators cannot even agree on a simple standardized reporting form.

When the argument can be successfully made that benefits for the injured worker can be improved by leaving a burdensome system, then we will have a real dogfight on our hands.

See also: Debunking ‘Opt-Out’ Myths (Part 6)  

PartnerSource President Bill Minick, who is the primary supporter of the Opt Out concept, and I do agree on a couple things. One of those is that competition is healthy and almost always results in improved service for all. The concept that backers are beginning to put forth represents the opportunity for true competition to a system that cannot seem to respond to other external stimuli.

I remain a vociferous advocate for the workers’ comp system; its importance in stabilizing a contentious area of labor relations has been well proven over the past 100 years. However, I also want to see a vibrant and relevant workers’ comp system for the next 100 years. That means we must address some of our issues head on, and answer the questions about what is important to us as a society.

Opt Out will again soon be an issue we are debating, but with a change in focus on their side. It will be a concept worthy of a larger debate.

It will be a debate that we best be ready to participate in.

6 Reasons We Aren’t Prepared for Disasters

When dawn broke on the morning of Sept. 8, 1900, the people of Galveston, Texas, had no inkling of the disaster that was about to befall them. The thickening clouds and rising surf hinted that a storm was on the way, but few were worried. The local Weather Bureau office, for its part, gave no reason to worry; no urgent warnings were issued, and no calls were made to evacuate. But by late afternoon it became clear that this was no ordinary storm. Hurricane-force winds of more than 100 mph were soon raking the city, driving a massive storm surge that devoured almost everything in its path. Many tried to flee, but it was too late. By the next day, more than 8,000 people were dead, the greatest loss of life from a natural disaster in U.S. history.

Fast-forward to September 2008 when Hurricane Ike threatened the same part of the Texas coast — but this time it was greeted by a well-informed populace. Ike had been under constant surveillance by satellites, aircraft reconnaissance and land-based radar for more than a week, with the media blasting a nonstop cacophony of reports and warnings, urging those in coastal areas to leave. The city of Galveston was also well-prepared: A 17-foot-high seawall that had been constructed after the 1900 storm stood ready to protect the city, and government-flood insurance policies were available to residents who were at risk of property loss. Unlike in 1900, Texas residents really should have had little reason to fear. On their side was a century of advances in meteorology, engineering and economics designed to ensure that Ike would, indeed, pass as a forgettable summer storm.

See also: 5 Techniques for Managing a Disaster  

It didn’t quite work out that way. Warnings were issued, but many in low-lying coastal communities ignored them — even when told that failing to heed the warnings meant they faced death. Galveston’s aging seawall turned out to be vulnerable; it was breached in multiple places, damaging roughly 80% of the homes and businesses in the city. The resort communities to the north on the Bolivar Peninsula, which never saw the need for a seawall, fared even worse, witnessing almost complete destruction. And among the thousands of homeowners who suffered flood losses, only 39% had seen fit to purchase flood insurance. In the end, Ike caused more than $14 billion in property damage and 100 deaths — almost all of it needless.

Why are we underprepared for disasters?

The gap between protective technology and protective action illustrated by the losses in Hurricane Ike is, of course, hardly limited to Galveston or to hurricanes. While our ability to foresee and protect against natural catastrophes has increased dramatically over the course of the past century, it has done little to reduce material losses from such events.

Rather than seeing decreases in damage and fatalities because of the aid of science, we’ve instead seen the worldwide economic cost and impact on people’s lives as hazards increased exponentially through the early 21st century, with five of the 10 costliest natural disasters in history with respect to property damage occurring since 2005. While scientific and technological advances have allowed deaths to decrease on average, horrific calamities still occur, as in the case of the 230,000 people estimated to have lost their lives in the 2004 Indian Ocean earthquake and tsunami; the 87,000 who died in the 2008 Sichuan earthquake in China; the 160,000 who lost their lives in Haiti from an earthquake in 2010; and the 8,000 fatalities that occurred in the 2015 Nepalese earthquake. Even in the U.S., Hurricane Katrina in 2005 caused more than 1,800 fatalities, making it the third-most deadly such storm in U.S. history.

In our book “The Ostrich Paradox,” we explore six reasons that individuals, communities and institutions often under-invest in protection against low-probability, high-consequence events. They are:

  1. Myopia: a tendency to focus on overly short future time horizons when appraising immediate costs and the potential benefits of protective investments;
  2. Amnesia: a tendency to forget too quickly the lessons of past disasters;
  3. Optimism: a tendency to underestimate the likelihood that losses will occur from future hazards;
  4. Inertia: a tendency to maintain the status quo or adopt a default option when there is uncertainty about the potential benefits of investing in alternative protective measures;
  5. Simplification: a tendency to selectively attend to only a subset of the relevant factors to consider when making choices involving risk; and
  6. Herding: a tendency to base choices on the observed actions of others.

See also: Are You Ready for the Next Disaster?

We need to recognize that, when making decisions, our biases are part of our cognitive DNA. While we may not be able to alter our cognitive wiring, we may be able to improve preparedness by recognizing these specific biases and designing strategies that anticipate them.

Adapted from The Ostrich Paradox: Why We Underprepare for Disasters, by Robert Meyer and Howard Kunreuther, copyright 2017. Reprinted by permission of Wharton Digital Press.

Workers’ Comp and Due Process Don’t Mix

If attorneys and judges really want due process with regard to workplace injuries, then they should endorse the workers’ compensation (WC) alternative in Texas that we call nonsubscription. They won’t, even though nonsubscription is consistent with the Fifth, Seventh and Fourteenth Amendments to the U.S. Constitution — the amendments that identify due process as a key component of our national identity. The Fourteenth Amendment is very clear: “[N]or shall any State deprive any person of life, liberty or property, without due process of law . . .” In this legal context, employers are considered persons, so WC statutes mandating them to pay insurance premiums — regardless of fault — are violations of due process. That argument was so powerful it nearly prevented the original enactment of WC laws around the country a century ago.

Unlike WC, Texas nonsubscription never required employees or employers to fully surrender their legal rights to a system of special adjudication, so when employees sue their nonsubscribing employers, the cases are of the big-boy variety: tort. In Texas nonsubscription, we’ve seen about 100 judgments/settlements at or over the $1 million mark — much bigger than what WC constituents are used to. Moreover, our lawsuits in nonsubscription are processed in the civil court system, which is both a hallmark of due process and a reminder of what a day in court really looks like.

By contrast, WC disputes are typically relegated to administrative systems, where attorneys are sometimes tutored on procedure during hearings by administrative law judges. If this sounds like due-process-with-training-wheels, it’s because training wheels are necessary for everyone involved in the system (from lawyers and judges to regulators and legislators) to keep their balance as they attempt to negotiate two types of terrain at once. Due process can be thought of as a reasonably smooth legal pathway that’s been cleared for centuries by lawyers and judges. The special adjudication reserved for WC can be thought of as a smooth but abbreviated fast track that’s subject to change at the will of a legislature. But the fast track to fairness within the confines of WC is now littered with bumps and potholes because judges have permitted lawyers to drag due process procedures into a system of special adjudication that was never designed to accommodate them.

See also: Back to the Drafting Table on Work Comp  

To fans of due process, the nonsubscription system in Texas does say: “We will not deprive our employees and employers of their life, liberty or property unconstitutionally.” To fans of special adjudication, the WC system in Texas (and everywhere else) should say: “We understand why an expedited process for solving problems related to workplace injuries appeals to both employers and employees, and we can reduce costs, save time and improve outcomes for injured workers by minimizing attorney involvement.”

So if you are an employer or an employee committed to due process in the world of workplace injury, you should do everything possible to support Texas nonsubscription. But if you are committed to foisting due process concerns onto existing WC systems, you’re probably just a lawyer looking for a payday.

These Aren’t the Droids You Are Looking For

The lack of due process in unconstitutionally seizing property from employers is the obvious and gaping flaw that attorneys and judges don’t want to discuss when promulgating due process in all other areas of WC. They certainly don’t want to alter the funding of WC. Strict due process was a hurdle that WC couldn’t clear when the Grand Bargain was struck in the early 20th century. Due process almost destroyed WC then — and it threatens to destroy it today. Simply stated, strict due process and WC do not mix. This critical warning continues to fall on deaf ears as state Supreme Court Justices from New Mexico to Florida apply due process wherever it is convenient for the legal profession (but not necessarily where it is most critical for injured workers).

When forced to address this unconstitutional seizure issue, the legal community has, thus far, successfully used mind tricks akin to the one made famous by Star Wars’ Obi-Wan Kenobi. Lawyers want us to forget that reduction of legal friction was a key incentive for employers to abandon their due process concerns and accept the Grand Bargain in the first place. Each time a new generation of entrepreneurs asks, “Why do employers have to foot the bill for this whole sprawling WC system?,” legal spokespeople respond, “Everyone already agreed to this,” deftly deflecting through a sort of Jedi mind trick. And when the business owners who have done their research press the matter by asking, “But didn’t everyone also agree to bypass other areas of due process in favor of special adjudication within the confines of WC?” the legal spokespeople wave their hands and shake their heads very convincingly as they chant in unison, “No. That is not the argument you are looking for. ”

As with Kenobi’s lie, there’s no substance to the lawyers’ falsehood beyond the confidence with which they assert it, but the mind trick continues to work. “Well, I guess that isn’t the argument I am looking for,” you might hear from an exasperated CFO. “These attorneys have been trained in the law, so they must know. Carry on.

Those who lie about due process’ historical place within WC need to know that we are on to them. Their flawed arguments need some work.

See also: What Happened on the Oklahoma Option?  

Texas nonsubscription has provided a robust case study in what due process looks like for employers and employees alike. WC worked well under special adjudication for decades. But over the past half century, as layers of procedural due process have been added to WC’s inner workings, the legal community has cried foul about the lack of substantive due process — except it selectively disincorporated that whole funding-by-the-employer component from its argument.

I support due process in Texas nonsubscription.

And I support special adjudication in WC.

Let the legal community dictate what happens in nonsubscription. But let the legislature dictate what occurs in WC — which was the original deal. Mixing them has never worked.