Workers’ Compensation in D.C.: Separate and Unequal

Originally published in Washington City Paper on October 7, with the support of Spotlight DC — Capital City Fund for Investigative Journalism.
——

In April 2009, then-53-year-old Esther Layne, a customer service representative with the D.C. Office of Unified Communications, suffered an acute attack from exposure to allergens in her workplace and had to be hospitalized. Layne says she was first exposed to toxic gas and pesticides while working as a clerk typist for a D.C. substance abuse facility in the 1990s. Though she tried to return to work following her 2009 hospitalization, Layne continued to suffer complications, and never fully recovered. A few months later she was approved for public sector worker’s compensation, and began receiving benefits both to treat her asthma and rhinitis, and for wage loss.

Now, at 65, Esther Layne is fighting an unexpected development: D.C. abruptly cut off her benefits after a city-hired physician concluded last year that her ongoing symptoms including sensory deficits and shortness of breath could not be objectively linked to her workplace exposure. “I see a top allergist in D.C. [Dr. Elena Reece] and they just ignored her letter, and they send me to their doctors who are quacks,” Layne says.

Now Layne’s attorney is pressing the city to give her permanent relief, but D.C. is claiming because she worked in the public sector as opposed to the private sector, she’s not even entitled to that kind of redress anymore. 

“All my credit cards are maxed out and the little bit of savings I had is gone,” Layne says. “I’m trying not to be depressed, but I’m so stressed and I’m behind on all my bills. They don’t care anything about your health and living situation. It’s disrespectful, and the thing that really bothers me is I dedicated my life to government.”

Layne’s fight for relief overlaps with other ongoing worker compensation battles in D.C, an area of government that has garnered markedly little media and political attention over the years. Unlike nearly every state, D.C. has two separate systems for injured public and private sector workers, and the inequalities between those systems have grown wider over the last decade as new restrictions limiting benefits for public sector employees have rained down.

Workers’ comp is now slated for a rare moment in the spotlight, with a Council hearing scheduled for Oct. 16, but even that event is enmeshed in confusing politics. Ward 4 Councilmember and government operations committee chairman Brandon Todd introduced two bills in July to address some of the inequities of the public-sector system, but his bills have no co-sponsors to date. And since Todd lost his primary to challenger Janeese Lewis George in June, he will exit the Council at the end of the year. 

Some Council watchers speculated his bills had been driven by a last-ditch effort to court labor groups during the primary, since union discussions around potential workers’ comp reform started in the winter. Others pointed to the influence of Todd’s chief of staff, Sherryl Newman, who is married to an attorney who represents injured public sector workers in the city. Todd did not return multiple requests for comment.

“Workers’ comp is one of those technical issues that does really end up affecting people’s lives, but it doesn’t really rise up to be anyone’s top priority,” says Elizabeth Falcon, the executive director of DC Jobs with Justice, and a supporter of one of Todd’s bills.“Even for the unions there’s only some sectors that need workers’ comp … I hope that the weird politics of this don’t undermine the Council solving the problem, which is real.”

***

Originally born out of Germany and later adopted by the U.S. in the first two decades of the 20th century, workers’ comp is the idea that employees will give up their right to sue if they are injured on the job, and in return employers will pay their medical expenses and at least some of their lost wages. Factories were dangerous places and highly prone to gruesome accidents, and in his 1907 State of the Union Address President Theodore Roosevelt touted the importance of expanding this workplace bargain. “The number of accidents to wage-workers, including those that are preventable and those that are not, has become appalling in the mechanical, manufacturing, and transportation operations of the day,” Roosevelt declared. “It works grim hardship to the ordinary wage-worker and his family to have the effect of such an accident fall solely upon him.”

Today, in nearly every state, injured public and private sector workers are covered under the same set of workers’ comp rules, except police officers and firefighters, who often have their own arrangements. But in D.C. it’s different, a product of Congress’ decades of control over local affairs. When Congress gave governing authority back to the District in the 1970s, it required D.C. to establish a merit-based personnel system that mirrored the Federal Employee Compensation Act, leading to the Comprehensive Merit Personnel Act of 1978. Among other things, this law established workers’ comp for former federal employees now working for the city government; private sector workers were covered under their own statute passed a year later. While both sectors of workers’ comp were originally handled by D.C.’s Department of Employment Services, beginning in 2003 public sector workers’ comp was transferred to the newly created Office of Risk Management, a fitting moniker, workers say, for the conflict of interest inherent in having the same agency act as the city’s insurer, an adjudicator of workers’ claims, and a drafter of workers’ comp rules.

(Because D.C. Superior Court hears appeals of ORM’s decisions about issues like the need for medical treatment, ORM insists they are sufficiently independent and there is no conflict of interest. However, attorneys point out this still leaves fact-finding in the hands of ORM, as the Superior Court does not conduct hearings or review new evidence.)

In the late 1990s, when the city’s finances were under particular duress, some business and political leaders complained that D.C. was too generous to its injured workers and urged officials to put more stringent limits on potential relief. The Council imposed a few modest reforms to the private sector law but resisted pressure to limit the length of time an injured employee could collect benefits, to the chagrin of the business community and the Washington Post editorial board. “If we’re not interested in being competitive, then we do what we’re doing and we can sit back and complain when businesses don’t come here,” Ward 2 Councilmember Jack Evans lamented at the time.

For public sector workers, meanwhile, things were a mess. Injured employees were increasingly losing their benefits or denied them for arbitrary and conflicting reasons, and others were never given notice before their checks were cut off. For those who did receive notices of termination in the mail, most would say that in ORM’s judgement they were no longer disabled, based on the opinion of the government’s hand-picked medical examiners.

After hearing from many people with similar complaints, attorneys working at the Employment Justice Center, the George Washington University Law School’s Public Justice Advocacy Clinic, and the private firm Miller & Chevalier filed a class action lawsuit on behalf of the publicmsector workers in 2001. The case, Lightfoot v. District of Columbiawas litigated for more than a decade and called for reinstating previously denied workers’ comp benefits and halting future terminations until a fairer process could be installed.

“Nobody was talking about workers’ comp, it was just an invisible issue,” recalls Laura Brown, the former director of legal services at the Employment Justice Center who helped litigate Lightfoot. “There weren’t really many rules that were known. It was like this weird internal system that only people working there knew the rules, and the claimants did not. People’s benefits were being terminated, suspended, modified without notice, and often with little or no input from the worker.”

Duncan Stevens, a former Miller & Chevalier lawyer who also helped with Lightfoot, remembers asking the city for data on how many people saw their benefits terminated between 1998 and 2002. “We asked them, and they didn’t know—they just did not know,” he says. “And we said, ‘How can you not know?’ and they gave us all sorts of answers.”

While the lawyers were successful in bringing more due process to the public sector system, the courts ultimately declined to recognize all the injured workers as a single class. “Members of a class must be treated more or less identically to band together, but the system was so chaotic that you could not say employees had been treated the same,” Duncan explains. “Some got decent explanations [for terminating their benefits], some got no explanations at all.”

Around the same time the Lightfoot case was wrapping up, beginning in 2010, things started to get worse for injured public sector workers at the D.C. Council. Those who had unsuccessfully advocated for caps to private sector workers’ comp in the 1990s found new success with lawmakers curtailing rights for those working for city government. Among other things, the D.C. Council, with the support of the Office of Risk Management, removed the compensability of most emotional and psychological injuries, repealed augmented pay for public-sector spouses and dependent children, removed the ability of an injured worker to choose their own doctor, removed the requirement that courts give legal preference to the opinion of a worker’s treating physician, and instituted a new 500-week cap on receiving benefits. None of these rules existed or exist for injured private sector workers.

Advocates note that most of the Council’s changes came as part of budget support acts, generally with no hearings to debate the proposals, and with very little legislative history to review.

D.C. wasn’t the only place where workers’ compensation was quietly being rolled back. A ProPublica and NPR investigation published five years ago found that between 2003 and 2015, lawmakers in 33 states, largely at the behest of the business community, passed new workers’ comp laws to reduce benefits or make it harder to qualify for them. These measures were often branded as “reform” and pushed on “the false premise that costs [were] out of control.” While the journalists looked at changes across 50 states, D.C. was not included in their survey.

One reason the national degradation of workers’ comp had attracted little attention was because after budget cuts in 2004, the U.S. Department of Labor stopped tracking state workers’ comp laws. Reporters found that the cutbacks in some places “virtually guarantee[d]” injured workers would sink into poverty, and that workers often had to battle insurance companies “for years” to get the medical care their doctors recommended.

J. Paul Leigh, an economist at the University of California, Davis, who has studied workers’ comp, says one change he’s tracked has been the rising clout of doctors, who are charging far more for common procedures than they used to. “As medical costs continue to go up, state legislatures and insurance companies have wanted to restrict the amount spent,” Leigh says. “It used to be roughly 30 percent of workers’ comp went to the doctor, and 70 percent to workers in lost wages. Now it’s over 50 percent going to the doctor.”

When the D.C. Council approved, as part of its Budget Support Act of 2010, a new provision to limit public sector workers’ comp to 500 weeks, lawmakers clarified the clock would start ticking one year after enactment, meaning September 24, 2011. 500 weeks is now a mere six months away, and longtime injured workers are set to be cut off beginning in April 2021. The Council also required that within the final 52 weeks prior to termination, a worker is entitled to a hearing before an administrative law judge to determine if their injuries are permanent.

The Office of Risk Management tells City Paper there are 79 injured workers who have received notice that the 500-week temporary benefit cap would be reached within 52 weeks. Of those workers, ORM says they’ve received on average 1,126 weeks (or 21.67 years) of benefits. 

One of those workers is 65-year-old Laurie Posner, a former paramedic who injured her back and neck several times on the job in the 1990s, requiring multiple surgeries, and again in early 2000, while lifting a patient. Posner couldn’t return to work and was approved for workers’ compensation for her cervical strain. On May 6, the Stafford, Va., resident received a letter informing her that she will be reaching the new statutory cap on April 24, 2021, though she could schedule a hearing.

“I’ve been in chronic pain for years, and if I were cut off I would lose my home, which I’ve had to refinance three times just to stay in it,” Posner says. “It’s not like I’ve paid off my house. I’ve been using my equity to survive on what little I’m making, and if I lost that, I would lose my home, definitely.”

Hal Levi, a local public sector workers’ compensation attorney says that “unfortunately there’s a lot of people out there injured prior to September 2011 who have no idea what’s happening and don’t know what’s going to happen to them next April.” Many workers’ comp beneficiaries lack legal representation and it would be easy to read their termination notice and not understand what it means. “If they reach that 500 weeks next April, they won’t even have a right to a hearing,” Levi adds. “Their benefits will just be stopped.”

Levi’s oldest client was injured back in 1983, some 37 years ago. “Some of these clients are crippled, some are in wheelchairs, one has had a heart transplant,” he says. “They come to me because I’m one of the few lawyers around here who will take on their matters and I feel for them. I really feel they’ve gotten royally beaten down by the Office of Risk Management to get approval for their medical bills.”

***

One of the most striking disparities that has emerged over the last decade between the public-sector and private sector workers’ compensation systems is the notion that public sector workers are no longer eligible for permanent relief from serious workplace injuries. The Office of Risk Management and their lawyers at the Office of the Attorney General claim the D.C. Council did away with this eligibility in a 2015 budget bill,though workers’ compensation attorneys hotly dispute that legislative interpretation.

Council Chairman Phil Mendelson tells City Paper he doesn’t “have much memory” on what the legislative intent was in 2015 and would have to review the committee report. “The only thing I remember is that the disability comp has been very controversial for the public sector system and the Council felt that the Office of Risk Management was not doing a very good job,” he says. “ORM was seen to be more interested in not processing claims as a way of saving the government money, which was not something the Council liked.”

In D.C., like in nearly every other jurisdiction, there are four categories of workers’ compensation, which go by names like “temporary-partial disability”, “temporary-total disability,” “permanent-partial disability,” and “permanent-total disability.”

Temporary-partial is when a disabled worker is seeking treatment but expected to work part-time or at a lower-level job until they completely recover. Temporary-total is when an injured worker cannot work, though could potentially return to their job eventually—this is typically the default classification in D.C. Permanent-partial is when a worker’s ability to earn income is partially impaired from an injury that will never heal, and permanent-total is when a worker can’t earn any future income by performing the work they used to do.

Many workers, like Posner, the former paramedic, have been classified as temporary-total disabled, but have been receiving benefits for decades and effectively treated as permanently disabled. “It’s been a distinction without any real meaning until now,” says Levi.

Posner says she was never told how long her workers’ compensation benefits would last, but ORM informed her in 2003 that she couldn’t return to work as a paramedic. “They told me I would be compensated until I could return, and since I was told I couldn’t return I assumed it would be for life,” she tells City Paper.

To justify their interpretation, the Office of Risk Management points to a budget bill the Council passed in 2015, when lawmakers repealed a provision dealing with so-called “scheduled awards,” or cash settlements granted for certain injuries. The Council also added a new provision clarifying that a public sector worker receiving a scheduled award could no longer receive temporary-total or temporary-permanent disability benefits on top of it.

Two years later, the Office of Risk Management issued new regulations that claimed the Council had thus eliminated permanent-total and permanent-partial disability for public sector workers in 2015, though workers’ compensation attorneys say nothing in the legislative history suggests that was the case. This interpretation however, has had calamitous implications for workers like Esther Layne who cannot return to work and are now learning they are not even eligible to be considered for a permanent extension of their temporary-total benefits, which are newly capped.

In a court filing sent to Layne’s attorney on Dec. 13, the Office of the Attorney General wrote that permanent benefits for public sector workers are “no longer available” since their alleged repeal in 2015, and that the Office of Risk Management’s interpretation of the statute should be “deemed the accurate interpretation” unless there is a clear error.

“The public sector system here has some of the drastic anti-worker features that you find in the reddest states,” says Benjamin Douglas, an Ashcraft & Gerel attorney who represents both public and private sector claimants in D.C., including Layne and Posner.

Levi, who is 73 years old and has been practicing law for more than four decades, says he has watched as the Office of Risk Management and the Council “changed the rules of the game in ways that’ve been very, very damaging” to injured public sector workers.

“We’ve tried to fight it, we’ve tried to challenge it, and up until now, we’ve had very little success in doing either,” he says. “Commenting on rules as they’ve been proposed has done no good. Testifying at the oversight hearings has not done much good. I’ve gotten convinced in past years that ORM just seems to have its way with the City Council, which is very unfortunate.”

One factor that has suppressed the concerns of injured workers is that there has never really been an organized advocacy group speaking on their behalf, aside from a couple of lawyers like Levi. Many are not D.C. residents; some live in Maryland and Virginia or have moved even further away, and never really had the ear of the Council. And for the longtime injured workers who are no longer paying union dues and may never return to work, their plight has never risen to the top of labor’s legislative wishlist, either. In a climate of austerity many unions made the decision to fight for their current members rather than rally on behalf of those who could no longer do their jobs.

***

Robert Newman got into public sector workers’ compensation law through Hal Levi, who he was connected with through a mutual friend. In 2018 the two men went to Councilmember Todd with some proposed changes to the Comprehensive Merit Personnel Act. (Newman is married to Todd’s chief of staff, Sherryl Newman.) This then led to the Injured Public Workers Fairness Amendment Act of 2018, introduced by Todd and At-Large Councilmember Robert White, and co-sponsored by Ward 8’s Anita Bonds and Ward 6’s Charles Allen.

The bill was referred to At-Large Councilmember Elissa Silverman’s Committee on Labor and Workforce Development, which then had jurisdiction over the Office of Risk Management. But it “never saw the light of day” says Newman, who lamented that Silverman never brought the bill up for a hearing.

Silverman’s office confirmed they met with Levi and Newman in June 2018 and felt at the time that they couldn’t fit their bill into the already packed fall legislative schedule before the end of the Council period. Silverman’s office was also concerned that it hadn’t heard from injured workers or their unions about issues with workers’ compensation, and staffers reasoned the underlying issues could be explored further at ORM’s annual performance oversight hearing the following February. In January, however, the agency was transferred to Todd’s Government Operations Committee.

Now, two years later, there are two new bills before the Council, both introduced by Todd.

One bill, which is more sweeping, would seek to make the public-sector system broadly identical to the private sector one. Advocates for this bill, the Public Sector Injured Workers’ Equality Amendment Act, say it will lead to greater justice for city employees, granting them the same rights and privileges as their private sector counterparts. Among other changes, the bill would let injured public sector workers again choose their own doctors, receive benefits for more emotional injuries, be eligible for permanent relief, no longer have to wait for the D.C. government to respond to them before they can file for their own hearings, and make it easier to obtain legal representation by making it easier for lawyers to be reimbursed for their services.

Advocates also point to a racial equity aspect of harmonizing the two systems. According to a recent Economic Policy Institute analysis of Census data, roughly 64 percent of D.C. government employees are Black, and 27 percent are White. In the D.C. private sector, by contrast, 34 percent of employees are Black, and 45 percent are White. And according to statistics about the two workers’ compensation systems gleaned from a Freedom of Information Act request, between 2009 and 2019 public sector workers in D.C. were approximately half as likely to receive permanent-partial disability and nearly 100 percent less likely to receive permanent-total disability than their private sector counterparts. The FOIA data also suggests that the public sector has significantly higher accident rates than the private sector.

We are really at a workers’ compensation disadvantage in the public sector,” says John Gibson, president of Teamsters Local 639, which represents city government employees like custodians and school grounds workers. Gibson’s union is backing Todd’s bill to equalize the two systems, and while he says the problems have been evident for a while, “it just never really gained traction” before to tackle. “We have heard nightmare stories about people losing just everything because [ORM] drags their feet on processing claims, or they don’t hear the full case, and we just feel they’ve been really partial,” he says.

Brenda Zwack, an attorney representing American Federation of State, County and Municipal Employees District Council 20, which is also in support of the Public Sector Injured Workers’ Equality Amendment Act, says while unions had heard complaints over the years, raising awareness about these rules “was kind of an esoteric legal question,” making it “hard for people to advocate around.”

Though AFSCME and other unions do not negotiate over it, Zwack acknowledges many workers do come to unions with workers’ compensation concerns. “It’s not at the top of AFSCME’s legislative agenda, but we do think [the bill] is the right thing to do because we’ve heard members complain about the system,” she says. “In the broad sense we want to support good things for workers, and AFSCME represents some people working in some of the most dangerous jobs.”

Todd’s second bill, the Public Sector Workers’ Compensation Permanent Total Disability Amendment Act, would propose a narrower fix, clarifying that city government employees are indeed entitled to permanent relief for serious injuries.

This legislation is what Levi and Newman support; they say rushing to put the public sector workers’ comp system under the same rules as the private sector without deliberately studying the tradeoffs between the two could result in losing some aspects of the public-sector system that are currently more advantageous for workers. They argue the more sweeping bill could be more in the interest of attorneys than the workers themselves, and lawmakers should prioritize fixing the permanent disability provision, so those receiving temporary-total disability benefits could remain covered after the cap expires in April.

“My personal belief is this requires a whole lot of study that hasn’t been given to it. I think hearings need to be held and it’s really got to be delved to the point where the Council understands what the pros and cons are,” says Levi. “I’m not using this as a vehicle to try and gain business. I’m going to be retiring soon.”

Levi supports repealing all the changes made to the Comprehensive Merit Personnel Act over the last decade, but he worries there may be some aspects of the private sector system that if adopted wholesale, could actually jeopardize public sector workers. One example he cites is cost-of-living increases, which currently are only permitted in the private sector for permanent disabilities, but the Comprehensive Merit Personnel Act allows increases also for temporary disabilities. Newman suggested the Council form a committee to study the best way to equalize the systems, and then come back and propose legislation.

Robert Preston, a spokesperson for ORM, said the administration’s position on Todd’s bills “will be provided to the Council in the normal course of the legislative process.” Preston maintained that comparing the public and private workers’ compensation system is like comparing “apples to oranges” and argued the two systems have “completely different” orientations. 

Zwack, of AFSCME District Council 20, says she’s “yet to see any downsides” for workers under Todd’s comprehensive reform bill and thinks they’d be “by far better off” if it were to pass. “Council 20 is certainly satisfied, the proposed legislation would be a huge step forward to equity,” she says.

Douglas, the Ashcraft & Gerel attorney who also supports the comprehensive bill, says it “would allow attorneys to fight more for our clients, because we could actually take matters to court when it suits our clients and not just when it suits the Office of Risk Management.” It’s true the Public Sector Injured Workers’ Equality Amendment Act would have fewer constraints on when attorneys could be compensated for their legal services, but Douglas says “that is also how it would help clients get representation.”

The politics are complicated by Todd leaving the Council, but as long as the bills are given a hearing this year, they could then be fast-tracked in 2021, even if they are not voted on in December. Mendelson says he’s had no conversations with his colleagues about these public sector workers’ compensation issues, and advocates haven’t approached him either.

“I think Todd’s hope was to get the hearings done and then if we need, we can find someone else to sponsor it,” says Newman. “In 2018 we had four co-sponsors, so I think we can find one of them to bring it forward.”

Douglas also says he’s not too worried about their legislative prospects. “As for long-term plans, I am optimistic that the Council will get on board with serious reform this year,” he says. “If that does not happen, of course the struggle will continue.”