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  • Writer's pictureBrian Keit

History of Workers' Comp: The "Grand Bargain"

About 100 years ago the introduction of workers' compensation changed the way injured workers were compensated for work related injuries. Prior to this new system, an injured worker could sue their employer in tort. They would have the right to a jury trial in a court of law, and full damages including pain and suffering, but they would have to prove the employer proximately caused their injury through negligent acts or omissions. The adjudication by jury of complicated issues such as legal causation as well as extent of damages put a significant strain on the courts' resources. Additionally, work was more dangerous 100 years ago, and the workforce was expanding rapidly due to industrial growth and population expansion. There were not enough judges and courtrooms to handle all work related injury cases. The policy need for a streamlined and efficient system of laws and procedures arose, engendering the conception of workers' comp as a solution to the problem.

To effectuate a simpler system, workers' comp utilizes a compromise between the workforce and the corporations. This is known as the Grand Bargain. The injured worker no longer has to prove his employer caused his injury through negligent action or omission. To have a compensable claim regardless of fault is a huge benefit to the employee. The trade off is that the employee is limited in his damages. He gives up his right to a jury trial as well as damages for pain and suffering. Workers' compensation systems and administrative courts attending thereto were established quickly and across all U.S. jurisdictions.

Workers' comp has remained the exclusive remedy for work related injury compensation since its inception 100 years ago. The Grand Bargain constituted a mutually beneficial architecture for compromise between the workforce and industry and supplied the needed relief to the overburdened courts. However, in the current political climate in Iowa and many other jurisdictions, where work comp "reform" is propagated, the Grand Bargain may be losing its appeal to the workforce. In my estimation, law makers would do well to avoid "willful ignorance" about the beneficent purpose of the workers' compensation system. The grandeur of the Grand Bargain cannot be maintained if it is askew in favor of corporate interests over and at the detriment to the interests of the workforce.

Brian F. Keit

April 17, 2023

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