In 1935 the President's Committee on Economic Security recommended "passage of accident compensation acts for railroad employees.

1945

Mr. L. F. Loree, then President of the Delaware and Hudson Railroad Corporation, had, in 1933, discussed the problem of many railroads with respect to the dual standard under which employees must be compensated for certain of their injuries. He had said: 46

"The same railroads that compensate their State employees in this manner (under State compensation laws) have in cases of accidents to interstate employees, to meet highly organized attacks of attorneys who often make exorbitant profits from the exploitation of such accidents. The result is that in these cases the railroads pay much more than they should in justice be required to pay, while the injured employees and their dependents receive less than they would under the compensation laws of most States."

Mr. Loree indicated that the railroad industry was growing tired of this double standard of liability and promises, saying:

66

. . . that if there were any genuine prospect of obtaining a suitable Federal statute of the same character there would be little, if any, opposition from railroad employers.'

The first Railroad Retirement Act was held invalid by the Supreme Court of the United States on May 6, 1935.47 The majority of the Court, speaking through Mr. Justice Roberts, at page 370, said:

"That Congress may, under the commerce power, prescribe an uniform rule of liability and a remedy uniformly available to all those so engaged, is not open to doubt. The considerations upon which we have sustained compulsory workmen's compensation laws passed by the states in the sphere where their jurisdiction is exclusive apply with equal force in any sphere wherein Congress has been granted paramount authority. Such authority it may assert whenever its exercise is appropriate to the purpose of the grant. A case in point is the Longshoremen's and Harbor Workers' Compensation Act, passed pursuant to the delegation of admiralty jurisdiction to the United States. Modern industry, and this is particularly true of railroads, involves instrumentalities, tasks and dangers unknown when the doctrines of the common law as to negligence were developing. The resultant injuries to employees, impossible of prevention by the utmost care, may well demand new and different redress than that afforded in the past."

Taking cognizance of the argument that insuring risks tends to make an employer relax his vigilance over safety measures on the grounds that no matter what happens the insurance company will take care of it, the majority of the Court, at pages 370-371 said :

45 U. S. Committee on Economic Security, Report to the President, 1935, p. 46. 46 23 American Labor Legislation Review 110.

47 Railroad Retirement Board v. Alton R. Co., 295 U. S. 330.

"By the very certainty that compensation must be paid for every injury such legislation promotes and encourages precaution on the part of the employer against accident and tends to make transportation safer and more efficient. The power to prescribe a uniform rule for the transportation industry throughout the country justified the modification of common-law rules by the safety-appliance acts applicable to interstate carriers and would serve to sustain compensation acts of a broader scope, like those in force in many States."

Applying what the Court here said to the provisions of Senator Wagner's bill, one well-known writer reached the conclusion that the Supreme Court would sustain its enactment as a valid exercise of the power of congress.48 He specially pointed to this language, at page 370 of the majority opinion of the Court in the Alton case:

"In dealing with the situation it is permissible to substitute... a fixed and reasonable compensation commuted to the degree of injury; to replace uncertainty and protracted litigation with certainty and celerity of payment; to eliminate waste, and to make the rule of compensation uniform throughout the field of interstate transportation, in contrast with inconsistent local systems.

In the dissenting opinion of Chief Justice Hughes in the Alton case, at page 389, he said:

'Interstate carriers cannot conduct their interstate operations without general officers and their staffs, without departments for major repairs and those for administering finances and keeping accounts. General management is as important to the interstate commerce of the carriers as is the immediate supervision of traffic, and the proper maintenance of equipment and the handling of moneys and the keeping of books are as necessary as the loading and moving of cars."

Senator Wagner continued to advocate his bill. In a paper submitted to the Twenty-Ninth Annual Meeting of the American Association for Labor Legislation, on December 28, 1935, he said: 49

"It is strange that a protective move like workmen's compensation, which gained such a headstart and received such widespread acceptance in this country, should not at once have sheltered the field of interstate transportation."

Commenting upon the fact that many railway employees "have been misled by the spectacular recoveries awarded in a few extraordinary court decisions," he said that:

"The focus of attention upon the rare case that an employee can take to the court and win in court, obscures the all-important 48 Gellhorn, Validity of Federal Compensation for Transportation Employees, 43 Yale L. J. 906, and 25 American Legislation Review 74.

49 26 American Labor Legislation Review 15.

information about what is happening in the overwhelming majority of cases.'

Senator Wagner reintroduced his bill in the 76th Congress, on July 21, 1939, as S. 2962. This bill was "to provide compensation for disability or death resulting from injury to employees of interstate carriers.' In this bill most of the provisions of the New York State Workmen's Compensation Law were lifted bodily, or modified where necessary to accord with a nation-wide coverage and Federal procedure. However, where there were provisions in the laws of some of the other states more favorable to the beneficiaries of such an act, they were substituted for the same provisions in the New York law or the other laws from which the bill copied. This bill would, if enacted into law, have been administered by the Railroad Retirement Board.

By this time most of the operating railway labor organizations favored a Federal workmen's compensation law "in principle." However, the BRT continued to oppose this type of legislation, preferring to remain under the Federal Employers' Liability Act, but with a broadening of that law. They maintained this position despite the fact that every study that had been made tended to show that workmen's compensation would be more beneficial to the majority of railroad employees than the Federal Employers' Liability Act. Commenting upon this situation, The Railway Clerk, the official organ of the Brotherhood of Railway and Steamship Clerks, Etc., in its issue for August 1939, said: 50

"Nor can the failure to protect workers in interstate commerce be fairly laid at the door of Congress. As early as 1912 a Federal law for the protection of workers in interstate commerce passed both Houses of Congress, but due to the failure of the railroad unions to energetically push for its passage, it perished because of a failure to iron out differences between the Senate and House bills. passage of almost 30 years does not seem to have altered perceptibly the line-up at that time.

The

"The trouble lies in the inability of the railroad unions to get together on a program. Although 19 of 21 railroad unions have approved passage of workmen's compensation laws, and the other two have approved such bills in principle, the fact remains that almost three decades have gone by without any action to protect transportation workers against accidents falling under such laws.

"Those who favor retention of the present Federal Employers' Liability Act have been deluded by the ease of securing jury verdicts for large amounts in damages in the lower courts, for a case is hardly ever decided against an employee. But this advantage is counterbalanced by the disposition of the appellate courts to reverse these verdicts. The higher up an employee claim for damages goes in the judicial hierarchy, the more sacred become property rights and the less the value attached to human rights. The employee hardly ever

won.

50 The Railway Clerk, Vol. 38, p. 329.

"A compensation law would level off some of the big judgments. There is no doubt about that. But it would also remove the gamble railroad employees must now take in securing a big judgment or none at all. Instead of the long chance of winning a jackpot with the dice loaded against them, compensation for injuries and death would be reasonably certain under a Federal compensation law.” On August 11, 1939 the President signed into law S. 1708-76th Cong., First Session, amending the Federal Employers' Liability Act, viz : 1. The provisions of the Act were extended to employees of carriers "any part of whose duties as such shall be in the furtherance of interstate or foreign commerce; or shall, in any way directly or closely and substantially, affect such commerce."

2. Employees are not to be held to have assumed the risks of their employment where injury or death results in whole or in part from the negligence of the carrier.

3. Actions under the act are required to be commenced within three years from the day the course of action occurred.

4. Any contract, rule, regulation or device whatsoever, the purpose, intent, or effect of which is to prevent employees of common carriers from furnishing voluntary information to a person in interest as to the facts incident to the injury or death of any employees, is declared void, and carriers are prohibited from disciplining employees who furnish such information.

Prior to the amendment of August 11, 1939, in order that there might be recovery under the Federal Employers' Liability Act the injured or deceased employee must have been engaged in an "act of interstate transportation" at the time the accident occurred. It will readily be observed that the scope of the act was much broadened by the 1939 amendment. However, at least the BLFE was not satisfied with the amended law. The president of that organization, on July 7, 1941, said: 51

"The Employers' Liability Act for the past twenty years has gradually been taking on new form, and if you asked a damage-suit lawyer what the act meant he would tell you that it means just what the courts say it means. You could no longer read the act and understand just what your rights were.'

In 1944, the United States Employees' Compensation Commission appealed to Congress for a compensation law covering interstate employees.5

52

On June 1, 1940, July 19, 1941, August 7, 1941 and September 6, 1941, drafts of a proposed Interstate Workmen's Compensation Act were released by the Railroad Retirement Board, or as confidential committee prints of the Senate Committee on Interstate Commerce. No action was taken on any of these, due to the fact that the emphasis was shifted, resulting in extensive amendment of the Railroad Retirement Act and the

51 111 BLFE Magazine, p. 98.

52 U. S. Employees' Compensation Commission, 28th Annual Rep. p. 4.

Railroad Unemployment Insurance Act by Public Law 572, 79th Cong. 2d Session, approved, which became effective, generally speaking, on July 31, 1946. These drafts presumably give a reasonably clear preview of what might be expected in any Federal workmen's compensation law, except that it is not possible, of course, to forecast how greatly these provisions will be "liberalized."

Also, attention is directed to the fact that Section 20 of the Merchant Marine Act of 1915, as amended by the Jones Act of 1920 53 makes the provisions of the Federal Employers' Liability Act available to seamen as an optional remedy against negligent ship owners. Seamen have long opposed workmen's compensation laws, so that it is likely that they would oppose the substitution of a Federal Workmen's Compensation Law for the Federal Employers' Liability Act.

The American Bar Association has proposed that the Federal Employers' Liability Act shall not apply with respect to injuries suffered, or death resulting therefrom when occurring in any State, territory, or the District of Columbia, having a workmen's compensation act applicable to such injury or death. At the Seventy-Second Annual Meeting of The American Bar Association, in St. Louis, Missouri, September 5-9, 1949, the following resolution was adopted by the House of Delegates:

54

RESOLVED, That the American Bar Association approves the submission to Congress of an amendment to the Act entitled "An Act relating to the liability of common carriers by railroad to their employees in certain cases" approved April 22, 1908, as amended August 11, 1939, said amendment to embody substantially the following provisions :

"Be it enacted . . . that the provisions of the Act entitled 'An Act relating to the liability of common carriers by railroad to their employees in certain cases,' approved April 22, 1908, as amended August 11, 1939, shall not apply with respect to injuries suffered, or death resulting therefrom, when occurring in any state, territory, or the District of Columbia, having a Workmen's Compensation Act applicable to such injury or death. The liabilities of the parties and rights to recover for such injuries or death shall be measured solely by the terms of the Workmen's Compensation Act applicable thereto, as hereinafter provided, which shall be binding and effective on all parties interested, without power of election between such Workmen's Compensation Act and the Act relating to the liability of common carriers by railroad to their employees in certain cases, approved April 22, 1908, as amended. Provided, that any employee or his personal representatives, as the case may be, shall have the right to recover benefits for such injuries or death under the Workmen's Compensation Act of any state, territory or the District of Columbia wherein the accident oc

53 41 Stat. 988, 1007.

54 74 A. B. A. Reports 108-109.