Employment in guarding tools and materials intended for use in
the construction of a new railroad station and new tracks which,
when finished, will be used in interstate commerce has no such
direct relation to interstate transportation as will afford basis
for applying the Federal Employers' Liability Act in case of
accident and death.
Pedersen v. Delaware, Lackawanna &
Western R. Co., 229 U. S. 146,
229 U. S.
152.
He who assails a statute as unconstitutional must show that his
right is infringed by it; where, however, a statute so regulates
the correlative rights of two classes -- as employers and employees
-- that, if void as to one it must be void as to the other,
complaint of a party belonging to one class may require an
examination of the statute in both aspects.
The New York Workmen's Compensation Law, Laws 1913, c. 816; Laws
1914, chaps. 41, 316, provides an exclusive system to govern the
liabilities of employers and the rights of employees and their
dependents in respect of compensation for disabling injuries and
death caused by accident (not due to the willful intent or the
intoxication of the employee) in certain employments, classed as
hazardous; the duty of employers to compensate is made absolute;
the compensation which employers must pay and employees (or their
dependents, in death cases) must accept in satisfaction is measured
by a prescribed scale, based on loss of earning power, gauged by
the previous wage, and the nature and duration of the disability
or, in case of death, the dependency of the beneficiaries; the
amounts fixed are apparently moderate and reasonable, and the means
of collection, through administrative proceedings subject to
judicial review of law questions, are apparently economical,
expeditious, and fair; employers are required to furnish security
against future liabilities, and the act is prospective.
Page 243 U. S. 189
Held:
(1) That neither (a) in rendering the employer liable
irrespective of the doctrines of negligence, contributory
negligence, assumption of risk, and negligence of fellow servants,
nor (b) in depriving the employee, or his dependents, of the higher
damages which, in some cases, might be recovered under those
doctrines, can the act be said to violate due process.
(2) That, viewed from the standpoint of natural justice, the
system provided by the act in lieu of former rules is neither
arbitrary nor unreasonable.
(3) That the exclusion of farm laborers and domestic servants
from the scheme of the act may not be judicially declared an
arbitrary classification violating the equal protection of the
law.
The common law rules respecting the rights and liabilities of
employer and employee in accident cases,
viz., negligence,
assumption of risk, contributory negligence, fellow servant
doctrine, as rules defining legal duty and guiding future conduct,
may be altered by state legislation, and even set aside entirely,
at least if some reasonably just substitute be provided.
Since the matter of compensation for disability or death
incurred in the course of hazardous employments is of direct
interest to the public as a matter affecting the common welfare,
the liberty of employer and employee to agree upon such
compensation as part of the terms of employment is subject to be
restricted by the state police power.
The denial by a trial by jury is not inconsistent with due
process of law within the meaning of the Fourteenth Amendment.
The making of a deposit of cash and securities in obedience to
the New York Workmen's Compensation Act, accompanied by an express
reservation of all contentions respecting the invalidity of the
act, does not estop the depositor from questioning its
constitutionality.
Under the power to establish a compulsory Workmen's Compensation
System, the state may require employers to furnish satisfactory
proof of financial ability to pay compensation in future and may
require them to deposit reasonable amounts of securities to insure
such payments.
Section 50 of the New York Workmen's Compensation Law requires
the employer to secure payment of compensation either by state
insurance, or by insurance by an authorized corporation or
association, or by furnishing satisfactory proof to the state
commission of his financial ability to pay, in which case the
commission may, in its discretion, require him to deposit
securities of a kind prescribed by the state insurance law in an
amount to be determined by the commission.
Held:
(1) That, in passing on these provisions, the Court will
presume
Page 243 U. S. 190
that the method of self-insurance will be open to all employers,
on reasonable terms within the power of the state to impose.
(2) That, viewed as optional alternatives, the other modes of
insurance are free from constitutional objections as regards
employers.
(3) That such an option is not inconsistent with the
constitutional rights of employees, there being no ground to
presume that any of the methods of security would prove inadequate
to safeguard their interests.
169 App.Div. 903, 216 N.Y. 653, affirmed.
The case is stated in the opinion.
MR. JUSTICE PITNEY delivered the opinion of the Court.
A proceeding was commenced by defendant in error before the
Workmen's Compensation Commission of the State of New York,
established by the Workmen's Compensation Law of that state,
[
Footnote 1] to recover
compensation from the New York Central & Hudson River Railroad
Company for the death of her husband, Jacob White, who lost his
life September 2, 1914, through an accidental injury arising out of
and in the course of his employment under that company. The
Commission awarded compensation in accordance with the terms of the
law; its award was affirmed, without opinion, by the Appellate
Page 243 U. S. 191
Division of the Supreme Court for the Third Judicial Department,
whose order was affirmed by the Court of Appeals without opinion.
169 App.Div. 903, 216 N.Y. 653. Federal questions having been
saved, the present writ of error was sued out by the New York
Central Railroad Company, successor, through a consolidation of
corporations, to the rights and liabilities of the employing
company. The writ was directed to the appellate division, to which
the record and proceedings had been remitted by the Court of
Appeals.
Sioux Remedy Co. v. Cope, 235 U.
S. 197,
235 U. S.
200.
The errors specified are based upon these contentions: (1) that
the liability, if any, of the railroad company for the death of
Jacob White is defined and limited exclusively by the provisions of
the Federal Employers' Liability Act of April 22, 1908, c. 149, 35
Stat. 65, and (2) that to award compensation to defendant in error
under the provisions of the Workmen's Compensation Law would
deprive plaintiff in error of its property without due process of
law, and deny to it the equal protection of the laws, in
contravention of the Fourteenth Amendment.
The first point assumes that the deceased was employed in
interstate commerce at the time he received the fatal injuries.
According to the record, he was a night watchman, charged with the
duty of guarding tools and materials intended to be used in the
construction of a new station and new tracks upon a line of
interstate railroad. The Commission found, upon evidence fully
warranting the finding, that he was on duty at the time, and at a
place not outside of the limits prescribed for the performance of
his duties; that he was not engaged in interstate commerce, and
that the injury received by him and resulting in his death was an
accidental injury arising out of and in the course of his
employment.
The admitted fact that the new station and tracks were
Page 243 U. S. 192
designed for use, when finished, in interstate commerce does not
bring the case within the federal act. The test is "[w]as the
employee at the time of the injury engaged in interstate
transportation, or in work so closely related to it as to be
practically a part of it?"
Shanks v. Delaware, Lackawanna &
Western R. Co., 239 U. S. 556,
239 U. S. 558.
Decedent's work bore no direct relation to interstate
transportation, and had to do solely with construction work, which
is clearly distinguishable, as was pointed out in
Pedersen v.
Delaware, Lackawanna & Western R. Co., 229 U.
S. 146,
229 U. S. 152.
And see Chicago, Burlington & Quincy R. Co. v.
Harrington, 241 U. S. 177,
241 U. S. 180;
Raymond v. Chicago, Minneapolis & St. Paul Ry. Co.,
ante, 243 U. S. 43. The
first point therefore is without basis in fact.
We turn to the constitutional question. The Workmen's
Compensation Law of New York establishes forty-two groups of
hazardous employments, defines "employee" as a person engaged in
one of these employments upon the premises, or at the plant, or in
the course of his employment away from the plant of his employer,
but excluding farm laborers and domestic servants; defines
"employment" as including employment only in a trade, business, or
occupation carried on by the employer for pecuniary gain, "injury"
and "personal injury" as meaning only accidental injuries arising
out of and in the course of employment, and such disease or
infection as naturally and unavoidably may result therefrom, and
requires every employer subject to its provisions to pay or provide
compensation according to a prescribed schedule for the disability
or death of his employee resulting from an accidental personal
injury arising out of and in the course of the employment, without
regard to fault as a cause, except where the injury is occasioned
by the willful intention of the injured employee to bring about the
injury or death of himself or of another, or where it results
solely
Page 243 U. S. 193
from the intoxication of the injured employee while on duty, in
which cases neither the injured employee nor any dependent shall
receive compensation. By § 11, the prescribed liability is made
exclusive, except that, if an employer fail to secure the payment
of compensation as provided in § 50, an injured employee, or his
legal representative, in case death results from the injury, may at
his option, elect to claim compensation under the act, or to
maintain an action in the courts for damages, and in such an action
it shall not be necessary to plead or prove freedom from
contributory negligence, nor may the defendant plead as a defense
that the injury was caused by the negligence of a fellow servant,
that the employee assumed the risk of his employment, or that the
injury was due to contributory negligence. Compensation under the
act is not regulated by the measure of damages applied in
negligence suits, but, in addition to providing surgical or other
like treatment, it is based solely on loss of earning power, being
graduated according to the average weekly wages of the injured
employee and the character and duration of the disability, whether
partial or total, temporary or permanent, while in case the injury
causes death, the compensation is known as a death benefit, and
includes funeral expenses, not exceeding $100, payments to the
surviving wife (or dependent husband) during widowhood (or
dependent widowerhood) of a percentage of the average wages of the
deceased, and, if there be a surviving child or children under the
age of eighteen years, an additional percentage of such wages for
each child until that age is reached. There are provisions
invalidating agreements by employees to waive the right to
compensation, prohibiting any assignment, release, or commutation
of claims for compensation or benefits except as provided by the
act, exempting them from the claims of creditors, and requiring
that the compensation and benefits shall be paid only to employees
or their dependents.
Page 243 U. S. 194
Provision is made for the establishment of a Workmen's
Compensation Commission, [
Footnote
2] with administrative and judicial functions, including
authority to pass upon claims to compensation on notice to the
parties interested. The award or decision of the Commission is made
subject to an appeal, on questions of law only, to the Appellate
Division of the Supreme Court for the Third Department, with an
ultimate appeal to the Court of Appeals in cases where such an
appeal would lie in civil actions. A fund is created, known as "the
state insurance fund," for the purpose of insuring employers
against liability under the law and assuring to the persons
entitled the compensation thereby provided. The fund is made up
primarily of premiums received from employers at rates fixed by the
Commission in view of the hazards of the different classes of
employment, and the premiums are to be based upon the total payroll
and number of employees in each class at the lowest rate consistent
with the maintenance of a solvent state insurance fund and the
creation of a reasonable surplus and reserve. Elaborate provisions
are laid down for the administration of this fund. By § 50, each
employer is required to secure compensation to his employees in one
of the following ways: (1) by insuring and keeping insured the
payment of such compensation in the state fund; or (2) through any
stock corporation or mutual association authorized to transact the
business of workmen's compensation insurance in the state; or
(3)
"by furnishing satisfactory proof to the Commission of his
financial ability to pay such compensation for himself, in which
case the Commission may, in its discretion, require the deposit
with the Commission of securities of the kind prescribed in § 13 of
the Insurance Law, in an amount to be determined by the Commission,
to secure his
Page 243 U. S. 195
liability to pay the compensation provided in this chapter."
If an employer fails to comply with this section, he is made
liable to a penalty in an amount equal to the
pro rata
premium that would have been payable for insurance in the state
fund during the period of noncompliance, besides which, his injured
employees or their dependents are at liberty to maintain an action
for damages in the courts, as prescribed by § 11.
In a previous year, the legislature enacted a compulsory
compensation law applicable to a limited number of specially
hazardous employments, and requiring the employer to pay
compensation without regard to fault. Laws 1910, c. 674. This was
held by the Court of Appeals in
Ives v. South Buffalo Ry.
Co., 201 N.Y. 271, to be invalid because in conflict with due
process of law provisions of the state constitution and of the
Fourteenth Amendment. Thereafter, and in the year 1913, a
constitutional amendment was adopted, effective January 1, 1914,
declaring:
"Nothing contained in this Constitution shall be construed to
limit the power of the legislature to enact laws for the protection
of the lives, health, or safety of employees, or for the payment,
either by employers or by employers and employees or otherwise,
either directly or through a state or other system of insurance or
otherwise, of compensation for injuries to employees or for death
of employees resulting from such injuries without regard to fault
as a cause thereof, except where the injury is occasioned by the
willful intention of the injured employee to bring about the injury
or death of himself or of another, or where the injury results
solely from the intoxication of the injured employee while on duty,
or for the adjustment, determination, and settlement, with or
without trial by jury, of issues which may arise under such
legislation, or to provide that the right of such compensation and
the remedy therefor shall be exclusive of all
Page 243 U. S. 196
other rights and remedies for injuries to employees or for death
resulting from such injuries, or to provide that the amount of such
compensation for death shall not exceed a fixed or determinable
sum, provided that all moneys paid by an employer to his employees
or their legal representatives by reason of the enactment of any of
the laws herein authorized shall be held to be a proper charge in
the cost of operating the business of the employer."
In December, 1913, the legislature enacted the law now under
consideration (Laws 1913, c. 816), and in 1914 reenacted it (Laws
1914, c. 41) to take effect as to payment of compensation on July 1
in that year. The act was sustained by the Court of Appeals as not
inconsistent with the Fourteenth Amendment in
Jensen v.
Southern Pacific Co., 215 N.Y. 514, and that decision was
followed in the case at bar.
The scheme of the act is so wide a departure from common law
standards respecting the responsibility of employer to employee
that doubts naturally have been raised respecting its
constitutional validity. The adverse considerations urged or
suggested in this case and in kindred cases submitted at the same
time are: (a) that the employer's property is taken without due
process of law, because he is subjected to a liability for
compensation without regard to any neglect or default on his part
or on the part of any other person for whom he is responsible, and
in spite of the fact that the injury may be solely attributable to
the fault of the employee, (b) that the employee's rights are
interfered with in that he is prevented from having compensation
for injuries arising from the employer's fault commensurate with
the damages actually sustained, and is limited to the measure of
compensation prescribed by the act, and (c) that both employer and
employee are deprived of their liberty to acquire property by being
prevented from making such
Page 243 U. S. 197
agreement as they choose respecting the terms of the
employment.
In support of the legislation, it is said that the whole common
law doctrine of employer's liability for negligence, with its
defenses of contributory negligence, fellow servant's negligence,
and assumption of risk, is based upon fictions, and is inapplicable
to modern conditions of employment; that, in the highly organized
and hazardous industries of the present day, the causes of accident
are often so obscure and complex that in a material proportion of
cases it is impossible by any method correctly to ascertain the
facts necessary to form an accurate judgment, and in a still larger
proportion, the expense and delay required for such ascertainment
amount in effect to a defeat of justice; that, under the present
system, the injured workman is left to bear the greater part of
industrial accident loss, which, because of his limited income, he
is unable to sustain, so that he and those dependent upon him are
overcome by poverty and frequently become a burden upon public or
private charity, and that litigation is unduly costly and tedious,
encouraging corrupt practices and arousing antagonisms between
employers and employees.
In considering the constitutional question, it is necessary to
view the matter from the standpoint of the employee as well as from
that of the employer. For, while plaintiff in error is an employer,
and cannot succeed without showing that its rights as such are
infringed (
Plymouth Coal Co. v. Pennsylvania, 232 U.
S. 571,
232 U. S. 576;
Jeffrey Mfg. Co. v. Blagg, 235 U.
S. 571,
235 U. S.
576), yet, as pointed out by the Court of Appeals in the
Jensen case, 215 N.Y. 526, the exemption from further
liability is an essential part of the scheme, so that the statute,
if invalid as against the employee, is invalid as against the
employer.
The close relation of the rules governing responsibility as
between employer and employee to the fundamental rights
Page 243 U. S. 198
of liberty and property is, of course, recognized. But those
rules, as guides of conduct, are not beyond alteration by
legislation in the public interest. No person has a vested interest
in any rule of law, entitling him to insist that it shall remain
unchanged for his benefit.
Munn v. Illinois, 94 U. S.
113,
94 U. S. 134;
Hurtado v. California, 110 U. S. 516,
110 U. S. 532;
Martin v. Pittsburg & Lake Erie R. Co., 203 U.
S. 284,
203 U. S. 294;
Second Employers' Liability Cases, 223 U. S.
1,
223 U. S. 50;
Chicago & Alton R. Co. v. Tranbarger, 238 U. S.
67,
238 U. S. 76.
The common law bases the employer's liability for in juries to the
employee upon the ground of negligence, but negligence is merely
the disregard of some duty imposed by law, and the nature and
extent of the duty may be modified by legislation, with
corresponding change in the test of negligence. Indeed, liability
may be imposed for the consequences of a failure to comply with a
statutory duty, irrespective of negligence in the ordinary sense,
safety appliance acts being a familiar instance.
St. Louis,
Iron Mountain & Southern Ry. Co. v. Taylor, 210 U.
S. 281,
210 U. S. 295;
Texas & Pacific Ry. Co. v. Rigsby, 241 U. S.
33,
241 U. S. 39,
241 U. S.
43.
The fault may be that of the employer himself, or most
frequently that of another for whose conduct he is made responsible
according to the maxim
respondeat superior. In the latter
case, the employer may be entirely blameless, may have exercised
the utmost human foresight to safeguard the employee, yet, if the
alter ego, while acting within the scope of his duties, be
negligent -- in disobedience, it may be, of the employer's positive
and specific command -- the employer is answerable for the
consequences. It cannot be that the rule embodied in the maxim is
unalterable by legislation.
The immunity of the employer from responsibility to an employee
for the negligence of a fellow employee is of comparatively recent
origin, it being the product of the judicial conception that the
probability of a fellow workman's
Page 243 U. S. 199
negligence is one of the natural and ordinary risks of the
occupation, assumed by the employee and presumably taken into
account in the fixing of his wages. The earliest reported cases are
Murray v. South Carolina R. Co. (1841), 1 McMull. 385,
398;
Farwell v. Boston & Worcester R. Corp. (1842), 4
Met. 49, 57;
Hutchinson v. York, New Castle & Berwick Ry.
Co. (1850), L.R. 5 Exch. 343, 351;
Wigmore v. Jay
(1850), 5 Exch. 354;
Bartonshill Coal Co. v. Reid, (1858),
3 Macq. H.L. Cas. 266, 284, 295.
And see Randall v. Baltimore
& Ohio R. Co., 109 U. S. 478,
109 U. S. 483;
Northern Pacific R. Co. v. Herbert, 116 U.
S. 642,
116 U. S. 647.
The doctrine has prevailed generally throughout the United States,
but with material differences in different jurisdictions respecting
who should be deemed a fellow servant and who a vice principal or
alter ego of the master, turning sometimes upon refined
distinctions as to grades and departments in the employment.
See Knutter v. New York & N.J. Telephone Co., 67
N.J.L. 646, 650-653. It needs no argument to show that such a rule
is subject to modification or abrogation by a state upon proper
occasion.
The same may be said with respect to the general doctrine of
assumption of risk. By the common law, the employee assumes the
risks normally incident to the occupation in which he voluntarily
engages; other and extraordinary risks and those due to the
employer's negligence he does not assume until made aware of them,
or until they become so obvious that an ordinarily prudent man
would observe and appreciate them, in either of which cases, he
does assume them if he continues in the employment without
obtaining from the employer an assurance that the matter will be
remedied, but if he receive such an assurance, then, pending
performance of the promise, the employee does not, in ordinary
cases, assume the special risk.
Seaboard
Air Line Ry. v. Horton, 233
Page 243 U. S. 200
U.S. 492,
233 U. S. 504;
239 U. S. 239 U.S.
595,
239 U. S. 599.
Plainly, these rules, as guides of conduct and tests of liability,
are subject to change in the exercise of the sovereign authority of
the state.
So also with respect to contributory negligence. Aside from
injuries intentionally self-inflicted, for which the statute under
consideration affords no compensation, it is plain that the rules
of law upon the subject, in their bearing upon the employer's
responsibility, are subject to legislative change, for contributory
negligence, again, involves a default in some duty resting on the
employee, and his duties are subject to modification.
It may be added by way of reminder that the entire matter of
liability for death caused by wrongful act, both within and without
the relation of employer and employee, is a modern statutory
innovation, in which the states differ as to who may sue, for whose
benefit, and the measure of damages.
But it is not necessary to extend the discussion. This Court
repeatedly has upheld the authority of the states to establish by
legislation departures from the fellow servant rule and other
common law rules affecting the employer's liability for personal
injuries to the employee.
Missouri Pacific Ry. Co. v.
Mackey, 127 U. S. 205,
127 U. S. 208;
Minneapolis & St. Louis Ry. Co. v. Herrick,
127 U. S. 210;
Minnesota Iron Co. v. Kline, 199 U.
S. 593,
199 U. S. 598;
Tullis v. Lake Erie & Western R. Co., 175 U.
S. 348;
Louisville & Nashville R. Co. v.
Melton, 218 U. S. 36,
218 U. S. 53;
Chicago, Indianapolis & Louisville Ry. Co. v. Hackett,
228 U. S. 559;
Wilmington Star Mining Co. v. Fulton, 205 U. S.
60,
205 U. S. 73;
Missouri Pacific Ry. Co. v. Castle, 224 U.
S. 541,
224 U. S. 544.
A corresponding power on the part of Congress, when legislating
within its appropriate sphere, was sustained in
Second
Employers' Liability Cases, 223 U. S. 1.
And
see El Paso & Northeastern Ry. Co. v. Gutierrez,
215 U. S. 87,
215 U. S. 97;
Baltimore & Ohio R. Co. v. Interstate Commerce
Commission, 221 U. S. 612,
221 U. S.
619.
Page 243 U. S. 201
It is true that, in the case of the statutes thus sustained,
there were reasons rendering the particular departures appropriate.
Nor is it necessary, for the purposes of the present case, to say
that a state might, without violence to the constitutional guaranty
of "due process of law," suddenly set aside all common law rules
respecting liability as between employer and employee without
providing a reasonably just substitute. Considering the vast
industrial organization of the State of New York, for instance,
with hundreds of thousands of plants and millions of wage earners,
each employer, on the one hand, having embarked his capital, and
each employee, on the other, having taken up his particular mode of
earning a livelihood, in reliance upon the probable permanence of
an established body of law governing the relation, it perhaps may
be doubted whether the state could abolish all rights of action, on
the one hand, or all defenses, on the other, without setting up
something adequate in their stead. No such question is here
presented, and we intimate no opinion upon it. The statute under
consideration sets aside one body of rules only to establish
another system in its place. If the employee is no longer able to
recover as much as before in case of being injured through the
employer's negligence, he is entitled to moderate compensation in
all cases of injury, and has a certain and speedy remedy without
the difficulty and expense of establishing negligence or proving
the amount of the damages. Instead of assuming the entire
consequences of all ordinary risks of the occupation, he assumes
the consequences, in excess of the scheduled compensation, of risks
ordinary and extraordinary. On the other hand, if the employer is
left without defense respecting the question of fault, he at the
same time is assured that the recovery is limited, and that it goes
directly to the relief of the designated beneficiary. And just as
the employee's assumption of ordinary risks at common law
presumably was taken into account in fixing
Page 243 U. S. 202
the rate of wages, so the fixed responsibility of the employer,
and the modified assumption of risk by the employee under the new
system, presumably will be reflected in the wage scale. The act
evidently is intended as a just settlement of a difficult problem,
affecting one of the most important of social relations, and it is
to be judged in its entirety. We have said enough to demonstrate
that, in such an adjustment, the particular rules of the common law
affecting the subject matter are not placed by the Fourteenth
Amendment beyond the reach of the lawmaking power of the state, and
thus we are brought to the question whether the method of
compensation that is established as a substitute transcends the
limits of permissible state action.
We will consider, first, the scheme of compensation, deferring
for the present the question of the manner in which the employer is
required to secure payment.
Briefly, the statute imposes liability upon the employer to make
compensation for disability or death of the employee resulting from
accidental personal injury arising out of and in the course of the
employment, without regard to fault as a cause except where the
injury or death is occasioned by the employee's willful intention
to produce it, or where the injury results solely from his
intoxication while on duty; it graduates the compensation for
disability according to a prescribed scale based upon the loss of
earning power, having regard to the previous wage and the character
and duration of the disability, and measures the death benefits
according to the dependency of the surviving wife, husband, or
infant children. Perhaps we should add that it has no retrospective
effect, and applies only to cases arising some months after its
passage.
Of course, we cannot ignore the question whether the new
arrangement is arbitrary and unreasonable, from the standpoint of
natural justice. Respecting this, it is important to be observed
that the act applies only to disabling
Page 243 U. S. 203
or fatal personal injuries received in the course of hazardous
employment in gainful occupation. Reduced to its elements, the
situation to be dealt with is this: employer and employee, by
mutual consent, engage in a common operation intended to be
advantageous to both; the employee is to contribute his personal
services, and for these is to receive wages, and, ordinarily,
nothing more; the employer is to furnish plant, facilities,
organization, capital, credit, is to control and mange the
operation, paying the wages and other expenses, disposing of the
product at such prices as he can obtain, taking all the profits, if
any there be, and, of necessity, bearing the entire losses. In the
nature of things, there is more or less of a probability that the
employee may lose his life through some accidental injury arising
out of the employment, leaving his widow or children deprived of
their natural support, or that he may sustain an injury not mortal,
but resulting in his total or partial disablement, temporary or
permanent, with corresponding impairment of earning capacity. The
physical suffering must be borne by the employee alone; the laws of
nature prevent this from being evaded or shifted to another, and
the statute makes no attempt to afford an equivalent in
compensation. But, besides, there is the loss of earning power -- a
loss of that which stands to the employee as his capital in trade.
This is a loss arising out of the business, and, however it may be
charged up, is an expense of the operation, as truly as the cost of
repairing broken machinery or any other expense that ordinarily is
paid by the employer. Who is to bear the charge? It is plain that,
on grounds of natural justice, it is not unreasonable for the
state, while relieving the employer from responsibility for damages
measured by common law standards and payable in cases where he or
those for whose conduct he is answerable are found to be at fault,
to require him to contribute a reasonable amount, and according to
a reasonable and definite scale,
Page 243 U. S. 204
by way of compensation for the loss of earning power incurred in
the common enterprise, irrespective of the question of negligence,
instead of leaving the entire loss to rest where it may chance to
fall -- that is, upon the injured employee or his dependents. Nor
can it be deemed arbitrary and unreasonable, from the standpoint of
the employee's interest, to supplant a system under which he
assumed the entire risk of injury in ordinary cases, and in others
had a right to recover an amount more or less speculative upon
proving facts of negligence that often were difficult to prove, and
substitute a system under which, in all ordinary cases of
accidental injury, he is sure of a definite and easily ascertained
compensation, not being obliged to assume the entire loss in any
case, but in all cases assuming any loss beyond the prescribed
scale.
Much emphasis is laid upon the criticism that the act creates
liability without fault. This is sufficiently answered by what has
been said, but we may add that liability without fault is not a
novelty in the law. The common law liability of the carrier, of the
innkeeper, or him who employed fire or other dangerous agency or
harbored a mischievous animal, was not dependent altogether upon
questions of fault or negligence. Statutes imposing liability
without fault have been sustained.
St. Louis & San
Francisco Ry. Co. v. Mathews, 165 U. S.
1,
165 U. S. 22;
Chicago, Rock Island & Pacific Ry. Co. v. Zernecke,
183 U. S. 582,
183 U. S.
586.
We have referred to the maxim,
respondeat superior. In
a well known English case,
Hall v. Smith, 2 Bing. 156,
160, this maxim was said by Best, C.J., to be
"bottomed on this principle, that he who expects to derive
advantage from an act which is done by another for him, must answer
for any injury which a third person may sustain from it."
And this view has been adopted in New York.
Cardot v.
Barney, 63 N.Y. 281, 287. The provision for compulsory
compensation in the act under consideration
Page 243 U. S. 205
cannot be deemed to be an arbitrary and unreasonable application
of the principle so as to amount to a deprivation of the employer's
property without due process of law. The pecuniary loss resulting
from the employee's death or disablement must fall somewhere. It
results from something done in the course of an operation from
which the employer expects to derive a profit. In excluding the
question of fault as a cause of the injury, the act in effect
disregards the proximate cause and looks to one more remote -- the
primary cause, as it may be deemed -- and that is the employment
itself. For this both parties are responsible, since they
voluntarily engage in it as coadventurers, with personal injury to
the employee as a probable and foreseen result. In ignoring any
possible negligence of the employee producing or contributing to
the injury, the lawmaker reasonably may have been influenced by the
belief that, in modern industry, the utmost diligence in the
employer's service is in some degree inconsistent with adequate
care on the part of the employee for his own safety; that the more
intently he devotes himself to the work, the less he can take
precautions for his own security. And it is evident that the
consequences of a disabling or fatal injury are precisely the same
to the parties immediately affected and to the community whether
the proximate cause be culpable or innocent. Viewing the entire
matter, it cannot be pronounced arbitrary and unreasonable for the
state to impose upon the employer the absolute duty of making a
moderate and definite compensation in money to every disabled
employee, or, in case of his death, to those who were entitled to
look to him for support, in lieu of the common law liability
confined to cases of negligence.
This, of course, is not to say that any scale of compensation,
however insignificant, on the one hand, or onerous, on the other,
would be supportable. In this case, no criticism is made on the
ground that the compensation prescribed
Page 243 U. S. 206
by the statute in question is unreasonable in amount, either in
general or in the particular case. Any question of that kind may be
met when it arises.
But, it is said, the statute strikes at the fundamentals of
constitutional freedom of contract, and we are referred to two
recent declarations by this Court. The first is this:
"Included in the right of personal liberty and the right of
private property -- partaking of the nature of each -- is the right
to make contracts for the acquisition of property. Chief among such
contracts is that of personal employment, by which labor and other
services are exchanged for money or other forms of property. If
this right be struck down or arbitrarily interfered with, there is
a substantial impairment of liberty in the long established
constitutional sense."
Coppage v. Kansas, 236 U. S. 1,
236 U. S. 14. And
this is the other:
"It requires no argument to show that the right to work for a
living in the common occupations of the community is of the very
essence of the personal freedom and opportunity that it was the
purpose of the [Fourteenth] Amendment to secure."
Truax v. Raich, 239 U. S. 33,
239 U. S.
41.
It is not our purpose to qualify or weaken either of these
declarations in the least. And we recognize that the legislation
under review does measurably limit the freedom of employer and
employee to agree respecting the terms of employment, and that it
cannot be supported except on the ground that it is a reasonable
exercise of the police power of the state. In our opinion, it is
fairly supportable upon that ground. And for this reason: the
subject matter in respect of which freedom of contract is
restricted is the matter of compensation for human life or limb
lost or disability incurred in the course of hazardous employment,
and the public has a direct interest in this as affecting the
common welfare.
"The whole is no greater than the sum of all the parts, and when
the individual health, safety, and welfare are sacrificed or
neglected, the state
Page 243 U. S. 207
must suffer."
Holden v. Hardy, 169 U. S. 366,
169 U. S. 397.
It cannot be doubted that the state may prohibit and punish
self-maiming and attempts at suicide; it may prohibit a man from
bartering away his life or his personal security; indeed, the right
to these is often declared, in bills of rights, to be "natural and
inalienable;" and the authority to prohibit contracts made in
derogation of a lawfully established policy of the state respecting
compensation for accidental death or disabling personal injury is
equally clear.
Chicago, Burlington & Quincy R. Co. v.
McGuire, 219 U. S. 549,
219 U. S. 571;
Second Employers' Liability Cases, 223 U. S.
1,
223 U. S. 52.
We have not overlooked the criticism that the act imposes no
rule of conduct upon the employer with respect to the conditions of
labor in the various industries embraced within its terms,
prescribes no duty with regard to where the workmen shall work, the
character of the machinery, tools, or appliances, the rules or
regulations to be established, or the safety devices to be
maintained. This statute does not concern itself with measures of
prevention, which presumably are embraced in other laws. But the
interest of the public is not confined to these. One of the grounds
of its concern with the continued life and earning power of the
individual is its interest in the prevention of pauperism, with its
concomitants of vice and crime. And, in our opinion, laws
regulating the responsibility of employers for the injury or death
of employees, arising out of the employment, bear so close a
relation to the protection of the lives and safety of those
concerned that they properly may be regarded as coming within the
category of police regulations.
Sherlock v. Alling,
93 U. S. 99,
93 U. S. 103;
Missouri Pacific Ry. Co. v. Castle, 224 U.
S. 541,
224 U. S.
545.
No question is made but that the procedural provisions of the
act are amply adequate to afford the notice and opportunity to be
heard required by the Fourteenth
Page 243 U. S. 208
Amendment. The denial of a trial by jury is not inconsistent
with "due process."
Walker v. Sauvinet, 92 U. S.
90;
Frank v. Mangum, 237 U.
S. 309,
237 U. S.
340.
The objection under the "equal protection" clause is not
pressed. The only apparent basis for it is in the exclusion of farm
laborers and domestic servants from the scheme. But manifestly this
cannot be judicially declared to be an arbitrary classification,
since it reasonably may be considered that the risks inherent in
these occupations are exceptionally patent, simple, and familiar.
Missouri, Kansas & Texas Ry. Co. v. Cade, 233 U.
S. 642,
233 U. S. 650,
and cases there cited.
We conclude that the prescribed scheme of compulsory
compensation is not repugnant to the provisions of the Fourteenth
Amendment, and are brought to consider next the manner in which the
employer is required to secure payment of the compensation. By §
50, this may be done in one of three ways: (a) state insurance; (b)
insurance with an authorized insurance corporation or association;
or (c) by a deposit of securities. The record shows that the
predecessor of plaintiff in error chose the third method, and, with
the sanction of the Commission, deposited securities to the amount
of $300,000, under § 50, and $30,000 in cash as a deposit to secure
prompt and convenient payment, under § 25, with an agreement to
make a further deposit if required. This was accompanied with a
reservation of all contentions as to the invalidity of the act, and
had not the effect of preventing plaintiff in error from raising
the questions we have discussed.
The system of compulsory compensation having been found to be
within the power of the state, it is within the limits of
permissible regulation, in aid of the system, to require the
employer to furnish satisfactory proof of his financial ability to
pay the compensation, and to deposit a reasonable amount of
securities for that purpose. The third clause of § 50 has not been,
and presumably will
Page 243 U. S. 209
not be, construed so as to give an unbridled discretion to the
Commission; nor is it to be presumed that solvent employers will be
prevented from becoming self-insurers on reasonable terms. No
question is made but that the terms imposed upon this railroad
company were reasonable in view of the magnitude of its operations,
the number of its employees, and the amount of its payroll (about
$50,000,000 annually); hence, no criticism of the practical effect
of the third clause is suggested.
This being so, it is obvious that this case presents no question
as to whether the state might, consistently with the Fourteenth
Amendment, compel employers to effect insurance according to either
of the plans mentioned in the first and second clauses. There is no
such compulsion, since self-insurance under the third clause
presumably is open to all employers on reasonable terms that it is
within the power of the state to impose. Regarded as optional
arrangements, for acceptance or rejection by employers unwilling to
comply with that clause, the plans of insurance are unexceptionable
from the constitutional standpoint. Manifestly, the employee is not
injuriously affected in a constitutional sense by the provisions
giving to the employer an option to secure payment of the
compensation in either of the modes prescribed, for there is no
presumption that either will prove inadequate to safeguard the
employee's interests.
Judgment affirmed.
[
Footnote 1]
Chap. 816, Laws 1913, as reenacted and amended by c. 41, Laws
1914, and amended by c. 316, Laws 1914.
[
Footnote 2]
By c. 674, Laws 1915, §§ 2 and 8, this Commission was abolished
and its functions were conferred upon the newly created Industrial
Commission.