Authors:  Transportation Research Board

Date of Publication:  1994

Sponsoring Agency:  Transportation Research Board

Performing Organization:  Transportation Research Board

Report No: 241

Abstract:

Acting through its report on the 1991 Department of Transportation and Related Agencies Appropriations Bill, the House Appropriations Committee requested a comprehensive analysis of the Federal Employer's Liability Act of 1908 (FELA).  FELA prescribes a tort-based compensation process for injured railroad workers that has been a long-time source of controversy within the railroad industry.

In response to this request, the Transportation Research Board, with partial funding support from the Federal Transit Administration and the Federal Railroad Administration, established a committee of 15 experts to assess the injury compensation system that has evolved under FELA and compare it with the no-fault compensation systems that cover most U.S. workers.  The committee, under the chairmanship of Clinton V. Oster, Jr., Professor of Economics in the School of Public and Environmental Affairs at Indiana University, included individuals with expertise in freight transportation and costing, workers' compensation economics and policy, tort law, safety, medical disability and rehabilitation, labor law and economics, and workers' compensation administration.

The committee's first task was, first and foremost, to take an unbiased look at FELA and other workers' compensation systems to measure their strengths and weaknesses and ultimately to compare them for their effectiveness in successfully addressing the problems created by workplace injuries.  The committee addressed the chief points of contention between supporters and opponents of FELA including the level and cost of benefits, the administrative costs and delays in providing compensation, the amount of litigation and legal costs, the effect on employee relations, and FELA's safety incentives.

The resulting report describes the operation of injury compensation under both FELA and workers' compensation systems and details the committee's findings and conclusions regarding both approaches.  In accordance with its charge from the National Research Council, the study committee limited its analysis to technical matters and did not recommend any specific changes in federal policy.

As part of the effort to understand the positions of both the supporters and opponents of FELA, the study committee met with representatives of railroad labor and railroad management.  To develop the empirical information necessary to describe injury compensation under FELA and compare it with that under workers’ compensation systems, railroad industry data were gathered from the Association of American Railroads, Burlington Northern, CSX Transportation, Norfolk Southern, Southern Pacific, Union Pacific, the Metropolitan Transportation Authority of New York, and the Railroad Retirement Board. Information on workers’ compensation systems was sought from numerous sources including the Workers’ Compensation Research Institute, the National Council on Compensation Insurance, the state of Washington, and the U.S. Department of Labor. One railroad provided detailed data on injuries and compensation that are used in Chapter 6; the railroad is not identified to maintain the confidentiality of the data. Because FELA and workers’ compensation systems have different objectives and are parts of different benefit systems, there are, not unexpectedly, differences in the levels of benefits, the sources of costs, and the employee benefits that complement and substitute for employer injury compensation. Because of differences in approach between the tort-based compensation of FELA and the no-fault, strict liability systems of workers’ compensation, few data are available that are directly comparable among the systems. Therefore, in reaching its conclusions, the committee relied not only on the analysis of available data, but also on its collective judgment and experience with compensation systems for injured workers.
 

No. of Pages:  197