R. E. Sheehan Co. v. Shuler

Background

An employee of the Sheehan Company died on the job and left no survivors entitled to benefits. The State Industrial Board ordered the employer and its insurance carrier to pay two $500 sums into special state funds created by amendments to New York’s Workmen’s Compensation Law. One fund was for extra lifetime payments when a worker who already had a partial disability later becomes totally disabled, and the other was for maintenance during vocational rehabilitation, up to ten dollars a week. The employer and its insurer challenged those provisions as violating the Fourteenth Amendment.

Reasoning

The Court addressed whether the required $500 payments into the two special funds denied due process or equal protection. The opinion explained that the State may create industry-wide funds rather than require each immediate employer to pay the full additional compensation. The Court found the payments reasonable in amount, noted similar earlier decisions approving pooled contributions, and explained that all employers are subject to the same conditions for paying into the funds. Therefore, the amendments do not arbitrarily or unreasonably impose liability and do not violate the Fourteenth Amendment.

Real world impact

The decision means employers in the covered hazardous occupations, and their insurers, must pay into these state funds when an employee dies without beneficiaries. Injured workers who later suffer total disability after a prior partial disability, or who undergo vocational rehabilitation, may receive additional support from those funds. The New York courts’ judgments requiring the payments were affirmed and the law’s funding structure stands.