A New Class of Hybrid-Tort Actions Based on Recent FELA Decisions?

Two recent decisions (Heckman 2013 and Phillips 2014) affecting personal injuries to railroad workers under the Federal Employers Liability Act (FELA) have suggested that Railroad Retirement Board payroll taxes should be withheld by railroad employers from personal injury awards paid to railroad workers who were injured on the job. This requirement has thus far been limited to suits against railroad employers for injuries at work by railroad employees and has been supported by railroad employers and the U.S. Department of Justice. Four other recent decisions (Windom 2012, Mickey 2013, Mickey 2014, and Cowden 2014) have, for various reasons, held that payroll taxes should not be withheld in spite of arguments to the contrary from railroad employers and the Department of Justice. This short paper provides descriptions for the six recent decisions and argues that the implications of an appellate ruling in favor of payroll tax withholding by railroad employers could create a new class of ‘‘hybrid-tort’’ personal injury actions that would extend to all employers, and not just railroad employers. If so, all forensic economic experts could find themselves having to change how payroll taxes are treated in all cases involving workers suing employers for lost earnings resulting from on-the-job injuries.