Compensating Injured Railroad Workers Under the Federal Employer's Liability Act

TRB Special Report 241 - Compensating Injured Railroad Workers Under the Federal Employer's Liability Act assesses the injury compensation system that has evolved under Federal Employer's Liability Act (FELA) and compares it with the no-fault compensation systems that cover most U.S. workers.

Railroad workers who are injured on the job seek compensation for their injuries under the provisions of the Federal Employers’ Liability Act of 1908 (FELA). This act prescribes a tort-based approach to on-the-job injury as opposed to the no-fault approach of workers’ compensation applicable to most U.S. workers. For many years, railroad management has argued that the FELA process imposes higher costs on the rail industry than those imposed by the workers’ compensation system that applies to its competitors—primarily the trucking industry—which places railroads at a competitive disadvantage. Rail union leaders contend that FELA is a necessary system to provide fair compensation and to offer incentives to industry to offer a safe working environment.

At the request of Congress, a TRB committee that produced this reort compared FELA with other workers’ compensation systems. Although the data for making such comparisons are imperfect, the committee concluded that the FELA process generally provides higher benefits but can result in delays in payments, involve higher transaction costs, and result in greater costs to railroads. The differences in the two injury compensation systems, however, are not as great as they were at one time. Moreover, because of the high degree of unionization in the railroad industry, any reductions in injury compensation benefits are likely to be resisted strongly by labor. The committee recommended that industry and labor make constructive changes in the FELA process that would reduce transaction costs. One means of doing so would be to rely on alternative dispute-resolution mechanisms to reduce the extent of litigation.