Opinion ID: 2629515
Heading Depth: 4
Heading Rank: 3

Heading: The legislation bears a fair and substantial relationship to the state's objectives.

Text: The final step in equal protection analysis involving an economic interest is to determine whether the challenged legislation bears a fair and substantial relationship to the state's objectives. [45] We hold that the 2004 amendments have a fair and substantial relationship to the state's objectives. The amendments plainly further the act's goal of ensuring provision of workers' compensation benefits at a reasonable cost to employers by (1) preventing double payment by subcontractors because the general contractor and project owner can no longer be sued for tort damages and (2) shielding those who are potentially liable for benefits from negligence claims. Schiel argues that the 2004 amendments do not have a sufficiently close fit to the legislature's goals to withstand an equal protection challenge, maintaining that they took away rights from injured workers without any meaningful quid pro quo.  He contends that the legislature should have extended the exclusive remedy provision only to those general contractors or project owners who actually paid workers' compensation benefits, not to all who might be potentially liable for payment of benefits, essentially saying that the legislature should have provided a closer fit between the objectives and the legislation. But we have never required a perfect fit between a legislative classification and a goal when applying minimum scrutiny. [46] As we noted in C.J. v. State, Department of Corrections, [47] policies reviewed under minimum scrutiny are not unconstitutional simply because a litigant is able to propose a regulation that would further the legislative goal in a more rational manner. [48] Although it may not happen in many cases, a contractor may not have workers' compensation insurance. By extending liability for workers' compensation to project owners, the 2004 amendments provide workers with more entities that can be held liable for workers' compensation. [49] In addition, in an instance where no employer has obtained workers' compensation insurance, a general contractor or project owner may have more income or assets available to pay an injured worker, which could benefit some injured workers. [50] The justification for permitting the employee of a project owner to sue a subcontractor for negligence but not permitting the employee of a subcontractor to sue the project owner is that the subcontractor would never be liable to the project owner's employee for workers' compensation benefits while a project owner might be liable for workers' compensation benefits to the subcontractor's employee. Even though the change in policy adversely impacts some injured workers, like Schiel, it may benefit others. Schiel also argues that the 2004 amendments were not necessary because the law already required employers to secure workers' compensation insurance and provided remedies in the event the employer failed to do so. But the legislature could decide that the available remedies, such as a prohibition on raising certain defenses in a negligence action and possible fines or stop work orders, [51] did not adequately address the issue of uninsured contractors. The legislature has the power to substitute or add remedies to address the problem of subcontractors or contractors who did not carry workers' compensation insurance. In sum, because the 2004 amendments to the workers' compensation statute deal with an economic interest and bear a fair and substantial relationship to legitimate state goals, they do not violate Schiel's right to equal protection under the Alaska Constitution.