Opinion ID: 2117678
Heading Depth: 1
Heading Rank: 5

Heading: The Purpose of the Agricultural Exclusion

Text: The record in this case contains a considerable amount of material relating to the subject of the agricultural exclusion and, together with numerous writings (see e. g., 1B Larson, Workmen's Compensation Law, Farm Labor, § 53), compels the conclusion that the purpose for the exclusion of agricultural services was not for the benefit of the employees but for the employers. This double-pronged exclusion, the agricultural employer and the agricultural employee, complicates analysis of the constitutional question. The exclusion of the agricultural employer appears to have been the focus of most of the cases that we have analyzed. North Dakota, being the most agricultural of all states, has never hesitated to grant to agriculture, as its most important industry, legislative preferences. A cursory analysis of one title of the North Dakota Century Code (Title 39) discloses seventeen readily identifiable exemptions for agriculture and a number which are not readily recognizable but are preferences in fact. This type of preference has been upheld whenever it has been challenged. See e. g., Figenskau v. McCoy, 66 N.D. 290, 265 N.W. 259 (1936). The agricultural exclusion violates none of the restrictions placed upon legislation by the constitution insofar as it results in a benefit to agricultural employers that are not enjoyed by other industries. A subsidized agriculture appears to have been accepted as inherent under our economic system. The other prong of this exclusion requires that we focus upon the agricultural employee. There are four possible purposes for excluding agricultural employees from the benefits offered other employees by the Workmen's Compensation Act: (1) The purpose of excluding agricultural employees was to overcome political opposition to passage of a workmen's compensation act by a farm-oriented legislature. Legislatures were quick to perceive that farmers would oppose such increased liability, and that they would not insure their hired help. . . . There were many individual and small farmers in the early twentieth century, not only on the farms, but as members of the legislatures in legislative halls, and it was feared that extension of the compensation acts to them would defeat the proposed bills. Exceptions were therefore made for farmers and farm laborers. . . . . One legislature followed the other in incorporating the exception, an exclusion with hollow but happy sound which echoed its way across the country, leaving in its wake only confusion and disaster for injured farm workers. Horovitz, Injury and Death Under Workmen's Compensation Laws, Employees and Employers, pp. 214, 215 (1944), Wright & Potter Printing Co., Boston, Mass. In the beginning of such legislation, political expedience may have justified the exclusion under the doctrine that reform may take one step at a time. But, in the light of the passage of time, changed conditions, and the expressed purpose of the Act, that cannot justify the exemption forever. See State v. Gamble Skogmo, Inc., 144 N.W.2d 749, 760 (N.D.1966), quoting from Williamson v. Lee Optical, Inc., 348 U.S. 483, 489, 75 S.Ct. 461, 465, 99 L.Ed. 563 (1955). See also, City of Bismarck v. Materi, 177 N.W.2d 530 (N.D.1970), and Tharaldson v. Unsatisfied Judgment Fund, supra, 225 N.W.2d at 46. Now that sixty years have passed and almost everything in life has changed, and farmers have experienced legal difficulties in the form of common-law tort claims, it appears that reconsideration of the agricultural exclusion is overdue. See Rosebear v. Anderson, 143 F.Supp. 721 (D.N.D.1956), 245 F.2d 673 (8th Cir. 1957), not as a decision supporting our reasoning in this case but as an indication that farmers may, and do, suffer common-law tort claims. When we focus upon the employee, this purpose, if we can call it that, only supports a conclusion that agricultural employees had little influence in legislative matters, but supplies no justification for the exclusion in a constitutional sense. (2) Farm employees should be excluded because their work is not as hazardous as other employment and compulsory coverage for them is not needed. Least convincing of all is the assertion that farm laborers do not need this kind of protection. Whatever the compensation acts may say, agriculture is one of the most hazardous of all occupations. In 1964, of 4,761,000 agricultural workers, 3,000 were fatally injured, while of 17,259,000 manufacturing employees, the number of fatalities was 2,000. 1B Larson, Workmen's Compensation Law, Farm Labor, § 53:20, p. 9-109. With advanced technology and increasing mechanization, farming has become more dangerous. Of all occupations, only mining and construction are more hazardous than farming. Davis, Death of a Hired Man Agricultural Employees and Workmen's Compensation in the North Central States, 13 S.D.L.Rev. 1 (1968); National Safety Council, Accident Facts, p. 85 (1965). See also, Medd, Legal Problems of Migrant Agricultural Workers, 50 N.D.L.Rev. 459 (1973-74). The hazards inherent in farming have not escaped the notice of the judiciary and explain, in part, the reason for those cases in which we have been urged to declare some farm activities to be nonagricultural, i. e., beekeeping Morel v. Thompson, 225 N.W.2d 584 (N.D.1975); and livestock feeding Butts Feed Lots v. Board of Cty. Commissioners, 261 N.W.2d 667 (N.D.1977). Some courts, even when faced with explicit statutory language, have resorted to fine-line distinctions to avoid unjust results. In upholding an agricultural exclusion in Roush v. Heffelbower, 226 Mich. 664, 196 N.W. 185, 186 (1923), the court said: In excluding farm laborers from the benefits granted to other classes, it was evidently the theory of the Legislature that the work of the farm laborer was not sufficiently hazardous to require the protection of the Compensation Law. As the danger incident to the operation of machinery used in threshing grain and husking corn is as great as that incident to the use of machinery in a factory or elsewhere, it was probably in the legislative mind that when a farmer was engaged in that business apart from his regular farming operations, he was not engaged in farming and his employees were not farm laborers. In no other way can the exclusion of farm laborers from the benefits of the statute be explained or justified. A conclusion that modern-day farming is nonhazardous defies reality and provides no explanation for the exclusion of agricultural employees from coverage under the Act. It is readily acknowledged that driving cattle on horseback has not become more dangerous than it was in 1919, yet riders employed at sales rings and stockyards have always benefited from coverage while riders employed by farmers and ranchers have not. (3) Farm employees should be excluded because the family farm is a closely knit community of relatives and friends who care for each other's needs and injuries and no other protection is needed. The court, in Sayles v. Foley, 38 R.I. 484, 96 A. 340, 344 (1916), possibly had something like that in mind when it said: As to domestic and agricultural employes, if the Legislature deemed the nature of their employment with, as a general rule, its intimate personal relations between the employer and his employes, to be such that it would be proper to leave them both as to remedies for personal injuries arising from accidents in the course of their employment to the common-law action and its defenses, we cannot say that such classification is arbitrary and unreasonable, as there is a substantial difference between the condition of these employes and those where the obvious risks of the employment are greater and where the mere number of employes permits little opportunity for actual acquaintance. In this case, Benson's employer, Decker, testified in effect that he thought that he had private insurance that would have taken care of any employee accident. He did carry farm liability coverage which included $2,000 no-fault medical benefits, and these were, in fact, paid to Benson. Decker asserted that he discovered, after the accident, that the coverage he thought he had is not even available from commercial insurance carriers and that it would be too costly to carry voluntary workmen's compensation coverage. There may be farmers even more beneficent than Decker but there undoubtedly are many migrant, temporary, part-time employees who have no reason whatsoever to expect to be cared for, if injured, out of any beneficence of their farmer-employer. (4) Farm employees should be excluded because farm employers cannot afford to pay the premium. We accord this justification considerable weight and perceive more than an element of truth in it. Any addition to the overhead costs of operating a farm threatens the chances of a profitable operation. The latest edition of 1B Larson, Workmen's Compensation Law, § 53:10, indicates that not more than seventeen states have mandatory workmen's compensation coverage for agricultural workers. All other things being equal, there is a recognizable, competitive edge for a farmer who is freed from any item of overhead cost. There is also some validity in the argument that a great proportion of the North Dakota farmers who have family-size farms would be unduly burdened by the administrative inconvenience and expense of record keeping even though farmers are much more sophisticated now than in 1919. The Michigan court pointed out in Gutierrez v. Glaser Crandell Company, supra, 202 N.W.2d at 794: Defendant argues that the administrative burden placed upon the agricultural employer would be too great. However, such employer already must meet the requirements of withholding tax and social security to name just two. If the legislature would base a classification on the record-keeping burden alone, it would be objectionable as underinclusive because there are family-size businesses that suffer the very same burden. Size of the operation is not a factor in the exemption any more than hazardousness of the activity. Another of the economic factors that provides justification for a farm exemption is that, in our marketing system, a farmer, unlike a manufacturer, cannot add the costs of workmen's compensation premiums to the price for which he will sell his products. We acknowledged the validity of this factor in Figenskau v. McCoy, 66 N.D. 290, 265 N.W. 259, 263 (1936), where we said: It is a matter of common knowledge that under the present transportation and marketing system the cost of transportation of agricultural products from the farm to the market or to the railway station usually falls upon the farmer. He has no way of including the cost of transportation in the price which he receives for his products and thus passing it on to the purchaser. The cost of transportation is one of the handicaps of the farming industry in this state. The Legislature may have reasonably decided that, since the fee here considered adds to the cost of transportation between farm and market or at least between the farm and the railroad station, it should not impose a further transportation burden upon agricultural products. When considered in this light, the exemption is based upon a reasonable and distinguishable classification, and is not in conflict with the provisions of either the state or federal Constitutions. We note that the cost of premiums is not incurred solely for the benefit of the employee. An agricultural employer, if covered by the Workmen's Compensation Act, would benefit by being relieved of the burden of defending possible common-law tort claims, especially in those cases where his negligence was the proximate cause of the injury to the employee. We cannot ignore the effect of the exemption upon agricultural employees. We agree with that part of the Gutierrez opinion which said: A court is not confined to a sterile examination of the statute itself but must look to its effect. 202 N.W.2d at 793. When we look at the effect of the agricultural service exclusion, we must focus upon both employer and employee and, although some inequality is permissible, we must balance the benefits against the burdens imposed on each class. When a special benefit is granted by legislative enactment to a group and the resulting burden falls on the widest possible base, the balancing required is simple. Thus, for example, in situations wherein there is a claim that a tax benefit violates equal rights because those benefits are not available equally for all taxpayers, no balancing is required if the burden resulting from the special benefit falls on the public generally. See, e. g., Caldis v. Board of County Commissioners, supra , and Signal Oil and Gas Company v. Williams County, 206 N.W.2d 75 (N.D.1973). These are simple situations similar to those involving the licensing of a profession, regulating of activities that have a vested public interest, or involve economic or political policy. See State v. Knoefler, 279 N.W.2d 658 (N.D. 1979). As the United States Supreme court said in Weber v. Aetna Casualty & Surety Co., 406 U.S. 164, 173, 92 S.Ct. 1400, 1405, 31 L.Ed.2d 768, 777 (1972): The essential inquiry. . . is . . . inevitably a dual one: What legitimate state interest does the classification promote? What fundamental personal rights might the classification endanger? We believe that the courts can assist in the preservation of the legitimate concerns of the legislature for the interests of agricultural wage earners and for the well-being of those engaged as agricultural employers, without imposing any extreme burden upon either. When the nature of the discrimination appears evident on the face of the statutethe imposition of the burden upon the broadest basis rather than the narrowesta judicial review in the nature of strict scrutiny may be appropriate. See Hughes v. Oklahoma, ___ U.S. ___, ___, 99 S.Ct. 1727, 1737, 60 L.Ed.2d 250 (1979), where the United States Supreme Court, in holding a statute of Oklahoma repugnant to the Commerce Clause, said: Section 4-115(B) is certainly not a `last ditch' attempt at conservation after nondiscriminatory alternatives have proven unfeasible. It is rather a choice of the most discriminatory means even though nondiscriminatory alternatives would seem likely to fulfill the State's purported legitimate local purpose more effectively. There would be no logic in concluding that rights of merchants to ship Oklahoma minnows in interstate commerce should be scrutinized differently from the right of an agricultural wage earner to be treated equally under the law. We find unacceptable the suggestion by the attorney general that by excluding farm workers from workmen's compensation coverage, the legislature has, in effect, spread the burden of injured farm workers to the widest possible baseto the taxpayers in generalbecause injured farm workers who are poor can receive welfare. The burden still rests entirely upon the injured farm employee, if not economically, surely in the loss of dignity.