The grand bargain is the early-twentieth-century trade on which the workers’ compensation system rests: the injured worker gives up the right to sue the employer, and in exchange the state guarantees medical care and a share of lost wages. No fault, no jury, no courtroom lottery. It became the one piece of the welfare state that employers accepted because workers paid for it with a real right. Both sides gave something up. North Dakota still collects the worker’s half of the trade in full — the right to sue has been gone for a hundred years, and a hearing before an agency official is not the same as a day in court. The state’s half is another matter.
Consider the accounting, because the agency’s own numbers do the arguing. Workforce Safety & Insurance, the public agency that administers the system in North Dakota, held about $2.3 billion in assets at the end of fiscal 2025. Over the past twenty years it has returned around $1.8 billion to the state’s businesses in refunds and dividends. It pays the lowest premiums in the country — roughly fifty cents per hundred dollars of payroll — and it issues refunds so routinely that Dan Ruby, a Minot legislator who has sat in the statehouse for twenty-five years and runs a sanitation company, saw his annual premium fall from around $100,000 for twenty-five workers to a little over $10,000 for twice as many. The same agency paid $40 million in lost wages last year, down from $79.4 million in 2016. It paid on average about $4,100 per active claim, roughly $500 less than in 2016. The number of hearings requested by injured workers and employers fell to 108 last year, from 304 a decade earlier. And there are two lawyers left in North Dakota who will represent injured workers. Both are in their late sixties.
It is true, in the narrow sense in which such things are true, that safer workplaces and clearer statutes may explain some of the decline. Art Thompson, the agency’s director, offers a partial explanation for the average’s slide: a decade ago, during the oil boom, the injuries coming through the door were more severe, and a more brutal case mix meant a higher average. Take the point. It does not explain the whole record. Lost-wage payments fell by half — to $40 million from $79.4 million — even as the workforce grew. Hearings fell by about two-thirds, from 304 to 108. Lawyers fell to two. The fee schedule is one documented part of the explanation, because lawyers say the awards are not large enough to justify the time and expense of taking these cases; the source does not establish that it accounts for every change in the market. The agency reports that it approves 90 percent of initial claims, that its customer-satisfaction score from workers is 4.22 out of five, and that its director considers the system “working as well as it’s ever been designed to work.” The compliment is probably accurate, and it is the indictment. The system is working exactly as designed. The question the director’s sentence leaves open is whose design. A satisfaction score measures the workers who answered the survey; it cannot measure the workers who abandoned the process before reaching a review — and among the abandoned may be people who could not find legal help. The agency’s own review office — housed inside the agency that issued the denial — reverses or settles about 10 percent of the cases brought to it. That shows that some decisions change when challenged. It does not establish that the remaining denials are correct, or that the declining number of appeals has one cause.
Start with the two lawyers, because the shortage has a price component, and the record gives us that component directly. The agency that denies the claims also sets the rate at which the denial can be contested: $7,455 for a successful administrative hearing, and the lawyer is paid only when the worker wins. Dan Phillips, one of the two, carried Oak Reile’s case through an administrative hearing, a district court, and the North Dakota Supreme Court, and earned $14,595 for the whole of it — about half, by his estimate, of his time’s value. A price ceiling set below the cost of production can produce a shortage. That is not economics jargon; it is the rule that decides whether the work is worth doing. Phillips’s estimate indicates that the fee structure did not cover the value of the work in his case, and lawyers say the awards are not large enough to pay for their time and expenses. Those facts help explain why the work is disappearing. A rational young attorney may do the arithmetic at graduation and choose a specialty whose fee schedule does not cap the value of a client’s spine. There is no mystery in that part of the shortage, though the source does not establish that the fee cap is its only cause.
Here is the mechanism, stated more carefully: when suppliers are paid only after a contested claim succeeds, and the public agency sets the available fee, the fee structure can reduce the supply of lawyers willing to take the work. The state that denies the claims controls the price of the representation needed to contest the denial, and lawyers report that the price is too low for many cases. New Mexico raised its attorney-fee caps last year — the one jurisdiction in this story to read the price signal and respond to it. North Dakota rolled back the incentives for lawyers during the retrenchment of the 1990s and has spent the decades since, as the surplus grew, dialing back payouts and tightening eligibility. When the money for representation dries up, the rights that depended on it can become harder to exercise.
The institutional structure is even plainer than the economics. North Dakota’s part-time legislature must approve every change to the compensation statute, and many of its members are business owners, which means they regulate the agency while also paying premiums to it. The premium-payer writes the eligibility rules; the premium-payer benefits from the surplus; the premium-payer collects the dividend. Dan Ruby’s own numbers — $100,000 a year down to $10,000, for twice the workers — are the legislature’s disclosure statement. The injured worker appears in this arrangement as a cost item to be managed. This is not a scandal requiring a document dump; it is the public structure of the institution, printed on every refund check.
The Reile case shows what the structure can produce, in miniature and then in full. Oak Reile was delivering a pallet of washer fluid, cigarettes, and candy to a convenience store in 2020 when he slipped and fell, breaking two vertebrae and paralyzing himself from the armpits down. Months of hospitalization and rehabilitation followed, and then depression, and the agency denied his psychotherapy claim on the ground that depression was not a physiological effect of his injury. The source reports the agency’s stated basis for the denial; it does not establish that the decision was primarily about the cost of psychotherapy. What it does establish is that Reile and his wife had to contest the decision, and that the case eventually reached the North Dakota Supreme Court. Reile and his wife also battled the agency for six months over a $150 cushion for his wheelchair. In 2023 Phillips took the psychotherapy challenge to the North Dakota Supreme Court and won. Several days later, at WSI’s request, a state senator added an amendment to a bill closing the door on future claims for the psychological effects of a work injury, and the legislature passed it. Confronted with a loss, the agency sought a statutory change that would prevent similar claims in the future. That is what the reported sequence shows. It does not, by itself, establish the agency’s motive for seeking the amendment or that every disputed claim reflects the same reasoning.
The pattern is not unique to North Dakota. Jesse Jerger, a Fargo concrete worker, fractured his elbow and suffered permanent nerve damage after falling from a wall in 2023. WSI denied some of his claims. Two lawyers turned him down. One said he was too busy. Jerger eventually cashed out a life-insurance policy and drained his savings to pay the bills. “I just gave up,” he said. That is what happens when access to counsel disappears. Denials may become final because workers cannot find legal help, even when the underlying merits remain contested. The declining number of hearings can then be presented as proof that the system is clear and efficient, when it may instead show that injured workers have stopped believing anyone will hear them.
Phillips takes roughly one case for every six calls he receives, from a queue of more than twenty-five calls a week. He is sixty-seven and hopes to retire in three years. Dean Haas, the other lawyer still practicing, is sixty-eight and already part-time. When the last of them retires, the appeals function in North Dakota will close by natural causes — no vote, no bill, the fee cap doing work that the legislature need not acknowledge directly. The fund that fought Reile over a $150 cushion holds $1.2 billion in surplus and $2.3 billion in assets, and the refunds go out on schedule.
The fixes are not mysterious, and none of them requires abandoning the arrangement. Raise the fee caps to a level where a competent lawyer can take more than one case in six; New Mexico has shown the way. Move the review office out of the building that issued the denial — no party to a dispute should adjudicate its adversary’s appeal. And apply the conflict rule the structure is crying out for: the legislators who pay premiums to the fund should not be the legislators who write its statutes. The grand bargain can be honoured or it can be banked. North Dakota has been doing the second thing while calling it the first.