Torts - Cases, Principles, and Institutions Fifth Edition, 2016a

Witt & Tani, TCPI 5. Plaintiffs’ Conduct
establishment. When the defendant installed a new axe rack, plaintiff complained to the
superintendent of the factory that the new rack was dangerous. The superintendent answered that
“he would have to use the racks or leave.” Plaintiff stayed and was injured when a hatchet fell
from the rack. Massachusetts Supreme Judicial Court Chief Justice Oliver Wendell Holmes, Jr.,
soon to be appointed to the United States Supreme Court, ruled in favor of the defendant on the
ground that Lamson had assumed the risk:
The plaintiff, on his own evidence, appreciated the danger more than any one else. He
perfectly understood what was likely to happen. That likelihood did not depend upon the doing of
some negligent act by people in another branch of employment, but solely on the permanent
conditions of the racks and their surroundings and the plaintiff’s continuing to work where he did.
He complained, and was notified that he could go if he would not face the chance. He stayed and
took the risk.
Lamson v. American Ax & Tool Co., 58 N.E. 585, 585 (Mass. 1900).
The assumption of the risk rule in the nineteenth- and early twentieth-century workplace
encompassed the assumption of virtually all risks arising out of the negligence of a co-worker.
This was the so-called “fellow servant rule.” Articulated most famously by Chief Justice Lemuel
Shaw of Massachusetts (you will recall Shaw as the author of the opinion in Brown v. Kendall),
the fellow servant rule was grounded in two theories. The first was that employees are better
positioned than an employer to minimize the risks involved in the workplace:
Where several persons are employed in the conduct of one common enterprise or
undertaking, and the safety of each depends much on the care and skill with which
each other shall perform his appropriate duty, each is an observer of the conduct of
the others, can give notice of any misconduct, incapacity or neglect of duty, and
leave the service . . . . By these means, the safety of each will be much more
effectually secured, than could be done by a resort to the common employer for
indemnity in case of loss by the negligence of each other.
Farwell v. Boston & Worcester R. Corp., 45 Mass. 49, 59 (1842). Does Shaw’s description of the
workplace hold true for modern firms? Did it hold true for railroad firms in the middle of the
nineteenth century?
5. Compensating wage premiums? A second theoretical basis for the assumption of the risk
rule was that even if employees were not better positioned, the employees’ wages would be higher
ex ante to reflect the allocation of the risk of work accidents to workers ex post; as Shaw put it,
even if workers lost when they brought injury suits, their compensation was “adjusted
accordingly.” Farwell, 45 Mass. at 57.
Contemporary economists refer to this theory as the wage premium theory: employees
earn, or so it is said, a higher wage to reflect the risks they face in the workplace. If the
background tort rules make recovery for work accidents difficult, the wage will be higher still to
reflect the true costs of the job to the employee. Conversely, if the risk of accidents were
transferred to the employer (the theory goes) wages would decrease accordingly to reflect the
employer’s new costs.
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