Workers' Comp Case to Watch

Constitutional Challenge to Oklahoma Option

Attorneys have filed suit against the workers’ comp law in Oklahoma, the second state after Texas that gives employers an alternative to the state-based program.
By: | March 6, 2015

Saying two employers’ benefit plans “do not meet the minimum standards of the statute,” attorneys have filed suit against Oklahoma’s workers’ comp law. The filing in the state Supreme Court specifically names the State of Oklahoma and Insurance Commissioner John D. Doak.

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Oklahoma became only the second state after Texas that gives employers the option. Unlike the Texas law, Oklahoma’s statute requires employers to set up their own workers’ comp-type plans that meet the standards set by the state-based program.

“Petitioners allege the entire Oklahoma Employee Injury Benefit Act … is unconstitutional,” the filing states. “Further, that the Injury Benefit Plans approved by respondent that directly affect the injury claims of the two petitioners fall woefully short of reasonable standards of protecting Oklahoma’s injured workers.”

The suit was filed on behalf of injured workers for separate companies. Judy Pilkington was injured in September 2014 while an employee of Dillard’s Inc. Kim Lee, sustained injuries while employed by Swift Transportation Co. of Arizona. Both were denied benefits.

“There is no due process protection in allowing an Oklahoma employer to opt out of the statutory workers’ compensation system, set up its own benefit plan, make all the decisions regarding benefits, determine who and how a plan can be reviewed, and have total control of the development of the record for appeal,” according to the suit. “Nowhere along the way is there an agency or court or unbiased tribunal to look at the merits of an injured worker’s case. Opt out employers are allowed to replace a judge with a committee chosen by the employer. That flies in the face of the federal and state constitutions.”

The filing also says the statute treats claimants in opt-out companies differently from those that have not opted out. “In a claim before the Workers’ Compensation Commission, an injured worker, if aggrieved by the decision of an administrative law judge, is allowed … to appeal to the three-member Workers’ Compensation Commission. Then, if a party is aggrieved, Subsection C of § 78 provides a comprehensive standard of review in the Supreme Court,” according to the filing. “For opt out injured workers, the Supreme Court can reach a different conclusion only if the decision of the employer and the Commission is ‘contrary to law.’”

“When the facts come out regarding those injured workers’ claims and how they were treated, people will scratch their heads and wonder why this new lawsuit was ever filed.” — Bill Minnick, president, Partnersource

Finally, the suit objects to the time frame for workers to report injuries. “An injured worker for an employer who has not opted out of the statutory system has generally at least one year to file a claim before the Workers’ Compensation Commission,” it states. “However, in a Draconian blow to the rights of injured workers, in the Swift plan, there is a 24-hour statute of limitation, and even less time to report an injury under the Dillard’s plan.” The suit says that someone working for Dillard’s would not be entitled to benefits if she did not report the injury by the end of the work shift on the date of injury.

Proponents of the law called the action “the latest in a large group of lawsuits.” Bill Minnick, president of Partnersource, said in a statement the attorneys filing the suits “are trying to use the courts to dismantle legislation that has made Oklahoma more competitive and Oklahoma workers more informed about their benefits.”

Minnick argued that both opt out and the traditional workers’ comp system require payment “of the same types and amounts of benefits.” He said the option supports:

    • More employee accountability and medical control such as faster notice of injury and direction of care.
    • Increased employee and employer engagement, as they “actively communicate on program rights and responsibilities.”
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  • Free-market insurance competition since insurers can compete against one another to “determine who can offer the lowest price for the broadest benefits coverage.”

Minnick says benefit payments from opt-out employers are often higher than in the traditional system.

“When the facts come out regarding those injured workers’ claims and how they were treated, people will scratch their heads and wonder why this new lawsuit was ever filed,” Minnick wrote. “It contains many misstatements of the law and the facts. But that’s okay. Oklahoma Option programs are working well and everyone deserves their day in court.”

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]

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The R&I Editorial Team can be reached at [email protected]