Oklahoma Supreme Court: Companies Don’t Get to Make the Rules for Injured Workers

A nationwide campaign led by some of the country’s biggest companies to allow employers to “opt-out” of workers’ compensation insurance was dealt a major blow recently after the Oklahoma Supreme Court ruled these plans are unconstitutional. This was after the legislature three years ago granted employers in that state the ability to “opt-out” of the state’s workers’ compensation system and create their own plans.workboots

This led to a situation where the companies were allowed to set the terms dictating things like:

  • Which injuries would be covered;
  • Which doctors injured workers were allowed to see;
  • How workers would be compensated;
  • How disputes for workers’ compensation benefits would be handled.

As you can imagine, this was a system clearly designed to give employers the upper hand in these proceedings. It’s no wonder the measure was backed fervently by the gas industry, the oil industry and major retailers like Lowe’s, Hobby Lobby and Walmart. 

After the Oklahoma legislature passed this measure, these companies were emboldened to lobby for similar reforms in other states. They were joined by those in the trucking industry, the health care industry and others. Draft proposals and bills were touted in South Carolina, Tennessee, West Virginia, Georgia, Mississippi, Illinois and Wisconsin. You may recall the expose last year by NPR and ProPublica that detailed how and why these plans were bad for workers. There were tighter restrictions and lower benefits – and they were part of an ongoing effort over the last 20 years to whittle away at the protections workers had fought so hard for when the “grand bargain” of workers’ compensation was reached. Workers’ compensation was a compromise between workers and employers: Workers were guaranteed a no-fault system of compensation (medical bills and lost wages) for work-related injuries, while companies were insulated from costly lawsuits filed by employees injured at work.

As awareness grew about the state-by-state efforts to deprive workers of the protections guaranteed under the system, there has been growing push back. This decision in Oklahoma is one example. Recently in Florida, the Florida Supreme Court scrapped laws that capped plaintiff attorney fees in workers’ compensation cases (sometimes making it so that attorneys were working for as little as $1 an hour) and that arbitrarily limited workers to two years of temporarily disability pay – regardless of whether they could actually return to work at that point. (Similar two-year caps still exist in West Virginia, Texas, Oklahoma, North Dakota and California.)

There remain a number of provisions in place that significantly reduce benefits for certain injuries.

But now with the Oklahoma decision, Texas is now the only state that still allows companies to opt-out of the state’s workers’ compensation system.

The ruling in Oklahoma stemmed from an employee at a retail department store who was injured while lifting shoe boxes two years ago. Her employer, Dillard’s, opted out of the state workers’ compensation and created its own plan for benefits. Initially, it paid for the worker’s medical care, but then later denied the claim. The company asserted any further surgery/ damage were the result of a pre-existing condition, not her work-related injury. The state high court ruled in a 7-2 ruling that these kinds of opt-out plans are not constitutional because they treat one group of injured workers different from others in the state. For example, while most workers in the state had 30 days to report a work-related injury and were entitled to ask for a hearing before a judge, workers at this company were required to report their injuries by the end of the work day. They were also only allowed to appeal a decision on denial of benefits in writing and only to a committee of individuals chosen by the company. The state high court remanded the case back to the state’s workers’ compensation commission to make a determination on whether plaintiff’s injury was work-related and, if so, what damages should be awarded.

If you have been injured at work, contact the Lee Law Offices at 800-887-1965.

Additional Resources:

Oklahoma’s Top Court: Companies Can’t Set Own Rules for Injured Workers, Sept. 13, 2016, By Micahel Grabell, ProPublica

More Blog Entries:

Weighing Apportionment of Workers’ Compensation Liability, Sept. 14, 2016, Asheville Workers’ Compensation Lawyer Blog


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