Court sets aside portions of Oklahoma’s new workers’ comp law

published in McAfee & Taft EmployerLINC | April 19, 2016

It has been just over two years since Oklahoma’s completely overhauled workers’ compensation system went into effect. Since then, various provisions have come under attack by employees. Shortly after the effective date, the Oklahoma Supreme Court determined that the Oklahoma Legislature had the power to enact the new law, but explained it would also determine whether portions of the law were constitutional on a piecemeal basis. Recently, the court overturned portions of the law because they are contrary to the Oklahoma Constitution. Other legal challenges remain, however, so the period of uncertainty is not over.

Court strikes down limitations on cumulative trauma injuries

The new workers’ compensation system includes a provision requiring an employee to work for an employer for a minimum of 180 days in order to recover benefits for a cumulative-trauma injury. In Torres v. Seaboard Foods, LLC, a less-than-180-day employee who alleged she incurred an on-the-job cumulative injury challenged the law. After initially losing her case in front of the Workers’ Compensation Commission, the employee took her case to the Oklahoma Supreme Court.

The Oklahoma Supreme Court determined that the 180-day employment requirement was unconstitutional because it violated the due process clause of the Oklahoma Constitution. The court noted that the Legislature’s intent in passing the law was to reduce fraudulent claims. It determined, however, that the 180-day employment requirement was an arbitrary cut-off that prohibited those who actually did sustain a cumulative trauma injury in their first 180 days of employment from being able to recover, while also failing to stop fraudulent claims from those who had worked for more than 180 days at an employer. Because the requirement was arbitrary and the law took away an individual’s right to bring a claim in any court, the provision was declared unconstitutional.

Deferral payment provision invalidated

Earlier this month, the Oklahoma Supreme Court invalidated a second section of the workers’ compensation law. In Maxwell v. Sprint PCS, the court tackled a provision that requires individuals who have a permanent partial disability and who return to work at their same job (or a job paying the same rate) to defer and reduce their award. The law provides that some injuries are subject to the deferral and reduction while other injuries are not.

Attorneys representing the employers argued that the legislative policy behind the provision was that disability payments should be directly connected to an employee’s reduction in earnings. The court found that the statute violated the due process clause in the Oklahoma Constitution because the injured worker was limited to presenting medical evidence and could not present evidence regarding earning capacity. By contrast, the employer could present evidence of earning capacity by showing that the employee returned to work. The court decided that the Legislature cannot make the determination that workers who return to their job have not had a loss of earning capacity. The court stated that workers could have a reduction in earnings capacity by virtue of a shorter career due to injury.

The court also held that the law “arbitrarily” made two categories of individuals—one that had injuries subject to deferral and reduction and another group whose injuries were not subject to deferral and reduction. Because the division was arbitrary, the law is a “special law” and is unconstitutional.

The future

A pending challenge is whether certain retaliation claims will be heard by a county district court or by an administrative law judge in the Workers’ Compensation Commission. More specifically, the new law requires that employees who claim they were retaliated against for filing a workers’ compensation action bring their claim to the Workers’ Compensation Commission.

There is general agreement that individuals who claim they were retaliated against prior to the effective date of the new law (February 1, 2014) may bring retaliation claims to the district court and that employees who were physically injured after the effective date of the new law should bring their retaliation claims to the Commission. However, there is a dispute as to which body should hear a claim if the employee was injured prior to the effective date but the alleged retaliatory act occurred after the effective date. Many state district courts have held that such “straddle” claims should be heard by the district court. But those decisions are on appeal and awaiting a decision by the Oklahoma Supreme Court.

While the challenges to various portions of the law will continue for the foreseeable future, the challenges will be related to isolated issues. The core administrative process, with administrative law judges handling claims and the Workers’ Compensation Commission serving as the initial appellate body, will continue.