Oklahoma High Court Invalidates Workers’ Comp Rule

The Oklahoma Supreme Court Tuesday struck down the “opt out” provision of the state’s workers’ compensation law, ruling it is an unconstitutional special law that gives employers the authority to single out injured workers for inequitable treatment.

In a 7-2 ruling, the state’s highest court said the “opt out” provision “creates impermissible, unequal, disparate treatment” of injured workers and “does not guarantee members of the subject class, all employees, the same rights when a work related injury occurs,” in violation of the Oklahoma Constitution. Only Texas and Oklahoma have “opt out” provisions in their workers’ compensation systems.

Oklahoma’s Opt Out Act allows employers to “opt out” of the state’s workers’ compensation system and create their own plan. But employers who create their own plans can include conditions for recovery that make it more difficult for an injured worker to recover for a work-related injury than someone covered by the state’s plan, according to the ruling.

“The statutory language itself demonstrates that injured workers under the Opt Out Act have no protection to the coverage, process or procedure afforded their fellow employees,” it says.

The case involves a work-related injury sustained by an employee of Dillard’s Department Stores, Jonnie Yvonne Vasquez, who alleged she injured her neck and shoulder while lifting shoe boxes while working on Sept. 11, 2014. The ruling states that it applies to Vasquez’s case as well as all other cases on appeal and pending before the Workers Compensation Commission. Only 65 employers have elected to leave the state’s workers’ compensation system and create their own plans, said Vasquez’s attorney, Bob Burke of Oklahoma City.

In a dissenting opinion, Justices James Winchester and Steven Taylor said they would not invalidate the “opt out” provisions but would require the Workers Compensation Commission to determine whether an employee covered by an employer’s workers’ compensation plan was denied benefits the employee would have received under the state’s plan and require the employer plan to meet the requirements of the Opt Out Act.

An attorney for Dillard’s, G. Calvin Sharpe, did not immediately return a telephone call seeking comment. Attorney General Scott Pruitt’s office, which defended the “opt out” provisions, also did not immediately respond to a request for comment.

The ruling is the latest setback for sweeping Oklahoma workers’ compensation guidelines adopted by the Legislature in 2013. In April, the Supreme Court invalidated provisions that allowed deferral of payments for permanent partial disability for workers who eventually return to their jobs.

Revamping the state’s workers’ compensation system has been a priority for Republican legislative leaders who claim the state’s previous system was a detriment to business and industry in the state. Republican Gov. Mary Fallin has supported changes in the law.

But Burke said 38 separate provisions of the 2013 workers’ compensation law have been found unconstitutional, inoperable or invalid since they went into effect.

“It’s a great victory for the working men and women of this state,” Burke said. “We can’t allow the injured worker to be royally shafted like this.”