A 7-2 ruling in the Oklahoma Supreme Court found that provisions that would allow employers to opt-out of the state’s Workers’ Compensation were unconstitutional.
The case, titled Vasquez v Dillard’s, Inc., started when Jonnie Vasquez injured her neck and shoulder while working for a Dillard’s department store in a work-related injury. Vasquez received compensation for her injury initially, but was later denied benefits on the grounds that her injury was part of a “pre-existing condition.” However, Vasquez’s injury would have been covered under the state Administrative Workers’ Compensation Act. Dillard’s was able to legally deny Vasquez’s claim because of a clause within the Act that stated employers who opted-out of workers’ comp were allowed to dictate “covered injuries, medical management, dispute resolution or other process, funding, [and] notices or penalties.”
In response to her claim denial, Vasquez quickly appealed her case to the Workers’ Compensation Commission who ruled that the opt-out clause of the Act was unconstitutional. Dillard’s Inc. then filed an appeal to the Oklahoma Supreme Court which agreed with the Commission’s ruling.
Special Law Unfair
The Oklahoma Supreme Court agreed that the “special law” that permitted the option for employers to opt-out of workers’ compensation subjected some workers who were injured at work to unfair treatment. The result of opt-out choices for employers is that workers simply do not have the same rights to compensation that would otherwise be covered under workers’ compensation law. For example, compensation programs for companies that have opted-out of workers’ comp may limit the time to report an injury to the end of a worker’s shift, instead of a 30 day period provided by the state workers’ comp system. Additionally, by opting out companies may also limit what is considered a work-related injury and dictate how long certain people with injuries will receive compensation.
Bob Burke, the attorney who represented Vasquez, stated, “Dillard’s plan contained 54 different ‘gutted’ benefit provisions when compared to to the regular workers’ compensation law. Dillard’s workers were not covered for tornado injuries; carpal tunnel; injuries to part of the body which had been injured before; or exposure to mold, chemicals, asbestos, or communicable diseases — all those injuries would have been covered by regular workers’ comp.”
NPR and ProPublica conducted an investigation into the effects of employers who opted-out of workers’ compensation and found that such cases often limited workers’ rights to compensation in work-related injuries. However, and argument still stands for opt-out provisions, according to Bill Minick, whose company PartnerSource has written several compensation plans for companies in Oklahoma. The argument for opt-out options for companies is that it saves time in the claims process and saves money on attorneys’ fees for workers.
Burke disagrees with this argument for opt-out provisions, stating that typical opt-out plans “allows the company to select every doctor and decide every element of medical care, deducts any Social Security benefits from any weekly or permanent disability payments, and forces a unilateral settlement upon the worker.”
In the end, the Oklahoma Supreme Court found that the argument for workers’ compensation opt-out clauses did not involve a legitimate government interest and was amended from the Administrative Workers’ Compensation Act. This ruling may have far-reaching effects, considering that similar opt-out provisions have been proposed or drafted in Tennessee, South Carolina, Georgia, Mississippi, West Virginia, Wisconsin and Illinois. Currently, Texas is the only state that has a fully implemented workers’ compensation opt-out option available for employers.
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