Oklahoma High Court Won’t Hear Challenge to Work Comp Alternative

April 30, 2015 by

The Oklahoma Supreme Court has declined to take up a case challenging the constitutionality of the portion of the state’s workers’ compensation law that allows companies to employ an alternative to workers’ compensation in providing benefits to injured workers.

The law, which was the result of workers’ comp reform passed by the Oklahoma Legislature and signed by Gov. Mary Fallin in 2013, and went into effect on Feb. 1, 2014, allows some employers to comply with Oklahoma’s workers’ comp requirements by operating their own written benefit plans. The plans under the Oklahoma Employee Injury Benefit Act, sometimes called the Oklahoma Option, must be reviewed and approved by the insurance commissioner.

The law also transformed the workers’ compensation system from a court-based system to an administrative one.

In Judy Pilkington et al. v. State of Oklahoma et al, the plaintiffs argue that the part of the law allowing employers with their own benefit plan to “opt out” of the administrative workers’ comp system is unconstitutional. They claim it denies injured workers due process of law.

Oklahoma Insurance Commissioner John Doak is named as the defendant.

The plaintiffs are Judy Pilkington, who was injured while working for Dillards, and Kim Lee, who was injured while an employee of Swift Transportation Co. of Arizona LLC. Both were injured after the new administrative system went into effect and their claims were denied by their respective companies.

Their complaint stated 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.”

According to court documents, the alternative benefit plans for both companies, which were developed by Dallas-based PartnerSource, a division of Arthur J. Gallagher Risk Management Services Inc., were approved by Commissioner Doak.

Praising the Oklahoma Supreme Court’s decision not to become “embroiled in the latest attack on our state’s innovative workers’ compensation system,” Doak said his agency has “worked to ensure that we are following both the letter and the spirit of the law so that the benefits provided by employers to protect their employees are exactly what our Legislature and Governor developed.”

He added that the insurance department would “continue to implement the law as tasked and appreciate the importance of our role in ensuring that Oklahoma’s employees are provided with the best workers’ compensation protections in the nation.”

The state high court has previously rejected challenges to the 2013 workers’ comp reform, law, including one filed in 2013 by state Sen. Harry Coates, R-Seminole, Rep. Emily Virgin, D-Norman, and the Professional Firefighters of Oklahoma and its president, Rick Beams.

That lawsuit alleged that parts of the law were vague, overly broad and amounted to unconstitutional logrolling, or combining multiple subjects into one bill.

Rejecting that challenge in December 2013, the Oklahmoa Supreme Court held that SB 1062 “is not unconstitutional as a multiple-subject bill.”

Related:

Popular Today