March 3, 2016
The Pretzel Logic on Oklahoma Option
The Oklahoma Option ruling means employers considering locating operations there should sit on the sidelines and wait for clarity.
As a veteran of the worker’s compensation claims trenches, I saw first-hand how the expensive nature of the system drove employers out of business. It sad to see businesses go belly-up, and it was equally sad for the workers who were suddenly unemployed.
It was definitely a case of lose-lose.
One way to combat the high costs of workers’ compensation was to opt out of the traditionally expensive system in states that allowed it. By opting out, employers were forced to be more engaged in the administration of their program and focus more on the outcome.
The result was a less expensive system, providing quality benefits to the injured workers and improving the overall outcome.
Oklahoma was one of the states that seemed to have found the right mix. So I was quite dismayed to learn of the recent decision by the Oklahoma Workers’ Compensation Commission (WCC).
The case, Vasquez v. Dillard’s Inc., involved a worker for Dillard’s who was denied benefits after a work injury that was determined to be an aggravation of a pre-existing injury.
The WCC declared the opt-out portion of the workers’ compensation system unconstitutional because they felt it created a dual system where the injured worker is treated differently.
The most intriguing facet is how the WCC abandoned its traditional administrative role for that of a judiciary in deciding what law is, and is not, constitutional.
That, I suppose, is another story.
However, the WCC completely ignored the already approved opt-out option and remanded the case back to the administrative law judge within the traditional workers’ compensation system.
Not only am I concerned about that sort of pretzel logic, but I also see it as another attack on exclusive remedy.
Right now, my company doesn’t do business in any of the opt-out states. That doesn’t mean we wouldn’t consider it if that option presented itself down the road.
But that is probably on hold as any state considering moving forward with the opt-out system has now been stopped dead in its tracks. Best to sit tight for now.
As for whether the Oklahoma ruling will change what I do with regard to workers’ compensation remains to be seen. As I’m sure many employers will do now, I’ll wait on the sidelines and see how this plays out.
This is basically what I was doing before the Oklahoma ruling … observing from afar to see if the opt-out system (if it came to my states) was not only cost-effective but also fair to the workers.
I would never consider an alternate workers’ compensation system unless I was convinced it offered our injured workers the same, or better, benefits as the traditional system. I would also need to be convinced that it produced better outcomes.