Deeply Divided Oklahoma High Court Says Reduction of PPD Allowed Where Employer Paid Full Wages During Police Officer’s Disability Period

In a deeply divided (5-4) decision, the Supreme Court of Oklahoma recently held that a provision in the state’s workers’ compensation law [Okla. Stat. tit. 85A, § 89] allowing an employer—in this case a municipality—to receive a deduction to an injured police officer’s award of permanent partial disability based upon amounts paid during her temporary total disability period in excess of the temporary disability maximum is constitutional [Braitsch v. City of Tulsa, 2018 OK 100, 2018 Okla. LEXIS 109 (Dec. 18, 2018)]. The officer had argued that the statute violated her right to due process of law and, alternatively, that the state was a “special law” that could not stand a constitutional examination.

Background

The police officer, Braitsch, injured her right arm while employed by the City of Tulsa and after the effective date of the Administrative Workers’ Compensation Act (AWCA), 85A O.S. §§ 1-125. Through her collective bargaining agreement, Braitsch was paid her full salary in lieu of temporary total disability (TTD) payments. She was later awarded permanent partial disability (PPD) benefits which were reduced by the amount her full salary payments were in excess of TTD benefits pursuant to 85A O.S. § 89. The ALJ considered, but denied Braitsch ’s constitutional challenges and the Workers’ Compensation Commission en banc affirmed the ALJ’s decision. The appeal before the state Supreme Court concerned only the asserted constitutional challenges.

Due Process Claim

The majority utilized a two-prong test to determine whether Braitsch had been denied procedural due process:

  1. Whether Braitsch possessed a protected interest to which due process protection applied; and
  2. Whether she had been afforded an appropriate level of process.

Braitsch had claimed she had a protected interest in her collective bargaining agreement to receive full wages during the TTD period and she had a protected interest in her PPD award. The majority indicated that in as much as Braitsch had been paid her full wages during the TTD period, she could not successfully argue that there had been a taking of property promised under her collective bargaining agreement.

As to the PPD award, the majority agreed that Braitsch had been vested with a property interest worthy of the protections of due process. The majority added that the PPD award had been calculated by the statutes in place at the time of Braitsch’s injury, including the deduction pursuant to 85A O.S. § 89. This was not, therefore, a case where PPD was awarded and then later reduced or taken away without a hearing.

The majority observed that Braitsch had not argued she received an unfair hearing or that the ALJ was partial. It noted that several hearings had taken place and Braitsch had been represented by counsel. The majority held, therefore, that Braitsch had been afforded an appropriate level of process and found no evidence to support Braitsch’s claim that she incurred an unconstitutional taking of property without procedural due process.

Substantive Due Process

That still left, of course, Braitsch’s substantive due process claim. The majority acknowledged that the substantive component of the due process clause barred certain governmental action despite the adequacy of procedural protections provided. Generally speaking, in determining whether an action violated substantive rights, a balance was required between the right protected and the demands of society. The majority stressed that by receiving her full wages during her temporary total disability period, Braitsch received more than what other employees would receive who are only awarded TTD benefits.

The deduction, therefore, brought parity to workers’ compensation awards by providing, in the end, relatively the same amount of benefits to all injured workers. Accordingly, the majority held the state interest articulated in support of 85A O.S. § 89 was legitimate: ensuring fairness, efficiency, objectivity, predictability, and uniformity in the awarding of PPD benefits. Braitsch had not established her right to substantive due process was violated by the provisions of 85A O.S. § 89.

As to Braitsch’s special law contention, the majority allowed that the vice of special acts is that they create preferences and establish inequality. Here, however, no subclass was created and members of the affected classes were treated the same. The majority held, therefore, that 85A O.S. § 89 was a general law and not an impermissible special law special law in violation of the Oklahoma Constitution.

Dissent

In the dissent, Vice Chief Justice Gurich argued that Braitsch lost the benefit of her bargained for contractual protections in addition to those allowed to her under under the workers’ compensation laws. Under the facts, said Justice Gurich, in reducing the amount of money that Braitsch received while off work, the employer had “unilaterally changed the terms of the [collective bargaining agreement]. The dissent also found § 89 constitutionally offensive in that it was a special law, observing that a somewhat similar version of the statute had been declared unconstitutional in Grant v. Goodyear Tire & Rubber Co., 2000 OK 41, 5 P.3d 594. The dissent did allow that the current version of the statute appeared to have corrected the prior special law constitutional infirmities by making it applicable to all employers and insurers. The dissent said that, in truth, however, it would still only benefit self-insured employers who were contractually bound to pay higher wages.

Comment

I’m curious about readers’ views. I’m a bit torn on this one. While I agree that statutes are presumptively constitutional, I also think the dissent makes a compelling argument that the effect of this statute is to deprive the police officer of bargained for benefits. I do think part of the dissent’s argument is off base, I.e., unfair: the employer here didn’t “unilaterally” change the CBA, as argued in the dissenting opinion. The dissent’s underlying point remains, however. This wasn’t a situation in which the employer paid full lost wages during the PTD period on its own. It paid them only because it was required to do so. Allowing the employer to reduce what it had already fully consented to do—pay full wages—seems to be an unconstitutional taking. I’m, of course, not a constitutional law expert. What say ye?

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