Does Torres Signal How OK High Court Will Decide Constitutionality of Opt Out?

As I reported on Wednesday, in Torres v. Seaboard Foods, LLC, the Supreme Court of Oklahoma struck down a provision in the state’s workers’ compensation law that disqualifies a claimant from recovering for a cumulative trauma (CT) injury unless the claimant has completed at least 180 days of “continuous active employment with the employer.” It did so, in relevant part, on the basis that Okla. Stat. tit. 85A, § 2(14) creates two classes of employees that have been similarly injured and, without appropriate justification, treats them differently. Last Friday, I noted that in Vasquez v. Dillard’s, Inc., a panel of the state’s Workers’ Compensation Commission found two core sections of the Oklahoma Opt Out law unconstitutional.  I noted that the case would almost certainly be reviewed by the state’s high court. The obvious question: Does Torres offer any clues as to how the Court will decide the appeal in Vasquez?

Rational Interest Test

In Torres, the Court provided a relatively concise constitutional law primer on how the legislature had missed the mark with § 2(14). Initially, it recognized that legitimate State interests included legislation to prevent fraud and to advance economic interests. A good portion of the Court’s Torres discussion deals with the use of § 2(14) to prevent fraud and that discussion won’t really be too helpful in Vasquez, since fraud prevention is not at the heart of the Opt Out law.  Rather, the Opt Out law is almost purely an attempt by the legislature to advance the state’s economic interests, a goal that the Torres Court agreed was ordinarily within the province of the legislative branch of government.

The Court indicated that in reviewing legislation advancing economic interests, it had traditionally employed the rational interest test which, of course, gives greater deference to the legislation than if the Court used a strict scrutiny test. Yet, under the rational interest test, the legislature does not have carte blanc authority to enact economic interests legislation. The Torres Court indicated [see ¶25] that there were circumstances in which it would give a less deferential review of legislation that acted to restrict a person’s constitutionally protected liberty interests. Specifically, the Court said that a legislature’s authority to create or abolish a right or benefit did not mean that the legislature had the authority to create an unconstitutional condition related to that right or benefit [see ¶26].

Police Powers Are Broad, But Must Be Reasonably Exercised

The Court continued that while the state’s police power was broad when it came to regulating commercial issues, that power must be reasonably exercised. The Court offered another important point, that the § 5 prohibition against filing a civil action vs. the employer (Oklahoma’s exclusive remedy provision) meant that the State’s classification scheme could not be solely for the purpose of preventing fraudulent claims filed with the Workers’ Compensation Commission.  That would have been accomplished without § 5. Therefore, even in Torres, the regulation of economic affairs, not just the prevention of fraudulent claims, appeared to be at the core of Oklahoma’s workers’ compensation reform legislation.

Problem With Employer’s Economic Argument

The Torres Court continued that, at least in the current case, the employer and amicus curiae had articulated the legitimate State interest test incorrectly. They had argued that if the State had a legitimate interest in lowering costs to employers through legislation, then the statute should be constitutional if employers’ costs are, or potentially will be, decreased in any degree by operation of the statute. That argument—like the employer’s argument related to fraudulent claims—included concepts of overinclusiveness and underinclusiveness that were inappropriate, said the Court [see ¶ 47].

Commentary: 2013 Senate Bill 1062 Impermissibly Creates Two Classes of Employees

As I argued last November, 2013 Senate Bill 1062, which both “reforms” the traditional compulsory portion of Oklahoma’s workers’ compensation laws and also adds the so-called Opt Out provisions for qualifying employers, crafts an Orwellian scheme under which all Oklahoma employees are equal; it’s just that some are more equal than others. For example, as noted in Torres, SB 1062 allows recovery in CT trauma cases for one class—those who have worked for 180 days—and bars, as a matter of law, a similar claim for a worker who left the employment one day earlier. According to Senate Bill 1062, those two classes are actually equal; it’s just that those who are employed on the 181st day are a bit more equal.

Similarly, as noted in Vasquez, SB 1062 sets up multiple sets of additional classes: e.g., on the one hand, employees who suffer a work-related aggravation of a preexisting spine injury and who work for employers covered under the “traditional” workers’ compensation system—who get compensated—and, on the other hand, employees with exactly the same sort of injury, but who work for Dillard’s, who get none. Any why the disparate treatment? Because, through special dispensation, Dillard’s has been allowed to craft its own definition of “injury” that excludes the type actually sustained by its employee.  It is required under SB 1062 to provide provide workers’ compensation benefits to its employees on a basis that is “equal” to those of non-Opt Out employers, even if the benefits really aren’t equal at all.

As noted by the Vasquez panel, under Opt Out rules, the employer who writes the check for benefits also gets to decide what sort of coverage it will provide. To be redundant, all Oklahoma employees are treated equally under Senate Bill 1062; it’s just that some are treated more equally than others. The Vasquez panel put it somewhat similarly:

The appearance of equal treatment under the dual system is like a water mirage on the highway that disappears upon closer inspection.

I’m Not a Constitutional Expert; Tell Me Where I’m Wrong

As I have said on any number of occasions, I am not an expert in Constitutional law. I made a “high-B” in Con Law in the spring of 1975, if my fading memory serves. I could be missing some important issues here. It seems to me, however, that the Torres Court has clearly said that just because the employer can articulate some level of savings under the Opt Out arrangement, it doesn’t follow that the argument is over.  The effect on the employee must also be given important consideration. Or is a mirage of equality sufficient?

The Oklahoma legislature didn’t just say that folks like Vasquez can’t recover workers’ compensation benefits. It said that it gives its legislative proxy to the employer to set the basic rules, as it sees fit. The legislature then adds insult to injury by saying, “Employee, if you don’t like the employer’s rules, it’s tough; nor can you sue your employer in tort,” a right the employee would have had at common law.

Combining the reasoning of the Commission Panel’s decision in Vasquez with that of the high Court in Torres, I can’t see how the Opt Out provisions survive constitutionally. I’ve actually been saying this since SB 1062 was enacted and signed into law.  I fully recognize that the Torres Court did not say that it was sufficient for an aggrieved claimant to show merely that the law engages in overinclusion and underinclusion. But, tell me where I’m wrong. Understand, I didn’t ask you to tell me that I’m dumb—I already know that—instead, tell me why I’m wrong.

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