Earlier today (September 13, 2016), in Vasquez v. Dillard’s, Inc., 2016 OK 89, in a 7–2 decision, the Supreme Court of Oklahoma, in one of the most important workers’ compensation decisions in memory, held the core provision of the Oklahoma Employee Injury Benefit Act (the state’s Opt Out Law), Okla. Stat. tit. 85A, § 203, creates “impermissible, unequal, disparate treatment of a select group of injured workers” and, therefore, is an unconstitutional special law under the Oklahoma Constitution, art 2, § 59 [Opinion, ¶ 1].
Readers will recall that on February 26, 2016, the state’s Workers’ Compensation Commission found § 203 and 209 unconstitutional on the basis that the law denied equal protection to Oklahoma’s injured workers and denied them the constitutionally protected right of access to the courts (see my earlier post. Citing its own earlier decision in Robinson v. Fairview Fellowship Home for Senior Citizens, Inc., 2016 OK 42, 371 P.3d 477 (see my earlier discussion here), the majority indicated it had a responsibility to address the issue before it.
Opt Out: an Unconstitutional Special Law
Speaking for the majority, Justice Watt observed that Dillard’s had contended the Opt Out law was not a “special” law, since it applied to “all employers,” rather than injured employees. The majority was unconvinced, noting the title of the Act made no mention at all of employers. Instead, it referenced “injured employees.” The majority also cast aside Dillard’s argument that the Opt Out law provided a baseline of “Core Coverage” in § 203(B), guaranteeing individual employees equal treatment, finding that position “incredible” [Opinion, ¶ 20].
The majority stressed that instead of providing employees of qualified plan employers equal rights with those of employees falling within the traditional Workers’ Compensation Act, the “clear, concise, unmistakable, and mandatory language” of the Opt Out law provided that “such employers are not bound by any provision of the Workers’ Compensation Act for the purpose of: defining covered injuries; medical management; dispute resolution or other process; funding; notices; or penalties [Opinion, ¶ 22, emphasis by the majority].
Opt Out Not a Constitutionally Permissible Special Law
The majority also cast aside Dillard’s final contention that even if the Opt Out law was a special law, it was constitutionally permissible because it was substantially and reasonably related to a legitimate government objective. The employer-enumerated goals could not save the law from the constitutional challenge before the court. Citing Maxwell v. Sprint PCS, 2016 OK 41, 369 P.3d 1079, the majority acknowledged that the Legislature had the authority to exclude an entire class of employees from coverage under the workers’ compensation system generally. What it could not do was to exclude one group of claimants from benefits that had been accorded to others. The majority stressed, “No distinctive characteristic exists for the disparate treatment of injured workers simply upon the basis that the employer has opted out of the general workers’ compensation system.”
Opt Out Law’s “Severance” Provision No Help
The majority also held that the suggestion that the Opt Out law could be saved by simply requiring that qualified employers treat their employees exactly as the Administrative Act required would frustrate any rational reason for an employer to go to the trouble of developing a plan mirroring the surviving statutory scheme.
Majority’s Decision Affects Pending Disputes Before the Commission
The majority noted that there were a number of cases currently pending before the Commission that had been stayed because they concerned similar issues to those in the case at bar. The majority said its decision was to be given immediate effect, not only with regard to the current case, but also with regard to all other affected cases before the Commission and in the appellate pipeline.
Justice Winchester, joined by Justice Taylor, dissented, indicating that the majority opinion had emphasized (a) that statutory provisions were presumed constitutional; (b) that the Court’s function was not to correct the Legislature; and (c) that the Court should rule on the narrowest grounds possible. According to Justice Winchester, the majority’s result violated all three. Rather than strike the law, the dissent contended the Commission should have made an inquiry into whether Vasquez had been denied the benefits she would otherwise have received under the general workers’ compensation law. The dissent also said that all new legislation needs “fine-tuning, either by legislative amendment or court direction” [Dissent, ¶ 5]. Employers whose plans had met or exceeded the provisions of the general workers’ compensation law would never get the opportunity to have the validity of their plans tested.