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Be Careful What You Wish For - Part II

September 2014

By: Robert P. Fitz-Patrick

The Administrative Workers' Compensation Act became effective in February, with much positive anticipation from employers. The act is 7 months old, and although claims accumulated slowly at first, filing is picking up speed. However, there remains an aura of uncertainty as to how the act will be implemented. In particular, it remains likely that provisions of it will face constitutional and other challenges, some of which may be successful.

Such challenges have already occurred. The state Supreme Court recently overturned a rule occurring prior to the act's effective date. Indeed, the court all but invited challenges to the act in Coates v Fallin. While determining that the act was properly enacted, members of the court believe that key elements of its opt-out option - which allows employers to self-administer workers' compensation claims - are unconstitutional. Although few employers have so far decided to opt out, that number is increasing, and future judicial treatment of the provision is uncertain.

Another potentially constitutionally inform aspect of the act is that it vests exclusive jurisdiction over the adjudication of claims alleging retailiation against employees with workers' compensation claims in the commission. Historically, such claims were only cognizable in the district courts of Oklahoma, and claimants - and employers - received a trial by jury. Arguments exist that vesting jurisdiction of an employment-related tort claim in the commission denies claimants due process, equal protection and the right to a jury trial.

While claimants will likely challenge this portion of the act, employer's workers' compensation insurance - in front of the commission inures to their benefit. It won't be difficult for a claimant to add a retaliation claim to any injury claim in the relatively informal commission proceedings. Further, it's possible that opt-out employers will face commission proceedings for such claims despite their opt-out status. 

The more formal proceedings in the district courts, including the ability to prevail on dispositive motions for weak retaliation claims, may be optimal for the defense of such claims. The retaliation provision of the act may ultimately create significant exposure to employers.