Oklahoma Supreme Court Finds Clause in Workers' Compensation Act Unconstitutional
The Oklahoma Supreme Court ruled a key clause of a worker’s compensation reform law unconstitutional. The provision allows employers to opt-out of traditional workers compensation insurance if they provide a separate plan for their employees.
The Case of Vasquez v. Dillard’s
In Vasquez v. Dillard’s, Inc., Vasquez injured her neck and shoulder in a work-related injury. She received initial compensation, but was later denied benefits when the company claimed her injury was part of a preexisting condition.
While Vasquez’s injury should have been covered under the Administrative Workers’ Compensation Act, Dillard’s denied her claim because employers who opt-out of state workers compensation are allowed to select which types of injuries are covered, the length of time, and which doctors injured employees can see.
Vasquez appealed to the Workers’ Compensation Commission, who ruled the opt-out clause was unconstitutional. Dillard’s then filed an appeal with the Oklahoma Supreme court which sided with the state’s ruling.
The Outcome of the Opt-Out Act
The Oklahoma Supreme Court ruled “the Opt-Out Act does not guarantee members of the subject class, all employees, the same rights when a work-related injury occurs. Rather, it provides employers the authority to single out their injured employees for inequitable treatment.”
In fact, the court found in many cases, workers did not have the same access to benefits and coverage that are covered under workers compensation laws, such as a time limit for reporting an injury, receiving benefits, and even a more narrowed definition of what is considered a work-related injury.
The ruling will likely have a wide-ranging impact as several other states have opt-out provisions, including Tennessee, Illinois, and Wisconsin. In Texas, the opt-out provision is fully implemented.