The Oklahoma Supreme Court on Monday upheld the constitutionality of Oklahoma's new workers' compensation law, sparking jubilation among many Oklahoma government and business leaders.
“The Supreme Court acted properly today in upholding the constitutionality of Oklahoma's workers' compensation reforms,” Gov. Mary Fallin said. “I am excited the state can move forward with improvements that will help to encourage job growth and investment in Oklahoma while delivering on a more efficient, effective and fairer workers' compensation process.”
Fred Morgan, president of The State Chamber of Oklahoma, called Monday's ruling “a big victory.”
“Today's decision is obviously very good news for the business community,” Morgan said. “We hope the new law can be implemented promptly.”
The Supreme Court ruled that the new law does not violate a constitutional prohibition against covering multiple subjects in a single bill.
However, three justices did express concerns about opt-out provisions in the law. They indicated those opt-out provisions may not pass constitutional muster if future constitutional challenges are made once administrative rules have been developed and implemented.
Despite those cautions, backers of the new law clearly were thrilled by Monday's ruling.
“These reforms create a new and modern system that protects workers and is fair to Oklahoma businesses,” said House Speaker T.W. Shannon, R-Lawton. “The archaic and confrontational system this state has relied on in the past did little for workers, hurt business and only benefited the handful that profited from such a dysfunctional system. This ruling ensures Oklahoma is moving in the right direction.”
The new law phases out the state's judicial workers' compensation system and replaces it with an administrative system which will go into effect in February of 2014.
The new law also authorizes employers to opt out of the state system as long as they provide equivalent benefits to injured workers.
Opponents challenged the law on multiple grounds, but the Supreme Court's majority opinion focused on the allegation that the new law could violate a constitutional prohibition against covering multiple subjects in a single bill — a practice commonly referred to as logrolling.
The court rejected that claim.
“As all sections of the new law are interrelated and refer to a single subject, workers' compensation or the manner in which employees may ensure protection against work-related injuries, we disagree with the constitutional challenge to the Administrative Act on grounds of logrolling,” justices wrote in the majority opinion.
In a separate concurring opinion, Justice Douglas L. Combs agreed the law didn't violate the single-subject rule but said provisions established for employers who opt out of the administrative system “do not provide adequate due process protections” for injured employees.
“Right out of the gate, claimants whose employers have opted out receive a lower level of due process protection than claimants whose employers chose not to, and that decision is not made by the claimant, but by the employer,” he wrote.
Vice-Chief Justice John F. Reif expressed similar concerns in an opinion that dissented from a portion of the court's majority opinion.
“A fundamental element of due process is a fair and impartial trial,” he wrote. “Under the opt out system, the employer and any ‘appeals' committee chosen by the employer cannot satisfy the impartiality requirement of due process, because the employer has a direct pecuniary interest in the decision of a claim.”
Several elected state officials and lawmakers issued news releases Monday praising the court's decision upholding the constitutionality of the new law.
“The decision by the court is a victory for the reform of workers' compensation in Oklahoma and those who desired to see our antiquated system changed,” Attorney General Scott Pruitt said. “I am thankful that our office was able to play a significant part in upholding the changes made by the Legislature by successfully defending the constitutionality of the law.”
Oklahoma Insurance Commissioner John D. Doak said the ruling is “great news” for economic development and jobs in the state of Oklahoma.
“Oklahoma currently has one of the highest average costs of workers' compensation benefits in the nation, which has had an enormous impact on our state economy,” he said. “The new law has already shown significant workers' compensation insurance rate decreases across the state and will continue to bring positive change to our state by ensuring Oklahoma is one of the best places to do business.”
Senate President Pro Tempore Brian Bingman, R-Sapulpa, said he was confident from the beginning that the law wasconstitutional.
“With this ruling, the creation of the new state Workers' Compensation Commission can continue without delay to ensure a seamless transition for businesses and employees alike,” he said.