Last Friday, an Oklahoma state commission dealt a serious blow to efforts to further weaken protections for workers hurt on the job. Yes, you heard that right--an Oklahoma commission put its foot down to halt an erosion of workers' rights.
People get hurt at work. In fact, more than three million workers get hurt at work, and 4,500 die, every year. These injuries can be prevented, but when they are not, an old social insurance program--workers' compensation--kicks in. These state-run programs are a no-fault system to deal with worker injuries. The basic principle of workers' compensation is that workers give up their right to sue their employer if they are injured, and in exchange, companies will buy insurance to provide medical treatment, rehabilitation, reimbursement for lost wages, and death benefits. It was called a "grand bargain" when it was set up more than 100 years ago.
In the past 10 years, however, big business has successfully chipped away at these programs, state by state, making it harder for injured workers to qualify. Nowhere has the drive to weaken injured workers' rights been as great as in Oklahoma, which passed a law several few years ago allowing employers to "opt out" of the workers' compensation system and mandated benefits if they set up their own plan that is equal to or better than those established by the state.
These "opt out" plans were marketed by a Dallas-based attorney, Bill Minick, who, according to a Pro Publica/NPR expose last year, co-wrote Oklahoma's Opt-Out Act, manages 90 percent of the new opt-out plans in that state, and whose wife is the medical director charged with picking doctors and reviewing whether injuries are work related. Minick claims he will save employers lots of money. Well, the decision by the Oklahoma Workers' Compensation Commission makes clear how he saves employers money: His plans are illegal.
Last Friday, in Vasquez v. Dillards, the first case to be appealed under the Opt-Out Act, the Oklahoma Workers' Compensation Commission found those plans to be unconstitutional. The commission wrote: "Although at first blush it appears that the Opt-Out Act requires that injured workers under an authorized benefit plan must be afforded benefits equal to or better than those under the Administrative Workers' Compensation Act, this is decidedly not so. . . . The appearance of equal treatment under the dual system is like a water mirage on the highway that disappears upon closer inspection."
Indeed, upon closer inspection, the commission found that although the plans claim to pay the same benefits that state-mandated plans would pay, these opt-out plans define work injuries differently. In fact, the Opt-Out Act allowed employers to create their own definition of "injury"--and of course they did, eliminating from compensation many work injuries, such as damage or harm arising from asbestos exposure.
That is the crux of the decision. Under the state workers' comp system, the legislature defines covered injuries for all workers in the state. Under the Opt-Out Act, however, the commission found that the employers acts as the "legislature and defines 'injury' for its injured workers." This created unequal treatment for a select group of injured workers--those in the opt-out plans--rendering such plans unconstitutional.
Bob Burke, the attorney who argued the case on behalf of Jonnie Yvonne Vasquez, who suffered neck and shoulder injuries while working at Dillards but was denied benefits, said it best: "This decision assures that all Oklahoma men and women who are injured on the job are treated equally and will be allowed to tell their story to a judge. The opt-out plans put all power in the hands of the employer, with no independent review ever of the employer's decision. The employer under such a plan decides what constitutes an injury, has total control over the doctor and hospital that an injured worker goes to, and can force a settlement at the end of the case. If the worker does not accept the settlement, all benefits are terminated."
The truth about workers' compensation is that it's already a weak system. Changes over the past decade in programs around the country have made it harder for injured workers to receive full benefits, which are paltry even when awarded. An increasing number of studies confirm that only a fraction of injured workers receive any workers' compensation benefits. Studies have found that fewer than 40 percent of eligible workers apply for workers' compensation benefits at all. And for low-wage workers, many face additional barriers to filing, including worry about retaliation for reporting a job injury and requesting medical care. A landmark study by NELP and partner organizations of more than 4,000 low-wage workers in Chicago, Los Angeles, and New York found that among those workers experiencing a serious injury on the job, fewer than 1 in 10 (eight percent) filed for workers' compensation benefits. The truth is that the costs of workplace injuries has shifted to the worker, their families, and the taxpayer-funded social safety net.
The Oklahoma decision will be appealed by the industry. But employers and legislatures in other states that are considering introducing similar laws should take note: Your plans have been unmasked.
Deborah Berkowitz is a senior fellow for worker safety and health with the National Employment Law Project and formerly a senior official with the U.S. Occupational Safety and Health Administration.