On May 6, 2013, Governor Mary Fallin signed into law Senate Bill 1062. The new law replaces Oklahoma’s adversarial court-based workers’ compensation system with an administrative system and provides an opportunity for employers to opt-out of the administrative system. The new law applies to on-the-job injury claims that arise on or after February 1, 2014. Claims filed prior to February 1, 2014 will be determined based on the current law by the newly-formed Workers’ Compensation Court of Existing Claims.
Under the new law, the current workers’ compensation court will be replaced by an administrative system governed by a three-member Commission. The Commission will have the authority to hear claims, as well as to select administrative law judges to conduct hearings and determine an employee’s rights to benefits following an on-the-job accident, subject to appeal to the Commission. An employer will be allowed to opt-out of the new administrative system as long as the employer has a written and approved benefit plan that provides the same or greater benefits for occupational injuries as those specified in the new law. Employers can also require employees to settle workers’ compensation claims and disputes through arbitration.
The impact of the new law on workers’ compensation retaliation claims is especially important for Oklahoma employers. The new retaliation provision includes substantially the same list of prohibited conduct as under the current law. Specifically, employers may not discriminate or retaliate against an employee when the employee has in good faith filed a claim, retained a lawyer for representation, instituted a workers’ compensation proceeding, or testified or is about to testify in any workers’ compensation proceeding. Additionally, employers may not terminate an employee during a period of temporary total disability (“TTD”) for the sole reason of being absent from work or to avoid payment of TTD benefits to the injured employee.
Similar to the current law, the new law provides that employers are not required to rehire or retain an employee who, after TTD benefits have been exhausted, is determined by a physician to be physically unable to perform his or her assigned duties. New language has been added stating that an employee is not required to be rehired or retained if that employee’s position is “no longer available.” It is unclear how this provision will be interpreted, and it is sure to spawn litigation.
There are significant changes to the damages available for a workers’ compensation retaliation claim under the new law. The current law provides for back pay damages and compensatory damages for emotional distress and punitive damages capped at $100,000. However, the new law states that employees are entitled to back pay of up to a maximum of $100,000, with no specific mention of compensatory or punitive damages. Presumably, it was the Legislature’s intent to eliminate the availability of compensatory and punitive damages in retaliation claims. Further, the new law does not expressly provide for reinstatement. Thus, it appears that reinstatement or front pay in lieu of reinstatement is no longer available under the new law. These issues will surely be litigated once the new law takes effect.
Additionally, the new law provides that a prevailing party shall be entitled to recover costs and a reasonable attorney fee. While at first glance this would seem to be a good change for employers, it is uncertain how the prevailing party award will be interpreted. Specifically, it is uncertain whether the prevailing defendant will be entitled to costs and attorney fees in all cases or whether the provision will be interpreted similar to federal attorney fee statutes, which rarely award attorney fees in favor of a prevailing defendant.
Under the new statute, jurisdiction for workers’ compensation retaliation claims rests exclusively with the Workers’ Compensation Commission. Employees no longer have the right to initially file an action in the district court. The retaliation provisions do not specify appeal rights or set forth a procedure for appealing the decision of the Commission; however, the new law sets forth the general appeal procedure for injury claims, allowing appeals to the Supreme Court of Oklahoma. It is unclear whether retaliation claims are subject to this appeal procedure as well. Further, there are questions regarding what procedural rules, discovery rules, and evidence rules will apply and whether more than 35 years of case law will apply.
In short, it remains to be seen whether the new administrative system will be advantageous for employers defending workers’ compensation retaliation claims. One thought is that the process will now be less predictable and certain for both employees and employers. Another thought is that employees will be dissuaded from filing workers’ compensation retaliation claims due to the presumably limited damages available. However, we may see an increase in the filing of retaliation cases due to the availability of attorney fees. There remain many unanswered questions that will need to be addressed, and challenges to the constitutionality of the law are anticipated.
We will continue to monitor developments from the Oklahoma legislature. If you have any questions or would like further information, please contact our labor and employment law group.