Oklahoma State Capitol

Oklahoma Opts Out of Opt Out

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Oklahoma State CapitolBy a wide 7-2 majority decision, the Oklahoma Supreme Court has opted out of “Opt Out.”  (Vasquez v. Dillard’s Inc., 2016 OK 114, 810) The Supreme Court’s decision unequivocally holds that the Employee Injury Benefit Act (Opt Out Act), which gave Oklahoma employers the option to “opt out” of the state Workers’ Compensation Act, is unconstitutional.  “We hold that the Opt Out Act is an unconstitutional special law within the meaning of the Oklahoma Constitution, Article 5, Sect. 59, creating an impermissible select group of employees seeking compensation for work-related injuries for disparate treatment.”

The Court issued four separate decisions with Judge J. Watt writing for the majority with two separate, concurring decisions by Judges Combs and Gurich with Judge Winchester writing for the dissent.

Importantly, the Court held that the Opt Out Act’s specific language which allowed Employers to bypass the the provisions of the State Workers’ Compensation Act “for the purpose of: defining covered injuries; medical management; dispute resolution or other process; funding; notices; or penalties” created two sets of disparate sets of employees.  Further, that because Employers were free to create their own plans, an injured worker would have “no protection to the coverage, process, or procedure afforded their fellow employees falling under the Administrative Workers’ Compensation Act.”  Accordingly, this “dual system” which creates “impermissible, unequal and disparate treatment of a select group of injured workers” is unconstitutional.

After the passing of Oklahoma’s Opt Out Act in 2014, similar Opt Out bills began popping up in states across the country.  Two bills are currently on hold in our neighboring states of South Carolina and Tennessee.   However, with criticism of this type of dual scheme rising, in part due to critical reporting by National Public Radio and ProPublica Inc., the Opt Out movement has slowed.  Now with the the Oklahoma Supreme Court clearly weighing in on the issue, Opt Out, at least in its current formulation, may be finished.

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