Workers’ Comp: Court Denies Moving Case To Federal Court

By Joshua Harlow, Association For Responsible Alternatives To Workers Compensation (ARAWC):

Late Wednesday, an Oklahoma US District Court issued a procedural ruling that an “Oklahoma Option” benefit lawsuit could not be removed from the state court of competent jurisdiction (the Oklahoma Workers’ Compensation Commission) to federal district court.  The Option is an alternative to traditional workers’ compensation.  It requires qualified employers to implement an injury benefit plan that provides essentially the same benefits as Oklahoma workers’ compensation.  However, 59 employers have adopted such plans so far because the Option supports more employer communication with workers and more accountability, commonly achieving much better medical outcomes, as well as cost savings.  A similar approach has been active in Texas for decades, with injury benefit plans covering one-third of all Texas employers and 1.5 million Texas workers.

In Vasquez v Dillards, Inc., District Judge Friot concluded that the Oklahoma Employee Injury Benefit Act is part of Oklahoma’s statutory scheme governing workers’ compensation.  He noted that because federal law prevents the removal of claims to federal court that “arise under workers’ compensation laws”, the case should be remanded back to the Oklahoma Workers’ Compensation Commission.

Bill Minick, President of PartnerSource and a leading authority on such programs said, “This is purely a procedural ruling and not a substantive ruling on the case. Oklahoma Option plans are employee benefit plans voluntarily sponsored by private employers.  The court noted that Dillard’s Oklahoma Option benefit plan is ‘presumed to be an ERISA Plan’.  The Court did not make any further substantive ruling on the applicability of ERISA to Oklahoma Option plans or on the merits of the benefit claim.”

Minick continued with his analysis, “The Dillard’s injury benefit plan is subject to specific state laws that the Oklahoma Legislature decided must be satisfied in order for an employer to be exempt from the Oklahoma Administrative Workers’ Compensation Act.  This ruling is consistent with one, but inconsistent with many other federal court decisions involving injury benefit plans.  I believe the structure of the Oklahoma statute, in which the Legislature adopted workers’ compensation reforms and the Option in a single bill and title, has created some challenges in understanding.  The good news is that we are seeing the Oklahoma Option work extraordinarily well over the past 15 months, with injured workers recovering and returning to work faster.  Employers electing the Option are also enjoying substantial savings that make Oklahoma a better place to do business.  Gratefully, skirmishes like this are much more rare than workers’ compensation claim disputes, and are just a normal part of implementing a new law that is putting many trial lawyers on the sidelines.”