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Disability benefit ruling could mark the start of workers comp reform challenges

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An Oklahoma Supreme Court ruling that found deferring workers compensation benefits for injured employees who return to work is unconstitutional likely marks the beginning of more rulings that could alter workers comp reforms passed by Oklahoma in 2013, experts say.

“The speculation is that we are not at the end of those decisions, and Oklahoma may be readdressing a lot of issues that they thought they had addressed in 2013,” said Trey Gillespie, Austin, Texas-based senior workers compensation director at the Property Casualty Insurers Association of America.

The state high court said on Tuesday in Maxwell vs. Sprint PCS that it's unfair that injured workers who return to work are denied permanent partial disability benefits under Oklahoma's workers comp law, effectively treating them differently from injured workers who are unable to come back to their jobs. That provision of the state workers comp law has created a “subclass” of workers who forfeit their PPD workers comp benefits when returning to work, the court's ruling said.

The ruling was based on the case of Theresa Maxwell, who injured her knee in 2014 while working for Overland Park, Kansas-based Sprint PCS and received workers comp for her injury, according to court records.

She filed for PPD benefits after returning to work at Sprint, but an administrative law judge and the Oklahoma Workers' Compensation Commission ruled that Ms. Maxwell's PPD benefits should be deferred from the time that she returned to her job.

The Oklahoma Supreme Court voted 7-2 to reverse the workers comp commission's ruling on Tuesday. The high court found that PPD deferral rules under Oklahoma workers comp law relegated injured employees who return to work to an unfair “subclass” of workers, and therefore constituted an unconstitutional denial of due process.

The state supreme court's ruling “casts serious doubt” on the way that Oklahoma determines PPD benefits for injured workers, said Bob Burke, an Oklahoma City-based workers comp attorney who has been involved in various lawsuits challenging workers comp reforms passed by Oklahoma legislators in 2013.

Mr. Burke said in an emailed statement that he believes the recent ruling contained “several far-reaching holdings” that could impact other workers comp lawsuits moving forward in Oklahoma.

The Oklahoma Workers' Compensation Commission ruled in March that a state law allowing employers to opt out of the traditional workers comp system is unconstitutional. That ruling has been appealed by Dillard's Inc. to the state supreme court.

Also, attorneys representing injured workers, including Mr. Burke, have petitioned the Oklahoma Supreme Court to declare the state workers comp opt-out law unconstitutional because they say it denies due process to injured workers.

Fred Bosse, Austin, Texas-based vice president for state affairs in the Southwest region with the American Insurance Association, said Tuesday's ruling shows that Oklahoma's recent workers comp reforms are a “work in progress.”

“We anticipate that, eventually, the legislature will be called upon to address any constitutional deficiencies identified by the Oklahoma Supreme Court,” he said in an email.