Sunny Greetings from Isle of Palms, SC

Earlier today I had the pleasure of speaking at a “Spring Seminar” sponsored by Injured Workers’ Advocates, a group of South Carolina claimants’ attorneys who have gathered at the Isle of Palms resort near Charleston, SC for a few days of fun, sun, and CLE. Particularly today, the weather is exquisite. And while folks in the Palmetto State can’t necessarily match the fervor for college basketball enjoyed by my neighbors who live along Tobacco Road (Raleigh-Durham-Chapel Hill)—Go Devils!—there’s still plenty of excitement here related to yesterday’s bracket breakers in the 2015 men’s NCAA basketball tournament.

I spoke this morning on “opt outs,” providing an overview of the 2013 Oklahoma legislation that became effective February 1, 2014, and the somewhat similar/somewhat different bill that is currently pending in the Tennessee legislature. Rumor has it that additional opt out bills have been prepared and may soon be introduced in both North and South Carolina. I haven’t seen either proposal yet, so I’ll reserve judgment for if and when the bills are actually introduced.

Devil’s in the Details

As I indicated earlier today, when it comes to opt outs, the devil’s always in the details. While the Oklahoma law and the Tennessee bill give lip service to providing the same levels of benefits to employees whether the employer remains inside the traditional workers’ compensation system or opts out of it, the reality is that, at least in Oklahoma so far, the two systems are quite different. If an Oklahoma employer is still inside the system, the injured employee has one year to file a claim. As employees of Dillards, Inc., an opt out employer, have learned, they must file their claims by the end of the work shift. For employees who work for employers who remain in the system, any dispute is heard by a hearing officer, one or more commissioners and finally determined through the state court system. For the Dillards employee, factual determinations are made by a cadre of persons appointed by the employer pursuant to the benefit plan. Once these persons find the facts; those facts are essentially not appealable at all. To the extent that an injured employee feels the plan administrator or committee has made an incorrect legal determination, the employee must file a civil action in federal district court. in the 1920s, you could have get any color you wanted in a Ford automobile, as long as it was black. In many of the Oklahoma opt out arrangements, the injured employee can be treated by any physician he or she wants as long as it’s the one chosen by the employer.

False Zero-Sum Discussion

What concerns me most is the fact that the entire opt out discussion has introduced an unnecessary element into an already contentious workers’ compensation atmosphere. The states seem stuck in a zero-sum discussion: if Texas wins, then of course Oklahoma loses. It treats workers’ compensation as a set of false choices. Is there no other choice than to wrestle control of the system from a state agency and place it in the hands of one of the parties to the original “grand bargain” and, in doing so, remove any vestige of equilibrium? Do the states really feel this is the key to staying competitive? If the result of opt outs is to irretrievably remove the determination of workers’ compensation disputes from state agencies and the state judiciary and push them into the federal courts, will the state’s citizens be better served? As I indicated in a post following the initial defeat of the Oklahoma opt out scheme in 2012, who is really opting out here, a group of employers, or a broad swath of state legislators?