The end of the ‘grand bargain’ on workers’ compensation? (Steve Lewis Capitol Update)

Photo by Saad Akhtar.
Photo by Saad Akhtar.

Steve Lewis served as Speaker of the Oklahoma House of Representatives from 1989-1991. He currently practices law in Tulsa and represents clients at the Capitol. You can sign up on his website to receive the Capitol Updates newsletter by email.

An important and interesting court ruling came out of the District Court in Pottawatomie County last week that will likely play into some issues in the next legislative session.  Judge John Canavan, a seasoned attorney and trial judge, ruled that an injured worker has the right to sue his employer for damages if an on-the-job injury was foreseeable.  That’s because the new workers’ compensation law passed in 2013 had a provision saying that to recover under workers’ compensation the injury to the worker must have been unforeseeable.  The judge ruled that the injury in the case was foreseeable. Since the injured worker cannot receive workers’ compensation for his injury Judge Canavan said he must be allowed to litigate whether he should be compensated in a lawsuit against the employer in district court.

Near the turn of the 19th century workers’ compensation was added to the social compact in every state as the result of what became known as the “grand bargain.”  Under the grand bargain injured workers gave up the right to sue their employers for pain and suffering and agreed to accept a certain but lesser amount for lost wages and medical benefits.  Employers gave up the right to claim the injury was due to the worker’s negligence and avoid all liability for the injury. 

The 2013 worker’s compensation law opened a can of worms by eliminating “foreseeable” injuries from workers’ compensation.  Many jobs carry an element of risk, but the job has to get done even when it’s foreseeable that some workers will get hurt.  The judge ruled that since the legislature closed the door on workers’ compensation, the door to filing a lawsuit is opened.

 The 2013 law is a bad deal for both employers and employees.  Some may have thought they could take away workers’ compensation and at the same time leave the employee with no remedy.  The court said no, so now an employer could suffer a huge judgment against it if there’s an egregious injury or death.  But there’s no free ride for workers.  In District Court the worker will have to prove that his injury was the employer’s fault, not his, or he’ll get nothing. 

All this was argued in the halls of the legislature in 2013.  But just talking (or reading) about it is enough to make anyone’s head hurt.  It’s easier to sell the idea that the new law will make Oklahoma more “business friendly.”  How will this play into next session?  The issue will ultimately be decided by the Oklahoma Supreme Court.  If the Court upholds Judge Canavan the argument will be that the justices are not business friendly.  Proposals will be made to change the judicial selection process to get more business friendly judges.  The Supreme Court may not decide the case before next session is over, but just the fact that it could be will bring calls for a business friendly court.      


Steve Lewis served as Speaker of the Oklahoma House of Representatives from 1989-1990. He currently practices law in Tulsa and represents clients at the Capitol.

3 thoughts on “The end of the ‘grand bargain’ on workers’ compensation? (Steve Lewis Capitol Update)

  1. The 2013 law is another attempt to squash the hard working lower/middle class workers. I think it’s awful to not take care of an injured worker. It’s like telling someone you’re “disposable.” Think of our police and firefighters, who put their life on the line everyday. It’s rediculious, to tell an employee it was “expected”or “foreseen”. People are going to have to stand up and fight for what’s right. This shouldn’t surprise us I guess, as that’s what our Veterans have had to. It should be a given, we need to take care of those who protect and serve us!

  2. My wife was injured in a situation where other employees had been injured before making her injury “foreseeable.” After our experiences with “worker’s comp”, we would have been delighted to be able to directly sue the company.

  3. The District Court ruling has the potential to create problems in the workers’ compensation insurance market. Employers that are not exempt from the Administrative Workers’ Compensation Act are required to buy insurance to fund their obligations under the act. Workers’ compensation policies have two parts. The first part covers claims brought under a state’s workers’ compensation law. The second part, Employer’s Liability, covers claims for injuries that fall outside of the exclusive remedy provision of the state workers’ compensation law. Most states strictly limit the types of claims that fall outside of exclusive remedy. For example, Oklahoma’s Administrative Workers’ Compensation Act contains, among other things, an exception for intentional torts by the employer from exclusive remedy. The court’s ruling has almost done away with exclusive remedy. Employees can now sue the employer for damages resulting from just about any workplace injury. This brings about the possibility that more claims will fall under the Employer’s Liability portion of the insurance policy.

    Employer’s Liability claims should be and historically have been extremely rare. So the premium charged for the Employer’s Liability part of the policy is small compared to the portion of the premium charged for the Workers’ Compensation part of the policy. Insurers may decide that the rates in Oklahoma are not adequate if claims are shifting from the Workers’ Compensation part of the policy to the Employer’s Liability part of the policy. Most insurance companies will not want to wait and see if the rates are adequate. Quick rate changes are not practical because rates are based on prior experience and there has been comparable experience on which to base rates. The safest move for an insurance company is to stop writing workers’ compensation insurance in Oklahoma. We may see this happen if the ruling is not reversed by the Supreme Court or corrected by the legislature soon.

    Employers that have exempted themselves from the Administrative Workers’ Compensation Act by satisfying the requirements of the Oklahoma Employee Injury Benefit Act should not be affected by the court’s decision. Many of the provisions of the Administrative Workers’ Compensation Act, such as the benefits to be provided and exclusive remedy, continue to apply. But it appears that the written benefit plan required by the Oklahoma Employee Benefit Act does not have to incorporate the Administrative Workers’ Compensation Act’s definition of “Compensable Injury” that figures into the court’s ruling.

    Bob Moody, ARM
    Smith-Moody Risk Consulting LLC

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