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Okla.: Navigating Workers’ Compensation Laws and Retaliation Issues

By Allen Hutson  6/18/2014
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The Oklahoma Legislature's newly-enacted amendments to Oklahoma’s workers' compensation system went into effect Feb. 1, 2014, transforming Oklahoma’s workers’ compensation system from a judicial process to an administrative process. The Administrative Workers’ Compensation Act (AWCA), with its wide-sweeping modifications, has been under fire from various organizations across the state since its inception.

To date, the AWCA has survived each constitutional challenge thrown its direction. Although there are surely more constitutional challenges in the future, it is currently the law Oklahoma employers are required to follow.

It should be noted, however, that the AWCA is not retroactive. In other words, if an employee suffered a workplace injury prior to Feb. 1, 2014, invoking the benefits and protections of Oklahoma’s workers’ compensation system, the AWCA’s predecessor, the Oklahoma Workers’ Compensation Act (OWCA), applies, leaving employers in the unenviable position of being well-versed in two distinct acts. Therefore, this article notes major differences between the AWCA and OWCA. The most important thing for employers to remember is that both the AWCA and OWCA are potentially applicable following an employee’s workplace injury—the date of injury being determinative.    

The AWCA, like its predecessor, 85 O.S. § 341, contains an anti-retaliation provision, 85A O.S. § 7, protecting employees that suffer workplace injuries from retaliation. The most significant difference between the anti-retaliation provisions in the AWCA and OWCA is an employee that suffers a workplace injury post-Feb. 1, 2014 can no longer bring a claim for workers’ compensation retaliation in state court, but must instead file an administrative claim of retaliation with the Workers’ Compensation Commission. The other significant difference between the AWCA and OWCA is the potential damages recoverable by the employee. Under the AWCA an injured employee is not entitled to punitive damages or emotional distress damages, and his/her back pay damages are capped at $100,000. Alternatively, under the OWCA, an injured employee is entitled to punitive damages capped at $100,000, emotional distress damages, and unlimited back pay damages.

Other than the foregoing variations, the anti-retaliation provisions in the AWCA and OWCA are substantially similar, prohibiting employers from discharging (retaliating against) an employee who has in good faith initiated a claim under the AWCA, retained a lawyer regarding a claim, instituted a proceeding under the AWCA, or testified, or is about to testify, in a proceeding under the AWCA. Moreover, an employer is prohibited from terminating an employee during a period of temporary total disability solely because the employee is absent from work or to avoid paying temporary total disability benefits. In short, pursuant to the AWCA, it is unlawful for an employer to terminate an employee solely for suffering a workplace injury, filing a workers’ compensation claim, or obtaining temporary total disability benefits.                 

Allegations of retaliation come in many shapes and forms. In its basic form, retaliation can be described as any adverse employment action that was significantly motivated by an employee engaging in a protected activity, e.g., filing a workers’ compensation claim. Classic examples of adverse employment actions include: transfer/reassignment, unequal discipline, reduced pay and/or termination. Conversely, petty slights do not typically qualify as adverse employment actions. For example, ignoring an employee or failing to invite an employee to lunch after the employee filed a workers’ compensation claim likely will not amount to adverse employment actions. However, employers should be mindful that an employee’s subjective view, while not dispositive, will be relevant in the determination of whether the employee suffered an adverse employment action. Consequently, what may seem petty to one employee could be very significant to another.

Employers typically find themselves on the other end of a workers’ compensation retaliation claim in three instances: 1) the employer fires the employee prior to the employee filing a workers’ compensation claim; 2) the employer believes the employee’s workers’ compensation claim is fraudulent; and 3) the employer replaces the injured employee who is unable to work because business necessity requires the position be filled.

The first scenario, “Fire First, Ask Questions Later,” surfaces when an employer fires an employee at first notice of the employee’s workplace injury. For instance, an employee injures his leg in a forklift accident loading wooden crates. The employee, per company policy, immediately notifies his supervisor of the injury. The supervisor arranges transportation for the employee to the hospital. The following day, after deliberating with the owner of the company, the supervisor terminates the injured employee for various safety violations before he/she can file a workers’ compensation claim. The employer believes he just avoided a workers’ compensation retaliation claim because the injured employee did not have a chance to file his claim for workers’ compensation benefits. The injured employee, however, is protected pursuant to the AWCA the moment he suffered the workplace injury. The employer’s quick trigger provided the injured employee a perfect case of workers’ compensation retaliation.

The second scenario, “FRAUD!!!,” arises when an employer believes an employee is faking an injury or suffered the injury on personal time. For example, an employee limps into his supervisor’s office and claims he just injured his back picking up a box full of widgets. The supervisor directs the injured employee to seek medical attention per company policy, and the injured employee subsequently files a workers’ compensation claim. Shortly thereafter, a co-worker informs the supervisor that he/she witnessed the injured employee take a nasty fall while water skiing the day before the alleged injury. Outraged by the injured employee’s deceit, the supervisor terminates the injured employee on the spot the next day. The supervisor’s hasty decision making, again, delivered the injured employee’s workers’ compensation retaliation claim on a platter. An employer that suspects workers’ compensation fraud should report the fraudulent conduct to the Oklahoma Attorney General’s Workers’ Compensation and Insurance Fraud Unit. If, upon investigation, the injured employee has committed fraud, the employer can terminate the employee. If the fraudulent conduct cannot be substantiated, the employer should not discipline the injured employee and let the workers’ compensation claim run its course.

Finally, the third scenario, “Time To Move On,” arises when an employee is placed on temporary total disability following a workplace injury. In this scenario, the injured employee suffers a workplace injury and is subsequently placed on temporary total disability due to his/her physical restrictions. The injured employee remains on temporary total disability leave for over two months. At this point, due to business necessity, the employer decides it can no longer wait for the injured employee’s return, terminates the injured employee and replaces him with a new, uninjured employee. Here, the employer is in clear violation of the AWCA for terminating an employee while on temporary total disability solely due to his/her absence from work.

The common theme between the foregoing scenarios is hasty decision making. In each scenario, the employers would have been better served to take a step-back, breathe and assess the situation. Quick, emotional employment decisions typically result in litigation with bad facts for the employer.

Despite the inherent pitfalls employers face following a workplace injury, injured employees are not immune from workplace discipline, including, but not limited to, termination.  The AWCA explicitly permits an employer to terminate an employee protected by the AWCA if the employee exhausted his/her temporary total disability benefits and is determined by a physician to be physically unable to perform his/her assigned job duties or his/her position is no longer available. If the employer chooses to eliminate the inured worker’s position while he/she is on temporary total disability, the employer must be prepared to justify its business decision to eliminate the position. More importantly, the employer must be mindful not to immediately restore the position following the injured employee’s termination as such action would be evidence of retaliation.

An injured employee is also subject to discipline and poor performance reviews if warranted pursuant to the employer’s policies and procedures. The employer, however, must be able to identify and articulate the legitimate, non-retaliatory reasons for the discipline and poor performance reviews. If an employer cannot identify and articulate such reasons, its disciplinary actions will be clouded with retaliatory animus, and the inevitable claim of retaliation will be less defensible.

To limit potential workers’ compensation retaliation claims, an employer should, first and foremost, have in place a well-written anti-retaliation policy. Employers must also ensure that all employees are aware of both their rights and responsibilities under the policy. Employers should also stress to decision makers that any employment actions taken following an employee’s workplace injury be for legitimate, non-retaliatory reasons. A good rule of thumb is for decision makers to ask themselves, “What is the motivation behind this employment action?” If the motivation is that the employee filed a workers’ compensation claim, it is likely retaliatory, and therefore unlawful. An employer’s best protection against workers’ compensation retaliation claims, or any type of retaliation claim, is to be familiar with the employer’s anti-retaliation policy and carefully consider any employment action following an employee’s workplace injury.

Allen Hutson is an attorney in Crowe & Dunlevy’s Oklahoma City office, where he is a member of firm’s Labor & Employment practice group.

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