Court upholds injured worker's rights

Organized labor's reaction was generally favorable to an Oregon Supreme Court ruling May 10 that gives injured workers the right in some cases to seek damages in court when workers' compensation insurance benefits are denied.

Ruling in the case of Smothers vs. Gresham Transfer, the court limited the scope of the so-called "exclusive remedy" provision of Oregon's workers' compensation law - the trade-off which bars injured workers covered by the no-fault remedies of the comp system from suing their employers for damages caused by employer negligence. The court found that the trade-off must provide meaningful remedies for workers in one venue or the other.

The justices said unanimously that an injured worker who is denied workers' comp insurance benefits for failing to prove that his workplace was the "major contributing cause" (51 percent or more) of his injury has a constitutional right to pursue a claim for damages from his employer. The opinion was written by Justice Susan Leeson. New Justice Paul De Muniz did not participate in the consideration or decision of this case because it was heard before he was elected.

The long-awaited ruling, as reported by Associated Press, upheld a claim by Teamster Terry Smothers of Gresham, who contended he unfairly was left with no recourse when he developed respiratory problems in 1993 after inhaling acid-laden mist while working on trucks for Gresham Transfer Inc.

His compensation claim was rejected on grounds that he had a pre-existing asthma condition.

Smothers then sued, but the Multnomah County Circuit Court and the Oregon Court of Appeals rejected the claim because state law says the insurance system was his "exclusive remedy."

The Supreme Court overturned those rulings and sent the case back to the trial court for further proceedings. Whether workers are entitled to sue for compensation must be decided on a case-by-case basis, the court said. "This means that injured workers will no longer fall between the legal cracks of the system," said Oregon AFL-CIO President Tim Nesbitt. "If workers are hurt on the job, they should be entitled to benefits from the workers' comp system. But if the system makes it too difficult for them to qualify for benefits, then they should be entitled to their day in court. That's what the court decided. And that's only fair."

Tens of thousands of workers have been denied benefits under the major contributing cause doctrine of the law, according to a recent study commissioned by the Management-Labor Advisory Committee on Workers Compensation. Researchers Ed Welch and John Burton of the Worker Compensation Center of Michigan State University reported that about 45 percent of workers' compensation denials are based on the "major contribution" rule.

With the court ruling, some business groups and business-backed lawmakers now predict huge increases in employer premium costs for workers' comp insurance. Senate President Gene Derfler, R-Salem, used the decision to withdraw his support for Senate Bill 485, a package of moderate reforms to the workers' comp system negotiated by a labor-management group appointed last year by Governor John Kitzhaber.

"I'm cautioning everybody to take a deep breath and let's find out exactly what this ruling means and try to reasonably address it if we can," said Bob Shiprack, executive secretary of the Oregon State Building and Construction Trades Council.

Shiprack and Nesbitt were labor representatives on the governor's workers' comp committee that drafted SB 485. "I would be extraordinarily disappointed if this bill does not get signed into law," Shiprack said. "It was a solid attempt by people from labor and management to address problems with the system. To kill that work over this court ruling would do more harm than good, and it would really bring into question whether labor and management can ever sit down together."

State Representative Diane Rosenbaum, D-Portland, and a member of Communications Workers of America Local 7901 who has been involved in workers' comp issues, said the Smothers decision "is completely right and within the intent of workers' compensation law. If you go back to the original intent (of workers' comp as no-fault insurance for employers), the way to do that is go back to the standard prior to 1990."

Shiprack said a possible solution is for lawmakers to repeal the current major contributing cause standard of the statute and return to a "material contributing cause."

Nesbitt said he wasn't surprised to hear predictions that the sky would fall on Oregon's workplaces following the Supreme Court ruling. But a closer examination of the Smothers decision by the AFL-CIO indicates that these predictions and reactions are unwarranted.

According to the AFL-CIO:

* The Smothers decision will not raise workers' comp premium costs for any employer, not by a single dollar.

* Employers who maintain safe workplaces have nothing to fear from the Smothers case. Only employers who are negligent in failing to maintain safe workplaces and whose negligence causes workplace injuries will be exposed to legal actions under Smothers.

* Negligent employers will now have added incentives to make their workplaces safer for their workers. This is the real benefit of the Smothers case, the AFL-CIO said.

* The Smothers decision is similar to other recent court decisions in New Mexico, Montana and Ohio. It simply restores legal balance to the comp system.

"That's a balance that Oregon's employers and lawmakers should be able to live with, just as employers do in many other states," Nesbitt said.

Michael Gilbertson, the attorney for Smothers, told the Oregonian that the decision involves only cases where the worker can show his employer was negligent.

"Most cases are where the employee lifted a box wrong and hurt his back and would usually not involve employer negligence," he said.

Mike Maier of Service Employees Local 503 and a member of Workplace Injured United, a coalition of injured workers and advocates, predicts that as many as 25 percent of injured workers denied benefits over the last several years will initiate legal proceedings, in which they would probably end up seeking to prove negligence on the part of their employers.

Among the questions left unanswered by the court, Maier and others said are:

* Can workers sue if they have settled part or all of their claims?

* Must a worker appeal the denial before filing suit?

* Is there a statute of limitations for filing claims, considering that Oregon's law discouraged many injured workers from even filing?

* Is there a statute of limitations for filing suit following a denied claim?

After a six-week delay, House Republicans scheduled SB 485 for hearing on Tuesday, May 15. The Business, Labor, and Consumer Affairs Committee met at the Capitol but the outcome of that meeting was not available at press time.