State News : Oklahoma

OKLAHOMA TRENDS AUGUST 2024

 CO-WORKER LIABILITY

 The Oklahoma Supreme Court has said a co-worker can be sued by an injured worker in a third-party district court action. The case is Bayouth v. Dewberry, 2024 OK 42.

 A fundamental premise of workers' compensation/tort law is that exclusive remedy prevents an injured worker from maintaining a third-party action for the negligence of a co-worker. BUT THIS CASE IS DIFFERENT.

 On his day off, Employee A had an argument with Employee B and shot and injured him. The incident occurred at the place of their employment. Employee B filed a third-party action in district court against Employee A. An Oklahoma County district judge granted summary judgment for the estate of Employee A, citing the exclusivity of workers' compensation and a co-worker's immunity from third party suit.

 In a 7-2 decision, the Supreme Court said "an employee, who injures another employee, must be acting within the course and scope of their employment when the incident occurs in order to receive the protection of the exclusive remedy provision" of the Administrative Workers' Compensation Act.

The district judge did not make a ruling on whether Employee A was acting within the course and scope of his employment. There is a dispute about that issue, so the case has been remanded to the district court judge to opine on that issue.

 INDEMINITY PROVISIONS SUBCONTRACTORS OVERRULLED

The Oklahoma Supreme Court may have dealt a fatal blow to so-called "indemnity" provisions in contracts with subcontractors in work-related injury cases. Such indemnity agreements are common in the oil and gas industry, the employee leasing business, and in other areas. We have also seen provisions in contracts of janitorial services that indemnify the building owner in the event of third-party liability.

The case is Knox v. Oklahoma Gas and Electric Co., 2024 OK 37. Seven justices concurred in the result, two dissented in part, and two justices dissented to the entire decision. Justice Edmondson wrote the majority opinion.

 The facts—OG&E contracted with sub "A" to develop property for a solar power facility. Sub "A" contracted with Sub "B" who contracted with Sub "C" who was the employer of Mr. Knox who was killed in an accident while performing construction work. His widow brought a wrongful death action in district court. The widow received statutory workers' compensation benefits.

 As is common in oil field operations, the Employer (Sub "C) signed a contract agreeing to indemnify Sub "B" for any sums paid out in a third-party claim.

 Here is what we believe the opinion holds:

 (1) An employee cannot sue his or her employer BOTH in workers' comp and under common law negligence theories. (That's exclusive remedy) The dual capacity doctrine does not appear in the Administrative Workers' Compensation Act.

 (2) An employer cannot be held liable twice, under workers' comp, and by an indemnity agreement with another party. The Supreme Court opinion reasons that an employer cannot agree to indemnify a third party guilty of negligence if the third-party claim is based upon the same physical injury covered by workers' compensation. An employer is allowed to agree to indemnify contractors above in the case of an INTENTIONAL TORT, just not in negligence cases. 

 Parties other than the employer can still be sued based upon common law negligence in a traditional third-party case.  But those third parties cannot look to a subcontractor who is the employer for reimbursement for any negligence damages, even though the employer agreed to such terms.

 There have been claims in which a drilling contractor, the employer of the injured worker, signed an indemnity agreement with the owner of the oil or gas well. Because of the indemnity agreement, the drilling contractor paid BOTH the comp claim and the third-party negligence tort claim. It appears this will no longer be the case.   

 This decision could be far-reaching. Insurance risk managers must look at a general contractor for possible third-party liability because indemnity agreements won't prevent damage awards any longer.

Oklahoma Trends April 2024

Covid Appeal

 The Workers' Compensation Commission will hear an employer's appeal of an order by an administrative law judge finding that a claimant's contraction of COVID-19 is compensable as an on-the-job injury. The claimant also is appealing the order because the judge limited TTD in the case to eight weeks.

The claimant worked for a hospital in Tulsa. As an RN, she was treating a COVID patient who tore the nurse's A-95 mask off, screamed at her, and spit in her face and mouth. The claimant reported the incident. Ten days later, she had a high fever and tested positive for COVID, was sent home from work, and grew progressively worse. 

The claimant now has LONG COVID and has developed diabetes, high blood pressure,  lung issues, and heart problems. An Independent Medical Examiner appointed in the case found that all these conditions were a result of the COVID infection.  The judge followed the report and found a single event injury of contracting the COVID with a consequential injury to the heart, lungs, and diabetes.

The judge found that the claimant was required to have blood tests and other diagnostics every 90 days as an ICU nurse and that she did not have diabetes, high blood pressure, or heart problems before COVID. The judge ordered the employer to pay for medical treatment for the consequential injuries.

The judge also found that COVID is NOT an "ordinary disease of life" to which the general public is exposed. 85A O.S. Sec. 65(D)(3) provides that ordinary diseases of life are not compensable under workers' compensation law. The judge wrote, "The facts of this case certainly are not ordinary and the exposure was not the same as that of the general public. Claimant's job placed her at increased risk of contracting COVID-19."

After finding the injury compensable, the judge awarded only eight weeks of TTD, citing Section 62 of the AWCA that limits TTD to eight weeks in "soft tissue" injuries. 

Total number of Weeks for PPD

 In a 23-page opinion, the Oklahoma Supreme Court made a major ruling regarding how many total weeks of permanent disability benefits an injured worker can receive under the Administrative Workers' Compensation Act (AWCA), the new comp law that has been in effect since February 1, 2014.

 The AWCA limits to 350 the number of weeks of benefits for 100 % permanent partial disability (PPD). However, under the old workers' law that covered injuries up to January 31, 2014, the maximum number of weeks for 100 % disability was 520. In Mr. Cantwell's situation, the Workers' Compensation Court had awarded him 71 % disability to the body for injuries that occurred before the AWCA took effect on February 1, 2014.

 One of Mr. Cantwell's new injuries was to his hip, an injury admitted by his employer. He underwent 3 surgeries culmination in a total hip replacement. A judge of the Workers' Compensation Commission awarded Mr. Cantwell more than $30,000 PPD but followed the letter of the new law and said the insurance company did not have to pay the award because Mr. Cantwell was already over 350 weeks. The full Commission affirmed the judge and Mr. Cantwell appealed to the Supreme Court and claimed that it was unconstitutional for him not to receive up to 100 % disability for his lifetime injuries.

 In Cantwell v. Flex-N-Gate, 2023 OK 116, the Supreme Court, in a 5-4 vote, agreed with Mr. Cantwell and reversed the Commission's decision. The Court repeated the holding in other cases interpreting the AWCA that the law in effect at the time of an injury controls all aspects of a claim. The Supreme Court held that the Commission cannot use the number of weeks of benefits under the new law to determine what 100 % is, but rather must use percentages when old law injuries are present.

 The majority opinion held that the Commission's interpretation that an injured worker is prohibited from being awarded up to 100 % PPD is "constitutionally impermissible." The Court further said that a claimant has a "substantive right" to 100 % PPD and that the Commission's interpretation of the statute would affect that substantive right. A retroactive application of the 350-week limitation would violate Art. 5, Sec. 54 of the Oklahoma Constitution. 

 The opinion summed up its holding:

 "We hold that the 100 % limitation on PPD benefits controls over the number of weeks when awarding compensation for PPD where a claimant has both compensable awards for job-related injuries that occurred before February 1, 2014, and compensable awards for job-related injuries occurring after February 1, 2014."