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Judge’s Order Puts Workers’ Comp Act on Disabled List

While worrisome, the ruling has no immediate consequences.

While worrisome, the ruling has no immediate consequences.

A Jefferson County circuit judge in May threw a pipe wrench of sorts into the state Workers’ Compensation Act, declaring portions of it unconstitutional and thus technically nullifying the entire act. Circuit Judge Pat Ballard stayed the order for 120 days, suggesting that the Alabama Legislature use that time to fix it.

Specifically, Ballard took issue with the $220-a-week cap in compensation and the 15 percent cap on attorneys’ fees. The ruling stemmed from Nora Clower vs. CVS Caremark, filed in Jefferson County Circuit Court in 2013 and involving a CVS employee who said she earned about $335 a week before injuring her back on the job.

Ballard’s order addressed the act’s larger discrepancy of lumping all injured workers into one pool. “There is little credibility in telling two injured workers, both of whom are 99 percent disabled due to work injuries, that they both get $220 per week ... when one earns $8.50 per hour for a 40-hour work week, and the other earns an annual salary of $125,000,” he wrote. 

The judge also painted lawmakers as being as much the problem as the solution. “These crises are the direct result of a problem created and allowed to persist by the Legislature,” he wrote.

So what’s an Alabama business owner to do?

Probably not panic, according to several labor attorneys who discussed the issue with Business Alabama. While the judge has reopened the conversation about fair compensation for both workplace accident victims and the attorneys who represent them, it’s not the sort of question this particular Legislature seems likely to answer before the next election, at the earliest. There’s also a good chance the ruling will be stayed on appeal.

“The key issue is the $220 cap on weekly benefits paid for permanent partial disability. This cap was last raised 30 years ago and due to the cumulative impact of inflation, the value of that amount has greatly eroded relative to prevailing minimum and average weekly wages of employees in Alabama,” says Hand Arendall’s Bill Reece. 

Since the act deprives workers of their constitutional right to trial by jury/common law tort claims, it has to provide a meaningful benefit to workers through a no-fault compensation scheme. The judge’s order seems to indicate that the tradeoff has broken down, in the minds of many, Reece says. 

Another attorney who writes a popular blog on workers’ comp, Mike Fish of Birmingham-based Fish Nelson & Holden, doubts that an easy solution is lurking at the Statehouse.

“For the $220 cap or the 15 percent contingency fee to change, there needs to be a serious conversation between employee and employer interests to figure out the best way to effectuate that change. Simply introducing a bill and trying to force it down the other side’s throat is not going to work.  Major changes were implemented in 1992 and that was due to a couple of years of meetings between all interested parties until a consensus was formed.”

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