Source: National Underwriter Property & Casualty-Risk & Benefits Management, April 10, 1995 n15 p4(2).

Title: Oregon struggles to clarify WC law. (workers' compensation)
Author: Kathy Brock

PORTLAND, Ore. - Labor and business interests in Oregon are still struggling over workers' compensation legislation in the wake of a February decision by the Oregon Supreme Court that added fuel to the fiery debate.

The landmark Oregon Supreme Court opinion based on "Errand vs. Cascade Steel Rolling Mills Inc." gives injured employees the right to sue employers if they are denied workers' comp. benefits. That strikes at the core of workers' comp., which traditionally has been the "exclusive remedy" for workers hurt on the job.

The decision also has created more incentives for estranged labor and business interests to revisit workers' comp. statutes and work out a compromise. For several months now the debate has caused friction between labor and management interests that has drawn Governor John Kitzhaber into the fray.

"This ups the, ante considerably for some good-faith bargaining to take place," said Irv Fletcher, president of the Salem-based AFL-CIO, which represents 315 labor groups with 125,000 workers in Oregon. He said labor
interests felt they were being-trampled by business supporters pushing broad-scale legislative changes because they perceive a sympathetic car in the Republican-controlled legislature.

Mr. Fletcher criticized workers' comp. legislation sponsored by Sen. Kevin Mannix D-Salem and Sen. Gene Derfler, R-Salem. SB 369 reinstates some expanded benefits for injured workers that sunset this July, but other portions of the bill shrink rights and benefits for injured workers and their beneficiaries.

Already the Oregon Senate has approved SB 369 and sent it to the House Labor Committee for consideration. Gov. Kitzhaber has testified twice before the committee and met with proponents to try to strike a compromise.

"Peppered throughout the bill are provisions which, when you add them all up, fundamentally alter the balance" between workers' and management's rights, said Mark Gibson, the governor's policy adviser for health, human resources and labor.

Labor groups say SB 369 would cripple injured workers' rights. Management interests say it simply restores and clarifies the much-touted May 1990 reforms that have been eroded by court cases that have favored workers during the last five years. Those reforms have pushed down workers' comp. costs in Oregon, saving employers as much as $2 billion in either direct premiums or related costs.

One of the alternatives is for Gov. Kitzhaber to veto any workers' comp. bill that doesn't fairly balance the interests of workers and employers.

However, said Mr. Gibson, "I think it's probably too early in the process to talk about a veto. I think there's a lot of middle ground of agreement.

Both business and labor interests should be motivated to pass portions of SB 369. For labor, the bill retains certain increases in benefits, albeit not all they want. And unless business advocates pass legislation that nullifies the Supreme Court decision, they risk broad exposure to liability lawsuits far beyond the other court cases under debate.

Some say allowing the Supreme Court ruling to stand also would hurt Oregon's economic development.

"This is now a chip for labor. What it is, is a black mark for the governor and the entire state of Oregon," said Ross Dwinell, risk manager for United Grocers, a Portland wholesale distribution center for a co-op of 350 independent retail stores in Oregon, California and Washington.

"We just sent out the worst message we can send," said Mr. Dwinell, "Move here and you can be sued."

Employers and insurers fear the Supreme Court opinion will cost them more money and create more uncertainties - and frustrations.

Tom Towslee, a representative with Saif Corp., the state's largest workers' comp. carrier, said the decision would unravel the underlying rationale of workers' comp. coverage - the notion of no-fault insurance for on-the-job injuries for employees in exchange for workers' promises not to sue outside the system.

"This thing is a time bomb," agreed Steve Beckham, a representative of Liberty Northwest Insurance Corp. in Portland, the second largest workers' comp. carrier in Oregon' after the quasi-public Saif.

"This definitely will drive costs up," said Lisa Trussell, director of risk management for Associated Oregon Service Corp. in Salem, a for-profit subsidiary of the powerful statewide business group, Associated Oregon Industries.

"It really does just completely take workers' compensation and turn it on its head," said Jerry Keene, a Portland attorney who helped craft the May 1990 reforms and filed a friend-of-the-court brief in the recent Supreme Court
case. He said the court decision was a reasonable interpretation that highlighted a "glitch" in Oregon's workers' comp. statute.

SB 369 already includes revisions that would nullify the recent decision by the Oregon Supreme Court.

-- End --