The Oregonian, March 12, 1995

Kitzhaber Works to Soften Blow of Growing Hostility over Worker's Comp
By Ashbel S. Green - of The Oregonian staff


Sure, his jeans don't have holes in them. But Gov. John Kitzhaber is playing the peacenik while others are marching toward a war over the insurance system that pays workers for injuries they suffer on the job.

After nearly five years of relative peace, the Democratic Kitzhaber says, the war drums are beating again.

Before a 1990 peace accord, "Worker's compensation was truly the Bosnia of Oregon politics," Kitzhaber said in a recent speech. "It was hand-to-hand, house-to-house legislative warfare."

The battles resulted in heavy casualties for both management and labor -- nationwide, Oregon businesses had some of the highest insurance premiums while workers had some of the lowest benefits.

In 1990, Gov. Neil Goldschmidt loaned out the governor's mansion so labor and management could sit down and reform the system. They narrowed the definition of a workplace injury, which led to fewer claims and lower insurance rates, and increased benefits to injured workers. A special session in 1990 approved the reforms.

Labor and management arrived at a truce by excluding what many felt were the arms dealers of the war: the trial attorneys, insurance companies and the medical providers.

Peace has more or less reigned since then. Worker's benefits have increased. The premiums that companies pay for worker's compensation have plummeted, saving Oregon businesses more than $1 billion.

Well, according to Kitzhaber, hostilities are threatening to resume over Senate Bill 369.

It was drafted by a worker's compensation hawk, Sen. Gene Derfler, R-Salem, and an arms dealer, Rep. Kevin Mannix, D-Salem. In his private legal practice, Mannix represents insurance companies against employees who file worker's compensation claims.

Derfler and Mannix say the bill is needed to address a number of court decisions that have eroded the improvements made in 1990. The decisions threaten to raise insurance premiums. The bill also prevents worker benefits from dropping to the low level they were before the 1990 reform.

Finally, and most important to the system as a whole, the bill addresses a recent Oregon Supreme Court decision that said injured workers could sue their employees over workplace injuries in certain cases. The entire system was designed in 1916 to prevent workers from suing their employers by guaranteeing they would receive medical coverage and lost wages if they were injured on the job.

Mannix describes it as a fair adjustment of the 1990 treaty. Labor calls it a bombing raid. The token worker benefits just allow the supporters to deny they are in the process of an invasion.

"Those are red herrings," said state Sen. Randy Leonard, a Portland Democrat who is head of the Portland Firefighters Union. "They aren't giving anything to labor."

Back in 1990, the reformers knew that tensions would mount up again, so they set up a management/labor committee, which is supposed to settle disputes and forward them onto the Legislature.

But the group has not dealt with the string of court decisions, nor has it had time to deal with the Supreme Court decision. Many have blamed former Gov. Barbara Roberts, a favorite scapegoat these days, for not forcing labor to agree to reasonable changes.

"I would say that if we're going to use this analogy," Mannix said, "that they didn't go out and provide peacemakers."

Kitzhaber, working feverishly to avoid a war, has ordered the committee to come up with some recommendations before a Monday hearing before the House Labor Committee.

Meanwhile, Leonard said union people would rather have no bill than this one. Management, some unionists figure, need the bill more than labor does.

But management has a war place, too. If Kitzhaber vetoes SB369, the Legislature could send him a bill that only fixed the critical Supreme Court decision that allows some employees to sue their employers. That would let worker's benefits drop. And though a lot of Kitzhaber's support comes from labor, a veto would alienate his important business supporters.

And that's exactly why such a war looks particularly dangerous.

"What's happening in the legislature is very troubling to me because it is repolarizing around that issue," Kitzhaber said. "It's re-creating the labor-management, us vs. them mentality, which will spill over into issues of collective bargaining and a whole host of other issues that I think would be very, very unfortunate."

Peace, man.