I became interested in this industry sometime ago. And struggled to understand the implications and the requirements. I think we all started in a similar manner, believing that our individual state statue was ultimately the controlling element. We studied statutes and struggled to understand their nuances, complexities, and contradictions.

Oklahoma recently adopted an opt-out option for their workers' compensation process. There is an interesting white paper explaining the implications of this new opt-out. The implications remind me of an interesting scene in the Matrix. Keanu Reeves' character, Neo, enters the apartment of the "Oracle," to be afforded an audience. He encounters a young man who is tellekinetically bending and unbending a teaspoon repeatedly. Neo watches, and the young man says to him "Do not try and bend the spoon. That's impossible. Instead... only try to realize the truth." Neo asks about  "the truth" and the boy explains "there is no spoon;" then expounds, "then you'll see, that it is not the spoon that bends, it is only yourself."

After reading the white paper on the implications of Oklahoma's new opt out, which is compared therein with the existing Texas opt -out provision, I am left wondering: is there a "worker's compensation" that is being twisted and bent here or are we all bending?

Texas has had an opt-out for many years. A major feature of the Texas opt-out is that by making that election the employer loses immunity, and becomes potentially liable in tort for negligence that results in injury. The Oklahoma opt-out provides a similar opportunity to escape the confines and regulation of workers compensation, but leaves the employer immunity intact. In Texas, an employer may opt out completely or may opt-out and provide an alternate benefit plan. In order to opt-out in Oklahoma, the employer will have to provide a substitute plan, which may (non-Erisa) or may not (Erisa) have to be approved by Oklahoma  insurance regulators.

The authors of this white paper suggest that the lack of employer immunity has deterred the spread of the Texas style opt-out plan. They suggest that the Oklahoma plan, providing the savings of opt-out with the protections of immunity may be more likely to spread. 

According to the white paper authors, the Texas opt-out produces  savings as a result of decreased attorney involvement in the substitute plans. They identify binding arbitration as a root source of the savings. However, whether arbitration or litigation, in any circumstance, someone will have to determine disputes. No  system cannot exist without someone to decide disputes which will necessarily arise. 

In our Florida system, there is a tremendous amount of transparency and as a result predictability. I hope it is like that elsewhere. Much of this predictability/transparency could be lost in an arbitration process. The adversarial  process is markedly different in arbitration. Anyone who has practiced labor law appreciates the challenges of the arbitration process. There are also practical differences in that setting, with parties often representing themselves, or being represented by company or labor representatives. It is a field that often does not have the attorney involvement, and the protection of individual rights, to which we are accustomed in the traditional workers' compensation practice. 

According to this white paper, there will be significant evaluation of this new law, disputes, and regulations yet to come. The authors predict, however, that a process will emerge from this "new law" to sunlight as a model for other states to follow with a non-subscription or opt-out provision similar to Oklahoma's. I have heard rumblings already, with some questioning whether this is the future for us all. Wondering how this will develop both in and beyond Oklahoma, if at all, is interesting and intriguing. Is the Oklahoma experiment the harbinger of the future, or anomalous blip on the radar screen of Worker's Compensation?

At the end of the day, what will apparently matter is whether employers save or lose money by engaging this innovation. Note that it will be the employer's decision in Oklahoma to subscribe to traditional workers' compensation or to opt-out. It is curious that in the "great compromise" (see, New York Central Railroad v. White, 243 U.S. 188, 37 S.Ct. 247, 61 L.Ed. 667 (1917)) that is worker's compensation, one side should be afforded such ability to unilaterally decide such an important question. Many states have opt-outs for organized labor, in which labor and industry together negotiate an opt-out. The Oklahoma example is different in its unilateral approach.

This will be a hot topic at seminars in coming years. Debates will be engaged, legislatures will convene, bills may be sponsored, some may pass, and in a few years we will know whether Oklahoma is the "new normal," or yesterdays news. 

Is there a spoon? Or are we bending?