president of Associated Industries of Missouri
Tuesday, Jan. 9, 2007 may stand as the most significant day in the courts for employers and their relationship to injured workers in the history of Missouri. On that day two decisions were handed down that were polar opposite in their impact on business.
Since taking office in January of 2005, Governor Blunt has made economic development and job creation a priority issue. Speaker of the House Rod Jetton and President Pro-Tem of the Senate Michael Gibbons have worked with the governor to accomplish this objective. One of the cornerstone provisions of this economic climate change was the passage of Senate Bill 1, the workers’ compensation reform bill signed into law in 2005.
Only a few months following its passage, nearly 70 labor unions filed suit objecting to the common sense changes enacted in SB 1. Changes that for the most part did nothing more than guarantee that doctors' medical opinions were adhered to by administrative law judges, accidents covered actually happened at the work place, and accepting resolution reached by both the employee and employer without the increased cost of legal representation. These changes have resulted in a more streamlined compensation system for injured workers while saving employers on the premiums required for the coverage.
It fell upon Missouri Attorney General Jay Nixon to defend the law. He was joined in this defense by Associated Industries of Missouri, the only business organization that stepped forward to defend this law in court.
On this Tuesday in January, Judge Byron Kinder agreed with the attorney general in ruling that all changes to the workers’ comp system should remain in force. The decision states in part, “First, the plaintiffs’ claims rest on hypothetical scenarios, which cannot establish the first prong of justiciability. Second, the plaintiff organizations lack representational standing because they did not allege that the interest they seek to protect are germane… Pleading their broad mission statements also does not suffice." This was truly a remarkable win and all of the business community should have taken one collective sigh of relief.
Same day, different court room
The Missouri Supreme Court handed down a decision on the Schoemehl case. In short, Fred Schoemehl passed away only one month after being awarded medical and temporary total disability benefits. His surviving spouse, Annette, sued the Second Injury Fund for permanent total disability after his passing. The Supreme Court ruled on a 4-3 vote that she was entitled to these benefits.
The ruling states, “Because Schoemehl was her husband’s dependent, section 287.200.1 requires that she be considered the “employee”. It goes on to read, “She is entitled, therefore, to compensation under section 287.230.2 and to payment of the unpaid, unaccrued balance of her husband’s permanent total disability award."
This Supreme Court decision is as dangerous to the continued viability of the system as the Kinder decision was in its support. If the Schoemehl decision is not re-heard by Nixon in the next two weeks, then all surviving dependants could have standing to file suit for continued benefits.
The cost to Missouri employers is unfathomable. Basically, if not corrected, the workers compensation system has been relegated to a life insurance policy in addition to the legally mandated coverage for injured workers. The system simply cannot support this additional cost.
So what happens now?
The labor unions have threatened to appeal the Kinder decision. The Attorney General has a few days yet to file for re-hearing on the Supreme Court decision. The General Assembly can attempt to pass legislation to protect against future lawsuits by addressing the questionable language in chapter 287.
Tuesday, Jan. 9, 2007, will ever be known as the day the courts of Missouri ruled on the workers' compensation system. What will be the final outcome? The verdict is still out.