After reaching maximum medical improvement on July 2, 2014, she returned to her pre-injury position with Sprint, earning her pre-injury wages.

On September 24, 2014, Ms. Maxwell filed a request for a contested hearing on the issue of permanent partial disability.

A hearing was held on December 8, 2014, and the administrative law judge, relying on the sixth edition of the American Medical Association's “Guides to the Evaluation of Permanent Impairment,” concluded that Ms. Maxwell had sustained two percent permanent partial disability to her body as a whole as a result of the injury to her knee and that the rate of compensation was $323.00 for a total award of $2,261.00.

However, because she had returned to her pre-injury position and pay, the ALJ ordered the award of benefits be deferred at a rate of $323.00 beginning July 2, 2014, for every week she had worked in her pre-injury or equivalent job, pursuant to 85A O.S. Supp. 2013 § 45(C)(5).

Ms. Maxwell appealed the order, and the Workers' Compensation Commission sitting en banc affirmed.

The dispute reached the Oklahoma Supreme Court.

Oklahoma Law

Section 45(C)(5) of Title 85A provides:

5. Except pursuant to settlement agreements entered into by the employer and employee, payment of a permanent partial disability award shall be deferred and held in reserve by the employer or insurance company if the employee has reached maximum medical improvement and has been released to return to work by his or her treating physician, and then returns to his pre-injury or equivalent job for a term of weeks determined by dividing the total dollar value of the award by seventy percent (70%) of the employee's average weekly wage.

a. The amount of the permanent partial disability award shall be reduced by seventy percent (70%) of the employee's average weekly wage for each week he works in his pre-injury or equivalent job.

b. If, for any reason other than misconduct as defined in Section 2 of this act, the employer terminates the employee or the position offered is not the pre-injury or equivalent job, the remaining permanent partial disability award shall be paid in a lump sum. If the employee is discharged for misconduct, the employer shall have the burden to prove that the employee engaged in misconduct.

c. If the employee refuses an offer to return to his pre-injury or equivalent job, the permanent partial disability award shall continue to be deferred and shall be reduced by seventy percent (70%) of the employee's average weekly wage for each week he refuses to return to his pre-injury or equivalent job.

d. Attorney fees for permanent partial disability awards, as approved by the Commission, shall be calculated based upon the total permanent partial disability award and paid in full at the time of the deferral.

e. Assessments pursuant to Sections 31, 98, 112 and 165 of this act shall be calculated based upon the amount of the permanent partial disability award and shall be paid at the time of the deferral.

85A O.S. Supp. 2013 § 45(C)(5) (emphasis added).

Section 2 of Title 85A defines:

[p]re-injury or equivalent job

as:

the job that the claimant was working for the employer at the time the injury occurred or any other employment offered by the claimant's employer that pays at least one hundred percent (100%) of the employee's average weekly wage

85A O.S. Supp. 2013 § 2(37).

The Oklahoma Supreme Court's Decision

The Oklahoma Supreme Court ruled that the permanent partial disability deferral provision of 85A O.S. Supp. 2013 § 45(C)(5) was a violation of due process under the Oklahoma constitution. Accordingly, it ruled, the ALJ had erred in finding that because Ms. Maxwell had returned to her pre-injury position and pay, her award of benefits should be deferred pursuant to 85A O.S. Supp. 2013 § 45(C)(5).

In its decision, the court explained that the “Order Awarding Permanent Partial Disability Benefits” in Ms. Maxwell's case found that she had “sustained 2% permanent partial disability to the body as a whole for partial loss of use of her LEFT LEG (KNEE) and is awarded compensation for 7 weeks at $323.00 per week, in the total amount of $2,261.00….” (Emphasis added.) The court then found that, in accordance with the workers' compensation law, the ALJ's order awarding Ms. Maxwell compensation in the amount of $2,261.00 “clearly vested” in her a property interest “worthy of the protections of due process.”

The court noted, however, that at her hearing on the issue of permanent partial disability, she was limited to presenting medical evidence only and could not submit proof as to whether she had suffered any loss of wage-earning capacity. Her return to work “was the only evidence considered by the ALJ” in determining whether she had actually suffered any loss of wage-earning capacity.

The court then ruled that the legislature could not “pre-determine that an injured worker” had in fact had no loss of wage-earning capacity because he or she had returned to his or her job making the same wages. In the court's view, an employee who had sustained a permanent injury might not suffer a reduction of immediate earning capacity by returning to his or her job, but it often was likely that his or her “ultimate earning capacity will be reduced either by a shortening of his work life or a reduction of employment opportunities through a combination of age and physical impairment.” According to the court:

Evidence of loss of wage-earning capacity could include the injured employee's age, education, work history, vocational training, transferable skills, job opportunities, fitness to perform certain jobs, wage levels, or other information relating to his or her employment situation.

The court also noted that Ms. Maxwell had returned to work on July 2, 2014; the hearing on permanent partial disability was not held until December 8, 2014; and the order awarding permanent partial disability benefits deferred her permanent partial disability award at a rate of $323.00 beginning July 2, 2014 for every week she worked in her pre-injury job. Thus, the court explained, Ms. Maxwell's permanent partial disability award “was exhausted well before the hearing on permanent partial disability actually took place.”

Under this deferral scheme, the court found, an injured employee who returned to work lost the ability to collect any subsequent permanent partial disability award issued by an ALJ because by the time the case was heard, enough time would have passed so that the injured employee, in most instances, would have forfeited his or her right to receive any portion of the permanent partial disability award. “[S]tate statutes which attempt to take away vested property interest, or work an arbitrary forfeiture of property rights are unconstitutional as violations of due process,” the court stated.

Accordingly, the court held that the permanent partial disability deferral provision of 85A O.S. Supp. 2013 § 45(C)(5) was an unconstitutional violation of due process under Oklahoma law and it ruled that Sections 45(C)(5)(a-e) were “invalid and stricken.”

The case is Maxwell v. Sprint PCS, Nos. 113898, 113811, 113941, 114161 (Okla. April 12, 2016). Attorneys involved include: Bob Burke, Oklahoma City, Oklahoma, for Petitioner Theresa Maxwell and Petitioner Damien Smith; Gary Prochaska, Oklahoma City, Oklahoma, for Petitioner Damien Smith; Bret A. Unterschuetz, Law Offices of Arthur H. Adams, P.C., Tulsa, Oklahoma, for Petitioner Jerry Hoffman; Michael R. Green, Valerie L. Sparks, Law Offices of Michael R. Green, Tulsa, Oklahoma, for Petitioner Delano Majors; John A. McCaleb, Fenton, Fenton, Smith, Reneau & Moon, Oklahoma City, Oklahoma, for Respondents Sprint PCS and American Casualty Co. of Reading, PA; Preston G. Hanner, Caldwell, Russell, Thompson & Hanner P.C., Oklahoma City, Oklahoma, for Respondents Baze Corp. Investments and Compsource Mutual Insurance Company; Kevin E. McCarty, McCarty & Associates, PLLC., Oklahoma City, Oklahoma, for Respondents Tulsa Gas Technologies, and Commerce and Industry Insurance Company; David J.L. Frette, Anthony A. Blair, Perrine, Redemann, Berry, Taylor & Sloan, P.L.L.C, Tulsa, Oklahoma, for Respondent Accent Staffing Inc., and Compsource Mutual Insurance Company; E. Scott Pruitt, Patrick R. Wyrick, Sarah A. Greenwalt, Jared B. Haines, Office of the Attorney General, Oklahoma City, Oklahoma; Rabindranath Ramana, Calvert Law Firm, Oklahoma City, Oklahoma, for Amicus Curiae Oklahoma Coalition for Workers' Rights; V. Glenn Coffee, Denise K. Davick, Glenn Coffee & Associates, Oklahoma City, Oklahoma, for Amicus Curiae State Chamber of Oklahoma.