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Thursday, May 11, 2017

Alabama Work Comp Act Ruled Unconstitutional


By Thomas Eden

Nora Clower injured her lower back on the job while employer by Caremark CVS in Jefferson County Alabama and sought workers' compensation benefits. Clower claimed she earned an average of about $335 a week for CVS, being employed there for less than a year before her injury. Under the current law, workers hurt while on the job are eligible for up to $220 a week in compensation for a disability once their condition has stabilized. Lawyers for Ms. Clower argued that that cap dated to 1987, and $220 per week was above minimum wage level and the poverty level at that time. However, living costs and wages far exceed that number now and a similar cap would total just under $500 today.

This week in a groundbreaking ruling in the case of Nora Clower vs. CVS Caremark, in Jefferson County Circuit Court, Circuit Judge Pat Ballard found two provisions of Alabama’s Workers' Compensation Act unconstitutional. The $220 weekly cap and the 15% attorney fee.

In his order, Judge Ballard held that grouping of compensated injured workers into two classes which basically received the same benefit "makes no rational sense…There is little credibility in telling two injured workers, both of whom are 99 percent disabled due to work injuries, that they both get $220 per week... when one earns $8.50 per hour for a 40-hour work week, and the other earns an annual salary of $125,000…In fact, $220 a week for a family of four is more than half below the poverty line,” Ballard held.

On the question of a 15 percent cap on attorney's fees, Ballard held that it "fails to afford due process of the law." He also ruled that a cap on fees is a function of the judiciary branch and not the legislative.

Ballard stated he understood the far-reaching implications of his ruling when he observed in his order, "There will be impact on medical providers, who presumably draw great income from the provision of medical care billed to workers' compensation insurers, employers, and self-insurance funds… There will be impact to insurers, given that the sales of, and premiums collected for, workers' compensation insurance in Alabama will halt in the absence of workers' compensation laws... and workers will have to turn to other sources – or none at all – for the provision of medical care or subsistence compensation upon suffering the misfortune of workplace accidents."

Because of a non-severability statute in the Alabama Workers' Compensation Act, if any part of the law is deemed unconstitutional, the entire act is unconstitutional. Consequently, the entire Alabama Workers' Compensation Act is nullified by Judge Ballard’s ruling.  Ballard is staying his May 8 order 120 days so the Alabama Legislature can correct it, due to what he called the "magnitude" of the ruling." These crises are the direct result of a problem created and allowed to persist by the Legislature," he stated, before issuing a stay.

Common Sense Counsel: Employers are advised to continue to use the procedures they currently have in place for handling on-the-job injuries and workers’ compensation claims. I am confident Auburn Alum Governor Kay Ivey will handle this crisis with common sense.

Tommy Eden is a partner working out of the Constangy, Brooks, Smith & Prophete, LLP offices in Opelika, AL and West Point, GA and can be contacted at teden@constangy.com or 334-246-2901 and blog at www.alabamaatwork.com with link to decision.