Cole County Circuit Judge Byron Kinder rejected on January 9, 2007, claims that the workers’ compensation statutory overhauls enacted in 2005 violate the United States and Missouri Constitutions.
Employers, insurance companies and some defense counsel lobbied the new legislature for changes to the workers’ compensation system in 2005. The legislature responded by passing numerous statutory changes. Some of the more significant changes include the new “prevailing factor” standard for causation, forfeiture of benefits for positive drug and alcohol test results, and a mandated priority to be given to objective findings over subjective complaints.

Citing the sweeping breadth of the new changes, a group of labor unions and organizations filed a declaratory judgment action seeking a judicial determination as to the constitutionality of the changes. The groups alleged the changes were so significant that the due process concessions given up by employees in the workers' compensation system, such as the right to a jury trial, now outweighed the procedural benefits to employees. They alleged that the new law violated employees' constitutional rights.

Rejecting the challenge to the new act as a whole, Judge Kinder determined that the legislature acted with a rational basis when they passed the 2005 legislation. He opined that the changes were changes attempting to foster what he called a “pro-business climate” – the threshold question in assessing constitutionality.

Notably, however, Judge Kinder declined to rule on and left open several constitutional questions regarding particular sections of the new act. Many of the allegedly unfair scenarios raised by those challenging the act were not ripe for judicial decision. He said that a claimant actually had to be faced with such issues before raising a constitutional challenge.

Attorneys for the labor unions plan to appeal the ruling, and it likely will be certified directly to the Missouri Supreme Court due to the constitutional questions involved. Andy Mandel, an attorney for the labor groups, said he was “cautiously optimistic” about the viability of the appeal. In the meantime, lawyers, employees, employers and insurers, eagerly awaiting finality on constitutional questions, may have to be content to accept piecemeal rulings on the constitutionally suspect provisions.

Since the August 28, 2005, effective date, reaction to the changes has been unclear. The St. Louis Post-Dispatch reported in November that a number of surveyed insurance carriers expected workers’ compensation premiums to either remain the same or perhaps decrease by 1% on average statewide in 2007. The lack of any significant appellate or Supreme Court decisions interpreting the new changes has fueled this uncertainty. Moreover, the fact that the new changes expressly overrule several prior key decisions has left the law in a state of flux pending the constitutional challenge. The only real consensus, according to several members of the defense bar surveyed, is that the number of claims filed since the change has decreased by around 10-15%.

Those tracking the changes of the new act have pointed out that the elimination of certain remedies within the act might allow a greater number of civil suits by employees no longer eligible to avail themselves of workers’ compensation remedies. This sentiment was ultimately echoed by Judge Kinder, who explained that employees “remain entitled to assert common law claims where the law does not apply.”