Local Judge Rules Alabama’s Workers’ Compensation Act Unconstitutional

On May 8, 2017, Judge Pat Ballard in the Circuit Court for Jefferson County, Alabama, entered an Order which determined that two provisions in the Alabama Workers’ Compensation Act are unconstitutional.  The Order found that Ala. Code §§ 25-5-68 (maximum compensation) and 25-5-90 (statutory attorney’s fee) were invalid under both the Alabama and United States Constitutions.  Clower v. CVS Caremark Corp., (Civil Action Number:; 01-CV-2013-904687).

In brief, Judge Ballard determined that the $220 cap on Permanent Partial Disability awards violated the constitution because it failed to provide an adequate remedy to injured employees under the Alabama Constitution, and because it did not provide equal protection to different classes of employees (based upon their earnings) under the US Constitution.  Judge Ballard further determined that the statutory limitation on the attorney’s fee that can be recovered by the employee’s attorney violated due process and the separation of powers between the legislative and judicial branches.

The Alabama Workers’ Compensation Act includes a provision, under § 25-5-17, that if any provision under the Act is declared unconstitutional, the entire Act is unconstitutional.  As a result, upon the effective date of Judge Ballard’s Order, and in the absence of any appeal or legislative action in the interim, there would no longer be a workers’ compensation act in Alabama.

By its terms, the Order does not go into effect until 120 days from May 8, 2017 (September 5, 2017).  The Order specifically invites the Alabama State Legislature to address the constitutional issues found by Judge Ballard.  However, with less than one week left in the current legislative session, it is unlikely that a legislative solution will occur.

While the Order will almost certainly be appealed to the Alabama Court of Civil Appeals, any such appeal must be filed within 42 days of May 8, 2017.   A number of employer groups have already begun planning to appear as amicus curiae in support of the defendant in Clower.  It is likely that the appellate court will issue its own Stay of Judge Ballard’s Order during the pendency of an appeal.

At this point, and at least until September 5, 2017, the Act remains in effect.  However, we will be making a number of recommendations to our clients moving forward until resolution of this issue.

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