Article by Erik Smith. Published on Thursday, April 07, 2011 EST.

Lump-Sum Settlements Made Sense When he Ran Oregon Program, Says Gary Weeks – Urges House Speaker to Let Bill Loose

Gary Weeks, former director of Washington’s Department of Labor and Industries and its Oregon counterpart.

By Erik Smith

Staff writer/ Washington State Wire

OLYMPIA, April 7.—Gary Weeks, the former director of the Washington Department of Labor and Industries and its Oregon counterpart, is adding his endorsement to a controversial workers’ comp bill now stalled in a House committee.

            In a letter to House Speaker Frank Chopp, Weeks says lump-sum settlements made sense when he directed the Oregon workers’ comp program, and they can help rein in costs in this state as well.

            Weeks is backing Senate Bill 5566, a measure that passed the state Senate earlier this month that would allow workers to take voluntary lump-sum settlements in lieu of pensions. The measure right now sits in the House Labor and Workforce Development Committee. Heavy labor opposition has blocked the measure, and chairman Mike Sells, D-Everett, has said he does not intend to allow a vote.

            Recently retired after 35 years in state government and trade-association work, Weeks notes, “I no longer have a dog in the fight.” But he says lump-sum settlements proved their worth in Oregon. Permitted in 1990, they’re a big reason why the state has managed to avoid rate increases for the last 20 years. He disputes some of the biggest arguments against the measure, saying the Washington proposal offers more protection to workers than the Oregon law, and that the Oregon law didn’t increase demand for public medical services, as some have suggested might occur in Washington

            Washington is one of only six states that does not allow settlements of some type. Claims costs have increased dramatically over the last decade, and tax rates have spiked in the last two years – an average 7.6 percent increase in 2010 and 12 percent this year.

“It’s pretty compelling when the L&I director of two states says he agrees with 5566,” said Senate Minority Leader Mike Hewitt, R-Walla Walla.

            Speaks From Experience

In his letter, Weeks says he remains an avid follower of the debate:

            “Although I recently retired from public life after over 35 years of working with public agencies and nonprofit organizations, I still find the public policy debate in some key areas compelling. While I no longer have a dog in the fight that too often characterizes business and labor approaches to workers’ compensation reform, I know from experience what has worked and what can benefit both workers and business. In my career in public service, I have had the opportunity to serve as both the director of the Oregon Department of Consumer and Business Services (DCBS), which oversees Oregon’s workers’ compensation system, and Washington’s Department of Labor & Industries (L&I). It is this experience that gives me a perspective on what is effective and ineffective in workers’ compensation systems.

“In Oregon, I had the opportunity to direct DCBS in the critical few years after passage of that state’s landmark 1990 reforms. A central piece of the labor- and business-backed package was voluntary settlement agreements with strong sideboards for protection of the injured worker. Voluntary settlement agreements, sometimes called “compromise & release,” are an important strategy for controlling costs associated with long term disability and pension claims.

Suggests One Change

“ESB 5566, passed by the Washington State Senate and pending in the House, contains a voluntary settlement agreement proposal very similar to what labor and business groups backed in Oregon. It contains many of the same worker protections as the Oregon law, in fact providing more protection to the unrepresented worker. One significant difference between Oregon law and ESB 5566 is the limited settlement of medical benefits, something that I suggest you reexamine in the legislation. It is my belief that a worker’s right to life time medical benefits for work related injuries should not be compromised, so I suggest a change to the bill prohibiting the settlement of medical, as Oregon did in its 1990 reforms.   

“If passed in Washington, I do believe the voluntary settlement program contained in ESB 5566 would be a substantial improvement to Washington’s system, providing a flexible option for workers’ benefits while allowing the system another tool to address the complex claims that primarily drive its cost structure and premium rates. One of the primary reasons that Oregon has been able to hold Workers Compensation rates constant for over 20 years is the voluntary settlement process. It is important to understand that this change can occur while still providing protection for the worker from an unfair or unjust settlement.

Doesn’t Shift Costs

“Incidentally, prior to taking over as director of L&I in 2005, I served for six years as director of Oregon’s Department of Human Services. I understand the concern that settlement of workers’ compensation claims can lead to cost-shifting to other social service programs. I would report, however, that in my experience in Oregon, that did not occur.

“Thank you for the opportunity to express these thoughts to you and thank you for your efforts to make Washington’s workers compensation system deliver the best outcomes for workers and for business.

“Very truly yours,

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