Politics & Government

Judge blocks changes in workers’ comp commission; Bevin says court ‘erred’

A Kentucky judge on Wednesday temporarily blocked Gov. Matt Bevin’s executive order abolishing the Workers’ Compensation Nominating Commission and then re-creating it with new members.

Franklin Circuit Judge Phillip Shepherd said his temporary injunction sought by labor unions will remain in effect until he issues a final judgment or decides to amend it after an expedited review.

The judge set a June 13 hearing to set a schedule for an expedited hearing.

Eric M. Lamb, a Louisville attorney for the labor unions, said a temporary injunction “was a primary objective of ours and indicates the governor doesn’t have the power he thinks he does.”

Ched Jennings, a Louisville attorney who helped the unions with the litigation, said Shepherd “has identified the issues whether a governor can completely replace a commission with terms and whether he can rewrite the statutes.”

Bevin’s press secretary, Amanda Stamper, said, “We are confident that the circuit court erred. The governor’s counsel is looking at available legal options, including a possible immediate appeal.”

Stamper said the Bevin administration is “surprised and disappointed that the court has ruled against the governor’s utilization of clear statutory authority to end pay-to-play politics, bring more partisan balance and eliminate the systemic stranglehold of a few individuals by reorganizing the Workers’ Compensation Nominating Commission.”

She said the power that Bevin is using has been used by previous governors 357 times in the last 25 years, including 103 times during the administration of previous Gov. Steve Beshear.

“Three years ago, this same judge ruled that former Gov. Beshear could use the statute at issue to create Kynect out of thin air, and yet today ruled that Gov. Bevin cannot use the same statute to create a new Workers’ Compensation Nominating Commission.” (Kynect is a health-insurance exchange that Bevin is trying to dismantle.)

The judge, in his 16-page order, said the case “raises important issues concerning the scope of the governor’s reorganization power, and the limits on the governor’s powers to replace duly appointed members of boards and commissions who serve for a set term of years established by statute.”

He said the primary legal question to be addressed is whether there are any limits to the governor’s power to make a wholesale removal and replacement of an executive branch agency with commissioners who were appointed to serve a term of years.

Closely related to that question, Shepherd said, is whether the governor, through executive order, may effectively amend statutes.

Shepherd said the power of a governor to enact a reorganization is broad, “but whether the governor can effect a wholesale firing of duly appointed state officials serving in offices with a term of years, through the guise of an administrative reorganization, is a power that has never been upheld by case law, even if such a tactic has been commonly employed by past governors.”

The judge noted that Bevin submitted to the court an affidavit from J. Brooken Smith, chief of staff to Labor Secretary Derrick Ramsey, that said several members of the nominating commission had made political contributions and had served multiple terms.

Smith said Bevin had “called for an end to ‘pay-to-play’ method of governing and that he recommended to Ramsey that he recommend to Bevin the replacement of commission members.

“While this proposal may appear to political appointees of Gov. Bevin to ‘reduce the impact of party politics,’ it may equally be viewed as vastly increasing the impact of party politics by giving the incumbent governor unbridled discretion over the appointment of all members of the commission,” said Shepherd.

He said the statute specifically prescribes the role of political party membership in the composition of the commission, “and it is unclear how the governor’s attempt to alter those statutory requirements through an executive order is related to ‘economy, efficiency and improved administration’ that is contemplated by a reorganization” under the law.

Shepherd said, “While Gov. Bevin’s goal of changing the political culture and eliminating any form of ‘pay to play’ political appointments is laudable, the power he has asserted could just as easily be misused by the next governor to undermine statutory protections for workers, or employers, and to ‘stack the deck’ of the commission in a manner that would be biased against either workers or employers depending on the political goals of the governor at any future time.”

He said the executive order is “a powerful management tool” that “can be implemented with a sledge hammer or scalpel.”

During a recent hearing on the case, Shepherd compared Bevin’s executive order to a neutron bomb, saying “it destroyed all the people but left the structure in place.”

“It kind of boggles the mind what the potential would be for mischief if there is not some limiting principle,” he said.

Kentucky’s administrative law judges decide whether and how much employers have to pay workers who were hurt on the job. These judges are appointed by the governor, but Kentucky law says the governor can only appoint a judge that has been nominated by the Workers’ Compensation Nominating Commission.

Last month — with an unprecedented six vacancies to fill — Bevin abolished that commission, rewrote the law that governed it and then re-created it with new members, all by executive order.

Bevin has used that tactic with several boards and commissions, including the Kentucky Racing Commission and the Kentucky Horse Park Commission. But his order reorganizing the nominating commission is the first to be challenged in court. Two labor unions and four injured workers sued Bevin, fearing that his new commission would nominate judges more likely to side with employers at the expense of workers.

Shepherd has ordered the nominating commission not to make any recommendations to Bevin until after the lawsuit is resolved.

The suit was brought by the General Drivers, Warehousemen & Helpers Local Union #89 (Teamsters) and several union members who have pending workers’ compensation claims.

Jack Brammer: (502) 227-1198, @BGPolitics