The U.S. Supreme Court yesterday refused to hear a challenge from organized labor to sweeping changes in the District of Columbia's workers' compensation law that were put into effect last July after years of intensive lobbying by local business leaders.
The high court's decision lets stand a ruling by a three-judge panel of the D.C. Court of Appeals that affirmed the City Council's authority under the District's home rule charter to adopt new laws governing injury compensation for workers in private businesses who previously were covered by a federal law.
Corporation Counsel Judith Rogers, whose office represented the City Council in the case, said the Reagan administration may have played a key role by intervening in behalf of the new law.
In a brief filed with the high court, Solicitor General Rex E. Lee reversed an earlier Carter administration policy that opposed transferring responsibility for the city's worker's compensation law from the U.S. Department of Labor to the District government.
"There can be little doubt that Congress' broad delegation of authority to the District in the Home Rule Act included the power to enact workers' compensation legislation," Lee told the court.
Council Chairman David A. Clarke and officials of the Greater Washington Board of Trade, the area's largest business lobby and the chief proponent of the change in the law, hailed the Supreme Court's decision as a victory for home rule.
"The issue there was not what the law is or ought to be," said Clarke, who had opposed some sections of the new law. "The issue is the council's authority to pass it. It's a home rule issue, not a question of the content of the law."
Roger Blunt, chairman of the Board of Trade's lobbying arm, said the court's decision "was a victory for home rule" and puts to rest a 2 1/2-year legal battle between business and labor over the new compensation law.
Blunt said the old 1928 federal law, which imposed one of the highest taxes of its kind on local employers and provided workers with the highest benefit levels of any state except Alaska, was driving businesses away from Washington.
"Clearly the economic development posture of the city has been improved and, in the end, even labor had to believe that," Blunt said.
But officials of the Metropolitan Washington Council (AFL-CIO) and the Food and Allied Services Trade Council, who had challenged the new law on the grounds that the city had exceeded its limited home rule powers, said they were disappointed by yesterday's decision.
Joslyn Williams, president of the labor council, said he will urge the council to pass legislation to restore some of the benefits lost to workers under the new law--possibly through the creation of a new, nonprofit Worker Compensation Fund operated by the city.
"We tried hard to protect the intersts of working people," Williams said. "Now one of our legislative priorities for 1983 is the adoption of a self-funded workers' compensation fund. . . . "
The new District law, which was approved in 1980 but did not go into effect until last July 26, reduces the maximum weekly benefit for a worker who is totally disabled on the job from $496 to $396. The law also tightens definitions of eligibility, limits cost-of-living adjustments to 5 percent a year and helps prevent duplicate payments.
An official of the city's Department of Employment Services said recently that the new law will reduce the cost to local businesses by an estimated $50 million this year.