A three-judge panel of the D.C. Court of Appeals affirmed the authority of the D.C. City Council yesterday to enact sweeping changes in the laws governing injury compensation for workers in private businesses here previously covered under federal law.
In what city officials proclaimed a victory for home rule, the panel overturned a September 1980 ruling by a Superior Court judge who declared that the council lacked the authority to supersede the longstanding federal law with a locally enacted statute.
Under strong pressure from the Greater Washington Board of Trade, the council moved in 1979 to change the workers' compensation system that had covered private employes here since 1928. Payments allowed under that law caused insurance premiums paid by private employers for the roughly 300,000 covered by the program to soar from $20 million in 1972 to $140 million in 1980.
The Greater Washington Central Labor Council, AFL-CIO, considered the council actions a severe blow to workers and sued to block the new law. Yesterday, a labor council spokesman said the group will appeal the latest ruling to the full Court of Appeals.
"We are very disappointed, naturally, about the three-member appeals court decision, but we will continue the legal battle on behalf of all working people in the District of Columbia," said labor council spokesman Joslyn Williams. The council represents 150 unions in the Washington area.
Spokesmen for the Greater Washington Board of Trade declared yesterday's ruling a major victory for businesses located principally in the District or considering moving here. The board has contended that businesses have been discouraged from coming to the District by the relatively high insurance rates they would have to pay under the federal law.
"On this Friday, hopefully, this is the beginning of a new era in the cost of doing business here in the District of Columbia," said John Tydings, executive vice president of the Board of Trade. The board's 1,400 members employ two out of three private workers in the city.
Superior Court Judge John F. Doyle's 1980 decision voided the council legislation on the grounds that Congress, in passing the home rule act, had expressly given the city certain powers regarding workmen's compensation, but had not granted specific authority covering private employes. He concluded Congress had not intended to give the District that power and, in effect, ruled that the council had exceeded its authority by undoing a federal program.
In yesterday's unanimous decision, written by Judge William C. Pryor, the three-judge panel disagreed with Doyle's conclusions about congressional intent. The panel concluded that Congress did not intend to prohibit the local government from passing legislation regarding private employes. Pryor was joined in the opinion by retired Judge George R. Gallagher and Judge Stanley S. Harris, neither of whom has been considered a strong supporter of home rule in past decisions. Harris will leave the bench Feb. 5 to become U.S. attorney for the District.
The mere fact that a federal program was performing the essentially local function of governing compensation for local private employes, the court ruled, did not "transform the function into a 'function of the United States.' " Under the home rule act the city government is not allowed to tamper with exclusively federal operations.
Yesterday's decision does not affect benefits currently being paid to disabled workers.
"The court's decision is a real victory for the authority of the Council of the District of Columbia," said Council Chairman Arrington Dixon. "It reaffirms the right of the council to legislate on essentially local matters and is an important boost for the cause of home rule."
Labor officials object vigorously to a provision in the council law that changes the presumption that a worker who claims to have been injured on the job is injured and entitled to benefits unless the employer can produce "substantial evidence" to the contrary. The council law lessens the burden of proof on employers.
Under the federal law, District workers enjoyed the highest benefit levels of any state except Alaska. According to the most recent figures available, a worker who is totally disabled on the job in the District can collect a maximum weekly payment of two-thirds of his salary, up to $496 a week. Disability payments are tax-free.
The Board of Trade's Tydings said the law passed by the council would lower that maximum payment to $396 a week, tighten definitions of eligibility, limit cost-of-living adjustments to 5 percent a year and help prevent duplicate payments.
Roger Blunt, chairman of the Board of Trade's workers' compensation committee, said the law could reduce District employers' insurance premiums by 30 percent.
In addition to vowing a continued court battle, the labor council issued a political warning:
"The disastrous amendments to the workers compensation act were politically inspired and working men and women here will have to respond politically," said council spokesman Williams. "That means electing a mayor and city council sympathetic to the needs of workers in this city."