| “An agency out of control” is how many people have come to refer to Washington’s Department of Labor & Industries (L&I). Thurston County Superior Court Judge Richard A. Strophy seems to agree.
On February 18 Strophy ruled against L&I in a lawsuit brought by a small Seattle business regarding the legality of L&I rates. The decision upholds the plaintiff’s charge that L&I has been violating Washington State law in its annual rate calculations for more than twenty years.
During the case, L&I officials admitted under oath that the Department had in fact unilaterally changed its rate setting policy in violation of state law. Under the illegal policy, L&I had been subsidizing the rates of some industries at the expense of others, a practice that is clearly illegal under Washington law. Current law requires that each industry or “risk classification” pay its own insurance costs.
The court’s ruling has the potential to affect many industries that have been either underpaying or overpaying workers’ compensation premiums for the past twenty years. While the financial magnitude of L&I’s illegal rating process has not yet been established, some experts estimate that it could exceed $500 million per year.
According to the plaintiff’s attorney, Jon G. Schneidler, “. . . it appears that a great many industries, particularly in the white collar trades, may have been charged premiums at double or even triple the proper rate. . .”
It is interesting and important to note that L&I has not been required to submit an annual “rate filing” like those required of private sector insurers. If such a filing had been required of the monopolistic Department, it is unlikely that illegal practices outlined above would have gone unnoticed. | 
