Posted on Monday, April 9th, 2018 at 1:20 pm
Parker v. Webster County Coal LLC (Dotiki Mine), 529 S.W.3d 759 (Ky. 2017) is one of the most impactful Supreme Court decisions on Kentucky workers’ compensation law in recent times. Members of the Kentucky Legislature are politicking over revisions to the law as a result of the decision and practitioners for plaintiffs and defendants are arguing over how to settle claims in light of the changing legal landscape. Injured workers are left uncertain as to what benefits they are entitled.
In a workers’ compensation claim, if an injured worker is not permanently totally disabled then they are entitled to either 425 weeks or 520 weeks’ worth of income benefits, as determined by their percentage of impairment. However, prior to Parker, benefits would cease upon the date that the employee qualifies for social security retirement benefits or two years after the employers injury, whichever last occurred, pursuant to KRS 342.730(4).
The state of the law was that if an older worker got hurt, they got less benefits than a younger worker with an identical injury. The logic of cutting off benefits to an injured worker who is older was to prevent duplicate benefits in the form of retirement income and to allow savings in the workers’ compensation system. Parker did not address the absurdity that not every employee ceases working at retirement age, nor did it comment as to whom such “savings” went (spoiler alert –it’s the insurance company). Parker determined the issue of whether there was a rational basis to support a statute that undisputedly treated older and younger workers differently, but it did so in a way that perhaps the parties did not expect.
Mr. Parker was born in October, 1939, and worked as an underground coal miner for Webster County Coal LLC since 1974. In September, 2008, he slipped trying to clamber over a conveyor belt, injuring his knee and back. The Defendant challenged the injury to the spine, but ultimately the Administrative Law Judge ordered both the back and knee were compensable. Mr. Parker was awarded 4% impairment for his knee and 22% impairment for his low back injury, a combination of 26% whole person impairment. Ordinarily this would have qualified someone for 425 weeks’ worth of benefits, but with Mr. Parker being 68 years old at the time of his injury he qualified for social security retirement benefits. The Administrative Law Judge found that because Parker had received two years of temporary total disability benefits he was not entitled to any additional income benefits for his permanent disability. The Administrative Law Judge based his reasoning on KRS 342.730(4).
Plaintiff appealed arguing the unconstitutionality of KRS 342.730(4) claiming infringement of his right to due process, abrogation of jural rights and violation of the equal protection clause. Defendant countered that based on precedent these arguments were without merit.
Indeed there had previously been a failed constitutional challenge to KRS 342.730 (see McDowell v. Jackson Energy RECC, 84 S.W. 3d. 71 (Ky. 2002) and Keith v. Hopple Plastics, 178 S,W. 3d 463 (Ky. 2005). The Court justified its reason to revisit in part on the 2011 case Vision Mining Inc. v. Gardner, 364 S.W.3d 455 (Ky. 2011) but ultimately the Court decided the issue on the distinction between teachers, who participate in a retirement program separate from Social Security Retirement, and other workers in the Commonwealth . Teachers who had not had outside employment and who suffered a work related injury were not subject to the limitation of KRS 342,730 because they never qualify for Social Security Retirement benefits. The Court framed the issue as being disparate treatment between older workers who qualify for Social Security Retirement and older workers who do not.
The Court applied a rational basis test, concluding that to be the correct standard for social legislation like the Workers’ Compensation Act. It found that treating all other workers differently than teachers did not have a rational basis. The Court found the logic of avoiding duplicate benefits failed muster in the teacher scenario and found that pursuant to Vision Mining financial savings did not constitute a rational basis either.
Following Parker, it appears the Department of Workers’ claims is falling back to the tier down provision of the 1994 Act. Pursuant to that statute, an award of benefits was reduced by 10% at age 65 for one year and then reduced again by 10% annually until age 70. Once an injured worker reached 70, the benefits were no longer tiered down and they would continue for the duration of the award. Under the 1994 statute, Mr. Parker would be entitled to 425 weeks’ worth of benefits, rather than none at all.
The Kentucky legislature appears to be entertaining a much more severe reduction for the elderly workers of Kentucky. As of writing, Defense attorneys are arguing that benefits are likely going to be capped at 67 regardless of retirement benefits. Workers compensation carriers are taking this position on claims in and out of litigation to try and reduce their exposure on claims where the injury is clearly compensable.
Increasingly, people do not retire at 65. Sometimes they wish to continue their work, perhaps more often they have no choice but to work, people are living longer and retirement benefits are often insufficient. Occasionally, older workers need to support grandchildren or other people dependent for a myriad of reasons. Our 2018 society does not support a bright line rule that income benefits injured people rely on should stop at 65, 67, or any other arbitrary age. It is perhaps significant to remember the purpose of act, to provide income benefits and medical treatment for the cure and relief of a work-related injury. The focus should not be how old, it should be how hurt. If we lose sight of that everybody potentially suffers.