Minnesota Supreme Court Narrows PPD Eligibility Requirements for Employees Seeking Permanent Total Disability Status
In yet another defining decision seeking to clarify the Minnesota Workers’ Compensation Statute, the Minnesota Supreme Court on August 31, 2015, narrowed the scope of permanent partial disability (PPD) that may be used to meet the statutory threshold requirements in reaching permanent total disability (PTD) status. The court held that “for purposes of determining whether an employee is eligible for PTD benefits under Minn. Stat. § 176.101, subd. 5(2), a disability that contributes to the employee’s PPD rating must affect the employee’s ability ‘to secure anything more than sporadic employment resulting in an insubstantial income.’” In other words, an injured employee will no longer be able to use a PPD rating associated with a non-work related disability to meet the requirements of Minn. Stat. §176.101, subd. 5(2) if the non-work related disability does not affect the employee’s ability to work.
The Supreme Court, in Allan v. R.D. Offutt, No. A14-1555 (Minn. Aug. 31, 2015), has clarified an issue that has long boggled the collective minds of the defense bar and stirred the creativity of the petitioners’ bar; that is, whether a prior disability that does not affect an employee’s ability to secure employment may be considered when determining eligibility for PTD benefits under Minn. Stat. § 176.101, subd. 5(2). Since at least 1999, the Workers’ Compensation Court of Appeals (W.C.C.A.) has held that when determining eligibility for PTD, any disability could contribute to the employee’s whole-body PPD rating, regardless of whether the disability made it difficult for the employee to secure employment. The Allan Court has ensured that this will no longer be the rule.
Mr. Allan suffered a work-related low back injury when he was 48 years of age. His injury resulted in a 10% PPD rating. Three years later, he filed a claim petition seeking permanent total disability benefits. Based on his age, Minn. Stat. § 176.101, subd. 5(2) required that he demonstrate at least a 17% whole-body PPD rating in order to qualify for PTD benefits. To reach this threshold, Mr. Allan combined his 10% low back rating with a 10% rating related to a non-work related complete loss of teeth.
The compensation judge found that while Mr. Allan qualified for a 10% PPD rating based on his back injury, the rating for his complete loss of teeth should not be considered because the loss of teeth was fully corrected with dentures. Mr. Allan appealed the findings of the compensation judge and the W.C.C.A. reversed, holding that the correctable nature of a loss is irrelevant to whether the condition should be attributed to a calculation of a whole body rating. In reaching its decision, the W.C.C.A. relied on its own 1999 decision, Metzger v. Truck, Inc., 59 W.C.D. 229 (W.C.C.A. June 15, 1999). In Metzger the W.C.C.A. held that the employee could add the PPD rating from a non-work related hysterectomy to the PPD related to her work-injury. The combined whole-body rating was then ruled sufficient to qualify the employee for PTD benefits.
In reaching the contrary outcome, the Allan Court has relied on the canons of statutory interpretation. The Court held that Minn. Stat. § 176.101, subd. 5(2) is unambiguous in its requirement that disabilities that contribute to an employee’s whole-body rating must also affect employability. “[S]ubdivision 5(2) necessarily contains a causal nexus between employability and the work-related injury, and between employability and the disabilities that contribute to the permanent partial disability rating.” The Court further concluded that its case law demonstrates that they have consistently tied the award of PTD benefits to an inability to earn an income. Justice Anderson, in his majority opinion, notes that the dissent, and Mr. Allan, “ignore the primary purpose of the Workers’ Compensation Act, which is to ‘pay compensation in every case of personal injury or death of an employee arising out of and in the course of employment.” Minn. Stat. § 176.021, subd. 1. PTD necessarily deals with wage-loss and employability while PPD is more specific to functionality.
The defense bar will no doubt be grateful for the Court’s clarification as practitioners will need to start distinguishing between those non-work disabilities that do not affect employability and those that do. The Court, in footnote 1, reminds the reader that this decision does not address the W.C.C.A.’s holding in Frankhauser v. Fabcon, Inc., 57 WCD 239 (W.C.C.A. June 10, 1997), aff’d without opinion, 569 N.W.2d 533 (Minn. 1997) that non-work-related disabilities may contribute to the permanent partial disability rating as long as the disability affects employability. Therefore, going forward, a greater emphasis will need to be placed on whether a non-work related disability affects employment.
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