2x Multiplier and Return to Work

Helton v. Rockhampton Energy, LLC (2021-SC-0248-WC)

The 2x multiplier in KRS 342.730(1)(c)2 applies to permanent partial disability benefits only where an employee “returns to work” after a work-related injury at the same or higher wages and that work subsequently ends.  To qualify as a “return to work,” there must be a cessation of work followed by a resumption of work. Continuation of work is not a return to work.

Employee suffered a work-related injury on 11/16/18. He continued working his normal job at the same or greater wages until he was laid off for economic reasons on 9/2/19. Prior to being laid off, the employer never ceased working after the injury. The ALJ awarded the 2x multiplier since he was working making the same or greater wages post-injury and was then laid off. The Board reversed finding there was no “return” to work pursuant to KRS 342.730(1)(c)(2) because there was never a cessation of work followed by a resumption. The Court of Appeals and Supreme Court of Kentucky upheld the reversal.

3x Multiplier and Inapplicability of Public Policy Exclusion

Tractor Supply v. Wells (2021-SC-0286-WC)

In Livingood v. Transfreight, LLC, the Court held that if an employee returns to work making equal or greater wages and is subsequently fired for intentional misconduct with a reckless disregard to the consequences, the employee is not entitled to the 2x multiplier as awarding same would be against the public policy rule that no claimant should profit from own misconduct. Here, the employer sought to expand this public policy exclusion to the 3x multiplier which, pursuant to 342.730(1)(c)1, applies when the claimant no longer has the physical ability to return to the pre-injury job.

The employee was injured at work resulting in restrictions that prevented her from performing her pre-injury job duties. She returned to a light duty position and was subsequently terminated for allegedly providing false information during an investigation (unrelated to workers’ comp claim).

The ALJ awarded indemnity benefits with the 3x multiplier. The employer argued that claimant was not entitled to the 3x multiplier due to her misconduct, seeking to extend the holding in Livingood.

Affirming the decision of the ALJ, the Board, and Court of Appeals, the Supreme Court of Kentucky declined to extend Livingood to the 3x multiplier. The Court found that the 3x multiplier is concerned with the finding of disability and is not tied to any condition of employment. Because the 2x multiplier is related to leaving employment, it was reasonable for the court to determine that when the job loss is due to misconduct, awarding a double benefit would be unreasonable and against public policy. Here, the employee was entitled to the 3x multiplier because she could not return to her pre-injury duties and her subsequent termination was irrelevant.

Admissibility of Out of State Physician Reports

Toler v. Oldham County Fiscal Court (2021-SC-0356-WC)

In a case of first impression, the Supreme Court of Kentucky held that a written report by a physician not licensed in Kentucky cannot be submitted as evidence in a workers’ compensation case.

Overturning the ALJ, the Board and Court of Appeals, the Supreme Court first noted that the Kentucky Rules of Evidence (“KRE”) must be followed in all proceedings before an ALJ, except as varied by statute or 803 KAR 25:010. It then stated that KRS 342.033 provides that a party may introduce direct testimony from a physician through a written medical report. The Court also referenced 803 KAR 25:010 which states a party may file evidence from two physicians in accordance with KRS 342.033, either by deposition or medical report. Holding that the written report of a physician not licensed in Kentucky was inadmissible, the Court found that the plain language of KRS 342.0011(32) defining “physician” only included those who were licensed in Kentucky. It further found that the prefatory phrase in KRS 342.011 “unless context otherwise requires” did not apply.

The Court clarified that this holding does not apply to treating physicians because the “context otherwise requires” phrase required an expanded reading of physicians when dealing with treating physicians. Therefore, a treating physician not licensed in Kentucky may provide a written opinion on behalf of an employee. 

Note this case involved the admissibility of a written report. It is arguable that a medical opinion of an out of state physician introduced by deposition testimony would be admissible. In a 2005 case, the Supreme Court of Kentucky allowed the deposition testimony of a non-physician expert on the issue of causation, specifically stating that the definition of “physician” does not preclude an ALJ from considering other types of expert testimony if it is relevant to resolving a causation question. Dravo Lime Co., Inc. v. Eakins. Also, KRE 702 allows expert testimony on relevant issues, and it seems it would violate the KRE to refuse to admit deposition testimony of qualified experts, including out of state physicians.

Even if an out of state physician opinion would be admissible through deposition, it may now be difficult if not impossible to get the claimant to see an out of state physician if not licensed in Kentucky. KRS 342.205(1), in pertinent parts, states that “[a]fter an injury and so long as compensation is claimed, the employee, if requested by a party…shall submit himself or herself to examination, at a reasonable time and place, to a duly qualified physician or surgeon designated and paid by the requesting party.” (emphasis added).

Furthermore, if a claimant has moved out of state, it appears the employer will now have to pay to have the claimant travel back to Kentucky for an examination with a Kentucky licensed physician if they wish to submit a written report into evidence.

There are numerous places throughout KRS Chapter 342 and the applicable regulations that could be impacted by this decision, including regulations governing Utilization Review (“UR”) and Medical Fee Disputes. UR is currently being regulated by an emergency regulation while the new regulations work their way through the regulatory approval process. 803 KAR 25:195E defines “physician” as defined by KRS 342.0011(32). It further provides that “only a physician shall issue an initial utilization review denial.” (emphasis added). Final UR decisions also needed to be issued by a “physician.” Do UR denials now need to be made only by Kentucky licensed physicians? Can the UR decisions be admitted into evidence in medical fee disputes (“MFD”) if the physician is out of state? The DWC is working on current regulations to govern UR and MFD, so we anticipate the new regulations will provide clarification and guidance on these issues. Also, a Petition for Rehearing has been submitted to the Supreme Court requesting clarification on the impact this decision will have on the UR process. We will monitor closely and keep you updated on any developments.

Sixty-Day Submission Requirement for Medical Bills Applies Only Post-Award

Wonderfoil, Inc. v. Russell (2020-SC-0301-WC)

The Supreme Court of Kentucky held that the Board and Court of Appeals properly reversed the ALJ’s ruling that certain medical expenses were not submitted timely, holding that the 60-day deadline for submission of medical expenses by an employee only applies post-award. 

The Supreme Court of Kentucky reasoned that pre-award application of the 60-day deadline found in 803 KAR 25:096 would contradict other regulations requiring disclosure of unpaid medical bills during litigation. It cited a prior Board opinion, Brown Pallet v. Jones, which held that the 45-day deadline for submission of bills by medical providers found in KRS 342.020 only applies post-award. The Court also cited its earlier decision in R.J. Corman Railroad Construction v. Haddix holding that the requirement that employers pay medical bills within 30 days only applies post-award.

The Court explained that the claimant is still required to submit unpaid medical expenses in its Notice of Disclosure which must be filed within 45-days of the issuance of the Notice of Filing Application. Furthermore, the claimant then must turn over new medical expenses within 10 days of receiving same. And claimant must bring copies of unpaid medical bills and expenses to the Benefit Review Conference and failure “may” constitute a waiver to claim payment for those bills.

Exclusive Remedy and Up-the-Ladder Immunity

Cunningham v. Kroger Limited Partnership I (2021-CA-0704-MR)

Plaintiff worked for Penske, who agreed by contract to receive freight for Kroger Limited Partnership II (“KLP II) and deliver said freight to KLP II and to facilities of all KLP II’s divisions, subsidiaries or affiliates. Plaintiff was injured while making a delivery to Danville Kroger store, which is owned and operated by KLP I, a limited partner of the Kroger Company. KLP II is a subsidiary of the Kroger Company.

Plaintiff received workers’ compensation benefits from his employer, Penske. Plaintiff then filed civil suit against KLP I alleging negligence and seeking damages for medical expenses, lost wages and pain and suffering. The Court of Appeals affirmed the lower court decision granting KLP I summary judgment as an up-the-ladder employer immune from tort liability.

Application of 3x Multiplier to Injuries Sustained on Two Separate Occasions

Apple Valley Sanitation, Inc. v. Jon Stambaugh (2021-SC-0227-WC)

The employee sustained two separate work injuries, returning to work after the first injury until a subsequent injury 12 weeks later, after which he did not return to work. The employee was performing his pre-injury job except for a light duty restriction during 6 of the 12 weeks. The employee submitted a physician report stating he lacked the physical ability to perform his pre-injury job. The ALJ awarded benefits for both injury dates enhancing both by the 3x multiplier.

The employer argued that it was erroneous to enhance the award for the first injury date by the 3x multiplier because the employee returned to work performing the same job after the first injury. The Supreme Court of Kentucky affirmed the award of the 3x multiplier, finding that the employee’s continued work did not constitute a return to work reflecting a capacity to continue pre-injury work for the indefinite future.

Psychological and Psychiatric Conditions

Time Warner Cable, Inc. v. Smith (2020-SC-0580-WC)

The Supreme Court of Kentucky held that a Claimant's testimony is competent evidence as to his psychological medical condition, which the ALJ can rely on when determining the extent and duration of a disability. Here the claimant presented medical reports assessing physical and psychological impairments due to the work injury. The psychological report failed to assess restrictions based on the psychological condition. The ALJ noted that the physical injury and physical restrictions alone did not render the claimant permanently and totally disabled. Relying on the claimant’s testimony as to the affect his psychological condition had on his ability to work, the ALJ  found the claimant permanently and totally disabled and the Supreme Court affirmed.

Should you have any questions or wish to discuss any related matters, please contact us at your convenience.

H. Douglas Jones, Esq. – djones@jsbattorneys.com, 859.594.4200

Margo Menefee, Esq. – mmenefee@jsbattorneys.com, 859.594.4200

Income Benefits

O’Bryan v. Zip Express, (2020-SC-02620WC, not final) – The Supreme Court of Kentucky

Claimant was found by the ALJ to be permanently and totally disabled following a work-related motor vehicle accident. Claimant was 65 on the date of accident. Claimant appealed the award, arguing the age 70 cap on indemnity benefits under KRS 342.730(4) is an unconstitutional violation of equal protection.

The Court of Appeals found KRS 342.730(4) and the age 70 cap is constitutional both on its face and as retroactively applied (applies to all cases not fully and finally adjudicated as of the effective date of the act, 7/14/2018). The Supreme Court affirmed, consistent with its opinion in Kroger v. Cates, 627 S.W.3d 864 (Ky. 2021).

Employee v. Independent Contractor

AIG v. Oufafa, et. al., (2020-CA-0942-WC, not final); Taxi, LLC d/b/a Taxi 7 v. Oufafa, et. al., (2020-CA-0946-WC, not final) – Kentucky Court of Appeals

Taxi 7’s business is leasing taxicabs and related services, including dispatch and credit card processing to individuals, corporations, partnerships and other entities. Claimant signed a Lease agreement with Taxi 7 agreeing to pay $405 weekly for a cab lease, dispatch services, and credit card processing services, as well as $30 weekly for vehicle insurance. He also signed a paper titled “Status as a Self-Employed Businessperson,” in which he clearly acknowledged he was not an employee and not entitled to workers’ compensation benefits. Claimant could operate the cab as he saw fit, choose his hours, charge his own rates, and keep his collected fares.

Claimant filed for worker’s compensation benefits after being shot while driving. ALJ found Claimant was an independent contractor and Taxi 7 was a taxicab leasing company. While the ALJ did find that cab driving was an integral part of Taxi 7’s business of leasing cabs, the ALJ concluded that driving passengers was a distinct occupation different than the leasing of cabs.

The appellate Board reversed, finding that the ALJ incorrectly concluded that Taxi 7 was a taxicab leasing company rather than a taxicab company that employed the Claimant as a driver. The Court of Appeals reversed the Board, stating that the ALJ’s finding of fact that Taxi 7 was a taxicab leasing business and Claimant was not an employee was supported by the facts and not clearly erroneous. The Court emphasized Claimant received no remuneration from Taxi 7 and his earnings all came directly from his customers.

Should you have any questions or wish to discuss any related matters, please contact us at your convenience.

H. Douglas Jones, Esq. – djones@jsbattorneys.com, 859.594.4200

Margo Menefee, Esq. – mmenefee@jsbattorneys.com, 859.594.4200

H. Douglas Jones and Margo J. Menefee, JSB Attorneys, PLLC

So you’ve settled a workers compensation claim on a full and final basis with all waivers including reopening rights. Congratulations, now you can close that file and move on to the next. But wait, what if the employee dies after the settlement and the death is attributable to the work injury?

In Kentucky when an employee dies due to a work injury or occupational illness, the employee’s surviving spouse and dependents are entitled to “death benefits” per KRS 342.750. The weekly benefits payable to all beneficiaries in case of death can equate to as much as 75 percent of the average weekly wage of the state (current max is $688.34 weekly for injuries in 2021). Continued payment of those weekly benefits can continue until the date the deceased indemnity benefits would have ended per KRS 342.730 (age 70 or 4 years after injury, whichever occurs last).

In addition to the above weekly benefits, if the death occurs within four years of the date of injury, the deceased’s estate is entitled to a lump sum payment (currently $90,150.18 for injuries in 2021).

Death benefits can be quite the contingent liability, yet they are rarely discussed or analyzed as part of the settlement of a workers’ compensation claim. That’s because when we think of death benefits, we usually think of some catastrophic accident that has caused the death of the employee before that employee is able to adjudicate his/her own claim. The estate gets the lump sum payment, and the surviving spouse and dependents get weekly benefits as described above.

When settling a workers’ compensation claim with an injured worker, the parties usually don’t consider a possible future death relating to the work injury. However, what happens if a death occurs several years after the accident and after settlement of the underlying claim?

In the Supreme Court of Kentucky case Family Dollar v. Baytos, 525 S.W.3d 65 (Ky. 2017), the employee tore his aortic artery at work. He entered into a “full and final” settlement of all claims and died a year later as a result of the torn artery. His wife brought a claim for death benefits despite the prior settlement. The court affirmed the death benefit award, holding that death benefits are not derivative of the injured employee’s claim and therefore were not covered under the prior “full and final” settlement of her husband’s claim. Acknowledging that this interpretation of KRS 342.750 doubled the employers’ exposure, the court stated it was bound by the text of the statute.

KRS 342.750 creates a separate cause of action for surviving spouses and dependents when an injured worker dies as a result of a work injury, which results in a lingering contingent liability even after a claim is settled or paid in full. Whether the claimant can waive the rights of estates and death benefit recipients as part of a full and final settlement has not been resolved, but it is worth discussing death benefits as part of the settlement. We have included such waivers, along with additional consideration to the spouse as part of full and final settlements and would recommend exploring same when settling claims -- especially in high value and serious injury cases.

JSB ATTORNEYS, PLLC

May 14, 2021

Legislation Enacted

Senate Bill 49: AN ACT relating to home and community based services waiver providers.(Effective June 28, 2021)

·         Amend KRS 337.010 to exclude providers of certain home or community based services from the definition of employee in regards to payment of wages; amend KRS 342.650 to exempt certain home or community based services from coverage in regards to workers’ compensation; amend KRS 341.055 to exclude certain home or community based services from “covered employment” in regards to unemployment compensation.

Senate Bill 141 - AN ACT relating to the coal workers' pneumoconiosis fund.(Effective June 28, 2021)

·         Amend KRS 342.1242 and KRS 342.1243 to provide guidelines for distribution of funds remaining in the Kentucky coal workers' pneumoconiosis fund.

House Bill 48 - AN ACT relating to reimbursement for pharmacist services. (Effective June 28, 2021)

·         Create a new section of Subtitle 12 of KRS Chapter 304 to establish certain insurance practices relating to the reimbursement of pharmacists; amend KRS 304.14-135 to establish a clean claim form for the reimbursement of certain pharmacist services or procedures; amend KRS 304.17A-844 and 304.17B-011 to conform; amend KRS 18A.225 to require the state employee health plan to comply with pharmacist reimbursement requirements; amend KRS 342.020 to require workers' compensation employers, insurers, and payment obligors to comply with pharmacist reimbursement requirements.

House Bill 349 – AN ACT relating to legislative committees. (Effective June 28, 2021)

·         Amend KRS 11.202, 304.13-340, 304.50-160, 341.240, 342.035, 342.1223, 342.230, 342.342, 342.765, and 342.817 to change the name of the committee of the General Assembly which shall receive agency reports.

Legislation proposed but not passed

Senate Bill 85 – AN ACT relating to workers' compensation for volunteer firemen and other emergency personnel.

·         Amend KRS 342.140 to allow income benefits for volunteer firemen, police, and emergency management agency members or trainees to be based on fifty percent of the state average weekly wage if that is greater than the average weekly wage of their regular employment.

·         01/07/21: introduced in Senate to Committee on Committees (S); 02/02/21: to Economic Development, Tourism, & Labor (S)

Senate Bill 157 - AN ACT relating to workers' compensation.

·         Amend KRS 342.610 to provide that contractors shall not be liable for payment of compensation to subcontractors with no employees who are not subject to KRS Chapter 342.

·         02/03/21: introduced in Senate to Committee on Committees (S); 02/09/21: to Economic Development, Tourism, & Labor (S)

House Bill 242 - AN ACT relating to the recognition and registration of professional employer organizations.

·         Create new sections of KRS Chapter 336 to declare that professional employer organizations provide a valuable service to commerce and should be properly recognized and regulated; define "client," "co-employer," "co-employment relationship," "covered employee," "insurer," "professional employer organization group," "person," "professional employer agreement," "professional employer organization," "professional employer services," "registrant," and "temporary help service"; indicate that covered employees shall be deemed employees of the client for purposes of determining tax credits or economic incentives; require a person providing professional employer services to be registered and to set forth the registration requirements; require professional employer organizations to pay a registration fee; require a professional employer organization to either maintain positive working capital or provide a bond, letter of credit, or security; set forth the rights and responsibilities of parties to a co-employment agreement; set forth the health insurance obligations of professional employer organizations; set forth the workers' compensation requirements of professional employer organizations and the client; set forth the unemployment insurance obligations of the professional employer organization and the client; prohibit a person from knowingly providing professional employer services without becoming registered and set forth actions that may be taken by the Department of Workers' Claims against any person in violation; amend the definition of "premium" in KRS 342.0011 to include co-employment relationships with a professional employer organization; amend KRS 342.990 to delete references to KRS 342.615; repeal KRS 342.615; state that the provisions of this Act are severable.

·         02/09/21: introduced in House to Committee on Committees (H); 02/10/21: to Small Business & Information Technology (H)

House Bill 385 – AN ACT relating to employment.

·         Amend KRS 337.010 to remove exemptions in definition of employee for agricultural workers and domestic service workers; amend KRS 342.630 to indicate that agricultural employers are subject to KRS Chapter 342; amend KRS 342.650 to remove exemptions for domestic service employees and agricultural employees from coverage under KRS Chapter 342; amend other statutes to conform.

·         02/04/21: introduced in House to Committee on Committees (H)

House Bill 529 - AN ACT relating to workers' compensation.

·         Amend KRS 342.610 to exclude certain levels of delta-9-tetrahydrocannabinol in the blood from the presumption that an injury was caused by the introduction of certain substances into the employee's body.

·         02/22/21: introduced in House to Committee on Committees (H)

House Bill 59 - AN ACT relating to workers' compensation.

·         Amend KRS 342.020 to require an employer to pay for medical benefits at the time of injury and thereafter during disability instead of 780 weeks; amend KRS 342.990 to conform.

·         01/05/21: to Committee on Committees (H)

House Bill 62 - AN ACT relating to occupational disease claims.

·         Amend KRS 342.125 to remove the requirement that an affected employee previously diagnosed with occupational pneumoconiosis resulting from exposure to coal dust must have an additional two years of employment in the Commonwealth wherein the employee was continuously exposed to the hazards of the disease in order to reopen a claim.

·         01/05/21: to Committee on Committees (H)

House Bill 282 - AN ACT relating to workers' compensation.

·         Amend KRS 342.315 to eliminate the requirement that physicians contracting with the commissioner of the Department of Workers' Claims to perform evaluations in occupational disease claims be "B" readers who are licensed in Kentucky and are board-certified pulmonary specialists; amend KRS 342.316 to allow the commissioner to select a physician or medical facility for referral in occupational disease claims and eliminate the requirement that such physicians be "B" readers who are licensed in Kentucky and are board-certified pulmonary specialists; amend KRS 342.794 to delete the definition of "board-certified pulmonary specialist" and eliminate the requirement that physicians on the list of qualified "B" readers maintained by the commissioner include only those licensed in Kentucky and board-certified pulmonary specialists.

·         02/02/21: to Committee on Committees (H)

House Bill 500 - AN ACT relating to workers' compensation for first responders.

·         Amend KRS 342.0011 to clarify definition of "injury" to include psychological injuries for certain employees; create a new section of KRS Chapter 342 to set out when the psychological injuries are valid workers' compensation claims when no physical injury exists.

·         02/10/21: to Committee on Committees (H)

House Bill 479 - AN ACT relating to legal actions involving the Commonwealth of Kentucky and declaring an emergency.

·         Amend KRS 15.020 to authorize the Attorney General to bring an action regarding the constitutionality of statutes, regulations, and orders; establish venue; amend KRS 15.060 to authorize assistance from other areas of state government regarding investigations and prosecutions of various matters; amend KRS 15.113 to identify additional illegal or fraudulent activity under the investigative authority of the Attorney General; amend KRS 15.240 to expand the statutes under which the Attorney General can initiate an action or intervene in an action; amend KRS 342.760 and 342.765 to transfer the legal representation and reporting requirements regarding the uninsured employers fund from the Attorney General to the Labor Cabinet; amend KRS 446.350 to establish a waiver of sovereign immunity under limited situations; EMERGENCY.

·         03/11/21: recommitted to Appropriations & Revenue (H)

Should you have any questions or wish to discuss any of these matters personally, please contact us at your convenience.

H. Douglas Jones, Esq.

djones@jsbattorneys.com

Margo J. Menefee, Esq.

mmenefee@jsbattorneys.com

KENTUCKY UPDATE – NEW LEGISLATION

Kentucky Legislation (House Bill 48) Reimbursement for Pharmaceutical Services, effective 6/28/21

 Creates a new section of Subtitle 12 of KRS Chapter 304 to establish certain insurance practices relating to the reimbursement of pharmacists;

 Amends KRS 304.14-135 to establish a clean claim form for the reimbursement of certain pharmacist services or procedures;

 Amends KRS 304.17A-844 and 304.17B-011 to conform;

 Amends KRS 18A.225 to require the state employee health plan to comply with pharmacist reimbursement requirements; and

 Amends KRS 342.020 (Workers’ Compensation Statute) to require workers' compensation employers, insurers, and payment obligors to comply with pharmacist reimbursement requirements.

     o Section (14) was added to KRS 342.020. Medical treatment.

          (14)(a) As used in this subsection, "practice of pharmacy" has the same meaning as in KRS 315.010.     

             (b) In addition to all other compensation that may be reimbursed to a pharmacist under this chapter, the employer, insurer, or payment obligor shall be liable for the reimbursement of a pharmacist for a service or procedure at a rate not less than that provided to other nonphysician practitioners if the service or procedure:

                         1. Is within the scope of the practice of pharmacy;

                         2. Would otherwise be compensable under this chapter if the service or procedure were provided by a:

                                a. Physician;

                                 b. Advanced practice registered nurse; or

                                 c. Physician assistant; and

                         3. Is performed by the pharmacist in strict compliance with laws and administrative regulations related to the pharmacist's license.

    o KRS 315 is titled Pharmacists and Pharmacies. KRS 315.010 defines “practice of pharmacy” as follows:

              "Practice of pharmacy" means interpretation, evaluation, and implementation of medical orders and prescription drug orders; responsibility for dispensing prescription drug orders, including radioactive substances; participation in drug and drug-related device selection; administration of medications or biologics in the course of dispensing or maintaining a prescription drug order; the administration of adult immunizations pursuant to prescriberapproved protocols; the administration of immunizations to individuals nine (9) to seventeen (17) years of age pursuant to prescriber-approved protocols with the consent of a parent or guardian; the administration of immunizations to a child as defined in KRS 214.032, pursuant to protocols as authorized by KRS 315.500; drug evaluation, utilization, or regimen review; maintenance of patient pharmacy records; and provision of patient counseling and those professional acts, professional decisions, or professional services necessary to maintain and manage all areas of a patient's pharmacy-related care, including pharmacy-related primary care as defined in this section;

o Therefore, HB 48 amends KRS 342.020 to require employer/insurers to reimburse pharmacists for services provided if they fall within the scope of the “practice of pharmacy” definition above and would otherwise be compensable if provided by a physician, advanced practice registered nurse, or physician assistant. Also the service must be performed in strict compliance with the laws and administrative regulations related to the pharmacist’s license.

Should you have any questions or wish to discuss any of these matters personally, please contact us at your convenience.

H. Douglas Jones, Esq. djones@jsbattorneys.com

Margo J. Menefee, Esq. mmenefee@jsbattorneys.com 

KY SUPREME COURT EXPANDS OFFSET FOR PRE-EXISTING CONDITIONS Wetherby v. Amazon.com, 580 S.W.3d 521 (Ky. 2019)

H. Douglas Jones, Esq. and Margaret Menefee, Esq., Jones Howard Law, PLLC

The Supreme Court of Kentucky has rendered a significant decision regarding the ability to claim a permanent partial disability offset for a pre-existing condition.

In Kentucky, historically, pre-existing conditions were put in one of two categories: 1) pre-existing dormant condition aroused into a disabling reality by the current injury; or 2) pre-existing active condition. In the seminal case,Finley v. DBM Technologies, 217 S.W.3d 261 (Ky.App 2007), the Court held that a pre-existing active condition (subject to an offset) must be impairment ratable pursuant to the AMAGuides, 5^th Edition (“Guides”), and symptomatic immediately prior to the work injury. This standard made it very difficult to obtain an offset for most pre-existing conditions.

Finally, the Supreme Court in Wetherby rendered a decision finding that because Kentucky uses theGuides as a basis for permanent partial disability awards, it cannot ignore a pre-existing impairment and ratable condition simply because it did not meet the pre-existing active standard set forth inFinley.

Background

In 2012 while working at Amazon, Wetherby experienced pain and numbness in his neck and right arm after moving heavy boxes from a pallet to a conveyor belt. Wetherby underwent cervical surgery in 2014. Wetherby remained symptomatic following the 2014 surgery. Due to a 1980 injury, Wetherby previously underwent cervical fusions in 1980 and 1985.

It was undisputed that Wetherby was asymptomatic after the 1985 surgery, until the 2012 work injury. However, every physician who examined Wetherby acknowledged he had a pre-existing impairment pursuant to theGuides due to the earlier 1980 injury and related surgeries.

The Administrative Law Judge (ALJ) found that Wetherby had a total impairment rating of 31%. Determining that Wetherby had a 25% pre-existing cervical impairment (offset) due to his prior injury and associated surgeries, the ALJ awarded Wetherby a 6% impairment due to his 2012 Amazon injury.

Holding in Wetherby

Appealing to the Supreme Court of Kentucky, Wetherby maintained the ALJ improperly deducted a pre-existing active condition. Rejecting this argument, the Court analyzed language in theGuides regarding deductions for pre-existing conditions in the assessment of permanent impairment for spinal injuries.  The Court determined the 25% pre-existing impairment offset made by the ALJ did not constitute a “carve out” for a pre-existing active condition pursuant to Finley but, instead, was required by the Guides. The Court concluded the ALJ properly excluded the 25% impairment related to Wetherby’s two prior surgeries.

Ultimately, the Court found that Wetherby’s case did not fall within the confines ofFinley because the pre-existing condition was neither dormant nor active. The Court held that in order to be classified as dormant, all of the employee’s permanent impairment must have arisen after the current work injury. Wetherby’s prior condition was not dormant because the physicians assessed a pre-existing impairment rating under theGuides. It also was not active as Wetherby was not symptomatic immediately prior to the work injury. Therefore, the ALJ’s failure to perform an analysis underFinley was not in error.

Conclusion

This is a major “victory” for Kentucky employers. For the first time employers have an argument for a pre-existing impairment offset without having to prove a pre-existing “active” condition pursuant toFinley, i.e., a condition symptomatic immediately prior to an injury.

See the below press release regarding Gov. Beshear's ALJ appointments and Nominating Committee appointments.

Governor Beshear Makes Appointments to Kentucky Boards and Commissions

Employee has contracted COVID-19 

KRS 342.0011(1) requires psychological, psychiatric, or stress-related claims to be a direct result of a "physical injury." In other words, Kentucky does not recognize mental-mental claims. There is no Kentucky case precedent holding that a disease condition constitutes a "physical injury." Therefore, contracting COVID-19, in and of itself, does not give rise to a psychological claim. 

Kentucky courts have held in certain circumstances a “physically traumatic event” may give rise to a psychological claim. For example, the Court held a police officer who performed CPR on an individual he had just shot three times, which included skin contact with subject’s blood and body fluids, constituted a “physically traumatic event.”Richard E. Jacobs Group, Inc. v. White, 202 S.W.3d 24 (2006). A police officer who was physically assaulted by a knife wielding suspect suffered a “physically traumatic event.”Lexington-Fayette Urban County Government v. West, Ky., 52 S.W.3d 564 (2001).

Based on the foregoing, for a COVID-19 exposure or condition to give rise to a psychological claim, there must be an underlying “physical injury” (other than COVID-19), or a physically traumatic event. For example, intubating a patient, administering an IV or putting a patient on a respirator does not constitute a physical injury or a physically traumatic event, absent aggravating circumstances.

Employee is fearful of contracting COVID-19

Kentucky does not recognize mental-mental claims. For example, if an employee has an emotional reaction to job stress, absent a physical injury, there is no basis for a psychological claim. The fear of contracting COVID-19, in and of itself, would not give rise to a psychological claim.

Factual Analysis

Psychological claims associated with COVID-19 mandate a detailed, factual analysis of each and every claim. One key fact may change the outcome.

Jones Howard Law, PLLC will continue to provide COVID-19 updates regarding any significant developments associated with workers' compensation benefits and exposure. Should you have any questions or wish to discuss any of these matters personally, please contact one of our attorneys at your convenience.

                                                                        H. Douglas Jones, Esq.

                                                                        djones@joneshowardlaw.com

                                                                        Mark W. Howard, Esq

                                                                        mhoward@joneshowardlaw.com

                                                                        Troy W. Skeens, Esq.

                                                                        tskeens@joneshowardlaw.com

                                                                        Margo J. Menefee, Esq.

                                                                        mmenefee@joneshowardlaw.com