The Fourth Circuit issued a new Longshore and Harbor Workers Compensation Act decision discussing the various types of disability benefits paid under the Act. The new case is Huntington Ingalls Industries, Inc. v. Eason, and it is sure to garner a lot of attention for a fairly routine knee injury claim.
Explaining the Longshore Act and Disability:
Disability is an economic concept. An injured worker’s disability is not measured solely by the severity or duration of their medical condition. Instead, the effect on an injured worker’s wage-earning capacity must be considered, too.
There are four types of Longshore indemnity benefits: temporary total, temporary partial, permanent total, and permanent partial benefits. The difference between temporary and permanent disability is whether the injured worker has reached maximum medical improvement (i.e., medical permanency). And, the difference between total and partial disability is whether the injured worker can return to their pre-injury job, or at least to suitable alternative employment. Combining the difference between temporary and permanent with the difference between total and partial helps explain the four types of benefits:
- Temporary total disability – these are the benefits paid when an injured employee’s work-related medical condition is still healing, and the employee cannot work.
- Temporary partial disability – these are the benefits paid when an injured employee’s work-related medical condition is still healing, but the employee can work.
- Permanent total disability – these are the benefits paid when an injured employee’s work-related medical condition has reached maximum medical improvement, but the employee cannot return to work.
- Permanent partial disability – these are the benefits paid when an injured employee’s work-related medical condition has reached maximum medical improvement and the employee can return to either their pre-injury job or suitable alternative employment.
The type of benefits applicable to an injured worker has a direct effect on the injured worker’s weekly compensation rate. Remember, compensation is paid for disability; and disability is an economic concept. Here is how compensation is calculated for each type of benefits:
- Temporary total disability – compensation equals 2/3 of the injured employee’s pre-injury average weekly wage, subject to the statutory maximum compensation rate.
- Temporary partial disability – compensation equals 2/3 of the difference between the injured employee’s pre-injury average weekly wage and the employee’s post-injury wage-earning capacity, subject to the statutory maximum compensation rate. Temporary partial disability payments shall not be paid for this type of benefits for more than five years.
- Permanent total disability – compensation equals 2/3 of the injured employee’s pre-injury average weekly wage, subject to the statutory maximum compensation rate.
- Permanent partial disability – compensation for a scheduled loss (e.g., injuries to arms, legs, hands, feet, eyes, fingers, toes, hearing, and disfigurement) equals 2/3 of the injured employee’s pre-injury average weekly wage, subject to the statutory maximum compensation rate, as multiplied by the percent impairment to the injured body part; but compensation for an unscheduled loss (e.g., injuries to the mind, back, shoulder, hip, etc.) equals 2/3 of the difference between the injured employee’s pre-injury average weekly wage and the employee’s post-injury wage-earning capacity, subject to the statutory maximum compensation rate.
The system and classification of benefits is convoluted. But, the Eason court’s breakdown of the law regarding the different types of benefits is correct, and pretty succinct. Plus, the Fourth Circuit recognizes that disability is a “fluid concept,” and an injured worker’s type of disability is not “cast in stone.”
Applying the Types of Disability to a Particular Case:
Even though disability classification is a “fluid concept,” the Fourth Circuit recognized that one type of disability (temporary partial disability) cannot follow another type (permanent partial disability) when the classification is being made to the same injured body part.
The facts of the case might better explain the distinction drawn by the court. In Eason, a pipe fitter injured his right knee. This was a scheduled loss. The pipe fitter received temporary total disability for nine months, until returning back to work. A few months later, he received an impairment rating of 14% for his knee. The employer paid permanent partial disability compensation based on the 14% impairment rating. After the compensation owed for the permanent partial disability had been paid in full, the pipe fitter complained about pain in his left knee and a flare up of his right knee symptoms. The question became whether Claimant was entitled to additional compensation for a temporary partial disability due to a flare up of his knee injury.
The Fourth Circuit considered each of the party’s arguments, as well as the Director’s position. The Director took a “middle course” between the claimant’s and the employer’s arguments. The Director argued that temporary partial disability cannot be paid for the same injury covered by the permanent partial disability award. Why? Because “such temporary compensation essentially is duplicative to the scheduled compensation.” No one is supposed to get double recovery for the same injury. The Fourth Circuit agreed, stating (with internal citations omitted):
Eason suffered a scheduled injury. Thus, his permanent partial disability compensation is set by the schedule. Such scheduled compensation is presumed to cover Eason’s actual partial loss of wage-earning capacity due to that partial disability. This is so because, once a disability becomes total, it makes no sense to apply a presumption designed to approximate a claimant’s permanent partial disability compensation. A permanent or temporary total disability presumes the loss of all wage-earning capacity, while a permanent partial disability involves only a partial loss. Thus, an increase in the disability compensation for the change from permanent partial to either permanent total or temporary total is warranted to account for the additional actual loss in wage-earning capacity. …
In contrast, in the case of a scheduled permanent partial disability that allegedly changes to a temporary partial disability because the claimant’s injury flared up, there is no additional loss of wage-earning capacity. The claimant’s loss of wage-earning capacity already is accounted for under the schedule. In other words, the scheduled compensation accounts for all the lost wages due the claimant under the LHWCA.
The short-hand version: temporary partial disability can’t follow permanent partial disability for the same injury.
But, a claimant can become totally disabled for the same injury for which the injured worker was paid permanent partial disability compensation. Additional “temporary total disability compensation can be paid before the permanent partial disability compensation…or after….” Further, an injured worker who “receives scheduled permanent partial disability compensation is not precluded from subsequently receiving permanent total disability compensation.”
To add slightly to the short-hand version above: temporary partial disability can’t follow permanent partial disability for the same injury; but temporary total or permanent total disability can following permanent partial disability for the same injury.
First, civilian contractors should keep this decision in mind because it applies to them, too. The Defense Base Act incorporates the Longshore Act’s disability classifications.
Second, this was a lot of litigation over what appears to be a relatively small sum. It looks like the injured worker wanted temporary partial benefits paid at the rate of $845.52 per week for 11.857 weeks. If this is correct, then the amount in controversy was $10,025.33. Frankly, the employer might have spent 10 times that amount fighting with the injured worker. Maybe more. Just consider the procedural history. The parties had two stops at the Office of Administrative Law Judges, two stops at the Benefits Review Board, and the most recent stop at the Fourth Circuit. If an employer finds itself in this position in the future, and it is looking at the Eason case for guidance, it should ask itself whether it is willing to spend $100,000 in litigation to save $10,000 in disability benefits.
Third, I got the feeling that the Fourth Circuit understood the case law and could distinguish between the different types of benefits, but that it did not have a great working knowledge of the Longshore Act. Nearly every litigated yet compensable injury starts with temporary total disability and then goes to permanent total or permanent partial disability. My impression was that the court was looking at the progression in reverse order.
Fourth, what about the injured worker’s left knee? The Eason opinion is muddled with respect to the difference between the right knee injury and the left knee pain as it pertained to the benefits paid. If the permanent partial disability benefits were paid only for the right knee injury, then the left knee injury (if it exists) could still be compensable…provided that the left knee problems are the natural or unavoidable consequence of the earlier right knee injury.
If you are having a Longshore or Defense Base Act disability benefits classification dispute, contact Jon Robinson at Strongpoint Law Firm for a free case evaluation.