CASE NO. 4467 CRB-2-02-12
COMPENSATION REVIEW BOARD
WORKERS’ COMPENSATION COMMISSION
FEBRUARY 13, 2003
STATE OF CONNECTICUT/UNIVERSITY OF CONNECTICUT
The claimant was represented by Howard Schiller, Esq., 55 Church Street, P.O. Box 699, Willimantic, CT 06226.
The respondent was represented by Douglas Drayton, Esq., Pomeranz, Drayton & Stabnick, 95 Glastonbury Boulevard, Glastonbury, CT 06033.
This Petition for Review from the November 30, 2001 Finding and Award of the Commissioner acting for the Second District was heard August 23, 2002 before a Compensation Review Board panel consisting of the Commission Chairman John A. Mastropietro and Commissioners Donald H. Doyle, Jr. and Amado J. Vargas.
JOHN A. MASTROPIETRO, CHAIRMAN. The claimant has petitioned for review from the November 30, 2001 Finding and Award of the Commissioner acting for the Second District. She asserts on appeal that the trier erred by ruling that her § 31-308a C.G.S. benefit calculation should include amounts received pursuant to her employer’s disability retirement plan, thereby reducing the amount of the wage differential award. We find no error, and affirm the trial commissioner’s decision.
The trial commissioner found the following relevant facts. The claimant suffered a compensable back injury on April 17, 1990, leaving her with a 25% permanent partial disability of the back. After her specific indemnity benefits expired, she was awarded $150.00 per week in § 31-308a1 benefits from August 6, 1997 through May 5, 2001. The parties stipulated that a person in the claimant’s former job category currently earns $31,325.00 per year, translating into a weekly wage of $602.40. The most recent medical evidence shows that the claimant cannot work more than four to six hours at a time. The claimant’s last job paid her $8.50 per hour, which if she worked 30 hours per week would enable her to gross $255.00. Thus, the § 31-308a wage differential between her actual earning capacity and the salary currently being paid for her pre-injury job with the state would amount to $347.40 per week.
The claimant also receives a disability retirement pension from the State of Connecticut in the monthly amount of $1,396.72, or $324.82 per week. The parties disagreed as to whether this pension should be figured into the claimant’s earning capacity under § 31-308a. The claimant argued at the formal hearing and in her proposed findings that this board incorrectly decided Iannarone v. State/Dept. of Mental Retardation, 4138 CRB-7-99-10 (June 15, 2001), in which we held that a state-paid disability pension should be included in the amount that a claimant is “able to earn” under § 31-308a. Meanwhile, the respondent contended that the claimant would be unjustly enriched if the pension benefit were excluded. The trial commissioner opted to include the $324.82 disability retirement benefit in the amount the claimant was able to earn, which left her with a $579.72 total weekly earning capacity, just $22.58 less than the $602.40 being earned by employees currently working in the claimant’s former position with the state. The trier accordingly awarded the claimant benefits in the amount of $15.05 per week (sixty-six and two-thirds percent of $22.58), from which decision the claimant has appealed.
By the terms of § 31-308a, awards of benefits under the statute are discretionary. They may be ordered only when the commissioner finds that a claimant has met the criteria set forth in the statute. Belanger v. J&G Belanger Concrete Construction, 4368 CRB-6-01-3 (Feb. 19, 2002). Before such an award can be made, the commissioner must determine the weekly amount of money that an injured employee “will probably be able to earn” in the future, and subtract that from the wages currently being earned by someone working in a position comparable to the claimant’s former job. Under the 1990 version of the statute herein applicable, a claimant would be entitled to two-thirds of the difference between those two amounts.
In Iannarone, supra, this board determined that the weekly amount a former state employee would be able to earn post-injury should reflect not only his average earnings from a light duty job with a private employer, but also the $1,700 per month that he was receiving as a disability retirement pension from the state due to the loss of work capacity that had been caused by his compensable injury. As a general matter, in determining whether an income source should be incorporated into what a claimant is “able to earn,” one would need to decide whether the income in question reflects a work capacity on the part of the claimant, as “earnings” refer to “money or property gained or merited by labor, service, or the performance of something.” Id., quoting Black’s Law Dictionary, 5th Edition; Rodrigues v. American National Can, 4043 CRB-5-99-4 (July 26, 2000). Of course, a disability pension intrinsically reflects a loss of work capacity, rather than a readiness for gainful employment.
However, where a claimant is receiving a disability retirement pension from his former employer on account of his compensable injury and resultant inability to continue working for that employer, we have stated that “[w]e would be remiss if we were to ignore that the [§ 31-308a] benefits sought . . . by the claimant are meant to replenish a former income source . . . that is already being replenished in part by a pension from that same entity.” Iannarone, supra. Where a disability retirement pension is being paid as a result of a compensable injury, a claimant who collected such a pension in addition to the full difference (or two-thirds of the difference) between the wages he would have earned but for the injury and the wages he was able to earn afterward would be taking home more than he would had he not been injured in the first place. We doubt that the legislature envisioned such a stacking of benefits when it enacted § 31-308a, and we accordingly held in Iannarone that the claimant’s state disability pension was properly included in “the amount he is able to earn.” Furthermore, § 31-314 requires that the fixing of compensation under Chapter 568 duly allow for any sum that an employer has paid to an injured employee on account of her injury.
In entreating us to reconsider Iannarone’s reasoning, the claimant cites Ferrara v. Clifton Wright Hat Co., 125 Conn. 140 (1939), for the proposition that what a claimant is “able to earn” must be equated to her actual earning capacity. Because the state employees’ pension plan was provided by the legislature as a fringe benefit to state employment, the claimant argues that benefits payable under that plan should be characterized as a form of accident insurance that the state would be required to continue under § 31-284b C.G.S.2 while she is eligible to receive compensation under the Workers’ Compensation Act, rather than part of her “earnings,” or an advance under § 31-314. “[T]he State of Connecticut is essentially a self-insurer. If the State . . . had maintained disability insurance for the claimant with a third-party insurer, no claim could be made that the payment was made by the employer. . . . The State is paying not in its role as an employer, but in its capacity as a self-insurer, and benefits should be treated as insurance benefits.” Brief, p. 8. The claimant also observes that the disability retirement statutes provide that workers’ compensation benefits (which are nontaxable) be offset against disability retirement benefits, and asks us to recognize that reducing workers’ compensation benefits on account of disability retirement benefits is both beyond the authority of this Commission and detrimental to the proper functioning of the complex statutory scheme designed and enacted by our legislature.
The definition of “able to earn” that our Supreme Court set forth in Ferrara, supra, exists in the context of a discussion about a claimant who, following his compensable injury, had been refused a finding of impaired earning capacity despite his inability to either continue in his former trade or to obtain employment elsewhere. The Court explained, “Even if the finding be construed . . . as meaning that the plaintiff . . . is unfitted for employment in the hatting industry but is qualified for other work outside that occupation and to be regarded as incapacitated to that extent, in order to justify an award for partial incapacity it was necessary for the commissioner to have evidence justifying a finding as to the extent of that incapacity and consequent loss of earning ability.” Ferrara, supra, 144. The Court’s focus in Ferrara was on a very different issue from that before us here. Its interpretation of the phrase “able to earn” to mean “the amount [one] is capable of earning if employed” was not written in response to a situation involving the receipt of a benefit from an employer.
Though we are aware that disability benefits do not reflect an earning capacity, we hesitate to read Ferrara as being strongly supportive of an exclusion of such benefits from the amount a claimant is “able to earn.” We would not overrule Iannarone’s interpretation of § 31-308a on the basis of Ferrara. We also remind the claimant that we would not lightly overrule Iannarone, supra, and those cases that have followed its precedent, as the doctrine of stare decisis counsels that a court should not overrule its prior decisions unless the most cogent reasons and inescapable logic require it.” Smedley v. State/Dept. of Mental Retardation, 4461 CRB-5-01-11 (October 25, 2002)(where board declined to reverse earlier ruling in Iannarone); Hall v. Gilbert & Bennett Mfg. Co., 241 Conn. 282, 296 (1997).
More generally, the interplay among various types of wage-loss benefits is discussed in Larson’s treatise on workers’ compensation law.
Wage-loss legislation is designed to restore to the worker a portion . . . of wages lost due to the three major causes of wage-loss: physical disability, economic unemployment, and old age. The crucial operative fact is that of wage loss; the cause of the wage loss merely dictates the category of legislation applicable. Now if a worker undergoes a period of wage loss due to all three conditions, it does not follow that he or she should receive three sets of benefits simultaneously and thereby recover more than his or her actual wage. The worker is experiencing only one wage loss and, in any logical system, should receive only one wage-loss benefit. This conclusion is inevitable, once it is recognized that workers’ compensation, unemployment compensation, nonoccupational sickness and disability insurance, and old age and survivors’ insurance are all parts of a system based upon a common principle. If this is denied, then all coordination becomes impossible and social legislation becomes a grab-bag of assorted unrelated benefits. For example, if workers’ compensation is thought of as a quasi-tort recovery, there will be a temptation to say that the injured worker should be entitled to keep the entire recovery without reference to any other legislative benefits he or she may receive for the same wage loss. Again, if nonoccupational disability insurance is viewed, as it was for a time in Rhode Island, as essentially equivalent to private health and accident insurance, the argument will be heard that a worker has just as much right to keep both occupational and nonoccupational disability benefits as he or she would have to collect both workers’ compensation and the proceeds of a private accident policy.
9 Larson’s Workers’ Compensation Law (2000), § 157.01, pp. 2-3. Consistent with this principle of coordinating wage-loss benefits, the authors report that, in the case of state-controlled pension systems, a number of states apply offsets of one type of benefit against the other, whether it be on the pension side, on the workers’ compensation side, or on both sides. Id., § 157.04[a], p. 30. In contrast, private pensions provided by an employer, a union, or by an individual’s own purchase are normally not subject to reductions for compensation benefits, absent the occasional statutory provision that requires such an offset. Id., 157.05, p. 42-43.
Larson’s treatise demonstrates that there is thus substantial precedent in other jurisdictions for the disparate treatment of a state-provided disability pension, and such pensions are clearly treated as something different from the sort of “fringe benefits” that would fall within the ambit of § 31-284b. We note this in response to the claimant’s contention that the state is acting as a self-insurer in paying her a disability pension, and that such a pension should be treated no differently than a disability insurance benefit payable under a policy that a private employer (or, for that matter, the state) might have purchased on behalf of an employee. In our view, payments made by the state pursuant to a disability pension as a consequence of a compensable injury are fairly categorized as payments made on account of a claimant’s injury under § 31-314, rather than separate “fringe benefits” that must be continued as insurance coverage under § 31-284b.
An interesting argument set forth by the claimant in this appeal centers on an important concern that we share: the need to preserve the integrity of the legislature’s statutory scheme, insofar as it was designed to harmonize the relationship between the state disability retirement statutes and the Workers’ Compensation Act. At the formal hearing below, neither party offered evidence or detailed argument about the availability of an offset for workers’ compensation payments in the applicable state disability retirement statutes. The claimant’s attention was focused on the nature of disability retirement as a fringe benefit that should be encompassed by § 31-284b. See September 6, 2001 Transcript. At the close of the hearing, the commissioner asked the parties to brief her on the legal issues that Iannarone did not discuss. Id., 46-47. In ¶ 35 of the claimant’s proposed findings, she cites a March 3, 2000 opinion of the Attorney General in which it is noted that retirement from state employment would not affect a retiree’s eligibility for workers’ compensation benefits, whereas disability retirement benefits are themselves subject to reduction for time periods in which a retiree receives certain types of workers’ compensation benefits. As examples, § 5-170 and § 5-192p are cited. The claimant then asserts in ¶ 36 that “[i]t would be entirely inappropriate to have the claimant’s 308a benefits reduced by the claimant’s disability retirement benefits when those disability retirement benefits independently provide for a reduction of those benefits by the amount of the claimant’s workers’ compensation benefits.”
Although two examples of state retirement provisions were mentioned in passing in the claimant’s proposed findings, the record does not show that the claimant identified the particular statute that was applicable to her disability retirement pension, nor was any attempt made to discuss the availability of such an offset in more detail prior to the issuance of the commissioner’s decision. The trier accordingly made no finding that an offset for workers’ compensation benefits was mandated against any disability benefits due the claimant. As a general matter, this commission’s jurisdiction is limited to claims and questions arising under the Workers’ Compensation Act. Hunnihan v. Mattatuck Mfg. Co., 243 Conn. 438, 443 (1997). Where necessary to resolve cases arising under our Act, this commission has the authority to interpret statutory provisions codified outside the act; Id., n.5; such as the State Employees’ Retirement Act in Chapter 66 of the General Statutes. Thus, if sufficient evidence were introduced to demonstrate the applicability of a particular provision in Chapter 66, a commissioner or this board could hypothetically interpret such a statute to decide whether an offset against disability retirement benefits was required for workers’ compensation benefits. The trier could then account for that fact in evaluating whether logic and policy inexorably lead to a reading of § 31-308a that is different from the precedent set by this board in Iannarone, supra, and Smedley, supra, on account of a manifest incompatibility between the plain language of the applicable disability retirement statute and our current interpretation of § 31-308a.
Here, it is unknown to us which disability retirement statute applies to this case. For example, some former state employees receive disability pensions under the “Tier I” provision of § 5-169, while other disability pensions would be governed by the “Tier II” plan enumerated in § 5-192p. It may or may not be the case that payments under either plan are subject to offsets for certain workers’ compensation benefits as per § 5-170(b)-(c)3; as stated, virtually no information has been provided by either party on this issue. There may be other disability retirement provisions applicable to state employees as well. The claimant’s status is not definitively set forth in the record, or in the findings.
Before we could give fair consideration to altering our now-established reading of the Workers’ Compensation Act in order to account for an offset that is required by a statute codified outside the Act, and outside the field of this agency’s traditional authority and expertise, we would need to reliably establish the source of a claimant’s pension entitlement and the language applicable to the instant case. The claimant did not take the steps necessary to do that at trial, and the commissioner thus acted correctly in following the precedent set forth in Iannarone. There was insufficient basis in the record for her to do otherwise.
Accordingly, the trial commissioner’s decision is affirmed.
Commissioners Donald H. Doyle, Jr., and Amado J. Vargas concur.
1 As of the date of the claimant’s compensable injury, § 31-308a provided, “In addition to the compensation benefits provided by section 31-308 for specific loss of a member or use of the function of a member of the body, or any personal injury covered by this chapter, the commissioner, after such payments provided by said section 31-308 have been paid for the period set forth in said section, may award additional compensation benefits for such partial permanent disability equal to two-thirds of the difference between the wages currently earned by an employee in a position comparable to the position held by such injured employee prior to his injury and the weekly amount which such employee will probably be able to earn thereafter, to be determined by the commissioner based upon the nature and extent of the injury, the training, education and experience of the employee, the availability of work for persons with such physical condition and at the employee’s age, but not more than the maximum provided in section 31-309. If evidence of exact loss of earnings is not available, such loss may be computed from the proportionate loss of physical ability or earning power caused by the injury. The duration of such additional compensation shall be determined upon a similar basis by the commissioner.” BACK TO TEXT
2 Section 31-284b(a) [whose application is constitutionally limited to non-private employers outside the scope of the Employee Retirement Income Security Act] requires that “any employer . . . who provides accident and health insurance or life insurance coverage for any employee or makes payments or contributions at the regular hourly or weekly rate for full-time employees to an employee welfare fund . . . shall provide to such employee equivalent insurance coverage or welfare fund payments or contributions while the employee is eligible to receive or is receiving workers’ compensation payments pursuant to this chapter, or while the employee is receiving wages under a provision for sick leave payments for time lost due to an employment-related injury.” BACK TO TEXT
3 In relevant part, § 5-170 C.G.S. states: “(b) Retirement income payments made to a member receiving disability payments and necessary medical and hospital expenses under the provisions of the Workers’ Compensation Act, as set forth in chapter 568, shall be reduced for any period for which such disability payments are being made or have been made, except as provided in subsection (c) below. The amount of each reduced retirement income payment shall be determined in accordance with section 5-169.” Subsection (c) adds that retirement income payments shall not be reduced “[f]or a member receiving a specific indemnity award under section 31-307 or 31-308.” BACK TO TEXT