EARL L ERDMAN, Applicant
STORA ENSO NORTH AMERICA CORP, Employer
STORA ENSO NORTH AMERICA CORP, Insurer
The applicant filed an application for hearing in January 2005, seeking compensation for a back injury occurring on February 23, 2004. The matter was heard by an administrative law judge (ALJ) for the Worker's Compensation Division of the Department of Workforce Development on November 29, 2005. Prior to the hearing, the employer and its insurer (collectively, the respondent) conceded jurisdictional facts, that the applicant sustained a compensable injury, and an average weekly wage of $782.27. The respondent also conceded and paid permanent partial disability at five percent compared to disability to the body as a whole and certain medical expenses. At issue is the nature and extent of the applicant's disability beyond that conceded, the respondent's liability for additional medical expense, and the applicant's entitlement to an interlocutory order.
On January 23, 2006, the presiding ALJ issued an interlocutory order awarding compensation for permanent partial disability on a functional basis at 13 percent and awarding additional medical expense.
Both parties submitted timely petitions for review. The commission has considered the petitions and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission makes the following:
The applicant was born in 1943. He began working for the employer in 1968 or 1969. He was last employed as a tool tender. The employer assigned him that job in 2000, because he could no longer work in the storeroom after undergoing hip replacement surgeries.
On November 6, 2003, the applicant signed a "PACE Voluntary Early Retirement Program Separation and Release Agreement" which provided, among other things, that "employer has severed the employment relations effective 3-31-04" subject to the employer's option to defer the separation for up to a year. Exhibit D.
Under its personnel system, the employer has "Voluntary" and "Involuntary" retirements, which are "retirement[s] as a result of a [Voluntary or Involuntary] program offered by SENA (1)." See Exhibit 8, last page. A "normal" retirement is a retirement not under such a program at age 65. An "early" retirement is a retirement not under such a program between 55 and 64. The employer also has "disability retirements." The applicant's retirement is thus distinguishable from both "normal" retirements and standard "early" retirements under the employer's system.
Under the terms of the retirement package, the applicant obtained a one-time severance payment of $38,022.40, monthly retirement benefits of $1,319.30. The monthly benefit was about six percent less than what the applicant would have gotten had he waited four years to retire at age 65. The applicant also had the potential for unemployment insurance and trade readjustment allowances under the Federal Trade Act.
The applicant testified that his decision to take the voluntary retirement was motivated in part by the fact that his supervisors would not guarantee his job was safe. Transcript, pages 15-17. The respondent, on the other hand, has introduced a hearsay document between the employer's management and union personnel indicating a commitment to keep the applicant in his job, and not eliminate the tool crib attendant position, "for the duration of [the applicant's] working career." Exhibit 9.
On February 24, 2004, the applicant was hurt at work when he slipped and fell on ice while pushing a cart. He experienced immediate pain on his left side in his buttocks. The applicant reported the injury, but continued to work.
The applicant later sought treatment and the doctor described his condition as simply a low back contusion. An x-ray was done; it showed degenerative joint disease. A prior resolved back complaint and foot drop were noted, but the applicant declined undergoing an MRI.
On March 2, 2004, the applicant signed a "Notice of Separation" explaining that his separation was a "Voluntary Retirement." Exhibit 8. He signed an "Exit Checklist" on March 15. His last day of work was March 31, 2004.
Meanwhile, the applicant continued to follow up for his back problem in March and April 2004. A CT scan in March showed stenosis at L4-5, and an impingement could not be ruled out. An MRI done in April 2004 showed a large disc extrusion at L3-4, causing severe canal compromise along with bilateral lateral recess narrowing, possibly more on the left. His doctor, Mustafa Farooque, M.D., wanted to try injections and get an EMG to clear up the longstanding history of foot drop.
The injections provided some relief. The EMG was "complicated ... with somewhat confused findings," but most suggestive of an active L5 radiculopathy of moderate or greater degree. The applicant next saw a surgeon, Tom Faciszewski, M.D., on April 19, 2004. Dr. Faciszewski mentioned a potential lumbar decompression surgery.
About a week later, on April 27, 2004, Dr. Faciszewski performed the lumbar decompression surgery at L3-4. When he returned to Dr. Faciszewski in December 2004, the doctor reported that the applicant's foot drop was resolving, that the applicant's leg pain was gone, that the applicant had only occasional morning stiffness, but that otherwise the applicant had no symptoms. The doctor released the applicant to be seen as needed.
The applicant testified he still has pain in his right back and down his left leg with tingling to his toe. He can only sit comfortably for an hour and stand comfortably for half an hour. His foot drop improved temporarily after his surgery, then got worse. Transcript, page 24-25.
In December 2004, Dr. Faciszewski prepared a practitioner's report on form WKC-16-B. Exhibit H. This refers to the February 24, 2004 event, slipping on the ice, as the direct cause of the applicant's disability. Dr. Faciszewski rated permanent partial disability at 10 percent.
By letter dated May 19, 2005, however, Dr. Faciszewski opined the applicant's permanent partial disability was 7 percent (5 percent for the decompression and another two percent for persistent weakness). He also stated he did not place work restrictions after the procedure he performed. Exhibit 3.
Dr. Farooque prepared a practitioner's report indicating the traumatic event from the fall with the cart on February 24, 2004 directly caused the applicant's disability. Exhibit G. Dr. Farooque deferred to Dr. Faciszewski regarding permanent partial disability.
In July 2005, the applicant underwent a functional capacity evaluation (FCE). The evaluating physical therapist indicated that the applicant demonstrated full and consistent participation, that he worked to his safe maximum abilities, and that the results of the evaluation were considered valid and reliable. Exhibit I. The FCE allowed a total of two hours per day of sitting, standing, and walking, with frequent rest breaks. The FCE allowed only occasional bending, stooping, squatting, crawling, climbing, crouching, kneeling, balancing, pushing, and pulling. The therapist recommended no repetitive bending, lifting, and squatting. The applicant was prohibited from carrying more than 30 pounds, lifting more than 35 pounds from the floor to knuckle height, or lifting more than 15 pounds overhead. Using the head and neck in a static position, frequent neck flexing, or frequent neck rotation were also prohibited.
In November 2005, the applicant was evaluated by a physiatrist, Jeffrey Gorelick, M.D., whose report is at Exhibit F. He opined the February 24, 2004 work injury precipitated his low back pain and left sciatic symptoms, and accelerated a pre-existing condition of a left foot drop beyond normal progression. With respect to occupational exposure, Dr. Gorelick stated:
Whereas Mr. Erdman's radiologic changes noted most likely had a material contributory causative factor in regards to his 36-year employment, I believe his pain symptoms per se have a significantly much stronger correlation regarding his actual work injury event from February 24, 2004. He opined, too, that the applicant reached a healing plateau within a year of the April 27, 2004 surgery, with a 13 percent PPD.
The respondent had the applicant examined by Sridhar Vasudevan, M.D. on September 30, 2005. Regarding causation, Dr. Vasudevan opined:
Precipitation, aggravation and acceleration of a pre-existing lumbar disc disease as well as development of a right L4-5 radiculopathy directly related to the work injury of February 24, 2004.
Dr. Vasudevan opined, too, that the applicant would have been temporarily totally disabled from work from the time he stopped working on March 31, 2004, to an end of healing from the laminectomy on October 16, 2004. He felt the applicant would have had a five percent permanent partial disability, with restrictions against lifting more than 20 pounds frequently or 35 pounds occasionally, and against excessive bending, stooping, reach, pulling, and twisting. The doctor noted that these were the restrictions the applicant was working under before he retired.
As of the date of the hearing in November 2005, the applicant had not worked anywhere else, explaining that he only recently began to feel healthy enough to consider re-employment. He explained further that he planned to "go back to school for welder at a vocational center sometime." Transcript, page 26. He had not yet explored retraining as of the date of hearing.
The applicant's vocational expert is Bruce Schuyler, who examined the applicant in early November 2005. Exhibit M. Mr. Schuyler noted that the applicant was a high school graduate, who was honorably discharged from the US Army where he served as a diesel mechanic and crane operator. The applicant also attended a six-month welding program at a technical school in the late 1960's. Mr. Schuyler administered testing, which showed a sixth grade level for word recognition, and a third grade level on arithmetic.
Mr. Schuyler noted, too, that the applicant, who has worked for the employer since 1968, performed medium to heavy duty work for most of his career with light duty near the end. The applicant did unskilled and semi-skilled level work. Mr. Schuyler noted, too, that the applicant had not been seeking work because he did not believe he could work based on his condition.
Based on the FCE restrictions endorsed by Dr. Gorelick, Mr. Schuyler believed the applicant was employable, though his earning capacity had been significantly reduced. Examples of occupations that would reasonably be available to the applicant included: hand packagers, hotel/motel desk clerks, cashiers, couriers, messengers, and security guards. This work averaged $17,980 per year or $13,500, assuming a six-hour day. Comparing that figure to the $40,140 the applicant earned annually with the employer, Mr. Schuyler estimated a 70 percent loss of earning capacity.
However, Mr. Schuyler also considered a dislocated or displaced worker analysis. This analysis arises from the premise that, since the applicant's job was being eliminated and not really available elsewhere at the same wage, his prior earnings do not really reflect his pre-injury earning potential. Using this analysis, the applicant would have been able, before his injury, to work as a forklift operator, a parts salesman, a maintenance and repair worker, or a machine setter, operator, and tender. On this basis, Mr. Schuyler estimated a pre-injury, displaced worker earning capacity of $29,000 per year, and a loss of earning capacity of 45 to 50 percent.
Finally, Mr. Schuyler opined that under Dr. Vasudevan's opinion, the applicant would have no loss of earning capacity, as the doctor assumed the work injury did not result in any additional restrictions beyond those in effect at that the time of injury.
The respondent did not file an expert vocational opinion.
The respondent has conceded a compensable injury; the main issue on appeal is the extent of disability. The ALJ awarded permanent partial disability on a functional basis at 13 percent based on Dr. Gorelick's rating and she indicated she credited his opinion that additional restrictions were warranted. She did not award any permanent partial disability for loss of earning capacity, however, because the applicant elected to receive the voluntary retirement package. She did not credit his testimony that he felt pressured to take the voluntary program because he was worried about job loss. On this point, the ALJ noted the agreement at Exhibit 9, indicating his job was safe as long as he wanted it. The ALJ also found that due to his retirement the applicant was not entitled to compensation for temporary total disability, as that is awarded for wage replacement.
The commission, like the ALJ, credits Dr. Gorelick's work restrictions and his permanency rating. While treating surgeon Faciszewski did not seek work restrictions, the commission notes that even respondent-retained doctor Vasudevan opined work restrictions were warranted (though they paralleled those already set.) Further, Dr. Faciszewski himself did not assess the code-minimum five percent rating for permanent partial disability on a functional basis following laminectomy surgery under Wis. Admin. Code § DWD 80.32(11). Rather, the doctor awarded an additional five percent (in his first estimate) and additional two percent (in his second estimate) for persistent weakness. This suggests less than a good result from the surgery, strengthening the case for additional restrictions beyond those in place prior to the surgery. Further, the ALJ who saw the applicant testify also credited Dr. Gorelick's restrictions, and she, too, credited the applicant's representations as to his post-injury capacity (including continuing back pain, left leg pain and tingling, and limited sitting and standing tolerance.) In addition, Dr. Gorelick adopted the restrictions set after a comprehensive functional capacity evaluation, which the testing therapist stated was valid based on the applicant's full and consistent efforts during testing.
The next question, of course, is whether, given Dr. Gorelick's work restrictions and the circumstances of his discharge from employment, the applicant is entitled to compensation for loss of earning capacity. The applicant argues that he was forced to retire; that the employer's own separation agreements identify the employer was the moving party in the separation as it begins that the "employer has severed the employment relations effective 3-31-04;" that the trade readjustment allowances and unemployment insurance benefits are not normally available to workers who quit or retire, and that certain of the employer's documentation reflected the applicant's true status as laid off rather than a normal retiree.
Beyond that, the supreme court has held that even a traditional retirement -- or taking Social Security old age benefits -- does not necessarily preclude an award for loss of earning capacity. Kohler Co. v. ILHR Department, 42 Wis. 2d 396, 403 (1969). That is not to say that retirement may never factor into a loss of earning capacity analysis, especially given the effect of Wis. Stat. § 102.44(6) (2) which after was enacted after the Court's decision in Kohler Co. In Neil Anderson v. General Motors Corporation, WC Claim No. 92068305, 1993 WI Wrk. Comp. LEXIS 523 (LIRC, November 29, 1993), the commission held:
The applicant asserts that the administrative law judge erred in determining that the applicant was not entitled to compensation for loss of earning capacity as a result of his work-related back injury in December, 1991. The applicant states that he had no plan to retire until he suffered a back injury and that he was forced to retire due to his painful back condition. However, the issue is not whether the applicant had a reasonable cause to retire. The evidence indicated that the applicant applied for retirement shortly after his back surgery. The applicant subsequently retired prior to the end of his healing period and prior to the time that his treating physician assessed permanent restrictions and released him to return to work.
The employer testified that it had work available for him within his restrictions, but that the applicant never contacted the employer for employment. The employer's personnel administrator testified that if the applicant returned to light duty work in general manufacturing he would have received $15.89 per hour. The commission agrees with the administrative law judge that if the applicant had not decided to accept early retirement he could have returned to work for the employer with little or no wage loss. The employer had been able to accommodate the applicant's physical restrictions in the past. Given the fact that the applicant voluntarily removed himself from the labor market when he retired prior to the time that he had been released to return to work or had permanent restrictions assessed, and given the fact that the employer would have had work available for him within his restrictions if he had not retired, the administrative law judge appropriately found that the applicant was not entitled to a loss of earning capacity claim.
In Anderson, as here, the applicant retired after the injury, but before reaching a healing plateau. This is significant because when the applicant retired, it was not known what his restrictions would be. In Anderson, the commission credited the employer's testimony that it would have accommodated the injured work restrictions upon reaching a healing plateau. Here, there is no such testimony from the employer.
In fact, the record seems to suggest the opposite, in that the commission (like the ALJ) credits and adopts Dr. Gorelick's restrictions. First, the restrictions set in the FCE and adopted by Dr. Gorelick -- which permit only a six-hour day and impose restrictions against more than occasional bending, stooping, squatting, crawling, climbing, crouching, kneeling, balancing, pushing, and pulling -- are significantly more restrictive than Dr. Vasudevan's -- which permit full time work and restrictions against excessive bending, stooping, reaching, pulling, and twisting. Second, the union agreement at Exhibit 9 indicates the applicant's job was in some jeopardy, even if the employer agreed to retain it for him personally. The commission cannot reasonably infer -- in the absence of direct testimony -- that the employer would have provided the tool tender job, or any other, if the applicant could only work part-time.
In short, this is not a case where an employer in good faith makes an offer of employment which is refused by an employee without reasonable cause. The respondent has not shown the employer would have provided to the applicant work within Dr. Gorelick's restrictions had he not "retired," so there is no unreasonable refusal of such work under Wis. Stat. § 102.44(6)(g). Further, under Kohler, the commission declines to conclude that the voluntary retirement alone, particularly a reduction-in-force-employer-initiated retirement, should bar an award for loss of earning capacity.
In determining the amount of loss of earning capacity, the commission considered Mr. Schuyler's analysis and opinion, as well as the applicant's age, education, work history, and other factors in Wis. Admin. Code § DWD 80.34(1). It considered, too, the fact that the applicant had not yet tried to work or pursue retraining as of the date of the hearing in November 2005 (exhibit M, Schuyler's November 10, 2005 report page page 5; transcript, page 25-26), despite having been released to work having reached a plateau of healing by his treating surgeon Faciszewski and Dr. Gorelick some months earlier. The commission therefore awards compensation for loss of earning capacity at the low end of the range set out by Mr. Schuyler, 45 percent.
However, like the ALJ, the commission concludes the applicant is not entitled to temporary disability compensation on this record. The commission finds persuasive the court's reasoning in the General Motors (3) cases cited by the respondent in the case at hand. As both the circuit court and court of appeals in General Motors observed, temporary total disability is paid for loss of current earnings, as distinguished from permanent partial disability which is paid for loss of earning capacity including the future loss. In support of this conclusion, the circuit court cited language in Wagner v. Industrial Commission, 273 Wis. 553, 567d (1956) (noting that temporary disability is measured in terms of wage loss while permanent disability is measured on the basis of bodily impairment) and Northern States Power Co. v. Industrial Commission, 252 Wis. 70, 76 (1947) (noting that it is possible to determine actual wage loss during the healing period when temporary disability is paid but not for permanent disability which is to be made for all time). (4)
In Norenberg v. Miron Construction, WC claim no. 94-0333753 (LIRC, May 25, 1995), the commission did hold that temporary disability may be paid when a work injury forces the applicant to stop working during his or her healing period, even though the cessation of employment during the healing period is later characterized as a retirement. In that case, the commission distinguished General Motors because that case involved a new period of temporary disability that arose many years after the applicant had retired due to the permanent effects of his work injury.
Here, admittedly, the period of temporary disability claimed did not arise years after retirement. On the other hand, this really is not a case where the worker retired because of the effects of the work injury during his healing period. The employer was providing work to the applicant while he was treating for his back, up to the day he retired in March 2004. While the commission concludes the applicant should be compensated for his future loss of earning capacity following the laminectomy surgery and resulting restrictions imposed upon the end of healing a year later in early 2005, the commission cannot conclude he was actually losing current wages due to the work injury upon his separation from employment in March 2004 on the record.
Accordingly, the applicant is entitled to compensation for permanent partial disability on a vocational basis at 45 percent, into which the 13 percent rating on a functional basis is merged. This amounts to 450 weeks at the weekly rate of $232 (the statutory maximum for injuries in 2004), or $104,400.
Because no compensation for temporary disability is due, the permanent partial disability compensation begins to accrue as of the date of injury. See Wis. Stat. § 102.32(6)(e). As of June 13, 2006, then, 120 weeks permanent partial disability totaling $27,840 has accrued; 330 weeks totaling $76,560 remains unaccrued.
According to the transcript of the hearing, the respondent conceded and paid permanent partial disability at five percent totaling $11,600. Deducting that amount, the total additional amount awarded under this order is $92,800; of that amount, 70 weeks totaling $16,240 is accrued. Under Wis. Stat. § 102.26, the attorney fee shall be 18 percent of the additional amount awarded, which in future dollars equals $16,704, but which is subject to an interest credit of $2,659.80 to reflect its present value of $14,044.20. The applicant's attorney is also entitled to costs of $2,762.69. The costs and present value fee shall be shall be paid to the applicant's attorney in 30 days.
The amount due the applicant within 30 days is $10,554.51. This equals the amount of additional accrued benefits to June 13, 2006 ($16,240), less the fee thereon ($2,923.20), and less costs ($2,762.29).
The amount remaining to be paid as it accrues after June 13, 2006 is $62,779.20. This equals the unaccrued portion of the award ($76,560), less the fees thereon ($13,780.80). This amount shall be paid in monthly installments of $1,005.33 beginning on June 13, 2006.
The ALJ paid the medical expenses claimed in Exhibit L, except for a $100 charge unpaid balance to Central WI Radiologists and a $321.94 out-of-pocket payment to River View Hospital by the applicant. On appeal, the applicant did not object to the ALJ's deductions for those expenses, and the commission shall affirm them. The only other amounts outstanding in Exhibit L are $352.87 to Marshfield Clinic, an out-of-pocket payment by the applicant to Doctor's Clinic in the amount of $10.00, medical mileage incurred by the applicant in the amount of $316.06, and $3,166.84 in payment of medical treatment expense by Humana; these expenses shall be paid. The commission understands that Humana and Gates McDonald are merely administrators for the employer, who is self-insured for both worker's compensation and group medical insurance. Nonetheless, reimbursement shall be ordered under Wis. Stat. § 102.30(7).
Because the applicant may incur additional medical expense, or sustain additional disability with respect to his condition, this order shall be left interlocutory to permit future awards of compensation for medical expense and disability.
NOW, THEREFORE, the Labor and Industry Review Commission makes this
The findings and order of the administrative law judge are modified to conform to the foregoing and, as modified, are affirmed in part and reversed in part.
Within 30 days, the employer and its insurer shall pay all of the following:
Beginning on July 13, 2006, and continuing on the thirteenth day of each month thereafter, the employer and its insurer shall pay the applicant One thousand five dollars and thirty-three cents ($1,005.33) per month in permanent disability compensation until the additional amount of Sixty-two thousand seven hundred seventy-nine dollars and twenty cents ($62,779.20) has been paid.
Jurisdiction is reserved for such findings, orders, and awards as warranted and consistent with this decision.
Dated and mailed June 2, 2006
erdmaea . wrr : 101 : 4 ND § 5.23 § 5.9
/s/ James T. Flynn, Chairman
/s/ David B. Falstad, Commissioner
/s/ Robert Glaser, Commissioner
The commission did not confer with the presiding ALJ concerning witness credibility, because it did not reverse her decision on that basis of witness credibility. The ALJ concluded that the applicant's election of the special, early retirement benefit precluded a loss of earning capacity award. The commission instead concluded that neither Wis. Stat. § 102.44(6)(g) nor the circumstances of the applicant's separation from employment precludes an award for loss of earning capacity benefits per se.
cc:
Attorney Daniel R. Schoshinski
Attorney Philip Lehner
Appealed to Circuit Court.
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