How Employment after Injury Effects Exposure for Employers under Iowa Code § 85.34(2)(v)
The Iowa District Court of Polk County issued a ruling on April 21, 2021 in the case of Pavlich v. Martinez, Case No. CVCV060634. The case gained attention primarily due to the Iowa Workers’ Compensation Commissioner’s interpretation of Iowa Code § 85.34(2)(v) regarding Claimant’s employment post-injury and the effect on permanency benefits.
The practical application of the legal dispute outlined below is how to calculate permanency benefits when an employee has a whole body injury or injuries to more than two scheduled members in a single accident after July 1, 2017:
- If a claimant returns to work or is offered work with any employer at the same or greater wages, the claimant is only entitled to permanent disability benefits according to the functional impairment ratings.
- If a claimant returns to work with the defendant-employer and later voluntarily resigns, the claimant is only entitled to permanent disability benefits according to the functional impairment ratings.
** There have been a few decisions from Deputy Commissioners on other aspects of the same statute that may come into play under different factual scenarios, such as termination for cause after returning to work. The Pavlich case did not rule on those other decisions.
BACKGROUND
On April 16, 2018, Martinez was hauling 80,000 pounds of freight from Illinois to Missouri for Pavlich, Inc., a Kansas based company. While driving through Iowa at over 60 miles per hour, Martinez was texting on his cellphone when the vehicle in front of him started to brake. When Martinez looked up from his phone, he attempted to avoid a collision and rolled his semitruck. The entire incident, including the texting and accident, was recorded by cameras inside the truck cab.
After the accident Martinez eventually returned to full duty work for Pavlich Inc. driving local routes. He continued in his regular position until voluntarily resigning from Pavlich Inc. to take a different position. At the time of hearing, he was earning more at his new job.
ARBITRATION DECISION
Although several other legal issues were addressed, my primary argument was that Martinez was willfully negligent. However, the issue of whether Martinez was entitled to a functional impairment or an industrial disability became the focus after the Commissioner’s decision.
Martinez alleged an injury to his right upper extremity, bilateral lower extremities, back, and head. The Deputy Commissioner found Martinez suffered three scheduled member injuries – his right arm and both legs but not injuries to his back or head. The Deputy Commissioner further found Martinez was not willfully negligent.
When assessing permanent disability benefits, the Deputy Commissioner followed Iowa Code § 85.34(2)(s) (2016)[1] which states injuries to two scheduled members in a single accident is compensated on a functional basis based upon 500-weeks. Claimant was awarded the combination of his scheduled member impairment ratings.
APPEAL DECISION
On appeal, the Commissioner did not specifically address the issue of willful negligence and affirmed the Arbitration Decision except on how the Deputy Commissioner calculated permanency benefits. In short, the Commissioner determined Martinez should be awarded benefits based on an industrial disability rather than the functional impairment ratings.
The Commissioner found, since Martinez suffered more than two scheduled member injuries in the same accident and was no longer working for Pavlich Inc., permanency should have been assessed as an industrial disability under section 85.34(2)(v)[2].
Effective July 1, 2017, changes were made to Iowa Code § 85.34(2)(v) making a claimant’s entitlement to an industrial disability analysis dependent on whether the claimant has returned to work or is offered work, at what wages, and if it is with the pre-injury employer or a different employer. This was the first Appeal Decision issued by the Commissioner dealing with these statutory changes.
The Commissioner interpreted the new statutory changes to only address the scenario when a claimant returns to work or is offered work by the defendant-employer. Although Martinez did return to the same employer at the same wages, he voluntary quit that position to obtain a higher paying position. The Commissioner found the voluntary resignation “triggered his entitlement to benefits using the industrial disability analysis.”
DISTRICT COURT RULING
Without addressing the issue of the standard used for willful negligence, the District Court affirmed the Commissioner’s decision except on the issue of permanency benefits. The District Court found since Martinez returned to work for Pavlich. Inc. at the same or higher wages he was entitled only to the functional impairment ratings. The District Court further found Martinez’s voluntary resignation from Pavlich Inc. did not trigger entitlement to an industrial disability analysis under the new statutory changes.
If you have questions on how Pavlich v. Martinez might impact your case, please contact Abby Wenninghoff or Kalli Gloudemans at (402) 932-0290.
[1] Currently renumbered as Iowa Code 85.34(2)(t) (2021).
[2] Previously numbered as Iowa Code § 85.34(2)(u) (2017).
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