Work Comp Update: Employers could be liable for PTD, even on small claims
By J. Bradley Young, Harris Dowell Fisher & Young L.C.
(Read Time – approximately 3 minutes)
The Missouri Court of Appeals, Eastern District, issued a decision in Klecka v. Treasurer of Mo., No. ED108721 (Mo. Ct. App. June 22, 2021) earlier this week. This decision deals mostly with details under which the Second Injury Fund (SIF) has liability for permanent total disability. However, this opinion sets the stage for a future decision that could have potentially disastrous implications for employers and insurance carriers in Missouri.
PURPOSE OF THE SECOND INJURY FUND
The purpose of Missouri’s Second Injury Fund (SIF) is simple: If a claimant is hurt on the job and his/her injuries combine with pre-existing injuries or disabilities that prevent that claimant from returning to the workforce, the SIF, and not the employer/insurer, should be liable for paying the permanent total disability (PTD) benefits unless the last accident alone was sufficient to prevent the claimant from returning to work. This prevents discrimination against workers who have prior injuries as the employer does not face any potential liability for hiring workers with pre-existing injuries, knowing that the SIF would be responsible for PTD if the claimant were to be injured at work and the combination of all injuries prevented the claimant from ever returning to work.
However, beginning in 2014, the protection for employers and carriers provided by the SIF has been significantly curtailed because of the solvency issues with the SIF. Now, the SIF only provides benefits to claimants when the claimant has pre-existing work injuries or pre-existing military-related injuries that combine with the primary work injury making the claimant PTD. However, the SIF provides no benefits to claimants if the pre-existing injuries are not work or military-related injuries or conditions (such as prior sports injuries, degenerative conditions, or disabling health conditions such as diabetes, cancer, or even COVID-19).
WHY THIS CASE IS IMPORTANT TO EMPLOYERS AND CARRIERS
While this decision mainly focuses on details related to SIF liability, I also read the opinion to lay the groundwork for the legal doctrine that if a claimant is permanently and totally disabled (PTD) as a result of a primary work injury combined with a pre-existing disability, and the Second Injury Fund is NOT liable for PTD for any reason, then the employer (and their insurance carrier) may be liable for the PTD payments. While the Eastern District did not hold this as a matter of law, the following quotes from the attached decision certainly make it clear that this is the intent of the Court of Appeals:
"Because if an employee establishes he or she is PTD as a result of a work related injury, either the employer or the fund is liable, not neither.”
"Again, it is about who pays when a claimant is PTD following a primary injury and the tighter the restrictions on Fund liability, the more PTD liability falls back on employer.” (Emphasis added)
The Court of Appeals then quotes from the Missouri Supreme Court in Federal Mutual Insurance Company v. Carpenter, 371 S.W.2d 955 (Mo. 1963), stating:
“In the absence of a special statute in some manner, for some specific reason, limiting or cutting down his liability the employer and his insurer are obligated by law to pay the totally and permanently injured employee the full compensation benefits..."for life"…..and this entire liability and this general rule is not affected by the fact that the employee may have had some physical handicap or the fact that he may have sustained a previous loss or permanent mutilation in some other employment resulting in partial disability."
The Court of Appeals could easily, in some near-future decision, take the next step - - holding that any time a claimant is PTD and the SIF is not liable, then the employer/insurer is liable. This would make Missouri just like Illinois, where any injury, regardless of how minor that injury may be, can result in PTD against the employer/insurer if the minor work injury combines with any pre-existing injuries or conditions to render the claimant unemployable in the open labor market.
Such a future decision could potentially be applied to situations where claimants have COVID issues, then suffer a minor injury at work, and are then unable to continue working.
Associated Industries of Missouri will be working in the coming months to push for legislation to ensure that employers/insurers are only held liable for PTD in cases where the last accident, alone, results in the worker being permanently and totally disabled. An employer/insurer should not be held responsible for PTD in situations where the last accident combines with prior injuries or conditions which then prevents the claimant from obtaining work in the open labor market.
We will keep you updated as this process unfolds. If you have any questions or wish to discuss this further, please contact Brad Young at firstname.lastname@example.org or (636) 532-0300.