Workers' Comp Act, in Part, Determined to be Unconstitutional

Tuesday, March 12, 2013 | 0

The Florida 1st District Court of Appeals in its decision Westphal v. City of St. Petersburg, Case No. 1D12-3563, filed Feb. 28, 2013, determined that the 1994 amendments to the workers’ compensation law as found in Section 440.15(2)(a), Florida Statutes (2009) which limits temporary benefits to 104 weeks is unconstitutional “as applied” to the injured worker in this case and “others similarly situated.” The unconstitutionality applies to injured workers who, after receiving 104 weeks of temporary total compensation benefits, remain totally disabled, incapable of engaging in employment, and ineligible for any compensation under the Workers’ Compensation Act. For workers within this category, temporary total benefit entitlements would be extended to a period not to exceed 260 weeks.

For years, the court has dealt with the issue of injured workers’ entitlements to compensation benefits at that point in time when the maximum amount of temporary benefits had been paid and maximum medical improvement (MMI) had not been reached for a determination as to whether permanent total benefits were due (described by the court as the “statutory gap” period of time). An injured worker’s entitlement to permanent benefits as a matter of law cannot be determined until MMI has been reached; accordingly, if entitlement to temporary benefits has been exhausted and MMI has not been reached, what benefits, if any, is the injured employee entitled to during the statutory gap?

Initially, the court had suggested that the worker might be entitled to a hybrid form of benefits that could best be described or characterized as “temporary permanent total” benefits. Entitlements during this statutory gap were further described in the case of Matrix Employee Leasing, Inc. v. Hadley, 78 So. 3d 621 (Fla. 1st DCA 2011), which stated that at or near the time of the conclusion of temporary benefit entitlements (defined by many as statutory MMI), permanent total entitlement would be determined based upon what an injured worker’s disability would be when MMI was expected in the future. But what happens in those situations where at the end of 104 weeks, it was impossible to determine what the injured worker’s disability would be at a future date? It is this scenario and “statutory gap” time period as first described in the Hadley case that was dealt with in the Westphal case, i.e., the period that no benefits would be payable to the injured worker, notwithstanding the fact that he had serious injuries related to a compensable accident on-the-job.

Mr. Westphal was a severely injured worker, who, at the conclusion of the payment of 104 weeks of temporary benefits, had been directed by his doctors not to attempt employment. According to the court, for him to go back to work at that point would be contrary to medical advice which could be the basis for denying benefits by the employer/carrier. The Judge of Compensation Claims correctly determined that he was not entitled to any benefits according to Hadley because entitlement to temporary benefits had expired and it was too speculative as to what his disability status would be after MMI. The court determined that this non-payment of compensation benefits to this seriously injured individual was unconstitutional based on denial of the constitutionally guaranteed rights of access to courts and administration of justice without denial or delay. For these types of seriously injured persons, the court allowed for the payment of additional temporary total benefits up to 260 weeks, which was the statutory limitation period for temporary total benefits prior to the 1994 statutory changes limiting such benefits to 104 weeks.

The court indicated that their decision had prospective application only. It would not apply to rulings, adjudications or proceedings that had become final prior to the date of this opinion. An appeal to the Florida Supreme Court is being considered but no final decision has been made.

As a result, if this decision if allowed to stand by the Florida Supreme Court, numerous questions arise as to its applicability. What happens if an injured worker is still not able to return to work after 260 weeks of temporary benefits? What happens if at 104 weeks of paying temporary benefits, there can be a determination that at MMI the claimant will not be permanently and totally disabled (unlike the facts in Westphal where no determination could be made)? Do you expand temporary benefits to 260 weeks for those individuals who are less disabled than Mr. Westphal who will have an earning capacity upon being released by the doctors at MMI? Are there any cases in which the limitation of 104 weeks of temporary benefits remains in effect? (The court in Westphal specifically stated that the 104-week limitation of temporary benefits was unconstitutional “as applied” to Mr. Westphal and persons similarly situated.) What will the financial impact of this case be on costs in the workers’ compensation system and will this case result in an increase of premiums payable by industry either through a “law only filing” or through the normal annual filing for rate determinations by NCCI? NCCI is in the process of analyzing the case for any ratemaking impact. Will this case and the dicta contained in the opinion as to the court’s perception of the unfairness of the workers’ compensation statute to injured workers be the basis for other provisions in the law coming under attack as being unconstitutional (e.g., the limitation of benefits to psychiatrically injured workers)?

These questions and many more will most assuredly occur as all parties in the workers’ compensation system attempt to determine the true impact of this case. Again, the final review of the issues in this case will be made by the Florida Supreme Court if an appeal is taken.

James N. McConnaughhay is a partner of McConnaughhay, Duffy, Coonrad, Pope and Weaver, a workers' compensation defense firm in Tallahassee. This column was reprinted with his permission from the firm's website.