Workers’ Compensation Update – Allan v. Offutt, Co.

September 2, 2015

The Minnesota Supreme Court recently held in Allan v. R.D. Offutt that permanency ratings (work-related or not) that do not impact employability may not be used to meet the permanency threshold required to pursue a claim for permanent total disability benefits . This is a significant development in favor of employers and insurers. Injured workers can no longer combine non-work related disabilities that have no impact on their ability to secure employment with their work-related permanency ratings in order to meet the PTD permanency threshold. As clearly declared by the Court: “We hold that Minn. Stat. § 176.101, subd. 5(2), unambiguously requires that disabilities that contribute to an employee’s permanent-partial-disability rating must affect employability.” See case summary below for full analysis and impact. Please give us a call with any questions. We look forward to discussing this and other cases with you.


Allan v. R.D. Offut, Co.

The employee, Todd Allan, sustained a work-related injury to his lumbar spine in September 2010. The accident left him unable to perform a significant amount of work-related duties. Mr. Allan was assigned a 10% PPD rating relative to his work injury. He filed a claim petition seeking permanent total disability benefits. Because the PPD for his work injury did not meet the threshold 17% permanency rating required under Minn. Stat. §176.101 subd. 5, he also relied on his complete loss of teeth, which supported another 10% permanency rating. If he could not prove his minimum 17% PPD rating, his permanent total disability claim would be barred by statute.

The defense argued that the non-work related permanency, where it does not affect employability, cannot be considered to meet the permanent total disability PPD threshold.

The compensation judge denied the employee’s claim for permanent total disability benefits, choosing not to consider the employee’s complete loss of teeth, which had been corrected by dentures, to meet the statutory threshold. The employee appealed and the WCCA reversed and remanded, concluding that the loss of teeth could be used to meet the threshold. The WCCA further held that the loss of teeth need not affect Allan’s employability in order to contribute to the permanency rating. The employer and insurer appealed to the Minnesota Supreme Court.

Question for Supreme Court
Whether a disability that does not affect the employee’s ability to secure employment can be considered when determining if the employee is eligible for permanent total disability benefits under the Workers’ Compensation Act.

The Supreme Court found that Minn. Stat. §176.101 subd. 5(2) requires, unambiguously, that there must be a causal nexus between employability and the disabilities that contribute to the permanent partial disability rating used to meet the PPD threshold.

The establishing the required permanency is a threshold issue when determining whether an employee is eligible to claim permanent total disability benefits. While an injured worker is still allowed to combine permanency ratings for both work-related and non-work related conditions, an additional step has been added. Under the Allan holding, an employee must now demonstrate that these disabilities affect the employee’s ability to secure gainful employment.

Because the lower court failed to consider whether Allan’s loss of teeth affected his employability, the case was remanded for further consideration.

In Metzger v. Turch, Inc., the WCCA held that an employee’s non-work related hysterectomy could be considered in reaching the statutory permanent total disability permanency threshold. The Supreme Court’s holding in Allan, overturns this prior precedence. Therefore, the employee has the burden to show that any PPD rating to be considered affects the employee’s ability to secure suitable employment. The key question that must be asked is whether the permanency being claimed, whether or not it is work-related, affects the employee’s ability to secure more than sporadic, insubstantial employment.