The U.S. Fourth Circuit Court of Appeal has overturned the Benefits Review Board and held that a claimant who voluntarily retires before a workplace injury becomes debilitating may collect disability benefits.
The Fourth Circuit reversed the Board's decision in Moody v. Huntington Ingalls, Inc., BRB No. 15-0314, 50 BRBS 9 (3/10/16), reported on here. The claimant, Moody, worked for the employer for 45 years. He injured his back in 2001, and, after considerable treatment, he returned to work for the employer in 2011. After he advised the employer he intended to retire, the claimant injured his shoulder, but continued working until the date of his voluntary retirement. The claimant had surgery for his shoulder after he retired, and he alleged he was entitled to temporary total disability benefits while he recuperated. The Administrative Law Judge agreed, finding that the claimant’s retirement prior to the time of his surgery was irrelevant. However, the Board reversed this finding.
In reversing the Board, the Fourth Circuit explained that the issue before it was whether the claimant could be "disabled" after he voluntarily retired. The court began its analysis with the pertinent statutory provision, noting that under Section 902(10), "'[d]isability' means incapacity because of injury to earn the wages which the employee was receiving at the time of injury in the same or any other employment." The Fourth Circuit stated that "disability" equates to an "inability" to earn wages. The court believed that the claimant was unable to earn wages during his two-month recuperation period, thereby entitling him to benefits for this period. As the court stated, "[r]etirement, quite simply, is not inherently debilitating. By focusing on the voluntary nature of Moody's retirement, both the Board and Huntington Ingalls confuse being unwilling with being unable."
The Fourth Circuit recognized the employer's argument that prior case law characterizes disability as an "economic harm." However, the court reasoned that those cases define economic harm as the "lost capacity to earn wage, not actual economic loss." Therefore, the court said, "[r]ather than compensating Moody for a torn rotator cuff, the LHWCA mandates compensation for the lost earning capacity—an economic injury—that he suffers as a result of the torn rotator cuff." The court further observed that to "decide otherwise would not only deprive Moody of his rightful benefits but would also confer a windfall on Huntington: it is undisputed that Moody would have received disability benefits had he undergone surgery immediately, rather than discharging his duties in good faith, and Huntington would have had to pay for another driver."
The court further stated that the "fact that Moody did not actually work or seek job opportunities after retirement does not change the analysis. That fact goes to actual economic loss but not incapacity. Because the LHWCA compensates workers for their inability to earn wages due to injury, workers are entitled to disability benefits when an injury is sufficient to preclude the possibility of working. Here, Moody could have changed his mind and chosen to work even after retiring, perhaps in a job that offered better hours. ... His shoulder injury and the resulting surgery took that choice away from him for at least two months. The law compensates that deprivation of economic choice when it is caused by workplace injury."
"In sum," said the court, "voluntary retirement is not a form of total incapacity. As the Board has determined in the past, retirement status, standing alone, is irrelevant to earning capacity and the determination of 'disability' under 33 U.S.C. § 902(10)."
Moody v. Huntington Ingalls, Inc., No. 16-1773 (U.S. 4th Cir. 1/3/18).
© 2018 Ira J. Rosenzweig