Gerald Bauer v. Flint Hills Res. and ESIS Inc.

Gerald Bauer v. Flint Hills Res. and ESIS Inc., No. WC23-6513 (January 26, 2024).

The Employee, Jerry Bauer, worked as a production specialist at an oil refinery operated by the Employer, Flint Hills Resources, for nearly ten years before his date of injury.  His job involved crawling, climbing, lifting, and working 12-hour shifts.  On June 6, 2016, he sustained an admitted work-related injury to his right knee while working for the Employer.  At that time, he was 60 years old.  As a result of his work injury, the Employee underwent posterior cruciate ligament reconstruction surgery on April 3, 2017.  Subsequently, he was assigned permanent restrictions, but the Employer was unable to accommodate these restrictions, so the Employee could not return to his date-of-injury position.

The Employee received long-term disability benefits following the work injury.  He began receiving Social Security disability benefits on October 1, 2018 and they were converted to Social Security retirement benefits when he reached age 65.  Beginning in 2018, the Employee received vocational assistance from a qualified rehabilitation consultant and a placement specialist.  He engaged in an active job search but was unable to find a physically appropriate job.

In October 2019, the parties entered into a stipulation for settlement.  The parties stipulated that the Employee was permanently and totally disabled as of the date of injury, and that the Employer and Insurer were entitled to an offset of permanent total disability benefits by Social Security benefits as of October 1, 2018.  They also agreed that the Employee would be paid permanent total disability (PTD) benefits as of October 19, 2019.  Vocational rehabilitation benefits were closed under the stipulation for settlement and the Employee ended his job search.  On June 26, 2022, when the Employee reached age 67, the Insurer discontinued payment of PTD benefits in reliance on a statutory presumption of retirement provided by Minn. Stat. § 176.101, Subd. 4.  The Employee filed a claim petition for reinstatement of PTD benefits from and after June 27, 2022, asserting that he had rebutted the presumption and that he was entitled to PTD benefits through age 72.

The compensation judge, Sandra J. Grove, denied the Employee’s claim for permanent total disability benefits, finding that he had retired as of June 26, 2022, and that he did not rebut the retirement presumption.  In making these determinations, the compensation judge relied on the Employee’s prior deposition testimony that he planned to retire at age 67.  She also relied on the fact that the Employee did not pursue potential sources of additional income.  The compensation judge also found that a 2018 amendment to Minn. Stat. § 176.101, Subd. 4, was substantive, rather than procedural, and was therefore not retroactive.  The Employee appealed.

The issue at the hearing was whether the Employee had rebutted the retirement presumption and the compensation judge concluded that he had failed to do so.  The question for W.C.C.A was whether the decision of the compensation judge was supported by substantial evidence when considering the record as a whole.  The compensation judge analyzed the factors set forth in Davidson v. Thermo King.  64 W.C.D. 380 (W.C.C.A. 2004), for determining whether an employee is “retired.”  Those factors include: the employee’s expressed intent to retire or continue working, application for Social Security retirement benefits, evidence of a financial need for employment income, and whether the employee actively sought alternative employment or was working.

The compensation judge noted that the Employee admitted that his original plan was to retire at age 67.  As to the financial need factor, the compensation judge found that the Employee and his wife had made financial arrangements for his retirement by age 67.  In finding that the Employee had failed to meet his burden to rebut the retirement presumption, the compensation judge noted that, despite a claimed financial need, the Employee had not looked for work.  The compensation judge found that no physician had told the Employee that he could not work, and the Employee was aware that he could earn a certain amount and still receive his Social Security benefits. Despite this, the Employee had not engaged in a job search.  W.C.C.A. affirmed on this matter because substantial evidence of record supported these conclusions.

Additionally, in 2018, the Minnesota Legislature removed the retirement presumption at issue, substituting it with the termination of permanent total disability at age 72.  The Employee argued that the compensation judge committed an error of law by failing to apply the age 72 non-rebuttable presumption to the case at hand.  However, W.C.C.A. was not persuaded because unless otherwise specified, this article was effective for employees with dates of injury on or after October 1, 2018.  The Employee argued that the changes to Minn. Stat. § 176.101, Subd. 4, were procedural, rather than substantive, and therefore should be applied retroactively.  W.C.C.A. found that it was well established that in claims under the Workers’ Compensation Act, the law on the date of injury controls.  Therefore, they affirmed the compensation judge’s finding that the October 1, 2018, amendment to the retirement presumption was not retroactive.