The Iowa workers’ compensation law on apportionment has gone through many changes based on statutory amendments by the legislature and judicial interpretations by the Courts.
In my last blog entry I talk about the January 17, 2019 workers’ compensation appeal decision of Byers v. Guardsmark, LLC and New Hampshire Insurance Company and concentrated on the parts of the case relating to injuries to older workers.
The Byers case also analyzed the issue of apportionment. The Claimant in Byers had suffered severe back injuries in the late 1990s while working as a truck driver that had left him unable to work between the late 1990s and his employment as a security guard that began in 2014. The Claimant suffered another severe back injury in 2014 while working.
One of the defense arguments relating to the 2014 injury was that they should receive a credit or apportionment to reduce their responsibility for the Claimant’s 2014 injury by the extent to which he was already disabled by his injuries in the late 1990s. The Workers’ Compensation Commissioner denied the defense argument based on the following analysis:
- In 2004 Iowa Code Section 85.34(2)(u) was amended to provide that when analyzing the reduction of an employee’s earning capacity (which in turn relates to the amount of the award) caused by the injury, the judges should look at the earning capacity that the employee possessed when the injury occurred.
- In 2004 the legislature also amended Iowa Code Section 85.34(7) which provided that an employer is fully liable for compensating all of the worker’s disability that arises out of and in the course of the worker’s employment with the employer. At the same time the employer should not be liable for compensating an employee’s preexisting disability that arose out of and in the course of employment with a different employer or causes unrelated to employment.
- These two statutory changes were interpreted by the Iowa Supreme Court in the case of Roberts Dairy v. Billick, 861 N.W.2d 820 (Iowa 2015) as an intent to modify, but not overrule the “Fresh Start Rule.” The Fresh Start Rule is based on the idea that when a worker goes out and obtains a new job in the competitive labor market, his preexisting physical problems are reflected in the wages that the worker receives.
- Therefore, whether a worker is in perfect health when they started a new job, or in poor health, they each are deemed to have gone through a “Fresh Start” and while their earning capacities are certainly different, whatever amount of earning capacity they have in their new job will be treated as their 100% earning capacity.
- Therefore, if a worker in perfect health and a worker in poor health each receive the same injury, the worker in poor health will receive a higher workers’ compensation award because the injury destroys more of the smaller remaining earning capacity of the worker in poor health.
- Employers are generally only going to receive an apportionment for earlier injuries to a worker that occurred while the employee was employed with that same employer.
Therefore, in the Byers case the Commissioner rejected the defense request for an apportionment between the late 1990s injuries and the 2014 injury.
A number of provisions of the Iowa workers’ compensation statutes were amended in the spring of 2017, and the changes apply to all work injuries that occurred after July 1, 2017. These changes include apportionment rules.
The Byers case applied to a pre-July 1, 2017 injury and therefore does not interpret the new statutory changes relating to apportionment.
My best estimate is that the 2017 legal changes will not change the Iowa work comp law on apportionment. However, we will have to work through some trials and appeals before we have definite answers.