Court of Appeals of Iowa Reverses Determination of Permanent Total Disability by Workers’ Compensation Commission on the Basis That the Odd Lot Doctrine Was Inappropriately Applied

Recently, in Gits Manufacturing Co. v Frank, 2014 WL69668 (Jan 9, 2014), the Court of Appeals of Iowa determined that at an agency determination of permanent total disability arising out of a cumulative trauma lung injury was improper. At the trial level, the reviewing Deputy found the Claimant to be permanently and totally disabled pursuant to the odd lot doctrine. Generally, under the odd lot doctrine, an individual who is not completely disabled may still be found to be permanently and totally disabled for purposes of workers’ compensation if their history or training did not provide them with the skills to reenter the job market. In making its determination that Claimant was permanently totally disabled, the Deputy indicated that there was insufficient evidence that the Claimant could complete job retraining at her age and physical condition and that her work history did not provide her with the skills to reenter the job market as a sedentary worker.

Noting that the prima facie burden of proving the odd lot doctrine case can be established through evidence of the degree of the worker’s physical impairment coupled with other facts such as the Claimant’s education, age, training, or mental capacity, the Court Of Appeals noted that if the Claimant could meet that burden, the burden of proof then shifts to the employer to demonstrate that there is some form of suitable work continuously and regularly available to the worker. The employer objected on the basis that it did not believe that the Claimant produced sufficient evidence to establish a prima facie case for application of the odd lot doctrine. Essentially, the employer asserted that the employee failed to put forth any evidence in the record of efforts to seek employment and did not offer in evidence, anything regarding her inability to be employed.

Noting that it is normally incumbent on an injured worker to demonstrate a reasonable effort to secure employment in the area of the worker’s residence, the employer pointed out the fact that the Claimant admitted she had not looked for work in the four years subsequent to her employment ending with the employer.

While acknowledging “clearly unemployable Claimants” need not go through futile exercise of searching for nonexistent employment, the Court of Appeals reasoned that the job search is important in determining if someone falls into the odd lot category.

The Court of Appeals found it notable that the Claimant admitted that no doctor had told her that she should not apply for any employment. The Claimant also acknowledged that there was no reason why she could not learn additional computer skills or be retrained. There were no restrictions on the Claimant’s ability to drive and she acknowledged in her deposition that, had she had the retraining, there would be no reason why she could not perform in a sedentary office job as a receptionist.

Interestingly, the Court of Appeals of Iowa noted that “gainful employment” did not mean that an injured Claimant could work for 40 hours per week on a regular basis.

Reviewing these factors, the Court of Appeals of Iowa determined that the Claimant had not met her burden of proof to demonstrate that she was permanently and totally disabled as a result of the odd lot doctrine. The Court found it important that the Claimant failed to provide any evidence of a job search and that she admitted that she never attempted to find work subsequent to her injury. Analyzing this, the Court of Appeals of Iowa indicated that Claimant failed to satisfy the burden to introduce other substantial evidence that she had no reasonable prospects of steady employment.

The Court of Appeals of Iowa’s determination in Gits Manufacturing Co. v Frank provides some indication as to relevant evidence to investigate in situations when a Claimant alleges that they are unable to return to any form of employment. This decision is a favorable decision for employers and it will be interesting to see whether the Iowa Workers’ Compensation Commission applies the Court of Appeals of Iowa’s rationale in agency decisions.

For questions regarding the defense Iowa workers’ compensation claims please contact attorney Paul Barta at 402-475-1075.