By: Jamie Sanders, Partner, Alabama

 An issue has arisen among a number of claims specialists over the past few months and it is becoming a ground swell. The issue deals with whether the employer should pay PPD once the employee reaches MMI. It is my understanding there is a constituency whose opinion is that the employer does not have a duty to inform the employee of his or her rights nor ultimately be required to pay PPD benefits commensurate with a medically assigned impairment rating. Generally, I do not follow this line of thinking.

The statute 25-5-57 (a)(3)(a) reads: “for permanent partial disability, the compensation shall be based upon the extent of the disability in cases included in the …’schedule,’ the compensation shall be 66 2/3 of the average weekly earnings, during the number of weeks set out in the …’schedule.’ “ Moreover, 25-5-57 (a)(3)(g) sets out  body as a whole injuries(BAW): “the compensation shall be 66 2/3 of the difference between the AWW earnings of the worker at the time of the injury and the average weekly earnings he or she is able to earn in his or her partially disabled condition…” Further, “compensation shall continue during disability, but not beyond 300 weeks.” I interpret the statute to, if not compel the employer to pay the owed benefits, then to at least imply that the employer knows to pay the owed benefits based on the extent of disability. To interpret the statute differently is to insert the mental intent of the Act to say “but you don’t have to if the employee doesn’t demand his or her asserted right to receive PPD.” In my opinion, this thinking is akin to burying ones head in the sand.

The Workers Compensation Act was created to compensate employees for compensable on-the-job injuries. Where a defense is available to the employer, such defense(s) should be raised and if sufficient evidence exists, the employer should refrain from paying what then would become a non-compensable claim. However, where a medically compensable claim has been accepted as compensable, it becomes the duty of the employer to pay the claim for the assigned impairment rating. The statute clearly sets out the requirement, and the duty is heightened   if any dialogue has occurred between the claims specialist and the injured worker concerning MMI and impairment rating.

The basis of this approach is to abide by the law and to avoid what could create significant litigation in the form of outrage, fraud, suppression or bad faith. This issue has not been litigated in Alabama; however, in the case of Ex parte Lumberman, the Alabama Supreme Court denied the employer’s writ of mandamus to dismiss the employee’s tort of outrage. The employee was granted PTD by the trial court which was appealed by the employer. While on appeal the employer suspended indemnity benefits knowing that the only source of income for the employee was his indemnity benefits. The employee then filed suit for, inter alia, outrage.  The employer filed a writ to dismiss the lawsuit and the Supreme Court denied said writ. Though not clearly directive, Ex parte Lumberman does peer into the window for the survival of outrage claims for the failure to pay owed indemnity benefits. In addition, this leads to the possibility of claims for fraud and suppression where adjuster notes or correspondence reveal the acknowledgment of MMI and a medically assigned impairment rating with no indemnity benefits paid for such impairment. Any practice and/or procedure to operate in this manner could prove detrimental.