Library


WCB App Div Affirms Award, Despite Prior Condition and Severance Pay

The Maine WCB Appellate Division has recently issued a decision affirming an award of benefits to an employee who had received severance pay from her employer, and whose post-injury earnings at a different employer were lower than her pre-injury wages because of the nature of her new job.

In Mary Ellen Hunt v. Maine Coast Regional Health Care Corporation, Ms. Hunt injured her knee working as a nurse and was laid off because Maine Coast could not accommodate her restrictions. Maine Coast paid her 100% partial incapacity benefits voluntarily, but it then reduced her pay based on an imputed earning capacity, and it ultimately discontinued her benefits altogether on the grounds that “the effects of her work-related injury had ended.” She had just obtained a new job as a dealer at Hollywood Casino, with the base pay of $4.25 per hour plus tips, which allowed her to earn between $400 and $750 per week, which was still less than her pre-injury AWW.

Maine Coast argued that Ms. Hunt’s decreased earnings were “based on factors unconnected to the injury,” but Dr. Bradford performed a §312 IME and found that Ms. Hunt could do only sedentary work. He also found that, although she had a pre-existing knee condition, her current right knee problems were partly related to the work injury. Judge Greene adopted that opinion, found that Ms. Hunt had aggravated a pre-existing condition which contributed significantly to her disability, and awarded her ongoing fixed partial incapacity benefits under §201(4).

Maine Coast also argued that it gave Ms. Hunt "severance pay" which it should allowed to offset against WC benefits owed. Maine Coast apparently tried to submit the severance pay evidence with its position paper, rather than at hearing. Judge Greene found that Maine Coast did not submit its evidence until after the close of evidence, and that it did not seek to reopen the evidence for that purpose. He also ruled that merely labeling the payments as “severance” does not allow him to find that they are a wage continuation plan under §221.

Maine Coast appealed, but the WCB appellate panel upheld Judge Greene’s decision. Regarding the severance pay, the panel cited the Maine Supreme Court's 2002 decision in Michael Daly v. Spinnaker Industries, which held that the determination of whether severance pay is a wage continuation plan under §221 “must be made on a case-by-case basis.” The Daly court noted that its 1998 decision in Goff v. CMP held that employers asserting that severance pay is wage continuation bear the burdens of production and proof that the severance pay was meant to be a wage continuation under §221 and not a payment intended to prevent the former employee from asserting claims against the employer.

This decision demonstrates the importance of employers (1) providing suitable light-duty work to injured employees; (2) providing full post-injury pay information during litigation; (3) ensuring submission of that information before the close of evidence, (4) asking that evidence be reopened to submit newly-acquired information; and (5) providing documents and testimony to support a claim that severance pay is wage continuation under §221. If you have any questions, please let us know.

Thomas Getchell
Daniel Gilligan
Michael Richards
Attorneys at Law