In Gordon v Henry Ford Health System, an unpublished decision of the Michigan Court of Appeals (COA case #244596, 11/18/03), the Court held that the employer was entitled to credit against wage loss benefits it was paying for a work-related disability for the employee’s subsequent self-employment earnings where she actively participated in the operation of her business. The employee was receiving wage loss benefits from the employer for a work-related injury. Subsequently, she became the owner/operator of two group homes. The Court found that the homes were not merely an investment from which plaintiff derived passive income. Rather, the employee actively participated in the operation of the business. Therefore, the Court held that the employer was entitled to reduce the employee’s wage loss benefits for the employee’s self-employment earnings.

The Michigan Supreme Court, in a 5-2 decision, Schmaltz v Troy Metal Concepts, Inc., issued on December 23, 2003, held that, where plaintiff’s average weekly wage on the date of injury was greater than two-thirds of the state average weekly wage, the employee’s discontinued fringe benefits were not to be added to the average weekly wage calculation for purposes of determining partial wage loss in subsequent employment where the partial wage loss benefit was less than two-thirds of the state average weekly wage. The Court held that the average weekly wage that is used to establish benefit entitlement is determined at the time of injury and may not be subsequently recalculated, even where the partial benefit rate is less than two-thirds of the state average weekly wage. The Supreme Court adopted the Workers’ Compensation Appellate Commission’s analysis in Karczewski v General Motors Corp., 1994 Mich ACO 613 (1995).

In a 2-1 decision, dated November 6, 2003, the Michigan Court of Appeals, Cain v Waste Management, Inc., (COA case #242104) noted a distinction between subparts (g) and (b) of the statutory provision regarding total and permanent disability, MCL 418.361(3). In an earlier decision, the Michigan Supreme Court interpreted subpart (g) of MCL 418.361(3). It held that, under that provision, loss of industrial use of a limb for purposes of determining “permanent and total loss of industrial use” was to be determined using a “corrected” (i.e., measured with the help of prosthetics) standard to examine whether a limb could support industrial use. On remand, the Court of Appeals affirmed the Workers’ Compensation Appellate Commission in finding that, under a different subsection, subpart (b) (MCL 418.361(3)(b)), loss of industrial use of a limb is to be determined without regard to whether the limb could be made functional in industry with the help of a prosthetic or brace. In other words, the Court of Appeals held that, although subpart (g) (MCL 418.361(3)(g)) employs a corrected standard for determining loss of industrial use of a limb, subpart (b) (MCL 418.361(3)(b)) does not use a corrected standard and determines loss of industrial use without regard to enhancement of a limb’s function by use of a prosthetic or brace.

IS SYMPTOMATIC AGGRAVATION COMPENSABLE? Rakestraw v General Dynamics Land Systems (Michigan Supreme Court, 07/30/03) (For more information on recent developments and upcoming events in workers’ compensation, please access the Hickey Combs PLC website at hickeycombs.com) On July 30, 2003, the Michigan Supreme Court decided Rakestraw v General Dynamics Land Systems, Inc., ___ Mich ___, ___NW2d ___ (Docket No. 120996). In a four-to-three decision, the Court held that a claimant attempting to establish a compensable, work-related injury must prove that the injury is medically distinquishable from a preexisting nonwork-related condition in order to establish the existence of a “personal injury” under §301(1). When Mr. Rakestraw began working for General Dynamics in 1996, he had a preexisting neck condition (a herniated cervical disc that required surgeries in December 1991 and April 1992) that was asymptomatic. According to Mr. Rakestraw, his work for General Dynamics caused his neck pain to return and increase. Can a work-related aggravation or worsening of a preexisting condition be compensable? Yes, if the employee is able to establish that the injury was medically distinquishable from the preexisting condition. Does the employee need to prove a change or worsening in the underlying pathology to establish compensability? It is unclear whether Rakestraw requires a plaintiff to show a change or worsening in the underlying pathology. In her dissenting opinion, Justice Kelly acknowledges that the majority opinion holds that pain alone is insufficient to establish an injury (Justice Kelly, Dissenting, Slip Opinion p.2). Does Rakestraw apply to preexisting work-related injuries or conditions; i.e., can it be argued under Rakestraw that a mere symptomatic aggravation of a preexisting work-related condition is not compensable? The facts in Rakestraw deal only with a preexisting nonwork-related condition. However, it is conceivable that Rakestraw might be applied to a work-related condition from a prior employment or to a different injury date under prior coverage for the same employer. HOW TO USE RAKESTRAW Rakestraw can be used, in good faith, to deny or terminate benefits where the following exist: - A preexisting, non-occupational condition; - Becomes symptomatic or symptomatically worse; - Due to a work injury or exposure; and - The employee has failed to demonstrate a “medically distinquishable” injury. The following additional factors increase the likelihood that an employer will prevail under Rakestraw: - The employee did not sustain a specific event of injury or trauma, but merely claimed the onset or worsening of symptoms of a preexisting condition while performing regular work activities; and - The employee was a short-term employee - There is no evidence that the underlying pathology was worsened. This information is provided as a service to our clients and other interested persons. It is not intended to be legal advice. Before applying this information to a specific fact situation, please contact Hickey Combs PLC or another qualified workers’ compensation attorney. Thank you! HICKEY COMBS PLC

Legally Enforceable Bona Fide Offers of Reasonable Employment · Reasonable Employment – MCL 418.301(9) and MCL 418.401(7): [W]ork that is within the employee’s capacity to perform that poses no clear and proximate threat to that employee’s health and safety, and that is within a reasonable distance from that employee’s residence. The employee’s capacity to perform shall not be limited to work suitable to his or her qualifications and training. · Taylor v Schoolcraft College (Michigan Court of Appeals, unpublished, 1/3/03) The Court of Appeals in a 2-1 decision, held that a light duty job offer, stating that the job would be within a certain physician’s restrictions, did not meet the requisite specificity for a bona fide offer of reasonable employment where the doctor’s restrictions were not specifically stated in the body of the job offer letter, did not accompany the letter, and plaintiff was never informed of the nature of the restrictions. The employee had no factual basis on which to evaluate the reasonableness of the position with her doctor or attorney. · Tatroe v Tower Holding Corp, 2003 ACO # 56 The Appellate Commission held that a job pool arrangement where an employee is placed in assignments on day-to-day basis was not a bona fide offer of reasonable employment as it lacked specificity as to which jobs the employee would be expected to perform and there was no guarantee that a specific job would be available on any given day. Legally Enforceable Bona Fide Offers of Reasonable Employment · Guidelines for Bona Fide Offers of Reasonable Employment o In writing o Consider sending the job offer certified return receipt mail as well as regular mail o The job offer should contain the following information: - Date and time of return to work - Person to whom the employee is to report - The anticipated work schedule - The rate of pay - A statement that the job falls within the employee’s medical restrictions (include the actual restrictions and the name of the physician who authored them or attach the restriction slip to the letter) - The title and a description of the job that the employee will be performing (reference and attach a job description or “essential functions” of the job) o A reasonable time should be permitted between communicating the offer and the anticipated return to work date o Consider including in the letter a statement that it is expected that the employee will comply with the physician’s restrictions and that, if there is any question about whether the job duties are within the restrictions, the employee will immediately bring it to the attention of the employer. At the outset of the return to work, it is recommended that the employee sign a statement, agreeing to abide by the specific restrictions outlined by the physician and to communicate immediately with the employer if the employee has any concern that the job duties are inconsistent with the restrictions.