WAGE LOSS AFTER SEVERANCE AGREEMENTS? In an unpublished opinion, a panel of the Court of Appeals held that, if an employee commits to retire and has no intention to work again for a different employer, wage loss from an intervening injury is attributable to the retirement decision and not to the injury. Stiven v General Motors Corp (Case No. 294579, December 16, 2010). In the Stiven case, plaintiff executed an irrevocable special attrition plan (SAP) relative to her employment with General Motors. Under the terms of the SAP, plaintiff had to retire from General Motors no later than January 1, 2007. In return, she would receive a lump sum payment of $35,000.00 and a regular pension. On November 29, 2006, plaintiff sustained a work-related injury to her right hand and wrist. She was limited to one-handed work. She was unable to perform her regular job as an electrician, and performed accommodated work until the year-end plant shut down, commencing December 23, 2006. Consistent with the SAP, plaintiff retired on January 1, 2007. Plaintiff subsequently filed an application for workers’ compensation benefits. The Magistrate granted an open award of wage loss benefits. The Workers’ Compensation Appellate Commission (WCAC) affirmed the Magistrate’s ruling. General Motors appealed to the Court of Appeals, arguing that plaintiff was not entitled to wage loss benefits because any wage loss that she incurred was attributable to her decision to retire, not to her disability. The Court of Appeals framed the relevant issue as follows: ""Whether plaintiff, while intending and being required to retire from GM on January 1, 2007, firmly intended to retire from any and all active employment thereafter,and, if she indeed intended to seek post-GM employment,whether her work-related injury prevented her from obtaining such employment, thereby causing wage loss."" The Court of Appeals determined that there was insufficient factual development on that issue and noted that neither the Magistrate nor the WCAC directly answered the question. Therefore, the case was reversed and remanded to the Magistrate for further hearing. In summary, a severance agreement may preclude receipt of workers’ compensation wage loss benefits in retirement if the employer can establish that the employee had a firm intention to never work again for the same or a different employer. 01/13/11

The statute which governs the jurisdiction of the Michigan Workers’ Compensation Agency over out-of-state injuries, MCL 418.845, was amended by 2008 PA 499. It became effective January 13, 2009. The bipartisan amendment was enacted in response to the Michigan Supreme Court’s decision in Karaczewski v Farbman Stein & Co., 478 Mich 28, 732 NW2d 56 (2007). Karaczewski overruled prior case law and held that MCL 418.845 provided for Michigan jurisdiction of out-of-state injuries only if (1) the employee resided in Michigan at the time of injury and (2) the contract of hire was made in Michigan. Previous case law had not enforced the residency requirement. Following the Supreme Court’s decision in Karaczewski, the legislature enacted 2008 PA 499, effective January 13, 2009, amending MCL 418.845. The amendment provided jurisdiction of out-of-state injuries “if the injured employee is employed by an employer subject to this act and if either the employee is a resident of this state at the time of injury or the contract of hire was made in this state” (Emphasis added.) On May 10, 2010, the Michigan Supreme Court issued its opinion in Brewer v A. D. Transport Express, Inc. (Case# 139068, May 10, 2010). In that case, Mr. Brewer (plaintiff), a Michigan resident, sought workers’ compensation benefits under Michigan law for an injury he allegedly suffered in Ohio in 2003 while working for the defendant employer as a truck driver. The employer denied that plaintiff’s contract of hire was made in Michigan and the Magistrate found that plaintiff had failed to prove where and how he was hired. The Magistrate dismissed plaintiff’s Application for Mediation or Hearing. The Workers’ Compensation Appellate Commission affirmed, finding no facts that would allow the Magistrate to conclude that the contract of hire was made in Michigan. The Court of Appeals denied plaintiff’s application for leave to appeal. Plaintiff applied for leave to appeal to the Michigan Supreme Court. The Michigan Supreme Court agreed to hear the case on the limited issue of whether the legislative change to MCL 418.845 by 2008 PA 499, should be applied to plaintiff’s case. The Supreme Court, in a 5-2 decision, affirmed the decision of the Workers’ Compensation Appellate Commission upholding the Magistrate’s dismissal of plaintiff’s petition for lack of jurisdiction. The Supreme Court held that the amendment of MCL 418.845 enacted by 2008 PA 499 does not apply retroactively to cases in which the claimant was injured before the effective date of the amendment. (Slip opinion at 9.) The court noted that the amendment contained no language clearly manifesting a legislative intent that it apply retroactively. Id. The court also observed that, by expanding the Workers’ Compensation Agency’s jurisdiction “to include out-of-state injuries suffered by Michigan employees whose contracts of hire were not made in Michigan, the amendment imposed a new legal burden on out-of-state employers not previously subject to” the Agency’s jurisdiction. Id., at 8-9. The court further noted that the amendment “also potentially enlarged existing rights for Michigan residents injured in other states under contracts of hire not made in Michigan.” Id., at 9. In summary, the statutory amendment enlarging Michigan Workers’ Compensation Agency jurisdiction over out-of-state injuries, effective January 13, 2009, was held not to be retroactive to injuries occurring prior to the effective date of the amendment. If you have any questions regarding out-of-state jurisdiction or would like to discuss this matter further, please contact us at your convenience. 05/18/10

MICHIGAN 2010 MAXIMUM RATE AND WEEKLY BENEFIT TABLES The Michigan Workers' Compensation Agency has made the 2010 Maximum Rate and Weekly Benefit Tables available at the following link: http://www.michigan.gov/documents/wca/wca_2010_Rate_Book_302483_7.pdf. Also, the Agency's updated weekly benefit rate calculation program will become available for download on or about January 8, 2010, at the following link: http://www.michigan.gov/wca/0,1607,7-191--108224--,00.html . If you have any questions or would like to discuss this information, please contact us at your convenience. Thank you! Leonard M. Hickey Hickey Combs PLC 3358 Eagle Run Drive NE Grand Rapids, MI 49525-7055 Direct Dial: 616/364-2555 Facsimile: 616/364-2551 Cellular: 616/550-1661 E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it. Website: hickeycombs.com NOTICE: This is a privileged and confidential communication. If you have received it in error or are not the intended recipient, please delete it and destroy all copies. Thank you.

PROOF OF LOSS OF WAGE EARNING CAPACITY In Binkley v Alstom Power, Inc., 2009 ACO #212, the Workers’ Compensation Appellate Commission, in a two-to-one decision, clarified the ways in which plaintiff could prove loss of wage earning capacity in jobs suitable to his or her qualifications and training. In the Binkley case, there was no testimony from a vocational rehabilitation expert regarding plaintiff’s maximum wage earning capacity in jobs suitable to his qualifications and training, or whether there were still jobs plaintiff could perform post-injury in which he could earn his maximum reasonable wage at the time of injury. Further, the magistrate found that plaintiff “conducted a very limited job search following his injury. He called the Boilermakers Union on a few occasions, but realized that doing so was useless because he can no longer work as a boilermaker.” Magistrate’s decision at 13. Plaintiff worked as journeyman boilermaker. He was highly compensated. He earned $28.00 per hour, plus fringe benefits, when he was injured on December 1, 2006. The magistrate found that he sustained a work related injury to his low back and right lower extremity and that the injury had caused a medically distinguishable condition which precluded plaintiff from performing his job as a boilermaker. Notwithstanding the absence of vocational testimony and a very limited job search by plaintiff, the magistrate found plaintiff to be disabled. The magistrate based his fact finding on “common sense.” “The magistrate found it would defy common sense to conclude the plaintiff could duplicate or exceed his boilermaker wages using his sedentary skills.” 2009 ACO #212 at 15. In writing the majority opinion, Commissioner Donna Grit found that plaintiff’s “evidence falls short on step two of the Stokes disability analysis, which requires him to prove what jobs he is qualified and trained to perform that have the same salary range as his maximum wage earning capacity at the time of injury.” Id., at 13. Commissioner Grit went on to note that there was no statutory requirement to produce vocational testimony. However, in quoting the Stokes decision, she noted that a plaintiff “must provide some reasonable means to assess employment opportunities to which his qualifications and training might translate.” Id., citing Stokes v Chrysler LLC, 481 Mich. 266, 282 (2008). Importantly, the magistrate had made a finding that plaintiff had developed skills while working as a boilermaker which could translate into other jobs plaintiff had not sought. The magistrate noted that plaintiff had obtained skill in reading blueprints, welding, being a working foreman, general construction knowledge, and knowledge of tools. Thus, although plaintiff may have been disabled from performing the full realm of boilermaker duties, he had other, potentially transferable skills. The Appellate Commission reversed the magistrate’s grant of an open award of benefits, essentially finding that “common sense” was an inadequate basis on which to determine plaintiff’s inability to duplicate or exceed his boilermaker wages with his medical restrictions. The Appellate Commission held that, in order to meet his burden of proof on the issue of disability under Stokes, plaintiff would either have to provide expert testimony from a vocational rehabilitation consultant, or show that he had conducted a good faith job search, proving that there were no jobs available to him, suitable to his qualifications and training, which would have matched or exceeded his maximum reasonable wage at the time of injury. In summary, this decision is important because it clarifies the types of proof that will satisfy plaintiff’s burden of proving loss of wage earning capacity and disability under Stokes. A mere “common sense” conclusion that the employee is too skilled, to highly compensated and too disabled to find similar paying work is inadequate. The employee must prove the actual absence of or inability to obtain (due to work related medical restrictions) jobs paying his maximum reasonable wage in his relevant job market. If you have any questions or would like a copy of the full text of the Appellate Commission decision, please contact us. 04/30/10

WORKERS' COMPENSATION MILEAGE RATE CHANGE EFFECTIVE JANUARY 1, 2010 The Michigan Workers' Compensation Agency has posted the following notice on its website: ""The Department of Management and Budget has advised that effective January 1, 2010, the mileage rate will decrease to [$].50 per mile. There will be no change in the other travel reimbursement rates."" For more information, please double-click on the following link: http://www.michigan.gov/wca/0,1607,7-191--228208--,00.html. If you have any questions or would like to discuss this information, please contact me or John Combs (616-364-2552). Thank you!