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Court Rules for Ford in Retiree's Workers' Comp Dispute

A settlement agreement did not mention Ford potentially discontinuing benefits or the statutory retirement presumption and, in September 2010, Ford petitioned to discontinue paying the PTD benefits pursuant to the retirement presumption.

August 15, 2011
Related Topics: Workers' Compensation, Disability Benefits, Benefit Design and Communication, Compensation, Latest News
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An appeals court erred when it denied Ford Motor Co.'s petition to discontinue paying workers' compensation benefits to a worker who reached retirement age, Minnesota's Supreme Court ruled.

The high court ruled Aug. 10 in George E. Frandsen v. Ford Motor Co. reviewed whether Ford waived a retirement presumption in Minnesota's workers' compensation law simply by failing to expressly reserve the presumption in a settlement agreement.

The presumption states that permanent total disability benefits shall cease at age 67 because the employee is presumed retired from the labor market. But workers can rebut the presumption, court records state.

The Minnesota Association for Justice, the Minnesota Self-Insurers' Association, and the Minnesota Defense Lawyers Association all filed amicus briefs in the case at hand.

It involved Frandsen, who suffered an undisclosed injury in 2004 when he worked for Ford. In April 2007, Frandsen and Ford agreed that Frandsen was permanently and totally disabled.

But a settlement agreement did not mention Ford potentially discontinuing benefits or the statutory retirement presumption and, in September 2010, Ford petitioned to discontinue paying the permanent total disability benefits pursuant to the retirement presumption.

Ford argued in a hearing that Frandsen could not rebut the retirement presumption because he had stated in a deposition that he planned to retire when he was 66. Frandsen objected and argued that he is entitled to continue receiving the benefits.

A Workers' Compensation Court of Appeals denied Ford's petition after reviewing the settlement agreement. It found that Ford waived the retirement presumption because the parties did not incorporate the presumptive retirement provision of the law into the settlement agreement.

Because the appeals court determined that the retirement presumption did not apply, it did not discuss whether Frandsen had properly rebutted the presumption that he would have retired at age 66.

But the Supreme Court reversed and remanded the case to the appeals court for proceedings consistent with its opinion.

The high court said that Frandsen had to show that the employer intended to waive the retirement presumption and he did not do so.

“At the end of the day, the employee's position is essentially that entering into a stipulation with the implied knowledge of the existence of the retirement presumption is enough to establish an employer waiver,” the court's opinion states. “We disagree. The employee has the burden to come forward with at least some evidence of waiver, and we need not decide here what is the minimum level of evidentiary support that the employee must produce.”    

Filed by Roberto Ceniceros of Business Insurance, a sister publication of Workforce Management. To comment, email editors@workforce.com.

 

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