Workers' Compensation Court of Appeals Claude Bruton, Respondent,
Smithfield Foods, Inc. and ESIS, Inc., Relators, and Mayo Clinic, Intervenor.
Workers' Compensation Court of Appeals Office of
Christopher Sandquist, Sandquist Law Office, LLC, Mankato,
Minnesota, for respondent.
Grimsrud, Aafedt, Ford, Gray, Monson & Hager, P.A.,
Minneapolis, Minnesota, for relators.
absence of statutory authority to offset workers'
compensation benefits by the amount of disability benefits
paid under an employer's self-funded and
self-administered plan, the employer must pay workers'
compensation benefits without reducing those benefits by the
amount of previously paid disability benefits.
question presented in this case is whether an employee's
claim for temporary total disability (TTD) benefits under the
Minnesota Workers' Compensation Act can be offset by
benefits paid to the employee for the same period of
disability under the employer's self-funded,
self-administered, short-term disability (STD) plan. The
workers' compensation judge awarded TTD benefits to
respondent-employee Claude Bruton (Bruton), but determined
that relator-employer Smithfield Foods (Smithfield) was
entitled to offset those benefits by the amount of STD
benefits already paid. Then, because Smithfield had already
paid STD benefits in essentially the same amount that would
be owed as TTD benefits, the compensation judge dismissed
Bruton's petition. The workers' compensation court of
appeals reversed. Because there is no statutory authority for
an offset of workers' compensation benefits by the amount
of benefits paid under an employer's self-funded,
self-administered STD plan, we affirm.
facts of this case are undisputed. On August 25, 2016, Bruton
fell, dislocated his shoulder, and sustained facial
lacerations while working for Smithfield. At the time of this
injury, Smithfield maintained workers' compensation
insurance through Safety National Casualty Corporation, with
the claims administered by ESIS, Inc. Smithfield's policy
has a $2 million deductible per claim. Smithfield also
maintained an STD policy for its employees. The STD plan was
administered by Smithfield's human resources department
and was in the name of John Morrell Food Group, which is an
entity related to Smithfield. The parties stipulated that
Smithfield owns the funds held in this plan and administers
the plan on behalf of its (and John Morrell's) employees.
The parties also agreed that Smithfield's plan did not
qualify as an ERISA plan. See, e.g., 29 U.S.C.
§ 1002 (2012) (defining plans governed by the Employee
Retirement Income Security Act).
initially denied that Bruton suffered a work-related injury
covered by workers' compensation benefits. But,
Smithfield did not dispute that Bruton was disabled as a
result of his injuries. Thus, Smithfield paid Bruton STD
wage-loss benefits under its private plan, representing 80
percent of his weekly compensation from September 5, 2016 to
March 26, 2017, totaling $12, 419.90. During the same period,
Smithfield also paid Bruton $2, 030.48 for previously-accrued
paid sick and vacation leave.
filed a petition for workers' compensation benefits on
October 24, 2016. After Smithfield conducted an
investigation, it filed an amended notice of primary
liability that acknowledged Bruton's injuries were
compensable and work-related under the Workers'
Compensation Act. ESIS, Smithfield's workers'
compensation insurer, began paying benefits, including TTD
benefits, starting on March 27, 2017. ESIS also paid Bruton
benefits retroactively, for the period during which
workers' compensation liability was denied. For these
retroactive payments, ESIS paid Bruton $636.52, which
represented the difference between the STD benefits
Smithfield had already paid (reduced for state and federal
taxes), and the TTD benefits that Bruton would have received
had Smithfield acknowledged workers' compensation
liability at the outset.
hearing before the compensation judge, Smithfield maintained
that, because it had already paid Bruton wage-loss benefits
under its STD plan, it did not owe Bruton additional TTD
wage-loss benefits. Smithfield asserted that an offset was
necessary to avoid imposing a double liability on it and to
avoid a double recovery by Bruton. Relying on public policy
that disfavors a double recovery, the workers'
compensation judge concluded that an offset in Bruton's
TTD benefits was required based on the amount Smithfield had
paid as STD benefits.
appealed to the WCCA, which reversed. Bruton v.
Smithfield Foods, Inc., No. WC17-6113, 2018 WL 2710167
(Minn. WCCA May 21, 2018). The WCCA first concluded that the
payments made under Smithfield's STD plan were not
workers' compensation benefits because those payments
were not made by an entity that is statutorily required to
pay workers' compensation benefits: an insurer, a
self-insured employer, a government entity, or the Special
Compensation Fund. Id. at *3-4. Next, the WCCA
decided that Smithfield could not invoke either of two
statutory routes to reduce benefit payments to an injured
worker. Id. First, because the STD payments were not
wage-continuation payments, Smithfield could not invoke Minn.
Stat. § 176.221, subd. 9 (2018) (relieving an employer
who makes payment of "full wages" of certain
obligations). 2018 WL 2710167 at *3. Second, an intervention
claim was unnecessary because the WCCA could not
"infer" that Smithfield and John Morrell are the
same entity, despite the parties' stipulation otherwise.
Id. at *4. See Minn. Stat. § 176.361,
subd. 1 (2018) (allowing "[a] person" with "an
interest" to intervene in a workers' compensation
proceeding). Finally, the WCCA ...