Employer can't unilaterally stop benefits but can avoid penalty
Case name: Daugherty v. County of Douglas, No. A-09-290 (Neb. Ct. App. 01/12/10).
Ruling: The Nebraska Court of Appeals affirmed parts of the trial court's decision holding a modification of an original award was required and that the modification was only retroactive to the time the employer filed the modification application. It reversed the trial court's order awarding the worker a 50 percent waiting-time penalty.
What it means:
In Nebraska, employers are prohibited from unilaterally modifying a workers' compensation award. An award remains in full force and effect until an agreement is made between the employer and employee which is approved by the Nebraska workers' compensation court. If the parties cannot agree, a modification application can be made by either party any time after six months from the date of the agreement or award.
A deputy sheriff was injured on the job in 2002 and received temporary total disability benefits. He reached maximum medical improvement and returned to work. His employer stopped paying benefits and began paying him regular wages on that date. He stopped working entirely in 2006, and the employer resumed payment of TTD benefits. The employer filed an application for modification in 2007. The Court of Appeals determined the employer unilaterally stopped paying benefits twice without seeking the required permission of the court. It noted the original award did not specify an end date for the termination of TTD benefits. However, the court observed it is up to the court, not the employer, to determine the date of a change in disability. It also determined the trial court did not have authority to modify the deputy's benefits retroactively to a date prior to when the employer filed its application to modify the award, in 2007.
The court reversed the trial court's award of a penalty to the deputy, holding that the employer could reasonably have thought it could refrain from paying benefits when the deputy was working full time. It determined the employer's belief that it should not have to make "double payments" while the deputy was working was not unreasonable. It also pointed out that Nebraska courts had not previously addressed the situation.
The court also determined the employer was not entitled to credit for the wages it paid to the sheriff during the periods when it discontinued his workers' compensation benefits because he had returned to full-time employment. The court determined this argument was one made in equity, which the workers' compensation courts do not have jurisdiction to hear.
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March 4, 2010
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