Kentucky Supreme Court: Law limiting work comp benefits is retroactive

In recent years, the Kentucky legislature with the support of the business community has attempted to establish that workers' compensation wage-replacement benefit payments must stop when an older recipient starts getting Social Security Retirement benefits. The rationale was that Social Security payments eliminate the need for workers' compensation benefits, so cutting them off on a date certain would save employers and insurers money.

A couple of years ago, the legislature passed a bill providing that benefits would stop at when a claimant became eligible for retirement benefits or two years from injury or exposure to a condition causing occupational illness, whichever was later, but the Kentucky Supreme Court found that this was unconstitutional because it violated equal protection when some workers were eligible for Social Security and others would never be.

In response, the legislature passed House Bill 2, which took effect in mid-2018. We published a detailed blog about this legislation at the time. The new law provided that these benefits were to cease when the employee turns 70 or four years after the injury or exposure, whichever is later. This would treat all employees the same and cure the constitutional problem.

Another issue arose, however, of whether this provision should apply retroactively from its effective date. On August 29, 2019, the Kentucky Supreme Court answered this question in the affirmative in the decision of Lafarge Holcim v. Swinford.

James Swinford was a bulldozer operator who worked for Lafarge Holcim. When he was 75, after decades of this kind of work, he had a serious accident in the bulldozer that injured his neck and right arm. He was awarded permanent partial disability and had not returned to work. The Supreme Court affirmed the correctness of this award, which was the other issue before it.

The court also held that the 2018 provision capping benefits at 70 or four years from the incident, whichever is later, does apply retroactively.

The bill as passed contained a section that states the law applies retroactively to claims for injuries or last exposure on or after Dec. 12, 1996, and that are not yet final, are on appeal or which could still be appealed. However, the Legislative Research Commission did not include this section in the text of the official state statute. Rather, it placed it in a note following the official version of the statute.

The court explained that under state law the statutory text and the notes are "separate and distinct." State law also says that if laws are "of a private, local, or temporary nature" they do not have to be placed in the official version of the statutes. The section of the bill placed in the notes in this case was temporary because eventually all the claims it would apply to retroactively would wind their way through the process and become final. The court reasoned that the retroactivity provision was valid because it did not have to be part of the official version. Placement in the notes of a temporary law is allowable.

For this reason, the court sent Swinford's claim back to the administrative law judge to determine how the time limits will apply to him because the retroactive application applies to his case.

Anyone with questions about whether this retroactive provision impacts their claim should seek legal advice.

The lawyers at Landrum & Shouse LLP with offices in Louisville and Lexington represent people with work injuries or occupational diseases seeking workers' compensation and in third-party lawsuits.