Golden v. Westark Community College

• Decision Date: 02 July 1997
• Docket Number: No. CA,CA
• Citation: 948 S.W.2d 108,58 Ark.App. 209
• Parties: Bill GOLDEN, Appellant, v. WESTARK COMMUNITY COLLEGE, Appellee. 96-1338.
• Court: Arkansas Court of Appeals

Page 108

948 S.W.2d 108

58 Ark.App. 209

Bill GOLDEN, Appellant, v. WESTARK COMMUNITY COLLEGE, Appellee.

No. CA 96-1338.

Court of Appeals of Arkansas Divisions I and IV.

July 2, 1997.

William J. Kropp III, Fort Smith, for Appellant.

Nathan C. Culp, Little Rock, for Appellee.

ROAF, Judge.

Bill Golden sustained a compensable injury while at work as a security officer for Westark Community College (Westark). Golden was ultimately assigned a 20% permanent partial disability to the body as a whole. However, the Commission found that Westark was entitled to offset all of Golden's permanent disability benefits pursuant to Ark.Code Ann. § 11-9-522(f) (Repl.1996), since Golden was over sixty-five and drawing retirement benefits from Social Security. Golden raises four arguments in his appeal. He claims that (1) Ark.Code Ann. § 11-9-522(f) is unconstitutional in that it violates the Equal Protection Clauses of the state and federal constitutions; (2) the Age Discrimination in Employment Act promulgated by Congress preempts the application of Ark.Code Ann. § 11-9-522(f); (3) there is not substantial evidence to support the Commission's finding that he is entitled to only 20% permanent partial disability to the body as a whole; and (4) permanent partial disability benefits do not include money or benefits for permanent physical impairment. We affirm.

Golden worked as a security guard for Westark and was 67 years old at the time of his injury. His duties included walking or driving around the campus and ensuring the security of the buildings and facilities. He was required to walk up and down stairs and otherwise remain on his feet for extended periods of time.

In November 1993, when crossing a bridge connecting two buildings on the campus, Golden slipped on ice and injured his back. He underwent prolonged treatment as a result of the injury, and continued to suffer from pain and discomfort at the time of his workers' compensation hearing. Golden's treating physician gave him a 5% physical impairment rating and permanent restrictions on the type of work he was allowed to perform. The restrictions effectively prevented him from performing his duties as a security guard, and he was subsequently terminated. Golden was sixty-nine years old at the time of his workers' compensation hearing and was receiving $575 per month in social security retirement benefits. Westark paid, without contest, Golden's medical expenses and temporary total disability through his healing period. However, Westark contested the extent of Golden's permanent disability, and denied payment of any permanent disability benefits because of the operation of Ark.Code Ann. § 11-9-522(f).

The administrative law judge (ALJ) found that Golden sustained a 20% impairment to his body as a whole (5% physical disability and 15% wage-loss disability). The ALJ recognized that Ark.Code Ann. § 11-9-522(f) provides for a dollar-for-dollar offset for anyone aged sixty-five or older who either is drawing or is eligible to draw benefits from a publicly or privately funded retirement plan. However, the ALJ found that Golden was entitled to receive disability payments of $119 for 22 and one-half weeks based on his 5% physical disability, reasoning that the statutory offset did not apply to benefits for physical impairment. The ALJ did not reach the issue of constitutionality of the statute. Golden appealed to the Commission, which reversed the judgment of the ALJ with respect to the finding that a portion of Golden's benefits should not be offset pursuant to Ark.Code Ann. § 11-9-522(f), and found the statute not violative of equal protection. Because Golden's social security benefits of $575 per month were greater than the amount of his permanent disability benefits, Golden was thus left without any benefits for his permanent partial disability.

1. Constitutionality of Ark.Code Ann. 11-9-522(f)

Golden first argues that Ark.Code Ann. § 11-9-522(f) is unconstitutional in that it violates the Equal Protection Clauses of the state and federal constitutions. Golden claims that the classification in the statute is arbitrary, unreasonable, and allows for persons similarly situated to be treated differently. Golden also alleges that the classification of people found in the statute has no rational basis to any legitimate objective of the state.

Arkansas Code Annotated § 11-9-522(f) (Repl.1996) was included among the major changes to the workers' compensation law enacted by the Arkansas General Assembly in 1993, and provides:

(1) Any permanent partial disability benefits payable to an injured worker age sixty-five (65) or older shall be reduced in an amount equal to, dollar-for-dollar, the amount of benefits the injured worker received or is eligible to receive from a publicly or privately funded retirement or pension plan but not reduced by the employee's contributions to a privately funded retirement or pension plan.

(2) The purpose and intent of this subsection is to prohibit workers' compensation from becoming a retirement supplement.

A companion statute, Ark.Code Ann. § 11-9-519(g) (Repl.1996) provides for an identical offset with respect to permanent total disability benefits.

Because age, unlike race or gender, is not a suspect or quasi-suspect classification, this court should apply a rational-basis test to determine if the statute violates equal protection. Massachusetts Bd. of Retirement v. Murgia, 427 U.S. 307, 314, 96 S.Ct. 2562, 2567, 49 L.Ed.2d 520 (1976). It is well settled that an act by the legislature is entitled to a presumption of constitutionality. American Trucking Ass'n v. Gray, 288 Ark. 488, 707 S.W.2d 759 (1986); Pulaski County Mun. Court v. Scott, 272 Ark. 115, 612 S.W.2d 297 (1981). On appellate review, this court must presume that a statute is constitutional, and the party challenging the statute has the burden of proving otherwise. All doubts are resolved in favor of constitutionality. Misskelley v. State, 323 Ark. 449, 915 S.W.2d 702 (1996)(citing Reed v. Glover, 319 Ark. 16, 889 S.W.2d 729 (1994)).

The Equal Protection Clause does not preclude all statutory classifications. Cook v. State, 321 Ark. 641, 906 S.W.2d 681 (1995); Hamilton v. Hamilton, 317 Ark. 572, 879 S.W.2d 416 (1994). Classifications are permitted that have a rational basis and are reasonably related to a legitimate government purpose. McFarland v. McFarland, 318 Ark. 446, 885 S.W.2d 897 (1994). The role of the reviewing court is not to discover the actual basis for the legislation, but to consider whether any rational basis exists that demonstrates the possibility of a deliberate nexus with state objectives so that the legislation is not the product of utterly arbitrary and capricious government purpose. Misskelley, supra; Streight v. Ragland, 280 Ark. 206, 655 S.W.2d 459 (1983). This court must presume that the challenged classification will promote a legitimate state purpose if there is "any conceivable set of facts to uphold the law's rational basis." Bosworth v. Pledger, 305 Ark. 598, 810 S.W.2d 918 (1991).

Neither of Arkansas's two workers' compensation retirement offset statutes have faced a constitutional challenge since their enactment in 1993. However, a number of other states have considered similar statutes and have consistently upheld the constitutionality of the offset provisions. It is necessary to understand the underlying rationale for this legislation in order to properly consider the constitutionality of a particular statute. The premise for both state and federal offset legislation is the impropriety of duplicate benefits. This premise is based upon the idea that all wage-loss legislation is social legislation designed to restore to workers a portion of wages lost due to the three major causes of wage loss: disability, unemployment, and old age, and that, despite the cause, a worker experiences only one wage loss and should receive only one wage-loss benefit. See 9 LARSON'S WORKERS' COMPENSATION LAW, § 97.10. The primary aim of both federal and state offset legislation is to avoid duplicate benefits and, in addition, to designate the primary source for payment of a particular benefit.

With this premise in mind, the majority of jurisdictions have upheld the constitutionality of offset legislation against equal protection attacks, and even the two courts that have struck down their statutes have not done so based upon the lack of a legitimate governmental concern. These jurisdictions have found a variety of valid governmental purposes for the offset statutes. See e.g. Brown v. Goodyear Tire & Rubber Co., 3 Kan.App.2d 648, 599 P.2d 1031 (1979) (to prevent duplicate benefits); Sasso v. Ram Property Management, 431 So.2d 204 (Fla.Dist.Ct.App.1983) (to avoid "double dipping;" to reduce payment of fringe benefits due to age- related decline in productivity and physical abilities; to make room in the job market for younger workers by inducing retirement of older workers; to reduce costs of insurance premiums to employers); Harris v. State, 120 Wash.2d 461, 843 P.2d 1056 (1993) (to avoid duplicate payments; to reduce industrial insurance premiums; to save money for the state fund); State v. Richardson, 482 S.E.2d 162 (W.Va.1996) (to preserve fiscal integrity of workers' compensation fund, to avoid duplicate benefits); Case of Tobin, 424 Mass. 250, 675 N.E.2d 781 (1997)(coordination of benefits to prevent stacking of benefits; to reduce the cost of workers' compensation premiums for employers who pay into multiple-benefit systems).

It is clear that the Arkansas offset statutes are founded upon legitimate governmental concerns. The stated purpose of Ark.Code Ann. § 11-9-522(f) is "to prohibit workers' compensation from becoming a retirement supplement." Arkansas Code Annotated § 11-9-101 (Repl.1996), provides that one of the primary purposes of the workers' compensation laws is "to emphasize that the workers' compensation system in this state must be...