Kelley v. Gen. Motors, LLC
| Decision Date | 14 January 2021 |
| Docket Number | No. 344005,344005 |
| Citation | 335 Mich.App. 349,966 N.W.2d 716 |
| Parties | Ira O. KELLEY, Plaintiff-Appellant, v. GENERAL MOTORS, LLC, Defendant-Appellee. |
| Court | Court of Appeal of Michigan — District of US |
Paskel, Tashman, & Walker, PC, Southfield (by Michael J. Cantor ) for plaintiff.
Lacey & Jones, LLP, Troy (by Gerald M. Marcinkoski ) for defendant.
Before: Boonstra, P.J., and Tukel and Letica, JJ.
Over time, public policy has evolved in Michigan regarding the "coordination" of some social welfare benefits. "Coordination" refers to the approach by which "an employer paying workers’ compensation obligations may set off a portion of certain other benefits, such as pensions and social security payments, also received by the employee and financed by the employer." Reidenbach v. Kalamazoo , 327 Mich. App. 174, 183, 933 N.W.2d 335 (2019) (quotation marks and citation omitted). Our Supreme Court has noted the history and legal development of coordination:
Because most social legislation in Michigan was implemented in unrelated fragments, failure to coordinate resulted in an accumulation of benefits. For example, before coordination, it was not unusual for an employee to collect both unemployment and worker's compensation benefits at the same time. However, if an employee undergoes a period of wage loss, it does not follow that he should receive multiple wage-loss benefits simultaneously. An employee can experience only one wage loss and, in any logical or coherent system, should receive only one wage-loss benefit at any one time. [ Drouillard v. Stroh Brewery Co. , 449 Mich. 293, 299, 536 N.W.2d 530 (1995) (citation omitted).]
Thus, "[a]fter discovering that many employers were paying more than once to compensate a disabled employee's lost earning potential when that employee was also receiving disability pension benefits, the Legislature, in 1981, enacted MCL 418.354." Arbuckle v. Gen. Motors LLC, 499 Mich. 521, 526, 885 N.W.2d 232 (2016).
The statute permits an employer to reduce its obligation to pay an employee's weekly workers’ compensation benefits by coordinating those benefits with that employee's disability pension benefits. Although the statute makes coordination mandatory by default, MCL 418.354(14) permits an employer to elect not to coordinate disability pension benefits in certain circumstances, such as when it negotiates an employment agreement that provides otherwise. Id.
The statute has another twist, beyond the default and opt-out positions: the Legislature also provided that "[d]isability insurance benefit payments under the social security act," more commonly referred to as Social Security Disability Insurance or SSDI benefits, shall be coordinated, but only if the social security act were to someday be amended in a particular manner in which, to date, it has not been so amended. MCL 418.354(11) ; see note 4 of this opinion.
All of that is a long way of bringing us to the question presented in this case. The current disability pension plan between the United Auto. Workers—which represents plaintiff, Ira O. Kelley—and defendant, General Motors LLC, includes SSDI payments as part of a formula for coordinating benefits. The formula, which has been incorporated in collective-bargaining agreements (CBAs) for a number of years, aggregates a disabled employee's various sources of disability income and then, if the total exceeds the employee's average weekly wage, coordinates the benefits to reduce them; the formula limits the amount by which a benefit can be coordinated by providing that the amount of the reduction shall not exceed the amount of the disability benefit. See notes 1 and 3 of this opinion. Plaintiff challenges the formula as unlawful under MCL 418.354(11) ; plaintiff argues that the formula improperly considers his SSDI benefits by combining them with other benefits to determine whether he has reached an average weekly wage cap. Essentially, plaintiff argues that the formula effectively uses his SSDI benefits to reduce his worker's compensation benefits in violation of MCL 418.354(11). It is plaintiff's position that if SSDI benefits were not included in the formula, as he asserts MCL 418.354(11) mandates, then his total income under the formula would be less than his average weekly wage and not subject to any coordination.1
Although this case presents an interesting question of Michigan law regarding employee benefits, plaintiff's claim is preempted by § 301 of the Labor Management Relations Act (LMRA), codified at 29 USC 185, which requires that "the relationships created by [a collective-bargaining] agreement" be defined by application of "an evolving federal common law grounded in national labor policy," Bowen v. U.S. Postal Serv. , 459 U.S. 212, 224-225, 103 S. Ct. 588, 74 L. Ed. 2d 402 (1983). Thus, we need not consider whether MCL 418.354(11), in the abstract, operates in the manner in which plaintiff asserts because it simply is not available to him in this context involving a collective-bargaining agreement. Therefore, applying federal law, we affirm the judgment of the Michigan Compensation Appellate Commission (the Commission), which upheld defendant's coordination of plaintiff's benefits.
Plaintiff appeals by leave granted the decision of the Commission.2 Plaintiff's claim for unemployment benefits proceeded under a stipulated record. The magistrate agreed with plaintiff that MCL 418.354(11) prohibited consideration of SSDI benefits as part of the formula for coordinating plaintiff's benefits, ordering defendant to reimburse plaintiff for benefits wrongfully withheld. On appeal, the Commission concluded that defendant had not violated the statute and reversed the magistrate's order to reimburse plaintiff. Plaintiff now appeals the Commission's decision, which we affirm, albeit for reasons that differ from those provided by the Commission.
Plaintiff was awarded workers’ compensation benefits in 1990 and retired due to disability in 1992. At the time of his retirement, a 1990 letter of agreement, which was incorporated into a CBA involving plaintiff and defendant General Motors, barred coordination of benefits. In 2007, a letter of agreement was incorporated into the 2007 CBA, which for the first time resulted in some coordination of benefits, but only for "employees who are injured and retire on or after October 1, 2007," a class of employees that did not include plaintiff. In 2009, a new letter of agreement for the first time subjected plaintiff to coordination, because it applied to "all retirees who retired prior to January 1, 2010, regardless of their date of retirement or injury." As noted, the 2009 agreement contained a formula for computing the amount of benefit reduction, but it also placed a cap on the amount by which benefits could be reduced. The formula included "consideration" of an employee's SSDI benefits.3 It is plaintiff's contention that the consideration of those benefits runs afoul of MCL 418.354(11).4
On January 1, 2010, defendant began coordinating benefits pursuant to the 2009 letter of agreement. On January 21, 2014, plaintiff began receiving Social Security retirement benefits, and consequently his eligibility for workers’ compensation benefits ended. We need not detail the amounts involved in the application of the coordination formula in this particular case, but under it, plaintiff's workers’ compensation benefits were reduced by $118.70 per week for just over four years, from January 1, 2010 until January 21, 2014, a period of approximately 211 weeks, for a total difference of approximately $25,000.5 As noted, plaintiff argued below and maintains on appeal that the reduction of his benefits by that amount was in violation of MCL 418.354(11). In April 2010, he filed an application with the Michigan Administrative Hearings System Workers’ Compensation Board of Magistrates, making those allegations. After a hearing on the stipulated facts, the magistrate agreed, ordering reimbursement to plaintiff of the reduced payments. Defendant appealed the magistrate's decision to the Commission, which ruled that defendant's coordination formula did not violate MCL 418.354(11). This appeal followed.
We review questions of law in a workers’ compensation case, including the proper interpretation of a statute, de novo. Arbuckle, 499 Mich. at 531, 885 N.W.2d 232. "Interpretation of a collective-bargaining agreement, like interpretation of any other contract, is also a question of law" subject to de novo review. Id. (citation omitted). "A reviewing court interprets a collective-bargaining agreement according to ordinary principles of contract law, at least when those principles are not inconsistent with federal labor policy." Id. at 531-532, 885 N.W.2d 232 (quotation marks and citation omitted).
MCL 418.354(11), the statute on which plaintiff relies, provides that SSDI benefits shall be coordinated, but it further provides that it shall become operative only "if section 224 of the social security act, 42 USC 424a, is revised so that a reduction of social security disability insurance benefits is not made because of the receipt of worker's compensation benefits by the employee." See note 4 of this opinion. Thus, at present, MCL 418.354(11) is without operative effect and therefore does not mandate coordination of SSDI benefits because it is undisputed that Congress has never amended § 224 of the Social Security Act in the manner that would trigger the contingency in the statute. See Arbuckle , 499 Mich. at 530 n. 15, 885 N.W.2d 232. In Arbuckle , the plaintiff made precisely the same argument made here, in addition to a contractual claim. Id. The parties agree that, in Arbuckle , our Supreme Court did not address the question at issue in this case and they further agree generally that Michigan courts have never construed MCL 418.354(11)....
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