Iowa Supreme Court: Disability should be calculated based on function

In accordance with existing state law, the Iowa Supreme Court ruled Friday that a worker’s partial permanent disability benefits should be based on functionality, not lost earning capacity.

Den Hartog Industries and West Bend Mutual Insurance Company v. Tyler Dungan chronicles the fallout from a back injury that Tyler Dungan , who worked for plastic tanks manufacturer Den Hartog Industries, suffered in 2019 while loading onto a truck part of what would become part of the world’s largest margarita in Las Vegas. Mr. Dungan went on to work in other industries, where he made more money, and continued treatment and complaints of pain.

In proceedings for permanent partial disability, different doctors assigned Mr. Dungan a disability rating of 5% or 8%, based on his physical function.

Deciding that the “ultimate issue was Dungan’s loss of earning capacity, not his functional impairment, from the work injury,” a deputy with the state Workers’ Compensation Commission “noted that Dungan was twenty-six years old, had no postsecondary education, and would ‘more likely than not be unable to return to work as physically demanding as his day-to-day duties at Den Hartog made that job.’”

Considering these factors, the deputy found that Mr. Dungan had sustained a 15% industrial disability and therefore awarded him 75 weeks of permanent partial disability benefits in addition to costs and continued medical care. The Court of Appeals affirmed.

In reversing, the state’s highest court said the commission erred as it did not consider the language of state comp law, which says that in a case such as Mr. Dungan’s, “the employee shall be compensated based only upon the employee’s functional impairment resulting from the injury, and not in relation to the employee’s earning capacity.”

In a rare introduction to the ruling, one justice quoted Shakespeare’s “Cymbeline,” writing, “Read, and declare the meaning.”

“These words were addressed to a soothsayer in Shakespeare’s play, but today they are addressed to our court. The present case requires us to declare the meaning of Iowa Code,” the ruling states.