Article written July 31, 2021

On June 22, 2021, the Missouri Eastern District Court of Appeals handed down the latest decision in the Second Injury Fund line of cases that has shaped Missouri Worker’s Compensation litigation since the 2013 Amendments. The key takeaway: “If the claimant is PTD and satisfies the requirements of section 287.220.3, the Fund pays. If not, the employer pays.”

The Second Injury Fund was created to both encourage employers to hire injured workers and to limit their liability as it relates to those prior injuries. Since its inception in 1943 with the passing of Section 287.220, the legislature has periodically created limitations to the Fund’s liability through legislation and statutory amendments. These limitations were made to address solvency issues with the Fund. The most recent limitations are found in Section 287.220.3 which in relevant part limits Fund liability only when the prior injury totals over 50 weeks of disability. This, in effect, created two voids wherein a claimant may be PTD based on a combination of a current and prior injury, but not receive benefits for same. The decision in Klecka fills those voids.

Employer Liability Pre- and Post-Klecka

Prior to the Klecka decision, a claimant may be PTD, but not based on the last injury alone. In that case, if the claimant did not have a Fund qualifying injury, they would not receive PTD benefits. The Court in Klecka discarded this notion. The Court expressly imposes liability in this instance on the employer at the time of the last injury. This decision shifts the burden of those legislative changes to the employer for the totality of those de minimus, non-fund qualifying injuries if they render the claimant PTD in combination with the current injury.

Fund Liability Pre-and Post-Klecka

The Court also cut through some of the protections relied upon by the Fund under 287.200.3. Prior to Klecka, the Court in Parker determined that the Fund was liable for PTD caused by the primary injury in combination with other qualifying injuries. However, the Court in Klecka expanded the Fund liability by finding that in the presence of one qualifying disability, all non-qualifying disabilities must also be considered in making a PTD determination. In addition, factors to be considering in making a PTD determination also include medical and non-medical factors such as age, education, work experience, training, and physical condition.

Implications

While we await to see whether the Supreme Court will accept transfer of this case, the decision in Klecka has obvious implications for employers as it relates to PTD exposure. In the short term, employers can use non-qualifying prior injuries to point to the Fund for PTD liability – assuming there is at least one prior injury that meets the 50-week threshold. On the other hand, employers have PTD exposure for the totality of a claimant’s prior injuries if there is no fund qualifying injury.  This in essence will make it more difficult for employers to settle out primary cases and leave the Fund as a party as the Klecka decision basically creates a no-lose scenario so long as the claimant is determined to be PTD.

If you have any questions about this decision, or how it may impact you, do not hesitate to contact the attorneys at VBM. We will be closely monitoring the implications of this decision at the Division, Commission, and eventually Supreme Court levels.