Sixth Circuit: Ability to Perform Some Part-time Work Means Plaintiff Not Totally Disabled from Performing Any Work or Qualified for LTD Benefits

On Friday, the Sixth Circuit Court of Appeals affirmed summary judgment for a long-term disability benefits plan on the basis that it was not arbitrary or capricious for the plan to deny LTD benefits to a participant because she was capable of performing some part-time work.  McClain v. Eaton Corporation Disability Plan, No. 13-5395 (6^th Cir. 1-24-14).  Like many LTD plans, the defendant’s plan only provided LTD benefits (of 70% wage replacement) to participants who were sufficiently disabled so as to be “totally and continuously unable to engage in any occupation or perform any work for compensation or profit.”  The plaintiff’s “treating physician opined she could work part-time, and a market study identified various part-time positions in the area for which she was qualified.”  Therefore, the defendant plan concluded that because the plaintiff was able to perform some work, she was not totally disabled from performing any work as required by the terms of the benefit plan.

According to the Court’s opinion, the plaintiff injured her back at work and received short-term disability benefits under the plan, which only

defined disability as being “totally and continuously unable to perform the essential duties of your regular position with the Company, or the duties of any suitable alternative position with the Company.” After 24 months, however, the Plan switched from an “own occupation” standard to an “any occupation” standard, providing Second Tier coverage if “you are totally and continuously unable to engage in any occupation or perform any work for compensation or profit for which you are, or may become, reasonably well fit by reason of education, training or experience--at Eaton or elsewhere.”

After the short-term disability benefits expired, the plan sought updated medical information.  The plaintiff’s new treating physician “submitted medical information to the Claims Administrator, indicating that Plaintiff could work part time at a sedentary position with frequent rest, but that she had no ability to work full time.”  Importantly, he “limited Plaintiff to a part-time schedule, with certain restrictions.”  The Claims Administrator performed a survey of the local job market and identified “four positions locally, paying between $7.25 and $10.00 per hour, that both allowed for part-time work and met Plaintiff’s physical restrictions.”  Therefore, the plaintiff was notified that she did not qualify for LTD benefits because she was not “totally disabled” as required by the plan. 

 The plaintiff pursued an administrative appeal. A non-reviewing physician reviewed the plaintiff’s file and spoke with her treating physician.  He reiterated that plaintiff could perform sedentary work with restrictions, but did not note any restriction to part-time work.  Her treating physician indicated that she was very upset with him because of his restrictions and her loss of LTD benefits.  On her second appeal, the plaintiff submitted records from her initial surgeon, who also indicated that she could return to work in some capacity. 

The Plan Administrator arranged for a neurological surgeon and an orthopedic surgeon from an independent medical review organization to review Plaintiff’s claim file. Both doctors found that Plaintiff was not disabled under the terms of the Plan. The neurological surgeon submitted a report stating that Plaintiff was capable of returning to work with various restrictions, and that Plaintiff was capable of working in a sedentary position.

The orthopedic surgeon was even more optimistic: “The claimant should actually be able to return to work full duty without limitations at this point, as the multiple examinations performed and the imaging studies do not support further limitations or restrictions as noted.” Again, the Plan Administrator denied the plaintiff’s appeal and she sought further review in federal court.

 The Sixth Circuit noted that it must uphold the Plan Administrator’s decision: “A decision reviewed according to the arbitrary and capricious standard must be upheld if it results from a deliberate principled reasoning process’ and is supported by ‘substantial evidence.’”  

Under an arbitrary and capricious standard, honoring the extreme deference due the administrator, we are not convinced it was irrational to have concluded that an ability to work part time does not meet the definition of totally disabled to engage in any occupation or perform any work for compensation. It is reasonable to conclude that an ability to do some work means one is not unable to do “any work.”

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.