IN THE SUPREME COURT OF TENNESSEE
AT KNOXVILLE FILED
October 7, 1996
WALTER P. VOGEL, ) FOR PUBLICATION
Cecil Crowson, Jr.
) Appellate C ourt Clerk
Plaintiff/Appellee, ) Filed: October 7, 1996
)
v. ) Hon. John Turnbull, Judge
)
WELLS FARGO GUARD ) No. 03S01-9601-CV-00005
SERVICES, )
)
Defendant/Appellant, )
)
and )
)
DINA TOBIN, DIRECTOR OF THE )
DIVISION OF WORKERS’ )
COMPENSATION, TENNESSEE )
DEPARTMENT OF LABOR, )
SECOND INJURY FUND, STATE )
OF TENNESSEE, and CHARLES )
BURSON, ATTORNEY GENERAL )
FOR THE STATE OF TENNESSEE, )
)
Defendants/Appellants. )
For the Defendant/Appellants For Plaintiff/Appellee Vogel:
Wells Fargo Guard Services:
David H. Dunaway
Ernest D. Bennett, III DAVID H. DUNAWAY &
Nashville, TN ASSOCIATES
LaFollette, TN
For Defendants/Appellants
Dina Tobin and Charles Burson:
Charles W. Burson
Attorney General and Reporter
Dianne Stamey Dycus
Senior Counsel
Civil Division
Nashville, TN
OPINION
REVERSED WHITE, J.
In this workers' compensation case, we are asked to review the trial
court’s determination that Tennessee Code Annotated Section 50-6-
207(4)(A)(i) is unconstitutional and that plaintiff is entitled to life-time
workers’ compensation benefits. Having considered the positions of the
parties, the plain language and the legislative intent of the statute, and relevant
authority in other jurisdictions, we reverse.
Walter Vogel was employed as a security guard with Wells Fargo Guard
Services. As part of his obligation, he inspected tractor-trailers. During one
such inspection, he slipped on a muddy embankment, fell, and injured his
shoulder and back. At the time of his fall, Vogel was seventy-three years of
age and had substantial preexisting health problems, including stomach cancer,
heart difficulties, lung problems, and arthritic degeneration of the spine.
As a result of his work-related fall, Vogel sought the care of orthopedic
doctors. Dr. Donald Ivey performed back surgery on Vogel and assigned a
twenty-two percent physical impairment rating based on the back condition.
Dr. James McKinney, an orthopedic surgeon, found that Vogel had a seventy-
three percent impairment to the body as a whole, twenty percent of which was
attributable to Vogel's back injuries. Another orthopedic doctor, Dr. William
Kennedy, agreed that Vogel had significant body impairment and attributed
twenty-five percent to the back injury. Based on this evidence, the trial court
found that the medical evidence in the case supported a finding of twenty-three
percent medical impairment to the body as a whole.
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In addition to medical witnesses, Vogel presented the testimony of Dr.
Norman Hankins, a vocational expert. Hankins testified that Vogel's
vocational impairment was one hundred percent. As a result of this testimony,
the trial judge found that Vogel was one hundred percent permanently and
totally disabled as a result of the on the job injury. The state concedes that the
evidence supported this finding. The trial court apportioned the liability sixty-
five percent to Wells Fargo, Vogel's present employer, and thirty-five percent
to the Second Injury Fund.
In addition to awarding benefits, the trial court found that the statutory
scheme was unconstitutional. Specifically, the court held that Tennessee Code
Annotated Section 50-6-207(4)(A)(i)
would purport to limit [Vogel's] recovery for the compensable
disability found by the court to exist, due to his age. The court
finds that there is no rational basis for a situation which would, as
in this case, if a person was ninety-nine (99%) percent disabled,
award him three hundred ninety-six (396) weeks but, if he is one
hundred (100%) percent permanently and totally disabled, limit
him to two hundred sixty (260) weeks. The court therefore finds
after reviewing the entire record that the age related caps
contained in the Tennessee Worker's Compensation Reform Act . .
. should be and the same are declared to be arbitrary, capricious,
illegal, and unconstitutional under the Equal Protection Clause of
the Fourteenth Amendment of the United States Constitution
because they unfairly discriminate between workers based on age.
As a result of the trial judge's conclusion that the statute was unconstitutional,
the judge awarded Vogel life-time benefits under the Workers' Compensation
Act.
The statute at issue is part of the Workers' Compensation Reform Act of
1992. It provides, in relevant part, that
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compensation shall be paid during the period of such permanent
total disability until the employee reaches the age of sixty-five
(65); provided, that with respect to disabilities resulting from
injuries which occur after age sixty (60), regardless of the age of
the employee, permanent total disability benefits are payable for a
period of two hundred sixty (260) weeks. Such compensation
payments shall be reduced by the amount of any old age insurance
benefit payments attributable to employer contributions which the
employee may receive under the Social Security Act, U.S.C., title
42, chapter 7, subchapter II, as amended.
Tenn. Code Ann. § 50-6- 207(4)(A)(i)(1995 Supp.). Vogel contends that the
statute is constitutionally infirm because of the distinctions it draws between
workers who are injured before and after age sixty-five and between workers
who are injured before age sixty and those who are injured between the ages of
sixty and sixty-five. He challenges the statute as violating both the equal
protection clause and the Age Discrimination in Employment Act.
I. Constitutional Analysis Generally
We begin with the presumption which the law attaches and which we
cannot ignore that the acts of the General Assembly are constitutional. See
e.g., Petition of Burson, 909 S.W.2d 768 (Tenn. 1995); Davis-Kidd
Booksellers, Inc. v. McWherter, 866 S.W.2d 520 (Tenn. 1993); Bozeman v.
Barker, 571 S.W.2d 279 (Tenn. 1978). In evaluating the constitutionality of a
statute, we must indulge every presumption and resolve every doubt in favor of
constitutionality. Petition of Burson, 909 S.W.2d 768 (Tenn. 1995). A statute
comes to a court "clothed in a presumption of constitutionality [since] the
Legislature does not intentionally pass an unconstitutional act.” Cruz v.
Chevrolet Grey Iron Div. of General Motors, 247 N.W.2d 764, 769 (Mich.
1976). Therefore, notwithstanding the trial judge's findings in this case, we
must begin our inquiry with the presumption that the statute in question passes
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constitutional muster.
II. Equal Protection Challenge
From the beginning, we turn to analyze the statute in question
recognizing the very real concern that it violates equal protection by classifying
individuals differently based on age. In analyzing equal protection challenges,
we must first determine the appropriate measure of scrutiny. In Brown v.
Campbell County Board of Education, 915 S.W.2d 407 (Tenn. 1995), we
discussed the three levels of scrutiny applicable to discrimination claims and
concluded that claims such as these, in which the class allegedly discriminated
against is not a suspect class, should be scrutinized under the rational basis test.
Brown v. Campbell County Board of Education, 915 S.W.2d at 413-14. We
join other jurisdictions in applying the rational basis test to constitutional
challenges based on age. In a recent decision the Colorado Supreme Court held
that "[c]lassifications based on age are not suspect or special warranting strict
scrutiny or intermediate review." Industrial Claim Appeals Office v. Romero,
912 P.2d 62, 66 (Colo. 1996)(citing Massachusetts Board of Retirement v.
Murgia, 427 U.S. 307, 313-14 (1976)). See also Sasso v Ram Property
Management, 431 So.2d 204, 221 (Fla. App. 1983). Additionally, workers'
compensation benefits are not deemed to be fundamental rights thereby
triggering a higher standard of review. Industrial Claim Appeals Office v.
Romero, 912 P.2d at 66.
Under the rational basis test, our inquiry is whether the classification
system has a reasonable relationship to a legitimate state interest. "Unless the
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individual challenging the statute can establish that the differences are
unreasonable, the statute must be upheld.” Tennessee Small School Systems v.
McWherter, 851 S.W.2d 139, 154 (Tenn. 1992). If the classification is
naturally and reasonably related to that which it seeks to accomplish it has
passed the rational basis test and has met constitutional standards. Our chore,
then, is to determine whether the statute naturally and reasonably relates to
legitimate state purposes.
Our Workers’ Compensation Act, like most, draws classifications. The
fact that a statute classifies people differently, and results in inequality, does
not invalidate the statute. In fact, all classification systems involve
discrimination, but “only invidious discrimination with no rational basis for the
statutory classification . . . offends the equal protection guarantee.” Brown v.
Goodyear Tire & Rubber Co., 599 P.2d 1031, 1035 (Kan. App. 1979), aff’d,
608 P.2d 1356 (Kan. 1980).
As is also true of most workers’ compensation statutes, our statute uses
age as a basis for various classifications. Benefits are terminated for
permanently, totally disabled persons based on age and the length of benefits
for others who are permanently and totally disabled depends upon their age.
The use of age as a basis for drawing distinctions is not necessarily
problematic. In certain contexts, age-based discrimination has been deemed
rational and essential to legitimate governmental purposes. See Gregory v.
Ashcroft, 501 U.S. 452 (1991)(mandatory judicial retirement at age seventy is
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constitutional); Vance v. Bradley, 440 U.S. 93 (1979)(mandatory foreign
service officer retirement at age sixty is constitutional); Massachusetts Board
of Retirement v. Murgia, 427 U.S. 307 (1976)(Massachusetts ban on
employment of police officer over age fifty is constitutional). In the context of
disability benefits, no presumption of rationality attaches; consequently, we
must determine whether the discrimination is rationally related to any
legitimate government purpose.
Our statute, like many others, ties the termination of benefits for the
permanently, totally disabled worker to the commencement of Social Security
old-age benefits. Within this structure is the basis for what the state claims is a
rationally-based classification. The purpose of the statute, the state contends, is
to “provide permanent and total benefits to the age of 65, the age when an
employee is eligible for Social Security old-age benefits. This purpose, they
allege is consistent with the overall purpose of workers’ compensation law: the
replacement of lost wages. See Van Housler v. Mueller, 741 S.W.2d 329, 330
(Tenn. 1987).
The issue of whether a workers’ compensation scheme that ties the
termination of disability benefits to the onset of old-age benefits has led courts
to different, somewhat spirited debates.
In Industrial Claim Appeals Office v. Romero, 912 P.2d at 62, the
Colorado Supreme Court declared an age-based classification in its workers’
compensation law to be unconstitutional. The Colorado statute terminated
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permanent total benefits “when the employee reaches the age of sixty-five
years.” As a result, persons sixty-five and older who were permanently and
totally disabled were denied benefits for work-related injuries, while persons
who suffered less than total disabilities were allowed to recover.
The Colorado Court concluded that the statute created a discriminatory
classification between permanently totally disabled workers age sixty-five and
over and permanently partially disabled workers age sixty-five and over. As a
result, the Court analyzed the asserted governmental purposes to determine
whether the classification scheme was rationally related to a legitimate
government interest. The state alleged two governmental interests: prohibiting
duplicate benefits and reducing the costs of the compensation program. Upon
review, the Court found that “neither of those asserted purposes are rationally
related to the classification created . . . .” Id. at 67.
The Court found the governmental purpose of providing a cost-saving,
trade-off device, which enabled permanent total disability claimants under age
sixty-five to receive a cost of living increase, to bear no rational relationship to
the classification. They concluded that “[f]unding overall cost-of-living
increases for workers’ compensation recipients by eliminating benefits for
permanently and totally disabled persons age sixty-five and older is arbitrary,
unfair, and irrational.” Id. at 69.
In analyzing the asserted governmental purpose of preventing duplicate
benefits, the purpose implicit in the state’s position here, the Court noted that
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Social Security and workers’ compensation benefits “do not serve the same
purpose . . . . Social security retirement benefits . . . are not disability
benefits, but are old-age entitlements serving the same function as pension
payments. In contrast, workers’ compensation benefits are provided to
compensate employees who suffer work-related injuries for loss of income
resulting from such injuries.” Id. at 67-68.
Finally, the Court rejected the state’s argument that it was entitled to
draw distinctions based on administrative convenience. “[T]he legislature is
not justified in eliminating workers’ compensation benefits for all persons age
sixty-five and older who have been permanently and totally disabled merely
based on the administratively convenient presumption that such persons receive
retirement benefits.” Id. at 68.
That classification which the Colorado Court characterized as an
“administratively convenient presumption” was lauded by the Washington
Supreme Court as “serv[ing] a legitimate purpose in avoiding duplication of
benefits.” Harris v. State Department of Labor and Industries, 843 P.2d 1056,
1066 (Wa. 1993). The Washington Court discussed both the Florida approach
relied on by Colorado and the Kansas approach and found the latter more
palatable.
In the Florida decision, Sasso v. Ram Property Management, 452 So.2d
932 (Fla. 1984), the Court concluded that exclusion of those over 65 from
disability benefits was not “rationally related to the prevention of ‘double
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dipping’” since old-age benefits and disability benefits serve different
purposes. Sasso v. Ram Property Management, 452 So.2d at 934 n.3. The
statute survived an equal protection challenge because it was rationally related
to other legitimate government interests.
The Kansas approach, which the Washington Court found more
persuasive, adopts the theory that old-age and disability benefits, though
different, are “substantially similar” and serve the same purpose - the
replacement of wages. Thus, the Kansas Court of Appeals, like the
Washington Supreme Court, found that an age-based classification which
terminated disability benefits upon the commencement of Social Security
benefits “[h]as a rational basis, is not arbitrary, and affords like treatment of
persons similarly situated.” Brown v. Goodyear Tire and Rubber Co., 599 P.2d
1031, 1036 (Kan. App. 1979), aff’d, 608 P.2d 1356 (Kan. 1980). See also
Berry v. H. R. Beal & Sons, 649 A.2d 1101 (Me. 1994).
The Kansas and Washington approach views workers’ compensation
benefits as part of an overall “wage-loss program” which includes
unemployment, disability, and retirement benefits. When viewed as a part of
an overall program, it is argued that “[t]he crucial operative fact is the wage
loss, the cause of the wage loss merely dictates the category of legislation
applicable.” 4 A. Larson, Workmen’s Compensation § 97.10 (1990)
[I]f a work[er] undergoes a period of all three
conditions, it does not follow that [the worker] should
receive three sets of benefits . . . . [The worker] is
experiencing only one wage loss and, in any logical
system, should receive only one wage-loss benefit.
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Id. Thus, a statute that includes termination of disability benefits upon
commencement of old-age benefits, those courts conclude, is a rationally based
statute.
Our statute is not identical to the Colorado statute deemed
unconstitutional in Romero. Our statute terminates benefits for permanently,
totally disabled workers at age sixty-five, but it provides 260 weeks of benefits
for any worker who becomes permanently and totally disabled after age sixty
regardless of the age. Unlike the Colorado statute, it does not deprive
individuals like Vogel, seventy-three when injured, of benefits.
We conclude that our legislature intended to tie workers’ compensation
benefits for workers who are permanently and totally disabled to the
commencement of Social Security benefits. The distinctions drawn between
ages sixty and sixty-five, in an effort to accomplish that end, are not
unconstitutional. Further the 260 week award for claimants injured after age
sixty is rationally related to the goal of assuring that employees have an
adequate recovery. While we acknowledge the numerous1 distinction between
old-age and disability benefits,1 we conclude that the legislature was attempting
to serve legitimate state interest in awarding compensation benefits for the
permanently, totally disabled employee until old-age Social Security benefits
commenced. The scheme employed, differentiating on the basis of age, bears a
1
All persons who reach age sixty-five, who have been employed, and who have paid into
the Social Security Trust Fund are entitled to draw Social Security old-age benefits.
These benefits are not for disability. An eligible worker, despite his or her ability to
work, is entitled to receive Social Security old-age benefits. Disability benefits, under the
workers’ compensation statute, compensate the injured worker for that portion of his or
her industrial ability that has been lost due to injury.
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rational relationship to the accomplishment of that state interest. We are
persuaded, based on our reading of our statute and the excellent analyses by
other states reviewed in this opinion, that Section 50-6-207(A)(i), insofar as it
relates to termination of permanent total disability benefits for workers age
sixty and over, does not violate equal protection.
III. Age Discrimination in Employment Challenge
We turn now to the question of whether the statutory scheme violates the
Age Discrimination in Employment Act. That Act makes it unlawful for an
employer to
fail or refuse to hire or to discharge any individual or
otherwise (1) discriminate against any individual with
respect to . . . compensation, terms, conditions, or
privileges of employment, because of such
individual’s age; (2) to limit, segregate, or classify . . .
employees in any way which would deprive or tend to
deprive any individual or employment opportunities
or otherwise adversely affect [employee’s] status as
an employee, because of such individual’s age; or (3)
to reduce the wage rate of any employee in order to
comply with this chapter.
29 U.S.C. Section 623(a). The Act specifically excludes "bona fide seniority
system[s]" from coverage. Thus, we must determine whether the application of
the statute at issue concerns the "compensation, terms, conditions, or privileges
of employment" and, if so, whether it violates the terms of the Act or is
excluded from its coverage.
Some courts have held that state workers' compensation statutes do not
concern the "compensation, terms, conditions, or privileges of employment"
and thus are not affected by the Age Discrimination in Employment Act. See
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Peck v. General Motors Corp., 417 N.W.2d 547 (Mich. App. 1987); O'Neill v.
Department of Transportation, 442 So.2d 961 (Fla. App. 1983). The
Michigan Court of Appeals rationalized that while "[t]he ADEA addresses
discrimination by employers against employees, [t]he Workers' Disability
Compensation Act is a uniform system of compensation mandated by the state
and not the employer." Peck v. General Motors Corp., 417 N.W.2d at 55.
Likewise, the Florida Court of Appeals noted that ADEA provisions "are
limited to employment practices within the control of the employer.” O’Neill
v. Department of Transportation, 442 So.2d at 962.
While we find these justifications less than probing, we are mindful of
the fact that even if our statute concerns “compensation, terms, conditions, or
privileges of employment” such as to fall under the Act, classifications based
on age are not, by definition a violation of the Act. If the differentiation is
based on reasonable factors other than age, the classification is authorized,
even if it involves age discrimination. Brown v Goodyear Tire & Rubber Co.,
599 P.2d at 1031.
Against this backdrop, we have plaintiff's hollow claims that the statute
violates the Act. Plaintiff argues that Congress has mandated a policy that
promotes the employment of older persons and consequently, decries the cut-
off set by our statute. Yet, plaintiff cites no cases in which a provision of a
workers' compensation statute terminating benefits at age sixty-five has been
deemed to violate the Age Discrimination in Employment Act. Furthermore,
plaintiff does not describe how the statute differentiates between protected
13
individuals and non-protected individuals to the detriment of older individuals.
The disparity in our statute is not based on age, but on degree of disability.
Such disparity does not violate the Age Discrimination in Employment Act.
IV. Differentiation Between Permanent Total
and Permanent Partial Benefits
Unlike most of the cases on this subject, the constitutional challenge
before us is not limited to consideration of the reasonableness of tieing
workers’ compensation benefits to the onset of Social Security old-age
benefits. Our more difficult concern is a classification that is not age-based but
disability-based. Specifically, while permanently, totally disabled workers lose
their benefits at age sixty-five (or after 260 weeks), permanently, partially
disabled workers draw benefits based on a presumption that the maximum total
benefit is 400 weeks. Tenn. Code Ann. § 50-6-207(3)(E)(1995 Supp.). Thus, a
worker who becomes permanently, totally disabled at age sixty draws 260
weeks of benefits while the same worker who becomes ninety percent
permanently, partially disabled draws 360 weeks of benefits.
Undoubtedly, the line drawn in this instance by our legislation is
imperfect. It creates a result which, described in its best light, is odd. As the
trial judge noted, plaintiff would have received more benefits from a
determination of less disability. Such a scheme is irrational. It improperly
differentiates between persons and cannot stand.
Although we conclude that the differentiation between permanently
totally and permanently partially disabled workers over sixty is irrational, we
14
do not find that conclusion to authorize an award of lifetime benefits to
plaintiff. That remedy, created by the trial judge, is inappropriate. It is the
business of the legislature to pass new laws and modify existing ones. Thus, if
the legislature deems the award of lifetime benefits the appropriate solution,
they will undoubtedly amend the permanent, total disability section.
Pursuant to the statute, plaintiff, an employee who suffered “injuries . . .
after age sixty (60)” is entitled to benefits “for a period of two hundred sixty
(260) weeks” reduced by appropriate old-age benefits. Tenn. Code Ann. § 50-
6-207(4)(A)(i)(1995 Supp.). In order to lend some rationality to the
compensation scheme, we conclude that the 260 week cap set forth in
Tennessee Code Annotated Section 50-6-207(4)(A)(i) applies to all injured
workers over sixty who are awarded benefits under the Workers’
Compensation statute for permanent partial or permanent total disability. We
recognize that this conclusion militates against injured workers in some context
notwithstanding the remedial purpose of the Act. It is, nonetheless, required to
avoid an otherwise irrational result. Should the legislature intend lifetime
benefits for all that are permanently totally disabled and a 400 week cap for
permanent partial injuries, it may so declare.
V. Conclusion
The purpose of the Workers' Compensation Act is to provide injured
workers with periodic payments which serve as a substitute for wages. Van
House v. Mueller Co., 741 S.W.2d 329, 330 (Tenn. 1987). Our legislature's
response in awarding benefits for permanent total disability until age sixty-five,
15
or for 260 weeks for workers injured after age sixty, is a rational response to
that purpose which takes into account that Social Security old-age insurance
benefits commence at age sixty-five and which considers as well the
requirements of the Age Discrimination in Employment Act. We, therefore,
conclude that the provisions of Tennessee Code Annotated Section 50-6-
207(4)(A)(i) regarding permanent total disability do not violate either the Equal
Protection Clause of the United States Constitution or the Age Discrimination
in Employment Act.
We, do not find, however, the statute’s differential treatment of
permanent total and permanent partial benefits for workers over age sixty to be
rational. The trial court’s award of lifetime benefits is reversed. Plaintiff is
awarded benefits for 260 weeks pursuant to the statute. The costs are divided
equally among the parties.
_________________________________
Penny J. White, Justice
CONCUR:
Birch, C.J.
Drowota, Anderson, Reid, J.J.
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