RENDERED: MARCH 23, 2017
TO BE PUBLISHED
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RAY BALLOU APPELLANT
ON APPEAL FROM COURT OF APPEALS
CASE NO. 2015-CA-000812-WC
V. WORKERS' COMPENSATION BOARD
NO. 13-WC-00049
ENTERPRISE MINING CO, LLC; APPELLEES
HON. ROLAND CASE,
ADMINISTRATIVE LAW JUDGE;
WORKERS' COMPENSATION BOARD; AND
KENTUCKY ATTORNEY GENERAL
OPINION OF THE COURT BY JUSTICE KELLER
AFFIRMING
An Administrative Law Judge (AW) found that Ray Ballou has a
radiographic classification of category 1 / 1 coal workers' pneumoconiosis (CWP)
with spirometric test values that exceed 80%. Based on those findings, the AW
awarded Ballou retraining incentive benefits (RIB). However, because of
Ballou's advanced age, the AW found that Ballou could not receive those
benefits unless he participated in an approved retraining or educational
program. Ballou challenges the constitutionality of the RIB statute's age
classifications. Having reviewed the record and the arguments of the parties,
we affirm the holding by the Court of Appeals that those age classifications are
constitutional.
I. BACKGROUND.
The parties do not dispute the underlying facts. Ballou, who was born
on June 10, 1942, has a 9th grade education and has not received his GED. He
worked as an underground coal miner from 1982 until 2012 and was 69 years
of age when last exposed to coal dust. Ballou timely filed his occupational
disease claim, and the parties filed various medical reports in support of and in
opposition to that claim. Based on the evidence, the AW found that Ballou has
category. 1 / 1 coal workers' pneumoconiosis but no breathing impairment, and
the AW awarded benefits pursuant to Kentucky Revised Statute (KRS)
342.732(1)(a). However, because Ballou was more than 65 years of age, the
AW determined that Ballou could only receive those benefits if he participated
in an approved retraining or educational program. As noted above, the only
issue before this Court is whether the age classifications in KRS 342.732
violate Ballou's right to equal protection. We set forth additional background
information as necessary below.
II. STANDARD OF REVIEW.
The issue Ballou raises is one of law, which we review de novo. See U.S.
Bank Home Mortgage v. Schrecker, 455 S.W.3d 382, 384 (Ky. 2014).
III. ANALYSIS.
KRS 342.732 provides in pertinent part as follows:
(1) Notwithstanding any other provision of this chapter, income
benefits and retraining incentive benefits for occupational
pneumoconiosis resulting from exposure to coal dust in the
severance or processing of coal shall be paid as follows:
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(a) 1. If an employee has a radiographic classification of category
1/0, 1/ 1 or 1/2, coal workers' pneumoconiosis and spirometric
test values of eighty percent (80%) or more, the employee shall be
awarded a one (1) time only retraining incentive benefit which shall
be an amount equal to sixty-six and two-thirds percent (66-2/3%)
of the employee's average weekly wage as determined by KRS
342.740, but not more than seventy-five percent (75%) of the state
average weekly wage, payable semimonthly for a period not to
exceed one hundred four (104) weeks, except as provided in
subparagraph 3. of this paragraph.
2. Except as provided in subparagraph 3. of this paragraph, these
benefits shall be paid only while the employee is enrolled and
actively and successfully participating as a full-time student taking
the equivalent of twelve (12) or more credit hours per.week in a
bona fide training or education program that if successfully
completed will qualify the person completing the course for a trade,
occupation, or profession and which program can be completed
within the period benefits are payable under this subsection. The
program must be approved under administrative regulations to be
promulgated by the commissioner. These benefits shall also be
paid to an employee who is a part-time student taking not less
than the equivalent of six (6) nor more than eleven (11) credit
hours per week, except that benefits shall be an amount equal to
thirty-three and one-third percent (33-1/3%) of the employee's
average weekly wage as determined by KRS 342.740, but not more
than thirty-seven and one-half percent (37-1/2%) of the state
average weekly wage, payable biweekly for a period not to exceed
two hundred eight (208) weeks.
3. These benefits shall also be paid biweekly while an employee is
actively and successfully pursuing a General Equivalency Diploma
(GED) in accordance with administrative regulations promulgated
by the commissioner. These benefits shall be paid in the amount of
sixty-six and.two-thirds percent (66-2/3%) of the employee's
average weekly wage not to exceed seventy-five percent (75%) of the
state average weekly wage for a maximum period not to exceed
seventeen (17) weeks. These income benefits shall be in addition to
the maximum amount of retraining incentive benefits payable
under this paragraph.
4. The employer shall also pay, directly to the institution
conducting the training or education program, instruction, tuition,
and material costs not to exceed five thousand dollars ($5,000).
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5. The period of weeks during which thii;, benefit is payable shall
begin no later than the thirtieth day after the administrative law
judge's order awarding the benefit becomes final, except that an
employee may elect to defer the beginning of such benefits up to
the three hundred sixty-fifth day following the thirtieth day the
order becomes final. Unless the employee has requested deferral of
income benefits, those income benefits payable under
subparagraphs 1. and 2. of this paragraph shall begin no later
than thirty (30) days following conclusion of income benefits paid
under subparagraph 3. if such benefits were paid.
6. If an employee who is awarded retraining incentive benefits
under this paragraph successfully completes a bona fide training
or education program approved by the commissioner, upon
completion of the training or education program, the employer
shall pay to that employee the sum of five thousand dollars
($5,000) for successful completion of a program that requires a
course of study of not less than twelve (12) months nor more than
eighteen (18) months, or the sum of ten thousand dollars ($10,000)
for successful completion of a program that requires a course of
study of more than eighteen (18) months. This amount shall be in
addition to retraining incentive benefits awarded under this
paragraph, and tuition expenses paid by the employer.
7. An employee who is age fifty-seven (57) years or older on the
date of last exposure and who is awarded retraining incentive
benefits under subparagraphs 1. to 4. of this paragraph, may elect
to receive in lieu of retraining incentive benefits, an amount equal
to sixty-six and two-thirds percent (66-2/3%) of the employee's
average weekly wage, not to exceed seventy-five percent (75%) of
the state average weekly wage as determined by KRS 342.740
multiplied by the disability rating of twenty-five percent (25%) for a
period not to exceed four hundred twenty-five (425) weeks, or until
the employee reaches sixty-five (65) years of age, whichever occurs
first, KRS 342.730(4) notwithstanding.
8. A claim for retraining incentive benefits provided under this
section may be filed, but benefits shall not be payable, while an
employee is employed in the severance or processing of coal as
defined in KRS 342.0011(23).
Thus, a RIB award contains three components. One component consists
of payment of income benefits to a medically eligible coal industry employee
who participates in an approved retraining or educational program. The
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second component consists of payment of funds directly to the institution
providing the retraining or education. The third component consists of
payment of a lump sum to the employee upon successful completion of an
approved retraining or educational program. We note that an employee who
qualifies medically for RIB can opt to participate in an approved retraining or
educational program and receive the preceding benefits regardless of age.
KRS 342. 732(1)(a)7 provides a differerit option for those employees who
were 57 or older when last exposed to the hazards of CWP. Those employees
may opt to receive monetary benefits based on a 25% disability rating in lieu of
RIB for a period not to exceed 425 weeks or until they reach age 65. Thus,
while the option to receive RIB is available to all medically eligible employees,
the option to receive monetary benefits in lieu of RIB is only available to
medically eligible employees between the ages of 57 and 65. It is this
classification that Ballou challenges.
Ballou argues that, "under the statute, anyone who was 65 years or older
when he last worked receives no benefits solely due to his age." As noted
above, this is simply not the case. Ballou, like every other employee who
medically qualifies for RIB, is entitled to receive RIB regardless of his age. In
fact, the AW awarded Ballou RIB and set forth the amount of benefits
Enterprise Mining is required to pay if Ballou enrolls in and participates in an
approved retraining or educational program. The only "benefit" Ballou is
foreclosed from is the option to receive income without participating in an
approved retraining or educational program. Thus, Ballou is treated exactly
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the same as every other RIB eligible employee younger than 57 and older than
65. Therefore, the issue is whether the General Assembly had a reason for
permitting RIB eligible employees between 57 and 65 to opt to receive monetary
benefits in lieu of RIB.
As noted above, it is undisputed that KRS 342.732(1)(a)7 gives employees
between the ages of 57 and 65 who qualify for RIB an option that other
qualified employees do not have. When a statutory provision results in
arguably disparate treatment, we look to the 14th Amendment of the United
States Constitution and to Sections 1, 2, and 3 of the Kentucky Constitution.
The goal of those constitutional provisions "is to 'keep[ ] governmental decision
makers from treating differently persons who are in all relevant respects alikem
while recognizing that "nearly all legislation differentiates in some manner
between different classes of persons." Vision Mining, Inc. v. Gardner, 364
S.W.3d 455, 465 (Ky. 2011) (citation and footnote omitted). In order to
maintain the necessary balance between the goals of the constitutional
provisions and legislative reality, the Courts apply different levels of scrutiny
depending "on the classification made in the statute and the interest affected
by it." Id.
Currently, there are three levels of review applicable to an equal
protection challenge. Strict or intermediate scrutiny applies
whenever a statute makes a classification on the basis of a
"suspect" or "quasi-suspect" class, respectively. Conversely, "if the
statute merely affects social or economic policy, it is subject" to a
less searching form of judicial scrutiny, i.e. the "rational basis"
test.
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Id. at 465-66 (citations and footnotes omitted). "Workers' compensation
statutes concern matters of social and economic policy. As a result, such a
statute is not subject to strict o~ [intermediate] scrutiny and therefore must be
upheld if a 'rational basis' or 'substantial and justifiable reason' supports the
classifications that it creates." Id. at 466 (citation omitted).1 Proving the
absence of a rational basis or of a substantial and justifiable reason for a
statutory provision is a steep burden. Id. at 468-69.
The purpose of RIB is to encourage coal industry employees who have
early signs of CWP to leave the coal industry before that disease results in
significant impairment. See Kem Coal Co. v. Tu.mer, 920 S.W.2d 86, 88 (Ky.
App. 1996). Thus, in order to receive RIB or benefits in lieu of RIB (or any
other CWP related benefits), employees who have radiographic evidence of the
disease but no significant breathing impairment,2 must stop "working in the
mining industry in the severance and processing of coal." KRS 342.732(6).
RIB is not, like income benefits in KRS 342. 730, meant to replace lost earning
1 We note that, while federal case law may be instructive regarding issues of
equal protection, we are not bound to follow federal equal protection analysis. As we
noted in Elk Hom Coal Corp. v. Cheyenne Resources, Inc., 163 S.W.3d 408,418 (Ky.
2005), "the Kentucky Constitution's equal protection provisions ... are much more
detailed and specific than the Equal Protection Clause of the United States
Constitution." The analysis employed by our federal counterparts acts as a floor,
below which we may not fall, not as a ceiling, above which we may not rise. Id. In
fact, "we have construed our Constitution as requiring a 'reasonable basis' or a
'substantial and justifiable reason' for discriminatory legislation in areas of social and
economic policy." Id. at 418-19. In this case however, the preceding distinction, while
important, is one without a difference because KRS 342.732(l)(a)7 passes both tests.
2 Employees who have radiographic evidence of category 1/0, 1/ 1, or 1/2 CWP
and spirometric test values between 55% and 80% or employees who have category
2/ 1, 2/2, or 2/3 CWP with spirometric test values of 80% or more may choose to
receive RIB in lieu of an award of income benefits based on a 25% disability rating.
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capacity due to impairment. Theref(?re, any comparison to KRS 342. 730 is of
little persuasive value.
The issue with KRS 342.732(1)(a)7 is whether treating RIB eligible
employees who are 57 or older but younger than 65 differently from all other
RIB eligible employees has any rational relationship to the purpose of RIB. We
hold that it does. Employees who are between 57 and 65 are rapidly
approaching retirement age and are less likely to be amenable to embarking on
a new career. Therefore, offering to retrain such employees is not likely to
motivate them to leave the coal mining industry in order to prevent them from
becoming impaired.. However, paying those employees a monetary benefit that
is not tied to retraining may do so, thus removing employees susceptible to
more severe impairment from the work place. Encouraging susceptible
employees to leave the industry provides a rational basis for any perceived
discrimination. Furthermore, a significant number of employees will have left
or be in the process of leaving the coal industry at age 65; therefore, the added
incentive of KRS 342.730(1)(a)7 is no longer needed.
Finally, we believe that the provisions of KRS 342.732(1)(a)7 are
indivisibly intertwined. KRS 342.732(1)(a)7 must fall or stand in its entirety
and declaring it unconstitutional would leave Ballou in the same position he is
in today: entitled to RIB but only so long as he enrolls in and participates in an
approved retraining or educational program.
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IV. CONCLUSION.
For the foregoing reasons, we affirm the Court of Appeals.
All sitting. Minton, C.J., Cunningham, Hughes, Keller, VanMeter and
Venters, JJ., concur. Wright, J., dissents without opinion.
COUNSEL FOR APPELLANT:
Thomas Wayne Moak
Moak & Nunnery, PSC
COUNSEL FOR APPELLEE, ENTERPRISE MINING CO., LLC.:
Hugh Brettelle Stonecipher
Tighe A. Estes
Fogle Keller Purdy, PLLC
COUNSEL FOR APPELLEE, KENTUCKY ATTORNEY GENERAL:
Andy Beshear
James Robert Carpenter
Office of Kentucky Attorney General
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