Background:

Damon suffered from work-related bilateral tendinitis and carpal tunnel syndrome stemming from a 1991 date of injury. He continued to work at S.D. Warren until 2004 when, faced with a layoff, chose to accept an early retirement option. Before leaving S.D. Warren, Damon started working as a custodian for a local school department then immediately transitioned to full-time work in that position after retiring from S.D. Warren. The Hearing Officer found that Damon did not terminate “active employment” as required pursuant to 39-A M.R.S.A. §223 and therefore refused to apply the retiree presumption. S.D. Warren appealed that part of the decision.

In the same decision, the Hearing Officer allowed S.D. Warren to offset the payment of weekly benefits by the amount of premiums S.D. Warren continued to pay for Damon’s health and life insurance benefits. The employee appealed that part of the Hearing Officer’s decision.

Court Ruling:

The Law Court upheld the Hearing Officer’s refusal to apply the retiree presumption. The Court held that “active employment” under Section 223 refers to more than just the employment in which the employee was injured. In order for the retiree presumption to apply, the employee must terminate all active employment.

The Court vacated the part of the Hearing Officer’s decision allowing S.D. Warren to take an offset for continuing payment of the employee’s health and life insurance premiums. The Court first found that these benefits had not been included when determining the employee’s pre-injury average weekly wage. The Court then looked at the purpose of the coordination of benefits section of the Act which is to prevent a double recovery or a stacking of benefits. Since fringe benefits had not been included in the pre-injury average weekly wage, there was no risk of double recovery and allowing an offset would expand the scope of the coordination of benefits section beyond what the Legislature intended. The Court therefore held that S.D. Warren was not entitled to the offset.

View complete text of Edward Damon v. S.D. Warren Co., et al.