S.C. Court Ruling Expands Disability Pay for Injured Workers

A state Supreme Court decision in late October means that 49-year-old Allie James of Charleston -- along with potentially thousands of other workers who will face career-ending injuries -- can secure bigger Social Security disability payments during the complicated medical and legal aftermath.

For James, the ruling will mean hundreds of dollars per month more in benefits.

The ruling came after court justices determined that the S.C. Workers' Compensation Commission has the power to choose the method of accounting they use when doing the math on an injured worker's compensation benefits.

Insurance companies previously argued that commissioners didn't have that power, giving insurance companies a say in the matter. And with that say, some insurance companies were approaching injured workers and offering to request a method that would lead to more generous Social Security payments, with a catch: the worker would have to agree to take smaller workers' compensation awards, according to North Charleston attorney Jody McKnight of the Reisen Law Firm.

As the debate swirled in the courtroom, one state Supreme Court justice likened the practice to extortion.

"Their game is over," McKnight said. "This wasn't just unfair, but it was legally inappropriate to use a federal right that someone has as a bargaining chip to force them to accept less than the state rights and remedies that our legislature has afforded them."

McKnight, who represents James, called it a landmark case -- the first of its kind in the United States -- after searches for similar cases in other state law databases turned up short.

The Back Story
James fell down a flight of stairs working at Anne's Dress Shop on King Street in May 2002, putting her permanently out of work with a back injury.

She doesn't remember the fall because she was knocked unconscious. She was later determined to be "totally and permanently disabled," giving her access to nearly 10 years of weekly unemployment benefits. But until the ruling, the amount of money she would get through Social Security was up in the air.

"I'm ecstatic because it doesn't just benefit me, it benefits all the future workers' compensation cases so they won't have to go through all I went through," she said.

Columbia attorney Mark Cauthen represented Villanova Insurance Co., which he said hasn't decided whether to appeal. But he offered a defense for the insurance company's ability to have a say in accounting decisions.

"You don't want an injured worker making as much or more on disability," he said. "It's a disincentive for them to return to work, and particularly in this day in age when federal resources are so scarce, it doesn't seem fair."

But Sue Berkowitz of the Appleseed Legal Justice Center, which offered an opinion to the court, said most employees who end up on workers' compensation and Social Security don't make much.

"Even with both [Social Security and workers' compensation], it's still modest means," she said.

For James, hundreds of dollars per month in Social Security disability payments were at stake in the decision.

Justice center officials figured the math for her. Before the accident, James made about $605 per week. After the accident, she was given $403 per week in workers' compensation benefits, an amount she'll get for 500 weeks.

On top of that, James is entitled to get Social Security disability payments for an amount that was under question before the ruling.

Before the ruling, the insurance company could ask for one accounting method in which James would only get Social Security worth $349.90 per month, roughly $88 per week. If it opted for the second method, James could have gotten up to $1,077.50 per month, or about $269 per week.

Aftermath Uncertain
Commission Executive Director Gary Cannon said his agency, which regulates the state's workers' compensation laws, doesn't know how many cases the ruling could affect. During the most recent fiscal year, a total of 29,044 cases were closed that involved injuries so severe that the worker was rewarded more than $2,500 in medical expenses or got lost time wages paid.

South Carolina's legal community will point out that the state Supreme Court reversed itself, turning in a new, unanimous decision. Such a reversal is rare.

In January, after justices issued their first opinion against James, Justice Donald W. Beatty wrote a strong dissent.

"This case is before us only because the insurance company wants to bully the injured worker into accepting less benefits than the worker is entitled to under law. ... I cannot countenance such abhorrent behavior and I fail to see the judicial attraction to assisting insurance companies in their efforts to mistreat injured workers."

Justices later agreed to rehear the case after McKnight filed a petition, which led to the recent decision.

Katy Stech is a business reporter with The Post and Courier, Charleston, S.C. This article originally appeared on www.postandcourier.com.