This article will summarize the decisions of the courts in both

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1 MARYLAND UPDATE: The Workers' Compensation Offset for Government Retirement Benefits Only Applies When the Periods of Disability are Caused by the Same Injury This article will discuss the implications of the Court of Appeals' ruling in the recent case of Reger v. Washington County Board of Education, and how it alters the law regarding the offset of workers' compensation benefits when government employees receive retirement benefits for the same period of time. With respect to offsets, the Maryland Workers' Compensation Act allows employers and insurers to reduce workers compensation benefits owed to claimants when the claimant has received a similar benefit through a government retirement system for the same period of time. The Act states that "if a statute, charter, ordinance, resolution, regulation, or policy, regardless of whether part of a pension system, provides a benefit to the covered employee of a governmental unit or quasi-public corporation... the payment of the benefit by the employer satisfies, to the extent of the payment, the liability of the employer and Subsequent Injury Fund for payment of similar benefits under this title." Md. Code Ann., Lab. & Emp (a) (2017). This provision of the Act was interpreted by the Court of Special Appeals in Zakwieia v. Baltimore County Board of Education as providing an offset when the nature of the benefit received by the employee is similar. However, in the subsequent decision by the Court of Appeals in Reger, the court interpreted differently and determined that the offset is applicable only where the "same injury" forms the basis for both sets of benefits. Thus, if both claims involve the "same injury," the employer is entitled to reduce the workers' compensation benefits on a dollar for dollar basis for the same time period that both sets of benefits are owed. Conversely, if the basis for disability retirement is not the "same injury" as the basis for the workers' compensation claim, then the employer is not entitled to an offset and the employee can collect twice. This article will summarize the decisions of the courts in both

2 Zakwieia and Reger and provide insight into the future handling of offset cases. Zakwieia v. Baltimore County Board of Education 231 Md. App. 644 (February 3, 2017) Marcee Zakwieia ( the Claimant ) injured her back and right shoulder while employed by the Baltimore County Board of Education, and received workers compensation benefits for the injuries she sustained on the job. Thereafter, the Claimant applied for accidental disability retirement benefits through the Maryland State Retirement Agency ( MSRA ) for the work-related injury. The MSRA denied her application for accidental disability retirement benefits, but awarded her ordinary disability retirement benefits due to pre-existing degenerative arthritis of the lumbar spine. At a hearing on permanency, the Board asserted that it was entitled to an offset for temporary total disability benefits during the same period that the Claimant received ordinary disability benefits. The Workers Compensation Commission ( Commission ) found that the Claimant s ordinary disability retirement benefits and workers compensation benefits were similar benefits under 9-610(a) and were subject to an offset. The Claimant filed a petition for judicial review, and the Circuit Court for Baltimore County upheld the Commission s finding that the offset in 9-610(a) was applicable to the Claimant s disability retirement benefits. The Claimant then appealed to the Court of Special Appeals, which affirmed the decision of the Circuit Court. The appeals court held that the term similar benefits refers to the nature of the benefit, not whether the benefits accrued from the same or a similar injury. The court further held that Claimant s receipt of temporary total disability due to the work-related injury, and receipt of ordinary disability benefits due to pre-existing degenerative condition of her spine, provided a similar wage loss benefit. In Zakwieia the court focused on the legislative history of and found that the legislative intent of the offset provision was to provide a single recovery for employees covered by both government pension plans and workers compensation benefits. This was intended to prevent double payment by the government employer and a windfall to the claimants. Because of this interpretation, the court focused on the fact that in Zakwieia both sets of benefits were intended to compensate the Claimant for her inability to work due to her physical incapacity, not on whether the physical incapacity was due to the same injury. Accordingly, the court held that the application of the offset pursuant to was properly applied.

3 The court s holding in Zakwieia, however, is called into question by the recent decision of the Court of Appeals in Reger v. Washington County Board of Education. Reger v. Washington County Board of Education 166 A.3d 142 (August 4, 2017) Charles Reger, Jr. ( Claimant ), injured his back, neck, left leg, and left elbow while employed as a custodian for Washington County Board of Education. He received temporary total disability benefits for the injuries he sustained. Thereafter, the Claimant applied for accidental disability retirement benefits through MSRA. The MSRA did not grant the Claimant accidental disability retirement benefits, but did grant ordinary disability benefits due to the Claimant s pre-existing degenerative disease in his neck and back. The Employer and Insurer requested an offset of the Claimant s ordinary disability benefits against his temporary total disability benefits, pursuant to The Commission found that the Employer and Insurer were entitled to an offset during the periods of time that the Claimant received both temporary total disability and ordinary disability retirement benefits. The Claimant requested judicial review by the Circuit Court for Washington County. At a hearing on the parties cross-motions for summary judgment, the Claimant argued that the ordinary disability benefits he received were for his pre-existing degenerative spine changes, and thus, were not similar to the conditions for which he received temporary total disability benefits. The Employer and Insurer countered that the same physical incapacity arising from the work-related incident formed the basis for both awards, and emphasized that the intent of was to prevent double payment by the government employer. Following the hearing, the circuit court affirmed the decision of the Commission. The Claimant then appealed to the Court of Special Appeals, which then affirmed the circuit court s decision. Claimant then petitioned for writ of certiorari, which the Court of Appeals granted. The Court of Appeals also affirmed the decision of the circuit court and the Commission to apply the offset. However, its analysis of was materially different. Like the Court of Special Appeals in Zakwieia, the Court of Appeals in Reger focused on the legislative intent behind and came to a similar conclusion that the purpose of the offset provision is to prevent employees

4 from receiving a double recovery. However, the Court of Appeals in Reger held that the goal of the legislature was to prevent double recovery for the same injury. Because of this distinction, the Court of Appeals held that the principal criteria for determining whether the offset is applicable is whether the benefits paid to the employee arise from the same injury. Further, the Court of Appeals held that ordinary disability benefits can be legally similar to workers compensation benefits if the record reflects that the incapacity for which the disability benefits were awarded was the same accidental injury or occupational disease that was the basis for the workers compensation benefits. In determining whether the benefits arise from the same injury, the Commission must consider the relevant evidence, including but not limited to witness testimony, medical records, and expert opinion reports. Ultimately, the available relevant evidence is what led the Court in Reger to determine that the benefits were awarded for the same injury. Although the Claimant received temporary total disability benefits for the workrelated injury, and ordinary disability benefits from pre-existing degenerative disease, the Claimant did not show that they were separate and distinct injuries. On the contrary, the Claimant submitted the same medical records and similar expert opinions on the same body parts for both sets of benefits. The Court held that the relevant evidence presented by the Claimant demonstrated that both sets of benefits were awarded for the same injury, which meant the Employer was entitled an offset under WHAT DOES THIS MEAN? The decision by the Court in Reger now requires that the Claimant suffer from the same injury for an employer to obtain an offset for the claimant s receipt of both government benefits and workers compensation benefits. This holding calls into question the Court of Special Appeals earlier decision in Zakwieia, but does not explicitly overturn it. However, in distinguishing the Reger case from Zakwieia, the Court shifts the focus away from an analysis of the type of benefits the Claimant received to the type of injury they suffered. If the record reflects that the wage loss benefit the claimant is receiving was not awarded for the same injury as the workers compensation benefits, then the claimant can collect both sets of benefits. Ultimately, the Court of Appeals decision in Reger opens the door to a more factually driven approach to interpreting whether public employers are

5 entitled to an offset under This may make it more difficult to predict whether the offset will be granted.