Facts & Procedural History
- In July 2019, Tyler Dungan sustained a back injury while working for Den Hartog Industries, an “unscheduled” bodily injury under Iowa law.
- Dungan continued working under restrictions for some time, then voluntarily left that job (to relocate) and later obtained higher‑paying employment elsewhere.
- Dungan filed a petition for workers’ compensation benefits. Medical examiners assigned between 5% and 8% whole‑person impairment; the deputy found 8% more persuasive and then calculated industrial disability (loss of earning capacity) of 15%.
- The workers’ compensation commissioner affirmed. The District Court denied judicial review. The Court of Appeals affirmed.
- Den Hartog sought further review to challenge the method of calculating permanent partial disability.
Legal Issue
Whether, under Iowa Code § 85.34(2)(v) (as amended in 2017), a worker who sustains a nonscheduled permanent partial disability must be compensated based on earning capacity (industrial method) or functional impairment, when the worker has returned to work (or could return) at the same or greater wages.
Iowa Code § 85.34(2)(v)
If a worker “returns to work or is offered work for which the employee receives or would receive the same or greater salary, wages, or earnings than … at the time of injury,” then the employee “shall be compensated based only upon the employee’s functional impairment … and not in relation to … earning capacity.”
Supreme Court’s Holding & Reasoning Holding
The Iowa Supreme Court held that the commissioner erred in applying the industrial (earning capacity) method in this case. Because Dungan returned to work (or could work) at the same or greater earnings, he must be compensated based on his functional impairment, not his earning capacity. The decision of the Court of Appeals was vacated; the district court’s judgment reversed, and the case remanded for recalculation under the functional impairment method.
Reasoning
- Plain meaning of the statute
- The Court emphasized that sentence 3 of § 85.34(2)(v) plainly mandates use of functional impairment rather than earning capacity when the statutory condition is met.
- Because Dungan had returned to work at the same or higher pay, he triggered that exception and thus must be compensated on a functional impairment basis, unless the later-termination clause applies.
- The Court dismissed arguments that the statute’s language is ambiguous in this circumstance.
Implications & Key Takeaways
- The decision clarifies that for unscheduled injuries under Iowa’s workers’ compensation law, if a worker returns to (or is offered) employment at the same or greater wages, then the benefit must be based on functional impairment, not the more expansive industrial (earning capacity) method.
- The “review/reopening” clause does not limit the functional impairment exception only to those who are later terminated by the original employer. Even when that clause does not come into play, the functional impairment regime applies when its triggering condition is met.
- The ruling emphasizes textual fidelity: the Court holds that policy arguments or “humanitarian” interpretive principles cannot override the plain statutory command.
Practically, in workers’ compensation cases in Iowa, this decision will require careful analysis of post-injury employment (whether returned at equal or higher wages) to decide which method of computing disability applies.