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Employee entitled to penalty for withheld comp

Past due stamp

The Supreme Court of Alaska held that a seafood processor failed to timely pay an injured worker her permanent partial impairment and job dislocation benefits.

In UniSea Inc. v. De Lopez, the state’s high court ruled Friday that the Alaska Workers Compensation Appeals Commission correctly assessed a penalty against UniSea, based in Redmond, Washington, for withholding compensation for nearly three months after the employee’s second impairment rating.

Sofia Morales de Lopez worked as a fish sorter for UniSea at its Dutch Harbor, Alaska, processing plant. In June 2013, she fell 15 feet from a platform to a concrete floor and suffered several fractures. She was medevacked to Anchorage before returning home to California, where she was in a rehabilitation facility for several months and diagnosed with post-traumatic stress disorder.

The day after her injury, UniSea began paying her temporary total disability compensation, which it continued until August 2015. In November 2014, Ms. Morales was evaluated by a panel of doctors in Seattle — a neurologist, an orthopedist and a psychiatrist. The psychiatrist opined that her work injury was the substantial cause of her psychiatric condition and that he did not believe her condition to be medically stable. The other two doctors determined that her orthopedic problems were caused by the accident, and rated her as having a 5% whole person permanent impairment. In February 2015, UniSea continued to pay Ms. Morales total temporary disability compensation, but now it was based solely on her psychiatric condition.

In June 2015, Ms. Morales filed her first workers compensation claim seeking continuing medical care and other benefits. UniSea admitted that she was entitled to continued TTD compensation and psychiatric care but denied that she was entitled to continued physical medical care. UniSea scheduled a second psychiatric evaluation, but Ms. Morales did not attend, and the company discontinued TTD compensation as a result.

In September, she filed a compensation claim for continued medical costs, continued TTD, penalties for UniSea’s late payments, interest and attorney’s fees. In November 2015, she attended a second psychiatric evaluation, which rated her as having a 10% psychiatric impairment and that, combined with the 5% orthopedic impairment, gave her a 15% whole person impairment rating. UniSea then paid Ms. Morales a job dislocation benefit and partial permanent impairment compensation based on the 15% impairment rating.

She filed a claim for penalty and interest on the permanent partial impairment claim and sought a ruling by Alaska’s Workers’ Compensation Board invalidating her job dislocation benefit election because of UniSea’s delay in paying her that benefit.

The board held that no penalty was owed on the PPI compensation, finding that UniSea did not have a true “whole person rating” until February 2016 and that there had been no undue delay in paying her job dislocation benefits.

Ms. Morales appealed to the commission. The commission held that UniSea failed to timely pay the job dislocation benefit and PPI. UniSea appealed.

The Supreme Court of Alaska affirmed the commission’s decision, noting that it had previously found that PPI compensation payments were due within 21 days of the date an employer received a notice of a PPI rating, and imposing a penalty when an employer delayed all PPI compensation while it sought a rating clarification instead of paying the uncontested compensation and contesting it.

Although UniSea argued that it “did not have a true, final, whole person PPI rating” until February 2016, the court held that UniSea’s two-month delay in getting clarification of a PPI rating from its own doctors was unexplained, and that the record showed that UniSea was aware as early as November 2014 that it would need to pay Ms. Morales at least a $5,000 job dislocation benefit in addition to PPI compensation. The court held that using UniSea’s reasoning, “there is no limit on the amount of time an employer can delay until a payment is due after an initial rating.”

As a result, the court held that the commission correctly found that UniSea owed Ms. Morales a penalty on the PPI compensation and job dislocation benefit.

The court also affirmed the commission’s decision that UniSea should have paid the job dislocation benefit related to the orthopedic rating when it received that rating. Alaska statutes provide that an employee who chooses a job dislocation benefit in place of re-employment benefits and who has been given a PPI rating must be paid a sum based on the PPI, and the court noted that the language makes no mention that the rating must be “a final, combined rating.” Because Ms. Morales had elected the job dislocation benefit in 2013, the court found that UniSea was required to pay the corresponding benefit in November 2014.

The court also held that Ms. Morales was entitled to interest on any PPI compensation that was not timely paid.

UniSea could not be reached for comment.


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