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FOR IMMEDIATE NEWS RELEASE NEWS RELEASE # 41 FROM: CLERK OF SUPREME COURT OF LOUISIANA The Opinions handed down on the 30th day of April, 2004, are as follows: BY WEIMER, J.: 2003-C -1766 ALMA M. JONES v. GENERAL MOTORS CORPORATION (Office of Workers' Compensation District 1-W) Having found GM is not entitled to a credit, we reverse the portion of the judgment awarding a dollar-for-dollar credit. In light of the workers' compensation benefits previously paid by GM from March 29, 1999, through May 21, 1999, we amend the judgment to award Jones temporary total disabilities from May 22, 1999, (instead of from March 29, 1999) through June 7, 1999. The portion of the judgment, as amended by the court of appeal, awarding supplemental earnings benefits from June 8, 1999, through February 9, 2000, is unaffected by this decision. REVERSED, AMENDED AND RENDERED. VICTORY, J., dissents and assigns reasons.

04/30/04 SUPREME COURT OF LOUISIANA 03-C-1766 ALMA M. JONES versus GENERAL MOTORS CORPORATION
ON WRIT OF CERTIORARI TO THE COURT OF APPEAL, SECOND CIRCUIT, THE OFFICE OF WORKERS' COMPENSATION, DISTRICT NO. 1W

WEIMER, Justice This matter is before the court on the limited issue of whether this employer is entitled to a credit against its workers' compensation obligations pursuant to a purported reimbursement agreement executed by an injured employee. The judgment rendered by the workers' compensation judge awarded the employee workers' compensation benefits subject to a credit to the employer for payment of sickness and accident benefits. For reasons that follow, we find the agreement is unenforceable, and the employer is not entitled to a credit. FACTS AND PROCEDURAL HISTORY In 1983, Alma M. Jones began employment with General Motors Corporation (GM) at an assembly plant in Shreveport, Louisiana. During the course of her employment, she sustained a work-related injury on January 15, 1999, when a lever on the assembly machine she operated suddenly struck her right thumb severing the tip of the thumb. The injury required a partial amputation of the thumb and resulted

in a total impairment of the thumb of 36 percent, the equivalent of an 8 percent wholeperson impairment. Dr. John Knight, the orthopedic surgeon who performed the partial amputation, released Jones to return to light duty work on March 29, 1999. The physician indicated that if the job she was performing at the time of injury was not available, a job must be found within the restrictions outlined in the functional capacity evaluation. Because her former job was unavailable and there were no jobs available within the set restrictions, GM discontinued the workers' compensation benefits for temporary total disability it had been paying and began paying Jones workers' compensation benefits for permanent partial disability until May 21, 1999, at which time all workers' compensation benefits were terminated.1 On July 28, 1999, Jones filed a disputed claim for workers' compensation benefits, penalties and attorney fees. GM answered, denying that claimant was entitled to any additional workers' compensation benefits or medical expense reimbursement beyond what had already been paid; GM also asserted all rights to reduce benefits pursuant to LSA-R.S. 23:1206 and LSA-R.S. 23:1225, rights to credits or offsets set forth in LSA-R.S. 23:1221(3), rights to deny or reduce payments for medical expenses pursuant to LSA-R.S. 23:1142, and credit for medical expenses pursuant to LSA-R.S. 23:1212. At the trial of this matter, three documents that relate to the issue involved in this matter were introduced into evidence. A joint exhibit, J-2, showed the workers' compensation benefits GM paid to Jones following her accident on January 15, 1999. GM paid Jones temporary total
Jones returned to work in February of 2000, at the same job subject to certain restrictions. Shortly after Jones returned to work, she suffered another injury and was forced to take sick leave. That injury is not a part of this appeal. Jones moved to Arlington, Texas, in October 2000, and commenced working for the GM plant in that location. 2
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disability benefits of $367.00 per week from February 1, 1999, through March 28, 1999, and permanent partial disability benefits of $367.00 per week thereafter through May 21, 1999. GM introduced into evidence, as exhibit D-4, a so-called "Reimbursement Agreement" that was signed by Jones on January 25, 1999, nine days following her accident and prior to her receipt of any wage-loss benefits. The Reimbursement Agreement concerns her purported consent to repayment of workers' compensation benefits or sickness and accident and extended disability benefits (sickness/accident benefits) paid by the General Motors Life and Disability Benefits Program (Benefits Program), which is totally funded by GM. The Reimbursement Agreement is the basis for GM's claim to a credit toward any obligation to Jones for workers' compensation benefits for the thumb injury subsequent to May 21, 1999. (The text of the Reimbursement Agreement is reproduced, infra.) Jones introduced into evidence an undated letter to her from GM (exhibit P-16), in which GM set out the amounts and dates of its payments to Jones pursuant to the Benefits Program. The letter shows that, in addition to the workers' compensation benefits evidenced in J-2, Jones received sickness/accident benefits of $123.00 per week for the period from February 1, 1999, through March 28, 1999,

sickness/accident benefits of $490.00 per week for the period from March 29, 1999, through January 14, 2000, and extended disability benefits that totaled $1,670.23 for the period of January 15, 2000, through February 9, 2000. GM's total payment of sickness/accident benefits pursuant to the Benefits Program for the thumb injury from February 1, 1999, through February 9, 2000, was

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$23,234.23.2 According to exhibit P-16, GM claimed that amount included a "gross overpayment" of sickness/accident benefits from February 1, 1999, through February 9, 2000, of $13,613.90.3 GM calculated the overpayment on the basis of Jones's receipt during that time period of Social Security disability benefits of $1,189.00 per month, plus two cost-of-living increases. The letter states the gross overpayment represents the weekly Social Security disability benefits "carveout amount" that should have been deducted from the employee's weekly sickness/accident benefits. Pursuant to exhibit P-16, GM began making regular salary deductions of $50.00 per week, which amounted to a total in excess of $3,000.00 by the time of trial. Following trial on the merits, the workers' compensation judge (WCJ) ruled that Jones was entitled to workers' compensation benefits for temporary total disability from March 29, 1999, through June 21, 1999, based on an average weekly wage of $1,166.40 and a maximum weekly compensation rate of $367.00. LSA-R.S. 23:1221(1); LSA-R.S. 223:1202.4 The WCJ also ruled that Jones was also entitled to
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The amount consists of payments of $123.00 for 8 weeks, $490.00 for 42 weeks, and $1,670.23 for January 15, 2000, through February 9, 2000. The amount consists of overpayments of sickness and accident benefits through January 14, 2000, of $12,563.67 ($13,749.96 less $1,186.29 in payments for another injury) plus overpayments of extended disability benefits from January 15, 2000, through February 9, 2000, of $1,050.23.
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Louisiana Revised Statutes 23:1221(3) provides, in pertinent part: (a) For injury resulting in the employee's inability to earn wages equal to ninety percent or more of wages at time of injury, supplemental earnings benefits equal to sixty-six and two-thirds percent of the difference between the average monthly wages at time of injury and average monthly wages earned or average monthly wages the employee is able to earn in any month thereafter in any employment or self-employment, whether or not the same or a similar occupation as that in which the employee was customarily engaged when injured and whether or not an occupation for which the employee at the time of the injury was particularly fitted by reason of education, training, and experience, such comparison to be made on a monthly basis. Average monthly wages shall be computed by multiplying his "wages" by fifty-two and then dividing the quotient by twelve. Louisiana Revised Statutes 23:1202 provides, in pertinent part: (2) For injuries occurring on or after July 1, 1983, the maximum weekly compensation to be paid under this Chapter shall be seventy-five percent of the 4

supplemental earnings benefits from June 22, 1999, through February 9, 2000, based on the same wage and maximum compensation rate, with a zero earning capacity for such period. LSA-R.S. 23:1221(3).5 The WCJ granted GM a dollar-for-dollar credit for sickness/accident benefits paid through February 9, 2000, excluding amounts deducted from Jones's earnings by defendant as reimbursement for overpayment of benefits to her. The "amounts"

average weekly wage paid in all employment subject to the Louisiana Employment Security Law, and the minimum compensation for total disability shall be not less than twenty percent of such wage, said maximum and minimum to be computed to the nearest multiple of one dollar. There shall be no minimum compensation for benefits payable pursuant to R.S. 23:1221(3) or (4). In any case where the employee was receiving wages at a rate less than the applicable minimum compensation, the compensation shall be the employee's "wages". In no event shall monthly Supplemental Earnings Benefits exceed four and three tenths times temporary total disability benefits. B. For the purposes of this Chapter, the average weekly wage in all employment subject to the Louisiana Employment Security Law shall be determined by the administrator of the Louisiana Employment Security Law on or before August first of each year as of the quarter ending on the immediately preceding March thirty-first of each year. The average weekly wage so determined shall be applicable for the full period during which compensation is payable when the date of occurrence of injury falls within the twelve-month period commencing September first following the determination. Although LSA-R.S. 23:1221(1) ostensibly allows for 66 2/3 percent of the employee's weekly wage, that amount, in turn, is subject to a maximum weekly workers' compensation amount provided for in Section 1202. Thus, although 66 2/3 percent of Jones's weekly wage is $777.60 (66 2/3 percent of $1166.40), the actual maximum workers' compensation benefits she was entitled to is $367.00 based on the provisions of Section 1202.
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Louisiana Revised Statutes 23:1221(3) provides, in pertinent part: (a) For injury resulting in the employee's inability to earn wages equal to ninety percent or more of wages at time of injury, supplemental earnings benefits equal to sixty-six and two-thirds percent of the difference between the average monthly wages at time of injury and average monthly wages earned or average monthly wages the employee is able to earn in any month thereafter in any employment or self-employment, whether or not the same or a similar occupation as that in which the employee was customarily engaged when injured and whether or not an occupation for which the employee at the time of the injury was particularly fitted by reason of education, training, and experience, such comparison to be made on a monthly basis. Average monthly wages shall be computed by multiplying his "wages" by fifty-two and then dividing the quotient by twelve. 5

from "earnings" referred to in the judgment were evidenced by the letter from GM to Jones, which was introduced into evidence as exhibit P-16.6 Both parties appealed. Jones assigned error to the ruling that GM was entitled to the dollar-for-dollar credit. GM appealed the award of additional compensation benefits.7 Except for a minor amendment, the court of appeal affirmed the judgment.8 Jones v. General Motors Corporation, 37,167 (La.App. 2 Cir. 4/9/03), 847 So.2d 6. Jones filed a motion for rehearing, arguing that the court of appeal incorrectly interpreted the statutory scheme for offsets established by the legislature in LSA-R.S. 23:1225(C)(1).9 On rehearing, in a per curiam opinion, the court clarified its reasons for holding that GM was entitled to take a dollar-for-dollar credit for amounts paid under the Benefits Program. The court considered the question of whether an employer may enforce a reimbursement agreement when that agreement causes the worker's recovery of benefits from multiple sources to go below 66 2/3 percent of the worker's average weekly wage. Jones, 37,167 at 1, 847 So.2d at 16. The court of appeal acknowledged that the original opinion relied on the statutory provision of LSA-R.S.

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The court of appeal noted that in P-16 GM demanded and apparently was receiving payment from Jones for overpayments of sickness/accident benefits under the Benefits Program due to Social Security disability payments which she received for the period February 1, 1999, through March 22, 2000. Except for excluding the salary deduction amounts from the credit granted to GM, the WCJ did not address the reimbursement. Nor was the reimbursement discussed by the court of appeal.

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The remaining provisions of the judgment are not contested and will not be addressed in this opinion. Also, GM did not apply for a writ to this court, thus abandoning its argument that the award of additional compensation benefits was erroneous.
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The decision rendered by the court of appeal amended the judgment to award temporary total disability benefits to Jones until June 7, 1999 (rather than June 21, 1999) and supplemental earnings benefits from June 8, 1999 (rather than June 22, 1999) through February 9, 2000. The amendment did not affect the total amount of the award. See text of LSA-R.S. 23:1225(C)(1), infra. 6

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23:1225(C)(3)10 to uphold the Reimbursement Agreement. On further consideration, the court of appeal found that statutory provision to be inapplicable to the current controversy.11 The court then analyzed the Reimbursement Agreement under the provisions of LSA-R.S. 23:1225(C)(1)(c). Considering the language of that section of the statute, the court concluded: (1) the employee was not entitled to aggregate remuneration from multiple sources which exceeded 66 2/3 percent of the average weekly wage; (2) the statute does not place a lower limit on the amount of workers' compensation benefits that must be awarded, which minimum is established by other statutes; and (3) the statutory cap of 66 2/3 percent may be varied by agreement. The court found that the Reimbursement Agreement between the parties did not violate public policy and was thus enforceable. All other aspects of the original opinion were maintained.12 Jones applied for writ of certiorari, which this court granted to review the propriety of the ruling. Jones v. General Motors Corporation, 03-1766 (La. 11/7/03), 857 So.2d 506. DISCUSSION

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Louisiana Revised Statutes 23:1225(C)(3) provides: If an employee is receiving both workers' compensation benefits and disability benefits subject to a plan providing for reduction of disability benefits, the reduction of workers' compensation benefits required by Paragraph (1) of this Subsection shall be made by taking into account the full amount of employer funded disability benefits, pursuant to plan provisions, before any reduction of disability benefits are made.

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The court determined LSA-R.S. 23:1225(C)(3) was designed to allocate the offset to the compensation insurer where both the insurer and a disability plan seek to employ the offset. In her motion for rehearing, Jones argued, in the alternative, that the court of appeal erred in failing to address whether the Reimbursement Agreement between GM and herself was a violation of the Employment Retirement Income Security Act of 1974 (ERISA). The court of appeal found the Reimbursement Agreement was authorized by and enforceable under the Louisiana Workers' Compensation Law. The court of appeal indicated that GM was asserting rights to a credit to its compensation obligation and was not seeking a money judgment in favor of the disability plan. Because of our disposition of this matter, it is unnecessary to consider the ERISA argument. 7
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Workers' compensation is only one part of an employer-based system of wageloss protection. The overall system of benefits by which employers provide their employees with protection against loss of wages includes unemployment compensation, nonoccupational sickness and disability insurance, and old age and survivors' insurance. Garrett v. Seventh Ward General Hospital, 95-0017, p. 3 (La. 9/22/95), 660 So.2d 841, 843, citing 4 ARTHUR LARSON, WORKER'S COMPENSATION

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