UPDATED:  Chrysalis House was eventually overturned in Livingood v. Transfreight, 2014-SC-000100-WC (Ky. 2015).

Under KRS 342.730(1)(c)2 if an employee returns to work at a wage  equal or greater to his pre-injury wage and then experiences a period of cessation of that employment (temporary or permanent) for any reason, with or without cause, his weekly benefits shall double.  The phrase “for any reason, with or without cause,” has been consistently interpreted to mean just that.  Enter the Kentucky Supreme Court in Chrysalis House v. Tackett, 2008-SC-000221-WC, a to-be-published decision, addressing the plain meaning of KRS 342.730(1)(c)2 by re-defining just what “plain meaning” means .

In Tacket, the injured worker had returned to work at a wage equal or greater to his pre-injury wage.  He then ceased working when his employer terminated him for stealing.    He sought and obtained new employment, but at a lower wage.  He reopened his claim alleging entitlement to the x2 factor under KRS 342.730(1)(c)2.  The employer argued that Tacket was not entitled to double benefits because the cessation of work was attributable to a criminal act.  The ALJ acknowledged that a criminal act was committed, but did not necessarily feel that the termination was related to the criminal act.  Nonetheless,  he found it irrelevant for purposes of application of the x2 multiplier.

The matter made it to the Supreme Court with Chrysalis House still arguing Ticket was not entitled to the x2 factor.  The Supreme Court held:

KRS 342.730(1)(c)2 appears at first blush to provide clearly and unambiguously for a double benefit during a period of cessation of employment at the same or a greater wage “for any reason, with or without cause.” It is, however, a subsection of KRS 342.730(1), which authorizes income benefits to be awarded for “disability” that results from a work-related injury. We conclude for that reason that, when read in context, KRS 42.730(1)(c)2 permits a double income benefit during any period that employment at the same or a greater wage ceases “for any reason, with or without cause,” provided that the reason relates to the disabling injury.

In so finding, the court remanded the case to the ALJ for “a finding concerning whether employment at the same or a greater wage ceased for reasons related to his injury.”

Kentucky workers’ compensation practitioners were shocked by this decision, and realize they will now have to pursue an entirely new component of litigation in every claim involving potential application of the x2 factor, which will no doubt drive up workers’ compensation costs and stretch already overly burdened resources — at least until the Kentucky legislature addresses the matter.

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