Hoesli v. Triplett, Inc. , 303 Kan. 358 ( 2015 )

IN THE SUPREME COURT OF THE STATE OF KANSAS
No. 109,448
DOUGLAS K. HOESLI,
Appellant/Cross-appellee,
v.
TRIPLETT, INC. and FEDERATED MUTUAL INSURANCE COMPANY,
Appellees/Cross-appellants.
SYLLABUS BY THE COURT
1.
When a statute is plain and unambiguous, the court must give effect to its express
language, rather than determine what the law should or should not be. A court determines
legislative intent by first applying the meaning of the statute's text to a specific situation
at issue. A court does not read into the statute words not readily found there.
2.
When the language of a statute is unclear or ambiguous a court employs the
canons of statutory construction, consults legislative history, or considers other
background information to ascertain the statute's meaning.
3.
The doctrine of stare decisis instructs that points of law established by a court are
generally followed by the same court and courts of lower rank in later cases in which the
same legal issue is raised.
1
4.
The doctrine of stare decisis is not unyielding. A court of last resort can overrule
prior caselaw when: (a) it is clearly convinced a rule of law established in its earlier
cases was originally erroneous or is no longer sound because of changing conditions; and
(b) more good than harm will come by departing from precedent.
5.
K.S.A. 2010 Supp. 44-501(h) unambiguously provides that workers compensation
is subject to offset when the injured worker is simultaneously receiving social security
retirement benefits. The contrary holdings in Dickens v. Pizza Co., Inc., 266 Kan. 1066,
1071, 974 P.2d 601 (1999), and subsequent cases, which carved out exceptions to the
statute's plain language, are overruled.
6.
A court must construe a statute as constitutionally valid if there is any reasonable
way to do so. But this rule cannot be relied upon to change the meaning of unambiguous
statutory language.
7.
K.S.A. 2010 Supp. 44-501(h) does not violate the Equal Protection Clause of the
Fourteenth Amendment to the United States Constitution. The statute's purpose is to
avoid duplication of wage-loss benefits and its provisions satisfy the applicable rational
basis test.
Review of the judgment of the Court of Appeals in 49 Kan. App. 2d 1011, 321 P.3d 18 (2014).
Appeal from the Workers Compensation Board. Opinion filed November 20, 2015. Judgment of the Court
of Appeals affirming in part, vacating in part, and remanding is reversed as to the issue subject to review.
Judgment of the Workers Compensation Board is affirmed as to the issue subject to review.
2
Jan L. Fisher, of McCullough, Wareheim & LaBunker, of Topeka, argued the cause and was on
the briefs for appellant/cross-appellee.
Dallas L. Rakestraw, of McDonald, Tinker, Skaer, Quinn & Herrington, P.A., of Wichita, argued
the cause, and Vincent A. Burnett, of the same firm, was with him on the briefs for appellees/cross-
appellants.
The opinion of the court was delivered by
BILES, J.: Under the Kansas Workers Compensation Act, K.S.A. 44-501 et seq.,
an injured worker's compensation must be reduced by any social security retirement
benefits received by that worker, subject to certain limitations. K.S.A. 2010 Supp. 44-
501(h). But Kansas courts have limited this statutory offset and permitted already-retired
claimants, who were working simply to supplement their social security at the time of
injury, full workers compensation. See Dickens v. Pizza Co., Inc., 266 Kan. 1066, 1071,
974 P.2d 601 (1999). These prior cases adopting the exception relied upon a belief that
the offset's purpose was to prevent duplicative wage-loss benefits and that workers
compensation was not duplicative when an injured worker's wages were in addition to
social security benefits already being received. 266 Kan. at 1071. The question in this
case is whether that reasoning is valid given the statute's actual text.
As explained below, we hold that Dickens must be overruled because its
foundation rests on what was viewed as the legislature's subjective intent rather than
conforming to the statutory language and correctly applying our longstanding caselaw for
statutory interpretation. We reverse the Court of Appeal because it followed Dickens and
its progeny. See Hoesli v. Triplett, Inc., 49 Kan. App. 2d 1011, 1023, 321 P.3d 18 (2014);
see also Snider v. American Family Mut. Ins. Co., 297 Kan. 157, 168, 298 P.3d 1120
3
(2013) (Court of Appeals duty bound to follow Kansas Supreme Court precedent, absent
some indication the Kansas Supreme Court is departing from its previous position).
FACTUAL AND PROCEDURAL BACKGROUND
Douglas K. Hoesli, a full-time maintenance worker with Triplett, Inc., was injured
in a workplace accident for which he is entitled to workers compensation. Prior to his
injury, Hoesli was receiving social security retirement benefits and earning additional
employment income without a reduction in his social security because he had reached full
retirement age. See 42 U.S.C. § 403(f)(8)(E) (2012). As a result of his work-related
injury, Hoesli's workers compensation was determined to be $341.08 a week. The weekly
equivalent of his social security retirement benefits was $420.
At the administrative level, controversy ensued over whether state law required
Hoesli's workers compensation to be reduced by his social security retirement benefits
because of the offset statute, K.S.A. 2010 Supp. 44-501(h). It provides:
"If the employee is receiving retirement benefits under the federal social security
act or retirement benefits from any other retirement system, program or plan which is
provided by the employer against which the claim is being made, any compensation
benefit payments which the employee is eligible to receive under the workers
compensation act for such claim shall be reduced by the weekly equivalent amount of the
total amount of all such retirement benefits, less any portion of any such retirement
benefit, other than retirement benefits under the federal social security act, that is
attributable to payments or contributions made by the employee, but in no event shall the
workers compensation benefit be less than the workers compensation benefit payable for
the employee's percentage of functional impairment." (Emphasis added.) K.S.A. 2010
Supp. 44-501(h).
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Based on the italicized language, the administrative law judge (ALJ) ruled the
employer could use Hoesli's social security benefits to offset its workers compensation
obligation. The ALJ awarded Hoesli payment for his permanent partial general disability
only to the extent of his 13% functional impairment, or 53.95 weeks of benefits, because
the weekly equivalent amount of Hoesli's social security benefits exceeded his weekly
workers compensation. This adjustment was based on the statutory limitation that the
offset must not be less than the benefits payable for the percentage of functional
impairment resulting from the injury. See K.S.A. 2010 Supp. 44-501(h). The ALJ also
awarded Hoesli 12 weeks of benefits for his temporary total disability. The Workers
Compensation Board affirmed the ALJ's award, and both parties appealed to the Court of
Appeals.
In that court, Hoesli argued the Board's permanent partial disability award was
wrong because the offset statute did not apply and he should receive both streams of
income, i.e., workers compensation and the social security retirement benefits in full,
based on the reasoning underlying Dickens. Alternatively, Hoesli argued offsetting his
workers compensation payments would violate the Equal Protection Clause of the
Fourteenth Amendment to the United States Constitution because the offset was not
rationally related to the statute's purpose of preventing duplicative recovery of wage-loss
benefits. In a cross-appeal, Triplett challenged the Board's refusal to address its claim that
the ALJ erred by failing to apply the offset to Hoesli's temporary total disability benefits.
The Court of Appeals reversed the Board's offset, holding K.S.A. 2010 Supp. 44-
501(h) does not apply when the claimant has reached full retirement age under the Social
Security Act and was already receiving social security retirement benefits at the time of
injury. Hoesli, 49 Kan. App. 2d at 1023. The panel declined to address Hoesli's
alternative constitutional claim because it had reversed the Board's offset. 49 Kan. App.
5
2d at 1023. The panel further held that Triplett failed to preserve for appeal its challenge
to Hoesli's temporary total disability award. 49 Kan. App. 2d at 1027.
Triplett petitioned this court for review of the panel's interpretation of the offset
statute, which we granted. Hoesli did not cross-petition for review of the panel's decision
declining to reach the merits of his constitutional claim. Jurisdiction is proper under
K.S.A. 60-2101(b) (review of Court of Appeals decisions).
OFFSET IS REQUIRED BY K.S.A. 2010 SUPP. 44-501(h)
Triplett argues K.S.A. 2010 Supp. 44-501(h)'s plain language requires an offset
without exception and urges us to overrule the prior caselaw creating an exception.
Hoesli argues we must continue to follow this court's precedent and interpret that statute
to include an exception in circumstances like his based on the principles underlying
federal Social Security law. See Senior Citizens' Freedom to Work Act of 2000, Pul. L.
106-182; 42 U.S.C. §§ 402-403 (2012). He also argues this interpretation is necessary to
avoid an unconstitutional result.
Standard of Review
The Workers Compensation Board's decision is subject to appellate review under
the Kansas Judicial Review Act, K.S.A. 77-601 et seq. K.S.A. 2014 Supp. 44-556(a).
Relief may be granted if the Board erroneously interpreted or applied the law. K.S.A.
2014 Supp. 77-621(c)(4). Whether the Board properly interpreted and applied K.S.A.
2010 Supp. 44-501(h) is a question of law subject to de novo review. See Whaley v.
Sharp, 301 Kan. 192, 196, 343 P.3d 63 (2014).
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Discussion
When a statute is plain and unambiguous, a court must give effect to its express
language, rather than determine what the law should or should not be. Graham v. Dokter
Trucking Group, 284 Kan. 547, 554, 161 P.3d 695 (2007). We determine legislative
intent by first applying the meaning of the statute's text to the specific situation in
controversy. See State v. Phillips, 299 Kan. 479, 495, 325 P.3d 1095 (2014) (first task in
construing statute is to ascertain legislative intent through analysis of language employed,
giving ordinary words their ordinary meanings). A court does not read into the statute
words not readily found there. Whaley, 301 Kan. at 196; Graham, 284 Kan. at 554; see
Casco v. Armour Swift-Eckrich, 283 Kan. 508, 525, 154 P.3d 494 (2007). When the
language is unclear or ambiguous, the court employs the canons of statutory construction,
consults legislative history, or considers other background information to ascertain the
statute's meaning. Whaley, 301 Kan. at 196.
In this case, we must also consider the doctrine of stare decisis because our prior
caselaw interpreting the statutory provision is at issue. This doctrine instructs that points
of law established by a court are generally followed by the same court and courts of
lower rank in later cases in which the same legal issue is raised. Rhoten v. Dickson, 290
Kan. 92, 112, 223 P.3d 786 (2010). But the doctrine is not unyielding. A court is not
"inexorably bound by its own precedent." It can overrule prior caselaw when: (1) it is
clearly convinced a rule of law established in its earlier cases was originally erroneous or
is no longer sound because of changing conditions and (2) more good than harm will
come by departing from precedent. 290 Kan. at 112.
In this instance, Triplett argues the Dickens court erroneously interpreted the
statute and that subsequent caselaw has carried the error forward. This argument has been
made to the Court of Appeals before. See Jones v. Securitas Sec. Services, No. 105,414,
7
2011 WL 6311105, at *3 (Kan. App. 2011) (unpublished opinion) (rejecting argument
that Dickens should be reconsidered in light of trend of plain language statutory
interpretation applied to Workers Compensation Act by Kansas Supreme Court).
In Hoesli's case, the panel acknowledged the plain language of K.S.A. 2010 Supp.
44-501(h) provides that its setoff provision applies to any individual receiving federal
Social Security retirement benefits, irrespective of any other considerations. Hoesli, 49
Kan. App. 2d at 1021. But it adhered to the line of Kansas cases stemming from Dickens
that created an exception to the offset if the worker was already retired and receiving
social security retirement benefits at the time of injury. We reconsider Dickens now in
some detail because it is the root of the problem.
In Dickens, the injured worker had retired and then took a job intending to earn
only as much as he could without causing a reduction in his social security retirement
benefits. He later suffered a work injury for which he obtained workers compensation.
But the Board ruled that compensation would be offset by his social security retirement
benefits pursuant to K.S.A. 1998 Supp. 44-501(h), which was the then-existing offset
statute. 266 Kan. at 1067-68. The Dickens court reversed the Board, holding that the
statutory offset did not apply under the circumstances. It reasoned that the legislature's
intent "governs construction of a statute even though the literal meaning of the words
used in the statute is not followed." 266 Kan. at 1071. In doing so, it said it was "not
limited to a mere consideration of the language used in the statute." 266 Kan. at 1071.
The problem with Dickens is that it ignored the legislature's intent as expressed in
the statute's plain language in favor of the court's contrary perception of legislative
purpose. In other words, it engaged maxims of statutory construction without discerning
any uncertainty in the text. See State v. Paul, 285 Kan. 658, 661-62, 175 P.2d 840 (2008)
(court resorts to maxims of construction when statute is ambiguous, i.e., contains
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language of doubtful or conflicting meaning and leaves uncertainty as to which of
multiple meanings is proper).
Guided by this distorting light, the Dickens court determined that the offset was
enacted "to prevent duplication of wage-loss benefits." 266 Kan. at 1071. It then observed
that Kansas' Workers Compensation Act "has traditionally been viewed as '"one unit in
an overall system of wage loss protection, rather than something resembling a recovery in
tort. . . . [T]he conclusion follows that duplication of benefits from different parts of the
system should not ordinarily be allowed."'" 266 Kan. at 1070 (quoting Baker v. List and
Clark Construction Co., 222 Kan. 127, 130, 563 P.2d 431 [1977]). The components of
that system include workers compensation, unemployment compensation, and social
security. See 14 Larson's Worker's Compensation Law § 157.01 (2015).
The Dickens court then reasoned that applying the offset under the facts of the
case would conflict with the legislature's intent to prevent the duplication of benefits
because the claimant's social security retirement benefits and workers compensation
benefits were not duplicative. A worker, the court reasoned, suffers a "second wage loss"
when he or she is injured while working to supplement social security retirement benefits.
266 Kan. 1071.
No subsequent decision by this court has applied Dickens to relieve a workers
compensation claimant from the offset; but shortly after Dickens, this court held the
offset did apply to an injured worker whose social security disability benefits were
involuntarily converted to social security retirement benefits when the claimant had
reached retirement age. See Wishon v. Cossman, 268 Kan. 99, 991 P.2d 415 (1999). In
that case, the worker had been simultaneously receiving social security disability and
workers compensation benefits prior to the conversion. The claimant argued he should be
excluded from the offset under Dickens because he did not choose to retire but rather was
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forced to receive social security retirements benefits because he was receiving disability
benefits when he reached retirement age. 268 Kan. at 107.
The Wishon court disagreed, reasoning that a worker who retires was no longer
suffering wage loss because of injury but because of retirement—regardless of whether
the retirement was forced or voluntary. 268 Kan. at 107. And because the claimant was
receiving social security retirement benefits, the Wishon court concluded, "the plain
language of K.S.A. 44-501(h) require[d] that his workers compensation award be reduced
by his social security payments." 268 Kan. at 108. The apparently contradictory holdings
in Dickens and Wishon have never been reconciled by this court.
But a handful of Court of Appeals decisions have grappled with Dickens. The
most significant is McIntosh v. Sedgwick County, 32 Kan. App. 2d 889, 897, 91 P.3d 545
(2004). In that case, the panel held the offset applied when a claimant continued full time
employment after he began receiving social security retirement benefits and was
subsequently injured before retiring. To reach that conclusion, the panel noted the
caselaw applying K.S.A. 44-501(h) demonstrated the offset was triggered when a
claimant was injured prior to retirement but not when the claimant retired prior to injury.
And because the claimant in McIntosh was injured prior to his retirement, the court
concluded the offset applied. 32 Kan. App. 2d at 897-98.
The Court of Appeals has addressed similar issues numerous times over the past
several years and reached different outcomes depending on whether the injured worker
proved he or she was both "retired" and receiving social security retirement benefits at
the time of injury. See Farley v. Above Par Transportation, 50 Kan. App. 2d 866, 877,
334 P.3d 883 (Kan. App. 2014) (offset applied because there was insufficient evidence
that the claimant, who was receiving social security retirement benefits at time of injury,
had retired and returned to work before injury); Morales v. Wal-Mart, No. 107,526, 2013
10
WL 1010438, at *5 (Kan. App. 2013) (unpublished opinion) (offset applied when
employee was injured after she began receiving social security retirement benefits
because there was no evidence employee was retired and working to supplement social
security income); Jones, 2011 WL 6311105, at *3 (offset not applicable when claimant
received social security retirement benefits before reentering workforce to supplement
social security income); Anderson v. Blue Ribbon Farm and Home, No. 97,618, 2007 WL
2301949, at *2 (Kan. App. 2007) (offset applied because employee had not retired by
terminating his full-time employment and resuming work to supplement social security
retirement benefits at time of injury); Bale v. Hutchinson Hosp., No. 95,749, 2007 WL
1529679, at *4 (Kan. App. 2007) (unpublished opinion) (offset applied because of
insufficient evidence that claimant, who was injured after returning to work at age 68,
was receiving social security retirement benefits prior to such time).
The panel's decision in Hoesli's case represents an extension of Dickens and
McIntosh because Hoesli was receiving social security retirement benefits but had not yet
retired from his employment. Compare Hoesli, 49 Kan. App. 2d at 1023, with McIntosh,
32 Kan. App. 2d 889, 897 (offset applied on similar facts); see also Farley, 50 Kan. App.
2d at 877 (same). The panel acknowledged this addition to the fact pattern. Hoesli, 49
Kan. App. 2d at 1019-20.
The Hoesli court's rationale is straightforward. First, it observed that under the
current version of the Social Security Act individuals may simultaneously receive social
security retirement benefits and earn unlimited wages. Then, it concluded Hoesli's
workers compensation benefits and social security benefits were not "duplicative" since
the wages the workers compensation replaced and Hoesli's social security benefits were
"two separate, distinct and independent revenue streams, that would have continued for
the foreseeable future, but for the work-related injury." 49 Kan. App. 2d at 1021.
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Like the Dickens court, the Hoesli panel did not rely on the plain language of
K.S.A. 2010 Supp. 44-501(h), rationalizing that "legislative intent also plays a key role in
questions of statutory construction, and our Kansas appellate courts have considered the
intent behind our Kansas workers compensation statutes many times." 49 Kan. App. 2d at
1022. The panel was clearly debating whether Dickens remained good law, and it
concluded that "[r]ecent opinions by our Kansas Supreme Court indicate that the Dickens
exception continues to be good law . . . ." 49 Kan. App. 2d at 1022 (citing Robinson v.
City of Wichita Retirement Bd. of Trustees, 291 Kan. 266, 285-86, 241 P.3d 15 (2010).
After careful review of our caselaw, we conclude that Dickens and its progeny
improperly give effect to a perceived legislative purpose underlying K.S.A. 2010 Supp.
44-501(h) that is contrary to the statutory text's clearly expressed meaning: to offset all
workers compensation payments by the amount of social security retirement benefits the
claimant receives. Moreover, these cases miss the mark when they conclude that applying
the statute when benefits are not duplicative conflicts with that purpose. See Dickens, 266
Kan. at 1071 (statute's application would be "contrary to the intent of K.S.A. 1998 Supp.
44-501[h]"). The most that can be concluded is that the statute, as written, affects more
claimants than may be necessary to carry out the legislative purpose; but that does not
change the plain meaning of the statutory text. For these reasons, we hold that the
doctrine of stare decisis must yield to maintain consistency with our statutory
interpretation caselaw.
Hoesli argues we must adopt the panel's construction of K.S.A. 2010 Supp. 44-
501(h) because it is "the only way to interpret the statute so that it withstands the
constitutional challenge based on equal protection." But Hoesli is confusing this court's
duty to construe a statute as constitutionally valid when it is faced with more than one
reasonable interpretation and only one interpretation is constitutional. See Boatright v.
12
Kansas Racing Comm'n, 251 Kan. 240, 834 P.2d 368 (1992). That is not the situation
here because only one reasonable meaning can be gleaned from the statutory text.
Moreover, the court's duty to give effect to the plain language of an unambiguous
statute is not diluted just because that effect renders the statute unconstitutional. See
Brownsburg Area Patrons Affecting Change v. Baldwin, 714 N.E.2d 135, 139 (Ind. 1999)
("If a statute is unambiguous, then 'courts must apply the plain language . . . despite
perhaps strong policy or constitutional reasons to construe the statute in some other
way."); State v. Thompson, 836 N.W.2d 470, 484 (Iowa 2013) ("[I]t is 'our mandate to
construe statutes in a fashion to avoid a constitutional infirmity where possible.' [Citation
omitted] But, we cannot use the doctrine of constitutional avoidance to change the
meaning of unambiguous statutory language."); see also Clark v. Martinez, 543 U.S. 371,
381, 125 S. Ct. 716, 160 L. Ed. 2d 734 (2005) (canon of constitutional avoidance is "tool
for choosing between competing plausible interpretations of a statutory text" to avoid
decision of constitutional questions). But see Rich v. Department of Marine Resources,
994 A.2d 815, 818 (Me. 2010) ("Our responsibility is to effectuate the plain language of
the statute unless doing so results in a constitutional violation.").
Having held that K.S.A. 2010 Supp. 44-501(h) unambiguously provides that any
workers compensation payments are subject to the offset when the injured worker is
simultaneously receiving social security retirement benefits, we will confront Hoesli's
constitutional challenge.
K.S.A. 2010 SUPP. 44-501(h) COMPORTS WITH EQUAL PROTECTION
Hoesli claimed in the Court of Appeals that K.S.A. 2010 Supp. 44-501(h) would
deny him equal protection of the laws contrary to the Fourteenth Amendment of the
United States Constitution and Section 1 of the Kansas Constitution Bill of Rights if the
13
panel affirmed the Board's order offsetting his workers compensation with his social
security retirement benefits. The panel did not reach this claim because it ruled in
Hoesli's favor. But having reversed the panel on its statutory interpretation, we exercise
our discretion to consider the constitutional claim since this is a civil case and that issue
was fully briefed to the panel. See Supreme Court Rule 8.03(h)(1) (2014 Kan. Ct. R.
Annot. 77). The question is whether the distinction drawn by K.S.A. 2010 Supp. 44-501
between claimants who receive retirement benefits and all other claimants denies the
retirement-receiving claimants equal protection.
Standard of Review
Whether a statute violates equal protection is a question of law subject to de novo
review. Barrett ex rel. Barrett v. U.S.D. 259, 272 Kan. 250, 255, 32 P.3d 1156 (2001);
see State v. Cheeks, 298 Kan. 1, 4, 310 P.3d 346 (2013) (whether statute violates
constitution is question of law); Miller v. Johnson, 295 Kan. 636, 646-47, 289 P.3d 1098
(2012) (same). The court presumes statutes are constitutional, and all doubts are resolved
in favor of their validity. Miller, 295 Kan. at 646; Barrett, 272 Kan. at 255. The burden is
on the party attacking the statute to demonstrate it violates equal protection. 272 Kan. at
256; see also In re Weisgerber, 285 Kan. 98, 102, 169 P.3d 321 (2007) (burden is on
party challenging constitutionality).
Discussion
Equal protection claims regarding classifications within economic and social
welfare legislation that are not drawn along suspect lines, such as race or gender, are
analyzed using a rational basis test. See Fitzgerald v. Racing Ass'n of Central Iowa, 539
U.S. 103, 107, 123 S. Ct. 2156, 156 L. Ed. 2d 97 (2003); Schweiker v. Wilson, 450 U.S.
221, 234, 101 S. Ct. 1074, 67 L. Ed. 2d 186 (1981). Under this test, a law will not be
14
invalidated so long as the classification is "rationally related to legitimate government
objectives." Schweiker, 450 U.S. at 230.
"Insofar as the objective is concerned, a statutory discrimination will not be set
aside if any set of facts reasonably may be conceived to justify it. The legislature's
purpose in creating the classification need not be established." Barrett, 272 Kan. at 256
(quoting State v. Mueller, 271 Kan. 897, Syl. ¶ 8, 27 P.3d 884 [2001]); see Dandridge v.
Williams, 397 U.S. 471, 485, 90 S. Ct. 1153, 25 L. Ed. 2d 491 [1970]). A law "might
predominantly serve one general objective . . . while containing subsidiary provisions that
seek to achieve other desirable (perhaps even contrary) ends as well, thereby producing a
law that balances objectives but still serves the general objective when seen as a whole."
Fitzgerald, 539 U.S. at 108. All that is required is that "there is a plausible policy reason
for the classification, [and that] the legislative facts on which the classification is
apparently based rationally may have been considered to be true by the government
decisionmaker." 539 U.S. at 107.
But the relationship between the classification and the legislative objective it
serves need not be narrowly tailored to the objective. A rational connection between the
two will suffice."'[R]elevance is the only relationship required between the classification
and the objective.'" Barrett, 272 Kan. at 256 (quoting State v. Mueller, 271 Kan. 897, Syl.
¶ 8, 27 P.3d 884 [2001]). This standard is met so long as "the statute produces effects that
advance, rather than retard or have no bearing on, the attainment of the objective." 272
Kan. at 256.
The classification at issue is based upon the receipt of retirement benefits,
including social security. Under the statute, injured workers who do not receive such
benefits are entitled to the full amount of workers compensation recoverable under the
15
act, while those who do receive retirement benefits collect less workers compensation
than they would otherwise be entitled to. See K.S.A. 2010 Supp. 44-501(h).
This court has previously held this classification does not violate equal protection
because it was determined to be rationally related to the legitimate government objective
of preventing injured workers from receiving duplicative wage-loss benefits for single
periods of wage loss. Injured Workers, 262 Kan. at 870, 872. Hoesli argues Injured
Workers was decided before the 2000 amendments to the Social Security Act, which
eliminated the earnings test that reduced the retirement benefits paid to certain wage-
earning recipients aged 65 to 69. This earnings test could be viewed as a need-based
adjustment to social security retirement benefits. Based on this change in the law, Hoesli
claims Injured Workers' rationale is now suspect.
But even after the 2000 amendments, social security retirement benefits still
maintain their character as wage-loss benefits. The social security retirement system was
enacted "to provide workers and their families with basic protection against hardships
created by the loss of earnings due to . . . old age." See Mathews v. De Castro, 429 U.S.
181, 185-86, 97 S. Ct. 431, 50 L. Ed. 2d 389 (1976). And the 2000 amendments merely
"reduced from 70 to 65 the age at which an earnings test would not be applied to reduce
social security benefits." McDowell v. Jackson Energy RECC, 84 S.W.3d 71, 77 (Ky.
2002); see also Rayhall v. Akim Co., Inc., 263 Conn. 328, 819 A.2d 803 (2003) (holding
in post-amendment case that offsetting social security retirement benefits against
permanent total disability payments rationally related to reducing wage-replacement
benefits for retired workers).
Even though the statutory classification may extend further than necessary to
achieve its purpose by reaching workers compensation payments owed for injuries
incurred during employment undertaken to supplement social security, it does not violate
16
equal protection in doing so. See Massachusetts Bd. of Retirement v. Murgia, 427 U.S.
307, 316, 96 S. Ct. 2562, 49 L. Ed. 2d 520 (1976) (holding mandatory retirement age for
uniformed state police rationally related to legitimate goal of protecting public by
assuring police are physically prepared and noting no indication chosen age limit
excluded so few officers that were in fact unqualified to render the age limit wholly
unrelated to statutory objective; state need not adopt more precise, individualized method
of assuring physical fitness). As explained in 14 Larson's Workers' Compensation Law §
157.01 (2015):
"Wage-loss legislation is designed to restore to the worker a portion, such as one-
half to two-thirds, of wages lost due to the three major causes of wage-loss: physical
disability, economic unemployment, and old age. The crucial operative fact is that of
wage loss; the cause of the wage loss merely dictates the category of legislation
applicable. Now if a worker undergoes a period of wage loss due to all three conditions, it
does not follow that he or she should receive three sets of benefits simultaneously and
thereby recover more than his or her actual wage. The worker is experiencing only one
wage loss and, in any logical system, should receive only one wage-loss benefit. This
conclusion is inevitable, once it is recognized that workers' compensation, unemployment
compensation, nonoccupational sickness and disability insurance, and old age and
survivors' insurance are all parts of a system based upon a common principle. If this is
denied, then all coordination becomes impossible and social legislation becomes a grab-
bag of assorted unrelated benefits."
We hold that social security retirement benefits under the Social Security Act did
not lose their essential character as benefits to protect recipients from the loss of wages
due to advanced age simply because the 2000 amendments permit those who qualify for
the benefits on account of age to receive them, in full, while still earning wage income.
And since the purpose of K.S.A. 2010 Supp. 44-501(h) is to avoid duplication of wage-
loss benefits, and because the social security retirement offset furthers that purpose, the
statute satisfies the rational basis test. It does not violate equal protection simply because
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its reach is, in some cases, greater than the purpose served. Injured Workers, 262 Kan.
840, remains good law.
Accordingly, we reverse the decision of the Court of Appeals and affirm the
Board's decision as explained.
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