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For workers injured after March 31, 1982, the Michigan Legislature has allowed employers to reduce injured workers’ compensation benefits by the amount of their regular pension benefits. The Michigan Legislature has allowed employers and employees to negotiate whether disability pension benefits reduce workers’ compensation benefits.

General Motors and the UAW negotiated from 1982 until 1996 that disability pension benefits would not reduce workers’ compensation benefits. For persons retiring after September 1996, GM and the UAW agreed that such a reduction could occur when the disability retiree reached age 65.

In 2007, GM and the UAW reached a deal that for persons retiring after 2007, combined workers’ compensation benefits, Social Security Disability and disability pension benefits would be capped at the person’s earnings level when they became injured.

However in 2009, GM attempted to retroactively modify all the prior agreements made in the past so as to cap the benefits for all disability retirees benefits–even if they retired before 2007 and retired under an agreement that their workers’ compensation would not be reduced by disability pension benefits. We  challenged the right of GM to attempt to retroactively modify these agreements (and to reduce workers’ compensation because of the receipt of Social Security Disability.)  GM initially reported that 1800 GM disability retirees, retiring between 1982 and 2007, had their workers’ compensation benefits cut because of this attempted modification of the agreement.  (For persons retiring on disability pensions after January 2010, there is nothing preventing GM from reducing workers’ compensation by their disability pension benefits.)

The Michigan Court of Appeals in February 2015 ruled for the first time on the issue whether the attempt to modify the prior agreements regarding disability retirees, retiring between 1982 and 2007, was valid. The Court ruled in favor of our client Clifton Arbuckle’s estate and found that GM’s  attempt to modify the agreement failed and that GM improperly reduced his workers’ compensation benefits.

Unfortunately in July 2016, the Michigan Supreme Court reversed the Court of Appeals in GM’s favor. It also failed to rule on how this cap formula illegally considers a disabled worker’s receipt of Social Security Disability benefits..  If you are one of the hundreds of disabled workers dealing with this reduction in benefits and need advice or representation, please contact us to discuss your own individual situation in light of the Arbuckle decision.