The Supreme Court of Iowa held in Warren Properties v. Janice Stewart, No. 13-0474 (May 29, 2015) that an employer who is liable to compensate an employee for a successive unscheduled work injury is not liable to pay for the preexisting disability that arose from employment with a different employer, or from causes unrelated to employment, when the employee’s earning capacity was not reevaluated in the competitive job market or otherwise reevaluated prior to the successive injury.
Stewart worked for Wal-Mart and Warren Properties when she hurt her back at Wal-Mart while moving shopping carts in 2006. That claim eventually settled and Stewart was awarded 40% industrial disability. Subsequently, Stewart injured her shoulder and back when she slipped on ice while working at Warren Properties in 2009. The fresh-start rule did not apply to refresh Stewart’s earning capacity lost due to the disability arising from her 2006 injury that she sustained while working for Wal-Mart, because Stewart’s 2006 injury did not occur with a previous employer, but instead with a concurrent employer. The competitive labor market, therefore, did not reset/refresh Stewart’s earning capacity. See Grefe & Sidney April 2015 Newsletter for the Court’s application of the fresh-start rule when the claimant is reinjured after entering competitive labor market—Roberts Dairy and Crawford & Co. v. Billick, No. 13-1009 (Iowa April 3, 2015).
When earning capacity has not been reevaluated by the labor market, the Commission is required to use the formula set out in Iowa Code section 85.34(2)(u) to calculate the compensation and apply the apportionment rule in 85.34(7)(a) to assure that any compensation paid by Warren Properties for the 2009 injury is based on the loss of earning capacity resulting from that injury and not the loss of earning capacity sustained by Stewart as a consequence of the 2006 injury.