You already know that most ERISA plans require an assessment, say after 24 months, whether the claimant can perform “any occupation.”

This review usually involves a Vocational Assessment examining what “other occupations” and earnings are available given the claimant’s education, skills and experience.

HOT TIP: Courts are placing higher burdens on vocational experts when establishing what “other occupations” the claimant can assume.

For example, using median wage data may not be sufficient in certain circumstances.

Here’s the case of Flaaen v. Principal Life Insurance Co., 2017 WL 4286358 (W.D. WA, September 27, 2017)(attached)(“[T]he term ‘gainful occupation’ requires an evaluation of the insured’s actual employment prospects and wages based on his current experience and qualifications.”)

FACTS: Flaaen, a truck driver, received ERISA-governed disability benefits for years. While disabled, Flaaen earned a university bachelor’s degree in “Art/Media Culture”. After paying disability benefits for seven years, Principal Life sought to determine whether Flaaen could perform the “substantial and material duties of any Gainful Occupation” at an amount of $47,124. A vocational assessment determined he could perform jobs in the public relations and graphic design field, earning in excess of $50,000. Consequently, Principal discontinued benefits. Flaaen sued after an unsuccessful appeal. The Court applied de novo review.

ISSUE: Whether the Vocational Assessment supported the conclusion that Flaaen could perform “any Gainful Occupation”?

DISTRICT COURT HELD: NO—Flaaen was entitled to reinstatement of benefits.

  1. The Court rejected Principal’s argument that “an occupation is gainful even if the claimant would not be able to earn median/mean wage upon starting.” Op. at 12.
  2. “[C]hoosing the median wage of every professional is an arbitrary heuristic because it in no way relates to the experience or qualifications of the specific insured.” Op. at 14 (Emp. added).
  3. The record did not support the vocational assessment that Flaaen was qualified for either job suggested by the report. Principal also failed to show that the report was used by “experienced job experts”. Op. at 16.
  4. Principal’s vocational assessment failed to offer an opinion on Flaaen’s earning capacity. Op. at 18.
  5. Flaaen presented persuasive evidence he would earn only in the 25% percentile of certain occupations due to his inexperience. Principal’s mere reliance on Flaaen’s social media profiles and listed job titles was insufficient to support a conclusion that Flaaen had relevant job experience. Op. at 18-19.

KEY TAKE AWAY: This is another example of how the standard of review will affect the outcome. Come up with a plan to make your vocational assessments more defensible.

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Photo of Mike Reilly Mike Reilly

Mike Reilly is a nationally recognized labor, employment and employee benefits attorney, named one of the “Top 100 Most Powerful Employment Attorneys in the Nation” for the past five consecutive years by Human Resource Executive®. He has decades of experience providing strategic employment…

Mike Reilly is a nationally recognized labor, employment and employee benefits attorney, named one of the “Top 100 Most Powerful Employment Attorneys in the Nation” for the past five consecutive years by Human Resource Executive®. He has decades of experience providing strategic employment advice, and has represented clients in more than 75 jury trials, arbitrations, bench trials and claims before the EEOC and Washington State Human Rights Commission.

Small and large employers retain Mike for his strategic advice and decades of experience in employment issues and litigation, business decisions and litigation avoidance. Mike provides advice in claims involving discrimination, retaliation, wrongful discharge, disability accommodation, ERISA and non-ERISA employee benefit claims, and wage/hour claims. He served as lead counsel in an employee raiding/trade secret case as reported in the Wall Street Journal, and defends employers in class action claims.

Mike’s remarks on employment issues have been quoted in NewsweekCorporate Legal TimesSeattle TimesEmployee Relations Law JournalPuget Sound Business JournalCFO.com, and other professional journals and management publications. Chambers USA’s Guide to America’s Leading Lawyers for Businessrates Mike in the top ranking (band one) for his work in labor and employment law, and has described him as “one of Seattle’s top-rate attorneys” who is “truly phenomenal [with] superb legal instincts” and “an amazingly assertive litigator.” His clients include Nordstrom, Seattle Seahawks, Home Depot, KeyBank, Starbucks, Fred Hutchinson Cancer Research Center, Red Robin and Seattle Chamber of Commerce, among others.