                           STATE OF MICHIGAN

                            COURT OF APPEALS



ROBERT ARBUCKLE, Personal Representative                           UNPUBLISHED
of the Estate of CLIFTON M. ARBUCKLE,                              February 10, 2015

                Plaintiff-Appellant,

v                                                                  No. 310611
                                                                   MCAC
GENERAL MOTORS LLC,                                                LC No. 11-000043

                Defendant-Appellee.


Before: STEPHENS, P.J., and HOEKSTRA and METER, JJ.

PER CURIAM.

       Plaintiff1 appeals by leave granted a May 7, 2012, order entered by the Michigan
Compensation Appellate Commission (MCAC) that reversed the magistrate’s decision that
reduction of plaintiff’s workers’ compensation benefits by defendant was improper. We reverse
and remand for further proceedings.

        Plaintiff began his employment with defendant in 1969. During his employment,
plaintiff was represented by his union, the International Union, United Automobile, Aerospace
and Agricultural Implement Workers of America (UAW). Plaintiff was injured during the
course of his employment in 1991. On May 1, 1993, he began receiving a total and permanent
disability pension. On February 25, 1995, a workers’ compensation magistrate awarded plaintiff
workers’ compensation benefits at a fixed rate of $362.78 a week, 80 percent of plaintiff’s after-
tax weekly wage at the time of his injury. Pursuant to a pension agreement and a 1990 Letter of
Agreement, plaintiff’s workers’ compensation benefits were not reduced by his disability
pension benefits.2 At some point, plaintiff also began receiving Social Security Disability
Insurance (SSDI) benefits.



1
  Clifton Arbuckle died during this appeal. For ease of reference, this opinion uses the term
“plaintiff” to refer to him and not to his personal representative.
2
    A 1990 Letter of Agreement provided:
                Pursuant to Subsection 354(14) of the Michigan Workers Compensation
         Act, as amended, until termination or earlier amendment of the 1990 Collective

                                               -1-
        In 2007, defendant and the UAW engaged in negotiations regarding its active members
and future disability retirees. A contractual Letter of Agreement was reached, applicable to
employees retiring after the effective date of the 2007 agreement, which permitted defendant to
apply a new formula when determining whether a disability retiree’s workers’ compensation
benefits could be reduced. The agreement provided:

               Pursuant to Subsection 354(14) of the Michigan Workers Compensation
       Act, as amended, until termination or earlier amendment of the 2007 Collective
       Bargaining Agreement for employees who are injured and retire on or after
       October 1, 2007, workers’ compensation payments for such employees shall be
       reduced by disability retirement benefits payable under the Hourly-Rate
       Employees Pension Plan to the extent that the combined workers’ compensation
       payments, initial Social Security Disability Insurance Benefit Amount, and the
       initial disability retirement benefit (per week) exceed the employee’s gross
       Average Weekly Wage at the time of the injury . . . . [Emphasis added.]

Then, in 2009, under severe financial strain, defendant renegotiated with the UAW for what
defendant characterizes as a “compromise,” wherein the 2007 Letter of Agreement would
encompass a larger group of former employees, those that retired from defendant before January
1, 2010.

       Elizabeth LaMarra, defendant’s manager of life insurance and disability plans, explained
the nature of the 2009 “compromise” reached between defendant and the UAW that would
permit defendant to coordinate pension benefits and workers’ compensation benefits. LaMarra
explained:

               So we looked at a smaller pool of people that we would be able to
       coordinate pension and Workers’ Comp as allowed for under the State statute, but
       we would only look at people who, once we went through this test or this formula
       that’s indicated in this letter, that between their pension, their Workers’ comp,
       their initial Social Security, if you added all those together and it was greater than
       their average weekly wage, those would be the people that we could coordinate
       their pension with their Workers’ Comp. We were demonstrating to the union
       that employees were making more money not working than they were working
       looking at initial Social Security, initial pension and their Workers’ compensation.

       On November 16, 2009, plaintiff was advised that his workers’ compensation benefits
would be reduced pursuant to this new formula. In a correspondence dated January 19, 2010,
defendant advised plaintiff:

             As a result of the 2009 General Motors and UAW contract negotiations
       and Subsection 354(14) of the Michigan Workers Compensation Act, retired
       Bargaining Agreement, workers compensation for employees shall not be reduced
       by disability retirement benefits payable under the Hourly-Rate Employee
       Pension Plan.


                                                -2-
       employees may be impacted by coordination of their weekly workers’
       compensation benefit effective January 1, 2010. This coordination would apply
       to the extent that the combined workers compensation payments, initial Social
       Security Disability Insurance Benefits amount and the initial disability retirement
       benefit (per week) exceed the employee’s gross Average Weekly Wage at the
       time of injury.

               A review of your claim was conducted which indicates the following
       benefits being received or awarded:

              Weekly Workers Compensation - $362.78

              Initial Social Security Disability Insurance Benefit - $238.57

              Initial Disability Retirement Benefit - $169.45

              Average Weekly Wage at the time of the injury - $655.69

             Therefore as a result of the above, coordination will apply and your
       weekly workers compensation rate will be $262.55 as of January 1, 2010.

        After defendant implemented the reduction of plaintiff’s workers’ compensation benefits,
plaintiff requested a hearing before the director of the Workers’ Compensation Agency. The
thrust of plaintiff’s objection to coordination of benefits was that defendant’s formula violated
MCL 418.354(11) because it used SSDI benefits to offset the workers’ compensation benefit.

         At the hearing, Aaron Dickerson, an employee of defendant’s third-party benefits
administrator, testified that SSDI benefits were not being used to set off plaintiff’s workers’
compensation award. Instead, Dickerson explained that plaintiff’s disability pension was being
coordinated with workers’ compensation benefits, and SSDI benefits were “only mentioned
because it just helped calculate his weekly amount of benefits, that’s it.” Dickerson further
testified that the “total weekly benefits” was to be used as a “cap.” Dickerson also
acknowledged that under the 1990 collective bargaining agreement (CBA), workers’
compensation benefits could not be reduced by disability pension benefits. However, under the
2007/2009 Letter of Agreement, coordination of those benefits was permissible. According to
Dickerson, plaintiff’s workers’ compensation benefits were reduced because of the coordination
with his disability pension benefits, not because of a coordination with SSDI benefits.

       On November 3, 2010, Director Jack A. Nolish issued his opinion finding that defendant
had improperly reduced plaintiff’s workers’ compensation benefits. Director Nolish initially
noted that all parties agreed that MCL 418.354(11) prohibited the use of SSDI benefits as a set-
off when calculating workers’ compensation benefits. Director Nolish then concluded that
defendant was considering plaintiff’s SSDI benefits when calculating the amount of plaintiff’s
workers’ compensation benefits. Director Nolish found:

              By the wording of the agreement, GM is not taking a set-off in this case
       for Mr. Arbuckle’s SSDIB benefit. However, by using the SSDIB payment in

                                               -3-
       combination with the disability pension, the pension dollars are pushed beyond
       the limit of the “cap” resulting in the pension set-off reducing Mr. Arbuckle’s
       weekly benefits. If the SSDIB payment was not in the equation, there would not
       be any set-off for the pension. How then can it be said that the SSDIB payment is
       not being used for coordination of benefits.

Director Nolish concluded that defendant’s reduction of plaintiff’s workers’ compensation
benefits violated MCL 418.354(11).

       Director Nolish raised, but declined to consider, an alternative issue: whether the 2009
agreement, which permitted defendant to use the disability pension benefits as a workers’
compensation set-off, applied to plaintiff, who retired at a time when his 1990 CBA precluded
such set-offs. Director Nolish pondered this issue but did not resolve it. Ultimately, Director
Nolish ordered defendant to recalculate plaintiff’s “reduced weekly benefit rate as originally
ordered . . . less any appropriate pension set-off that does not take into account SSDIB benefits.”

         Thereafter, defendant appealed Director Nolish’s order to the Workers’ Compensation
Board of Magistrates. On March 10, 2011, Magistrate Kenneth A. Birch issued his opinion and
order finding that defendant had improperly reduced plaintiff’s workers’ compensation benefits.
However, Magistrate Birch’s ruling employed a different analysis than that used by Director
Nolish. Magistrate Birch concluded that the use of the SSDI benefits to determine the amount of
disability pension to be coordinated with workers’ compensation benefits did not violate MCL
418.354(11). However, according to the magistrate, a reduction of plaintiff’s workers’
compensation benefits was still improper. The magistrate noted that at the time of plaintiff’s
retirement, he had a contract that prohibited the coordination of his pension benefits with his
workers’ compensation benefits. The magistrate further acknowledged that in 2009, defendant
and the UAW agreed to allow some coordination of all disability pensions. The magistrate then
found that there was insufficient evidence to establish that the UAW had authority to bargain on
plaintiff’s behalf and bind him to the 2009 Agreement. Magistrate Birch noted that in 2009, as a
retiree, plaintiff had no voting privileges and no representation with respect to the negotiation of
the 2009 amendments to the CBA. Magistrate Birch ruled that defendant was “prohibited from
coordinating Plaintiff’s disability pension with weekly worker’s compensation benefits.”

       Thereafter, defendant appealed the magistrate’s decision to the MCAC, arguing that the
magistrate erred when it found that the UAW lacked authority to bind plaintiff to the 2009
Agreement. Plaintiff similarly appealed, arguing that the magistrate erred when it concluded that
defendant did not violate MCL 418.354(11). By order entered on May 7, 2012, the MCAC
reversed the magistrate’s ruling on the UAW’s authority to bind retirees and affirmed the
magistrate’s finding that defendant did not violate MCL 418.354(11).

        First, the MCAC considered, in general, an employer’s ability to coordinate pension
disability benefits and workers’ compensation benefits. The MCAC cited MCL 418.354(14),
which states:

              This section does not apply to any payments received or to be received
       under a disability pension plan provided by the same employer which plan is in
       existence on March 31, 1982. Any disability pension plan entered into or

                                                -4-
       renewed after March 31, 1982 may provide that the payments under that disability
       pension plan provided by the employer shall not be coordinated pursuant to this
       section.

The MCAC then cited this Court’s opinion in Murphy v City of Pontiac, 221 Mich App 639, 643;
561 NW2d 882 (1997), wherein this Court noted that Section 354 generally allows for
coordination of benefits, unless a disability pension plan renewed or entered into after March 31,
1982, excludes benefits from coordination. Applying MCL 418.354(14) and Murphy to the
instant matter, the MCAC reached the following legal conclusions:

               If, [sic] the UAW possessed the authority to bargain for plaintiff, then
       Murphy applies. We find that the Murphy case confirms defendant’s statutory
       authority to coordinate plaintiff’s disability pension based on the changes to the
       agreement after plaintiff retired. The facts of Murphy are indistinguishable from
       the facts of this case. In both cases the amendments occurred after the retirement.
       Therefore, the magistrate erred when he forbade coordination under Murphy.

               Alternatively, if the later amendments did not bind plaintiff because the
       UAW lacked the authority to bargain for plaintiff, then the amendments also
       would not protect plaintiff. In that case, plaintiff’s agreement with defendant
       expired when the UAW and defendant entered a new collective bargaining
       agreement (CBA). When the agreement that plaintiff actually ratified expired, the
       prohibition against coordination also expired. Without that prohibition, defendant
       may coordinate all of plaintiff’s disability pension. Therefore, coordinating less
       than the entire pension complies with defendant’s statutory right.

         After concluding that defendant had the authority to coordinate plaintiff’s pension
disability benefits with his workers’ compensation benefits, the MCAC found, as a matter of law,
that the method in which defendant calculated the reduction did not violate MCL 418.354(11),
i.e., that it did not improperly use the amount of SSDI benefits to calculate the reduction. The
MCAC reversed the magistrate’s decision and allowed defendant to coordinate plaintiff’s
disability pension using the terms of the 2009 amendment to the CBA.

        Plaintiff now appeals. The MCAC reviews the magistrate’s findings for compliance with
the substantial evidence standard set forth in MCL 418.861a(3); this Court, however, reviews the
MCAC’s findings to ensure the integrity of the administrative process. Mudel v Great Atlantic &
Pacific Tea Co, 462 Mich 691, 698-699, 701; 614 NW2d 607 (2000). “If there is any evidence
supporting the WCAC’s factual findings, and if the WCAC did not misapprehend its
administrate appellate role in reviewing decisions of the magistrate, then the courts must treat the
WCAC’s factual findings as conclusive.” Id. at 709-710. However, the MCAC’s decision may
be reversed if it operated within the wrong legal framework or based its decision on erroneous
legal reasoning. MCL 418.861a(14); DiBenedetto v West Shore Hosp, 461 Mich 394, 401-402;
605 NW2d 300 (2000). Issues of law are reviewed de novo by this Court. Id. at 401.

        Under the specific circumstances of this case, we find that the MCAC erred in concluding
that defendant had the authority to coordinate plaintiff’s benefits. We agree with the reasoning
of Magistrate Birch.

                                                -5-
        It is not disputed that under the 1990 CBA, coordination of workers’ compensation
benefits with disability retirement benefits was not allowed. Dickerson answered “Correct”
when asked, “Okay, and you know that people that retired in 1990 on disability pension didn’t
see their Workers’ Comp benefits get reduced by disability pension amounts if they retired under
the 1990 contract, correct?” LaMarra answered “True” when asked, “employers [sic] that retire
under different contracts have different entitlements based on when they retired, correct?” She
further stated that “you retire under a pension plan contract based on your retirement date.”

        While it is true that the 1990 Letter of Agreement stated that coordination was prohibited
“until termination or earlier amendment of the 1990 Collective Bargaining Agreement,” when
defendant attempted to amend the terms of plaintiff’s benefit structure, plaintiff, as a retiree, had
no representation. Indeed, the record contains no evidence that plaintiff authorized the UAW to
act as his representative to modify the 1990 agreement under which he retired. In Murphy, 221
Mich App at 643-644, the Court discussed whether an amendment of a CBA allowing previously
disallowed coordination of benefits constituted a “renewal” of a pension plan such that the
coordination was lawful. The Court upheld coordination and held that “[t]he pension plan at
issue here was changed as a result of collective bargaining . . . .” Id. at 644. However, the
crucial distinction between Murphy and the present case is that in Murphy, id. at 642, the parties
had stipulated that “the pension plan may . . . be changed by collective bargaining or by
ordinance amendment.” There was no such stipulation in the present case. It is simply not
tenable that a contract could be amended with respect to a particular party when that party had no
representation during the amendment process.

       In Murphy, id. at 643-644, the Court stated:

               We . . . hold that changes in a pension plan as a result of collective
       bargaining constitute renewal of the plan within the meaning of § 354(14). We
       presume that the intent underlying this section is to prevent retroactive application
       of the act’s coordination provisions and thus protect retirees who may have retired
       on the assumption that their worker’s compensation and disability pension
       benefits would not be coordinated. However, the second sentence of subsection
       14 implies that the Legislature also intended to allow employees and
       representatives of employees to bargain with employers regarding coordination
       after March 31, 1982. In the event that such bargaining does not result in a
       prohibition against coordination, the statute provides that coordination is
       permitted.

Here, there was no “bargaining” between plaintiff and the UAW with regard to the allowance of
coordination.

        The MCAC found that even if a proper amendment did not occur because of a lack of
representation for plaintiff, then the earlier CBA “expired,” thus allowing a coordination of
benefits. This is an untenable conclusion. LaMarra specifically testified that “there is only one
pension plan,” and she went on to explain that agreements such as the 2007/2009 letter
essentially would modify this one plan. As noted, LaMarra answered “True” when asked,
“employers [sic] that retire under different contracts have different entitlements based on when
they retired, correct?” There is no indication that defendant entered into any new agreement with

                                                -6-
plaintiff. There were amendments or attempted amendments, not “terminations.”3 Under the
circumstances, we reverse the decision of the MCAC and remand for further proceedings.4

       We note, briefly, that defendant argues that the MCAC did not have jurisdiction in this
case because it involved interpretation of a CBA. This argument is without merit because the
present case originated as a workers’ compensation issue and the CBA was raised as a defense.
See, generally, Caterpillar, Inc v Williams, 482 US 386, 398-399; 107 S Ct 2425; 96 L Ed 2d
318 (1987).

        Reversed and remanded for further proceedings consistent with this opinion. We do not
retain jurisdiction.

                                                              /s/ Cynthia Diane Stephens
                                                              /s/ Joel P. Hoekstra
                                                              /s/ Patrick M. Meter




3
    We note that the 2007 agreement explicitly refers to itself as an “amendment.”
4
 To the extent certain unpublished or otherwise nonbinding cases suggest a different outcome,
we do not find them persuasive.


                                                 -7-
