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Blogs | December 24, 2015
2 minute read

MSC questions whether worker’s challenge to union agreement that offsets workers’ compensation benefits against social security disability insurance is preempted by federal law

The Michigan Supreme Court granted mini-oral argument in Arbuckle v. General Motors LLC, No. 151277, to consider whether the plaintiff’s action challenging the offset of social security disability insurance benefits against his worker’s compensation benefits is preempted by federal law and whether it is governed by state or federal law. 

Clifton Arbuckle was injured during the course of his employment in 1991.  Four years later, a worker’s compensation magistrate awarded Arbuckle workers’ compensation benefits that were not reduced by his disability pension and disability insurance benefits.  In 2007, General Motors and the plaintiff’s union engaged in negotiations to establish a new formula for compensating active members and future disability retirees.  Under the new formula, the plaintiff’s workers’ compensation benefits were reduced and offset by his social security disability insurance benefit (SSDI). 

Arbuckle challenged this formula at a hearing before the director of the Workers’ Compensation Agency, arguing that the use of SSDI benefits to offset the workers’ compensation benefit violated MCL 418.354(11), which prohibited coordination of benefits with SSDI.  The director agreed.  General Motors appealed the order to Magistrate Kenneth A. Birch, who likewise ruled that the defendant “was prohibited from coordinating plaintiff’s disability pension with weekly workers’ compensation benefits,” although he determined that MCL 418.354(11) was not violated.  The magistrate also found that insufficient evidence to establish that the union had authority to negotiate on the plaintiff’s behalf and bind him to the new agreement. 

Upon further review, the Michigan Compensation Appellate Commission (MCAC) held that General Motors did have the authority to coordinate plaintiff’s disability benefits with his workers’ compensation benefits and that the reduction did not violate MCL 418.354(11).   But the Court of Appeals reversed MCAC’s holding, concluding that the defendant did not have the authority to coordinate the plaintiff’s benefits.  The Michigan Supreme Court granted mini-oral argument to determine whether the Arbuckle’s challenge is preempted by federal law and whether it is governed by state or federal law.