Airline not entitled to credit against benefits paid to pilot

In Kentucky, benefits received pursuant to a collective bargaining agreement are not exclusively employer-funded and are not offset by workers' compensation benefits received during the same time period.

Case name: UPS Airlines v. West, No. 2010-CA-001433-WC (Ky. Ct. App. 04/22/11).

Ruling: In a case of first impression, the Kentucky Court of Appeals held that the benefits a pilot received under a collective bargaining agreement while he was out of work due to a work-related injury should not be offset by the amount of temporary total disability benefits he received during the same period.

What it means: In Kentucky, benefits received pursuant to a collective bargaining agreement are not exclusively employer-funded and are not offset by workers' compensation benefits received during the same time period.

Summary: A pilot suffered a work-related injury when he moved his suitcase from a storage area. The pilot underwent successful fusion back surgery and returned to work. He received temporary total disability benefits during the time he was out of work due to the injury. The pilot was also entitled to receive other benefits from the airline under the terms of a collective bargaining agreement. No deductions were made from the pilot's paychecks for the receipt of this benefit. The airline asserted that it was entitled to a credit for the benefits it paid to the pilot under the collective bargaining agreement against his workers' compensation benefits. The Kentucky Court of Appeals held that the benefits under the collective bargaining agreement were not exclusively funded by the airline, so the airline was not entitled to a credit offsetting the amount of TTD benefits he received.

The court explained that benefits negotiated through the collective bargaining process were contractual and different from nonnegotiated employer benefit plans. Also, the court said that contractual benefits were excess and not workers' compensation. The court noted that the pilot had to pay union dues in order to be eligible for the benefits under the collective bargaining agreement. This supported the conclusion that the benefits through the collective bargaining process were not regular employee benefits.

The court also noted that the workers' compensation system was not intended to free an employer from adhering to its contractual obligations to its employees.

Read more at the WorkersComp Forum homepage.

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