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Black & Decker Wins Ruling on Disability Benefits

May 28, 2003|From Bloomberg News

Black & Decker Corp. won a U.S. Supreme Court decision Tuesday bolstering employers' authority to deny disability benefits to workers.

The justices ruled unanimously that employer-sponsored benefit plans don't have to defer to the opinion of a worker's treating doctor when making a disability decision. The justices set aside a lower court ruling that had sided with a former Black & Decker worker seeking benefits because of back problems.

"Courts have no warrant to require administrators automatically to accord special weight to the opinions of a claimant's physician," Justice Ruth Bader Ginsburg wrote for the court in Washington.

Black & Decker said that only a small percentage of claims -- those ending up in dispute -- will be affected by the ruling. Still, it will spare businesses cost increases that might have prompted them to reduce benefits for workers, the company said. The decision will affect employer-run plans and those administered by outside insurers such as Cigna Corp.

The lower court ruling reversed by the Supreme Court undercut the discretion given to benefit plan administrators under the Employee Retirement Income Security Act, Black & Decker argued. Although the treating-physician rule is used in Social Security cases, the Supreme Court said Tuesday that it doesn't apply to private benefit plans.

The rule would have required judges considering benefit claims to give deference to the opinion of the patient's doctor in the absence of "substantial evidence" to the contrary.

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