State News : New Jersey

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New Jersey



Understanding the difference between “impairment” and “disability” is important in properly reserving files and in defending workers’ compensation cases. Many people use the terms synonymously, but there is an important legal distinction. An impairment refers to a problem with the structure or organ of the body. Disability focuses on the functional limitations that are caused by the impairment with regard to performing activities at work or outside work.

This may sound like a subtle distinction but it makes a difference in the value of workers’ compensation cases and the validity of certain IMEs. Two employees who are the same age can have the same injury, perhaps a medial meniscus tear requiring surgery, and both may file a workers’ compensation claim seeking an award of partial permanent disability for the leg.  Employee A has unsuccessful knee surgery and has had to give up her favorite passion of running.  Employee B has successful knee surgery and is able to pursue her favorite passion of running.  She has run several 5k races as fast as ever and even a few half marathons.  They each had the same impairment of the knee but would they receive the same award in court?  If you said no you are correct because they don’t have the same level of disability.

The New Jersey Supreme Court explained in Perez v. Pantasote that the employee must not only show an injury which restricts the function of the body or an organ (an impairment) but must also show either a lessening to a material degree of working ability or “a substantial interference with the other, non work-related aspects of petitioner’s life” (the disability).

What are the implications of this distinction for medical experts, adjusters, lawyers and judges? Let’s start first with medical experts.  If a medical expert is going to provide an opinion in an IME that an injured worker has a disability of a certain percentage, the expert has to consider how the injury affects the worker’s work life or non-work life.  Last week I read an IME from an often-used petitioner’s orthopedic expert who concluded that an employee had multiple disabilities from a significant accident.  When you added up the various disability estimates, they totaled over 100%.  There were several significant impairments – fractures and tears.  But on closer inspection of the report, it was noteworthy that the medical expert never asked whether the employee had ever returned to work (he had), whether the injury caused a reduction in hours (it had not), whether the individual had reduced non-work activities, whether the individual had given up hobbies or exercise, and indeed whether this accident had affected the worker’s function in any way whatsoever.  The expert’s disability estimates were in essence meaningless because he knew nothing about the man’s life before the accident and after he reached maximal medical improvement.

The problem with this particular IME was that the doctor focused only on impairment but not on disability.  He did observe that the accident caused daily pain and that cold and damp weather aggravated discomfort. But that is not enough.  Very often IME physicians evaluate medical records instead of the individual.  Examiners on both sides make this mistake from time to time. The IME physician may do a great physical examination, a splendid summary of the treating records but still neglect to ask questions about the effect of the work injury on the examinee’s work life or non-work activities compared to the level of function before the injury occurred.

What are the implications for adjusters and defense lawyers?  When new files come in, it is critical to reserve the case for likely exposure.  The medical records are reviewed, particularly objective studies like MRIs and operative reports, and a reserve is established based on medical impairment. That is all we have at the initial stage.   It is too early to know the effect that this accident will have on work or non-work life because no one really knows at the outset whether the worker will return to work, or even return to work and get a second job, or return to doing all his or her former non-work activities. So the initial focus is limited to impairment.  As the case progresses, the focus needs to shift to the level of function of the injured worker in all aspects of life, namely the overall disability.  That is why it is helpful to obtain prior medical records and to investigate through the employer what the employee’s activity level was before the accident. 

The New Jersey workers’ compensation system has a major flaw in allowing virtually no discovery, so often the only way to find out about level of function outside work is through social medial searches or field surveillance.  An IME performed after MMI has been reached is also helpful when the IME doctor asks the right questions.  Did the worker golf before the accident but now cannot golf any longer due to severe back pain?  Did the worker recover so well that she or he added a part-time construction job on top of the original job?  Is the worker now unable to do overtime work?  Once the lawyer or adjuster has this information, very accurate reserves for disability awards can be established.

For judges this distinction between impairment and disability is always important.  Every good Judge of Compensation understands that the award is not based on a diagnosis.  Judges don’t award disability based on operative reports or MRI results.  They try to get a sense of the effect of the injury on the injured worker’s work life and non-work life, and they factor that information into the value of the case.  A judge will have extensive knowledge and experience with workers who undergo surgery for complete rotator cuff tears, for example, but the judge wants to know what the impact of this injury and surgery was in this particular worker’s case.   Disability awards are case by case.

Take the hypothetical of an athlete like Cody Bellinger, for example, the Los Angeles Dodgers 2019 National League MVP. In the recent 2020 World Series, Bellinger hit a home run and after he touched home plate, he high fived a teammate, causing his shoulder to suddenly dislocate.  This had happened to him before, so he popped his shoulder back into place and stayed in the game.  Following the World Series, he had surgery to repair the shoulder.  If he were to file a workers’ compensation claim petition under New Jersey law, what would the Judge ask?  What would be relevant for an athlete?  The Judge of Compensation would consider whether he was able to recover the ability to throw a ball from center field to second base on the fly, hit home runs like he used to, and raise his arm overhead to catch a fly ball.  The judge would not base the award solely on the fact that he had a shoulder dislocation but on the impact of his impairment on his career and non-work activities.  If the injury turned out to have no impact on any of his life functions, the award could be as low as zero. 

This explains why it is ultimately insufficient for lawyers to say to clients that an operated rotator cuff tear is worth 25% permanent partial disability in New Jersey.  That statement tends to equate impairment with disability. The award in each case depends on the extent of recovery, the ability to restore pre-injury functions, and the ability to function at work and at home.  Some people with rotator cuff tears have minimal issues post-surgery, and their award may be far less than 25%.  For others the injury could end a career and be worth far more than 25%.   The lesson is that workers’ compensation practitioners need to focus heavily on the level of function both before the accident and after treatment has ended.  For practitioners and IME doctors, a thorough investigation of pre injury and post injury functions is essential in every case in order to accurately assess disability.



John H. Geaney, Esq., is a Shareholder and Co-Chair in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at