State News : Texas

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Supreme confusion: Is Change Afoot for SIBs? Or not?


In our August newsletter, we reported optimism that the Texas Department of Insurance, Division of Workers’ Compensation may begin requiring applicants for Supplemental Income Benefits to provide material evidence of job applications they have submitted in their search for work. Two conflicting developments this month have heightened the intrigue. 


Our Optimism in August

The source of our optimism in August was a memo to stakeholders from General Counsel Kara Mace enclosing proposed changes to the DWC Form-052, Supplemental Income Benefits Application. The proposed revision included an FAQ page with the following guidance for applicants looking for work on their own:

Show you were actively looking for a job by attaching job applications or other documents showing you were looking for a job.


Was our optimism justified?

The first development this month buoyed our optimism – it was the Division’s filing of a legal brief in the Supreme Court of Texas in the long-running litigation over the validity of the SIBs rule. As we have reported, on behalf of our client, Accident Fund Insurance Company of America, we challenged the rule as facially invalid because, among other things, it allows the Division to award SIBs to claimants who purport to be looking for work on their own but who do not document an active work search with job applications submitted as required by the Texas Workers’ Compensation Act. A Travis County district court agreed that the rule is invalid and enjoined the Division from applying it, but the Division appealed that ruling and then the Austin court of appeals muddied the water by affirming in part and reversing in part. Accident Fund now has filed a petition for review by the Supreme Court of Texas in an attempt to obtain clarity. On October 6, the Division, represented by the Attorney General, filed a response to the petition. When describing applications for SIBs filed by workers who purport to be looking for work on their own, the Division made this representation to the court:

The Division requires injured workers independently looking for work to document their searches by job applications. If the worker submits an online or hard-copy written application, a copy must be provided to the Division with the worker’s SIBs application.

See page 19 of Division’s Response to Petitions for Review in Accident Fund Insurance Company of America and Texas Cotton Ginners’ Trust v. Texas Department of Insurance, Division of Workers’ Compensation, Cause No. 23-0273, which is available for review and downloading here.

This representation by the Division seems to confirm that change is afoot because the position it is taking now certainly is not the position it has taken in the past. Indeed, one of the reasons that Accident Fund challenged the validity of the SIBs rule in the first place is that the Division historically has not required SIBs recipients to provide copies of job applications they claim to have submitted to employers – instead, it has merely asked them to check boxes and fill in blanks on the Form DWC-052 (Application for Supplemental Income Benefits) describing actions they have taken.

Or is it situation normal?

But the second development this month has clouded the picture. On October 13, we received a decision from a contested case hearing that directly contradicts the Division’s representations to the state’s highest court. In that contested case hearing, in which the issue was entitlement to SIBs, we argued that the worker was not entitled to SIBs because she had not provided copies of job applications that she claimed she had submitted to employers. The Administrative Law Judge dismissed that argument and ordered payment of SIBs. In her decision, she wrote:


The insurance carrier questioned the claimant’s credibility because she did not provide any documentary evidence of the applications or emails she sent to the companies listed. The insurance carrier also contended that the claimant did not make an active effort to obtain employment. The insurance carrier’s argument was considered, but it was not persuasive.

Based on a careful review of the evidence presented, the claimant met her burden of proof to establish that she demonstrated an active effort to obtain employment. The claimant performed three work search contacts each week of the qualifying periods. Accordingly, the claimant is entitled to supplemental income benefits for the third and fourth quarters.


So we have to ask – have Division ALJs not gotten the memo that the Division’s position has changed? Or was the Division’s representation to the state’s highest court incorrect?

Copyright 2023, Stone Loughlin & Swanson, LLP