Supreme Court Concludes That Once a Worker Returns to Work at the Same or Greater Pay, and Injury is to be Considered Functionally Under 85.34(2)(v)

 Den Hartog Industries v. Dungan, No. 23-1402 (Iowa Oct. 3, 2025)

In this case interpreting 85.34(2)(v) of the Act, the Supreme Court concludes that an employee who returns to work at the same or greater wages following an otherwise industrial work injury is to have that injury considered functionally under 85.34(2)(v)(3). The decision reverses an earlier 2-1 decision of the Court of Appeals that had concluded the statute was unclear and was to be interpreted liberally. The court had concluded claimant's injury was to be determined industrially.

Claimant suffered an injury at work and continued to work for the employer for 11 months with some work restrictions.  After returning to work, he was paid wages that equaled or exceeded the wages he had previously received. He testified that his pain caused him to miss "a fair bit of work." He left the job after 11 months to take a different job and move closer to his family.  He subsequently found work, making more than he was making at the time of his job with Den Hartog.

The Court finds that the meaning of 85.34(2)(v) is clear.  Under 85.34(2)(v) of the statute, an employee eligible for compensation under that paragrah who returns to work at the same or greater salary, wages or earnings should be compensated based upon the functional impairment resulting from the injury. The Court concludes that references to a "bifurcated litigation process" and to a liberal rule of construction were not apposite, as they cannot overcome the "plain text" of 85.34(2)(v)(3).

The Court notes that under he first two sections of 85.34(2)(v), claimant's back injury would be determined industrially. However, because he returned to work at the same or greater wages, under 85.34(2)(v)(3), the injury was to be considered functionally.  Under the Court's decision, sentence 3 dictates that the injury be determined functionally.

The commissioner had noted that the 2017 amendments created a bifurcated litigtion process.  The Court concludes that such a process occurs only when the employee is terminated under 85.34(2)(v)(4), something that did not occur in this case. Bercause sentence 3 applies, there is no recourse for the employee to sentence 4.  The Court of Appeals did not adopt the "bifurcated litigation process" approach of the commissioner, but concluded that 85.34(2)(v) did not address the situaiton when the employee returns to work at the same or greater wages and is not terminated and found that a liberal construction of the statute meant that the "default" position, which considered the injury industrially, should be applied. The Court rejects this approach, finding that 85.34(2)(v) is not ambiguous.  "Instead, it provides for specific consequences that flow from specific events."  Specifically, once an employee returns to work at the same or greater wage, the injury is to be considered functionally.  If they are later terminated, they can pursue review reopening and seek industrial disability benefits under 85.34(2)(v)(4). In support, the Court cites Loew v. Menard, Inc., 2 NW3d 880 (Iowa 2024), in which the Court read 85.34(2)(v) as "requiring functional impairment to be used as the basis for compensation when the employee returned to work at the same or greater compensation."

The Court rejected arguments from claimant that it was better policy to allow industrial consideration from the outset, to avoid the need for a potential review-reopening action and that unscrupulous employers should be disincentivized from returning employees to work they cannot realistically performed.  The Court notes that these arguments were plausible, but could not overcome the clear statutory language. The decision of the Court of Appeals was reversed and benefits awarded at a functional level.