CHARLES L. ABBETT, JR., Employee, v. GEORGIA-PACIFIC CORP., SELF-INSURED, Employer/Appellant, and METLIFE and ESSENTIA HEALTH SMDC, Intervenors, and SPECIAL COMP. FUND.
WORKERS’ COMPENSATION COURT OF APPEALS
OCTOBER 11, 2012
CAUSATION; EVIDENCE - RES JUDICATA. Where the issue of causation for the employee’s low back surgery was not litigated during an administrative conference for a rehabilitation request to terminate a rehabilitation plan, the compensation judge did not err by failing to give that decision a res judicata effect in a later hearing on the causation issue.
PERMANENT TOTAL DISABILITY - SUBSTANTIAL EVIDENCE. Substantial evidence supports the compensation judge’s finding the employee was permanently and totally disabled where the employee did not voluntarily retire, he could not return to work without restrictions or perform light duty work, and vocational opinion indicated he could not find suitable employment.
Determined by: Milun, C.J., Johnson, J., and Hall, J.
Compensation Judge: William Marshall
Attorneys: Eric Beyer, Falsani, Balmer, Peterson, Quinn & Beyer, Duluth, MN, for the Respondent. James A. Wade, Johnson, Killen & Seiler, Duluth, MN, for the Appellant.
PATRICIA J. MILUN, Chief Judge
The self-insured employer appeals the compensation judge’s findings that the employee’s 2010 and 2011 low back surgeries were related to the employee’s 1989 work injury and that the employee was permanently and totally disabled as of November 2010, and also claims that the compensation judge erred by failing to order an offset for short-term disability benefits paid to the employee. We affirm.
Charles L. Abbett, Jr., the employee, began working for Georgia Power Corporation, the employer, in October 1970. The employer was self-insured for workers’ compensation liability. On March 22, 1989, the employee sustained an admitted work-related low back injury. The employee returned to work full time for the employer, but in a sedentary position under the employer’s light duty program. In March 2003, a compensation judge found that the March 22, 1989, incident had permanently aggravated the employee’s pre-existing lumbar spine conditions. The employer paid various workers’ compensation benefits over the years, including medical expenses, rehabilitation expenses, and temporary total disability benefits. The employee continued to have ongoing symptoms which worsened over time. In August 2009, the employee reported increasing pain. He was taken off work and prescribed different medications. The employee returned to work but reported that his position did not comply with his work restrictions. An ergonomic evaluation of the employee’s work place on December 14, 2009, indicated that the employee was working within his restrictions but made some recommendations for adjustments. The employee reported increased pain after he returned to work, and he continued treatment, including physical therapy. The employee began treating with Dr. Brian Konowalchuk, who recommended a lumbar strengthening program and to taper his use of narcotic medications, took the employee off work, and later prescribed a TENS unit.
On March 26, 2010, the employee was evaluated by Dr. Loren Vorlicky at the employer’s request. Dr. Vorlicky opined that the employee had continued progression of his degenerative disc disease, had reached maximum medical improvement for his low back complaints, and had a permanent 50 pound lifting restriction, but had no new low back conditions and no need for surgical treatment of his low back. In April 2010, the employee was evaluated by Dr. Konowalchuk. He reported that he was doing better, was exercising, had less pain, and was using less medication. Dr. Konowalchuk released the employee to return to work without restrictions and recommended a functional capacities evaluation (FCE), which the employer denied. The employer paid temporary total disability benefits from February 27, 2010, through April 11, 2010.
On July 16, 2010, the employee filed a medical request for approval of the FCE. The employer responded that an FCE was unnecessary since the employee was working full time. A hearing was scheduled in September 2010. In August 2010, Dr. Konowalchuk referred the employee to a neurosurgeon for a surgical consultation. Because of the referral, the employee canceled the medical request hearing. On October 6, 2010, the employer and insurer filed a rehabilitation request for closure of the rehabilitation plan since the employee was working full time. The employee responded that the request for termination of the plan was premature since the employee was scheduled for a surgical consultation.
During a night shift which began on November 10, 2010, the employee left work to go to the emergency room because of his pain symptoms. On November 11, 2010, the employee was examined by Dr. Frederick Harris. He reviewed the employee’s MRI, diagnosed lumbar spondylosis and a synovial cyst at L4-5 likely compressing the left L4 and L5 nerve roots, and recommended a left L4-5 hemilaminectomy, medial facetectomy, and a resection of the synovial cyst. The employee reported this to the employer, and was told it was not a workers’ compensation claim. Dr. Konowalchuk agreed that the surgery would help the employee’s left leg pain, but that he did not think the surgery would relieve all of the employee’s symptoms. The employee was taken off work pending surgery, which was performed by Dr. Harris on November 22, 2010. After the surgery, the employee received short-term disability benefits from the intervenor, MetLife.
An administrative conference, which was based on the employer’s request to close the rehabilitation file since the employee was working full time, was held on December 1, 2010. At that time, the employee was no longer working due to his surgery, but the employer argued that the surgery was not work related. No records from the surgery were available for review. A mediator/arbitrator from the Department of Labor and Industry allowed the closure of the rehabilitation file, stating that “the employee has not shown that he is presently disabled as a result of his work injury.” The mediator/arbitrator also noted that the surgical records were not available for review and that there was “no evidence submitted that the synovial cyst, the surgery or the employee’s current time loss from work are related to his work injury of 3-22-89.” The employee chose not to appeal this decision since he could not work at that time. The employee had some short-term relief after the surgery, but it did not eliminate his symptoms.
On December 16, 2010, the employer filed a notice of intention to discontinue temporary total disability benefits, which had been last paid in April 2010, based on the employee being off work for a non-occupational surgery since November 11, 2010.
In January 2011, Dr. Vorlicky updated his 2010 report after reviewing the employee’s medical records. Dr. Vorlicky opined that the employee’s synovial cyst was a natural part of the employee’s pre-existing degenerative disc disease and that the employee’s November 2010 surgery was not related to any work injury. On April 4, 2011, the employee was evaluated by Dr. Mark Gregerson, an orthopedic surgeon, who opined that the employee’s 2010 surgery was causally related to the 1989 work injury. On May 13, 2011, the employee filed a claim petition for medical treatment expenses, the surgical expenses, additional permanent partial disability benefits, and temporary total disability benefits, or alternatively, permanent total disability benefits.
The employee continued to experience pain symptoms and on May 10, 2011, he returned to Dr. Harris, who opined that the employee had an L4 foraminal mass lesion. On June 8, 2011, the employee underwent an additional L4-5 decompression surgery and an L4 through S1 fusion surgery, performed by Dr. Harris. The employee reported some improvement by August 2011. Dr. Konowalchuk recommended that the employee contact the employer to determine what restrictions could be accommodated. The employee contacted his supervisor, John Cahill, who testified that the employer’s policy was that employees with work injuries could return to light duty work with restrictions, but that employees with non-work injuries had to be released to return to regular duty. The employee testified that Mr. Cahill told him he would have to come back to work without restrictions. Mr. Cahill also testified that the employee was considered to be off work for a non-work related condition, but that the employee could have returned to light duty work if he had provided a work release and that he only expected the employee to return to the same light duty jobs he had held before the surgeries. The employee testified that he visited the plant to determine if there were any positions he could perform, but after 45 minutes of walking in the plant, he experienced increased pain. Dr. Konowalchuk indicated that he would support the employee’s application for social security disability. The employee was approved for social security disability benefits retroactively to the June 8, 2011, surgery. The employee submitted a retirement notice to the employer indicating his retirement as of August 31, 2011.
The employee was again evaluated by Dr. Vorlicky on October 14, 2011. Dr. Vorlicky opined that the June 2011 surgery was unrelated to the employee’s 1989 work injury, that it was premature to determine if the employee was at maximum medical improvement or if he was entitled to any additional permanent partial disability, and that the employee could return to work with restrictions, but that he could not return to his prior level of work with the employer since he was only four months post fusion surgery.
A hearing was held on the employee’s claim petition on January 19, 2012. The parties stipulated at the hearing that any benefits awarded would be offset by the amounts paid by an intervenor, MetLife, for disability benefits paid to the employee. Also at the hearing, Dale Kinnunen, a QRC who had conducted a vocational assessment of the employee, opined that the possibility of the employee finding even sporadic or insubstantial income was remote. The compensation judge found that the employee’s March 22, 1989, work injury was a substantial contributing factor to the employee’s need for medical treatment, including the 2010 and 2011 surgeries, that the employee had not voluntarily retired, that the employee was permanently and totally disabled as of November 10, 2010, as a result of the March 22, 1989, work injury, and that the employee was not entitled to any additional permanent partial disability benefits. The self-insured employer appeals.
STANDARD OF REVIEW
The Workers’ Compensation Court of Appeals must determine whether the findings of fact and order are clearly erroneous and unsupported by substantial evidence in view of the entire record as submitted. Substantial evidence supports the findings if, in the context of the entire record, they are supported by evidence that a reasonable mind might accept as adequate. Fact findings are clearly erroneous if the reviewing court, looking at the entire evidence, is left with a definite and firm conviction that a mistake has been committed. Findings of fact should not be disturbed, even though the reviewing court might disagree with them, “unless they are clearly erroneous in the sense that they are manifestly contrary to the weight of the evidence or not reasonably supported by the evidence as a whole.” A decision which rests upon the application of a statute or rule to essentially undisputed facts generally involves a question of law which the Workers’ Compensation Court of Appeals may consider de novo.
Causation - Res Judicata
The compensation judge found that the employee’s 1989 work injury was a substantial contributing factor to the employee’s need for medical treatment. The employer argues that the finding is erroneous as a matter of law since the compensation judge failed to give res judicata effect to the decision from the December 14, 2010, administrative conference under Minn. Stat. § 176.106 addressing the rehabilitation request. In that decision, the mediator/arbitrator granted the employer’s request to terminate the rehabilitation plan based on the employee’s return to full-time work with the employer before the surgery and on his determination that there was no evidence to show the employee was presently disabled as a result of his work injury.
We acknowledge the potential for a res judicata effect by Minn. Stat. § 176.106 decisions from the Department of Labor and Industry. Principles of res judicata are applicable in workers’ compensation proceedings for issues specifically litigated and decided in prior proceedings. Failure to file a timely objection by filing a request for formal hearing after a decision under Minn. Stat. § 176.106 is jurisdictional, and this court has held that an unappealed administrative decision may have some res judicata effect for those issues specifically decided in the prior proceeding. This court has also noted, however, that problems exist in using administrative decisions to bar future claims and defenses since there is no record of the administrative conference, no sworn testimony, and no formal exhibits, and therefore has stated that giving res judicata effect to an administrative decision concerning future treatment may be “particularly inappropriate.”
In this case, res judicata applies to the termination of the employee’s rehabilitation plan. On the day the employer filed the rehabilitation request, the employee had returned to full-time work with the employer and was contemplating lumbar back surgery with a resection of a synovial cyst. By the date of the administrative conference, the employee had undergone surgery, but had not yet undergone additional evaluations by his physician or the independent medical examiner to address the issue of causation. Contained in the administrative decision was a determination that the employee had failed to show “he is presently disabled as a result of his work injury” and therefore the rehabilitation plan was terminated. The mediator/arbitrator also indicated, however, that the surgical records were not available for review and that there was “no evidence submitted that the synovial cyst, the surgery or the employee’s current time loss from work are related to his work injury of 3-22-89.”
The issue at the administrative conference was the request for termination of the rehabilitation plan; and, as in every 176.106 conference, no record was created. The employee’s surgical records were not available for review. The mediator/arbitrator did not find that the employee’s surgery was not related to his work injury, but he stated that there was no evidence submitted to prove that the surgery was related. We cannot conclude that the issue of causation was litigated at the administrative conference. On the other hand, the benefits in dispute at the January 19, 2012, hearing were wage loss benefits, medical expenses, and permanency. The rehabilitation plan was not at issue at the hearing. Much of the evidence submitted by sworn testimony and by formal exhibits at the hearing was not in existence at the time of the rehabilitation conference. Conflicts in expert medical testimony and other evidence regarding a causal connection between the work injury and surgery were litigated by the parties at the hearing and resolved by the compensation judge. The judge’s decision that the work injury was a substantial contributing factor in the progression of the degenerative disc disease, the development of the cyst, and the need for medical treatment, surgeries, and time off from work cannot be vacated under the principles of res judicata. The compensation judge did not err by concluding that the administrative decision had no res judicata effect at the January 19, 2012, hearing.
Permanent Total Disability
The compensation judge found that the employee was permanently and totally disabled as a result of his 1989 work injury. The employer argues that the compensation judge erred by finding that the employee had not voluntarily retired and that he could not return to work, and that substantial evidence does not support the finding of permanent total disability. Permanent total disability occurs when an employee’s “physical condition, in combination with [the employee’s] age, training, and experience, and the type of work available in [the] community, causes [the employee] to be unable to secure anything more than sporadic employment resulting in an insubstantial income.” The work injury need not be the sole cause of the disability, only a substantial contributing cause.
The employer first contends the compensation judge erred by finding the employee did not voluntarily retire but retired as a consequence of the work injury. Voluntary retirement, or a voluntary removal from work that the employee could do, may be a defense to a permanent total disability claim. Whether an employee has retired and voluntarily withdrawn from the labor market is a question of fact for the compensation judge. At the hearing and on appeal, the employer argued that the employee had admitted that though he was verbally released to light duty by Dr. Konowalchuk before he reached maximum medical improvement, he instructed his treating physician not to provide the employer with a written release because he was going to retire. However, the evidence on this issue was in conflict and it is clear that the compensation judge considered this argument and accepted instead the evidence offered by the employee.
The employee testified he was required to be free of restrictions before he could return to work with the employer. He planned to meet that goal, but after two surgeries, the employee suffered an increase in symptoms that made it difficult to return to work and ultimately impossible to do his job. In addition, the employer’s supervisor testified that employees with work injuries are given light duty work but employees with non-work related injuries need to be released to regular duty. The compensation judge found the employer encouraged employees out for a work injury to return to work, even if they had restrictions, in a light duty capacity. The judge also found employees who were out for a non-work related injury had to be without restrictions before they would be allowed to return to work. In his memorandum, the judge stated:
The employee credibly testified at hearing that he had intended to remain working but, after the subsequent surgeries and the meeting with his employer, he felt he was physically unable to work. He also testified that he was under the impression that if he didn’t retire he would lose his benefit and/or pension options. He indicated he was under the impression that he needed to retire by 8/31/2011 to be eligible for his pension disability benefits and that he needed to apply for, and receive, SSDI to qualify for said benefits. This was confirmed by the HR Manager in his testimony. The employee testified that given his physical and financial situation he had no other option.
In this case, the employee had continued to work up until his last two surgeries. After his second surgery, he attempted to evaluate his work site and found his symptoms were significantly increased. He had changed physically and assuming that he would have been able to perform his job is unsupported speculation. His doctors and QRC Kinnunen agree disability retirement was his best option and, after discussing it with his doctor and his employer, the employee felt that retirement was his only option. The compensation judge finds credible the employee’s testimony and does not feel that his retirement was voluntary.
Overall, we cannot conclude that the judge erred in accepting the employee’s testimony that the employer treated employees who were out of work as a result of a work injury differently than employees out as a result of a non-work injury. While the employer’s supervisor testified the employee was only required to be released to return to the light duty jobs he could do before the surgery, this conflicted with the employer’s admitted policy that employees with non-work related injuries needed to be released for regular work. The employer had determined that the employee’s surgeries were not work related and was no longer paying his medical treatment expenses. The employer’s supervisor acknowledged that the employee’s condition was considered not to be work related at that time. The compensation judge could reasonably conclude that the employee believed he was now being treated as an employee with a non-work related injury and would be required to be released to work without restrictions before he could return to work. The compensation judge’s decision to accept the testimony on this issue was a matter of witness credibility, a matter uniquely committed to the finder of fact. Substantial evidence supports the compensation judge’s finding that the employees with non-work related injuries were required to be released for regular work without restrictions.
After the 2010 and 2011 surgeries, the employee had financial difficulties and wanted to return to work. At his doctor’s recommendation, he visited the employer’s facility two months after the 2011 surgery and experienced increased pain after only 45 minutes of walking on the concrete floors. The employer argues that the employee’s visit to the work site occurred too soon after his 2011 surgery and that he would have been able to return to light duty work. The employee testified that he felt he had no option but to retire since he could not return to work at that time. We find there is substantial evidence that supports the compensation judge’s determinations that the employee did not voluntarily retire, that the employer required him to be released to return to work without restrictions, and that his work injury is a substantial contributing factor in his decision to retire. We affirm his findings on these issues.
The employer also argues the ultimate finding that the employee is permanently and totally disabled as a result of the work injury is unsupported by substantial evidence in the record. The compensation judge found the employee permanently and totally disabled since November 10, 2010, and eligible for permanent total disability benefits as of that date. The judge accepted Dr. Gregerson’s opinion that the 1989 injury was a substantial contributing factor in the progression of the degeneration, development of the synovial cyst and need for medical treatment including surgery. The compensation judge also accepted QRC Kinnunen’s vocational expert opinion that given the employee’s age, experience, transferable work skills, education, and work restrictions, the possibility of the employee finding employment would be very remote since he lacked the educational and vocational background to conduct a successful job search.
The employee was 62 years old at the time of the hearing. He did not graduate from high school and has worked for the employer since 1970. He has been working at light duty positions with the employer since he sustained a low back work injury in 1989. He has sustained numerous aggravations to his low back over the years. The employee visited the employer’s facility two months after the 2011 surgery and experienced increased pain after only 45 minutes of walking on the concrete floors.
QRC Kinnunen, who had conducted a vocational assessment of the employee, opined that the possibility of the employee finding employment with even sporadic or insubstantial income was remote. The employer argues that the QRC’s opinion lacked foundation since the QRC did not know that the employee’s prior light duty jobs could be described as sedentary and that a sedentary job was available for the employee. At the hearing, the QRC stated that if the employee had been released to work for a sedentary position and a position was available for the employee with the employer, there was a possibility that the employee would be employable. As the compensation judge emphasized, the employee had not been released for light or sedentary work by Dr. Konowalchuk. The judge also noted that the QRC’s opinions were based on a thorough evaluation of the employee’s physical condition, educational and vocational background, age and ability to secure employment within his community. The compensation judge stated in his memorandum that the decision to accept the QRC’s opinion was centered on a vocational evaluation that was based “upon the actual situation” not on unsupported speculation. In addition, the employer did not offer any alternative vocational opinion to contradict the QRC’s testimony on the ability of the employee to find and hold a job. The compensation judge did not err by relying on the QRC’s opinion.
The employer then argues that the employee would have been released for light duty or sedentary work if the employee had asked Dr. Konowalchuk, as the employee had testified. The judge concluded that any argument that the employee was employable was speculative since the employee had not been released to work. Further, the employee testified that he would not have been able to perform the sedentary jobs he performed before the surgeries. There was conflicting evidence on this issue and it is clear that the compensation judge considered this argument and accepted the evidence offered by the employee. The judge found that there was no evidence that the employee could return to any work with the employer. The employee testified that Dr. Konowalchuk never released him to return to work and supported his claim for SSDI benefits.
Substantial evidence supports the compensation judge’s finding that the employee is permanently and totally disabled, and we affirm.
The employee received short-term disability benefits from MetLife from November 14, 2010, to May 10, 2011. The base benefit amount was $416.40 per week. At hearing, the parties stipulated that any benefits awarded would be offset by the amounts paid by MetLife. The employer argues on appeal that the compensation judge erred in failing to offer an offset for the short-term disability benefits paid to the employee. We disagree. The stipulation is an agreement that there is no dispute concerning an offset of short-term disability benefits. The compensation judge was not required to “offer” an offset in his order when the agreement already exists between the parties and was memorialized in the unappealed stipulation section of the findings and order. The parties can take the steps necessary to offset the benefits without further order by the court.
SEPARATE CONCURRING OPINION
THOMAS L. JOHNSON, Judge
I concur in the result reached by the majority.
 Decision and Order pursuant to Minn. Stat. § 176.106, served and filed December 14, 2010, submitted as Employer’s Ex. 22.
 Id. (memorandum).
 Tr. 65.
 Tr. 114.
 Tr. 106.
 Minn. Stat. § 176.421, subd. 1.
 Hengemuhle v. Long Prairie Jaycees, 358 N.W.2d 54, 59, 37 W.C.D. 235, 239 (Minn. 1984).
 Northern States Power Co. v. Lyon Food Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975).
 Krovchuk v. Koch Oil Refinery, 48 W.C.D. 607, 608 (W.C.C.A. 1993), summarily aff’d (Minn. June 3, 1993).
 See Alexander v. Kenneth R. LaLonde Enters., 288 N.W.2d 18, 20, 32 W.C.D. 312, 314 (Minn. 1980); Fischer v. Saga Corp., 498 N.W.2d 449, 450, 48 W.C.D. 368, 369 (Minn. 1993).
 See Milosevich v. Certified Servs., slip op. (W.C.C.A. July 2, 1992); Dodge v. Farmstead Foods, Inc., slip op. (W.C.C.A. Oct. 22, 1991); see also Stageberg v. Hyatt Regency, slip op. (W.C.C.A. May 21, 1998); Siltman v. Partridge River, Inc., 51 W.C.D. 282 (W.C.C.A. 1994), aff’d as modified (Minn. Sept. 14, 1994).
 Nguyen v. Anderson Automatics, Inc., No. WC09-5000 (W.C.C.A. Mar. 8, 2010).
 Gergel v. First Transit, Inc., No. WC11-5327 (W.C.C.A. Mar. 5, 2012). In that case, this court determined that res judicata was not appropriate for an administrative decision concerning future medical treatment, stating:
Administrative conferences are exceptionally informal. No record is created at the conference level; there is no sworn testimony, and there are no formal exhibits. As such, there is seldom any conclusive indication as to what issues were actually litigated and decided, and there is virtually never any way to determine just what information the judge used to arrive at his administrative decision. Administrative conference decisions on requests for approval of treatment not yet rendered, such as recommended surgery, raise additional issues, in that such rulings are prospective. Relevant circumstances may change after a conference, calling into question the employee’s need for or the advisability of the approved procedure.
 Decision and Order pursuant to Minn. Stat. § 176.106, served and filed December 14, 2010, submitted as Employer’s Ex. 22.
 Id. (memorandum).
 Schulte v. C.H. Peterson Constr. Co., 278 Minn. 79, 83, 153 N.W.2d 130, 133‑34, 24 W.C.D. 290, 295 (1967).
 See, e.g., Salmon v. Wheelabrator Frye, 409 N.W.2d 495, 498, 40 W.C.D. 117, 122 (Minn. 1987).
 Saenger v. Liberty Carton Co., 316 N.W.2d 737, 739, 34 W.C.D. 499, 502-03 (Minn. 1982) (an employee who has retired and has not attempted to return to employment has no reduction in earning capacity and is not entitled to temporary total or permanent total disability benefits).
 Schroeder v. Highway Servs., 403 N.W.2d 237, 238, 39 W.C.D. 723, 725 (Minn. 1987).
 Tr. 65.
 Tr. 67-71.
 Tr. 105.
 Memo. at 8.
 Finding 24.