NCCI Court Case Update, Iowa – October 2025

On October 3, 2025, the Iowa Supreme Court, in Den Hartog Industries v. Dungan, considered the determination of workers compensation (WC) benefits when an employee suffers nonscheduled permanent partial disabilities and then voluntarily leaves the employment to work at a different job with higher wages.

In this case, an employee sustained a compensable nonscheduled back injury but continued working for the same employer with restrictions. Nearly a year later, the employee voluntarily left that employment and began working a different job for higher pay.

During the benefit hearing, the administrative law judge (ALJ) applied Iowa statute 85.34 and awarded benefits in accordance with the industrial disability method—which considers the loss of earning capacity and does not consider the employee's functional impairment rating. The Iowa Court of Appeals affirmed.

On appeal, the supreme court reviewed the application of the statute in question, finding that the statute provides that compensation for unscheduled injuries is generally calculated using the industrial disability method, which reflects the employee's loss of earning capacity. The court noted that the statute further states that if the employee returns to work earning the same or higher wages, compensation is limited to the functional impairment rating, but if the employee returns to work and is later terminated by the same employer, the employee may seek additional industrial disability benefits for loss of earning capacity. The court held that based on its plain reading of the statute, the employee returned to work at a higher pay and, therefore, should be compensated based only on his functional impairment resulting from the injury and not in relation to loss of earning capacity. Moreover, the court added, the employee was not terminated from employment, so he would not be entitled to seek additional industrial disability benefits.

With this decision, the court reversed the ALJ's and the Court of Appeals' holding that the employee should be compensated in accordance with the industrial disability method.

For more information on other cases monitored by NCCI's Legal Division, visit previous Court Case Updates and Court Case Insights under the Legal section of INSIGHTS on ncci.com.

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