LaBruzza and McBride: "Employment in a Protected Environment" Defined?

LaBruzza and McBride v. McDonough, Case Numbers 21-4467 and 10-8562, decided January 24, 2024 involves TDIU and specifically the terms marginal employment and an protected work envinroment.

The VA denied the veteran’s entitlement to TDIU.  Both Board decisions found the veterans were not engaged in “employment in a protected environment,” but as the Court noted the Board denied the term differently in each case.

The Court begins by focusing on 38 CFR 4.16)a and specifically its reference to marginal employment and that definitions use of the term employment in a protected environment.  The Court noted:

“When we examined the phrase in Cantrell v. Shulkin, we found it ambiguous because neither § 4.16 nor any surrounding regulation explicitly defined it. 28 Vet.App. 382, 390 (2017). At that time, the Secretary said this ambiguity was by design, as VA had "purposely chosen not to prescribe a precise definition of 'protected environment'" to "allow[] the factfinder to make the determination on a case-by-case basis." Id. (internal quotations omitted). The Court declined to defer to this position, questioning how hundreds of VA adjudicators across the country could consistently apply that undefined phrase without guidance. Id. Finding that it was VA's responsibility to define the terms in its own regulations, the Court remanded for the Secretary to articulate a standard definition. Id. at 391-93.

 

In the ensuing 4 years, the Secretary did not promulgate an official definition or otherwise provide to VA adjudicators guidance as to how to apply the phrase. The Secretary finally offered a definition when ordered to do so by another panel of the Court in Arline v. McDonough. See 34 Vet.App. 238, 246 (2021). His litigating position in that case was that "employment in a protected environment" meant employment in "a non-competitive workplace separated from workplaces in the open labor market and in which hiring and compensation decisions are motivated by a benevolent attitude toward the employee." Id. at 247. Because the Arline Court affirmed the Board's denial of TDIU on other grounds, we did not address the propriety of this proffered definition. See id. at 242, 256. Over 2 years have passed since the Arline decision issued, and the Secretary has not formally or informally acted to disseminate his interpretation to VA adjudicators.”

 Id. at *5.

            The veterans argued that the protected work environment is not ambiguous but plainly means employment “in which the employee is protected from the economic consequences of his or her inability to perform the physical or mental tasks required by the substantially gainful employment at issue.”           

            The Court reconsidered its decision in Cantrell in light of Kisor’s discussion of agency deference and concluded the phrase is not ambiguous and finds “by examining the text, structure, history, and purpose of § 4.16(a), the meaning of "employment in a protected environment" has become clear. The phrase unambiguously means employment in a lower-income position that, due to the veteran's service-connected disability or disabilities, is shielded in some respect from competition in the employment market.”  Id. at *14.

            To address the ADA, the Court concluded “employees who receive reasonable accommodations under the ADA are not being shielded from the competitive labor market; they are working within it under one of the conditions that govern it. Thus, as a general matter, receipt of an ADA accommodation is not by itself evidence that a veteran is working in a protected environment. It also follows from this general proposition that a veteran receiving accommodations beyond those legally required by the ADA is more  likely to be able to demonstrate that he or she is employed in a protected environment. See Arline, 34 Vet.App. at 258-59 (Bartley, C.J., concurring in part). Conversely, a working veteran who does not require any ADA-mandated accommodation to work is less likely to be able to show that his or her employment is in a protected environment.”  Id. at *15. 

            The Court then noted “Given the fact-specific inquiry required to determine whether the veteran's employment is in a protected environment, however, we reiterate that these generalities are not categorical or dispositive. They will guide most cases. But the Board may consider any individualized factor or evidence that tends to clarify whether a specific position was shielded in some respect from competition in the employment market. And, of course, the income that a veteran earns from employment must be relatively low to qualify as "in a protected environment.””  Id. at *15. 

            The Court noted that while the term protected work environment might appear broad because no fact or factor are dispositive, a veteran and advocate “seeking to argue entitlement to TDIU during periods in which the veterans were employed should be prepared to submit sufficient evidence for VA to determine entitlement.”  Id. at *16. 

            The individual cases were remanded for analysis under the Court’s newly annunciated standard. 

            This is a dense decision that both defines protected work environment, and also addresses ADA reasonable accommodations.  However, the definition provided by the Court is so new, fact specific, and not grounded in any specific fact or factor.  As such, I predict that it will generate significant further litigation in how it should be applied.  I predict the VA will continue denying worthy TDIU cases and veteran’s will need good advocates to fight for their full benefits. 

Decision by Chief Judge Bartley and joined in by Judges Pietsch and Toth. 

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Calhoun: A Continuous Prosecuted Case under the AMA and the Freestanding Earlier Effective Date Claim Prohibition

Calhoun v. McDonough, Case Number 21-6124, decided January 9, 2024 involves the effective date of TDIU and determines “that an issue remains active—that is, a decision on the issue remains pending and does not become final, including for effective date purposes—when a claimant files a supplemental claim within one year of an adverse Board decision.”  Id. at *2.  Effectively, the Court noted the prohibition against free standing earlier effective date claims is not implicated in the AMA when the veteran has continuously prosecuted his claim.

The question was whether the issue of an earlier effective date for TDIU was a freestanding earlier effective date claim.  Importantly, “it is well established that the Board lacks the authority to review such a claim, which occurs when a claimant files a claim seeking an earlier effective date after the decision assigning that effective date has become final(and is not pursuing one of the exceptions to finality). Rudd v. Nicholson, 20 Vet.App. 296, 299 (2006). If the matter before the Court today involves a freestanding earlier effective date claim, the Board lacked authority to adjudicate the matter, and the proper remedy is for the Court to vacate the Board decision and dismiss the appeal seeking an earlier TDIU effective date.”  Id. at *3.

The Court began by discussing the differences between the legacy appeal system and the AMA, particularly as regards the concept of finality and options following a Board decision.

The Court noted that under the legacy system, a claimant could not seek to reopen a final effective date determination and “once an effective date decision became final in the legacy system, that decision was not subject to readjudication absent an assertion of clear and unmistakable error, an order from the Chairman granting reconsideration of a Board decision, or the Board's sua sponte correction of obvious error.”  Id. at *3-4.

The Court then pivoted to an explanation of the AMA and noted “the finality of an AMA benefits determination is forestalled when a claim is continuously pursued—that is, whenever the claimant elects one of the three review lanes within 1 year after an AOJ decision or files a supplemental claim within 1 year after a decision by the Board or the Court. Accordingly, an AMA decision does not become final until the 1-year period after a decision by the AOJ, the Board, or the Court has expired without an action in accordance with section 5110(a)(2) by the claimant.”  Id. at *5.

The Court then effectively overruled Rudd and Leonard in the context of AMA cases and explained: “Under the legacy system, Rudd and Leonard barred freestanding earlier effective date claims because they were impermissible attempts to overcome the finality of a prior decision. Leonard, 405 F.3d at 1337 (holding that allowing freestanding earlier effective date claims would "vitiate the rule of finality"); Rudd, 20 Vet.App. at 300 (same); see also Cook v. Principi, 318 F.3d 1334, 1339 (Fed. Cir. 2002) (holding that, because Congress explicitly provided certain exceptions to the rule of finality, it did not intend to allow other exceptions). But as discussed above, the revised version of section 5110 under the AMA includes the concept of the continuously pursued claim; expressly provides that claims are continuously pursued when a supplemental claim is filed within 1 year of a Board or Court decision; and directs that, when a claim is continuously pursued, the effective date of an award may be as early as the date the claim was initially filed. 38 U.S.C. § 5110(a)(1), (2)(D).  Thus, continuously pursued AMA claims are, as the term suggests, continuously pursued—that is, they have not yet become final. And it logically follows that claimants who continuously pursue an earlier effective date are not seeking to overcome or vitiate the finality of a prior decision because there is not yet a final decision; Rudd and Leonard are simply not for consideration.”  Id. at *7.

The Court then turned to the merits of the claim and found the Board provided inadequate reasons and bases for denying an earlier effective date for TDIU.

This decision clarifies the concept of a continuously prosecuted case in the AMA and how it is simply different than the older legacy system.

Decision by Chief Judge Bartley and joined in by Judges Pietsch and Toth. 

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