The easy and unfortunate answer to this question is yes. Federal courts across the nation differ on the meaning of “Regular Occupation” as the term is used in disability insurance policies. So, what state you live in, and the specific language of your disability policy, determines whether you receive disability benefits based on your inability to perform the material duties of your regular occupation.
The Fifth Circuit Definition of “Regular Occupation” Which Binds Mississippi, Louisiana, and Texas Federal Courts
An example of how some courts reason is found in the recent case of Juanita Nichols v. Reliance Standard Life Insurance Company (Reliance). Plaintiff Nichols worked at Peco Foods, Inc., a chicken processing plant. Her job description as defined by Peco was that of a Hazard Analysis Critical Control Point (HACCP) Coordinator. Her job routinely exposed her to temperatures around 40 degrees.
Nichols developed Raynaud’s phenomenon (also known as Raynaud’s Syndrome), a circulatory condition that could cause gangrene if Plaintiff continued working in the cold. She stopped working on January 28, 2016, and applied for long-term disability benefits through Peco’s long-term disability policy issued by Reliance Standard.
According to the terms of the policy, Nichols would be eligible for benefits if she proved she was unable to perform a material duty of her regular occupation, which was defined as the occupation she held at the time she filed her claim for disability. In addition, the policy stated that it “defines Regular Occupation as the way the claimant’s job ‘is normally performed in the national economy’ and not the way it is ‘performed for a specific employer or in a specific locale.’”
Reliance engaged a vocational rehabilitation specialist to determine Plaintiff’s regular occupation. He concluded that, based on the Department of Labor’s Dictionary of Occupational Titles (DOT), the components of her HACCP job description were most closely related to the job duties of a Sanitarian. The DOT job description of a Sanitarian does not include exposure to the cold. Peco provided the specialist with a list of Plaintiff’s job duties and that list did not include exposure to the cold.
Reliance acknowledged that Plaintiff could not work in a cold environment, but denied her LTD benefits finding that since her Regular Occupation was that of a Sanitarian, which did not require exposure to cold, she had not proven that she could not perform a material duty of her Regular Occupation.
Plaintiff appealed. She argued that her job inspecting chicken for sanitary defects meant she was exposed to cold in her regular occupation since federal law requires processed poultry to be kept at cold temperatures. Reliance engaged a second vocational specialist who came to the same conclusion as the first one: her Regular Occupation was best defined in the DOT as that of a Sanitarian. In its denial of her appeal, Reliance explained that while it acknowledged that she could not work in the cold, that was a job requirement specific to Peco Foods, Inc., and not specific to her occupation as a Sanitarian.
After she exhausted her administrative remedies, Nichols filed an ERISA lawsuit in the U.S. District Court for the Southern District of Mississippi. The District Court agreed with Plaintiff that exposure to cold was a material duty of her regular occupation and ordered Reliance to pay her LTD benefits. This time, Reliance Standard appealed.
The U.S. Court of Appeals for the Fifth Circuit held that the Plaintiff was not entitled to long term disability benefits. The Court said that Reliance Standard did not abuse its discretion when it refused to consider the specific duties of the claimant’s regular occupation.
The Fifth Circuit acknowledged that other federal courts defined Regular Occupation differently, but concluded “No matter what other circuits require, our precedent dictates that regular occupation is to be defined generally and need not account for each of a claimant’s unique job duties.” Therefore, the Court held that Reliance Standard’s denial of disability benefits was valid, and that Reliance did not need to consider the specific duties of the claimant’s regular occupation.
The Fifth Circuit’s decision binds courts in Mississippi, Louisiana, and Texas. This means that those courts must rule according to the way the Fifth Circuit ruled in the Nichols case. So, if you work in one of the named states, whether you can prove you are entitled to LTD benefits depends on the definition of your Regular Occupation according to the DOT, not according to your actual job duties.
Not All Courts Agree with the Fifth Circuit
At least two other circuit courts disagree with this ruling by the Fifth Circuit and have ruled that Regular Occupation means the actual duties the claimant was performing at the time he or she stopped working. Some examples of other court definitions of regular occupation are:
Kinstler v. First Reliance Life Insurance Co.
- , 181 F.3d 243, 253 (2d Cir. 1999). The Second Circuit defined Regular Occupation as “a position of the same general character as the insured’s previous job, requiring similar skills and training, and involving comparable duties.” The Second Circuit binds federal courts in Connecticut, New York, and Vermont.
Lasser v. Reliance Standard Life Insurance Co.
- , 344 F.3d 381, 387 n.5 (3d Cir. 2003). The Third Circuit held that “’Regular occupation’ is the usual work that the insured is actually performing immediately before the onset of disability.” The Third Circuit binds federal courts in Delaware, New Jersey, Pennsylvania, and the Virgin Islands.
- · In
Darvell v. Life Insurance Company of North America
- , 597 F.3d 929, 935–36 (8th Cir. 2010), the Eighth Circuit observed that the “[t]he circuits are split” on whether to define regular occupation based on the “claimant’s actual job duties” or “the insured’s occupation as it is performed in a typical work setting in the general economy.” In that case, the policy gave the plan administrator the discretion to define the terms of the policy, so the Court upheld the denial of benefits based on the definition of Regular Occupation meaning one defined by the DOT instead of the specific job duties of the claimant. The Eighth Circuit rulings are binding on those in Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota.
- · In
Bishop v. Long Term Disability Income Plan of SAP Am., Inc.
- , 232 Fed.Appx. 792, 794-95 (10th Cir.2007) the Tenth Circuit held that the insurer was required to consider claimant’s actual job duties in determining the “essential duties” of his regular occupation. The Tenth Circuit binds federal courts in Colorado, Kansas, New Mexico, Oklahoma, Utah, and Wyoming.