Maximum Medical Improvement Does Not Mandate Conversion to Permanency: ALJ Discretion to Continue § 31-308(a) Temporary Partial Benefits “In Lieu Of” § 31-308(b) Benefits

I. Introduction

Case: Gardner v. Dept. of Mental Health & Addiction Services (Supreme Court of Connecticut, officially released March 18, 2025).
Parties: Beulah Gardner (claimant/employee) vs. Department of Mental Health and Addiction Services (employer), among others.
Context: The case arises under Connecticut’s Workers’ Compensation Act (General Statutes § 31-275 et seq.) and centers on the interaction between (1) temporary partial incapacity benefits under § 31-308(a) and (2) permanent partial disability (permanency/specific) benefits under § 31-308(b) once a claimant reaches maximum medical improvement (MMI).

The claimant suffered a compensable left-wrist injury while restraining a patient at Whiting Forensic Hospital. After treatment and surgeries, physicians opined she reached MMI and assigned an 8% permanency rating. The employer filed a Form 36 (a notice seeking to reduce/discontinue benefits) to convert ongoing § 31-308(a) payments to § 31-308(b) benefits. The administrative law judge approved the conversion and concluded there was no discretion to continue § 31-308(a) after MMI; the Compensation Review Board and Appellate Court affirmed.

Certified issue: Whether a Workers’ Compensation Commission administrative law judge has authority to award ongoing § 31-308(a) temporary partial incapacity benefits after a claimant reaches MMI (and thus becomes eligible for § 31-308(b) permanency benefits).

II. Summary of the Opinion

The Supreme Court reversed the Appellate Court and held that the plain and unambiguous text of § 31-308(b) gives an administrative law judge discretion to award, after MMI, ongoing § 31-308(a) temporary partial incapacity benefits in lieu of § 31-308(b) permanency benefits, up to the 520-week statutory maximum applicable to § 31-308(a).

The Court remanded for further proceedings—meaning it did not itself award ongoing temporary partial benefits, but required the agency adjudication to proceed under the correct legal standard recognizing the ALJ’s discretion.

III. Analysis

A. Precedents Cited

1. Osterlund v. State

Osterlund v. State, 129 Conn. 591 (1943), is the doctrinal cornerstone. There, this Court interpreted language “nearly identical” to the current discretionary clause in § 31-308(b), holding that once maximum improvement is reached, the commissioner (now ALJ) must exercise “sound judgment” to decide whether to award scheduled specific compensation (permanency) or allow weekly incapacity compensation to continue.

The Gardner Court treated Osterlund not as historical background but as continuing, controlling interpretive authority—especially because the operative discretionary phrase (“may, in [the ALJ’s] discretion, in lieu of other compensation”) remains in § 31-308(b).

2. Esposito v. Stamford; Brennan v. Waterbury; Marandino v. Prometheus Pharmacy; Cappellino v. Cheshire

These cases supplied the structural taxonomy of benefits:

  • Esposito v. Stamford, 350 Conn. 209 (2024), reaffirmed that entitlement to § 31-308(b) benefits vests at MMI and discussed the employer’s obligation to pay them “sometime in the future,” which helped Gardner reject the notion that vesting implies immediate conversion.
  • Brennan v. Waterbury, 331 Conn. 672 (2019), distinguished “special”/incapacity benefits (tied to wage-earning impairment and durational limits) from “specific”/permanency benefits (fixed by schedule).
  • Marandino v. Prometheus Pharmacy, 294 Conn. 564 (2010), reiterated that permanency benefits compensate for loss/loss of use of a body part and emphasized that statutory interpretation occurs within an existing scheme.
  • Cappellino v. Cheshire, 226 Conn. 569 (1993), underscored that claimants often are entitled to both types of benefits because they compensate different losses—while still respecting the no-concurrency rule.

3. Rayhall v. Akim Co.; Paternostro v. Edward Coon Co.; Churchville v. Bruce R. Daly Mechanical Contractor; Hansen v. Gordon

The Court used these cases to define “incapacity,” confirm the statutory purpose, and police double recovery:

  • Rayhall v. Akim Co., 263 Conn. 328 (2003), was pivotal but limited: it reiterated that a claimant cannot receive concurrently a specific indemnity award and incapacity benefits for the same incident, and it interpreted the “in lieu of all other payments” phrasing as a prohibition on double payment rather than a mandate that incapacity ends at MMI. The employer’s attempt to read Rayhall as requiring immediate conversion at MMI was rejected as overreading.
  • Paternostro v. Edward Coon Co., 217 Conn. 42 (1991), supported the consecutive—not concurrent—payment principle.
  • Churchville v. Bruce R. Daly Mechanical Contractor, 299 Conn. 185 (2010), and Hansen v. Gordon, 221 Conn. 29 (1992), reinforced the meaning of “incapacity” as inability to work and the scope of partial incapacity.

4. McCurdy v. State (and § 31-295(c))

McCurdy v. State, 227 Conn. 261 (1993), mattered for the Court’s treatment of § 31-295(c). While § 31-295(c) states that § 31-308(b) compensation “shall be paid” within 30 days of MMI, McCurdy reflects that temporary total incapacity benefits under § 31-307 can continue after MMI. This parity argument was central: if temporary total can continue post-MMI, interpreting the statutes to bar temporary partial post-MMI would be an unjustified asymmetry.

5. Meriden v. Freedom of Information Commission; Curry v. Allan S. Goodman, Inc.; Dept. of Public Safety v. State Board of Labor Relations

These cases framed administrative deference. The Court declined to defer to the Compensation Review Board because its interpretation was not “time-tested” nor subjected to judicial scrutiny. Meriden v. Freedom of Information Commission, 338 Conn. 310 (2021), supplied the deference standard; Curry v. Allan S. Goodman, Inc., 286 Conn. 390 (2008), and Dept. of Public Safety v. State Board of Labor Relations, 296 Conn. 594 (2010), provided benchmarks for when an agency interpretation is sufficiently established.

6. Testone v. C. R. Gibson Co.; Rainbow Housing Corp. v. Cromwell; Potvin v. Lincoln Service & Equipment Co.

The employer cited Testone v. C. R. Gibson Co., 114 Conn. App. 210 (2009), but the Supreme Court characterized the relevant passage as dictum and noted it was not binding. The Court refused to consider an appended letter outside the record under Rainbow Housing Corp. v. Cromwell, 340 Conn. 501 (2021), and reiterated that Appellate Court decisions are not binding under Potvin v. Lincoln Service & Equipment Co., 298 Conn. 620 (2010).

B. Legal Reasoning

1. Text-first interpretation under § 1-2z

The Court’s reasoning is anchored in § 1-2z: if the statutory text and its relationship to other statutes are plain and unambiguous and do not yield absurd or unworkable results, extratextual evidence (including legislative history) “shall not be considered.”

Applying § 1-2z, the Court treated the key phrase in § 31-308(b)—that the ALJ “may, in the administrative law judge’s discretion, in lieu of other compensation” award proportional permanency— as unambiguous. “May” connotes permission, not compulsion; “in lieu of other compensation” indicates permanency can replace other benefits, not that it must. The Court therefore concluded that an ALJ can choose not to substitute § 31-308(b) and instead continue other compensation available under the Act, including § 31-308(a), subject to its cap.

2. Harmonizing § 31-308(b) with § 31-295(c)

The Appellate Court had pointed to § 31-295(c) as reflecting that permanency “shall be paid” after MMI. The Supreme Court acknowledged this could be read as limiting post-MMI incapacity, but rejected that reading for two principal reasons:

  • The Court’s own precedent recognizes post-MMI continuation of temporary total incapacity under § 31-307, so § 31-295(c) cannot be read as a hard stop on incapacity benefits generally.
  • Esposito v. Stamford frames § 31-295(c) as establishing vesting and a future payment obligation, not an immediate conversion mandate in every case.

3. Rejecting legislative-history-driven “repeal by implication” of discretion

The employer’s core argument was historical: that P.A. 93-228 deleted former § 31-308(d) language explicitly permitting partial incapacity benefits even after MMI, thereby stripping discretion. The Court found this approach incompatible with § 1-2z because it attempted to use legislative history to create ambiguity in otherwise clear text.

Critically, the Court also reasoned from continuity: the discretionary language construed in Osterlund v. State has “remained in the statute since 1943.” Without textual change to that operative phrase—or an express overruling—Osterlund remains controlling. The Court emphasized it has “routinely cited” Osterlund without limitation.

4. The decision’s practical logic: avoiding disproportional outcomes

Echoing Osterlund, the Court recognized that scheduled permanency can be a poor proxy for real-world earning impairment in partial-loss cases. The statutory design allows adjudicators to choose the benefit type that best matches the injury’s vocational and functional consequences—precisely by preserving discretion at the MMI inflection point.

C. Impact

1. Post-MMI benefit sequencing becomes a discretionary determination (within limits)

The most immediate doctrinal effect is that MMI is not an automatic switch from § 31-308(a) to § 31-308(b). After Gardner, parties should expect litigation and fact-finding focused on whether, in the ALJ’s “sound judgment,” ongoing temporary partial incapacity better fits the claimant’s circumstances than a scheduled permanency award—so long as § 31-308(a)’s 520-week ceiling is respected.

2. Increased significance of evidentiary showings about earning capacity and available work

Because § 31-308(a) is wage-loss oriented, Gardner elevates the importance of evidence regarding post-injury earning capacity, suitable work availability, and the claimant’s readiness and willingness to work, rather than treating MMI as a dispositive administrative marker.

3. Constraints remain: no concurrent double recovery; vested permanency still owed

The decision does not permit concurrent payment of incapacity and specific awards for the same incident, consistent with Rayhall v. Akim Co. and Paternostro v. Edward Coon Co.. Nor does it negate vesting: the right to § 31-308(b) benefits still vests at MMI under § 31-295(c); the key change is that payment can be deferred when incapacity benefits are awarded in lieu of permanency.

4. Administrative law: reduced deference where agency practice is not “time-tested”

The Court’s deference analysis signals skepticism toward claims that a small number of agency decisions (e.g., Murray v. Mass Mutual Life Ins. Co., Rivera v. Patient Care of Connecticut, Rayhall v. Akim Co. (CRB decision)) can establish “time-tested” agency gloss on major statutory questions—particularly when the issue has not been directly adjudicated.

IV. Complex Concepts Simplified

  • Maximum medical improvement (MMI): The point at which further significant medical recovery is not expected. It triggers vesting of permanency rights but, after Gardner, does not automatically end wage-loss benefits.
  • Temporary partial incapacity (§ 31-308(a)): A wage-loss benefit paid when the employee can work in some capacity but earns less (or cannot find suitable work in limited circumstances), capped at 520 weeks.
  • Permanent partial disability / “permanency” (§ 31-308(b)): A scheduled benefit tied to percentage loss of (or loss of use of) specific body parts, paid for a fixed number of weeks.
  • “Vesting” of permanency (§ 31-295(c)): The legal right to permanency becomes fixed at MMI; it does not necessarily mean it must be paid immediately if another benefit is awarded “in lieu of” it.
  • “In lieu of other compensation” (§ 31-308(b)): A substitution concept: the ALJ can award permanency instead of other compensation, which implies discretion to choose the alternative as well.
  • Form 36: The employer’s statutory notice seeking permission to reduce/discontinue benefits; approval is required for the change to take effect. (See also Esposito v. Stamford n.5 discussion of § 31-296(b).)
  • § 1-2z (Connecticut’s textualism rule): If the statute’s meaning is plain from its text and statutory context, courts do not consult legislative history.

V. Conclusion

Gardner v. Dept. of Mental Health & Addiction Services establishes a clear rule of Connecticut workers’ compensation law: after a claimant reaches maximum medical improvement, an administrative law judge retains discretion under § 31-308(b) to continue § 31-308(a) temporary partial incapacity benefits “in lieu of” § 31-308(b) permanency benefits, subject to § 31-308(a)’s 520-week limit and the longstanding prohibition against concurrent recovery of incapacity and specific benefits for the same incident.

The decision is significant for three reasons: it re-centers statutory interpretation on text under § 1-2z, reaffirms the continuing force of Osterlund v. State, and reshapes post-MMI practice by treating benefit conversion as a fact-sensitive discretionary judgment rather than a mechanical administrative consequence of MMI.