Sixth Circuit Finds Unum’s Conflict of Interest Did Not Motivate Its Decision to Terminate Long-Term Disability Benefits

In Harmon v. Unum Life Insurance Company of America, et al., No. 23-5619, 2024 WL 1075068 (6th Cir. Mar. 12, 2024), Plaintiff-Appellant Joey Harmon appealed the district court’s judgment in favor of Unum Life Insurance Company of America in his lawsuit challenging Unum’s termination of his long-term disability benefit claim. The Sixth Circuit found that Unum’s decision to terminate Plaintiff’s LTD benefits was not arbitrary and capricious where Unum relied on its in-house file-reviewing physician, interpreted Plaintiff’s doctor’s opinion as supporting Plaintiff’s ability to work, and conducted a vocational analysis looking at the jobs available in the area of Plaintiff’s new residence.

Plaintiff was working as a facilities technician for 24 Hour Fitness in Memphis, Tennessee, when he injured his back. His job required him to be able to lift at least 50 pounds, which he could not do. Plaintiff filed a claim with Unum, his employer’s LTD carrier, and Unum approved Plaintiff’s claim under its policy’s “own occupation” definition of disability. After 24 months of payments, the definition of disability switched to requiring the inability to perform “any gainful occupation.” Unum considered a gainful wage to be 60% of what Plaintiff was making before disability, which was approximately $13.54/hour. Unum’s vocational consultant reviewed Plaintiff’s job prospects in the Memphis labor market and found that jobs he could perform with his skillset and physical restrictions would not pay him a gainful wage. Unum then approved Plaintiff’s claim under the “any gainful occupation” definition of disability.

Shortly after Unum approved Plaintiff’s ongoing claim, an Administrative Law Judge for the Social Security Administration determined that Plaintiff could perform light work, including the work of a cashier, ticket seller, or assembler. Unum updated its vocational analysis with this information but did not find any gainful employment for Plaintiff in the Memphis labor market. Plaintiff then disclosed to Unum that he was living in Miami, Florida and lifting 10-15 pounds as part of his exercise routine. Unum contacted Plaintiff’s treating physician, Dr. Harris Mones, for an update and Dr. Mones sent in two separate faxes which were contradictory. The second fax indicated Plaintiff was capable of light work. Unum’s nurse consultant reviewed Dr. Mones’s submissions and agreed with his assessment that Plaintiff could work. Unum conducted another vocational assessment, this time looking at the Miami labor market. Unum identified alternative occupations that Plaintiff could do and earn a gainful wage. Unum terminated Plaintiff’s claim and Plaintiff appealed. On appeal, Unum’s in-house physician, Dr. Beth Schnars, reviewed Plaintiff’s medical records and Dr. Mones’s revised opinion that Plaintiff could not do light work. Based on that review, Unum upheld its termination of benefits.

On appeal, Plaintiff argued that Unum’s use of an in-house file reviewing physician was unreasonable. The court disagreed. According to the court, Dr. Schnars properly accounted for Dr. Mones’s opinion and considered Plaintiff’s dwindling treatment and “unremarkable” examinations. The court also found that Dr. Schnars, who specializes in internal medicine, was qualified to review his claim. “ERISA does not demand an examination by the narrowest of specialists.” Given Plaintiff’s self-reported activity level and the SSA’s determination, it was reasonable for Unum to rely on its consultant’s opinion that Plaintiff could perform light work. It was also reasonable for Unum to look at the job market in Miami instead of Memphis. Lastly, the court found that Plaintiff’s evidence of Unum’s conflict—Director Ridlon’s weekly reports tracking the opening and termination of claims under his purview—did not demonstrate that Unum’s structural conflict of interest motivated Unum’s decision to terminate his claim. The court concluded that Unum’s decision was based on a deliberate, principled reasoning process and supported by substantial evidence.