Ward Harper, Attorney at Law

Ward Harper, Attorney at Law (Phone: 801-272-7900 or 1-800-765-2141) (website: www.wardharper.com )

Time to change the transferability regulation (May 2009) NOSSCR Forum

Time to change the transferability regulation. If a claimant is over 55 years of age and restricted to sedentary work or 60 years of age and limited to sedentary or light work, the alternative work must be "so similar to your previous work that you would need to make very little, if any, vocational adjustment in terms of tools, work processes, work settings, or the industry." 20 C.F.R. 404.1568(d)(4) and 201.00(f) of Appendix 2. Ralph Wilborn, in "The Advocate’s Guide to Transferable Skills," in his Social Security Disability Advocate’s Handbook (James Publishing 2004), wrote that "[t]he regulations and ruling use the word ‘or’ instead of `and.’ If more than `very little’ vocational adjustment is required in terms of any one of the above four elements, the special transferability provision has not been satisfied and transferability of skills will not be found."
However, the Tenth Circuit Court of Appeals, in Jensen v. Barnhart, 463 F.3d 1163 (10th Cir. 2005), held that all four criteria need not be met, citing the plain language of the regulation and the fact that it had been in existence since 2000 and the agency had not changed it. There is surprisingly little case law on the issue. The lower court had held that at least two criteria need to be met and that there be "overall very little adjustment." The district court agreed with Jensen that if only one criterion was met, it would render the rule meaningless. For example, a heavy equipment operator at a steel mill could satisfy the regulation by accepting a completely different job such as a data processor in the same industry. However, the court rejected Jensen’s argument that all four must be met because this would read "or" out of the regulation. The Tenth Circuit wrote that there was nothing in the law preventing an ALJ from making such a judgment, implying that the agency only must give "full consideration" to these issues and that the regulation was just intended to provide guidance. Jensen v. Barnhart, 436 F.3d at 1166.
There are many reasons that this decision is contrary to what should be agency policy. For instance, in Social Security Ruling 82-41, an example is given concerning transferability, where the only difference in two situations is an age change which requires consideration of the older worker rule. The claimant’s past work was as a carpenter in the construction industry. If he is not old enough to invoke the stricter rule (age 60 for light work), he has transferable skills to other jobs in the furniture industry which "involve tools, raw materials and activities similar to those in past carpentry work." Only the industry is different. However, if the claimant is nearing retirement age (ages 60-64), he does not have transferable skills because "the claimant’s carpentry skills cannot be transferred with very little, if any, vocational adjustment in terms of tools, work processes or the industry."
Further support for the argument that all four criteria are required can be found in the POMS, which states that "[s]kills that are unique to a specific work process in a particular industry or work setting are not transferable if more than a minimal vocational adjustment in terms of tools, work process, work setting, or industry is required. DI 250015.015 A.3.b.
The regulation at issue became effective May 8, 2000 (see 65 Federal Register 17994 (April 6, 2000)). The comments accompanying implementation of the regulation state that the only more restrictive rule would be "no adjustment." It reads:

We believe that our standard of transferability of skills, that is, that there be "very little, if any, vocational adjustment in terms of tools, work processes, work settings, or the industry," is an appropriately narrow rule for individuals in the age groups affected. The only rule that could be narrower would be one that requires no vocational adjustment in terms of tools, work processes, work settings, or the industry, but such a standard would have virtually no applicability.65 Federal Register at 17997.
One can also generate a number of absurd conclusions using the court’s interpretation by comparing this supposedly tougher rule of transferability to the weaker rule of 20 C.F.R. 404.1568(d)(2). For instance, where only work settings, tools and industry are similar, the tougher rule is met and the weaker rule is not because (d)(2)(B) and (C) are not met (machines, raw materials, products, processes and services are all different).
Social Security Ruling 82-41 does provide an exception to the general rule that all four criteria must be met in cases where the job skills have universal applicability across industry lines. However, this exception would make little sense unless all four criteria were otherwise required. One can distinguish a particular case from Jensen on this point. In Jensen, there were only different industries in the case of the past work as an auto salesman. Jensen v. Barnhart, 436 F.3d at 1166. But that is not how the court analyzed the issue.

Advanced age (55 and older) has long been recognized as the critical age where workers have difficulty adapting to the demands of other jobs, and Social Security regulations for many years have required that much stricter criteria be met before such individuals who are limited to sedentary work can be found to have transferable skills. (See 43 Federal Register 9289 (March 7, 1978); 43 Federal Register 55359 (November 28, 1978); 65 Federal Register 17997 (April 6, 2000)). If ALJ’s are allowed to rely upon dissimilar semiskilled jobs (like telephone solicitor, information clerk and reservation clerk—the jobs identified in Jensen) that almost anyone can perform with minimal training as meeting the tougher rule for transferability, the intent of the rule is subverted.
In almost all crucial medical-vocational issues, the Social Security Administration has chosen to adopt a policy of providing very little direction in the regulations and rulings. One can find more explicit directions in the POMS, but these are not legally binding. Courts have declined to step in and clarify the issues or to force the agency to adhere to it’s own policies. This makes for a nonuniform national process of adjudication with ALJ’s applying many different standards of transferability. It is time for the agency correct this regulation by changing "or" to "and."
The tougher rule also requires that the past work and the alternative work be "very similar." 65 Federal Register 17998 (April 6, 2000). With any less than four criteria the rule could be easily met by very dissimilar jobs. SSR 82-41 expands on the job similarity requirement by stating that the job duties must be very closely related and the alternative work must be able to be performed at a high degree of proficiency with a minimal amount of job orientation.