### In the 

# United States Court of Appeals For the Seventh Circuit

____________________ No. 16

- 2894 J OSHUA R AY L ANIGAN , Plaintiff

- Appellant
,

v.

N ANCY A. B ERRYHILL , Acting Commissioner of Social Security, Defendant

- Appellee

.

____________________ Appeal from the United States District Court for the Western District of Wisconsin

. No. 15

- cv

- 474

- bbc

— Barbara B. Crabb
, Judge

.

____________________
A RGUED A PRIL 26, 2017

— D ECIDED J ULY 26, 2017

— O PINION I SSUED J ULY 31, 2017 *

____________________ Before W OOD , Chief Judge
, and R IPPLE and S YKES , Circuit Judges

. S YKES , Circuit Judge

. Joshua Lanigan injured his back at his job in 2009. That same year he hurt his neck in a car

* The court initially resolved this appeal by nonprecedential order. The order is being reissued as an opinion.2 No. 16

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accident, and in 2011 he was diagnosed with diabetes. Since then his medical impairments have been complicated by mental illness. Lanigan applied for Supplemental Security Income and Disability Insurance Benefits in March 2012 when he was 38 years old. An Administrative Law Judge (“ALJ”) found his physical and mental impairments to be severe but not disabling and denied benefits. The Appeals Council denied review, and the district court upheld the ALJ’s decision

. See 42 U.S.C. § 405(g). We conclude that the case must be returned to the agency for further proceedings because the ALJ misinformed a vocational expert about Lanigan’s residual functional capacity, thus undermining the expert’s testimony that Lanigan could engage in compe titive employment. I. Backg round Lanigan asserts that he became disabled in May 2009 a fter injur ing his lower back while working as a general laborer. He received worker’s compensation for th at injury and tried various forms of physical therapy, but none proved to be effective. Even tually he was diagnosed with degenerative disc disease in his lower back . In 2009 he also in

jured his neck in a car crash. Then in December 2011 he

was diagnosed with Type 2 diabetes . A t one time Lanigan was a body builder , but since 2009 he has been p hysi cally inactive and bounced between part

- time or seasonal jobs and periods of unemployment

. The Commissioner of Social Security concedes that Lanigan’s physical impairments , by themselves, would limit him to light work, so our focus is on his mental illness and its effect on his ability to engage in competitive employment.No. 16

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After Lanigan learned of his diabetes diagnosis, he fell into a state of depression, anxiety, and suicidal preoccup ation. He explained to a psychiatrist that he has an “ingrained fear of diabetes” because as a child he watched his grandf ather struggle with and eventually die from the disease. In January 2012, a m onth after receiving the diagnosis, Lanigan reported to his physician that he had been in a “very low mood,” rarely leaving his a partment, and “sitting for hours at a time with a loaded pistol on his lap.” The following year after a psychiatric evaluation, Lanigan’s treating psychiatrist documented a history of alcohol abuse, bipolar affective disorder, major depression, attention deficit / hyperactivity disorder, oppositional defiant disorder, and kleptomania. The psychiatrist also noted that Lanigan had complained of intermittent episodes of visual hallucinations in which he saw animals or people in his periphery and five

- to ten

mi nute episodes of palpitations, sweating, and tremors when in public places or in the midst of family members. Lanigan attribute s the episodes to his belief that he is being stigmatized because he is mentally ill.
In addition to the stress of being diagnos ed with diab etes , Lanigan’s inability to maintain full

- time work has also contributed to his anxiety. He and his wife divorced in 2009, and i n 2012 he moved in with his mother and stepfather after being evicted from his apartment. In the months fo llowing t hat move, Lanigan complained to his psychiatrist about the added stress of living with his verbally abusive stepfather, prompting the doctor to opine that the living arrangement had “been tough on him” and that “a lot of his pain and stress level would be improved ultimately if he can acquire the finances to get his own living quarters back.”4 No. 16

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In June 2012, three months after applying for benefits, Lanigan was examined by a state

- agency psychologist who concluded that he suffers from severe affective and anx iety disorders. Lanigan told the psychologist that he “can only pay attention for a few minutes” and is limited in his ability to “complete tasks, concentrate, understand, follow instru ctions, and get along [with] others.” Based on her examin ation, the psy chologist concluded that Lanigan’s mental impairments could cause moderate limitations in his ability
to ( 1) understand, remember, and carry out detailed instru ctions ; ( 2) maintain attention and concentration for extended periods ; ( 3) perform activities wi thin a schedule, maintain regular attendance, and be punctual ; and ( 4) work in coord ination with or in proximity to others without being distrac ted by them. A second state

- agency psychologist who r eviewed Lanigan’s file several months later agreed with the first doctor about the limitations caused by Lanigan’s menta l illness. One feature of Lanigan’s mental illness is unmentioned in the evaluations of the state

- agency psychologists

— apparently because the problem did not arise until 2013. That year Lanigan b egan experiencing recurring black out episodes. In June he was hospital ized on an involuntary, emergency basis after being arrest ed for shooting out wi ndows with a BB gun. At the hospital he claimed he could not recall his actions. When Lanigan was admitted , a d octor not ed that he had attempted suicide four times in the prior six months and scored his global assessment of functi oning (commonly known as “GAF” 1 ) at 30 to 35. In the discharge

1 The GAF is a 100

- point metric used to rate overall psychological, social, and occupational functioning, with lower scores correspo nding to lowerNo. 16

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summary, another doctor noted that Lanigan had been experiencing mood swings in which he would feel okay and then suddenly become very irritable and express fear that he was “going to hurt people.” Lanigan had told staff he was not hav ing homicidal thoughts while hospitalized but
, nevertheless, said he worried about his irr itable episodes and thus avoided people and isolated himself. At an outp atient visit a week after Lanigan’s release from the hospital, a psychiatric nurse noted that he possibly suffers from a dissociative disorder. At his hearing before the ALJ in Decembe r 2013, Lanigan testified about his mental

- health limitations. He described having difficulty in social situations and said he cannot go to a grocery store without first taking medication or having someone with him to help in case of a panic attack. He also briefly testified about his stay in the hospital in July 2013 and other blackout episodes when he would “not remember what I was doing.” He said, “I’ve had episodes where [I’m]

functioning. A M

. P SYCHIATRIC A SS ’ N , D IAGNOSTIC AND S TATISTICAL M ANUAL OF M ENTAL D ISORDERS 32

– 34 (4th ed., Text Rev. 2000). A GAF

score of 31 to 40 reflects “ [ s ] ome impairment in reality testing or co mmunication (e.g., speech is at times illogical, obscure, or irrelevant) OR major impairment in several areas, such as work or school, family relations, judgment, thinking, or mood (e.g., dep ressed man avoids friends, neglects family, and is unable to work

... ).” Id. at 34 (bold removed) . The American Psychiatric Association eliminated use of the GAF in 2013, before the ALJ’s decision in this case, citing a “conceptual lack of clarity” and “questionable psychometrics in routine practice.” See A M

. P SYCHIATRIC A SS ’ N , D IAGNOSTIC AND S TATISTICAL M ANUAL OF M ENTAL D ISORDERS 16 (5th ed. 2013). Although the American Psychiatric Association no longer uses this metric, at the time of Lanigan’s psych ological evaluations, clinicians still used GAF scores to report their assessment of a person’s overall level of functioning.6 No. 16

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sitting down at din ner with my family, they start fighting, it’s 6:00 in the evening and next thing I know I’m sitting in my room and it’s 9:45 and I don’t remember anything.” When asked about his current employment, Lanigan te stified that as of the date of the hearing
, he h ad been working part

- time at Michaels craft store for five to six weeks on the truck crew

— unloading the truck, stocking the store, and setting up displays. He described his limited interaction s with customers as “very stressful” and said he must have anoth er employee present with him when he encounters customers. Lanigan testifi ed that even his five

- hour shifts three or four days a week are hard but said his coworkers “are really nice” and make him “feel comfortable.” He also explained that he excuses himse lf three to five times during each shift, sometimes for up to 20 minutes, so that he can retreat to the bathroom and get his emotions “in check.” He said his boss knows his situa tion “so she’s tolerant of it.” A vocational expert also testified. The ALJ as ked him to assess whether competitive employment would be available to a person with the following hypothetical residual fun ctional capacity (“RFC”) : capable of perform ing low

- stress jobs constituting light work so long as those jobs involve only routine t asks; does not require more than occasional interaction with coworkers or the public; does not involve piece work or a rapid assembly line; is limited to occasional stooping, crouching, kneeling, or crawling ; and can be off task up to 10% of the workday in addition to regularly scheduled breaks. The ALJ did not explain the source of the 10% figure. The vocational expert opined that a person with this RFC could not operate a buffing machine or work as a general laborer as Lanigan once had done. But, the voca tio n-No. 16

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al expert continued, a person with the RFC described by the ALJ could work as a hand packer, machine operator, or factory inspector. The vocational expert acknowledged, however, that this hypothetical person would be unemplo yable if any of the followin g is true: he will be off task more than 10% of the workday
, he must leave his work station and walk around when off task
, he cannot interact at all with coworkers or the public
, or he will miss work more than twice per month.

T he ALJ applied the five

- step analysis for assessing dis ability, see 20 C.F.R. §§ 404.1520(a), 416.920(a), and concluded that Lanigan was not disabled. At s tep 1 the ALJ determined that Lanigan had not engaged in substantial gainful activity since his alleged onset in May 2009. At s te p 2 the ALJ ident ified Lanigan’s severe impairments as “degenerative disc disease

... , obesity, affective d isorder, and anxiety disorder.” And at s tep 3 the ALJ concluded that these impairments, individually or in combination, do not satisfy a listing for presumptive disability. The ALJ concluded that Lanigan’s mental impairments do not cause two or more marked limitations or one such limitation coupled with repeated episodes of decompensation, and thus the paragraph B criteria of l istings 12.04 and 12.06 w ere not satisfied. The ALJ acknowledged that Lanigan’s mental impairments do cause moderate restriction in his activities of daily living and moderate di fficulty in social functioning. The ALJ reasoned, however, that Lanigan must n ot have any marked limit ations because he was work ing part time in a retail enviro nment, care s for his cat and dog, prepares meals daily, vac uums, helps with laundry, drives, shops in stores, manages money, and sees family regularly.8 No. 16

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In assessing Lanigan’s RFC, the ALJ found Lani gan’s te stimony to be “generally credible” but rejected his statements concerning the intensity, persistence, and limiting effects of his mental illness. The ALJ reasoned that although Lanigan described severe problems being in public, he “actually works i n a retail store [] about 15

– 22 hours a week” and has sustained other work that would require some social intera ction “with no evidence that the work activity caused his symptoms to flare

- up or made him need emergency t rea tment.” The ALJ also noted that whi le the record provides “some support” for Lanigan’s testimony about his social limitations and anxiety in public, Brian Eggener, a treating psychiatrist, had assigned a GAF score of 65 to 70 in March 2012 . This means, the ALJ posited, that Lanigan has only mild symptoms and limitations. And even when Lanigan was having suicidal ideations, the ALJ noted, his GAF score was 71 upon discharge from the hospital. Moreover, the ALJ asserted
, the physician who approved Lanigan’s release said he was not showing sign s of depression or anxiety. The ALJ commented that the record lacks “o pinions from treating or examining physicians indicating that the claimant is dis abled or even has limitations greater than those determined in this decision,” and said he placed “great weight on the opinions of the State agency medical consultants that the claimant can sustain light to medium work” because those opinions are “consistent with the record as a whole.” T he ALJ concluded that Lanigan ’s RFC matched the hypothetical given to th e vocational expert. At s tep 4 , then, the ALJ found that Lanigan could not perform his past work bu t at s tep 5 concluded that he could work one of the jobs identified by the vocational expert.No. 16

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II. Discussion Because the Appeals Council denied review, the ALJ’s decision is the final word of the Commissioner of Social Security

. Scrogham v. Colvin , 765 F.3d 685, 695 (7th Cir. 2014). The district court’s decision is reviewed de novo, so we’re directly reviewing the ALJ’s decision. See Yurt v. Colvin
, 758 F.3d 850, 856 (7th Cir. 2014). We will uphold that dec ision if it is supported by substantial evidence in the record. Moore v. Colvin , 743 F.3d 1118, 1120

– 21 (7th Cir. 2014). On appeal Lanigan argues that the hypothetical RFC posed to the vocational expert

— “hy pothetical” in name only because the ALJ assigned that very same RFC to Lanigan

— is flawed and caused the vocational expert to overstate the available jobs that Lanigan can perform. Lanigan identifies two flaws: First, the ALJ failed to lay a foundation for certain limitations described in the hypothetical, including that he might be off task up to 10% of the workday (but not more) and that he is able to maintain “frequent” (rather than just “occasional”) contact with coworkers and the public. Se cond, Laniga n says, the hypothetical failed to account for his moderate limitations in concentration, persistence, and pace. See O’Connor

– Spinner v. Astrue , 627 F.3d 614, 619



### – 20 (7th Cir. 2010). We agree with Lanigan that the ALJ’s hypothetical is not supported by sub stantial evidence. See Ehrhart v. Sec’y of Health & Human Serv s

. , 969 F.2d 534, 540 (7th Cir. 1992) (stating the rule that a hypothetical question must be su pported by medical evidence in the record). The ALJ instruc ted the vocational expert to evaluate a hypothetical person who would “ be off task up to 10 % of the work day
, in add ition to regularly scheduled breaks.” Significantly, the voc a-10 No. 16

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tional expert testified that persons who will be off task less than 10% of the workday are capable of maintaining full

time employment. But those who will be off task more than 10% of the time , the expert acknowledged, will be incapable of maintaining competitive employment and thus are dis abled . Lanigan argues that the ALJ had no basis to conclud e that he wouldn ’ t be off task more than 10% of the time, especially given his unrebutted testimony that he was tak ing unscheduled b reaks (sometimes for 20 minutes) three to five times during his five

- hour shift s at Michaels. At that rate it’s likely Lanigan would be off t ask more than 10% of a typical workday. The Commissioner responds that the ALJ’s 10% calcul ation was supported by the state

- agency psychologists , who opined that Lanigan demonstrated adequate ability to sustain concentration and had only moderate

— not mark ed

— difficulty in various functional areas. But the Commissioner’s position is unpersuasive for two reasons. First, the ALJ made no effort to “build an accurate and logical bridge,” see Beardsley v. Colvin , 758 F.3d 834, 837 (7th Cir. 2014), between the ”no more than 10% ” finding and the psychologists’ general assessment that Lanigan exhibits moderate difficulty in areas like the “ability to maintain attention and concentration for extended periods” and the “ability to perform activities within a schedule

. ” An ALJ need not address every piece of evidence, but he must establish a logical connection between the evidence and his conclusion. O’Connor

– Spinner , 627 F.3d at 618. That did not happen here. Second, the ALJ did not explain why he gave more weight to the opinions of the state

- agency psychologists thanNo. 16

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he did to Lanigan’s long

- time counselor, Carrie Paisar. Edmund Musholt, one of the reviewing state

- agency ps ychologists, opined that Lanigan ’s claim that he cannot pay attention for more than a few minutes is “only partially credible because exams show his activities and interests involve adequate ability to sustain concentration and social interaction.” But Dr. Musholt did not identify, and thus the A LJ had no way of knowing, what “activities and interests” Lanigan supposedly was tackling adequately. Perhaps Lanigan was succeeding at “activities and interests” relevant to competitive employment, or he might have been excelling at wholly irrelevant task s, e.g., caring for his pets or vac uu m ing the house. See Stark v. Colvin , 813 F.3d 684, 688 (7th Cir. 2016) (concluding that the claimant’s “ persistence in struggling through household chores despite her pain does not mean, as the ALJ extrapolated, that sh e can manage the requirements of the work

- place ” because a person perfor ming chores
, unlike an employee
, has more flexibility “ and is not held to a minimum standard of performance”) ; Hill v. Colvin , 807 F.3d 862, 865, 869 (7th Cir. 2015) ( warn ing against

e quating the activities of daily living

— like babysitting, caring for pets, going to church, visiting with family me mbers, and doing household chores

— with those of a full

- time job ). On this record there is no way to know. In addition, Dr. Musholt’s assessmen t of Lanigan’s credibility differs from that of Esther Lefevre, the psychologist who actually examined Lanigan in June 2012. True, Dr. Lefevre did not fully credit Lanigan’s a ccount of his physical limitations , but she did not say anything suggesting skept icism about his report of significant mental limitations

. Further, Dr. Musholt’s assessment dates to March 2013, before Lanigan’s involuntary commitment in June 2013, and12 No. 16

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nothing is said about how long Dr. Lefevre spent examining Lanigan in 2012. In contrast, the records from Paisar, who had been seeing Lanigan weekly or biweekly for roughly two years, recount that in July 2013 Lanigan had “talked about being fearful of what he might do if he gets angry and ‘blacks out’” again and was “fr ustrated with not being able to remember time periods.” The counselor’s opinion is more recent than those of the state

- agency consultants, and it corroborate s Lanigan’s own account of serious difficulties with concentration. See Clifford v. Apfel , 227 F.3d 863, 870 (7th Cir. 2000) (“[M]ore weight is generally given to the opinion of a treating physician because of his greater familiarity with the claimant’s conditions and circumstances.”). Yet the ALJ seized on just one of Lanigan’s many sessions with Paisa r

— when Lanigan had reported enjoying a day outdoors with a friend

— and from that single session concluded that “i ncreasing his activity outside of the house ” had improved Lanigan’s symptoms “ rather than caused anxi ety attacks or other problems.” That select ive reading of two years of treatment notes is not persuasive. See Larson v. Astrue
, 615 F.3d 744, 751 (7th Cir. 2010) (having “symptoms that ‘wax and wane’ [is] not inconsistent with a diagnosis of recurrent, major depression ”); Bauer v. Astrue , 532 F.3d 606, 609 (7th Cir. 2008) (a claimant with a chronic disease like bipolar disorder “ is likely to have better days and worse days ,” and even if “ half the time she is well enough that she could work ,” she still “ could not hold down a full

- time job ”). Similarly, the ALJ’s conclusi on that Lanigan could mai ntain frequent ( instead of only occasional ) contact with coworkers is not supported by the record. The distinction matters because the vocational expert testified that someone who is limited to occ asion al contact with coworkers and hasNo. 16

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the hypothetical’s other limitations cannot maintain compe titive employment. The ALJ reasoned that although Lanigan described severe problems being in public, he “actually works in a retail store [] about 15

– 22 hours a week ” and has sustained other work that would require some social intera ction “with no evidence that the work activity caused his symptoms to flare

- up or made him need emergency trea tment.”

W e have cautioned ALJ s not to draw conclusions about a claimant’s abi lity to work full time based on part

- time employment. See Jelinek v. Astrue , 662 F.3d 805, 812 (7th Cir. 2011) (explaining that a claimant’s “brief, part

- time e mployment” did not support the conclusion “that she was able to work a full

- time job, week in an d week out, given her limitations”); Larson , 615 F.3d at 752 (“There is a significant difference between being able to work a few hours a week and having the capacity to work full time.”). That is especia lly true when, as here, the claimant’s employer is a ccomm odating him. See Larson , 615 F.3d at 752. At the hearing Lan igan testified that his supervisor at Michaels was aware of his mental illness and “tolerant of it

. ” I nstead of acknowledging the employer’s commendable generosity, the ALJ assumed that Lanig an’s work performance was no different than any other employee ’s

. Equally troubling , the ALJ failed to me ntion that Lanigan had been on the job for just six weeks, far too short a time to infer anything about his prospects of maintaining even part

- time emp loyment. See Jelinek , 662 F.3d
at 812 ; Larson , 615 F.3d at 752. And, finally, Lanigan’s test imony directly contradicts the ALJ’s assertion that his work activity never “caused his symptoms to flare

- up.” Lanigan testified that the very purpose of his freque nt breaks was to make su re his “emotions [were] in check.” And he said that14 No. 16

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on Black Friday he “melted down on the floor” and “went in the back for over a half hour ju st to get away from ever ybody.” Thus, as Lanigan contends, the ALJ’s hypothetical i nclude s assumptions about his RFC that simply lack support in the record. And, as Lanigan further argues, there is a second serious flaw in the hypothetical: it fail s to account for his moderate limitations in concentration, persistence, and pace

. S ee O’Connor

– Spinner , 627 F.3d at 619 (“Among the limitations the [vocational expert] must consider are def iciencies of concentra tion, persistence and pace.”). We have said that an ALJ must explicitly address those limitations in the hypothetical unless one of three ex ceptions applies: (1) the vocational expert was independently familiar with the claimant’s medical file; (2) the hypothetical adequately apprised the vocational expert of the claimant’s underlying mental conditions ; or (3) the hypothetical otherwise a ccoun t ed for the limitations using different terminology. Id. at 619

– 20. None of the exceptions applies here. As for the first, the Commissioner does not contend that the vocational expert examined Lanigan’s medical records , even if he might have reviewed info rmation about Lanigan’s employment history. And though the vocational expert was present when Lanigan testified at the hearing, that testimony was too limited to provide a complete and full picture of his mental limitations. Regarding the next two exceptio ns, the Commi ssioner argues that the ALJ’s hypothetical effectively co mmunicated
, in different words, the idea that Lanigan had experienced “moderate difficulties in concentration, persi stence, or pace

. ” We cannot agree. The hypothetical begins byNo. 16

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positing a person capable of performing “simple, routine, and repetitive tasks.” These terms refer to “unskilled work,” which the regulations define as work that can be learned by demonstration in less than 30 days. See 20 C.F.R. §§ 404.1568, 404.1520.
We have ex plained that the speed at which work can be learned is unrelated to whether a person with mental i mpairments

— i.e., difficulties maintaining concentration, persistence, or pace

— can perform such work. See Yurt
, 758 F.3d at 858

– 59 (rejecting the notion that “confining the claimant to simple, routine tasks and limited interactions with others adequately captures temperamental deficiencies and limitations in concentration, persistence, and pace”); Stewart v. Astrue , 561 F.3d 679, 685 (7th Cir. 2009) ; Craft v. Astrue , 539 F.3d 668, 677

– 78 (7th Cir. 2008). The Commi ssioner also argues that the hypothetical about “off

- task” behavior informed the vocational expert about Lanigan’s moderate difficulties in the domain of concentration, persi stence, or pace. As we’ve noted, however, to the extent that the 10% calculation was flawed, so was the hypothetical. See Young v. Barnhart , 362 F.3d 995, 1004 (7th Cir. 2004) (“For all of the same reasons that the RFC fell short, the hypothetical question, which was base d entirely on that RFC [,] did as well.”). Additionally, the Commissioner argues that even if the ALJ’s hypothetical wa s flawed, Lanigan waived any cha llenge to it by not object ing to the vocational expert ’s test imony during the hearing. The Com missioner r elies on Donahue v. Barnhart , which holds that claimants must raise objections to a vocational expert ’s testimony at the hearing. 279 F.3d 441, 446 (7th Cir. 2002). But Lanigan is not challen g-16 No. 16

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ing the vocational expert ’s testimony. Rather, he is challen ging the lack of a substantial basis for the ALJ’s characteriz ation of Lanigan’s mental RFC in the hypothetical questions he posed to the vocational expert

. Accordingly, we R EVERSE the decision upholding the ALJ’s denial of benefits and R EMAND to the agency fo r further proceedings.