Laying off a workers compensation claimant who is working with restrictions just became risky business. In late March 2000, the Michigan Supreme Court issued three decisions that address the termination or layoff of a partially disabled worker who unreasonably refuses an offer of favored work or is discharged for good cause.1
Prior to the recent Supreme Court rulings, conventional wisdom, and most courts, required an employer to keep an offer of favored work open for a reasonable period of time. The employee s failure to accept the light-duty job within this period resulted in permanent forfeiture of wage loss benefits. Similarly, a workers compensation claimant on light-duty who lost their job due to a just cause termination surrendered their right to payment of lost wages. According to the Court s recent rulings, permanent forfeiture no longer exists.
The Perez and McJunkin decisions demonstrate that an employer no longer has discretion in determining whether the job was left open for a reasonable period. Irrespective of the time frame only the partially disabled worker has the power to end the period of refusal. The claimant in Perez injured his back while working. He performed light duty for several months then moved out of state without signing a quit slip. Consistent with company policy, his employment was terminated when he failed to report for work for several consecutive days. Almost two years lapsed before Perez filed a petition for workers compensation benefits. Two and a half years after moving out of state, he called the employer and offered to return to his light-duty job.
The Court construed the Perez termination of employment as a withdrawal of the offer of favored work. Once the offer was withdrawn, there was no work for Perez to refuse. He was awarded full wage loss benefits for the duration of his disability.
Similarly, in McJunkin, the claimant s job was restructured to accommodate restrictions imposed after a work-related back injury. His efforts to perform the job lasted only minutes. Eventually, McJunkin s treating surgeon was deposed. The physician testified that McJunkin was probably physically capable of performing the light-duty job. McJunkin telephoned the employer the same day to accept the position he abandoned seven months earlier. The company advised him that the position was recently eliminated as a result of company restructuring.
The magistrate found that McJunkin was not entitled to wage loss benefits because he unreasonably refused to perform work that was within his capabilities. The Workers Compensation Appellate Commission affirmed the magistrate s decision and noted that the job did not need to be kept open indefinitely. The Supreme Court took issue with the Appellate Commission approach, ruling that the amount of time that lapses before an employee attempts to end a period of refusal is irrelevant. The Workers Disability Compensation Act never allows a permanent forfeiture of benefits.
The last of the consolidated cases, Russell v Whirlpool, looks at Section 301.(5)(e) of the Michigan Workers Disability Compensation Act:
If the employee, after having been employed pursuant to this subsection for less than 100 weeks loses his or her job for whatever reason, the employee shall receive compensation based upon his or her wage at the original date of injury.The Russell court ruled that a favored-work employee under Section 301(5)(e) who is fired for just cause is entitled to continuation of wage loss benefits.
The claimant in Russell underwent surgery for a work-related condition and was released to restricted employment. She performed job duties within her restrictions then suddenly stopped coming to work. The company sent a certified letter requesting documentation of her condition. Initially, she failed to respond. Within several weeks, she expressed a willingness to return to favored employment, but she was discharged based on her violation of a company policy that required documentation for absences exceeding five days. The Russell court rejected the argument that an employee discharged for violation of company policy permanently forfeits benefits because of their own misconduct. The court awarded full wage loss benefits.
Although Russell involved a discharge for absenteeism that was arguably related to the employee s work injury, the Court took no measures to confine the scope of its ruling. The nature or egregiousness of the infraction is unimportant. Any employee on restrictions (for a work-related injury for less than one hundred weeks) is entitled to benefits when fired for good cause.
Bringing employees with restrictions back to work still yields a number of advantages for the employer. Remember, if the employee was not placed on light duty, he or she would continue to receive wage loss benefits while remaining at home. The triad of decisions from the Supreme Court, however, provides workers compensation claimants with a level of protection and insulation that previously did not exist. This class of employees enjoys entitlement to a perpetual job offer and requires special consideration in all disciplinary actions.
Significantly, the Supreme Court rulings were unanimous in all three cases. Each of the three written opinions places heavy emphasis on the wording of the Workers Disability Compensation Act. The message from the Court: Any change in the outcome of these rulings must come from legislative reform.
1 Perez v Keeler Brass Co, Docket No. 112107, decided on March 29, 2000; McJunkin v cellasto Plastic Corp, Docket No. 110940, decided March 29, 2000; Russell v Whirlpool Financial Corp, Docket No. 111255, decided March 29, 2000.