Proof of Wage Loss Required Where Employment Ends Unrelated to Disability

Saturday, April 21, 2007 | 0

By Anne M. Hammill-Pasqua

In the case of Cunnigham v. Atlantic States Cast Iron Pipe, 386 N.J. Super. 423 (App. Div. 2006), petitioner injured his knee in a work-related accident on Oct. 21, 2003.

Following the accident, petitioner returned to work full duty and was subsequently terminated in November 2003 due to his failure to report to work.

The petitioner was reinstated under a "last chance agreement" on Jan. 5, 2004. Under the agreement petitioner could keep his job if he had no unauthorized absences for one year.

Petitioner failed to adhere to this agreement when he failed to return to work in mid January within three days of being incarcerated. Petitioner did report to work on the third day but not until several hours after his assigned shift commenced. As such, the petitioner was terminated.

Through union negotiations, the petitioner was again reinstated a second time under the "last chance" program on Feb. 2, 2005.

Petitioner did not return to work on Feb. 2, 2005 due to childcare issues and his return date was extended to Feb. 3, 2005. On Feb. 3, 2005, petitioner reported to work only to request leave one hour later due to child care issues.

Petitioner was terminated for the third time according to petitioner. However, per respondent's witness, petitioner advised he could not work due to child care issues.

On Feb. 11, 2005, petitioner went on his own to the prior authorized doctor. That doctor placed petitioner out of work due to the knee injury.

Thereafter, petitioner filed a Motion for Medical and Temporary Disability Benefits. Respondent did not dispute the medical treatment but disputed that temporary benefits were due petitioner. Respondent maintained petitioner sustained "no wage loss because he had been performing full-duty work and required no medical treatment for about a year, he voluntarily abandoned his employment and was unemployed." Id. 427.

The judge of compensation ordered payment of temporary total disability benefits, stating:

"Our statute requires respondents to pay temporary disability so long as petitioners are incapacitated due to work-related injury and have not reached maximum benefit of treatment. This obligation continues after they leave the employment irrespective of whether they left voluntarily ... I am aware of no authority requiring a petitioner to continue in a position to remain eligible for temporary disability benefits and no one has called any to my attention."

The order was appealed by the respondent.

The Appellate Court considered the cases of Electronic Associates Inc. v. Heisinger, 111 N.J. Super. 15, 20, 266 A.2d 601 (App. Div.), certif. denied, 57 N.J. 139, 270 A.2d 42 (1970) and Outland v. Monmouth Ocean Educ. Serv. Comm'n, 154 N.J. 531 (1998) in reversing and remanding the decision.

Respondent relied upon Electronic Associates Inc. v. Heisinger, 111 N.J. Super. 15 (App. Div. 1970) in support of its position that petitioner was not due temporary total disability benefits.

In Heisinger, the petitioner was denied temporary disability benefits on the basis that she terminated her employment voluntarily due to her pregnancy on Nov. 1, 1967. The petitioner filed a claim for bilateral carpal tunnel syndrome. She underwent her first surgery in January 1968 and second in May or June 1968. The court was silent as to the stage of her pregnancy at the time of the surgeries or her working ability. The court denied temporary total disability benefits stating:

"We do not construe the concept of temporary disability to include wage loss claims by those who have voluntarily terminated their employment for reasons unrelated to that employment. So to hold would depend upon creating a fictitious wage-earning status for the unemployed workman and run counter to the manifest tenor of N.J.S.A. 34:15-38 -- the statutory method for calculating the period for which temporary disability benefits shall be awarded." (citation)

Cunningham disputed that he voluntarily terminated his employment. The Appellate Court determined that it was irrelevant as to whether petitioner voluntarily terminated his employment. Rather, the Appellate Court explained:

"The purpose of temporary disability benefits is to provide an employee with partial wage loss replacement during a period of disability caused by a work-related injury. The reason for separation from employment, if unrelated to the employment or disability, is not dispositive of the overriding issue -- did the employee suffer a current wage loss?" Id. 429

The Appellate Court essentially applied the holding of Outland to Cunningham's circumstances.

In Outland, the issue in dispute was whether petitioner, a teacher, was entitled to temporary disability benefits during the summer months when she would not be working for the Monmouth-Ocean Education Service Commission. The court found benefits were due only if petitioner could prove she would have worked for this period.

"There should be no escape in this case from the straightforward rule that a worker is not temporarily disabled if the worker is not absent from work and thus not suffering wage loss ..." (citation)

The Court stated:

"Our dissenting colleagues cite numerous cases establishing that an injured employee may collect workers' compensation temporary disability benefits only if that employee has lost wages. See Post at 546-47, 713. That proposition is not in dispute. Outland v. Monmouth-Ocean Educ. Serv. Comm'n, 154 N.J. 531, 540 (N.J. 1998).

In short, we would agree with the Board that Outland would not be entitled to temporary disability benefits if Outland planned to relax all summer, perhaps vacationing at the Jersey shore. In that case the benefits would represent a windfall. But the payment of temporary disability benefits would not create a windfall if Outland planned to work during the summer recess and had her injury prevented her from following through with that plan.

On the contrary, to deny payments based on lost summer employment would frustrate the purpose of the workers' compensation system, which is "to compensate for the inroad upon the full-time earning capacity of the victim of industrial mishap." Maver v. Dwelling Managers Co., 34 N.J. 440, 443, (1961) (Weintraub, C.J.) Outland v. Monmouth-Ocean Educ. Serv. Comm'n, 154 N.J. 531, 542 (N.J. 1998)

The Cunningham court noted petitioner "left his job (whether characterized as voluntarily or as a termination for cause in violation of a company policy he knew would result in termination), and, without new employment secured, he did so at his peril. His leaving was not related in any way to his disability." (citation)

In applying Outland, the Appellate Division determined petitioner is not precluded from receipt of temporary total disability benefits where he is not employed at the time of temporary disability under these circumstances. However, the petitioner must establish that but for the disability he would have been employed in order to evidence an actual wage loss. The matter was remanded to the division for petitioner to prove actual wage loss.

This case clearly raises a new question in regard to a petitioner's entitlement to temporary benefits where the petitioner is not working at the time of the claimed period of temporary total disability.

Where the petitioner is separated from his employment for reasons unrelated to the disability, the next question is can petitioner prove actual wage loss.

If the answer is no, then there would be no entitlement to wage loss pursuant to Cunningham.

This is an important case for respondents to use in the defense of claims where the petitioner is unemployed at the time of temporary disability.

Anne M. Hammill-Pasqua is an attorney at Capehart Scatchard law firm located in New Jersey. This column first appeared in the law firm's newsletter. The law firm's Web site is http://www.capehart.com/CM/Custom/Home.asp. This article is reprinted with permission.

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