HR Update - Retaliation for Workers’ Compensation Claim
Wednesday, November 14th, 2007The following case was highlighted in a recent edition of BNA’s Bulletin to Management.
Was Termination Retaliation for Workers’ Compensation Claim?
“You fired me for filing for workers’ comp,” complained employee Jennifer Lilly. “That’s illegal retaliation.”
“We let you go because of your poor work habits,” countered Human Resources Director Sylvia Potter. “Nothing more.”
Did the employer retaliate?
Facts: A worker at a door factory injured her back at work. Her doctor put her on light duty and referred her to a specialist. A few days later, the department supervisor gave the employee a step warning for substandard performance. Under company policy, an employee would be fired for receiving four step warnings within a certain time frame.
The employee’s doctor faxed more specific work restrictions to the company. Three days later, a supervisory assistant issued the employee another step warning for substandard work. Her doctor notified the workers’ comp insurer that the employee had a herniated disc with nerve root impingement.
Two days later, the employee’s supervisor sent an e-mail to a human resources official suggesting that the employee be assigned a list of dirty jobs, including cleaning the rest rooms, or be moved back to her previous, lower-paying job in another department. The worker reluctantly accepted the transfer, which also resulted in a loss of seniority.
There, her new supervisor questioned whether her work restrictions were necessary. He picked up the chair that she used—as directed by her doctor—for periodic rest breaks and threw it across the room.
The employee was injured again when a co-worker pushed a stack of doors onto her ankle. She twisted her knee at work weeks later, and her supervisor questioned whether she should continue working at the company in light of her “excessive” injuries.
The employee hired an attorney to help obtain workers’ comp benefits. Her supervisor issued her a third step warning for using the wrong machine. She then complained to the human resources department about her supervisor. Two weeks later, he gave her a fourth-step warning for substandard work, triggering her discharge.
A jury ruled in favor of her claim of wrongful discharge in violation of public policy and awarded her $25,000 for emotional distress, $50,000 in back pay, $150,000 in future pay, and $775,000 in punitive damages. The employer challenged the award, and the appeals court sent the case back to the trial court for reconsideration of damages. The trial court found in the employer’s favor.
Award: The Iowa Court of Appeals Oct. 12 reinstated the $1 million jury verdict for the employee (Holding v. Graham Mfg. Corp., Iowa Ct. App., No. 7-411/06-1729, 10/12/07).
Discussion: Reversing the lower court and upholding the earlier jury verdict, the appeals court said that “a reasonable juror could conclude [the employee] was disciplined under false pretenses because most, if not all, of the four step warnings for improper performance did not reflect any mistake on her behalf.”
Her first supervisor’s e-mail to human resources and a meeting to discuss workers’ compensation costs in his department “may be viewed as showing that she was demoted because of the expenses associated with her workers’ compensation benefits,” the court said. It also found that her new supervisor demonstrated “open hostility” toward her work-injury claims.
Pointers: Under workers’ compensation programs, injured employees usually receive benefits regardless of fault, that is, whether the employee, the employer, or a third party such as another employee caused the injury.
Employers cannot call or harass employees who file workers’ compensation claims to find out when they plan to return to work.
Most states require employers to work with an employee, the insurer, and the medical provider to attempt to return the employee to work.
If employers fail to follow the required workers’ comp procedures, they may be subject to penalties from their state.
There is one circumstance when an employer is permitted to terminate an employee on workers’ compensation leave. This is when the employee’s medical condition has been discussed with her physician and it has been determined she will not be released to return to work without job restrictions (e.g., the employee can no longer lift more than 10 pounds) and those job restrictions preclude her from performing the essential functions of her position.
If an employer wants to terminate an employee for fraudulently collecting workers’ compensation benefits when the employee is capable of working, its first call should be to the state workers’ compensation agency’s fraud department (for A Plus clients this call would go to Justin Rowley, VP Risk Management).
This case discussion illustrates the handling of a problem in employee relations. It is based on an actual court ruling, although the names and dialogue are fictitious.
Further discussion: An employee who has experienced a work place accident can be discharged if the employee tests positive for substance abuse. Even though the employee has tested positive for drug abuse the medical costs will still be covered by workers’ compensation insurance but the employee will not qualify for TTD – total temporary disability payments. Also, an employee who is terminated for testing positive for drug use subsequent to an on the job injury will not qualify for unemployment insurance benefits.
A Plus Benefits suggests that clients take the opportunity of discussing a possible discharge for any employee who is currently on leave or light duty due to a workers’ compensation covered injury with the Human Resources department.
Randall Barker is the VP of Human Resources for A Plus Benefits, Inc.
Read Randall’s previous HR update.
