Terminating Your Temporary Disability Defense

Terminating an injured worker is just about the surest way of inspiring the injured worker and applicant's counsel to push for the full 2-year temporary disability cap. You can bet your bottom dollar that temporary disability — retro and continuing — will quickly become an expensive, hard-fought issue. What do you need to know to avoid the temporary disability trap?|

Don Barthel

August 4, 2011

Familiarity Breeds Contempt Does this story sound familiar? The case is accepted, the injured worker has returned to a modified position and, thus, you have discontinued temporary disability. Life is great ... that is, it seemed great until you receive the "nasty gram" from applicant's counsel advising that the injured worker has been terminated and you owe temporary disability retroactively and continuing! Do you? Terminating an injured worker is just about the surest way of inspiring the injured worker and applicant's counsel to push for the full 2-year temporary disability cap. You can bet your bottom dollar that temporary disability — retro and continuing — will quickly become an expensive, hard-fought issue. What do you need to know to avoid the temporary disability trap? What's Temporary Disability All About? "The essential purpose of [temporary disability] ... is to help replace the wages the employee would have earned, but for the injury, during his/her period(s) of temporary disability" [Signature Fruit Co. v Workers' Compensation Appeals Board, (Ochoa) (2006) 142 Cal.App. 4th 790, 801]. An employer's obligation to pay temporary disability ceases when the replacement income is no longer needed, such as when the injured worker has returned to work [Huston v. Workers' Compensation Appeals Board (1979) 95 Cal. App.3d 856, 868]. If an injured worker is released to modified duty and the employer offers him/her a job within his/her work restrictions, the injured worker is no longer entitled to temporary disability, even if the injured worker doesn't accept the modified duty [Vittone v. Workers' Compensation Appeals Board (2001) 66 Cal. Comp. Cases 435 (writ den.)]. For example, in Seale v. Workers' Compensation Appeals Board (1974) 39 Cal. Comp. Cases 676, 677 (writ den.), the Workers' Compensation Appeals Board found that an injured worker who did not return to modified duty — because his union was on strike and he would not cross the picket line — was therefore not entitled to temporary disability because his action "was voluntary and for reasons other than physical inability to work." But Termination is an "Employer Thing!" The case law is clear that injured workers who refuse to accept properly tailored modified duty can be denied temporary disability. This usually involves a situation in which the employee — and the employee alone — has made the unilateral decision to stymie the employer's good faith efforts to return the injured worker to work. But what happens when it is the employer who takes the action, such as terminating the injured worker, thereby making it impossible for the injured worker to take advantage of modified duty? In other words, isn't the scenario somehow different where the lack of availability of modified duty is due to an "employer thing" (e.g. terminating the injured worker), as opposed to an "employee thing" (e.g. refusing to cross a picket line, etc.)? No!!! The Workers' Compensation Appeals Board has made this clear, time and again, in various scenarios. For example, it was held that a termination for "participation in unlawful activities" of an injured worker who had accepted an offer of modified duty, but not yet begun working, "was a 'for cause' termination justifying the termination of [injured worker's] right to vocational rehabilitation" [Anzelde v. Workers' Compensation Appeals Board, (1996) 61 Cal. Comp. Cases 1458 (writ den.)]. Not surprisingly, this reasoning has been extended to temporary disability. Think about it. While friends at CAAA may claim — as suggested above — that termination is an "employer thing," is it really?

Is an employer truly free to keep an employee who, for example, participates in illegal activities? Of course not!
Should California's workers' compensation laws, as they pertain to temporary disability, penalize employers for good faith firings of injured workers? Of course not!
And don’t forget ... it is the injured worker's burden to prove that his/her wage loss is due to his/her industrial injury. If modified duty was or would otherwise be available but for injured worker's bad behavior requiring his/her termination, has the injured worker met his/her burden of proof?Of course not!

Test Time! So you've received the "nasty gram" from applicant's counsel advising that the injured worker has been terminated and, because he/she can no longer take advantage of the proffered modified duty, you owe temporary disability retroactively to the date of the termination and continuing! What do you need to know to assess your liability? If the employer had, prior to the termination, accommodated the injured worker's restrictions, persuasive evidence that the termination was "for good cause" should result in a defense verdict! But what if the injured worker was terminated for cause before modified duty is offered or accepted? The Workers' Compensation Appeals Board, in at least one panel decision, has suggested that "a more rigorous inquiry regarding the genuineness of the offer of modified duty is necessary" [Quiett v. System Transport, (5/15/08) OAK 0336115)]. If an employer indicates it would have offered the applicant modified duty but for applicant's termination for cause, the Workers' Compensation Judge and Appeals Board must determine... whether the ... putative offer ... is genuine, in good faith, and within the applicant's work restrictions [Robertson v. Workers' Compensation Appeals Board (2003) 112 Cal.App.4th 893]. An "Odd" Argument As you fight the good fight on temporary disability issues, expect applicant's counsel to attempt to muddy the waters by referencing the "odd lot doctrine?" What is it? The essence of the "odd lot doctrine" is that if an injured worker is temporarily partially disabled and only able to do "odd" jobs or "special work," the burden shifts to the employer to establish that there is work available that injured worker could perform. If there is no such work available, temporary total disability is owed [See Meyers v. IAC, (Titsworth) (1940) 39 Cal.App.2dd 665)]. However, when the injured worker is released to light work of a general nature, the burden does not shift to the defense; it remains with the injured worker to show that his/her inability to obtain employment is a consequence of the industrial injury (Id. At 669). Fight! The injured worker has been fired and modified duty was — or would have been — available? Expect a fight (particularly in this economy). Deny the temporary disability and collect your evidence to prove: