Up North--November-December 2010

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November-December 2010

SFM Up North
A publication from the Duluth offices of SFM Companies
Editor: Kathleen S. Bray, Attorney

THIS MONTH'S TOPICS:

What is a suitable post-injury job offer?
Providing employee misconduct as bar to workers' compensation benefits
Rebutting the age 67 retirement presumption

What is a suitable post-injury job offer?

One of the best tools an employer has at its disposal to help manage and minimize workers' compensation exposures is the job offer. Early return to work is good for the employee, and good for the employer. But, does an employee have to accept any physically suitable job offer made to him by the employer in order to safeguard his right to continued workers' compensation benefits? Not necessarily.

In addition to physical suitability, i.e., a job that matches the physical limitations or restrictions of the employee, an employee also may need to be able to continue his regular pattern and schedule of daily living. An employer and insurer may not succeed in discontinuing an employee's benefits based on unreasonable refusal of a regular or light duty job offer if the job offer requires an employee to work a different shift than he worked pre-injury, for example. In Haldeman v. Next Innovations, Ltd., No. WC06-189 (W.C.C.A. Oct. 12, 2006), the Court agreed that an employee's refusal of a job offer working the day shift was a reasonable refusal, because the employee was working the night shift at the time of the injury, to accommodate a second job he had at the time. Other cases have found that an employee's refusal of a post-injury job offer is reasonable when an employee declines a job based on a change in days or hours scheduled due to childcare needs, or in order to accommodate attendance at college.

The employee typically worked a shift from 7:00 a.m. to 3:30 p.m. and did not punch a clock. He had an unpaid lunch break for half an hour, and shared his lunch break with other employees. A lunch room was provided in one of the employer's buildings, but the employees were not required to use the lunch room or remain on the premises during their unpaid lunch break. A basketball hoop was on the premises, and sometimes employees casually played or shot hoops during their break. The employer did not sponsor a team, the basketball activity was not part of a formal mandatory wellness program, and there was not a basketball schedule during the lunch break. During one of the employee's unpaid lunch breaks, he suffered an injury while playing basketball. The employer denied the injury, asserting it did not occur during the course of his employment.

JOB OFFER TIPS? Employers should reflect as closely as possible the pre-injury schedule of employment when extending a post-injury job offer to an employee.

Providing employee misconduct as bar to workers' compensation benefits

If an employee is terminated from employment for reasons of misconduct, then the employee's entitlement to workers' compensation benefits may be suspended or, in some cases for injuries after October 1, 1995, may bar recommencement of temporary total disability benefits. Proving misconduct under the Minnesota Workers' Compensation Act, though, is very difficult. While the workers' compensation courts use the same definition of misconduct as is used in the unemployment compensation system, the interpretation of it is not identical, and cases interpreting the definition in the unemployment compensation system do not have binding effect in a workers' compensation case.

As noted by the Workers' Compensation Court of Appeals, in the case of Sampson v. Forest Lake District Memorial Hospital, No. WC09-184 (W.C.C.A. Nov. 10, 2009), the general definition of misconduct is taken from the unemployment compensation system which requires "willful or wanton disregard of an employer's interests as is found in deliberate violations or disregard of standards of behavior which the employer has the right to expect." In the Sampson case, the employer and insurer argued the employee was not entitled to a recommencement of temporary total disability benefits, because he had been terminated from employment for misconduct. The Court disagreed and found that the employee's conduct did not rise to the level of misconduct as required by the statute.

The misconduct cited by the employer involved the employee's failure as a housing director to provide accurate rent statements, receipt of a written warning related to tenant complaints and related to making negative comments about her employer. The employee also had been disciplined for letting a new employee terminate another employee when the injured employee was home with a sick child, and then another warning for failing to complete customer satisfaction surveys. The final straw leading to termination was in part for referring to her supervisors in disparaging terms and also in part for failing to complete the satisfaction surveys. The Court agreed with the Compensation Judge that this did not rise to the level of the egregious statutory misconduct required to bar recommencement of benefits. The Court also cited another relevant factor—the fact that the employee's performance reviews were always very favorable, with the disputed conduct not occurring allegedly until after the insurer denied the injury and then after another work injury occurred a few months later. The Court suggested the inference was not favorable to the employer.

Rebutting the age 67 retirement presumption

An employee receiving permanent total disability benefits for injuries after October 1, 1995 is presumed retired at age 67. This is a rebuttable presumption. A case from earlier in 2010 illustrates the factors a judge considers in evaluating whether an employee has rebutted the retirement presumption. In the case of Vandervoort v. Olinger Transportation, Inc., No. WC09-4983 (W.C.C.A. Jan. 4, 2010), the Workers' Compensation Court of Appeals reversed the Compensation Judge's finding that the employee failed to rebut the retirement presumption.

The employee worked for employer from 1998 until his injury on May 27, 2004. Prior to his employment with employer, he worked in farming and at a variety of temporary positions. A month after the injury, the employee filed for Social Security Disability benefits, ultimately receiving the requested benefits.

The parties negotiated a settlement that included a stipulation of permanent total disability (PTD). The Stipulation provided that the PTD benefits would end on the date of the employee's 67th birthday. The Stipulation also reserved to the employee the right to rebut the statutory retirement presumption. The employee objected to the discontinuance of PTD benefits when he turned 67, and the matter proceeded to hearing. The Compensation Judge found that the employee had failed to rebut the retirement presumption.

The Judge examined the six recognized factors relevant to the retirement presumption and whether the employee had rebutted the same:

Employee's expressed intent to retire or continue working;
The employee's application for Social Security retirement benefits;
Evidence of a financial need for employment income, including adequacy of pension or other retirement income;
Whether the employee had initiated discussion of retirement;
Whether employee had sought rehabilitation assistance; and
Whether the employee had actively sought alternative employment or was working.

The employee argued on appeal that because of the stipulation to PTD, should not have been expected to seek rehabilitation assistance or alternative employment. The Court of Appeals agreed with the employee. Because the alleged retirement occurred following the employee's settlement, the Court did not believe that failure to seek rehabilitation assistance was evidence of voluntary retirement. In examining the other factors, the Court noted that three factors were neutral on the issue of rebutting the presumption while one factor weighed in employee's favor (evidence of financial need). In a footnote, the Court of Appeals also observed that the FCE in early 2006 stated that the employee's goals included a return to trucking. The Court pointed to this as additional evidence of an intent to continue working.

Other deficiencies in the retirement presumption noted by the Court include a lack of medical evidence demonstrating a change or improvement in employee's medical condition, or evidence that employee was medically capable of sustained employment. Ongoing PTD benefits were ordered.

EMPLOYER TIP: If any statements are made by an injured employee about intent to retire, document it for future reference, as well as the circumstances of any retirement discussions (did employer raise the issue, did employee approach the employer, etc.)

NOTICE: The distribution and receipt of the information provided in this newsletter does not create or continue any attorney-client relationship. The information provided is general in nature and should not be treated as legal advice concerning any particular set of facts or circumstances. Recipients should consult with their attorney before acting on any information discussed in each issue.