Proof a Petitioner Would be Working But For a Compensable Accident is Prerequisite to the Receipt of Temporary Disability Benefits

By Katherine H. Hellander, Esq.

It is well-established that N.J.S.A. 34:15-12 entitles a petitioner to temporary disability benefits provided petitioner is unable to work for more than seven days due to a work-related accident. This principle is not absolute, however, as courts have placed several limitations on such an entitlement. One such exception, known as the Cunningham rule, dictates that the petitioner must demonstrate that he would be working “but for” the compensable accident. Cunningham v. Atlantic States Cast Iron Pipe Co.  386 N.J. Super. 423 (App. Div.) certif. denied. 188 N.J. 492 (2006)  If a petitioner fails to meet this burden, he is not entitled temporary benefits. While this rule seems concrete on its face, there are several scenarios which fall into an area of Cunningham ambiguity. One scenario that courts have yet to address is whether the reason behind the termination of employment has any bearing on entitlement to temporary benefits.

In Cunningham v. Atlantic States Cast Iron Pipe Co., the petitioner tore his medial meniscus in a work-related accident on October 21, 2003. Following the injury, the petitioner was incarcerated for a brief period of time and was unable to work. Upon his release, the petitioner missed additional time from work due to issues with child care. Employer Atlantic States’ policy mandated that any employee who inexcusably failed to report for work for three consecutive days would be terminated. The petitioner was terminated from employment on two separate occasions pursuant to this policy, only to win reinstatement through his union. The petitioner’s employment with Atlantic States was terminated for the final time on February 3, 2005 when he left work without permission.

Subsequent to his termination, but before he was able to secure new employment, the petitioner was placed out of work by the treating doctor. The employer denied the petitioner’s resulting request for temporary benefits. A Motion for Medical and/or Temporary Disability Benefits was filed and ultimately granted by the Judge of Compensation. The Judge held that a respondent is required to pay temporary disability benefits “…so long as petitioners are incapacitated due to work-related injury and have not reached maximum benefit of treatment.” The Judge went on to opine that the obligation to pay “…continues after they leave the employment irrespective of whether they left voluntarily.” As such, the petitioner was awarded temporary benefits retroactive to February 11, 2005.

On appeal, the respondent argued that temporary benefits are meant to serve as a replacement for actual wage loss. Given that the petitioner was not employed by the respondent at the time he was placed out of work, the respondent maintained that the petitioner could not prove actual lost wages. The Appellate Division noted that the petitioner was working full duty on the date of his termination and that his cessation of employment with Atlantic States was wholly unrelated to his disability. Taking this fact into consideration, the Court reversed the Judge of Compensation and remanded the matter to determine whether the petitioner could prove that he lost actual income due to the work-related accident.

The Appellate Division maintained this line of reasoning in the unreported case of Gioia v. Herr Foods, Inc.  No. A-0667-10T4 (App. Div. October 11, 2011). In Gioia, the petitioner injured his right ankle in a work-related accident and was provided with authorized care. He was cleared to return to light duty less than a week after the accident. However, on the day he was scheduled to return to work, the petitioner was terminated for violation of the employer’s drug policy as his post-accident drug screen was positive for cocaine.

The petitioner filed a Motion for Temporary Disability Benefits which was granted by the Judge of Compensation. The respondent appealed and argued that the petitioner was out of work due to violation of the drug policy, not as a result of the work-related accident. Just as in Cunningham, the Appellate Division held that the petitioner must prove that he would have been working “but for” the compensable injury. Given that the petitioner was out of work as the result of the failed drug test, not because of his disability, the Court held that the petitioner had failed to meet this burden. The Judge of Compensation was reversed, and the case was remanded to allow the petitioner to prove actual wage loss.

Both Cunningham and Gioia are clear that the petitioner must prove that he or she would be working but for the compensable accident. Further, both cases demonstrate that a petitioner who is terminated as the result of a company policy is not entitled to temporary benefits. The Court has yet to decide what happens when a petitioner is terminated pursuant to a company policy regarding exhaustion of leave time when the missed time was for treatment of the work-related injury.  For example, take a petitioner who is not at maximum medical improvement, but is terminated based on cessation of FMLA for a work-related injury.  If the petitioner exhausts all leave time and is terminated pursuant to company policy regarding excessive absenteeism, is he or she entitled to temporary benefits?    That question has not been addressed.

The Cunningham Court found “…no material difference between termination for cause with prior knowledge by the employee that violation of a work rule would result in termination, and voluntary departure.”  Essentially, the Court equated knowingly violating a company policy to quitting one’s job.   It makes a difference whether the employee quit or is fired.

Termination for excessive absenteeism is a reality in the workplace.  According to the EEOC, “an employer does not have to provide paid leave beyond that which is provided to similarly-situated employees.”   FMLA is for both work and non-work related serious health conditions.  Further, the Courts have held that it is unreasonable for an employer to be required to keep open a worker’s job for an indefinite period of time.   Therefore, an employer is not required to provide a petitioner with leave time greater than that of his co-workers, regardless of whether the leave arose out of a work-related accident.    Whether or not a person who is terminated for excessive leave is entitled to temporary benefits remains to be decided.

Light duty issues also come into play here.  If an employee is on light duty but the company policy limits light duty to three months, resulting in the termination of the employee, must the employer provide temporary disability benefits where a petitioner is not at maximum medical improvement?  One must study Harbatuk v. S&S Furniture Systems Installations. That case suggests that an employer must continue to pay temporary disability benefits if the employer can no longer provide light duty but the employee is not yet at maximum medical improvement.   However, this issue has not been specifically decided by the court.