Monday, August 26, 2013

Temporary Disability Benefits Denied After Termination For Cause

by Matthew R. Cook, Esq.

Over the years, the issue of whether a claimant is entitled to temporary disability benefits when they are terminated for cause while on light duty as a result of a work-related injury has been hotly debated with results varying. No bright line test had been established and both sides brought their respective arguments to the table with each side touting fairness in support of their cause. The debate may now come to an end with a definitive ruling on the matter from the South Carolina Supreme Court.Temporary_Disability_Benefits_Denied_After_Termination

In Pollack v. Southern Wine & Spirits of America, Opinion No. 27285 (July 17, 2013), the Supreme Court held that, where a claimant is on light duty as a result of a work-related injury and is terminated for valid cause, the claimant will not be entitled to temporary disability benefits.

The claimant, Daren Pollack, suffered an admitted injury to his back while lifting a case of alcohol for his employer, Southern Wine & Spirits. Claimant's physician issued lifting restrictions not to exceed fifteen pounds. Southern Wine & Spirits accommodated Claimant’s light duty restrictions and provided him with his full salary.

Temporary Disability Benefits Denied After Termination For Cause

Two months later, Claimant was involved in a minor accident involving a company vehicle. Claimant did not report the collision, in violation of company policy that required all accidents and incidents to be reported, whether or not there was damage to the company vehicle or other property. In addition, Claimant was in management and in charge of investigating other employee's vehicle accidents. Southern Wine & Spirits terminated Claimant for his failure to report the accident.

Claimant filed a Form 50 seeking temporary total disability (TTD) compensation from the date of his termination. Southern Wine & Spirits opposed his request for TTD based on his termination for cause. Claimant admitted to having previous infractions during his employment as well. 

The single commissioner denied Claimant’s request for TTD benefits. The full commission affirmed, finding that Claimant was not out of work due to his injury but rather for violating company policies that led to his termination. The Supreme Court affirmed, holding that “[a]n injured worker will be entitled to TTD compensation when his incapacity to earn wages is due to or because of the injury.”

The Court noted that the workers’ compensation statute (S.C. Code § 42-9-260) and its accompanying regulations provide that "the entitlement [to] TTD benefits is premised on a nexus between the work-related injury and the inability to earn wages." It further rejected Claimant's contention that the workers' compensation laws mandate payment of TTD when an employee is fired from an accommodated, light duty position. Such a result would protect injured employees who engage in misconduct while being accommodated with light duty work. It would further punish employers seeking to accommodate their injured employees.

The Court stated, while emphasizing the importance of the Commission’s fact-finding role, that "an employer’s denial of TTD benefits must be scrutinized carefully." Recent case law in South Carolina has seen this scrutiny in action. The Pollack Court cited several South Carolina decisions that required employers to pay temporary disability benefits following termination of an injured employee. Moreover, just last year the Court faced a similar question in Cranford v. Hutchinson Construction, 399 S.C. 65, 731 S.E.2d 303 (2012). The Court held that the employer was required to pay the claimant temporary disability benefits from the day after his termination until he reached maximum medical improvement. In that case, the claimant was fired "for being unsafe on the job site," although the claimant asserted the firing was pretextual. The Pollack court did not overrule—nor did they even cite—the Cranford decision.

While it remains to be seen how the Pollack decision will affect South Carolina workers' compensation cases, it appears the court will use a factual inquiry into whether Claimant's termination was legitimate and unrelated to the work accident or pretextual to determine whether TTD benefits are owed.

Claimant's counsel has requested a rehearing, and we are waiting the Court's decision on whether the rehearing will be granted. 

About the Author:

Matthew R. Cook, with Turner Padget Graham & Laney P.A. in Columbia, SC, practices in the area of workers' compensation law. He appears before the South Carolina Workers' Compensation Commission and in the state courts defending clients involved in workers' compensation matters.

Mr. Cook is a member of the South Carolina Workers' Compensation Educational Association, the South Carolina Defense Attorneys Association, the South Carolina Self Insurers Association, the Richland Bar Association, and the South Carolina Bar Association.

He is a frequent presenter at professional education programs, including our Advanced Workers' Compensation seminar  in Columbia, SC.

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Topics: Employment Law, Workers' Compensation, Hiring/Firing, Human Resources, Light Duty

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