Lynch Ryan's weblog about workers' compensation, risk management, business insurance, workplace health & safety, occupational medicine, injured workers, insurance webtools & technology and related topics

June 2, 2009

Can You Terminate an Employee on Workers Comp?

Here's a question that comes up frequently in our employer seminars: can you terminate an employee who is on workers comp? In general, it's not a good idea. In many states there is a presumption that the termination is in retaliation for filing the comp claim. Nonetheless, the complete answer to the question is yes, you can, but you must do it very carefully.

The invaluable Risk and Insurance Magazine describes a case in Texas that illustrates this point nicely (Williams v AT & T, U.S.District Court, Southern Texas). Williams, a telecommunications tech, alleged that he sprained his leg stepping down from a ladder. He was a bit confused about the exact date, offering more than one in his descriptions of the incident. His claim was denied. One month later, he violated an important company policy and was suspended and then terminated. Even though his comp claim was denied, he alleged that he was terminated in retaliation for filing the claim. He sued AT & T for violating the Texas comp act.

Keep in mind, the employer must be able to demonstrate that the termination had nothing to do with the (denied) claim. In this situation, the burden of proof is definitely on the employer. AT & T presented evidence that Williams had a history of poor performance and excessive disciplinary actions for more than a year prior to the alleged injury. In other words, two key criteria of proof were met: the disciplinary problems preceeded the workers comp incident and they were thoroughly documented.

The court granted summary judgment to the employer. While falling under the protected class of employees who have filed comp claims, Williams could not establish that his termination was related to the comp claim. There were plenty of other reasons for the employer's actions.

I often hear employers complain that they had been planning to terminate a marginal employee, but then the employee got hurt. In most cases, there is inadequate documentation of poor performance prior to the injury. These employers are stuck: any attempt to document performance issues after the injury will be viewed sceptically by the court. The termination will trigger retaliation claims.

Here is a quick tip to avoid this situation: fire marginal employees before they get hurt. Once employees are injured on the job, an employer's options narrow significantly. Given that marginal employees are more likely to be injured - that's part of what makes them marginal - prompt action to end their employment is an essential "best practice."

Posted by Jon Coppelman at 11:17 AM Link to, Comment (8), or E-mail this post
Comments

My comment really is a question: What can you do with injured employees who have extremely poor performances on any limited duty positions. For instance, a field employee who suddenly finds him/herself in a clerical position due to phyical limitations while injured? With proper documentation of inadequate performances, can those employees be dismissed?

Michelle B Hines
Loss Prevention Officer

Posted by: Michelle B Hines at June 2, 2009 1:14 PM

In response to Michelle's question (the preceding comment):

You raise a very interesting question. I assume that you have workers with physically demanding jobs who, due to injury, can temporarily perform only clerical type functions. The standards for modified duty jobs are a little different from the regular job: you have to find job functions within the physical limitations emanating from the injury. Because modified duty is both temporary and outside the normal job duties, it would be very risky - and possibly unfair- to document out a worker who had trouble with his modified duty tasks. If the employee has a bad attitude, document this and write him up. If he just doesn't have the skills for the job, I would muddle through until he is able to return to his regular position. (You might reduce the hours during recovery.)

The goal of modified duty is to speed recovery and get people back to doing what you hired them to do. I would not be comfortable terminating someone who performed the modified duty poorly - and if you did this, you would be confronted with the presumption that you acted in retaliation. As is so often the case, management functions between the proverbial rock and a hard place.

Posted by: Jon Coppelman at June 2, 2009 2:02 PM

In Australia - yes we are on this blog! There is a prohibtion against termination in the first 12 months following injury if the worker is able to return to some form of work. So it is unsafe for any employer to termination employment inside that 12 months. IN addition our Federal Employment legislation prevents termination for temporarily sick workers for up to 6 months. Generally speaking rehab is promoted if the worker has some prospect of returning to work with the pre-accident employer.

Posted by: Rob Guthrie at June 2, 2009 10:27 PM

Is the poor performance "attitude," "hostility," etc.? If so, you can counsel on this aspect, certainly. I think Jon's post is right on point.

Posted by: Nancy Germond at June 3, 2009 10:20 AM

I am in Australia too. There are a few points to consider here. The first is the importance of having robust documentation in place... both on a performance / discipline front and a return to work front. The generic 'tick and flick' return to work / offer of suitable duties plans just don't cut it. Furthermore, the grand canyon needs to be put between the two issues so as to avoid muddying the waters... whatever you do you cannot be perceived to be terminating a worker's employment because they are injured. The reason for the termination must be clear... e.g. abusive behaviour in the workplace. If it is more for performance issues then the documentation surrounding this is crucial. We see too many employers verbalising the return to work and termination process and they get caught out. Another option in longer term cases is the termination of a worker who can no longer meet the inherent requirements of their pre-injury duties. This can be done in Australia but again the documentation is of paramount importance. However, going down this path will be perceived to be withdrawing suitable duties and the worker may entitled to receive weekly compensation. In any termination it is always our recommendation that an employer has documented evidence that a worker has the capacity to be at work for their pre-injury hours... this can (not always) help in demonstrating that a worker is not entitled to receive weekly compensation as they can be at work on their normal hours, however, due to their behaviour in the workplace they have in fact removed themselves from the return to work process and are therefore not entitled to their weekly compensation. Ceasing ongoing weekly compensation (e.g. a full return to work or a non-compliance suspension) is the best way to reduce claims costs and in turn premium.

Posted by: Paul Marsh at June 9, 2009 6:19 AM

Is it considered retailiation if an employer terminates an employee a day after they were injured on the job? Leaving the employee with no time to file a comp claim?

Posted by: Texas at June 26, 2009 6:28 PM

Texas, to answer your question, it might be ... it would depend on the facts of the case.

One issue is whether the employer subscribes workers comp coverage - TX allows employers to opt out of coverage. If an employer does provide workers comp coverage, here are links to what TX law says about discrimination (1), 2, 3. Note that the burden of proof falls on the employee.

Even if the employer opts out of workers comp, an employee might find some protection from discrimination under ERISA, ADA, FMLA or the OSH Act.

Posted by: JFerguson at June 29, 2009 9:23 AM

In California, if an employee is out on workers comp, then released for full duty, but doesn't return to work, can he be terminated?

Posted by: Sandra at July 14, 2009 2:32 PM
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