Avoiding Liability for Terminating the Injured Employee

By Mark A. Lies II, Seyfarth Shaw, LLP

Editor’s Note – Mark A. Lies II is a labor and employment law attorney and partner with the Chicago, IL, law firm of Seyfarth Shaw, LLP. He specializes in occupational safety and health and related employment law and personal injury litigation. Legal topics provide general information, not specific legal advice. Individual circumstances may limit or modify this information.

Unfortunately, from time to time, employees sustain injuries, either occupational or non-occupational, which involve prolonged absences from work. Frequently, a number of these employees have significant difficulty in recovering to be able to return to their former jobs in a timely fashion. As a result, employers must consider how to terminate the relationship without violating federal or state law. This article will discuss the relative rights of the employees and employer and how terminating such employees can be done in a legally compliant manner.

Employees Terminable At Will
In general, in most states, any em-ployee is terminable at the will of the employer, that is, the employee can be terminated for any reason unless such reason is prohibited by law, public policy, or a contract right. For example, an employer cannot terminate an employee because:

While there is no general answer to the many individual scenarios that may arise, in order to avoid liability, the employer must consider the following recommendations.

Avoiding Workers’ Compensation Retaliation
Most states prohibit employers from terminating an employee because he/she has sustained a work related injury or has filed a workers’ compensation claim or exercised other rights under a workers’ compensation law. Some states have further prohibitions, such as a prohibition against terminating an employee while an employee is disabled as a result of the underlying injury. Subject to these state law requirements, there is generally no prohibition on terminating an employee for excess absenteeism.

Thus, the employer should be prepared to demonstrate, with competent medical evidence, that the employee who has been absent from work because of any injury is or is not capable of returning to work. If the employee cannot return to work because he/she has significant continuing health problems with no reasonable prospect of improvement, the employer can consider terminating the relationship, unless there may be some additional duty under the Family and Medical Leave Act (FMLA) or the Americans with Disabilities Act (ADA), when the employee fails to return to work after an extended absence.

The other, and more frequent, scenario involves a dispute between the employer’s physician and the employee’s physician about whether the employee is capable of returning to work. The employer contends that the employee is capable of working at the former job or a light duty position (and wants to stop paying temporary total disability benefits), while the employee’s personal, treating physician continues to release the employee from work and the employee draws benefits. In order to avoid potential litigation for a retaliatory discharge or termination, the employer should consider the following:

This progressive approach may seem time consuming, however, it will ensure that the employer can demonstrate its motivation for termination was not the filing of a workers’ compensation claim, but the employee’s excessive absenteeism in failing and refusing to return to available work. The employer’s action will also reduce potential liability for punitive damages if the employer’s position is challenged because the decision was made in good faith in reliance upon competent medical evidence.

Americans with Disabilities Act
Under the ADA, an injured employee who has developed a “disability” recognized under the law (a significant impairment of a major life activity, e.g., working, lifting, walking, etc.) may have certain protections against termination. It is critical that employers consider the amendments to the ADA that went into effect on January 1, 2009 (see “Labor and the Law” in the February 2009 Render), which have greatly expanded the scope of employee protections against employment discrimination if the employee has a qualified disability. The federal Equal Employment Opportunity Commission is expected to issue compliance guidance for the amendments that employers must obtain and consider in all employment decisions where employee physical, mental, or emotional impairments are involved.

The employer must make a threshold fact-specific determination whether the available evidence indicates that the injured employee may have a physical, mental, or emotional impairment that rises to the level of a protected disability. If the employee’s impairment is “transitory” (under the amendments, the ADA has established a general threshold of six months or less of actual or expected duration of an impairment to be considered transitory rather than a qualified disability), the impairment is likely not to be considered a disability and the termination for absenteeism should not be a violation of the ADA.

If it appears that the impairment is significant, the employer can and should require the employee to submit to a medical examination to determine fitness to return to work. If such examination reveals that there are impairments that are significant and likely to be chronic, the employer should engage in an “interactive” (i.e., communication dialogue) with the employee about the employee’s return to work. If the employee indicates a willingness to return to work at the prior job (or the same job with minor modifications as an “accommodation”) within a reasonable period of time, the employer should consider granting leave to allow such opportunity. If, however, the employee cannot or will not indicate when he/she will return, the employer should begin a progressive series of actions, including correspondence, directing the employee to return to work by a certain date or he/she will be subject to termination for unexcused absence.

Assuming that the employee indicates that he/she cannot return to the prior position, and the employer believes that the employee may have a disability, the employer may have one more step to consider, that of an assignment to a vacant position, if the employer currently has such a position available, within the employee’s qualifications (education, training, and experience) and physical or other limitations as an accommodation. If the employee refuses to accept such accommodation, the employer’s duty under the ADA is satisfied and the employee’s continued absence is unexcused. Incidentally, if the employee accepts the accommodation position, the employer can set the compensation and other job benefits consistent with the economic value of the new position, even if it results in a reduction of compensation or other benefits to the employee.

Family and Medical Leave Act
Under the FMLA, an employer who has more than 50 employees at its location is required to provide up to 12 weeks of unpaid leave of absence from work in any 12-month period to any employee who has worked for the employer for at least 12 months (which need not be consecutive) and at least 1,250 hours during the 12 months prior to the requested leave and who has sustained a “serious health condition.” The U.S. Department of Labor issued extensive regulations and guidance to employers on November 17, 2008, which must be considered in all decisions relating to employee leaves for serious health conditions. Thus, before any employer considers terminating an employee who has sustained a serious injury and absence from work for treatment, the employer must confirm that it has complied with the FMLA’s technical requirements to notify the employee that he/she has commenced the leave initially, has properly counted the days utilized on the leave, and that the available leave has been exhausted. It is important to note that employees can take such leaves on an intermittent basis. Assuming that these requirements have been met and the leave period has been fully exhausted, there is no impediment under the FMLA to terminate.

Labor Contract or Handbook Rights
Finally, an injured employee may have certain rights under a labor agreement or employee handbook that limit the employer’s ability to terminate the employee until the conditions under the agreement or handbook have been met. For example, the employee may have a right to be absent from work for certain periods, typically up to one year under some labor agreements, or a right to a minimum period of notice and an opportunity to return to work under a handbook, before he/she can be terminated. Thus, the employer should review the labor agreement and/or handbook to assure that such employee rights are honored.

The employer faces several potential hurdles to ensure that the termination of an injured employee does not violate the employee’s rights under state and federal law. Careful analysis of these foregoing rights will ensure that the termination can be sustained as non-discriminatory.

Comments on this and any other article in Render are welcome and may be sent to editors@rendermagazine.com.

Labor and the Law – August 2009 RENDER | back