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New Jersey - Workers' Compensation
Prove It! - The Appellate Division Restates The Petitioner's Burden Of Proof For New Jersey Workers' Compensation Temporary Disability Benefits

Under the New Jersey Workers' Compensation Act, an injured worker is entitled to a wage replacement benefit during the time the worker is temporarily and totally disabled from the work injury. This benefit is commonly referred to in the insurance industry as "temporary/total" benefits or "TTD." Temporary disability benefits are payable during both continuous and intermittent periods of disability. However, they are limited to a total period of 400 weeks. The purpose of temporary disability benefits is to provide an injured worker with a "partial substitute for loss of current wages."

In Cunningham v. Atlantic States Cast Iron Pipe Co., 2006 N.J. Super. (App. Div. June 26, 2006), the court addressed the issue of whether an injured worker is entitled to temporary disability benefits when the period of disability occurred after the worker's employment was terminated. The petitioner sustained a work-related injury to his left knee on October 21, 2003, which ultimately required surgery in December 2003. Between November 2003 and February 2005, the petitioner's employment was terminated and reinstated on two separate occasions following union-negotiated agreements on the petitioner's behalf.

On February 3, 2005, the petitioner requested to leave his employment temporarily to make new child care arrangements. The employer's human resources manager, Mr. Surca, advised the petitioner that if he left, the petitioner would be terminated. The petitioner did, in fact, leave work and was terminated. Unlike the two times before, the petitioner made no further attempts to be reinstated. (Mr. Surca testified that the petitioner informed him that he [the petitioner] could not live up to the union-negotiated rehire agreement, said he was leaving, and then left. Mr. Surca also testified he denied telling the petitioner he would be terminated if he left. The Judge of Workers' Compensation rejected this testimony as less credible than the petitioner.)

On February 11, 2005, the petitioner, under his own volition, went to the physician originally authorized by the respondent to provide medical treatment for the work injury, Dr. Helmold. Dr. Helmold authored a note stating the petitioner was disabled from his knee injury and required additional medical treatment. In response to the petitioner's Motion for Temporary and Medical Benefits, the respondent argued the petitioner was not entitled to temporary disability benefits since he voluntarily abandoned his employment and was unemployed when the disability occurred. The respondent did not dispute the entitlement to additional medical benefits. Following hearings on the Motion, the Judge of Workers' Compensation ordered the payment of temporary disability benefits, reasoning that the petitioner did not intend to remove himself from the labor market, "…I am aware of no authority requiring a petitioner to continue in a position to remain eligible for temporary disability benefits and no one has called any to my attention."

On appeal, the respondent argued that the petitioner voluntarily chose to end the employment relationship by knowingly and voluntarily violating a condition of his employment prior to the occurrence of the disability. Electronic Associates, Inc. v. Heisinger, 111 N.J. Super. 15, 20 (App. Div.), certif. denied, 57 N.J. 139 (1970) (an employee who retired because of her pregnancy was not entitled to a temporary disability award for an injury that occurred during her employment, but did not manifest itself until after her retirement because she suffered no current wage loss attributable to her occupation). The petitioner again argued that his termination was involuntary as the Judge of Workers' Compensation found.

The court started its analysis by stating that the basis for the petitioner's separation from his employment was irrelevant to the determination of eligibility for temporary disability benefits. Rather, the issue is whether the petitioner suffered a current wage loss as a result of the work injury.

The claimant has the burden of proving not only that he was available and willing to work, but that he would have been working if not for the disability…There is nothing in the record to suggest that he had any promise or prospect of employment to begin in the days following February 11, 2005, that he had to forgo because of the disability. Thus, the supposed wage loss replacement for those days was not for actual lost wages.

The court then looked to the principles stated in Outland v. Monmouth-Ocean Educ. Serv. Comm., 154 N.J. 531 (1998). There, the petitioner was a school teacher whose disability from a work-related injury sustained during the school year continued into the summer recess. The Outland Court distinguished between those teachers who planned to work during the summer, but could not because of a work-related injury, and those who did not plan to work during the recess. The Court held that the injured teacher would be entitled to temporary disability benefits during the summer if she could prove she was unable to perform work she had planned to do because of the work injury.

In applying those principles to the current case, the court found that the Judge of Workers' Compensation's order bestowed a windfall on the petitioner and reversed the order granting temporary disability benefits. The court stated that, if the petitioner can prove he actually lost income on or after February 11, 2005, because of his disability, he is entitled to receive temporary disability benefits. (Emphasis added.) The court remanded the case to allow the petitioner an opportunity to prove actual wage loss consistent with its decision. In dicta, the court stated that the petitioner will have a more difficult time in sustaining his burden of proof in comparison to the facts in Outland, where a teacher's recurrent employment schedule is fixed. The court also suggested that this burden could be met with occupational expert testimony to address the issue of how long it takes a given petitioner to secure employment, but it stopped short of stating that expert testimony is a necessary element of proof.

This case reaffirms the Act's requirement that a petitioner prove both a work-related medical disability and an actual loss of wages in order to obtain temporary disability benefits. Although this holding will apply to only a limited number of scenarios, the court's mention of occupational expert testimony to resolve future disputes could significantly increase the amount of litigation in disputes involving temporary disability benefits. The court's decision also reminds us that workers' compensation issues are often intertwined with human resources administration and employment issues. Employers may reduce their future liability by being diligent in maintaining employment and human resource records, particularly when employment relationships end, as the information contained in these records could be the subject of unexpected workers' compensation litigation.

*Bob is an associate in our Cherry Hill, NJ office. He can be reached at (856) 414-6009 or at rjfitzgerald@mdwcg.com.