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Why New Jersey Comp Law Holds That One Who Has Been Fired Is Not Entitled To Temporary Disability Benefits Unless He Or She Would Have Been Working Another Job

By on May 12, 2017 in Benefits with 0 Comments

One of the most controversial issues in New Jersey workers’ compensation has to do with whether an injured worker who has been fired is entitled to temporary disability benefits.  The leading case is Cunningham v. Atlantic States Cast Iron Pipe Co., 386 N.J. Super. 423 (App. Div.), certif. denied, 188 N.J. 402 (2006).   That case was a true disrupter because until it was decided, the general consensus was that the employer paid temporary disability benefits post-termination until the point of maximum medical improvement.

But where did the rule in Cunningham come from? The roots of the Cunningham decision rest in Outland v. Monmouth-Ocean Educ. Serv. Comm’n, 154 N.J. 531 (1998).  Outland was a Supreme Court case which focused on whether a teacher who was injured during the school year was entitled to temporary disability benefits over the summer months when the teacher would not have been working due to the closing of school.   The Supreme Court held that such a teacher is not entitled to temporary disability benefits in the summer months unless the teacher could prove that he or she would have been working in some other summer job.  Evidence of prior summer employment and an offer of upcoming summer employment would suffice, but without that evidence, the teacher would not be entitled to temporary disability benefits during the summer months, even if the teacher was actively treating for the workers’ compensation injury.

The theory in Outland is simple:  there is really no wage loss during the summer for many teachers, except for those who had a job lined up and now cannot perform it due to the work injury.  Eight years after Outland was decided, Mr. Cunningham tested the same waters.  He was fired from Atlantic States for reasons of work misconduct but then returned to the authorized workers’ compensation doctor who had been treating his knee.  The authorized doctor then recommended surgery on petitioner’s knee.  Cunningham sought temporary disability benefits for the period of his surgery, but the employer argued that he had no wage loss because he had been fired.  The Court agreed with the employer and ruled no temporary disability benefits were due unless Mr. Cunningham could prove that he would have been working in some other job but for the work injury.

This same rationale carried the day in Gioia v. Herr Foods, Inc., No. A-0667-10T4 (App. Div. October 11, 2011).  In that case the petitioner had a legitimate work injury, fracturing his foot stepping from his delivery truck. The company required a post-accident drug test, which came back positive, leading to the termination of petitioner, who was on light duty at the time.  The petitioner argued that he was entitled to temporary disability benefits because he was actively treating.  But the employer prevailed, arguing that petitioner had no wage loss since he had been fired for violation of the company drug policy, and he had no proof of another job offer.

Other cases have patterned themselves on the Cunningham case, and practitioners need to be aware of this line of cases.   The rule remains that an employer can deny temporary disability benefits following job termination unless the injured worker can prove that he or she would have worked in another position but for the work injury.  The Cunningham also case makes clear that it does not matter if the employee quit or was fired:  the same test applies, namely would the employee have been working some other job but for the work injury?

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John H. Geaney

About the Author

About the Author:

John H. Geaney, an executive committee member and shareholder with Capehart Scatchard, began an email newsletter entitled Currents in Workers’ Compensation, ADA and FMLA in 2001 in order to keep clients and readers informed on leading developments in these three areas of law. Since that time he has written over 500 newsletter updates.

Mr. Geaney is the author of Geaney’s New Jersey Workers’ Compensation Manual for Practitioners, Adjusters & Employers. The manual is distributed by the New Jersey Institute for Continuing Legal Education (NJICLE). He also authored an ADA and FMLA manual as distributed by NJICLE. If you are interested in purchasing the manual, please contact NJICLE at 732-214-8500 or visit their website at www.njicle.com.

Mr. Geaney represents employers in the defense of workers’ compensation, ADA and FMLA matters. He is a Fellow of the College of Workers’ Compensation Lawyers of the American Bar Association and is certified by the Supreme Court of New Jersey as a workers’ compensation law attorney. He is one of two firm representatives to the National Workers’ Compensation Defense Network. He has served on the Executive Committee of Capehart Scatchard for over ten (10) years.

A graduate of Holy Cross College summa cum laude, Mr. Geaney obtained his law degree from Boston College Law School. He has been named a “Super Lawyer” by his peers and Law and Politics. He serves as Vice President of the Friends of MEND, the fundraising arm of a local charitable organization devoted to promoting affordable housing.

Capehart Scatchard is a full service law firm with offices in Mt. Laurel and Trenton, New Jersey. The firm represents employers and businesses in a wide variety of areas, including workers’ compensation, civil litigation, labor, environmental, business, estates and governmental affairs.

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