At Will Employment Worker’s Compensation and Termination

by | Sep 28, 2006 | Labor and Employment, Litigation

Indiana remains an “at will” employment state which doctrine provides if there is no definite term of employment, an employer may discharge the employee at any time with or without cause. Over the years there have been challenges to the doctrine that have resulted in the recognition of three exceptions. The first is where an employee establishes “adequate, independent consideration” which would support an employment contract. The parties are considered to have intended to establish a relationship which the employer would only be able to terminate for good cause. Such independent consideration has been deemed provided when the employee had a prior job with assured permanency and only accepted the new position believing that there were assurances of similar permanency. Consideration is also found if an employee entered into a settlement agreement releasing the employer from liability on an employment related claim. Another exception that an employee may utilize is the doctrine of promissory estoppel. An employee must demonstrate that the employer made a promise to the employee upon which the employee relied to his detriment and that justice requires the promise to be fulfilled. Lastly, there is the public policy exception which provides an employee may not be discharged for exercising a statutorily conferred right. This includes refusing to commit an illegal act for which he/she would be personally liable or for filing a worker’s compensation claim.

What does an employer do when an employee on worker’s compensation does not return for an extended period of time? Employees may be off several weeks, months or even a year. Does the employer have the ability to terminate the employee without risking the liability of a retaliatory discharge claim? Yes; however, the employer needs to have its attendance and/or leave policies clearly address the issue of extended absence and the failure to be able to return to work.

To establish a case for retaliatory discharge an employee must prove by a preponderance of the evidence that there was a prima facia case of retaliation. In the case of worker’s compensation, if a termination follows the filing of the claim, a prima facia case would be made. The burden shifts to the employer to articulate a legitimate reason for the discharge. If the employer carries that burden, the employee has the opportunity to prove that the reason offered by the employer is a pretext. The employee must present evidence that implies causation between the filing of a worker’s compensation claim and the termination.

The courts have held that the plaintiff must demonstrate that his/her discharge was solely in retaliation for the filing of a worker’s compensation claim. If the employer has an absence control policy which provides that after a specific amount of time has lapsed without a return to work, the employment relationship will be severed, the courts find that the policy is the reason for which the employee is terminated, not the filing of a worker’s compensation claim. If the absentee policy has language that puts the employee on notice that continued absenteeism will result in disciplinary action including discharge, it establishes a legitimate reason for termination. If the employer is large enough to be subject to the Family and Medical Leave Act which requires the provision of 12 weeks of unpaid job protected leave, after that 12 weeks has expired, if the employee is unable to return to work and the policy so provides the termination of that employee under the absenteeism policy is also not a retaliatory discharge. The absence rules are to be applied to all individuals, whether they have work related injuries or injuries sustained elsewhere. If the policies are uniformly applied, the reason for the termination becomes the employee’s inability to return to work and the application of the absence policy. It is not seen as retaliatory for the filing of a worker’s compensation claim.

As the continued absence and provision of benefits to employees who have work related injuries has a detrimental affect on the operation of an employer, it is important that the attendance and/or leave policies be reviewed, and if necessary, amended accordingly. Having such policies does not guarantee that an employer is immune from a retaliatory discharge claim. It does, however, provide a legitimate reason for the discharge and a defense should an employee file a retaliatory discharge case after having been absent for an inordinate period of time after filing a worker’s compensation claim.

More about Burke Costanza & Carberry LLP

More about Burke Costanza & Carberry LLP