An Update on “Termination for Cause” in Workers’ Compensation

Written by Nicholas P. Marrone, Esq.

Edited by Rachel A. Riordan, Esq.

Under the Virginia Workers’ Compensation Act (“the Act”), claimants that have been terminated for justified cause are not entitled to compensation benefits during periods of light duty release regardless of whether or not they market their residual capacity. Prior to 2005 the standard for whether or not a claimant was terminated for cause was based on a Virginia Supreme Court case called Goodyear Tire & Rubber Co. v. Watson, 219 Va. 830, 252 S.E.2d 310 (1979). In that 1979 case the claimant had returned to light duty work offered by the Employer but was then terminated due to poor performance, which had nothing to do with the claimant’s injury. The Court held that a claimant who is terminated for cause unrelated to his work injury while on light duty is not entitled to receive compensation benefits under the Act. This standard is different from how Virginia treats a refusal of light duty employment from an employer. When it comes to a refusal of light duty, a claimant can cure and have compensation benefits reinstated during periods of light duty release by adequately marketing themselves within six (6) months of the refusal. A claimant cannot, however, cure a termination for cause to reinstate compensation benefits during light duty release.
Around the mid-1990s, however, the Commission began to stray from the standard set by the Virginia Court of Appeals in determining whether or not a termination for cause would result in the Claimant being forever barred from compensation benefits during periods of light duty work release. During this time, the Virginia Court of Appeals continued to focus on whether a claimant’s termination was for a reason related to the claimant’s conduct or was a termination due to the claimant’s work injury.  If it was the former, the Claimant could not cure the termination, but if it was the latter (i.e., a claimant being laid off because the employer cannot accommodate light duty restrictions) the claimant could. While the standard set out by the Virginia Court of Appeals in Goodyear appeared clear, the Virginia Workers’ Compensation Commission began using a “willful misbehavior” analysis. Under that test, a claimant is disqualified from receiving benefits if he or she is “discharged from misconduct connected with the work”, which was interpreted to mean “deliberately violates” or “willfully disregards”. In other words, the Commission began ruling that a claimant had to be terminated for an intentional act for the termination to be for cause forever barring the claimant from compensation benefits during light duty release.
This “willful misbehavior” standard was not applied uniformly by the Commission. In Khanna v. Dryhome Roofing, VWC File No. 157-63-33 (Apr. 7, 1995) the Commission found a termination for justified cause when the claimant, who was aware of his schedule, failed to show for work. However, in Dehart v. Reynolds Metals Co., VWC File No. 179-97-20 (Jul. 22, 1997) the claimant had been late for work several times and was given a final warning that any further tardiness would result in termination. The claimant subsequently
came into work at noon after sleeping in and missing a doctor’s appointment.
The claimant, however, did not tell the employer she missed her appointment. The employer then received a note from the doctor stating the claimant slept through the appointment. The claimant, was then terminated for her prior absences and misrepresenting her appointment with the doctor. The Commission found the claimant’s behavior did not rise to the level of “willful misbehavior” forever barring compensation.
After the Commission spent years straying from the Court of Appeals’ decision in Goodyear, the Court issues their decision in Artis v. Ottenberg’s Baker’s Inc., 45 Va. App. 72, 608 S.E.2d 512 (2005). In this case the Virginia Court of Appeals held that the employer need not prove that a claimant’s wrongful act was intentional, willful, or deliberate to justify a termination for cause. All that is required is a showing that (1) the claimant’s wage loss is properly attributable to the wrongful act (i.e., the claimant was terminated due to their misconduct and not their light duty restrictions) and (2) the claimant is responsible for that wrongful act (i.e., the wrongful act has to merely be voluntary, and does not need to be intentional, willful or deliberate). Despite the Court of Appeals’ clarification in Artis as to the proper standard, in the years following that decision, the Commission still continued to focus on the egregiousness of a claimant’s act in determining whether the termination should work a forfeiture of benefits.   
Eventually, after a decade of such decisions from the Commission, the Court of Appeals again rejected that standard and reaffirmed its adherence to the Artis two-prong test in the case of Riverside Behavior Centers v. Teel, No. 2143-143-1 (Va. Ct. App. May 12, 2015). In that case the Court held that the employer need not prove the employee’s act was intentional, willful or deliberate;  but only that the wage loss was attributable to the employee’s wrongful act and that the employee was responsible for that act. In decisions since Teel the Commission appears to have finally abandoned the egregiousness standard and instead has focused on whether the termination was for a reason related to the employee’s disability or his wrongful act, as Artis calls for. Therefore, today, under the Teel standard, the Khanna and Dehart cases discussed above would come to the same result: the claimants would both be barred from receiving compensation during periods of restricted duty release due to their terminations even though their actions may not have been intentional, willful or deliberate. 
Practice Tip: Always be sure to seek out the current employment status of the claimant. A claimant with restrictions seeking compensation benefits may have been terminated for cause from the employer long after the work accident, but the adjuster may not be aware of the termination or may not be educated on the issue of termination for cause in Virginia; the adjuster may not even know to bring the termination to your attention. Be sure to confirm with the employer if the claimant had been terminated for cause in order to be sure this affirmative defense is raised in order to avoid exposing your client to compensation benefits the claimant is not entitled to.


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