State News : New Jersey

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, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com.