Belsky Weinberg & Horowitz, LLC A Personal Injury & Workers’ Compensation Law Firm

Worker's Firing Does Not Bar Workers' Compensation Benefits

An employee's firing does not bar workers' compensation benefits if the claimant's evidence demonstrates that his or her disability caused the subsequent inability to find work, the Court of Special Appeals has ruled. The court's ruling stems from a lawsuit involving an injured worker receiving benefits who was fired after his assertion that he had not worked for a business he owned on the side was contradicted by video surveillance.

The Washington Metropolitan Area Transit Authority (WMATA) had appealed a Circuit Court for Prince George's County decision against it in a worker's compensation lawsuit. Robert Washington had been fired for claiming that he was unable to work after an injury to his back while employed as WMATA as a truck operator. However, video surveillance introduced at the Workers' Compensation Commission hearing to determine Washington's continued receipt of temporary total disability payments showed that he was working as a driver for his stretch limousine service two days before the hearing. Washington specifically denied that he had not worked those days. The Commission ruled against Washington, although Washington was later awarded permanent partial disability amounting to 22 percent industrial loss of use of his body because of the injury to his back.

Dissatisfied with the award, Washington asked for judicial review of the Commission's decision. WMATA did not challenge the award; but, before trial, WMATA asked the court to exclude all evidence Washington planned to present concerning his past and current income as the owner of the limousine service and his past or present loss of income resulting from his termination of employment with WMATA.

WMATA argued that evidence of Washington's wage differential was irrelevant because the wage loss did not occur as the result of the accidental injury but instead was caused by Washington's fraudulent statements to the Commission. In addition, the employer contended that even if the evidence of wage loss was relevant, "it is very misleading," because "the jury may decide to punish WMATA for terminating him or to give him a permanent rating that is the equivalent of having his WMATA job." The court denied the motion, concluding that it would, instead, give a jury instruction at the close of evidence that Washington was terminated from WMATA for cause. The jury increased the award, finding that he had 64 percent disability.

WMATA appealed. WMATA said there were evidentiary problems with Washington's post-injury termination and his earnings from his private business. The appeals court reversed and remanded for a new trial.

The touchstone of the workers' compensation system is an on-the-job injury which results in disability or death. A permanent partial disability is one that is "permanent in duration and partial in extent." Compensation awards for permanent disability are "not based solely on loss of wages, but are based on actual incapacity to perform the tasks usually encountered in one's employment, and on physical impairment of the body that may or may not be incapacitating." The test used to determine the degree of disability is whether a claimant's injuries allow him to return to and adequately perform his prior job with the employer and whether the workplace injury caused a reduction in wages.

Under Maryland law, all relevant evidence is admissible. Evidence is relevant if it has a tendency to make the existence of a fact of importance to the determination of the legal action more or less likely than it would be without the evidence. However, if evidence meets this test, then it can be concluded that the trial court abused its discretion by admitting relevant evidence which should have been excluded because its prejudicial impact outweighs its probative value.

WMATA argued that the trial court made a mistake when it allowed Washington to introduce evidence of his pre-injury income with WMATA and his post-injury earnings from his personal business. WMATA contended that this evidence was irrelevant and unfairly prejudicial as it did not tend to prove loss of earning capacity caused by an accidental work injury. WMATA argued that Washington's termination was caused by making false statements, not his work injury.

The appeals court first noted that WMATA cited in its legal brief a number of out-of-state decisions for the proposition that an employee fired for misconduct has voluntarily removed himself from the workforce and is not entitled to wage loss benefits. However, at least one state appellate court has concluded that the majority of jurisdictions reject this rule, the Maryland court pointed out, discussing a 1993 case by the Arizona Supreme Court where it held that misconduct is irrelevant and that payment of benefits does not depend on a worker's character but is based on an injury that occurs within the scope of the workers' compensation statutes. "In our view, Maryland cases point in this direction," the court said, examining, among others, a Maryland case where it was ruled that incarceration did not affect an award of compensation because the award was based on disability.

"WMATA emphasizes the fact that Washington was terminated for lying in order to obtain benefits. While such misconduct is not to be condoned, it is noteworthy that the General Assembly has barred compensation only for an employee who is convicted of knowingly affecting or attempting to affect the payment of workers' compensation by means of a fraudulent representation," the court said.

The court also said that it was hard to see how WMATA was prejudiced by the denial of this component of its motion. The employer apparently requested and obtained a special verdict on the issue of whether the percentage of disability and incidental loss was the result of the loss of Washington's job with WMATA - a question the jury answered in the negative.

However, the appellate court reversed and remanded on the decision to admit Washington's earnings from the limousine service. The general rule is that profits derived from a business are not to be considered as earnings and cannot be accepted as a measure of loss of earning power unless they are almost entirely the direct result of the claimant's personal management and endeavors. Because Washington owned the service and admittedly, sometimes drove a limousine himself, with five vehicles, he obviously employed other drivers, the court said. Given the persistent references at trial to the limousine service and the "otherwise inexplicable size of the verdict, WMATA was clearly prejudiced by the jury's consideration of this evidence," the court said.

Baltimore, Maryland-based Belsky, Weinberg & Horowitz has represented consumers in workers' compensation cases for many years. Call our attorneys at 410-234-0100 or email us for a free consultation.

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