Shooting Self in Foot.jpgA recent Michigan Court of Appeals decision extended an employer’s liability for a retaliation claim by employees exercising a right afforded under Michigan’s Worker’s Disability Compensation Act (WDCA) even though the employee had yet to file a petition under the act.

This case is also a reminder that employers and their HR professionals need to fully evaluate the facts and circumstances giving rise to an adverse employment decision before making a decision that could have the unintended consequence of giving rise to a retaliation claim. 

Overview of Retaliation under Michigan’s Workers Disability Compensation Act.

Before getting into the specifics of this case, and for the history buffs out there, going back to 1976, Michigan courts have held that terminating an employee in retaliation for having filed a worker’s compensation petition is against Michigan’s public policy. Sventko v Kroger Co, (1976). 

In 1982, the Michigan legislature essentially added this court ruling and policy by amendment to the WDCA, which specifically prohibits an employer from discriminating and retaliating against an employee for pursuing remedies under the WDCA.

Unlawful Retaliation and Michigan’s Workers Disability Compensation Act.

Fast forward to this past October where a Michigan Court of Appeals panel in the case of Cuddington v United Health Servs, (Oct 25, 2012), held that the filing of a petition for worker’s compensation benefits is not a prerequisite to all retaliatory discharge claims against employers under the applicable statutory provision (MCL 418.301(13)).

Instead, the Cuddington Court reasoned that an employee who exercises a right afforded under the WDCA and is later terminated or discriminated against in retaliation for exercising that right, may maintain a retaliation action under the WDCA.

In the Cuddington case, Raymond Cuddington had been employed by the employer for 12 years. He was injured in an automobile accident while making a delivery for his employer. While EMS were called to the scene, Mr. Cuddington elected not to go to the hospital that night. However, the next morning soreness and pain set in and Mr. Cuddington sought medical treatment and called-off work.  

In response to this call-off, the President of the company and his wife (also an officer of the company) called Mr. Cuddington to ask why he was not at work. The President’s wife then advised Mr. Cuddington over the phone that:

You ain’t hurt, if you were hurt you would have went in the ambulance to the hospital last night. If you don’t come into work, you are blanking — blanking fired.

In spite of the employer’s eloquent and apparent termination notice, Mr. Cuddington reported back to work two days after this doctor’s visit, but he was told that he had been terminated. Following this termination, Mr. Cuddington filed a claim for worker’s compensation benefits and subsequently commenced this action for retaliatory discharge pursuant to MCL 418.301(13).

Unlawful Retaliation for Exercising Rights Under Michigan’s Workers Disability Compensation Act.

While the employee had not filed a Worker’s compensation claim at the time of his termination, Mr. William Webster, an attorney who specializes in representing individuals in bringing Worker’s Compensation claims, explains that a finding of retaliation by the employer is perfectly consistent with Michigan’s Worker’s Compensation Act. Specifically, he notes:

Employees and employers engage in a trade-off under the Workers’ Compensation Act. Employers enjoy immunity from suit by injured workers in exchange for providing workers’ compensation. Employers in essence ‘earn’ this immunity from suit by providing timely benefits to injured workers without regard to fault. Those benefits include medical treatment, wage loss benefits, and possible vocational rehabilitation. If an employee is terminated or otherwise suffers adverse employment action for trying to obtain one of those limited, statutorily defined benefits, then a retaliation claim is available to the aggrieved employee.

In sum, because the employee had sought a right provided under the WDCA – medical treatment – and was allegedly terminated for pursuing that right, the employee had a claim for retaliation even though the employee had yet to file a Worker’s compensation claim.  

The Take-Away for Employers

Retaliation and wrongful discharge claims may arise under any number of theories that may not be immediately apparent at the time an employer makes an adverse employment decision. And while many employers understandably would completely agree with Yogi Berra’s observation that “Prediction is very hard, especially about the future,” it is important that employers and their HR professionals fully consider all the facts and circumstances before taking action in order to eliminate potential retaliation claims. 

According to Mr. Webster, this is especially important in the area of worker’s compensation claim because of recent amendments to the Workers’ Compensation Act that took effect in December of 2011, which altered the manner in which wage loss benefits are calculated.