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Outland v. Monmouth-Ocean Educ. Service Com'n

July 01, 1998

MONA J. OUTLAND, PETITIONER-APPELLANT,
v.
MONMOUTH-OCEAN EDUCATION SERVICE COMMISSION, RESPONDENT-RESPONDENT.



The opinion of the court was delivered by: O'hern, J.

On certification to the Superior Court, Appellate Division, whose opinion is reported at 295 N.J. Super. 390 (1996).

We granted certification to consider an asserted conflict between the decision below and that in Porter v. Elizabeth Board of Education, 281 N.J. Super. 13 (App. Div.), certif. denied, 142 N.J. 455 (1995). The issue in each case is whether a teacher employed under a ten-month contract, injured at work during the school year, is entitled to temporary disability benefits in workers' compensation during the summer recess period.

The conflict involves the interpretation of N.J.S.A. 18A:30-2.1. That section ensures that school employees who are unable to report to work because of injuries they received in the course of their employment receive their full salaries and lose no sick leave during the period of their disability. The section reads as follows:

Whenever any employee, entitled to sick leave under this chapter, is absent from his post of duty as a result of a personal injury caused by an accident arising out of and in the course of his employment, his employer shall pay to such employee the full salary or wages for the period of such absence for up to one calendar year without having such absence charged to the annual sick leave or the accumulated sick leave provided in sections 18A:30-2 and 18A:30- 3. . . . Any amount of salary or wages paid or payable to the employee pursuant to this section shall be reduced by the amount of any work[ers'] compensation award made for temporary disability.

[N.J.S.A. 18A:30-2.1.]

I.

Mona J. Outland is employed by the Monmouth-Ocean Education Service Commission. (We shall refer to it as the Board.) A teacher of emotionally disturbed children, Outland suffered severe and disabling injuries when one of her students assaulted her on April 22, 1994. She was unable to return to work from April 23, 1994 to June 30, 1994, when the summer vacation period commenced.

At the time of her injury, Outland's weekly salary was $593. Despite her absence from school, she received 100% of that salary over the remainder of the school year: seventy percent ($415) by way of temporary disability benefits under a section of the Workers' Compensation Act, N.J.S.A. 34:15-12, and the remaining thirty percent ($178) under N.J.S.A. 18A:30-2.1.

Teachers normally are paid on the basis of an academic year rather than a calendar year. Most teachers thus do not receive pay checks during the summer, when schools are in recess. N.J.S.A. 18A:29-3, however, allows school boards to offer academic-year employees the option to have ten percent of their salaries withheld and then paid over the summer. A statement accompanying that legislation recites that the amounts paid during the summer to employees who select that so-called "twelve-month plan" are deemed to have been earned as of the preceding June 30th. Introductory Statement, Assembly, No. 3679, L. 1979, c. 495. Outland, however, had not elected to be paid on the twelve-month plan. Outland therefore, by the end of the school year, had received 100% of the salary that the Board had agreed to pay her for that school year.

Outland's disability payments ceased after June 30, 1994. Although the Board did not dispute that disability payments would have to resume at the beginning of the next academic year had Outland not been able to return to work by then, the Board refused to pay benefits to Outland over the summer recess, which ran from July 1 to August 31, 1994.

Outland filed a motion for temporary disability benefits in the Division of Workers' Compensation. She argued that the Board's payment of benefits equal to seventy percent of her weekly wage, which the Board had been paying pursuant to N.J.S.A. 34:15-12, should continue over the summer. She has not claimed, neither in the Division nor on appeal, that the Board was obligated by N.J.S.A. 18A:30-2.1 to pay the remaining thirty percent of her weekly salary during the summer recess.

While her matter was pending, the Appellate Division rendered its Porter decision. 281 N.J. Super. 13. Donald Porter was a teacher in Elizabeth who sustained a back injury while teaching. The Division of Workers' Compensation (the Division), among other rulings, ordered the Elizabeth Board of Education to pay Porter temporary disability benefits over the summer. On the school board's appeal, the Appellate Division affirmed the Division's holding on that issue. In interpreting N.J.S.A. 18A:30-2.1, the court focused on the Legislature's use of the term "calendar year." The court was "convinced that the Legislature, in utilizing the term 'calendar year' rather than 'school year' as the applicable time period, [intended] that school board employees be fully compensated for the time during which they are temporarily disabled without regard to whether that disability falls within the school year or the summer recess." 281 N.J. Super. at 21. The effect of the Appellate Division's decision was that teachers who had elected to be paid on the regular ten-month plan, who were temporarily disabled as a result of injuries suffered in the course of their employment, and whose disabilities lasted beyond the end of the school year would continue to receive temporary disability benefits under workers' compensation during the summer recess regardless of whether those teachers had planned to take summer jobs.

The compensation Judge followed Porter and awarded Outland $3,675.71 in workers' compensation temporary disability benefits, an amount equal to 70% of her weekly salary multiplied by the number of weeks in the summer recess. The Board appealed. The Appellate Division reversed the award of the compensation Judge. Disagreeing with the Porter decision, the Outland panel concluded that neither N.J.S.A. 18A:30-2.1 nor the Workers' Compensation Act was intended to provide injured workers with a means to recover wages that were not lost. 295 N.J. Super. at 397. Because there was no evidence that Outland had "lost" any wages over the summer, and because during the summer she was not "absent from [her] post of duty" as a teacher, the Appellate Division held that neither of the relevant statutes entitled her to disability payments over the summer. Id. at 398.

II.

We agree with so much of the Appellate Division's Outland decision that holds that the sick leave provisions of the education laws do not serve to amend the workers' compensation laws to create an entitlement to temporary disability benefits that would not otherwise exist under those laws. The parties have briefed the issue of whether we should read N.J.S.A. 18A:30-2.1 in pari materia with N.J.S.A. 34:15-12. We need not resolve that issue because the portion of N.J.S.A. 18A:30-2.1 that Outland would have us read into N.J.S.A. 34:15-12 does not carry the meaning Outland would like it to carry. The Legislature used the term "calendar year" in N.J.S.A. 18A:30-2.1 in order to establish the maximum duration of a school board's obligation to pay the full salary of an injured employee, not to establish any sort of affirmative obligation of an employer to pay benefits during the summer or any other point in a year when the teacher would not have earned a salary for teaching. See Williams v. Board of Educ. of Deptford Township, 192 N.J. Super. 31, 40-41 (App. Div. 1983) (construing "calendar year" language in N.J.S.A. 18A:30-2.1 to require compensation for covered absences within 365 days of date of injury). It did not use the term "calendar year" to confer on injured workers a double recovery or windfall. Nor would the drafters of the Workers' Compensation Act have favored a double recovery. See N.J.S.A. 34:15-40 (entitling providers of workers' compensation benefits to recover amounts paid to injured employee by third parties, up to the amount of workers' compensation benefits paid); Midland Ins. Co. v. Colatrella, 102 N.J. 612, 618 (1986) (affirming application of workers' compensation lien to proceeds recovered by injured worker from his uninsured motorist policy, when worker had previously recovered workers' compensation benefits).

Correctly understood, the significance of the "calendar year" language for a teacher whose inability to work began toward the end of a school year and lasted through the summer is that the payments due under N.J.S.A. 18A:30-2.1, after ceasing during the summer months when the teacher would not have taught, would have to resume in the fall when the teacher would otherwise have returned to the classroom. The payments would then continue until the first anniversary of the commencement of the teacher's disability, provided the disability lasted that long.

Understood in the context of N.J.S.A. 18A:30-2.1, the workers' compensation temporary disability benefits payable under N.J.S.A. 34:15- 12, serve, during the school year, as a credit toward the disability income due to the occupationally injured teacher under the sick leave statute. During the summer recess period the workers' compensation temporary disability benefits serve to replace the wages lost from other employment because of the occupational injury. No payments are due under the sick leave act during the summer because the injured teacher is not absent from her "post of duty" as a teacher. The Workers' Compensation Act, on the other hand, is not tied so specifically to a particular occupation. The injured teacher should be entitled to workers' compensation temporary disability benefits during the summer if she can prove that she is unable to resume whatever type of work she otherwise would have had.

Therefore, the payments that Outland seeks do not constitute a double recovery or windfall for her but rather a replacement of income from work actually lost, whether covered by a benefit program or not. The Board argues that entitlement under the Workers' Compensation Act is based on the contract in force at the time of the injury, and that because Outland received all of the money that was due to her under her contract, any further payments would overcompensate her. The Board's argument is premised on the thesis that the contract of hire (the teaching contract) determines whether temporary disability benefits are paid. It reasons that workers' compensation benefits to an employee are based on the "wages" of an employee, a term that is defined under N.J.S.A. 34:15-37 as the money rate of pay "under the employment contract." There being no money due over the summer under the teaching contract, the Board reasons that no benefits for disability are due. The flaw in the argument is that if temporary benefits were payable only during the time that the contract of hire were to have been in existence, a seasonal worker, such as a farm laborer who suffered an injury near the end of a harvest season, would receive no temporary disability benefits after the season was over. The contract of hire would have expired.

We agree with petitioner that there is no such restriction in the Workers' Compensation Act. Temporary disability benefits are payable until the employee is "able to resume work," N.J.S.A. 34:15-12 and -38, not just until the contract for hire was to have expired. Under the Board's reasoning, a callous employer could avoid all responsibility for temporary disability benefits to an at-will employee by asserting that it had, before the accident, planned to terminate the employee. There being no money due under the employment contract (it would have been terminated), there would be no temporary disability benefits due to the injured worker. We surmise that in that circumstance our Dissenting members might fall short of following the logic of the board. However, their understanding is not sufficiently stirred to perceive in the case of Mona Outland the failed logic of the Board.

Our Dissenting colleagues cite numerous cases establishing that an injured employee may collect workers' compensation temporary disability benefits only if that employee has lost wages. See post at ___ (slip op. at 3-4). That proposition is not in dispute. What is in dispute is whether an injured employee may collect workers' compensation temporary disability benefits for wages the claimant would have earned from another job. None of the cases cited by the Dissent limit a claimant to compensation for wages lost from the job on which the injury took place. In contrast, there is well-reasoned support for an injured employee's entitlement to compensation for wages the employee would have earned from off-season employment. See Powell v. Industrial Comm'n, 441 P.2d 553, 556 (Ariz. Ct. App. 1968) (calculating teacher's average monthly wage, for workers' compensation purposes, by dividing the teacher's annual salary by nine, as opposed to twelve months, and reasoning that during the months not covered by the contract with the school board, "[the teacher's] time was her own"); Dominquez v. Industrial Comm'n, 529 P.2d 732, 740 (Ariz. Ct. App. 1974) (setting aside the calculation of "average monthly wage" of a seasonal fruit picker where hearing officer multiplied the worker's monthly wage of $389.63 by potential duration of employment of five months, then dividing that product by twelve; and noting that a hearing officer should consider whether claimant's "prior work record indicated that he had continually been employed for twelve months of the year in different seasonal jobs," in which case the award could be tailored to the "employee's particular situation" to reflect more accurately the claimant's earning capacity); 33 U.S.C.A. § 910 (Longshore and Harbor Workers' Compensation Act) (setting forth that, for workers' compensation purposes, the "annual average earnings" of an injured longshoreman, who "shall not have worked in such employment during substantially the whole of the year immediately preceding the injury," shall equal "three hundred times the average daily wage or salary for a six-day worker and two hundred and sixty times the average daily wage or salary for a five-day worker, which he shall have earned in such employment during the days when so employed").

Unlike our Dissenting colleagues, we cannot ignore the reality that teachers often supplement their income during the summer. Many teachers base mortgage commitments on the expectation of a supplemental summer income. For others, summer jobs are essential in building a child's college fund. The two- month recess places teachers in a special category. Mona Outland is not claiming benefits based on a lost capacity to work an extra few hours at the end of an eight-hour work day. Nor is she claiming compensation for a lost opportunity to pick up some extra cash during a paid week's vacation. She, like most teachers, has an entire season off, during which neither work nor income is due under the employment contract. She is a seasonal employee, like a laborer hired to harvest crops or wrap Christmas gifts. In fact, Dean Larson, in his workers' compensation treatise, uses a teacher as his prime example of a seasonal employee. 2 Arthur Larson, The Law of Workmen's Compensation § 60.22(a) (1989). The Legislature could never have intended that an employee's seasonal status would fortuitously shield an employer from its obligation to compensate for the loss of such a significant opportunity to earn income.

A teacher's ability to choose to be paid on a twelve-month basis, pursuant to N.J.S.A. 18A:29-3, does not make the teacher's job any less seasonal. We noted above that salaries paid over the summer to school board employees who choose to be paid on the twelve-month plan are deemed to have been earned as of the preceding June 30th. The selection of this twelve-month plan is nothing more than a decision to defer the receipt of income previously earned. A teacher on the twelve-month plan injured during the school year would be entitled to both workers' compensation temporary disability benefits and the additional benefits afforded by the sick leave act. Those benefits would be "earned" as of June 30th but deferred into the summer in accordance with the teacher's choice. (We illustrate these cash flows in the Appendix to this opinion.) Had the teacher planned to work during the off-season, and had the injury prevented her from doing so, the teacher would be entitled to receive additional workers' compensation temporary disability benefits during the summer. Benefits received per pay period during the summer would be greater than the pay checks of an uninjured employee who selected the twelve-month plan, but that difference is a meaningless consequence of the original decision to defer income earned during the school year.

In short, we would agree with the Board that Outland would not be entitled to temporary disability benefits if Outland planned to relax all summer, perhaps vacationing at the Jersey shore. In that case the benefits would represent a windfall. But the payment of temporary disability benefits would not create a windfall if Outland planned to work during the summer recess and had her injury prevented her from following through with that plan. On the contrary, to deny payments based on lost summer employment would frustrate the purpose of the workers' compensation system, which is "to compensate for the inroad upon the full-time earning capacity of the victim of industrial mishap." Maver v. Dwelling Managers Co., 34 N.J. 440, 443 (1961) (Weintraub, C.J.) (emphasis added).

We therefore cannot accept the Board's contention that the sum of the salary Outland received prior to her injury and her temporary disability benefits may not exceed the amount she was due to earn as income over the entire school year. To accept the Board's contention would make second-class citizens of teachers in contrast to other seasonal employees. Although a seasonal employee's benefits must be based on the hourly, daily or weekly wage provided "under the contract of hiring in force at the time of the accident," N.J.S.A. 34:15-37, a seasonal employee's aggregate recovery of workers' compensation temporary disability benefits has no necessary relationship to the aggregate amount due to him or her under the contract in force at the time of the injury. We repeat that the purpose of the Workers' Compensation Act is "to compensate [the worker] for the inroad upon the full-time earning capacity of the victim of industrial mishap." Maver, supra, 34 N.J. at ...


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