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Cunningham v. Atlantic States Cast Iron Pipe Co.

June 26, 2006


On appeal from a Final Decision of the New Jersey Division of Workers' Compensation, CP03-36542.

The opinion of the court was delivered by: Lisa, J.A.D.



Argued March 28, 2006

Before Judges Coburn, Collester and Lisa.

This is a workers' compensation case. The petitioner, Dennis Cunningham, suffered a compensable injury, returned to full duty work, and was later terminated for cause. Before he obtained other employment, his injury disabled him from the ability to work. The judge of compensation determined that temporary disability benefits were available because, notwithstanding his termination, Cunningham was incapacitated and had not taken himself out of the labor market. We agree that an employee is not precluded from receiving temporary disability benefits under these circumstances. However, because temporary disability benefits constitute replacement for actual wage loss, the employee must prove that but for the disability he would have been employed. The record is lacking in this regard. Therefore, we reverse and remand for further proceedings.

Cunningham worked as a machine operator for respondent, Atlantic States Cast Iron Pipe Co. (Atlantic States), since 2001. On October 21, 2003, he was injured at work. He suffered a torn medial meniscus to his left knee. Atlantic States' designated physician, Dr. Karl Helmold, treated Cunningham and performed an arthroscopic surgical repair on December 9, 2003.

An Atlantic States policy provided that an employee would be terminated who inexcusably failed to report to work for three consecutive days. In November 2003, Cunningham failed to report for three consecutive days due to incarceration. He was terminated pursuant to the company policy, but through the efforts of his union, he was reinstated under a "last chance" agreement. The agreement provided that he could keep his job if he had no unauthorized absences for one year. He returned to work under the agreement on January 5, 2004.

Initially, Cunningham was assigned light duty, but Helmold cleared him for full duty as of January 23, 2004. Working without restrictions, he successfully completed his last chance agreement on January 5, 2005. In mid-January 2005, because of an outstanding traffic warrant, Cunningham was again incarcerated. He called his employer from jail and was informed he would be terminated if he did not return to work within three days. He arrived at work on the third day between 11:00 a.m. and noon, but his scheduled shift was 7:00 a.m. to 3:00 p.m. Atlantic States deemed this a violation of the three-day policy and terminated him. He refused to leave, and the employer called the police to remove him.

The union negotiated another last chance agreement similar to the previous one, and Cunningham was scheduled to return to work on February 2, 2005. Because he had to make childcare arrangements, he requested and was given a one-day extension. He reported at 7:00 a.m. on February 3, 2005, but in less than an hour received a call, which he said was from the childcare provider advising that new arrangements needed to be made immediately. He said he had not paid the provider and there was a misunderstanding about payment arrangements. Cunningham testified that he asked Atlantic States' human resources manager, James Surca, for permission to leave temporarily so he could attempt to place the children in the care of a relative or friend. He said Surca told him if he left he would be terminated. He left work and was terminated. He made no further efforts to be reinstated.

Surca gave a different version of the discussion with Cunningham. He said Cunningham came into his office, informed him he could not live up to his agreement because of the childcare problem, said he was leaving, and left. Surca denied telling Cunningham he would be terminated if he left. The judge of compensation accepted Cunningham's version, a finding supported by the record and to which we defer. Close v. Kordulak Bros., 44 N.J. 589, 599 (1965). For reasons we will discuss, the outcome would be the same under either scenario.

On February 11, 2005, just eight days after his termination, Cunningham went on his own accord to Helmold, who examined him and issued a note stating that he was unable to work because of his knee injury. Helmold estimated that Cunningham would not be able to return to work until August 1, 2005. On May 5, 2005, Cunningham filed a motion for temporary disability and medical benefits. Atlantic States did not contest the request for medical benefits, nor does it dispute that Cunningham is entitled to a permanent disability award, for which a claim is pending. Atlantic States' opposition to the claim for temporary disability was not medically grounded. Atlantic States did not dispute the opinion of its designated physician that Cunningham was unable to work because of the injury. Instead, Atlantic States argued that Cunningham suffered no wage loss because he had been performing full duty work and required no medical treatment for about a year, he voluntarily abandoned his employment, and he was unemployed.

The judge of compensation reasoned that Cunningham did not intend to remove himself from the labor market and, to the contrary, "he was extremely distressed at losing his employment and very much wanted to retain his job." She concluded:

Our statute requires respondents to pay temporary disability so long as petitioners are incapacitated due to work-related injury and have not reached maximum benefit of treatment. This obligation continues after they leave the employment irrespective of whether they left voluntarily. . . . I am aware of no authority requiring a petitioner to continue in a position ...

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