Memorandum of Law on the issue of the OBLIGATION TO REHIRE
MEMORANDUM OF LAW
DOES THE WORKERS COMPENSATION ACT (CHAPTER 440) PROVIDE ANY REMEDY FOR AN INJURED WORKER WHEN THE EMPLOYER (ONE WITH 50 OR MORE EMPLOYEES) FAILS TO FULFILL ITS OBLIGATION TO MAKE WORK AVAILABLE TO AN INJURED WORKER WHO HAS REACHED MMI WITH RESTRICTIONS AND LIMITATIONS?
Florida Statute 440.15 (6) (1993) reads:
"OBLIGATION TO REHIRE - If the employer has not in good faith made available to the employee, within a 100-mile radius of the employee’s residence, work appropriate to the employee’s physical limitations within 30 days after the carrier notifies the employer of maximum medical improvement and the employee’s physical limitations, the employer shall pay to the Division for deposit into Workers Compensation Administrative Trust Fund a fine of $ 250.00 for every $ 5,000.00 of the employers workers compensation premium or payroll, not to exceed $ 2,000.00 per violation, as the Division requires by rule. The employer is not subject to this subsection if the employee is receiving permanent total disability benefits or if the employer has 50 or fewer employees."
The 1996 Annual Report of the Division of Worker’s Compensation lists as one of the Division's goals:
"To return injured employees to suitable employment as soon as feasible, using the most cost effective means, at a wage as close as possible to their pre-injury wage."
RECENT HISTORY OF BENEFITS FOR DISABILITY
EXCLUDING - Permanent Total Disability (PTD)
Before 1979 injured workers were compensated for their physical impairments in an amount equal to their percentage of permanent impairment multiplied by 350 weeks and multiplied again by their full compensation rate. If their loss of wage earning capacity (disability) exceeded the percentage of impairment, the higher number was awarded to compensate for a "disability" greater than the "impairment," but not considered permanent total disability (PTD).
From 1979 to 1990, impairments were compensated only if they were of a particular defined type i.e., amputation, loss of vision, etc. All impairments not enumerated went uncompensated unless they caused a wage loss. In those instances even a 1% impairment allowed for up to 520 weeks (ten years) of wage loss benefits. Wage loss and disability were synonymous.
Between 1990 and 1994, impairments as defined in 440.15 were compensated using a wage loss benefit limited by a schedule. For example: impairments between 6% and 9% were eligible for 78 weeks of wage loss (for disability). The 1993 amendments to ch. 440 eliminated all defined impairment benefits. All impairments are now compensated at 3 weeks of compensation for each percentage point of impairment. The weekly compensation rate is one-half the TTD rate. Disability is compensated by a supplemental benefit based on a wage loss formula but only if the impairment is 2 % or more of the body 440.15 (3) (b) 1a. There is no compensation whatsoever under the 1993 act for "disability" if there is an impairment rating less than 20% of the body as determined by the Florida Impairment Guides.
"Impairment" and "Disability" are NOT the same. F.S. 440.02 (11) defines "Disability" as meaning incapacity because of the injury to earn in the same or any other employment the wages which the employee was receiving at the time of the injury. Permanent "Impairment" is defined as any anatomic or functional abnormality or loss determined as a percentage of the body as a whole, existing after the date of maximum medical improvement, which results from injury, F.S. 440.02 (19) (1993) (language in bold added by the 1993 legislature).
This First DCA has held:
"The context and use of "Permanent Impairment" in other portions of chapter 440 likewise confirms our conclusion that "Permanent Impairment", being a term of art limited to anatomic or functional abnormality or loss as established and rated by a testifying physician, is not the conceptual equivalent of a claimant’s "disability" to earn wages or income at the level he or she was earning at the time of the industrial accident." Escambia County v. Goldsmith, 500 So. 2d 626, 633 (1 DCA 1986).
LEGISLATIVE INTENT - 1993 Legislative intent is spelled out specifically:
"LEGISLATIVE INTENT - Whereas it is often difficult for workers with disabilities to achieve employment or to become re-employed following an injury, and it is the desire of the Legislature to facilitate the return of these workers to the work place, it is the purpose of this section to encourage the re-employment and
accommodation of the physically disabled by reducing an employer’s insurance premium for re-employing an injured worker, to decrease litigation between carriers on apportionment issues, and to protect employers from excess liability for compensation and medical expense when an injury to a physically disabled worker merges with, aggravates or accelerates his preexisting permanent physical impairment to cause either a greater disability or permanent impairment or an increase in expenditures for temporary compensation or medical benefits than would have resulted from the injury alone..."
(F.S. 440.015 (1993)).
"It is the intent of the legislature that workers compensation laws be interpreted so as to assure the quick and efficient delivery of disability and medical benefits to an injured worker and to facilitate the workers return to gainful re-employment at a reasonable cost to the employer" (the underlined language was added by the 1993 Legislature) F.S. 440.015 (1993).
To accomplish the stated objectives the 1993 Legislature created the "Preferred Worker" program for workers who had a permanent impairment resulting from a compensable injury or occupational disease and who were unable to return to their regular employment (F.S. 440.49 (2) (b), (8) (1993)). In addition, incentives of a monetary nature were written into the act to benefit those employers who hired Preferred Workers (F.S. 440.49 (8) (1993)).
The 1993 Legislature also enacted F.S. 440.491, "Reemployment of Injured Workers; Rehabilitation." That section provides that if an employee who suffered a compensable injury was unemployed sixty (60) days after the date of the injury and receiving benefits for TTD, TPD or Wage Loss ..... the carrier must thereafter determine the re-employment status of the employee at ninety (90) day intervals as long as the employee remains unemployed, is not receiving medical care coordination or re-employment services and is receiving the benefits specified in this subsection." (F.S. 440.491 (3) (a) (1993)). F.S. 440.491 continues by requiring that the carrier authorize qualified rehabilitation providers, re-employment assessment, training and education. An employee who refuses to accept training and education recommended by a vocational evaluator and considered necessary by the Division is subject to a 50 % reduction in weekly compensation benefits (F.S. 440.491 (6) (1993)).
The "Obligation to Rehire" section was also enacted to carry out the legislative intent of returning employees of large employers back to work if their " disability" was less than total.
The thrust of the 1993 Legislation was to cut or eliminate certain benefits to injured workers and replace them with the assurance that the State of Florida -- its departments, divisions and bureaus as well as its large employers -- would make sure that under no circumstances would an injured worker be left jobless and without indemnity benefits as long as that worker cooperated in a serious and meaningful attempt by the employer/carrier to return that worker to regular gainful employment.
STATUTORY CONSTRUCTION - 440.15 (6) "Obligation to Rehire", 440.205 "Coercion of Employees" and 440.02 (32) "Arising out of."
The Supreme Court said:
"The unanimous holding of this Court has been that all provisions of an act by the Legislature are presumed to have some useful purpose. There is no presumption that the Legislature inserts a clause or praragraph in an act which is useless. Stein v. Biscayne Kennel Club, 145 Fla. 306, 199 So. 364, (Fla. 1940), Ames v. Mathews, 99 Fla. 1, 126 So. 308; Girard Trust Company v. Tampashores Development Company, 95 Fla. 1010, 117 So. 786 (1952); Alexander v. Booth Florida, 56 So. 2nd 716 (Fla. 1952); 50 AmJur 361, Statutes, Sections 358, 359.
"If a statute grants a right or imposes a duty, it also confers by implication every particular power necessary for the exercise of the one or the performance of the other. That which is clearly implied is as much a part of the law and is as effectual as that which is expressed. Where a Statute requires an act to be done for the benefit of another or forbids the doing of an act which may be to his injury, though no action be given in express terms by the statute for the omission or commission, the general rule of law is that the party injured should have action; for, where a statute gives a right, there, although in express terms it has not give a remedy, the remedy which by law is properly applicable to that right follows as an incident." Girard Trust Company v. Tampashores Development Company (supra)(GIRARD).
COERCION OF EMPLOYEES - 440.205
The above principles of law have been applied to the workers’ compensation act by the Supreme Court in interpreting Florida Statute 440.205 (1979). That statute says:
"No employer shall discharge, threaten to discharge, intimidate, or coerce any employee by reason of such employee’s valid claim for compensation or attempt to claim compensation under the workers’ compensation law."
In Smith v. Piezo Technology (SMITH), the First District Court of Appealposed to the Supreme Court the following questions of great public importance:
1. "Whether 440.205, Florida Statute (1979) creates a cause of action for a "wrongful discharge" in retaliation for an employee’s pursuit of a workers’ compensation claim;
2. If 440.205 does create a cause of action for a "wrongful discharge" whether such action is cognizable before a Deputy Commissioner;
3. If 440.205 does create a cause of action for "wrongful discharge" but such action is not cognizable before a Deputy Commissioner, whether such action is cognizable in the Circuit Court?" Smith v. Piezo Techonology, 427 So. 182 (Fla. 1983).
The Supreme Court answered the certified questions by holding that 440.205 Florida Statutes (1979) created a statutory cause of action for wrongful discharge in retaliation for an employee’s pursuit of a valid workers’ compensation claim. Such action is not cognizable before a Deputy Commissioner but rather is cognizable in a court of competent jurisdiction". SMITH, supra.
The SMITH Court based its reasoning on those passages in the GIRARD opinion quoted above. The Supreme Court in SMITH also quoted from one of Florida’s earliest decisions:
"Thus, because the Legislature enacted a statute that clearly imposes a duty and because of the intent of the section is to preclude retaliatory discharge, the statute confers by implication every particular power necessary to insure the performance of that duty." Mitchell v. Maxwell 2 Fla. 594 (1849).
F.S. 440.205 (1979) requires, according to the SMITH Court, the exercise of jurisdiction outside of that granted in respect to claims under Chapter 440. For that reason the Court held that wrongful discharge is not cognizable before a Deputy Commissioner within Chapter 440, SMITH supra.
ARISING OUT OF - 440.02 (32)
The First District Court of Appeal has also interpreted the 1993 legislation with regard to legislative intent. The 1993 Legislature severely restricted, by definition, what kinds accidents and/or injuries would be covered under Chapter 440. For the first time a definition of "arising out of" the employment was placed in the statute, F.S. 440.02 (32) (1993). Nevertheless, the 1st DCA has chosen to rely upon the traditional definitions of "arising out of" and "in the course and scope of employment" because the court interpreted the broad legislative intent as an intention to continue coverage under workers' compensation rather than to provide the employee with a common law action against the employer in Circuit Court. Both the 1st DCA and the 3rd DCA said "nothing" in the revisions with regard to the fact that the workers’ compensation law was intended to broaden tort liability. Vigliotti v. K-Mart, 680 So. 2d 466 (1 DCA 1996) (VIGLIOTTI) and "that workers’ compensation is the exclusive remedy for injuries on the job," Perez v. Publix, 673 So. 2d 938 (3rd DCA 1996) (PEREZ).
OBLIGATION TO REHIRE - 440.15 (6)
F.S. 440.15 (6) "Obligation to Rehire" must be interpreted in the same fashion as either SMITH or VIGLIOTTI and PEREZ. F.S. 440.15 (6) (1993) either creates an obligation on behalf of the employer to provide employment (not necessarily with that employer, but merely within a 100 mile radius of the employee’s residence) and thereby grants the right of re-employment to the injured worker (somewhat akin to the reasonable accommodation required by the Americans with Disability Act, or it creates a right with no remedy ala SMITH. F.S. 440.15 (6) provides no specific remedy to the injured worker to enforce the obligation and the right to be re-employed. The section does provide for a fine, to be paid into the Workers’ Compensation Administrative Trust Fund by the recalcitrant employer (the fine does not inure to the benefit of the injured worker). The legislature intended to provide a specific benefit to those employers who did re-employ injured workers. Employers who are in compliance are supposed to get premium rebates, see F.S. 440.49 (a) (1993).
INTERPRETATION OF THE 1990 COMPENSATION ACT
In a decision which ruled that the 1990 amendments to the workers’ compensation act were constitutional, the Supreme Court went so far as to say that if an employee eligible for benefits under the W.C. Act has those benefits legislatively taken away, a viable tort remedy may remain, Martinez v. Scanlan, 582 So. 2d 1167 fn4 (Fla. 1991).
The 1993 legislation removed all compensation for "Disability" for those injured workers with "Impairments" of less than 20% of the body. In place of a monetary benefit the legislature mandated an "Obligation to Rehire" thereby restoring an injured workers wage earning capacity. This would be the "compensation" for "disability."
Note: It is possible for rights and obligations to be split. It is possible to collect some benefits under the workers’ compensation law and have a tort remedy for those benefits guaranteed by Federal law but for which there is no remedy in the State compensation scheme, Moniz v. Reitano, 23 FLW D803 (4 DCA 1998).
THE "OBLIGATION TO REHIRE" - DIVISION RULEMAKING
F.S. 440.591 grants the Division rule making authority.
F.S. 440.15 (6) requires the Division to promulgate rules for the imposition of fines.
Although the Legislature directed the Division of Workers’ Compensation to enact rules for the imposition and collection of fines as provided for in F.S. 440.15 (6) (1993), the Division has never promulgated said rules or collected any fines. A December 5th, 1997 letter from Reginald L. Watkins, Bureau Chief Rehabilitaiton and Medical Services, Florida Department of Labor and Employment Security, Division of Workers’ Compensation indicates that the Division has no records of any fines being levied or paid pursuant to F.S. 440.15 (6) (1993). That letter was written in response to a request for records pursuant to the Florida’s Public Records Act, Ch. 199.01 (et. seq).
FURTHER REVIEW OF THE 1993 ACT
The 1993 legislature restricted the ability of injured workers to obtain PTD benefits by creating a new definition of PTD called "catastrophic injury." The legislature went further by giving the Employer/Servicing Agent extraordinary rights, the use of which could terminate permanent total disability benefits once begun. The legislature allowed an employer or carrier to conduct vocational evaluations or testing "even after the employee has been accepted or adjudicated as entitled to compensation under this chapter (PTD)." Such evaluations can be done once a year, F.S. 440.15 (1) (e) 1. The Judge of Compensation Claims is directed to order a cessation of PTD benefits or supplements for any period during which an employee willfully fails or refuses to appear without good cause for a scheduled vocational evaluation or testing, F.S. 440.15 (1) (e) (1993). The Legislature left intact a provision which provides:
"If an injured employee refuses employment suitable to the capacity thereof, offered to or procured therefore, such employee shall not be entitled to any compensation at any time during the continuance of such refusal unless at any time in the opinion of the Judge of Compensation Claims such refusal is justifiable. (F.S. 440.15 (6) (renumbered ) (7) (1993)).
When a employer violates the Obligation to Rehire section, a fine is supposed to be paid into the Administration Trust Fund. There is no apparent benefit to the employee. When the employee violates a section of the act, the employee’s benefits are suspended or severely cut. This provides a direct monetary benefit to the employer/carrier.
At the appropriate point in time, whether it be on the date of maximum medical improvement or after 104 weeks of benefits are paid, does the Worker’s Compensation Judge have jurisdiction to deal with an employers failure to fulfill its obligation to rehire an injured worker; or does F.S. 440.15 (6) (1993) create a separate cause of action in the Circuit Court for enforcement of the right to be re-hired?
The JCC could decide that there is concurrent jurisdiction. But if there is, what remedy is provided under Chapter 440 for a breach of the "Obligation to Rehire" section?
The JCC could conclude that the "Obligation to Rehire" provision enacted by the legislature is intended to have no useful purpose, other than for the imposition of a fine that the Division will not levy.
SUGGESTIONS FOR RESOLUTION
The JCC should look to the doctrine of "Equitable Estoppel". In Florida "Equitable Estoppel" has been defined as:
"Equitable Estoppel precludes a person from maintaining a position inconsistent with another position which is sought to be maintained at the same time or which was asserted at a previous time; and, as a general rule where a person has, with knowledge of the facts, acted or conducted himself in a particular manner, or asserted a position inconsistent with such act or conduct to the prejudice of another who has acted in reliance on such conduct. The doctrine requires of a party consistency of conduct, when inconsistency would work a substantial injury to the other party." McCabe v. Florida Power & Light, 524 So.2nd 1068 (Fla. 4th DCA 1988).
The employer has taken totally inconsistent positions. On the one hand, that as of MMI the employee was not totally disabled (PTD). And on the other hand, that no "disability" benefits are due even though the employee has a disability as defined in the act and remains unemployed or underemployed!
As a general rule, the law does not prefer the imposition of a fine if an interpretation of the statute providing for that fine is capable of a less ominous result. The employee contends that the alternative provided by F.S. 440.15 (6) (1993) to the payment of a fine is the provision of PTD benefits to the injured worker. It is for this reason that we point out not only the doctrine of equitable Estoppel, but also those provisions of the workers’ compensation law enacted by the legislature in 1993 which make it much easier to remove an employee from the status of PTD. The employee also reminds the court of the dominant legislative intent, expressed thoughout the statute, that employees be returned to work and that employer be given incentives to take an injured worker back to work.
Our analysis of the pertinent provisions of the 1993 compensation law, those portions which were repealed effective January 1, 1994, legal theory and policy considerations as well as principles of statutory construction lead us to believe that an employer of more than 50 employees is required to continue to pay weekly compensation benefits (PTD) during that period of time during which the employer fails to fulfil the obligation to rehire an employee who qualifies for re-employment under F.S. 440.15 (6) (1993). The alternative, placing enforcement of the right or obligation to re-employment in the Circuit Court, (apparently an appropriate forum in accordance with SMITH and SCANLAN does not appear to fit the policy espoused by the 1st DCA in VIGLIOTTI or the 3rd DCA in PEREZ.
We have researched the laws of other jurisdictions which have similar legislation to Florida’s "Obligation to Rehire." Professor Larson covers this topic in Section 61.26 of his "The Law of Workers’ Compensation". Professor Larson reports that the right to re-employment usually takes one of two forms; either a State Fair Employment Practice Law that includes handicapped or disabled individuals among its protected classes or a State Workers' Compensation Statute which mandates rehiring of a compensation claimant after he or she is again able to work. This second category is found in New Mexico’s Workers’ Compensation Act and its Occupational Disease Act, N.M. Stat. Ann Section 52-1-50.1 and 52-3-49.1. Those statutes refer to "reasonable accommodation" and "modified" jobs as well as a return to work at less than the workers pre-injury pay. A Wisconsin statute provides for up to a year’s lost wages as a consequence of a violation of its statute requiring re-employment in available, suitable jobs. That section provides:
"Any employer who without reasonable cause refuses to rehire an employee who is injured in the course of employment, where suitable employment is available within the employee’s physical and mental limitations, upon Order of the Department and in addition to other benefits, has exclusive liability to pay to the employee the wages lost during the period of such refusal, not exceeding one year’s wages. In determining the availability of suitable employment the continuance in business of the employer shall be considered and any written rules promulgated by the employer with respect to seniority or the provisions of any Collective Bargaining Agreement with respect to seniority shall govern". (WIS. Stat. Section 102.35).
Professor Larson also discusses in his Treatise the effect of the "Americans with Disabilities Act" on those state laws creating a preference in favor of persons who have a disability as a result of a compensable injury as against other disabled persons. Professor Larson concludes that if a state wishes to create such a preference, it would have to attempt to do so by state legislation, on the model, for example, of the New Mexico Statute. To the extent that such preferences are given to injured workers who continue to suffer from a condition that is considered a disability under the ADA, there appears to be little or no conflict between this type of statute and the ADA. In those cases, the compensation is just as much within the police protection of the ADA as any other disabled persons with whom they might be in competition, Larson, "The Law of Workers’ Compensation", section 61.26.
The United States District Court for the Northern District of California held that Congress did not intend to defer to state compensation laws when there appeared to be a conflict with the ADA. To the contrary, the wording of the Federal Statute shows that Congress wished to provide a standard minimum level of protection for disabled workers. As for that section of the act stating that the ADA should not be construed to invalidate or limit state laws providing equal or greater protection, the Court declared that it was meant to insure that remedies available under the state law would supplement not supplant, those obtainable under the ADA. The United States District court ruled that preemption principles required that the exclusivity provisions of the California Compensation Law be given no effect, Wood v. County of Alameyda, et. al. 875 F. Supp. 659 (USDC N.D. California 1995).
We believe that the JCC has jurisdiction to award the one classification of indemnity benefits mentioned in the "Obligation to Rehire" section which satisfies the legislative intent that an employer with greater than 50 employees provide a job or pay PTD in order to avoid payment of a fine. Any other interpretation of F.S. 440.15 (6) (1993) would have to lead to one of two inescapable conclusions: that the legislature intended that the rights and obligations of the parties be moved into the Circuit court or; that the legislature did not intend for the "Obligation to Rehire" section to have any useful purpose whatsoever.
The employer would have the rule of law in this case be: "In exchange for up to a$ 2,000.00 contribution to the Fund, a large employer does not have to pay PTD or fulfill the obligation to rehire."
If the Division’s goal is reemployment of the injured worker and the legislative intent is the same, what can the JCC do, as the trier of fact and finder of law to accomplish these goals? It is a given that the JCC cannot order an employer to hire a claimant or even find a job for the injured worker. The JCC can order the payment of PTD benefits until the employer complies just as the JCC can order the cessation of benefits to the claimant who fails to fulfill his or her obligations under the act.
For the reasons stated in claimant’s argument, it is respectfully requested that the JCC award permanent total disability benefits to the injured worker starting on the date of MMI and continuing until such time as the employer fulfills it’s "Obligation to Rehire" pursuant toF.S. 440.15 (6) (1993), or until such time as the employee fails to fulfill his or her obligation to cooperate with reasonable rehabilitation efforts or to accept employment offered which is within the employees restrictions and limitations.
Mark L. Zientz
Law Offices of Mark L. Zientz, P.A.
9130 South Dadeland Boulevard
Miami, Florida 33156
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