Reconsideration of Tennessee Workers’ Compensation Benefits After Termination for Cause

In Stacey v. Nissan North America, Inc., No. M2014-00796-SC-R3-WC, 2015 WL 6119501 (Tenn. Workers Comp. Panel October 15, 2015) the Supreme Court of Tennessee Special Workers’ Compensation Appeals Panel assessed an Employee’s right to reconsideration of prior workers’ compensation awards following the Employee’s termination.

A claimant’s request for reconsideration of a prior award or settlement is governed by Section 50–6–241(d)(1)(B), Tennessee Code Annotated, which provides (in pertinent part):

(i) If an injured employee receives benefits for body as a whole injuries pursuant to subdivision (d)(1)(A) and the employee is subsequently no longer employed by the pre-injury employer at the wage specified in subdivision (d)(1)(A) within four hundred (400) weeks of the day the employee returned to work for the pre-injury employer, the employee may seek reconsideration of the permanent partial disability benefits….

(iii) Notwithstanding this subdivision (d)(1)(B), under no circumstances shall an employee be entitled to reconsideration when the loss of employment is due to…

(b) The employee’s misconduct connected with the employee’s employment.

Tenn.Code Ann. § 50–6–241(d)(1)(B).

Courts in Tennessee have consistently held that “even though an employee might have a statutory right to reconsideration, there is no entitlement to an enlargement of the previous award.” Pigg v. Liberty Mutual Insurance Co., No. M2007–01940–WC–R3–WC, 2009 WL 585962 at *4 (Tenn. Workers Comp. Panel March 9, 2009). Stacey, along with other recent decisions by the Panel, point to the boundaries of the exception to the right to reconsideration.

In Marvin Windows of Tennessee, Inc. v. Gardner, No. W2011–01479–WC–R3–WC, 2012 WL 2674519 (Tenn. Workers Comp. Panel June 8, 2012) an employee settled a workers’ compensation claim and returned to work for his pre-injury employer. Employee was later diagnosed with cancer and took a medical leave of absence for over one year. The employer’s written policy permitted one year of medical leave. When the employee was unable to return to work after one year of medical leave, the employer terminated his employment. The employee then sought reconsideration of his earlier award, but the trial court ruled that he was not eligible for reconsideration.

On appeal, the Panel considered whether the employee’s failure to comply with the employer’s medical-leave policy constituted “misconduct” for purposes of the reconsideration statute. The Panel noted that “[t]he employee behavior need not rise to the level of gross or willful misconduct to satisfy this misconduct standard. Misconduct refers to an employee’s inability to perform his or her job due to reasons unrelated to a workplace injury. The standards for behavior and productivity are governed by reasonable policies established by the employer.” Marvin Windows, 2012 WL 2674519, at *3–4 (Tenn. Workers Comp. Panel June 8, 2012) (internal citations omitted).

Further, “The court must also consider the employer’s need to enforce workplace rules and the reasonableness of the contested rules. Employers should be permitted to enforce workplace rules without being penalized in a workers’ compensation case. Therefore, an employer will not be penalized for enforcement of a policy if the court determines (1) that the actions allegedly precipitating the employee’s dismissal qualified as misconduct under established or ordinary workplace rules and/or expectations; and (2) that those actions were, as a factual matter, the true motivation for the dismissal.” Id., (citations omitted). The Panel in Marvin Windows found that the employer’s medical-leave policy was reasonable and the employee’s inability to comply with that policy constituted “misconduct” that barred reconsideration of the employee’s earlier settlement award. Id.

In Dia v. Imports Collision Center, Inc., No. M2013-01496-WC-R3-WC, 2014 WL 4104591, (Tenn.Workers Comp.Panel Feb. 24, 2014), an employee sought reconsideration of his previous settlement after his employment was terminated. Employee and employer disputed many of the events regarding the circumstances of termination, but it was undisputed that employee had sought to have employee sign a disciplinary form to return to work and that employee failed to do so. The employer claimed that the employee, among other things, was terminated for misconduct, and thus was not entitled to reconsideration of his previous settlement. The Appeals Panel found that the employee’s actions in failing to sign the disciplinary notice constituted misconduct for purposes of the reconsideration statute.

In Stacey, the Employee attempted to receive reconsideration of three previous workers’ compensation claims following his termination. The Employee was terminated after a verbal altercation with an employee of a workout facility provided by the Employer for its employees. Prior to this argument, Employee had completed his workday, left the premises, and returned on his own time to the workout facility. The workout facility was staffed by a contractor, and therefore the employee on the receiving end of the altercation was not an employee of the Employer. Employer had never before disciplined employees for actions occurring at the workout facility.

Based on this fact pattern, the appellate court held that Employee’s termination was not sufficiently connected to his employment in order to meet the “connected with” language under 50–6–241(d)(1)(B) since it occurred offsite, outside of the context of the Employee’s employment and to not involve a clear violation of a policy of the Employer. The Employee was thus entitled to reconsideration of his previous awards and settlements.

As shown in Stacey, Dia, and Marvin Windows, the determination by Tennessee courts as to whether or not a termination meets the standard of misconduct “connected with an employee’s employment” under § 50–6–241(d)(1)(B) is fact-intensive. The closer the employee’s “misconduct” can be found to have violated a clear policy of the employer, the more likely they are to be found to meet the standard for an exception to the employee’s right to reconsideration.