One employer paid the price to the tune of $4.3 million when it terminated a man who injured himself at the job site. The injured employee worked as a facility supervisor and hurt his back by slipping on ice while unloading goods into a freezer. Although the company testified it placed the employee on “temporary alternative duty” before terminating him, his job duties did not change despite his doctor’s restrictions. The courts ruled that the company had violated the employee’s workers’ compensation rights and rightfully awarded the employee.

Most states have laws that prohibit employers from retaliating against an employee who files a workers’ compensation claim. However, the employer may lawfully terminate as long as:

  1. Termination isn’t retaliatory
  2. Termination is based on misconduct that is unrelated to the workers’ compensation claim.  

Given the high stakes involved in terminating in these circumstances, it’s in your best interest to have protocol in place to avoid violating state or federal law. Ensure that the termination would not violate the employee’s rights with the following checklist:

- Demonstrate the employee is not capable of returning to work. Avoid Workers’ Compensation Retaliation by demonstrating with sufficient medical evidence that your employee who has been absent from work due to injury is not capable of returning to work. Unless the employee is covered under the Family and Medical Leave Act (FMLA) or the Americans with Disabilities Act (ADA), generally it is not prohibitive to terminate for grounds of an excessive absence. Take every step necessary to demonstrate that your motivation for terminating is not due to a workers’ compensation claim but the excessive absenteeism on the employee’s part in failing to return to work. For instance, written documentation is a sure-fire way to protect yourself. If a physician’s report indicates that the employee can return to work, send a letter to the employee stating that you expect him or her to return by a certain date. If the employee fails to return, by sending a final letter advising that you plan to terminate him or her by a certain date you reduce your liability significantly.

- Consider if an employee has a qualified disability. Under the ADA, an injured employee who develops a disability preventing him or her from performing an activity required at the workplace, such as lifting or walking, may have certain protections against termination. 

- Make sure you comply with FMLA requirements.
If you have more than 50 employees at your business site, the FMLA requires you to provide up to 12 weeks of unpaid leave to an employee who has a serious health condition and has worked for you for at least 12 months and at least 1,250 hours during those months. Before considering termination, confirm that you’ve complied with the FMLA’s requirements and that the leave period has been exhausted.

- Review the employee handbook with the employee.
If, during the hiring process, you issued the employee a handbook that included a signed employee acknowledgement page, review the agreed upon information to ensure that the employee’s rights are honored before taking any steps to terminate.

It is no small matter to terminate an employee on workers’ compensation leave. As the employer, you face several potential obstacles if you go down this road, and it’s essential that you carefully evaluate each one of them. Ask your HUB broker how you can protect yourself and your company so that the termination cannot be ruled as anti-discriminatory.