NEDERHOOD v. CADILLAC MALLEABLE IRON COMPANY; ZIMMERMAN v. CADILLAC MALLEABLE IRON COMPANY
Case Details
- Citation
- 445 Mich. 234
- Judge(s)
- Cavanagh, C.J., and Mallett, J., concurred with Boyle, J.; Griffin, J., concurred with Riley, J.
- Procedural Posture — the stage the case had reached
- appeal
- State
- Michigan
Related Laws
No specific laws identified for this ruling.
Claim Types
Outcome
The Michigan Supreme Court reversed the Worker's Compensation Appeal Board in both cases on different grounds. In Nederhood, the Court reversed and remanded, holding that voluntary cessation of favored work does not result in permanent forfeiture of benefits. In Zimmerman, the Court reversed, holding that a supervening heart attack while on strike revived the right to wage loss benefits.
Excerpt
NEDERHOOD v CADILLAC MALLEABLE IRON COMPANY ZIMMERMAN v CADILLAC MALLEABLE IRON COMPANY Docket Nos. 94110, 94299. Argued October 5, 1993 (Calendar Nos. 3-4). Decided May 31, 1994. Rehearing denied in Nederhood, post, 1237. Roger Nederhood and James Zimmerman separately sought worker’s compensation benefits for disability that allegedly arose out of and in the course of their employment with Cadillac Malleable Iron Company. A hearing referee found the plaintiffs to have been partially disabled at the commencement of a strike between Malleable and their union, but denied them benefits during the period of their participation in the strike. The referee found, however, that wage loss benefits recommenced when an offer by the union to return to work terminated any unreasonable refusal by the plaintiffs to perform favored work. The referee additionally found that Zimmerman became totally disabled on February 4, 1982, as a result of a supervening heart condition unrelated to his favored work. In separate proceedings, the Worker’s Compensation Appeal Board affirmed the referee’s findings with respect to dates of injury and the cessation of benefits during the strike, but reversed with regard to the restoration of wage loss benefits after the union’s offer, finding no showing that plaintiffs personally had offered to return to work. The Court of Appeals, Hood, P.J., and Connor and Richard Kaufman, JJ., affirmed in an unpublished opinion per curiam. In Zimmerman, it held that the wcab had not applied erroneous legal reasoning in determining that the plaintiff’s refusal to perform favored work while on strike, and not the actions of the union in striking, provided a basis for denying benefits, and that such forfeiture continued for the duration of the plaintiff’s unwillingness to return to work. It additionally found that Zimmerman’s supervening heart attack did not render him eligible for benefits, because he failed to communicate his willingness to return to work before the heart attack (Docket No. 134288). In Nederhood, the Court held that the wcab had correctly applied the law in determining that the plaintiff’s participation in the strike precluded collection of work loss benefits during the pendency of the strike and that he had not personally offered to return to favored work (Docket No. 134290). The plaintiffs appeal. In separate opinions, the Supreme Court held: A voluntary cessation of favored work per se does not result in a permanent forfeiture of wage loss benefits. In Zimmerman, the occurrence of the plaintiff’s heart attack while on strike does not preclude the recovery of wage loss benefits. Generally, a refusal of suitable work suspends benefits for the duration of the refusal. However, a permanent forfeiture of benefits is not in accord with a liberal construction of the Worker’s Disability Compensation Act. Nederhood reversed and remanded for further proceedings. Zimmerman reversed. Justice Brickley additionally stated that a voluntary cessation of favored work by a striking employee should result in a suspension of wage loss benefits. Neither a conditional offer to return by a worker’s union nor the hiring of permanent replacement workers by the employer should operate to automatically restore benefits to the striking employee. However, benefits should be restored once the employee expresses a good-faith willingness to return to favored work, provided such willingness is communicated to the employer within a reasonable period following the cessation of favored work. The resumption of such an employee’s right to benefits upon the occasion of a supervening heart attack that renders the employee totally disabled should depend on the certainty and extent of the injury, the length of the refusal to perform favored work before the injury, and the lack of a causal nexus between the refusal of favored work and the resulting heart attack. Justice Boyle, joined by Chief Justice Cavanagh and Justice Mallett, concurring in part and dissenting in part, additionally stated that the hiring of permanent replacement workers, in fact and in law, may work to withdraw an employer’s offer of favored work. An employee’s right to benefits is suspended only as long as there is a voluntary withholding of services. If the employer has revoked the offer of favored work with the hiring of replacement workers, then the refusal to work is no longer due to the strike. The issue of the adoption of a reasonable time limitation on an employee’s ability to reestablish the right to favored work is not properly before the Court and its disposition is unwarranted. However, only because three members of the Court propose the adoption of such a limitation is it necessary to oppose this adoption. The reasonable time limitation would present employers with a windfall by relieving them of the obligation to pay owed benefits or offer favored work without policy justification. Justice Riley, joined by Justice Griffin, concurring in part and dissenting in part, additionally stated that a striking favored worker fully disabled by a supervening event is not entitled to a reinstatement of benefits without showing an intention to have returned to work but for the supervening event. A favored worker who refuses to perform favored work because of participation in a strike forfeits the right to compensation. The worker only becomes eligible to have benefits restored when a good-faith willingness to resume favored work is tendered. Reasonableness must apply to both parties. A favored worker’s unreasonable delay in accepting an offer of favored work relieves the employer of liability. In Nederhood, the plaintiff failed to present a prima facie case and appropriately was denied relief. A supervening event causing cessation of an employee’s favored work will not terminate the right to benefits as long as the event is not under the employee’s control. While such an event does not preclude payment of compensation, the favored work doctrine does not require compensation to be automatically revived upon its happening. A claimant must show that favored work already was being performed and that a supervening independent event precluded its continuance. In Zimmerman, the plaintiff was not entitled to benefits. He was not performing favored work when he suffered the heart attack, but was voluntarily participating- in a strike, and he failed to present evidence that he would have returned to work despite the strike and the decertification of the union. His disability is irrelevant to his ability to receive benefits because he would have been ineligible for such benefits if he had not had the heart attack. Justice Levin, writing separately, joined in reversal in Zimmerman, and would remand with the direction that benefits should be awarded to Nederhood, but joined in remand to provide a fourth vote for a disposition that may result in the award of compensation. MCL 418.301(5)(a); MSA 17.237(301)(5)(a), effective January 1, 1982, providing that a disabled employee who refuses a bona fide offer of reasonable employment from a previous employer, another employer, or through the Employment Security Commission without good and reasonable cause is no longer entitled to any wage loss benefits during the period of such refusal, is inconsistent with the view that such a refusal results in permanent forfeiture of worker’s compensation benefits. That statutory provision is also inconsistent with the view that because it would be unreasonable to expect the employer to keep such positions open beyond the point that it announced the jobs would be filled by permanent replacements, Nederhood may not recover benefits. While the needs of the employer may justify the employer in not keeping an offer open beyond a reasonable time, the need of the employee to participate in a strike may justify a refusal to work during a strike. The disabled worker is nevertheless disabled and can properly be denied benefits only during the period of a refusal, without good and reasonable cause, of a bona fide offer of reasonable employment from a previous employer, another employer, or through the mesc. The period of such a refusal is a question of fact, and the burden of showing refusal of work should be borne by the employer because the offer of favored work is in mitigation of damages. Bott & Spencer, P.C. (by Timothy J. Bott), for the plaintiff. Russell & Carowitz (by Fanny L. Vail) for the defendant. Brickley, J. We granted leave in these cases to determine whether the Worker’s Compensation Appeal Board and the Court of Appeals erred in concluding that the plaintiffs-appellants were disqualified from receiving worker’s compensation benefits because they left favored work to participate in a strike that resulted in the use of permanent replacements. In deciding this issue, we must determine whether the hiring of permanent replacement workers obligates an employer to renew its offer of favored work to its injured employees, or whether the employee must take action to reinstate benefits. In the case of plaintiff-appellant James Zimmerman, who became fully disabled after the strike had begun, we must determine whether such total disability operates to revive his right to benefits. We conclude that where a striking favored worker has voluntarily ceased performance of favored work, benefits should be restored once the favored worker expresses a good-faith willingness to return to favored work, provided this willingness is communicated to the employer within a reasonable time after the cessation of favored work. Such benefits should not automatically be restored upon the hiring of permanent replacement workers by the employer. Additionally, we would hold that plaintiff Zimmerman’s supervening heart attack, which rendered him totally disabled, revived his right to benefits. I A This dispute arose out of a labor strike between defendant-appellee Cadillac Malleable Iron Company and Local 784 of the uaw, of which plaintiffs-appellants, James Zimmerman and Roger Nederhood, were members. On September 30, 1981, the collective bargaining agreement between Cadillac and the union expired, and the union struck on October 1, 1981, when it became apparent that a new agreement was not forthcoming. At this time, approximately thirty-five proposals for a new contract were unresolved. Cadillac was demanding twenty-four additional language changes in the contract and the union was demanding a $2 per month increase in the employer’s pension contribution for current retirees. On October 7, 1981, Cadillac modified its September 30 proposal and submitted it to the union. These modifications included an extension of seniority retention during layoff to thirty-six months. This offer was rejected by the union and was withdrawn by Cadillac by October 22, 1981. On January 12, 1982, Cadillac officially informed the union that it would be hiring permanent replacement workers. At a January 18, 1982, bargaining session, the union attempted to accept the October 7, 1981, proposal, and offered to accept a dollar an hour cut in wages. Cadillac informed the union representative that the October 7 proposal had been withdrawn, and insisted on limiting wages to $6 per hour with no cost-of-living adjustment, and on limiting the number of plant classifications. The union representative terminated this meeting. As of March, 1983, forty-one or forty-two replacement workers had been hired. At the time of the strike, approximately eighty workers had been employed by Cadillac. The record is silent with regard to whether plaintiffs’ favored work positions had been given to permanent replacements. B A hearing referee found both Zimmerman and Nederhood to have been partially disabled at the commencement of the strike, but determined that plaintiffs were not entitled to wage loss benefits for the period between October 1, 1981, and January 18, 1982, because of their participation in a strike. The referee found, however, that wage loss benefits recommenced on January 18, 1982, determining that the union’s “offer to return” to work on this date terminated any unreasonable refusal by plaintiffs to perform favored work. Additionally, the hearing referee found that on February 4, 1982, plaintiff Zimmerman became totally disabled as a result of his supervening, non-work-related heart condition. The wcab affirmed the hearing referee’s findings with respect to injury dates and the cessation of benefits during the strike, but reversed the referee’s determination that plaintiffs were entitled to restoration of wage loss benefits as of January 18, 1982, finding instead that there was no showing that plaintiffs themselves had offered to return to work at any time before the wcab hearing. Plaintiffs’ applications for leave to appeal to the Court of Appeals were denied for lack of merit, and we remanded for consideration as on leave granted. The Court of Appeals affirmed the decisions of the wcab. In Zimmerman, it held that the wcab had not applied erroneous legal reasoning in determining that plaintiff’s individual refusal to perform favored work while his union was on strike, and not the actions of the union in striking, provided a basis for denying benefits, and that such forfeiture continued for the duration of plaintiff’s unwillingness to return to work. In Nederhood, it held that the wcab had correctly applied the law in determining that Nederhood’s participation in the strike precluded him from collecting wage loss benefits during the pendency of the strike. The Court of Appeals also found that the record adequately supported the board’s holding that plaintiffs had not personally offered to return to favored work, and that the union’s January 18, 1982, "offer” was merely another proposal in a series of negotiations. Additionally, in Zimmerman, it found that plaintiff’s supervening heart attack did not render him eligible for benefits because he had failed to communicate his willingness to return to work before his supervening heart attack, thus failing to meet his burden of establishing his entitlement to benefits. On March 16, 1993, we granted leave to appeal, ordering that Zimmerman and Nederhood be submitted and argued together. 442 Mich 867. II As a preliminary matter, we note that the parties do not dispute that the plaintiffs were performing favored work at the time of the strike. Additionally, the parties do not contest that before the union’s offer to return to work on December 4, 1981, under a contract incorporating prestrike terms, plaintiffs were disqualified from receiving benefits on the basis of their voluntary cessation of favored work stemming from their participation in a strike. We must now decide the duration of this disqualification._ The general rule is that a refusal of suitable work suspends benefits for the duration of the refusal. Although this Court has never expressly decided the question, in Bower v Whitehall Leather Co, 412 Mich 172; 312 NW2d 640 (1981), we utilized a case that supports this rule, and our decision in Pigue v General Motors Corp, 317 Mich 311; 26 NW2d 900 (1947), seems also to imply a suspension of benefits instead of a permanent forfeiture. A The Bower Court’s citation, with apparent approval, of PPG Industries, Inc v Aites, 7 Pa Commw Ct 588; 300 A2d 902 (1973), supports the conclusion that Bower envisioned only a temporary loss of benefits. In PPG Industries, Inc, the employee left his favored work to become a minister. Once it became evident that he was unable to earn a living as a minister, he attempted to find other light work. The court held that he had. not permanently forfeited his benefits by leaving favored work. The combination of the claimant’s attempt to find employment other than as a minister and the unavailability of his old favored position triggered his eligibility for benefits. B The Pigue Court did not expressly address this issue because the claimant had returned to favored work upon settlement of the strike. In framing the issue, however, the Court stated that the pivotal question was whether the plaintiff was entitled to compensation "during the period of a strike . . . .” Id. at 315. While the weight to be accorded this is minimal, it lends credence to the view that suspension is the sanction implicit in Pigue. Noteworthy, also, is that the Pigue Court neither stated nor intimated that a permanent forfeiture results. c Larson, in his treatise on worker’s compensation, opines that a temporary forfeiture of benefits is the preferred sanction. Although discussed within the context of employee misconduct, the reasons underlying his conclusions apply with equal force to the striking employee. Larson states that an injured employee discharged for misconduct should not suffer a permanent loss of benefits. He draws an analogy to the unemployment context, in which misconduct-based discharges and voluntary quitting are handled by imposing a penalty of a limited number of weeks. Likewise, he concludes that in the worker’s compensation arena, the penalty for a voluntary cessation of favored work should also be limited to a loss of benefits for a period of weeks. D The Minnesota Supreme Court has grappled with this issue and determined that only a temporary forfeiture of benefits should result. Marsolek v George A Hormel Co, 438 NW2d 922, 923 (Minn, 1989). In this case, a partially disabled employee, Marsolek, was terminated for misconduct during a strike against the employer. Marsolek had threatened to damage cars and injure employees attempting to cross the picket line. When the plant was reopened five months after the strike began, Marsolek was not invited to return. Except for a three-month period following the strike, he was unable to find employment, and filed a claim for worker’s compensation benefits, including a claim for lost wages. The court held that a justifiable discharge for misconduct suspends an injured employee’s right to wage loss benefits; but the suspension of entitlement to wage loss benefits will be lifted once it has become demonstrable that the employee’s work-related disability is the cause of the employee’s inability to find or hold new employment. Such a determination should be made upon consideration of the totality of the circumstances including the usual work search "requirements.” [Id. at 924. Emphasis added.] In reaching this conclusion, the court noted that the purpose of the Worker’s Compensation Act was to compensate injured employees for a wage loss attributable to a work injury. On this basis, compensation has been denied where the record established only a discharge for misconduct; but benefits have been awarded where the record evidenced misconduct, yet showed that the employee’s injury was the cause of his inability to find other work. E The Court of Appeals has, on several occasions, spoken on the issue of permanent forfeiture. In Hartsell v Richmond Lumber Co, 154 Mich App 523; 398 NW2d 456 (1986), the employee left his favored work as a night watchman and began working elsewhere. Hartsell was given compensation for total disability during the period between his injury and his employment as a night watchman, and was given compensation for partial disability for the period up until his hearing, but was denied compensation for lost wages during the period following his cessation of favored work. In February, 1978, Richmond Lumber closed its plant, and in May, 1978, Hartsell filed a petition for compensation. The Court of Appeals affirmed an award of benefits from the time of the plant closing, holding that the plant closure was a tacit withdrawal of the offer of favored work, rendering Hartsell eligible for benefits. The Court of Appeals reached a similar result in Steward v Westran Corp, 130 Mich App 68; 343 NW2d 7 (1983). In this case, the plaintiff initially accepted Westran’s offer of favored work, but upon completion of his first favored work assignment, he rej
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