Parker, Kern, Nard & Wenzel
Legal Updates


Denying TD After a Valid Termination

I am always finding issues that most of us regard as previously decided through various court decisions that apparently are not clear to others since they continue to come up as issues in new claims. For example, recently I saw two cases where the applicant was terminated for cause after being offered modified work. The applicant of course then asks for TD benefits and the carrier then asserts the termination as a reason for non-payment of TD. The issue is whether or not the carrier/employer has to pick up TD.

Where the employer provides a valid offer of modified work, the applicant begins working but ends up terminated for cause, the carrier can refuse to pick up TD benefits. There is case law that supports the denial of TD benefits to the applicant so long as the employer continues to be ready, willing and able to offer modified work and the termination was valid.

There is a slight catch, but it should be one that is easy to meet. It will be the employer’s burden to prove the termination was valid and that appropriate modified work would have been provided to applicant if he were still employed.

In a WCAB Panel decision not designated as significant (Rosalba Toloza, Applicant v. Dolan Foster Enterprises, WCAB No. ADJ6523994 - 2011 Cal. Wrk. Comp. P.D. LEXIS 51) the board held that the employee was terminated lawfully and the employer was not liable for TD benefits following termination. The court however did point out that an employer may remain liable for temporary disability indemnity after terminating an employee from modified work if good cause for the termination is not established (Manpower Temporary Services v. Workers' Comp. Appeals Bd. (Rodriguez) (2006) 71 Cal.Comp.Cases 1614), or if the record does not contain substantial evidence to support a finding that applicant's own misconduct created the lack of ability to return to modified work. (Butterball Turkey Company v. Workers' Comp. Appeals Bd. (Esquivel) (2000) 65 Cal.Comp.Cases 61.)

In other words the burden is on the employer to prove the termination was both lawful and justified. They must also establish that modified work would continue to be offered.

Please also note this decision to not pay TTD only applies where the applicant is Temporarily Partially Disabled (TPD), not Temporarily Totally Disabled (TTD). If the applicant is Temporarily Totally Disabled, benefits should be paid, since he would still be TTD whether still employed or not, but be wary of a doctor that makes the applicant TTD solely because he was lawfully terminated and is unable to get another job because of his work restrictions. That is not the correct standard for that determination and you should get a supplemental report from the doctor indicating what restrictions the applicant had at the time of his termination. If they are different, have that doctor justify why there is an increase in the work restrictions or why he would be TTD. Most likely, the doctor will retract the TTD and provide the appropriate restrictions.