May My Company In New Jersey Lawfully Fire An Employee Who Files For Workers’ Compensation Benefits?

Most workers in New Jersey are eligible for temporary or permanent cash benefits, known as workers’ compensation benefits, when they are injured by an accident arising out of and in the course of their employment.  See N.J. Workers’ Comp. Law § 34:15-1.

I have observed a prevalent belief, among both employers and workers, that a business in New Jersey may not lawfully fire a worker who has filed for workers’ compensation benefits.  This belief is true only in part.

The New Jersey Workers’ Compensation Law makes it unlawful for an employer “to discharge or in any other manner discriminates against an employee . . . because [the] employee has claimed or attempted to claim” workers’ compensation benefits from the employer “or because [the employee] has testified, or is about to testify,” in any workers’ compensation proceeding.  N.J.S.A. § 34:15-39.1.

By contrast, an employer in New Jersey may terminate an employee, even though the employee has claimed or attempted to claim workers’ compensation benefits from that employer, for “a legitimate, non-discriminatory reason.”  See Morris v. Siemens Components, Inc., 928 F. Supp. 486, 493 (D.N.J. 1996); see also Kube v. New Penn Motor Express, 865 F. Supp. 221, 230 (D.N.J. 1994).

In order to establish a prima facie case of retaliatory discharge, an employee must show that he made or attempted to make a claim for workers’ compensation benefits, and that he was discharged in retaliation for making that claim.  See Morris, 928 F. Supp. at 493; Kube, 865 F. Supp. at 230.

“Although the timing of a discharge may be significant, it, alone, cannot raise an inference of causation sufficient to establish a prima facie case of retaliation.”  Morris, 928 F. Supp. at 493.  An employer may fire an employee based on “the neutral application of” the employer’s absenteeism policy, even if “a substantial number of those absences were attributable to a work related injury.”  Galante v. Sandoz, Inc., 470 A.2d 45, 47, 49, 192 N.J. Super. 403, 407, 411 (Super. Ct. Law Div. Essex County 1983), aff’d, 483 A.2d 829, 196 N.J. Super. 568 (App. Div. 1984) (per curiam).

An employer who, in violation of N.J.S.A. § 34:15-39.1, discharges or in another manner discriminates against an employee because the employee has claimed or attempted to claim workers’ compensation benefits is potentially subject to several types of civil or criminal liability.  First, the violation may be prosecuted as a disorderly persons offense, for which the employer is subject to a fine of not less than $100 nor more than $1,000, or imprisonment for not more than 60 days, or both.  N.J.S.A. § 34:15-39.1.

Second, an employee may bring an administrative proceeding with the New Jersey Commissioner of Labor and Workforce Development (the “Commissioner of Labor”), in which the employee is entitled to seek reinstatement and lost wages.  Id. § 34:15-39.1; Lally v. Copygraphics, 413 A.2d 960, 173 N.J. Super. 162, 178 (App. Div. 1980), aff’d, 428 A.2d 1317, 85 N.J. 668 (N.J. 1981) (per curiam).

Third, an employee may choose instead to file, in Superior Court, a lawsuit asserting a common law cause of action for wrongful discharge based upon the retaliatory firing attributable to the employee’s filing of the workers’ compensation claim.  See Lally v. Copygraphics, 428 A.2d 1317, 1318, 85 N.J. 668, 670-671 (N.J. 1981) (per curiam).  In that wrongful discharge lawsuit, the employee may seek the full array of tort remedies available in such lawsuits, including punitive damages.  See Lally, 428 A.2d at 1318, 85 N.J. at 670.

Fourth, the Commissioner of Labor, by instituting a summary proceeding, may impose a penalty not exceeding $1,000 for each violation.  N.J.S.A. § 34:15-39.2.  “The employer alone and not [the employer’s] insurance carrier” is liable for any penalties.  N.J.S.A. § 34:15-39.3.

If your company needs assistance or guidance on a labor and employment issue and your company is located in the New Jersey area, call Attorney David S. Rich at (347) 941-0760.