Bower v. Whitehall Leather Co.

• Decision Date: 01 November 1980
• Docket Number: Docket No. 64020
• Citation: 412 Mich. 172,312 N.W.2d 640
• Parties: Ferrell BOWER, Plaintiff-Appellant, v. WHITEHALL LEATHER COMPANY and Second Injury Fund, Defendants-Appellees. ,
• Court: Michigan Supreme Court

Page 640

312 N.W.2d 640

412 Mich. 172

Ferrell BOWER, Plaintiff-Appellant, v. WHITEHALL LEATHER COMPANY and Second Injury Fund Defendants-Appellees.

Docket No. 64020, Nov. Term, 1980.

Calendar No. 5.

Supreme Court of Michigan.

Argued Nov. 13, 1980.

Decided Nov. 23, 1981.

McCroskey, Libner, Van Leuven, Feldman, Cochrane & Brock, Muskegon by J. Walter Brock, Muskegon, for plaintiff-appellant.

Landman, Luyendyk, Latimer, Clink & Robb, Muskegon by Jon D. Vander Ploeg, Muskegon, for defendant-appellee Whitehall Leather Co.

Miller, Cohen, Martens & Sugerman, P. C. by Bruce A. Miller, Renate Klass, Detroit, for amicus curiae Intern. Union, United Auto., Aerospace & Agricultural Implement Workers of America (UAW); Jordan Rossen, Associate Gen. Counsel, Detroit, of counsel.

MOODY, Justice.

The issue presented in this case is whether a partially disabled worker must forfeit all rights to workers' disability benefits because he will not leave a job in Florida to accept his former employer's offer of favored work when (1) he is physically able to perform the work; (2) the employer did not offer the work until the day of the hearing on the disability claim, nearly one year after the submission of that claim; and (3) the worker, in the meantime, had moved his family to Florida and accepted substitute lighter work there, the wages of which are credited against the employer's liability for compensation.

Consistent with the policy of both the Worker's Disability Compensation Act and the judicially created favored-work doctrine to encourage disabled workers to seek jobs within their physical capabilities rather than remain idle, we hold that the worker in these circumstances may refuse the proffered employment without forfeiting his workers' disability benefits. In reaching our decision, we find that the good faith or reasonableness of a worker's actions must be taken into account in determining whether the forfeiture penalty should be imposed, and, further, that factors other than those relating to the physical capacity to perform favored work may be considered in assessing the reasonableness of the refusal. Accordingly, we reverse the decision of the Court of Appeals and reinstate the WCAB award of continuing benefits to plaintiff.

I

Plaintiff Ferrell Bower, a long-time supervisory employee at defendant Whitehall Leather Company, suffered a non-work-related injury to his left knee in April, 1970. After surgery, he was able to return to his work as a foreman and leather sorter without physical difficulty.

It is undisputed that the fact that Mr. Bower was a conscientious, hard-working employee, who did not want to shift his work onto others, helped contribute to a series of subsequent injuries.

In February, 1971, a wagon tongue fell apart as plaintiff was pulling it, and he fell, reinjuring his left knee. A few days later he suffered further injury to the same knee when he fell off the side of a steel mat. As a result, he was forced to undergo additional surgery on the knee in April, 1971.

Mr. Bower returned to his job, but once again, in April, 1973, he fell and reinjured the knee, this time after stepping on a ball bearing. The knee became progressively worse, and in the fall of 1973, plaintiff took a three-month paid leave of absence and went to Florida, where he was given swimming exercises and other physical therapy.

By December, 1973, Mr. Bower's knee had improved sufficiently to enable him to return to work at Whitehall Leather. However, as a result of a strike in the summer of 1974, management employees such as plaintiff were forced to perform regular labor. The additional work, both parties agree, was beyond Mr. Bower's physical capacity, and on July 19, 1974, feeling he "just couldn't take it any more", he finally left his job at Whitehall.

Mr. Bower and his wife then moved to Florida, where both sought and found work. Initially, plaintiff took a job as a security guard for a golf club. Then, in November, 1974, he found more permanent employment as an internal detective for a department store. Though his wages were somewhat less than his earnings at Whitehall, he could perform the job comfortably in spite of his physical limitations.

Subsequently, during the course of the hearing on Bower's disability claim, more than nine months after Bower left Whitehall, defendant offered plaintiff favored work at a salary equal to that he had previously earned at Whitehall. According to the employer, this offer was made in good faith and at the first opportunity; Whitehall was not able to obtain medical testimony indicating that Bower was capable of performing lighter work until three weeks before the trial.

Acceptance would have required Bower to quit his Florida job and return to Michigan to work he was not sure he could physically perform. Therefore, he rejected Whitehall's offer.

The Administrative Law Judge awarded continuing differential benefits to plaintiff based on the injuries incurred during the course of his employment at Whitehall. Bower's Florida wages were credited against Whitehall's compensation liability. ¹

A unanimous Workers' Compensation Appeal Board (WCAB) affirmed. Bower v. Whitehall Leather Co., 1977 WCABO 3920. The WCAB found that although plaintiff remained disabled from general common labor, he was physically able to perform the favored work offered by defendant. It found further that Whitehall's offer was made in good faith. Nevertheless, the board held that Bower's refusal of the proffered employment did not result in a forfeiture of benefits because his refusal was reasonable under all the circumstances.

Defendant's application for leave to appeal was denied by the Court of Appeals. Whitehall appealed to this Court, and we remanded the case to the Court of Appeals for consideration as on leave granted. 403 Mich. 844 (1978).

In a published per curiam opinion, the Court of Appeals reversed the WCAB. Bower v. Whitehall Leather Co., 93 Mich.App. 257, 286 N.W.2d 877 (1979). It held that Bower's refusal to accept the good-faith offer of favored work within his physical capabilities terminated his right to disability benefits.

This Court granted leave to appeal. 408 Mich. 930 (1980).

II

Defendant Whitehall Leather contends, and the Court of Appeals agrees that, as a matter of law, an injured employee who rejects a good-faith offer of favored work that the employee is physically capable of performing is not entitled to disability benefits. Whitehall argues further that the WCAB erred in including the factor of the reasonableness of the refusal as part of the standard used to determine whether Bower must forfeit his benefits. However, nothing in the Worker's Disability Compensation Act indicates that the Legislature intended such a rule, and we decline to judicially adopt this harsh and rigid view of employees' rights and obligations.

The favored-work doctrine is a purely judicial creation. Favored, or light, work can be loosely defined as less strenuous post-injury work. Wages from favored work may be used as a setoff against an employer's compensation liability, M.C.L. § 418.361(1); M.S.A. § 17.237(361)(1), but favored work wages do not establish an earning capacity, and when such wages cease, they neither suspend nor bar compensation. Powell v. Casco Nelmor Corp., 406 Mich. 332, 279 N.W.2d 769 (1979).

The primary purpose of the doctrine is that of mitigation. It allows an employer to reduce or completely eliminate compensation payments by providing work within the injured employee's physical capacity. At the same time, it encourages the employee to return to productive employment rather than to remain idle, thus also serving a rehabilitative function. Pulley v. Detroit Engineering & Machine Co., 378 Mich. 418, 145 N.W.2d 40 (1966).

To hold that the reasonableness of an employee's action in refusing favored work cannot be considered in determining whether benefits should be forfeited would be to contradict the basic principle underlying both these purposes. The common-law doctrine of mitigation is founded upon notions of reasonableness:

"If the effort, risk, sacrifice, or expense which the person wronged must incur in order to avoid or minimize a loss or injury is such that under all the circumstances a reasonable man might well decline to incur it, a failure to do so imposes no disability against recovering full damages." McCormick, Damages, § 35, p. 133.

Further, in the area of rehabilitation, the Worker's Disability Compensation Act itself specifically incorporates the factor of reasonableness in judging forfeiture:

"If there is an unjustifiable refusal to accept rehabilitation pursuant to a decision of the director, the director shall order a loss or reduction of compensation in an amount determined by the director for each week of the period of refusal." M.C.L. § 418.319(1); M.S.A. § 17.237(319)(1). (Emphasis added.)

While it has not before confronted the issue directly, this Court has implicitly recognized that the favored-work doctrine must be tempered with reasonableness. In a major favored-work case, Kolenko v. United States Rubber Products, Inc., 285 Mich. 159, 280 N.W. 148 (1938), the employer refused to describe the nature of the proffered work before demanding that the employee accept it. Rejecting defendant's argument that refusal of the favored work in these circumstances should result in forfeiture of benefits, the Court stated:

"The burden was on the defendant to show that it offered plaintiff work which she could perform. * * * Plaintiff was under no obligation to comply with the unreasonable and arbitrary demand of defendant that she accept whatever work the company thought suitable for her. Plaintiff in her attitude and conduct with regard to the proposed job clearly appears to have been actuated by good faith. The law does not compel her to submit to the capricious dictates of an employer with regard to the kind of work she must accept in order...