McRae v. Toastmaster, Inc.

• Decision Date: 25 June 2004
• Docket Number: No. 287A03.,287A03.
• Court: North Carolina Supreme Court
• Parties: Alberta McRAE, Employee v. TOASTMASTER, INC., Employer Self-Insured (Corporate Claims Management, Servicing Agent).

597 S.E.2d 695

358 N.C. 488

Alberta McRAE, Employee v. TOASTMASTER, INC., Employer

Self-Insured (Corporate Claims Management, Servicing Agent).

No. 287A03.

Supreme Court of North Carolina.

June 25, 2004.

H. Bright Lindler, Rockingham and Charles R. Hassell, Jr., Raleigh, for plaintiff-appellant.

Cranfill, Sumner & Hartzog, L.L.P., by Kirk D. Kuhns and Jaye E. Bingham, Raleigh, for defendant-appellees.

LAKE, Chief Justice.

This case arises out of an employment dispute that ultimately resulted both in plaintiff's termination and in her loss of workers' compensation benefits. The sole issue presented on appeal to this Court is whether defendant-employer provided competent evidence showing that plaintiff's failure to perform her assigned job duties was not related to her prior compensable injury under workers' compensation. The Court of Appeals held there was such competent evidence, thereby denying plaintiff additional benefits. For the reasons set forth herein, we reverse.

At the outset, we note the significance of the circumstances of the case at bar. Only a handful of cases concerning the termination of injured employees have been scrutinized by the state's appellate courts — and none by this Court. We thus recognize that our decision here will impact many workers' compensation claims that involve an employee who is not performing his work-related duties at preinjury levels. In its consideration of the instant case, the Court of Appeals applied a balancing test originally established in Seagraves v. Austin Co. of Greensboro, 123 N.C.App. 228, 472 S.E.2d 397 (1996),¹ and concluded that plaintiff had failed to demonstrate that she was entitled to continued benefits after being terminated from employment for misconduct. As a consequence of this holding, we therefore must determine whether: (1) the test in Seagraves is the appropriate means for deciding a case of this nature, and, if so, (2) whether the test was appropriately applied in this instance.

I.

In 1996, plaintiff Alberta McRae began working as an assembler for defendant, Toastmaster, Inc. Her initial duties required her to peel Uniform Product Code (UPC) labels from a roll and place them on boxes. After working in this position for six months, plaintiff was transferred to a different department, where she installed clock components.

Sometime in 1997, plaintiff began experiencing pain and numbness in her right hand. In January 1998, plaintiff visited the company nurse, complaining of continuing discomfort in her hand. She was referred to the Occupational Health Center at Scotland Memorial Hospital and was placed on light-duty work through mid-February.

Plaintiff's symptoms persisted throughout the first half of 1998, and in June she obtained permission to see an orthopedic surgeon. She was diagnosed with carpal tunnel syndrome and initially treated with medication. In July 1998, plaintiff informed the surgeon that she had experienced some improvement in her condition; however, in September 1998, she returned to the doctor complaining of problems with both hands. Soon thereafter, plaintiff was diagnosed with bilateral carpal tunnel syndrome. During this period, plaintiff's doctor recommended that plaintiff refrain from clock assembling duties at work. In response, defendant assigned plaintiff to other light-duty work assignments.

In late October 1998, plaintiff had surgery on her right wrist. Similar surgery on her left wrist was performed about a month later. In the wake of her surgeries, plaintiff briefly returned to clock assembling, but she continued to feel discomfort performing the tasks required. Plaintiff's doctor finally advised her to avoid such work permanently.

Sometime in April 1999, defendant reassigned plaintiff to her duties as a UPC box labeler — her original position with the company. However, in the weeks that followed, plaintiff failed to label the boxes as required. When she was reprimanded by the company for her miscues, plaintiff could not explain why she missed so many boxes, although she would later testify at her workers' compensation hearing that she had some difficulty with her hands while trying to peel the individual labels off their roll.

On 5 May 1999, defendant terminated plaintiff's employment with the company. Defendant admitted liability for benefits related to plaintiff's carpal tunnel syndrome surgery, paid plaintiff compensation for the periods of work she missed due to her surgery, and paid plaintiff's medical bills that were associated with her hand injuries.

Plaintiff then sought additional relief for the continuation of benefit payments and complied with all necessary procedures to procure a hearing before a deputy commissioner of the North Carolina Industrial Commission. In an order filed 9 February 2001, the deputy commissioner found that: (1) although plaintiff was terminated for errors she committed as a UPC labeler, her errors were not intentional and did not constitute misconduct; (2) there was a serious question regarding whether the labeling job was suitable for plaintiff in view of her hand ailments and the repetitive pinching and hand movements required by the position; and (3) she continued to have some residual symptoms in her hands while performing the job.

As a result of these findings, the deputy commissioner concluded that: (1) since plaintiff was not terminated for misconduct, she did not constructively refuse suitable employment; and (2) plaintiff is therefore entitled to elect between receiving compensation for her disability and compensation for her actual wage loss, whichever proves to be the "more munificent remedy."

The deputy commissioner then calculated plaintiff's disability award at a rate of $166.67 per week, to begin the week after her termination. The deputy commissioner also ordered that such payments continue, as applicable, until plaintiff returned to work or if unable to do so, through her lifetime.

Defendant appealed to the full Commission. The Commission, with one commissioner dissenting, filed an opinion and award on 18 April 2002, finding that the greater weight of the evidence "fail[ed] to establish that plaintiff could not perform the UPC labeler position [due to her injuries]." The majority went on to find that plaintiff's failure to perform her labeling duties constituted "a failure to accept a suitable position reasonably offered by her employer." The Commission's majority then concluded that plaintiff "was terminated for misconduct and she thereby constructively refused suitable employment." As a result, the majority reduced plaintiff's benefit award to $166.67 for sixteen weeks.

The Commission's dissenting opinion, in essence, concurred with the deputy commissioner's view, concluding that plaintiff's inability to keep up with the demands of the UPC labeling job was caused by her compensable occupational disease. Plaintiff was under doctor's orders to avoid "`repetitious pushing, pulling, gripping, pinching[,] and fingering,'" which, in the dissent's reasoning, constituted the core duties of a UPC box labeler. Thus, because plaintiff was assigned a task that required her to perform the same type of repetitive hand functions that had effected her original injuries, it could not be appropriately determined that plaintiff had refused — constructively or otherwise — a suitable offer of employment.

Upon review by the Court of Appeals, a majority affirmed the full Commission's opinion and award, concluding that: (1) defendant-employer had provided competent evidence that plaintiff's failure to perform her UPC labeling duties was not related to her prior compensable injury, and (2) plaintiff had failed to present any evidence of disability, and any presumption of such disability ended when plaintiff returned to work. The Court of Appeals' majority thus affirmed the Commission's conclusions that plaintiff had constructively refused suitable employment and that she was entitled only to a reduced award.

The Court of Appeals' dissenting opinion concluded that the evidence was susceptible to only two interpretations — plaintiff's failure to perform tasks previously accomplished was attributable to either her intervening injury or negligence — neither of which meets the legal criteria required to establish misconduct or a constructive refusal of suitable employment. The dissent's paramount concern focused on the potential prospective effect of the majority's holding, which, according to the dissent, would expand an employer's right to terminate an injured employee well beyond the narrow parameters recognized under existing law.

II.

On appeal to this Court, plaintiff argues that the majorities on the Industrial Commission and the Court of Appeals decided her case under a misapprehension of the law. In sum, she contends that her conduct under the circumstances did not amount to either: (1) misconduct that would justify her termination without regard for her compensable injury, or (2) a refusal — actual or constructive — to engage in suitable employment.

In Seagraves, the Court of Appeals examined the question of whether an employee can be deemed to have refused suitable employment, thereby precluding injury-related benefits, if she is terminated for misconduct that is unrelated to her workplace injuries. 123 N.C.App. 228,472 S.E.2d 397; see also N.C.G.S. § 97-32 (2003) (refusal of injured employee to accept suitable employment shall result in suspension of compensation); and N.C.G.S. § 97-32.1 (2003) (if an employee's trial return to work is unsuccessful, his or her right to continuing compensation shall be unimpaired unless terminated or suspended thereafter pursuant to the Workers' Compensation Act). In its analysis in Seagraves, the court acknowledged that the underlying purpose of the North Carolina Workers' Compensation Act is to "provide compensation to workers whose earning capacity is diminished or destroyed by injury arising from their employment"...