Rustin v. Industrial Com'n of Arizona
| Decision Date | 23 January 1996 |
| Docket Number | No. CV-94-0506-PR,CV-94-0506-PR |
| Citation | 910 P.2d 627,184 Ariz. 476 |
| Parties | Dawn RUSTIN, Petitioner, v. INDUSTRIAL COMMISSION OF ARIZONA, Respondent, Safeway Stores, Respondent Employer, Safeway Stores, Respondent Carrier. |
| Court | Arizona Supreme Court |
On November 5, 1990, claimant Dawn Rustin sustained an injury while working for Safeway Stores as a meat wrapper. Safeway a self-insured employer, 1 began paying workers' compensation benefits. In March 1991, with the claim still indeterminable because her injury was not medically stationary, 2 Rustin received a letter from Safeway inviting participation in a "voluntary employment separation program." This correspondence advised that "layoffs in some areas" might be necessary to meet projected wage reductions, and though it was "unlikely" that job classifications being offered voluntary separation would experience such terminations, the employer proposed that in exchange for "a one-time, gross lump sum payment" of $7,500, a participating employee would "1) agree to resign his/her employment; 2) sign a legal release of claims; and 3) agree not to reapply for employment with Safeway in the Phoenix division." Rustin entered into the program and left the company. 3
In November 1991, claimant had surgery to stabilize her injury. She then began receiving temporary partial disability benefits from Safeway. Several months later, she was released for light-duty work but was unable to find employment. During this time, and despite claimant's ineligibility to reapply for employment because of the terms of her earlier "separation," Safeway hired a rehabilitation consultant to determine whether her pre-injury position as a meat wrapper remained suitable. The expert contacted claimant's physician to learn what job alterations, if any, would allow Rustin's return to the same type of work. After reviewing the doctor's recommendations, Safeway asserted that had Rustin been eligible for rehire, it would have been "able to accommodate [the required] modifications" while maintaining her pre-injury rate of pay. The company later admitted that in the absence of its modified position, the claimant would have experienced a loss in earnings. 4
In April 1992, Rustin was released from care by her physician. She was then medically stationary. The doctor concluded that she had a permanent disability and limited her activities accordingly. Two months later, the Industrial Commission found that although claimant suffered an injury resulting in disability, she had not experienced a reduction in her monthly earning capacity. It held that Rustin's voluntary termination of employment, rather than any medical limitations, precluded her from returning to the same or similar job without a loss of income.
Claimant requested a hearing. The administrative law judge agreed that "any loss [in earning capacity] which applicant has sustained is by reason of her voluntary retirement rather than her physical incapacity to perform work...." After exhausting administrative review, claimant sought relief in the court of appeals. That court affirmed the finding. 5 We accepted review and now set aside the award.
The requirement of showing lost earning capacity lies with the claimant. Arizona DPS v. Industrial Comm'n, 176 Ariz. 318, 322, 861 P.2d 603, 607 (1993). "If and when the worker meets this initial burden of proof, it falls upon the employer or carrier to go forward with evidence demonstrating the availability of suitable employment and/or the lack of a causal relationship between the claimed loss of earning capacity and the injury." Id. There is no contention that claimant's proof was insufficient. In fact, Safeway agrees that the dispositive issue is whether it met the requirement of going forward with sufficient evidence to controvert claimant's showing. It argues that Rustin's inability to secure work at pre-injury wages was solely due to her voluntary participation in the employment separation program, by which she was precluded from being rehired in the modified position that would otherwise have been available. 6
As the court of appeals noted, however, the parties agree that "there is suitable employment available with companies other than employer that would result in a loss of earning capacity to claimant." 7 It is virtually undisputed on this record that, absent the modified position Safeway allegedly was willing to provide, every store in the Phoenix area would have paid Rustin less than her pre-injury wage. Thus, while the task in these cases is usually "to determine as near as possible whether in a competitive labor market the subject in his injured condition can probably sell his services and for how much," Zimmerman v. Industrial Comm'n, 137 Ariz. 578, 583-84, 672 P.2d 922, 927-28 (1983) (citation omitted), the parties here have stipulated that in the competitive market, claimant could only have sold her services at a reduced wage rate.
Safeway claims, however, that Rustin's voluntary resignation and agreement never to work for its Phoenix division altered the "competitive market" and that this act was the sole cause of any loss in earning capacity. In support of its position, Safeway cites the following language from Arizona DPS:
If ... the injury and its sequelae play no part in the worker's inability to find suitable employment, there is no compensable loss of earning capacity.
....
Termination reasons unrelated to the industrial injury, such as layoff, strike, economic conditions, or misconduct become significant only where the evidence demonstrates that they, rather than claimant's disability, caused the subsequent inability to secure work.
176 Ariz. at 323, 861 P.2d at 608. While the foregoing is a correct statement of law, there are serious flaws in Safeway's attempt to apply it here.
We believe the voluntary employment separation program was unrelated to Rustin's industrial claim. There is no evidence in the record that either party believed her compensation benefits would be affected by the separation agreement. Safeway admits that the offering letter had nothing to do with the pending claim and was sent state-wide to various classes of employees. 8 Additionally, the letter itself suggested that participation in the program would not affect Rustin's claim. It specifically stated that the payment received under the program would be "in addition to any ... benefits to which the employee would otherwise be entitled upon resigning." Even though this language may be open to differing interpretations, several well-settled principles of law lead us to conclude that the program terms could not have effectively extinguished Rustin's claim.
Claimant received $7500 for her agreement to retire and never reapply for a position with Safeway. This was the standard amount given to all participants in the program. Rustin did not get additional consideration for relinquishing her pending compensation claim. To permit a forfeiture under these circumstances would clearly undermine the goals of our workers' compensation laws. See Wiley v. Industrial Comm'n, 174 Ariz. 94, 100, 847 P.2d 595, 601 (1993) () (internal citations omitted).
Although Arizona recognizes the validity of post-compensability settlements in workers' compensation cases, Safeway Stores v. Industrial Comm'n, 152 Ariz. 42, 730 P.2d 219 (1986), the voluntary retirement agreement relied upon by Safeway failed to comply with applicable legal requirements. We have insisted that such settlements "be made in the open, subject to Commission approval." Id. at 48, 730 P.2d at 225. The agreement here, insofar as it purported to affect Rustin's compensation claim, was clearly not made "in the open." As best we can tell from the record before us, it contained no...
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Schuck & Sons Const. v. Industrial Com'n of Ariz.
...Such settlement agreements, however, are "subject to Commission approval." Id. at 48, 730 P.2d at 225. See also Rustin v. Industrial Comm'n, 184 Ariz. 476, 910 P.2d 627 (1996). In addition, a Commission rule provides that "[n]o settlement agreement, compromise, or waiver of rights of a work......