The Current State of an Employee’s Right of Reinstatement Under the Workers’ Compensation Act

The information contained in this article is not intended as legal advice and may no longer be accurate due to changes in the law. Consult NHMA's legal services or your municipal attorney.

Effective February 8th, 1994, employers with five or more employees are required to reinstate injured employees to their former position upon request, assuming that the position exists and is available, and that the employee is not disabled from performing the duties of the position with reasonable accommodations for the employee’s limitations.  A certificate from the employee’s attending physician is considered to be prima facie evidence that the employee is capable of performing the duties.  An employee does not waive his or her right of reinstatement by refusing to return to work without the approval of his or her attending physician.

The statute indicated that the employee’s right of reinstatement terminates if there is a medical determination by the attending physician that the employee cannot return to his or her former position, if the employee accepts employment with another employer, or if 18 months have passed since the date of the injury. 

This statute, while felt to be a boon to employees, is rarely utilized by injured workers and the issue is infrequently litigated at the New Hampshire Department of Labor or New Hampshire Supreme Court. 

Department of Labor Rule 504.05 had also indicated that the employer wasn’t obligated to provide the former position to an injured employee of a construction contractor if the project is completed, unless another project is ongoing, to a seasonal or temporary employee, to a part-time employee as defined by the employer’s personnel policy, to an employee whose department is targeted for a reduction in force or layoff in a formal company plan, to an employee who had been given permanent restrictions by his or her treating physician, or an employee unable to return to work within 18 months from the date of the injury.

The main concern of employers, carriers, and self-insureds was the fact that there was not a provision for the cessation of the right of reinstatement based on a good faith personnel action or termination.  The Department of Labor has applied such an exception to the right of reinstatement.  However, the New Hampshire Supreme Court has historically read the Workers’ Compensation Act in a manner that liberally construes the provisions of the Act in favor of the injured worker.  Therefore, there was substantial concern that the Court would not “read in” an exception which is not even hinted at in the Department of Labor regulations or the statute itself.

No cases on the right of reinstatement went to the Supreme Court for seven years after enactment until Appeal of Halloran, 147 N.H. 177 (2001), a case which involved a very limited, fact specific ruling.  The Supreme Court held that the injured worker could take a direct action against the insurance carrier for the employer’s violation of the right of reinstatement when the employer has subsequently become insolvent and is unable to pay the weekly wage benefits which the employer should be paying to the injured worker.  This was a surprising result as the statute itself specifically indicates that if the employer does not reinstate the worker, and the Labor Department finds that reinstatement should have taken place, that the employer, not the carrier or trust is responsible for average weekly wage benefits.  However, rather than find the injured worker to have no recourse, the Court interpreted the statute in a manner inconsistent with the actual language of the statute to come to this result.

Thereafter, there were no additional reinstatement cases taken to the Supreme Court for 15 years.  In 2016 the Court addressed two separate cases, the first being the Appeal of Raymond Cover, 168 N.H. 614 (2016).  In this case the claimant was a part-time employee of the New Hampshire Liquor Commission.  He filed a workers’ compensation claim and was aware that he needed to provide documentation to justify his absence from work by a date certain, or he would be terminated.  He did not provide the documentation and was terminated.  Thereafter a hearing was requested and the injury was found compensable.  Wage benefits and medical benefits were paid.  Reinstatement was also requested but was denied by the hearing officer who noted that part-time employees were not eligible for reinstatement pursuant to the Department of Labor regulations, as they existed at that point in time.

The Appeals Board found that the Department of Labor regulations specifically excluded part-time employees from eligibility for reinstatement.  The Supreme Court found that while the statute does not specifically extend protection to part-time employees, the statute did not specifically exempt part-time employees from protection either.  Therefore, they found that the Labor Department regulation added language to the statute which the legislature did not see fit to include.  On that basis, they remanded the case for further findings consistent with the determination that the status of a part-time worker does not exclude the claimant from having a right of reinstatement.  The Department of Labor regulations have removed the exception for “part-time employees”.

In the case of Appeal of Carlos Marti, 169 N.H.185 (2016), the claimant suffered a work related injury and sought permission to go to the local emergency room.  The employer refused the request and referred the claimant to an occupational health clinic pursuant to company policy.  The claimant was informed that if he left to go to the emergency room it would constitute insubordination and he would be fired.  He did so, and was terminated.  He did not grieve his termination under the collective bargaining agreement. 

The claim was accepted and benefits were paid.  The claimant then requested a hearing on his claim for reinstatement.  The employer took the position that the claimant’s right of reinstatement was severed by a good faith personnel action.  The Court noted that while a good faith personnel action is not delineated in the statute as a reason for cessation of a right of reinstatement, the Court could “think of various other termination scenarios under which the legislature could not have intended the terminated worker to be entitled to reinstatement”.  Therefore, it concluded that the term “employee” in the right of reinstatement statute “cannot be read to include a worker who has been legitimately terminated from employment for cause”.  The Court also remanded this case to the Appeals Board for a determination as to whether the claimant’s failure to grieve his termination foreclosed a challenge to the termination under the relevant collective bargaining agreement.

One of the most frequently most asked questions by employers is whether they have the ability to terminate an injured worker, who has a compensable claim, prior to the lapse of 18 months from the date of the injury.  For workers’ compensation purposes only, an injured worker can almost always be terminated.  If the right of reinstatement has not lapsed, or terminated, this departure from the workplace would be “conditional”.  In other words, if the injured worker subsequently claimed a right of reinstatement, and was entitled to reinstatement, the termination would be voided and the claimant would return to the job.  Please note that there may be employment law ramifications to a termination and employment law counsel should always be consulted prior to the termination.  The indirect effect on the workers’ compensation claim may be to increase the indemnity exposure of the claim.  For example, if the employer accepts the claimant back at the prior job, or a similar job with reasonable accommodation, there may be no indemnity exposure whatsoever.  However, if reinstatement is not granted, claimants frequently request hearings on both extent of disability (to be paid indemnity benefits by the carrier) and right of reinstatement (to be paid wage benefits by the employer).  These arguments usually tend to be somewhat mutually exclusive.  In order to receive indemnity benefits they must be disabled from the job.  In order to receive reinstatement they must be able to do the job.  However, claimant’s counsel usually argues in the alternative and adds both issues.  Therefore, the lack of a reinstatement may increase indemnity exposure both to the carrier, and wage benefit exposure to the employer.

The current state of the workers’ compensation law is that a good faith termination does end the claimant’s right of reinstatement.  Please note that neither case sets forth any true analysis of what would constitute a “good faith termination”.  Also please note that the Labor Department hearing officers on the workers’ compensation side, are not in the normal habit of assessing whether a termination is made in good faith.  Due to the small number of reinstatement cases actually litigated, there is not a clear understanding as to what standards the Labor Department will apply in order to come to the conclusion of whether the termination was made in good faith.

Paul L. Salafia is an attorney with the Devine Millimet Law firm in Concord.  Paul may be reached by phone at 603.226.1000 x1706 or by email at psalafia@devinemillimet.com.