Employer Fined For Cutting Off Workers’ Compensation Benefits
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The North Carolina Court of Appeals has upheld an Order imposing two thousand dollars ($2,000) in legal fees to an injured worker. The fee sanction was imposed because the employer arbitrarily cut off workers’ compensation benefits for the employee before a full hearing was conducted.
The employer filed a Form 24 Application to stop payment based upon the employer’s contention that the employee could do light duty work.
The facts of the case were that after his injury the employee had returned to work in a light duty position as a recreation room attendant. The claimant was terminated from this light duty position. This termination was ultimately held to be justified by the North Carolina Industrial Commission. The Industrial Commission also ultimately approved the termination of benefits.
Even though the plaintiff’s termination was justified, the employer drew an attorney fee penalty from the Industrial Commission because it terminated the worker’s benefits without permission from the Industrial Commission. The Industrial Commission held that the defendant-employer was obligated to reinstate the plaintiff’s full benefits and keep paying him after he was terminated until the Industrial Commission approved a suspension or termination after a full hearing. The Industrial Commission said that the penalty was not mooted just because the termination of benefits was eventually approved.
The defendant-employer argued to the Court of Appeals that the Industrial Commission had penalized the employer for not paying benefits which were never due. In response, the North Carolina Court of Appeals wrote: “To the contrary, the temporary total disability benefits were due pursuant to Rule 404 of the Workers’ Compensation Rules of the North Carolina Industrial Commission”. The court held that the plaintiff’s total disability payments which were previously paid in accordance with an agreement between the parties, could not be cut off without a finding that the worker’s disability no longer existed.
Under the terms of Rule 802 of the Workers’ Compensation Rule, non-compliance with a Workers’ Compensation Rule may subject the violator to sanctions including the imposition of attorney’s fees.
This Court of Appeals case, Thompson v. Triangle Communities is very important.
The employer has a right to ask the Industrial Commission to terminate benefits. However, the employer does not have a right to terminate benefits without permission from the Industrial Commission. This places an undue hardship upon the employee who is without income during the time that it takes for a hearing on the issue of whether benefits should be terminated. It usually takes many months for the Industrial Commission to set such a hearing. Even after the hearing the appeals process could take many more months or even years. If the employer terminates the employee’s benefits without having received permission from the Industrial Commission, the employee and his or her family suffers an enormous financial hardship. That is why the rule exist which forbids such termination without approval.