A recent ruling by the Michigan Supreme Court indicates that a worker's misconduct may disqualify that individual from receiving workers' compensation benefits.
Section 305 of Michigan's Workers' Disability Compensation Act states: "If an employee is injured by reason of his intentional and willful misconduct he shall not receive compensation under the provisions of this act."
This clause of the Act is not new. Historically, however, the courts utilized the provision to deny benefits only when the injured employee engaged in particularly reprehensible conduct such as sexual harassment.
On July 30, 2008, Michigan's Supreme Court interpreted the statute in broader terms in Brackett v Focus Hope, Inc. The majority of the court, in a 4-3 split decision, focused on the definition of "intentional and willful" rather than the severity or offensiveness of the injured worker's conduct.
Ms. Brackett alleged a psychological disability caused by disciplinary action taken after she refused to attend a mandatory Martin Luther King Day celebration in Dearborn. She testified she knew her employer, Focus Hope, required all employees to participate in the annual event. She also acknowledged that when she was hired the CEO of Focus Hope explained the importance of the event, which promoted its goal of racial equality and reconciliation.
Traditionally Focus Hope held its Martin Luther King Day festivities in Detroit. Ms. Brackett took issue with a decision to move the celebration to Dearborn. She told her supervisor that was she unwilling to attend the event in Dearborn due to her own bad experiences there. She also offered the opinion that the city's history of unfairness to African-Americans made it an inappropriate locale for an event honoring Martin Luther King.
Ms. Brackett's supervisor disciplined her for failure to attend the Dearborn celebration by docking her one day's pay. Focus Hope's CEO insisted on deducting a second day of pay and issued a memo stating that the refusal to go to Dearborn for the Martin Luther King Day event reduced her confidence in Ms. Brackett's commitment to Focus Hope. Ms. Brackett became profoundly upset by the CEO's harshness. Her psychologist diagnosed a disabling depression.
Both the magistrate and the Workers' Compensation Appellate Commission awarded benefits to Ms. Brackett but found that her refusal to attend the Martin Luther King Day celebration constituted intentional and willful misconduct. The Supreme Court agreed that the evidence supported the determination that she engaged in intentional and willful misconduct. The Supreme Court also noted that Ms. Brackett was not fired for her actions; she was disciplined. It was the discipline for Ms. Brackett's intentional and willful misconduct that caused her depression and mental disability.
Court of Appeals and Supreme Court Rulings
The Court of Appeals agreed that Ms. Brackett violated a workplace rule but held that to be disqualified from receiving workers' compensation benefits she needed to act in a manner that involved some degree of "moral turpitude." The Supreme Court reversed the Court of Appeals' determination that Ms. Brackett's actions did not rise to a level that prevented her from receiving workers' compensation benefits.
The majority of Michigan's Supreme Court justices, in a 4-3 split, focused on defining the statutory terms "intentional and willful" rather than assessing the nature of Ms. Brackett's conduct. Relying on the dictionary definitions of the words in the statute the court held that Section 305 prohibits the recovery of benefits for conduct that is deliberate or non-accidental and disregards the employer's interests, including its work rules. Ms. Brackett knew that attending the event was mandatory. She understood that the festivities promoted Focus Hope's goal of racial reconciliation. Yet she categorically refused to go to the function in Dearborn. The controlling Supreme Court decision limits the analysis to the willfulness and intent of the employee's actions, explaining that "Section 305 does not create a sliding scale of moral turpitude."
Enforcement of Rules
On a practical level, the Brackett decision tells us that the employee's misconduct must violate a rule that is both clearly established and consistently enforced. An employer cannot allow workers to ignore a policy or regulation and then use the seldom enforced standard as a basis for denying workers' compensation benefits. Simply issuing a company handbook is not sufficient to successfully invoke the willful and intentional misconduct clause blocking to workers' compensation benefits.
Here are a few basic steps employers should follow:
Make sure that rules and policies are provided to all employees. Explain rules and regulations during orientation and conduct periodic reviews.
Provide workers with an opportunity, and source, for clarifying workplace rules.
Enforce rules in a uniform manner.
If you require any assistance with this court interpretation or other workers' compensation issues, contact your Warner attorney or any member of the firm's Labor & Employment Group.
We also provide clients with assistance instituting preventive measures in the workplace. Our attorneys specializing in workers' compensation have years of litigation experience and appear in all of the Workers' Disability Compensation Bureaus in lower Michigan.