Outland v. Monmouth-Ocean Education Service Commission , 154 N.J. 531 ( 1998 )

HANDLER, J.,

dissenting.

The Court holds that a temporarily disabled teacher employed under a ten-month contract by the board of education may seek to recover from her employer temporary disability benefits covering the summer recess period, even though she was already completely compensated for her lost wages as a teacher. The result reached by the Court goes well beyond the provisions of the Workers’ Compensation Act. I, therefore, dissent.

I

Under the Workers’ Compensation Act, N.J.S.A 34:15-1 to - 142 (the Act), an employee is entitled to compensation from the employer when the employee suffers “personal injury ... by accident arising out of and in the course of [] employment, of which the actual or lawfully imputed negligence of the employer is the natural and proximate cause.” N.J.S.A. 34:15-1. The Act is social legislation with its primary purpose being “to provide an employee, when he suffers a work-connected injury, with a speedy and efficient remedy for loss of wages.” Cureton v. Joma Plumbing & Heating Co., 38 N.J. 326, 331, 184 A.2d 644 (1962).

The heart of the statute is the schedule of payments provided in N.J.S.A 34:15-12. “For injury producing temporary disability, [the schedule of compensation is] 70% of the worker’s weekly wages received at the time of the injury____ This compensation shall be paid during the period of such disability, not, however, beyond 400 weeks.” N.J.S.A. 34:15-12a (emphasis added). ‘Wages” are defined as “the money rate at which the service rendered is recompensed under the contract of hiring in force at the time of the accident.” N.J.S.A. 34:15-37 (emphasis added). For temporary disability, these benefits are to be calculated according to the provisions of N.J.S.A. 34:15-38, which states as follows:

To calculate the number of weeks and fraction thereof that compensation is payable for temporary disability, determine the number of calendar days of disability from and including as a full day the day that the employee is first unable to continue at work by reason of the accident, including also Saturdays, Sundays and holidays, up to the first working day that the employee is able to resume work and continue permanently thereat____ The resulting whole number and sevenths will be the required period for which compensation is payable on account of temporary disability.

[Ibid,]

In sum, the scheme for awarding temporary disability benefits requires that, first, as the result of an accident arising out of and in the course of employment, the employee must be temporarily disabled. N.J.S.A. 34:15-1; N.J.S.A. 34:15-12a. Next, if the employee is temporarily disabled, the employee is entitled to receive 70% of his or her wages as determined by looking at the employment contract at the time of the accident. N.J.S.A. 34:15-12a; N.J.S.A. 34:15-37. Finally, once the rate of compensation is determined, the amount of time the employee receives benefits is determined by when the employee returns to work. N.J.S.A. 34:15-38.

The threshold inquiry is whether the worker is temporarily disabled. N.J.S.A 34:15-12a (“[C]ompensation shall be paid during the period of such disability.”). The Act itself does not define “temporary disability.” It is a contextual concept that relates the disability to the work and to the wages from the work. Courts attempting to articulate a definition for the term have recognized the functional relationship between disability and - its necessary effect on work and wages. In Calabria v. Liberty Mutual Insurance Co., 4 N.J. 64, 71 A.2d 550 (1950), the Court stated in dictum that an employee cannot make a claim for temporary disability without being absent from work. Id. at 68, 71 A.2d 550 (“Calabria made no claim for temporary disability. He could not because there had been no absence from work”). Such a basic rule, that an employee is not temporarily disabled if the employee is not absent from work and thus losing wages from that work, has been repeated numerous times by the courts of New Jersey. See, e.g., Young v. Western Elec. Co., 96 N.J. 220, 226, 475 A.2d 544 (1984) (“temporary disability compensation ... payments are in lieu of those wages”); Ort v. Taylor-Wharton Co., 47 N.J. 198, 208, 219 A.2d 866 (1966) (“[Temporary disability represents a partial substitute for loss of current wages.”); Gorski v. Town of Kearny, 236 N.J.Super. 213, 215, 565 A.2d 415 (App.Div.1989) (“Temporary disability benefits are paid in lieu of salary.”); Electronic Assocs., Inc. v. Heisinger, 111 N.J.Super. 15, 20, 266 A.2d 601 (App.Div.1970) (“Petitioner here is entitled to no award for temporary disability because she suffered no current wage loss as a result of an ailment attributable to her occupation.”); General Motors Acceptance Corp. v. Falcone, 130 N.J.Super. 517, 520, 327 A.2d 699 (Cty.Ct.1974) (“The award is ‘in lieu of wages.’”) (quoting Williams v. Newark Dept. of Welfare, 43 N.J.Super. 473, 477, 129 A.2d 56 (Cty.Ct.1957)); Worthington v. Plainfield Bd. of Educ., 23 N.J. Misc. 14, 19, 40 A.2d 9 (Dept. Labor 1944) (“[P]etitioner is not entitled to any temporary disability [benefits], there being no lost compensable time.”); Krov v. Centaur Const. Co., 18 N.J. Misc. 593, 596, 15 A.2d 619 (Dept. Labor 1940) (“The petitioner having lost no time from his work, is not entitled to compensation for temporary disability.”). The major treatise on Workers’ Compensation is in accord with this proposition. See 1C Arthur Larson, Larson’s Workmen’s Compensation Law § 57.12(b) at 10-19 (1993) (“Temporary total ... and temporary partial occasion relatively little controversy, since they are ordinarily established by direct evidence of actual wage loss.”)

There should be no escape in this case from the straightforward rule that a worker is not temporarily disabled if the worker is not absent from work and thus not suffering wage loss attributable to that work. Outland suffered her injury in late April and, as a result of the injury, missed work until June 30, the end of the school year and her contract period; during that time of absence from work, she suffered a wage loss attributable to that work. Hence, her temporary disability occurred during and was limited by that period, and she appropriately was awarded temporary disability benefits based on those definitional elements. For the summer months, however, Outland was not absent from work nor did she suffer a loss in wages because there was no work from which she was absent. Even considering possible outside employment, Outland did not suffer a loss of wages under the Act because N.J.S.A. 34:15-37’s definition of wages looks only to the employment contract in force at the time of the accident. Thus, Outland was not “temporarily disabled,” within the meaning of the Act, during the summer months. Not being temporarily disabled, Outland was not entitled to any benefits for the summer months.

Even if the Court were properly reading the statute, the result the Court reaches should be avoided. See State v. Provenzano, 34 N.J. 318, 322, 169 A.2d 135 (1961) (ruling that in any endeavor involving statutory construction, an important maxim to consider is that “a statute will not be construed to lead to absurd results. All rules of construction are subordinate to that obvious proposition.”). The Court’s conclusion that Outland can recover benefits if she lost wages over the summer attributable to some other kind of employment will lead to anomalous results in the context of the statute and legislative scheme.

The purpose of the Act is to provide a portion of the employee’s salary when the employee suffers a wage loss as a result of a work-related injury. “Compensation was to be a benefit earned. It was to be a matter of right and not of grace or related in any way to the dole.” Moore v. Magor Car Corp., 27 N.J. 82, 85, 141 A.2d 536 (1958). To provide summer benefits for full-time teachers who are on a ten-month contract and who are not employed under their contract over the summer is an extraordinary and untoward result in light of the Act’s purpose — it asks the Division of Workers’ Compensation to order payments for the teacher beyond her actual earned salary.

The result the Court reaches is even less tenable when the sick leave chapter of the Education Title is taken into consideration. Under N.J.S.A 18A:30-2.1, the school board employee is entitled to be paid the full salary or wages for the employee’s period of absence. Thus, a teacher injured during the school year receives his or her entire salary from a combination of temporary disability benefits and supplemental benefits under the Education Title. A continuing award of benefits over the summer would place the school board in the position of paying employees more than their completed full-time contract. Such results are surely unwarranted. Cf. 2 Larson, supra, § 60.22(a) at 10-715 (“If a school teacher, for example, is paid $2,000 a month for nine months of the year, there is no reason to calculate earning capacity on the unrealistic basis of $2,000 a month for twelve months.”). Other jurisdictions that have faced comparable situations under similar workers’ compensation laws have also concluded that awarding benefits over the summer months would be irrational. See, e.g., School Dist. No. 401 v. Minturn, 83 Wash.App. 1, 920 P.2d 601 (1996); Herbst’s Case, 416 Mass. 648, 624 N.E.2d 564 (1993).

The appendix included in the Court’s opinion attempts to illustrate that a teacher receiving worker’s compensation benefits over the summer would not be. receiving a “double recovery.” Ante at 544-45, 713 A.2d at 466-67. In the Court’s example, a teacher receiving benefits over the summer would receive $14,672 whereas a non-injured teacher, again in the Court’s example, would receive $16,800. The problem with that example is that the Court is assuming that the appropriate comparison is to the total combined earnings the teacher would receive between April and August. That comparison is misleading. The school board did not bargain to pay the teacher the money in the months of July and August that the Court includes in its example. Thus, the correct comparison is between the $14,672 the teacher would receive between April and August if she were injured and receiving benefits over the summer and the $10,800 she would receive from the school board between April and August had she not been injured. Obviously, the amount she would receive including workers compensation over the summer months is in excess of the amount in her contract with the school board. (That is true regardless of whether she is paid on the ten-month or twelve-month plan.) The majority’s inclusion of the summer wages in its illustration is merely an attempt to mask this fact.

Highlighting the anomalous nature of the Court’s conclusion is that under its reasoning if Outland proves she lost any wages over the summer, N.J.S.A. 34:15-37 would require that Outland be paid temporary disability benefits over the summer at the rate of $415 per week because that is seventy percent of her wages at the time of her injury. If Outland’s hypothetical summer job was a minimum wage job paying her roughly $200 per week, the Act as interpreted by the Court would nonetheless require the school board to pay Outland based on her higher school-year salary. The alternative would be reading into the Act a provision that Out-land’s temporary disability benefits would change to a different rate over the summer; however, reading that provision into the Act would be a bold form of judicial legislation. No such provision exists, and the anomaly of paying Outland more over the summer than she would otherwise have made at her summer job highlights how problematic the majority’s reasoning is.

II

The Court advances its own notions of public policy as a basis for its conclusion that Outland is entitled to temporary disability benefits over the summer. The Court claims that there is no restriction in the Act that should limit recovery for seasonal workers. The Court expresses its concern over seasonal workers by stating that “[t]he flaw in the [school board’s] argument is that if temporary benefits were payable only during the time that the contract of hire were to have been in existence, a seasonal worker, such as a farm laborer who suffered an injury near the end of a harvest season, would receive no temporary disability benefits after the season was over.” Ante at 539, 713 A.2d 464. In taking the prospect of seasonal employment into consideration, the Court ventures beyond the facts and genuine policy implications of this case.⁵ This concern over seasonal employment is well-intentioned. It has always been recognized and acknowledged by this Court and the Legislature. E.g., Vasquez v. Glassboro Service Assoc., Inc., 83 N.J. 86, 415 A.2d 1156 (1980) (protecting the housing interests of migrant farm workers); State v. Shack, 58 N.J. 297, 277 A.2d 369 (1971) (allowing non-profit organization onto private property to assist migrant farm workers); N.J.S.A. 34:9A-1 to -41 (Seasonal Farm Labor Act). It should not serve, however, to warp a clear statute or to advance a social policy not adopted by the Legislature.

The root of the Court’s concern over seasonal workers is in N.J.S.A 34:15-38’s provision for calculating benefits. The Court reasons that the calculation required includes the summer months because the provision requires payment over the entire period until the employee is “able to resume work.” Such a reading converts N.J.S.A 34:15-38 from a provision that merely describes how to calculate benefits to a provision granting the substantive right to receive benefits. By its own terms, though, N.J.S.A. 34:15-38 describes the process of calculating benefits only if there is a “temporary disability.” Over the summer, Outland was not “temporarily disabled” because she was not losing any wages she would have otherwise received from her employment at the time of injury. Thus, she was not entitled to benefits over the summer.

What is really behind the Court’s misreading of N.J.S.A. 34:15-38 is its own policy determinations and not the actual provisions of the Act. That is evident in the majority’s use of the hypothetical at-will employee whose employer claims it was going to lay off the employee. See ante at 539-40, 713 A.2d at 464. The majority allows its sympathy for that employee to distort the statute in Outland’s case — one that does not involve an at-will employee nor an indefinite period of employment. Furthermore, in the majority’s hypothetical, if the employer lays off the employee only because the employee sought worker’s compensation benefits, the employer would be unlawfully firing the employee in retaliation for seeking those benefits. Firing an employee under those circumstances is clearly forbidden by the Act. N.J.S.A. 34:15-39.1; Lolly v. Copygraphics, 85 N.J. 668, 428 A.2d 1317 (1981).

The crux of the Court’s holding is its mistaken reading into the Act a provision in favor of seasonal employees. Were we to have a provision in our Workers Compensation Act providing for a calculation of wages based on the employee’s annual earnings (as does Arizona, which is why the resolution of the two Arizona cases cited by the majority, see ante at 540, 713 A.2d at 465, differs from the conclusion we reach), we might agree with the majority’s conclusion. However, New Jersey’s Workers Compensation Act does not annualize wages in that context. Rather, it squarely answers the question at hand in its provision that wages are “the money rate at which the service rendered is recompensed under the contract of hiring in force at the time of the accident.” N.J.S.A. 34:15-37. Because of that difference, neither Arizona law nor the Longshore and Harbor Workers’ Compensation Act, see ante at 540, 713 A.2d at 465, is relevant in determining how to compensate a teacher injured in New Jersey.

The Court also cites as a reason for its conclusion that “to deny payments based on lost summer employment would frustrate the purpose of the workers’ compensation system.” Ante at 542, 713 A.2d at 466. The Court finds the purpose of the system in Mover v. Dwelling Managers Co., 34 N.J. 440, 170 A.2d 35 (1961). According to the Court, that case shows that an employee should be compensated for his “full-time” earning capacity. But the Court ignores the holding of Mover, which is that unless the “employee’s full time is jointly engaged by a number of employers,” 34 N.J. at 444, 170 A.2d 35, the Act “singles out the employment of injury and requires a finding of the weekly wage with reference to it alone,” id. at 446, 170 A.2d 35; see also Tomarchio v. Township of Greenwich, 75 N.J. 62, 78, 379 A.2d 848 (1977) (reaffirming Mover even though “[t]his view is apparently unique to New Jersey”). The Court’s selective citation to the case ignores the part of Mover relevant to Outland’s situation — that discussing temporary benefits as they relate to an injured worker with multiple employers. That section clearly limits the rate of temporary disability benefits to compensating for the loss of wages of the employment at the time of injury and not other employments. The Court’s opinion here does not address at all this holding in Mover.

The Court finally notes that accepting the school board’s reasoning would make teachers “second-class citizens” under the Act. Ante at 542, 713 A.2d at 466. Because teachers are covered only by the general provision in N.J.S.A 34:15-37 that wages are determined by the “contract of hiring in force at the time of the accident,” the more specific provisions in N.J.S.A 34:15-37 for hourly, daily, or weekly employees are inapplicable to Outland’s case. Using those provisions to conclude that “Outland should be compensated for the loss of two months of earning capacity,” ante at 543, 713 A.2d at 466 (emphasis added), is an open act of judicial re-writing of a statute.

Ill

The Court’s opinion in this case opens a Pandora’s box of policy issues. It embraces the worthwhile goal of providing all seasonal employees the benefits designed to overcome the economic losses attributable to temporary disability. It does so, however, oblivious to the Legislature’s stronger prerogatives and greater understanding in respect of whether and how seasonal employees should be protected. It is for the Legislature to decide what constitutes seasonal employment, the significance of the source of wages, the appropriate rates of payment, the accommodation of dual and successive employments, and the implications of full-time employment that is paid on a partial-year basis. The entitlement of teachers as seasonal employees is a difficult and complex subject with consequences for public education that should not be resolved cavalierly by the judiciary.

One can hardly assume the Legislature will believe that the Court in this opinion is only explaining and confirming an existing legislative plan. Each year, New Jersey spends roughly 57% of its school budget on salaries and benefits. Nick Chiles, A Lesson in School Spending, Newark Star Ledger, Mar. 23, 1998, at 1. The Court betrays fiscal indifference when it compels an increase in those expenditures based on misreadings of clear statutes and adventurous forays into public policy regarding what is right for hypothetical average seasonal employees, who dramatically differ from your prototypical teacher. The Legislature may well believe that teachers are not to be treated as other seasonal employees and that their interests are generally well-protected and secured. Especially in light of the ongoing school funding controversy, we should be extremely wary of ordering the schools to spend more money to compensate teachers for summer job loss when the Legislature has not so mandated. Whether it is sound public policy is not for us to say.

I would, therefore, affirm the decision of the Appellate Division and let stand the ruling that Outland is not entitled to temporary disability benefits over the summer months.

Chief Justice PORITZ and Justice GARIBALDI join in this opinion.

For reversal and remandment — Justices POLLOCK, O’HERN, STEIN and COLEMAN-4.

For affirmance — Chief Justice PORITZ, and Justices HANDLER and GARIBALDI — 3.

5 It is worth noting that in the over eighty-five years of the Act we have not had any reported cases involving controversies over the status of seasonal workers under the Act.