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Tuesday, April 2, 2019

How Not to Terminate




March 1, 2019: The Supreme Court of Alabama affirmed a $1.26 million retaliatory discharge verdict consisting of $314,862.88 in compensatory damages and $944,588.64 in punitive damages in Rice v. Merchants FoodService. Denny Rice was one of eight drivers delivering food to the Mobile County School System when he suffered an on-the-job injury that forced him out of work for almost six months. Upon returning to work from workers’ compensation leave, Rice was immediately terminated and told his position had been filled while he was on leave, so no work was available.
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Rice testified at trial that he was devastated by the termination and feared and anguished over how he would be able to cope financially without a job. He testified that he postponed a planned wedding, withdrew $20,000 from his 401(k) and applied for and took a commercial driving test in order to enhance his commercial drivers’ license. He eventually found a position with a trucking company where his annual salary slightly exceeded his former salary, but only because he was forced to work over 900 hours more per year. At trial Rice requested damages for mental anguish and emotional distress and for his lost wages between his termination and locating his new job. He also requested “front pay” damages, which is his lost future earnings until he turned 65, based on the difference in pay between his old job and new job. At trial, Merchants FoodService argued that such front pay damages were not recoverable since he made more money at his new job than he did at his old job. The Mobile County trial judge allowed the claim to proceed to the jury as a fact question, however, because his new job paid more on annual basis only because Rice was forced to work over 900 more hours per year.

On appeal, Merchants FoodService actually conceded liability on the retaliatory discharge claim and contested only the amount of compensatory and punitive damages awarded. The termination clearly violated its personnel manual which required the company to attempt to find another position for the employee returning from workers’ comp leave. In addition, there was evidence the employer was in the midst of an operational expansion at the time and a job opening for a similar position was posted only 11 days after the termination. During trial, Rice presented evidence from another employee who was also terminated on the day he returned from workers’ comp leave as well as an internal company email that acknowledged that the termination of Plaintiff was improper (“this one will probably come back to bite us, so stay tuned”).

Common Sense Counsel: This case appears to be an outlier of “how not to terminate” an employee who has taken work comp leave. It should also serve as a strong reminder to Alabama employers to take great care in understanding and complying with its own employment manual and established company policies when an injured employee returns from a workplace injury. Prior to terminating an employee who has recently returned from work comp leave it is advisable that employers review their personnel manuals and contact trusted legal counsel before terminating the employee.

Tommy Eden is a partner working out of the Constangy, Brooks, Smith & Prophete, LLP office in Opelika, AL and can be contacted at teden@constangy.com or 334-246-2901.