Beware the Danger of Firing an Employee for an Allegedly False Workers Compensation Claim

Many employers have filed a workers compensation claim on behalf of an employee, but nonetheless doubted whether the employee was actually injured or if a workplace incident even happened.  Occasionally those suspicions are confirmed when the insurer denies the employee’s claim.  As a result, the employer may then feel justified in disciplining or firing the employee for filing a false claim.

Minnesota courts have recognized that an employee may be discharged for dishonest behavior, including filing a false workers compensation claim.  See Randall v. N. Milk Prods., Inc., 519 N.W.2d 456, 459-60 (Minn. Ct. App. 1994) (noting that dishonesty is not a legitimate basis for termination, however, if it is a pretext for a retaliatory discharge).  At the same time, the Minnesota Workers Compensation law prohibits an employer from discharging an employee in retaliation for seeking workers compensation benefits.  Minn. Stat. § 176.82, subd. 1.

The tension between these two principles surfaced in a recent case decided by the Minnesota federal district court.  Schaefer v. BioLife Plasma LLC, Civil No. 11-3468 (D. Minn. Sept. 18, 2013).  The matter arose when the employee allegedly slipped during the winter in the company parking lot.  She claimed that she had slipped during both of her afternoon breaks.  After the workers compensation claim was filed, the employer viewed videotape of the parking lot and concluded no slip had occurred.  Based in part on this information, the insurer denied the claim.  The employee was later fired for filing a false claim.

The employee sued for retaliatory discharge and the employer moved for summary judgment.  The Schaefer court denied the employer’s motion, concluding that the employee had presented evidence that the employer’s belief in a false report was not reasonable because the company’s investigation was noticeably incomplete.  For example, video footage from the first break was not retained and footage from the second break was apparently of poor quality.  It was also uncertain whether the slip incidents occurred outside of camera range.  The court also noted that the employer had not contacted the employee’s doctor to determine whether her injuries were consistent with a slip incident.

The court expressly noted “its concern with employers using falsification of workers’ compensation claims – or the injuries underlying them – as a grounds for termination” and further stated that “[p]ermitting termination of an employee on the grounds that a flawed investigation demonstrates a reasonable belief of claim falsification provides an employer with the incentive to do a poor investigation.”

Takeaway:  While employers should certainly investigate any employee allegation of workplace injury, in doing so it should make sure any such investigation is complete and not results oriented.  Employers should also carefully consider any discharge decision resulting from an allegedly false claim made by the employee.

About Michael Miller

Michael is a Chambers-rated attorney in Briggs and Morgan's Employment, Benefits, and Labor group and is head of the firm’s Employment Law Counseling and Compliance practice group. He has 25 years experience counseling employers to prevent unwanted litigation and advises companies of ongoing changes in federal, state and local employment law. Michael advises employers in all areas of employment law including discipline and discharge, leaves of absence, wage and hour compliance, non-compete and confidentiality agreements, affirmative action plans, background checking, and drug/alcohol testing. For Michael's full bio, click here.

Posted on October 1, 2013, in Retaliation, Workers' Compensation. Bookmark the permalink. Leave a comment.

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