No ‘Lost Wages’ Claim for Plant Furlough

A claimant who was furloughed from work for a pre-defined and limited duration that applied to all manufacturing employees, whether or not they were work-restricted, is not entitled to lost wages, in the absence of evidence showing a causal relationship between his restricted capacity and the wage loss; the Court of Appeals reverses the commission’s decision.

The general furlough happened once a year for an annual “physical inventory count.”

One commentator has suggested that loss of employment should not be deemed due to disability if a worker without the disability would lose employment or suffer a reduction in earnings under the same economic conditions.

Any attempt at precision in application of this formula requires a delineation of factors to be considered in establishing “same economic conditions.” We find they include: 1) the length of any furlough from work; 2) whether that furlough included all employees, restricted or not, of the same class; 3) the reason for the furlough; 4) whether the term of the furlough was pre-determined by the employer; and 5) whether the employees were offered employment at the termination of the furlough. These factors address the fundamental issue in these cases: Is any wage loss causally related to the injury?

We hold that during a furlough a condition precedent for an award to a partially incapacitated employee for lost wages (or diminution in earning power) is a causal relationship between that incapacity and that loss. We do not assert that a partially incapacitated employee must prove an actual loss of wages during a period of furlough. We do assert the loss of actual or potential wages must be the result of the partial incapacity. The language of Va. Code § 65.2-502 admits of no interpretation but that a causal relationship is required.

Our decision is limited in scope; it addresses only those cases where a partially incapacitated employee is furloughed. The fundamental issue in these cases is: Is any wage loss causally related to the injury?
Here, claimant has not demonstrated that his lost wages were causally related to his injury. He may not look to the provisions of the Act for recompense.

The decision of the commission is reversed and the claim for lost wages is dismissed.

Reversed and dismissed.

Dissent

Petty, J.: Today the majority has appended an additional perquisite to the receipt of compensation under Va. Code § 65.2-502 – the employee must also establish that his loss of wages was not due to economic conditions that similarly impacted able-bodied employees. It then proceeds to announce, out of whole cloth, five factors to consider in apply its “same economic conditions” test. In doing so, the majority, in my opinion, ignores both existing precedent and legislative intent and effectively alters both the spirit and the letter of the Workers’ Compensation Act.

I cannot adopt the majority’s view. I must also reject the majority’s additional rule that a claimant must prove his disability was the reason he was unable to market his remaining capacity for work.

I would affirm the commission.

Utility Trailer Mfg. Co. v. Testerman (Haley) No. 1484-10-3, July 12, 2011; Workers’ Comp. Comm’n; Robert M. Himmel for appellants; D. Edward Wise Jr. for appellee. VLW 011-7-234, 18 pp.