SJC Rules Workers’ Comp Benefits are Not Compensation for Services Rendered

The Massachusetts Supreme Judicial Court issued a decision today (May 16th, 2017) that will further protect workers who are injured on the job and ensure that they continue receiving their workers’ compensation benefits even if they are suspended. The SJC overturned the decision of the Superior Court and reinstated the original ruling from the Department of Industrial Accidents, granting a former Boston EMS worker his workers’ compensation benefits. The case was handled by John Becker, Of Counsel to Sandulli Grace, he received assistance from former Sandulli Grace Attorney Jamie Goodwin who argued the case below.

The plaintiff in the case, Brian Benoit, had been an EMT and paramedic with Boston EMS for almost 20 years when he injured his ankle while transporting a patient. Unable to work, he filed for and received workers’ compensation benefits for almost a year under the Massachusetts workers’ Compensation Statute. Mass. G. L. c. 152. Boston EMS halted his workers’ comp payments in August of 2012, arguing that injury was not accidental. Benoit seeking to have his benefits reinstated, filed a complaint at the DIA in October of 2012. Shortly thereafter Benoit was indicted in an unrelated matter, and Boston EMS promptly placed him on suspension in accordance with G. L. c. 268A § 25. Under G. L. c. 268A § 25 public employees are barred from receiving compensation while on suspension. In addition to their argument that the injury was not accidental, Boston EMS also argued that Benoit’s workers’ compensation benefits constituted compensation for services and were therefore not obligated to pay them under the statute. The DIA ruled that Boston EMS had impermissibly denied Benoit his rightful workers’ comp benefits and ordered that they be reinstated. Boston EMS refused to comply with the order and appealed the decision in Superior Court, Benoit also filed an action in Superior Court to inforce the decision of the DIA.

The Superior Court determined workers’ compensation payments constituted compensation and granted the Motion to Dismiss brought by Boston EMS, Benoit appealed that decision. After pleading guilty and subsequently resigning from Boston EMS, Benoit refiled an action in Superior Court alleging that since he was no longer suspended, the suspension statute should no longer apply. The Superior Court disagreed with him once again, stating that since he was suspended at the time of his resignation he was still considered to be suspended. Benoit consolidated both of his appeals and the SJC removed the case from the Appellate court. While the SJC denied Benoit’s first two claims, they agreed with him that the workers’ Compensation Statute was not proscribed by the suspension statute.

workers’ Compensation in Massachusetts was originally enacted in 1911, and the statutory scheme protects workers who are injured while on the job. It allows the injured party to remain financially stable while protecting the employer from prohibitively costly settlements and judgments. When an employee pursues a workers’ compensation claim, they forfeit their right to sue their employer for damages. The no-fault system creates certainty for all parties, the injured employee knows the benefits they will receive and the employer knows what they are liable for. The act also mandates that every employer obtain workers’ compensation insurance from an insurer who will make the payments or obtain licensing as a self-insurer. If the employer chooses a third-party insurer, that insurer will be the one to pay out the workers’ compensation benefits. However, if the employer chooses to be self-insured, as Boston EMS did, they will be liable for all workers compensation payments. Employees can also opt out of the system in order to retain their right to sue, but they must do so at their time of hire. An injured employee will receive medical costs and weekly payments based on salary for a period of time depending on the nature and seriousness of their injury. The SJC decided this case on whether those payments consisted of compensation for services rendered.

While the court acknowledged that compensation is usually interpreted broadly, they recognized the limitations in G. L. c. 268A § 1(a) which defines compensation as any money, thing of value or benefit conferred or given to a person in return for services rendered. The restriction of ‘in return for services rendered’ became the deciding factor in this case. The SJC determined that workers’ compensation benefits are not conferred upon an injured employee for services rendered but because the employee waives the right to sue in order to guarantee benefits when he or she is injured. They differentiated the workers’ compensation act from other forms of compensation such as sick pay and unemployment insurance. The SJC also differentiated workers compensation benefits as they were outside the purview of the employer-employee relationship and instead based on the relationship between the employee and the insurer. The court specifically discussed the differences between workers’ compensation benefits and unemployment benefits. Unlike workers’ comp, the employee is not required to give up either their rights or money to receive unemployment. Unemployment benefits serve as a recognition of the services the employee performed while working and are directly tied to the employer who fund the unemployment insurance mechanism.

This ruling provides substantial protections for workers who are hurt on the job. Employer’s and insurance companies will be barred from denying payments due to a suspension stemming from misconduct. Employees will have the peace of mind that even if they are suspended while they are out of work they are still entitled to receive their workers’ compensation benefits.

Read The Decision

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