Supreme Court Reinstates Benefits for Injured Employee

August 11, 2014

The Tennessee Supreme Court has ruled that an injured employee is entitled to the full amount of workers’ compensation benefits awarded to him by a trial court, despite having taken an employment buyout package shortly after his injury.

In 2008, Cha Yang suffered two separate shoulder injuries while working on an assembly line that manufactured Nissan vehicles. Yang underwent two surgeries to repair his shoulders but continued to experience significant pain, irritability, anxiety, and depression. In August 2008, he accepted a voluntary “buyout” from Nissan and resigned his employment in exchange for approximately one year’s salary and health insurance coverage for one year. He later filed a lawsuit for workers’ compensation benefits.

The trial court ruled in favor of Yang and awarded him 90% permanent partial disability benefits, temporary total disability benefits, long-term disability benefits, vocational benefits, attorney’s fees, and discretionary costs. Nissan appealed, arguing that Yang’s permanent partial disability benefits should be reduced because Yang had accepted the voluntary buyout.

On direct appeal, the Special Workers’ Compensation Appeals Panel agreed with Nissan and reduced Yang’s permanent partial disability benefits from 90% to 37.5%. The Panel thought that Yang’s decision to accept the voluntary buyout was not “reasonable” because he resigned his employment before he had completed the medical treatment for his shoulder injuries. Under the current workers’ compensation law in Tennessee, if an employee acts unreasonably by leaving his employment after an injury, his benefits must be “capped” at a lower rate.

The Supreme Court granted Yang permission to appeal and reversed the Panel, reinstating the higher award granted by the trial court. The Court agreed with the Panel that, ordinarily, “if an employee retires or resigns or declines an offer to return to work for either personal or other reasons that are not related to his or her workplace injury,” the employee has acted unreasonably and his benefits must be capped. The Court explained, however, that whether an employee acted reasonably is a highly fact-intensive question that is best left for trial courts to decide.

In Yang’s case, the trial judge had accredited testimony that Yang accepted the buyout and resigned his employment because “his recovery ‘wasn’t progressing,’ he did not know if his medical condition would improve, and he believed he ‘couldn’t go back’ to work after his shoulder surgeries.” Because these reasons were all related to Yang’s work-related injury, the Supreme Court determined that the trial court had properly awarded the higher amount of benefits. The Court also rejected the Panel’s conclusion that an injured employee can never retire or resign prior to completing medical treatment.

Read the Cha Yang v. Nissan North America, Inc. et al. opinion authored by Chief Justice Gary R. Wade, here.