Opinion
No. 98 CA 1745.
September 28, 1999.
APPEAL FROM THE CIVIL SERVICE COMMISSION.
Joel P. Loeffelholz, New Orleans, LA, for Appellant, Deonne Jones.
Carol L. Haynes, New Orleans, LA, for Appellee, Department of Health and Hospitals.
BEFORE: FOIL, FOGG and GUIDRY, JJ.
In this appeal, a civil service employee challenges the denial of her request for back pay and interest following her termination from employment. The Civil Service Commission found the employee's workers' compensation settlement completely offset the amount of back wages plus interest to which she was entitled during the period of time following her termination and reinstatement. Finding the Commission erred in failing to award the employee any amount on her back wages claim, we reverse.
FACTUAL AND PROCEDURAL BACKGROUND
Deonne Jones was employed by the State of Louisiana, Department of Health and Hospitals, New Orleans Adolescent Hospital (DHH), as a painter. Alleging that she was injured during a slip and fall incident at work on December 8, 1995, Ms. Jones received workers' compensation benefits following the injury in the amount of $7,377.33 for weekly compensation benefits and $15,192.70 in medical payments.
On October 15, 1996, after having exhausted all of her sick and family medical leave, Ms. Jones was terminated from her employment at DHH. She appealed the decision to the Civil Service Commission, which ordered that she be reinstated to her position. The Commission ruled that Ms. Jones was entitled to receive back pay plus interest from October 15, 1996, until the date she was restored to her former provision.
On April 11, 1997, Ms. Jones and DHH settled her worker's compensation claim based on the December 8, 1995 incident. She received a lump sum settlement of $15,000.00 in full satisfaction of her compensation claim.
Ms. Jones was reinstated to her former position by DHH on June 18, 1997. By letter dated June 20, 1997, her attorney apprised DHH that it owed $12,506.47 in back pay plus interest through July 1, 1997. In an affidavit, Ms. Jones denied earning wages or receiving unemployment compensation from the date of her separation from service through June 18, 1997.
DHH refused to pay the back wages, citing the receipt of the $15,000.00 compensation settlement, which it claimed completely offset the amount of back wages and interest owed to Ms. Jones. Ms. Jones appealed to the Commission, claiming that DHH violated Civil Service Rule 13.38 by refusing to pay the back pay plus interest as ordered by the Commission. She also requested an additional attorney fee award for having to bring the second appeal.
The Civil Service Referee denied the appeal, believing the compensation settlement completely offset the amount of back wages to which Ms. Jones was entitled. The Referee noted that the purpose of any award of back pay is to make the employee whole, and found that allowing an employee to receive both a salary and workers' compensation benefits for the same period would run counter to this goal. The Commission denied the appeal, making the decision of the Referee the final decision of the Commission. This appeal, taken by Ms. Jones, followed.
DISCUSSION
Civil Service Rule 13.38, which sets forth the responsibilities of an employee and an employer following a decision of the Commission, requires an employee, upon returning to work, to present satisfactory proof of "all wages earned or unemployment compensation received." This provision entitles an employer to offset such amounts received against a back pay award. Plaintiff insists that the compensation settlement should have had no effect on her entitlement to back wages and that she should be allowed to recoup her full salary from her employer. She contends that workers' compensation benefits are not payments for wages lost but rather are part of a social program and thus cannot be considered as "earned wages" for the purpose of the credit allowed under Civil Service Rule 13.38.
We disagree with this argument. It is well settled that the purpose of the Workers' Compensation Law is to replace lost wages and to compensate for the lost capacity to earn wages. Brooks v. Chicola, 514 So.2d 7, 11 (La. 1987); Pierce v. Lafourche Parish Council, 98-1758, p. 3 (La.App. 1 Cir. 6/25/99), 739 So.2d 297, 300. Workers' compensation benefits compensate employees for loss of income resulting from on the job injuries. Id. Thus, at least part of the settlement entered into by Ms. Jones contained payments for lost wages during the period of separation.
Further, this court has previously allowed an employer to offset unemployment compensation benefits received by an employee during the period of separation against a back wage award. In Westrope v. Department of Health and Human Resources, 489 So.2d 1024 (La.App. 1st Cir. 1986), this court cited the obvious inequity in allowing a person to receive both unemployment compensation and back wages for the period of time that person's wages were reinstated.
Similarly, it would be inequitable for a worker to receive both replacement lost wages and a full salary during the period of separation. Therefore, we agree that the compensation benefits received by Ms. Jones pursuant to the settlement should offset her back wage award. However, we find the Commission erred in utilizing the entire $15,000.00 award to offset the back wage award as that settlement could also encompass workers' compensation benefits other than lost wages during the period of time from separation to reinstatement. Ms. Jones suggests that an equitable solution to the problem of determining an appropriate apportionment would be to credit back two-thirds of the award, which she claims would be representative of the salary to which she was entitled during the period of separation. She insists that she should be entitled to one-third of her back pay award to make up for the difference between the compensation settlement and her full back pay, which would "make her whole." We agree, finding this proposition to represent a fair and equitable resolution of the offset issue.
Accordingly, we reverse the judgment of the Civil Service Commission. We enter an award in favor of Deonne Jones in the amount of $4,168.41, which represents one-third of the total back pay plus interest owed to her as of July 1, 1997 ($12,506.47). After that date, she is entitled to legal interest on the $4,168.41 back wage award, until paid. All costs of this appeal, in the amount of $116.00, are assessed to appellee, the Department of Health and Hospitals, Office of Mental Health, New Orleans Adolescent Hospital.
REVERSED AND RENDERED.
GUIDRY, J., concurs in part and dissents in part and assigns reasons.
Because I am of the opinion that the provisions governing this matter must be applied as written, as more fully discussed below, I respectfully concur with the majority to the extent that appellant is awarded one-third of her back pay with interest and respectfully dissent from the majority's failure to award appellant the remaining two-thirds of her back pay plus interest.
Pursuant to Civil Service Rule 13.38 (a), an employee who successfully appeals his or her termination
shall present himself ready for work at the time and place of his employment as it existed prior to the separation, shall be returned by the appointing authority to the regular payroll at that time, and shall, at that time or as soon thereafter as possible, present to his employer satisfactory proof of all wages earned and unemployment compensation received, if any, during the period of Appellant's separation, or, if no wages or unemployment compensation have been so received, Appellant shall present a written and signed statement to that effect to his employer upon his return.
Within fifteen (15) days after the appointing authority receives this information, the appointing authority shall request the actual disbursement of the funds representing the back pay due and such disbursement shall be promptly disbursed. La.R.S. 49:113 provides:
Employees in the state or city civil service, who have been illegally discharged from their employment, as found by the appellate courts, shall be entitled to be paid by the employing agency all salaries and wages withheld during the period of illegal separation, against which amount shall be credited and set-off all wages and salaries earned by the employee in private employment in the period of separation.
The case law interpreting this particular provision is limited at best. However, the jurisprudence, which involves cases with similar issues, leads me to the conclusion that appellant's argument has merit, and dictates a reversal of the Commission's decision.
As previously articulated by this court,
The legislative intent with respect to the employing agency's ability to credit the amount of back pay owed by the amount of earnings from private employment during the interim is evident from the language in La.R.S. 49:113. The intent is simply to put the employee in the same position he would have been in had he not been illegally terminated. Pursuant to the terms of the statute, an employee has the right to be compensated just as though he had remained in the employ of the department. However, the employee is not entitled to reap the benefits of wages earned from private employment during the interim in addition to the entire back pay amount. The statute mandates that the employing agency shall setoff the amount of back pay by the employee's total outside earnings from private employment during the interim.
Ceaser v. State Department of Public Safety and Corrections, 583 So.2d 145, 147 (La.App. 1st Cir. 1991) (footnotes omitted) (emphasis added). This court briefly discussed La.R.S. 49:113 in Louisiana State University v. Bailey, 432 So.2d 336 (La.App. 1st Cir. 1983), and stated that although the statute refers specifically to private employment, this means "wages and salaries received from other work performed during the period of dismissal." Bailey, 432 So.2d at 339 (emphasis added).
The Fourth Circuit also dealt with a similar issue of whether the offset against back pay applies to unemployment compensation in Alongi v. Department of Police, 480 So.2d 1001 (La.App. 4th Cir. 1985), writ denied, 481 So.2d 1351 (La. 1986). While recognizing the legislative intent, of making the employee whole, the court determined that the statute should be interpreted to mean what it says. The set off only applies to wages earned from employment and does not apply to compensation benefits received. Alongi, 480 So.2d at 1002-03.
Although the present case involves workers' compensation benefits and the cases cited involved unemployment compensation, I opine that the same reasoning applies. The set off only applies to "wages and salaries earned by the employee . . . in the period of separation." Thus, because the compensation benefits received by appellant do not meet this definition, the set off should not apply.