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Thinking About Permanently Replacing an Employee on Workers’ Compensation Leave? Better Be Sure There are No Other Feasible Alternatives
On June 10, the Hawaii Supreme Court issued a published opinion holding that an employer who takes an adverse action against an employee with a work injury based on business hardship should be prepared to provide evidence of the business hardship and demonstrate that “no feasible alternative” exists to the adverse action.
Employer Refused to Reinstate Employee After Replacement Hired
Tammy Josue was placed on disability leave after suffering a work injury while employed at BCI Coca-Cola Bottling Company of Los Angeles (“BCI”). After being on leave for more than ten months, BCI hired a permanent replacement for Josue’s pre-work-injury position because her prolonged absence was creating a hardship for the department and it was unclear when or if she would return to work. About five months later, Josue was released to work and sought to return to her pre-work-injury position, which BCI refused because it had filled the position. BCI offered other positions to Josue, but she declined them because she thought they were either downgrades or above her qualifications.
Josue filed a complaint alleging that BCI discriminated against her in violation of Hawaii Revised Statutes § 378-32(a)(2) when it refused to return her back to her pre-work-injury position. That statute makes it “unlawful for any employer to suspend, discharge, or discriminate against any of the employer’s employees . . . Solely because the employee has suffered a work injury . . . .”
ICA Finds No Discrimination
In an opinion issued last year, the Intermediate Court of Appeals (“ICA”) determined that Josue’s prolonged absence was creating a business hardship, and that such hardship was a valid justification for hiring a permanent replacement. The ICA concluded that the work injury was not the “sole” reason for refusing to return Josue to her pre-work-injury position because “business necessity” also justified BCI’s decision. Therefore, the ICA concluded that BCI’s refusal did not constitute unlawful discrimination.
The Hawaii Supreme Court, however, disagreed with the ICA. In BCI Coca-Cola Bottling Co. v. Murakami (June 10, 2019), the Court indicated “In the Absence of True Business Necessity, Discrimination for Business Reasons is Discrimination ‘Solely Because’ of a Work Injury.” The Court explained that in order for an employer to establish “true business necessity,” the employer must:
- Adduce evidence that, at the time the position was filled, the vacancy at issue impaired the employer’s business operations; and
- Produce evidence that the proffered justification for the action was the only reasonable means by which to remedy the employer’s business impairment.
In other words, “an employer must prove that there were no feasible alternatives to the discriminatory employment action.” If there are reasonable alternative methods of relieving the business impairment that do not involve taking adverse employment action against the injured employee, an employer is obligated to use one of these means.
Applying the new rule to this case, the Court held that BCI did not establish why a temporary replacement or other alternative would not have sufficiently addressed its business concerns, and thus, failed to meet its burden of proving there was “no feasible alternative” to hiring a permanent replacement. Specifically, the Court determined that
- Impairment of Business Operations: The Court found the evidence “unclear” as to whether business operations were adversely affected by Josue’s absence. The fact that other employees had to work two additional hours to perform Josue’s work duties was not enough because there was no “clear evidence” in the record that the other employees “did not wish to perform this work for additional compensation, that providing additional pay to the other [employees] posed a financial burden to the business, or that the arrangement was otherwise impairing [BCI]’s business operations.”
- No Feasible Alternatives to Hiring Permanent Replacement: The Court also found that BCI failed to establish that there were no feasible alternatives to hiring a permanent replacement because BCI did not present any evidence as to why a temporary replacement or other alternative would not have sufficiently addressed its business concerns.
An employer who wants to hire a replacement employee for another employee suffering from a workers’ compensation injury should ensure they have specific evidence that:
- At the time the position is filled, the vacancy at issue impaired the employer’s business operations; and
- There were “no feasible alternatives” to the employment action.
In determining whether a “feasible alternative” exists, the employer should consider the anticipated length of the injured employee’s absence.
- If the employee will be on leave for weeks or months, then filling the position with a temporary employee or having another employee cover for the absent employee may be a suitable alternative to hiring a permanent replacement.
- If the employee will be absent indefinitely or for an extended period, then preserving the injured employee’s right to return to the employee’s former or equivalent position “may not be feasible.” If an employer intends to rely on this defense, the employer should seek confirmation from the employee’s physician that the leave is indefinite or for an extended period.
- Specific alternatives might include:
- Filling the vacant position with a temporary employee,
- Having another employee or employees cover the duties of the position, or
- Holding open an equivalent or better position that does not create a business impairment.