Leidecker, John A., Jr.

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1996 Survey of Rhode Island Law: Cases: Employment Law

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Roger Williams University Law ReviewVolume 2 | Issue 2 Article 13Spring 19971996 Survey of Rhode Island Law: Cases:Employment LawJohn A. Leidecker Jr.Roger Williams University School of LawFollow this and additional works at: http://docs.rwu.edu/rwu_LRThis Survey of Rhode Island Law is brought to you for free and open access by the Journals at DOCS@RWU. It has been accepted for inclusion inRoger Williams University Law Review by an authorized administrator of DOCS@RWU. For more information, please contact mwu@rwu.edu.Recommended CitationLeidecker, John A. Jr. (1997) "1996 Survey of Rhode Island Law: Cases: Employment Law," Roger Williams University Law Review: Vol.2: Iss. 2, Article 13.Available at: http://docs.rwu.edu/rwu_LR/vol2/iss2/13SURVEY SECTIONEmployment Law. Cole v. Davol, 679 A.2d 875 (R.I. 1996). Forwork related injuries occurring before May 18, 1992, employersmay not reduce workers' compensation payments by the amount ofvacation pay benefits made to partially incapacitated employeespaid during a scheduled plant shutdown.FACTS AND TRAVELAfter being injured on the job, claimants, Susan Cole, FredCabral and Beneranda Maria Carvalho, all employees of Davol,Inc. (Davol), began receiving workers' compensation benefits andperforming light duty work.1 Pursuant to a collective bargainingagreement, these employees had earned credit for vacation paybenefits calculated upon time in service to the company.2 DuringDavol's two week scheduled plant shutdown, each employee wasentitled to receive vacation pay.3The company, however, in calculating the employees' post in-jury earning capacities, included the vacation benefits paid to theemployees during the scheduled two week shutdown.4 Construingthe vacation pay as earnings, and including it in the earning capac-ity calculation, allowed the employer an offset from the amount ofworkers' compensation payments due the employees during theshutdown.5The Appellate Division of the Workers' Compensation Courtheld the "vacation benefits paid to employees during the shutdownwere earnings under the applicable law."6 The employees, takingexception, sought redress from the Rhode Island Supreme Court.7BACKGROUNDAt common law, employees who sustained economic losses be-cause of work related injuries are required to seek redress throughtort actions. 8 By the late 1800s, however, state legislators beganrecognizing the difficulties encountered by injured workers at-1. Cole v. Davol, 679 A2d 875 (LI. 1996).2. Id.3. Id.4. I&5. Id.6. Id.7. Id.8. Mark A- Rothstein et al., Employment Law § 7.2, at 2 (1994).1997]472 ROGER WILLIAMS UNIVERSITY LAW REVIEW [Vol. 2:471tempting to recover lost earnings.9 In response, various legisla-tures enacted a variety of worker compensation schemes to furnishcompensation for the loss of earning capacity.' 0"Most workers' compensation laws legislatively establish lia-bility without fault and cover all private and most public employ-ers."" Generally, the workers' compensation laws are enforced byadministrative agencies with allowance for judicial review. InRhode Island, appeal of a final workers' compensation decree maybe made to the supreme court.12Generally, the provisions of the Workers' Compensation Actare "liberally construed to effectuate the benevolent purpose thatled to [its] enactment."' 3 In determining when compensationshould be provided, the Rhode Island Supreme Court has ruledthat an employee, although disabled, has not sustained a loss ofearning capacity if weekly payments received by the employee dur-ing the injury period exceed his weekly, pre-injury earnings.' 4 In alater refinement of this broad rule, the court, in Trzoniec v. GeneralControls Co.,15 held certain monies should be excluded when deter-mining an individual's actual earning capacity.' 6 Wages, if paid"as a voluntary gesture of gratitude for past services rendered" andnot intended to be in lieu of compensation, should not be in-cluded.' 7 The court reasoned that such wages would not reflect theindividual's actual earning capacity.' 8The same reasoning was later applied in Robidoux v. Uniroyal,Inc.,' 9 to accumulated sick and vacation leave payments. 20 InRobidoux, the Rhode Island Supreme Court overturned a Workers'Compensation Commission decree that denied benefit payments toan employee whose weekly wages, consisting in part of vacationpay and accumulated sick leave pay, exceeded his pre-injury9. Id,10. Id. § 7.3, at 5.11. Id. § 7.4, at 7.12. R.I. Gen. Laws §§ 28-35-29 to -30 (1995).13. Fontaine v. Caldarone, 412 A.2d 243, 245 (R.I. 1980).14. Weber v. American Silk Spinning Co., 95 A. 603, 605 (R.I. 1915).15. 216 A-2d 886 (ILI. 1966).16. Id. at 888.17. Id.18. Id.19. Robidoux v. Uniroyal, Inc., 359 A.2d 45 (R.I. 1976).20. Id.SURVEY SECTIONwages.2 ' The supreme court reasoned that including the accumu-lated sick and vacation pay in the computation would cause theemployee to lose payments which "would otherwise be available tohim," a result seemingly running against the intent of thelegislature. 22The Workers' Compensation laws in effect at the time of theinstant case provided that an employer must pay a partially inca-pacitated employee an amount equal to sixty-six and two-thirdspercent of the difference between his average weekly wage prior tothe injuries and the weekly wage he earned thereafter, but notmore than the maximum rate for total incapacitation.23HOLnmhG AND ANALYSISThe court relied heavily on its earlier holdings in Trzoniec andRobidoux in recognizing that vacation pay is an accumulated bene-fit of employment.24 The court pointed out that Davol's counsel ac-knowledged "if [the] employees had terminated their employmentat Davol before the shutdown, they still would have received theiraccrued vacation pay."25 In fact, maintenance employees who con-tinued to work during the shutdown period received both their reg-ular compensation and vacation pay.26 The dispositive aspect ofan accumulated benefit was further explained in the distinctionmade by the court between accrued entitlements for which an em-ployer is not entitled to credit, and voluntary payments made byan employer when an employee is injured.27CONCLUSIONIn 1992, the General Assembly amended Rhode Island Gen-eral Laws section 28-33-20 to include "any paid vacation time"21. Id. at 48.22. Id.23. Cole v. Davol, 679 A.2d 875, 876 n.2 (1996) (noting that Rhode Island Gen-eral Laws section 28-33-18 now sets the differential rate at 75%).24. Id. at 876.25. Id. at 878.26. Id27. IcL; see Murhon v. Workmens' Compensation Appeal Board, 618 A.2d1178, 1181 (Pa. Commw. Ct. 1992) (holding that voluntary payments made in re-lief of an employee's injuries may be credited towards offsetting compensationpayments).1997] 473474 ROGER WILLIAMS UNIVERSITY LAW REVIEW [Vol. 2:471when computing earnings. 28 Consequently, had the injuries thatbefell Cole and the other Davol workers occurred after May 18,1992, Davol's inclusion of vacation time in its method of calculatingworkers' compensation benefits would have been permitted. Thestatutory change, however, does not mention accumulated sickleave pay, and presumably, the earlier holding of Robidoux re-mains good law in that respect. However, it remains unclearwhether the holding that accumulated sick leave benefits shouldbe excluded when computing earning capacity will survive the1992 legislative amendment.John A. Leidecker, Jr.28. 1992 RI. Pub. Laws ch. 31, § 5.

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1996 Survey of Rhode Island Law: Cases: Employment Law

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