Illinois employers need not pay certain workers’ compensation benefits to employees fired for cause, according to a recent state appellate court decision. Interstate Scaffolding, Inc. v. The Workers’ Compensation Commission, et al., 385 Ill. App. 3d. 1040, 896 N.E. 2d 1132 (3d Dist. 2008).

The case involved an employee injured while working, who then returned to light duty work. The employer accommodated the employee’s work-injury-related restrictions. After returning to work, the employee admitted writing graffiti on the employer’s walls, and was fired.

The court addressed the issue of whether the employee should continue receiving temporary total disability (“TTD”) benefits after his termination for cause. The court first explained that in Illinois, an employee is temporarily totally disabled from the time the injury renders him unable to work until he is as recovered as the permanent character of his injury permits. An employee seeking TTD benefits must prove both that he did not work and that he was unable to work.

Although the court ruled that the employee still had a temporary total disability when fired from his light duty job, it decided that he forfeited his right to TTD benefits when his employer fired him for cause.

The court said that the “overriding purpose” of Illinois’ workers’ compensation laws is to “compensate an employee for lost earnings resulting from a work-related disability.” The court reasoned that because this employee’s lost earnings resulted from his own admitted misconduct unrelated to his work-related disability, he forfeited his right to any TTD benefits.

This case gives Illinois employers some additional comfort level if they have cause to fire an employee who has returned to work on light duty after filing a workers’ compensation claim. Now, employers (and their workers’ compensation insurance carriers) can discontinue TTD benefits under such circumstances.

Employers should, however, continue to exercise extreme caution before terminating employees who have filed workers’ compensation claims. The employee fired for cause in the recent appellate court case admitted writing the graffiti, giving the employer uncontested cause to fire the employee. Additionally, this recent case did not involve any retaliatory discharge claim by the employee. Illinois still makes it illegal to fire an employee in retaliation for having filed a workers’ compensation claim, subjecting the employer to possible compensatory and punitive damages. Employers who fire employees who have filed workers’ compensation claims without such clear-cut grounds for termination may have to continue paying workers’ compensation benefits and defend a retaliatory discharge claim.

The lesson for Illinois employers? If you are thinking about firing an employee who recently filed a workers’ compensation claim, then you should have rock-solid, non-retaliatory grounds for doing so. Only then can you avoid continued TTD payments, and successfully defend a retaliatory discharge claim.