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$4.3 million workers comp retaliation award upheld

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An Illinois man was properly awarded $4.3 million in a workers compensation retaliation lawsuit because his employer failed to modify his duties and terminated his job while requiring him to apply for other positions within the company, an appellate court ruled last week.

Larry W. Holland worked as a facility supervisor for frozen food distributor Schwan's Home Service Inc. in West Frankfort, Ill., court records show. In 2008, he injured his back after he slipped on ice while unloading goods into a Schwan's freezer.

Mr. Holland's doctor ruled that he could return to work under certain restrictions, including “no heavy lifting (and) no prolonged standing,” court records show. Schwan's testified that it placed Mr. Holland on “temporary alternative duty.”

Court records show that Mr. Holland's job duties did not change in spite of his doctor's work restrictions. He continued to lift heavy objects and “endured prolonged standing, bending, and twisting during the loading and unloading of goods, when refueling the delivery trucks, and while inventorying the delivery trucks.”

Mr. Holland's back condition worsened, records show. In April 2009, Mr. Holland's doctor told him to stop working for a month to undergo “aggressive” physical therapy. Just before he was to approved to return for full-duty work, Schwan's sent Mr. Holland a letter in May 2009 saying that his position was set to be eliminated.

Schwan's provided Mr. Holland an unpaid 30-day period to find a new job within the company or be terminated, records show. He also was told not to report to work until he had applied and been accepted for another job at Schwan's.

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Though Mr. Holland was told later that a material handler job had been created specifically for him within the company, he never accepted or declined the position, records show. He later testified that he did not think the job was legitimate because he did not receive a formal offer letter from the company, which had been standard procedure when Mr. Holland accepted previous positions within Schwan's.

Upon failure to accept the material handler job, Mr. Holland was officially terminated from Schwan's in July 2009, records show. He later sued the company for retaliatory discharge under Illinois workers comp law.

A Franklin County Circuit Court jury awarded Mr. Holland $4.26 million in punitive and compensatory damages, records show. Schwan's appealed, arguing that Mr. Holland resigned from his employment and was not discharged.

A three judge panel of the Illinois 5th Appellate District Court upheld the jury award 2-1 on Thursday. In its ruling, the court found that Schwan's terminated Mr. Holland while on leave for physical therapy because the company stopped paying him during that time and did not provide temporary total disability benefits.

“At that time, Holland was not earning any salary or wages,” the ruling reads. “It does not require much of an inference for the jury to conclude that a person who has no job and no income, and who must apply for a new job, no longer has an employment relationship with his former employer.”

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The jury acted properly in awarding $3.6 million in punitive damages in Mr. Holland's favor, the appellate court ruled, because evidence showed that Mr. Holland's back condition deteriorated after Schwan's failed to modify his work duties.

“The obvious conclusion from this testimony, if found credible, is that Schwan's actions increased the pain that Holland suffered as a result of the workplace accident,” the ruling reads. “The jury was entitled to consider this evidence in evaluating Schwan's wanton disregard for Holland's rights under the Workers' Compensation Act.”

The jury award was not excessive, the appellate court found, based on evidence in Mr. Holland's case and Schwan's net worth of $306 million at the time of trial.

In a dissenting opinion, Justice Stephen L. Spomer said he would reverse the jury award. He contended that there was not sufficient proof that Schwan's intended to terminate Mr. Holland when the company told him to apply for other jobs before returning to work.

“Even when viewed in the light most favorable to the plaintiff, the evidence demonstrates, at the most, that Schwan's had begun a job reassignment process that might eventually lead to the termination of the plaintiff, if he did not follow the directions” from Schwan's, the dissent reads.