Nederhood v. Cadillac Malleable Iron Co.

518 N.W.2d 390, 445 Mich. 234

• Court: Michigan Supreme Court
• Decided: May 31, 1994
• Docket: Docket Nos. 94110, 94299, (Calendar Nos. 3-4)
• Status: Published

Opinions

Brickley, J.

We granted leave in these cases to determine whether the Worker’s Compensation Appeal Board and the Court of Appeals erred in concluding that the plaintiffs-appellants were disqualified from receiving worker’s compensation benefits because they left favored work to participate in a strike that resulted in the use of permanent replacements. In deciding this issue, we must determine whether the hiring of permanent replacement workers obligates an employer to renew its offer of favored work to its injured employees, or whether the employee must take action to reinstate benefits. In the case of plaintiff-appellant James Zimmerman, who became fully disabled after the strike had begun, we must determine whether such total disability operates to revive his right to benefits.

We conclude that where a striking favored worker has voluntarily ceased performance of favored work, benefits should be restored once the favored worker expresses a good-faith willingness to return to favored work, provided this willingness is communicated to the employer within a reasonable time after the cessation of favored work. Such benefits should not automatically be restored upon the hiring of permanent replacement workers by the employer. Additionally, we would hold that plaintiff Zimmerman’s supervening heart attack, which rendered him totally disabled, revived his right to benefits.

I

A

This dispute arose out of a labor strike between defendant-appellee Cadillac Malleable Iron Company and Local 784 of the uaw, of which plaintiffs-appellants, James Zimmerman and Roger Nederhood, were members. On September 30, 1981, the collective bargaining agreement between Cadillac and the union expired, and the union struck on October 1, 1981, when it became apparent that a new agreement was not forthcoming. At this time, approximately thirty-five proposals for a new contract were unresolved. Cadillac was demanding twenty-four additional language changes in the contract and the union was demanding a $2 per month increase in the employer’s pension contribution for current retirees.

On October 7, 1981, Cadillac modified its September 30 proposal and submitted it to the union. These modifications included an extension of seniority retention during layoff to thirty-six months.¹ This offer was rejected by the union and was withdrawn by Cadillac by October 22, 1981.

On January 12, 1982, Cadillac officially informed the union that it would be hiring permanent replacement workers. At a January 18, 1982, bargaining session, the union attempted to accept the October 7, 1981, proposal, and offered to accept a dollar an hour cut in wages. Cadillac informed the union representative that the October 7 proposal had been withdrawn, and insisted on limiting wages to $6 per hour with no cost-of-living adjustment, and on limiting the number of plant classifications. The union representative terminated this meeting.

As of March, 1983, forty-one or forty-two replacement workers had been hired. At the time of the strike, approximately eighty workers had been employed by Cadillac. The record is silent with regard to whether plaintiffs’ favored work positions had been given to permanent replacements.

B

A hearing referee found both Zimmerman and Nederhood to have been partially disabled at the commencement of the strike, but determined that plaintiffs were not entitled to wage loss benefits for the period between October 1, 1981, and January 18, 1982, because of their participation in a strike.² The referee found, however, that wage loss benefits recommenced on January 18, 1982, determining that the union’s “offer to return” to work on this date terminated any unreasonable refusal by plaintiffs to perform favored work.

Additionally, the hearing referee found that on February 4, 1982, plaintiff Zimmerman became totally disabled as a result of his supervening, non-work-related heart condition.

The wcab affirmed the hearing referee’s findings with respect to injury dates and the cessation of benefits during the strike, but reversed the referee’s determination that plaintiffs were entitled to restoration of wage loss benefits as of January 18, 1982, finding instead that there was no showing that plaintiffs themselves had offered to return to work at any time before the wcab hearing.³

Plaintiffs’ applications for leave to appeal to the Court of Appeals were denied for lack of merit, and we remanded for consideration as on leave granted. The Court of Appeals affirmed the decisions of the wcab. In Zimmerman, it held that the wcab had not applied erroneous legal reasoning in determining that plaintiff’s individual refusal to perform favored work while his union was on strike, and not the actions of the union in striking, provided a basis for denying benefits, and that such forfeiture continued for the duration of plaintiff’s unwillingness to return to work. In Nederhood, it held that the wcab had correctly applied the law in determining that Nederhood’s participation in the strike precluded him from collecting wage loss benefits during the pendency of the strike. The Court of Appeals also found that the record adequately supported the board’s holding that plaintiffs had not personally offered to return to favored work, and that the union’s January 18, 1982, "offer” was merely another proposal in a series of negotiations.

Additionally, in Zimmerman, it found that plaintiff’s supervening heart attack did not render him eligible for benefits because he had failed to communicate his willingness to return to work before his supervening heart attack, thus failing to meet his burden of establishing his entitlement to benefits.

On March 16, 1993, we granted leave to appeal, ordering that Zimmerman and Nederhood be submitted and argued together. 442 Mich 867.

II

As a preliminary matter, we note that the parties do not dispute that the plaintiffs were performing favored work at the time of the strike.⁴

Additionally, the parties do not contest that before the union’s offer to return to work on December 4, 1981, under a contract incorporating prestrike terms, plaintiffs were disqualified from receiving benefits on the basis of their voluntary cessation of favored work stemming from their participation in a strike.⁵ We must now decide the duration of this disqualification._

The general rule is that a refusal of suitable work suspends benefits for the duration of the refusal.⁶ Although this Court has never expressly decided the question,⁷ in Bower v Whitehall Leather Co, 412 Mich 172; 312 NW2d 640 (1981), we utilized a case that supports this rule, and our decision in Pigue v General Motors Corp, 317 Mich 311; 26 NW2d 900 (1947), seems also to imply a suspension of benefits instead of a permanent forfeiture.

The Bower Court’s citation, with apparent approval, of PPG Industries, Inc v Aites, 7 Pa Commw Ct 588; 300 A2d 902 (1973), supports the conclusion that Bower envisioned only a temporary loss of benefits. In PPG Industries, Inc, the employee left his favored work to become a minister. Once it became evident that he was unable to earn a living as a minister, he attempted to find other light work. The court held that he had. not permanently forfeited his benefits by leaving favored work. The combination of the claimant’s attempt to find employment other than as a minister and the unavailability of his old favored position triggered his eligibility for benefits.

The Pigue Court did not expressly address this issue because the claimant had returned to favored work upon settlement of the strike. In framing the issue, however, the Court stated that the pivotal question was whether the plaintiff was entitled to compensation "during the period of a strike . . . .” Id. at 315. While the weight to be accorded this is minimal, it lends credence to the view that suspension is the sanction implicit in Pigue. Noteworthy, also, is that the Pigue Court neither stated nor intimated that a permanent forfeiture results.

c

Larson, in his treatise on worker’s compensation, opines that a temporary forfeiture of benefits is the preferred sanction. Although discussed within the context of employee misconduct, the reasons underlying his conclusions apply with equal force to the striking employee. Larson states that an injured employee discharged for misconduct should not suffer a permanent loss of benefits. He draws an analogy to the unemployment context, in which misconduct-based discharges and voluntary quitting are handled by imposing a penalty of a limited number of weeks. Likewise, he concludes that in the worker’s compensation arena, the penalty for a voluntary cessation of favored work should also be limited to a loss of benefits for a period of weeks.⁸

D

The Minnesota Supreme Court has grappled with this issue and determined that only a temporary forfeiture of benefits should result. Marsolek v George A Hormel Co, 438 NW2d 922, 923 (Minn, 1989). In this case, a partially disabled employee, Marsolek, was terminated for misconduct during a strike against the employer. Marsolek had threatened to damage cars and injure employees attempting to cross the picket line. When the plant was reopened five months after the strike began, Marsolek was not invited to return. Except for a three-month period following the strike, he was unable to find employment, and filed a claim for worker’s compensation benefits, including a claim for lost wages. The court held that

a justifiable discharge for misconduct suspends an injured employee’s right to wage loss benefits; but the suspension of entitlement to wage loss benefits will be lifted once it has become demonstrable that the employee’s work-related disability is the cause of the employee’s inability to find or hold new employment. Such a determination should be made upon consideration of the totality of the circumstances including the usual work search "requirements.” [Id. at 924. Emphasis added.]

In reaching this conclusion, the court noted that the purpose of the Worker’s Compensation Act was to compensate injured employees for a wage loss attributable to a work injury. On this basis, compensation has been denied where the record established only a discharge for misconduct;⁹ but benefits have been awarded where the record evidenced misconduct, yet showed that the employee’s injury was the cause of his inability to find other work.¹⁰

E

The Court of Appeals has, on several occasions, spoken on the issue of permanent forfeiture. In Hartsell v Richmond Lumber Co, 154 Mich App 523; 398 NW2d 456 (1986), the employee left his favored work as a night watchman and began working elsewhere. Hartsell was given compensation for total disability during the period between his injury and his employment as a night watchman, and was given compensation for partial disability for the period up until his hearing, but was denied compensation for lost wages during the period following his cessation of favored work. In February, 1978, Richmond Lumber closed its plant, and in May, 1978, Hartsell filed a petition for compensation. The Court of Appeals affirmed an award of benefits from the time of the plant closing, holding that the plant closure was a tacit withdrawal of the offer of favored work, rendering Hartsell eligible for benefits.

The Court of Appeals reached a similar result in Steward v Westran Corp, 130 Mich App 68; 343 NW2d 7 (1983). In this case, the plaintiff initially accepted Westran’s offer of favored work, but upon completion of his first favored work assignment, he rejected Westran’s offer of additional favored work. Later, while his claim for compensation was pending, the plaintiff requested reassignment to favored work. The Court held that the plaintiff forfeited his benefits during the period of his refusal of favored work, but that such forfeiture terminated upon the plaintiff’s request for reassignment.

A different result was reached by the Court of Appeals in Russell v General Motors Corp, 172 Mich App 627; 432 NW2d 738 (1988). In this case, General Motors offered Russell favored work on April 18, 1980. Russell failed to respond. On April 8, 1981, a hearing referee concluded that benefits could be terminated because of Russell’s failure to accept favored work. Following this decision, General Motors fired Russell, and on October 27, 1981, Russell attempted to accept the offer of favored work. When General Motors refused, Russell filed a claim for worker’s compensation benefits. The Court held that the offer of favored work need only be kept open for a reasonable time, after which the employee permanently forfeits any right to benefits.¹¹ It should be noted that the permanent forfeiture did not stem from the employee’s initial rejection of favored work; rather, it was triggered by the employee’s refusal to accept favored work within a reasonable time after the offer was made.

F

In formulating our decision on this issue, we must also be mindful of the policies underlying the Worker’s Disability Compensation Act. MCL 418.101 et seq.; MSA 17.237(101) et seq. As a preliminary matter, it must be remembered that the act was designed to be remedial and must not be unnecessarily construed so as to favor a denial of benefits. The Bower Court opined:

The Workers’ Disability Compensation Act was designed to help relieve the social and economic difficulties faced by injured workers. As remedial legislation, it is liberally construed to grant rather than deny benefits. [Id. at 191.]

It would seem that a permanent forfeiture of benefits is not in accord with a liberal construction of the Worker’s Disability Compensation Act.

G

Finally, support for the concept of a temporary suspension of benefits can be drawn from an amendment of the worker’s compensation legislation that contains the first statutory reference to the favored work doctrine and was implemented while this case was progressing.¹² Despite the inapplicability of this legislation to the case at bar, it cannot be ignored in formulating a policy to be applied in future cases. The statute provides:

If an employee receives a bona fide offer of reasonable employment from the previous employer, another employer, or through the Michigan employment security commission and the employee refuses that employment without good and reasonable cause, the employee shall be considered to have voluntarily removed himself or herself from the work force and is no longer entitled to any wage loss benefits under this act during the period of such refusal. [MCL 418.301(5)(a); MSA 17.237(301)(5)(a). Emphasis added.]

The only plausible interpretation of this statute is that benefits will be suspended for the duration of the employee’s unreasonable refusal to accept employment. If permanent forfeiture were the intended consequence, the phrase, "during the period of such refusal,” would be rendered meaningless.

In view of the above, we would hold that a voluntary cessation of favored work per se does not result in a permanent forfeiture of wage loss benefits. We note that this holding is in accord with the views espoused by Larson and most of the cases cited,¹³ and represents what we believe to be the better approach as a matter of policy, given the worker’s compensation legislation in general, and more specifically, the recently enacted amendments implemented following the commencement of this case. A temporary suspension of benefits, in contrast to a permanent forfeiture, comports with the dual aims of worker’s compensation, namely, mitigation and rehabilitation, without enabling the employer to enjoy a windfall.

hi

Our conclusion that an unreasonable refusal or cessation of favored work does not necessarily cause permanent forfeiture of benefits compels a determination of what act or acts operate to reinstate those benefits.

This issue was addressed by the Court of Appeals in Chilcote v Cadillac Malleable Iron Co, 198 Mich App 166; 497 NW2d 211 (1993),¹⁴ in which the Court held that a voluntary participant in an ongoing strike must inform his employer of his willingness to return to work for that employer before he can be entitled to compensation benefits. The Court stated:

[P]laintiff, in order to be entitled to compensation benefits while a strike is ongoing and in which he is a voluntary participant, must show that he informed his strikebound employer of his willingness to return to work for that employer. Working for other employers is not evidence that plaintiff is willing to return to work for his strikebound employer. [Id. at 171.]

In essence, the Court assumed the existence of an offer of favored work and, in this context, held that the employee had the burden of showing that he had informed his employer of his willingness to return to favored work.

The Court of Appeals also addressed this issue in Russell v General Motors, supra at 632, when it held that

[t]here comes a point after which it is unreasonable to think that such employee might someday accept the offer that was originally spurned. It is at that point that a company should be permitted to withdraw its offer with no fear of disadvantage. [Emphasis added.]

We believe that the rules announced in Chilcote and Russell strike the best balance between the interests of the injured striking employee and the employer whose offer of favored work has been rejected. Fairness, as well as ease of administration, dictates that the party refusing favored work bears the burden of proving a willingness to perform such work, and that such willingness must be expressed within a reasonable period. An employer should not have to continuously bear the burden of initiating a renewal of favored work, nor should the employer be forced to hold favored positions open indefinitely.

We conclude then that an employee who has ceased to perform existing favored work should establish a good-faith willingness to accept or resume favored work that remains available in order to restore eligibility for benefits. Additionally, this willingness should be expressed within a reasonable period in order to be effective.

Plaintiffs advance two theories in support of their argument that, even under the above-mentioned rule, they are entitled to a resumption of benefits. Initially, plaintiffs argue that they expressed the requisite willingness to return on January 18, 1982, when the union representative attempted to accept Cadillac’s October 7, 1981, offer, an offer that had already been withdrawn. Plaintiffs assert that this purported "offer to return” operated to transform them into involuntary strikers.

Because it was the union that "offered to return,” we must first determine whether this "offer” can be attributed to the plaintiffs. Plaintiffs argue that the concept of "concerted action” supports this conclusion, and that 29 USC 159(a) mandates it.

Exclusive representatives; employees’ adjustment of grievances directly with employer. Representatives designated or selected for the purposes of collective bargaining by the majority of the employees in a unit appropriate for such purposes, shall be the exclusive representatives of all the employees in such unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment .... [Emphasis added.]

This provision directs the employer to bargain only with the majority representative; he cannot bargain with individual employees. In essence, it forbids separation of the union and its members at the bargaining table.

Applying this to the case at bar, we conclude that the union’s "offer to return” should be attributed to the individual employees.¹⁵ In the absence of any evidence indicating plaintiffs’ desire to separate themselves from the union’s position, the union’s offer should be deemed an offer by each member.

Accordingly, we must now determine whether the "offer” established plaintiffs’ willingness to return to work, so that a rejection by the employer would transform plaintiffs into involuntary strikers.

In order to establish that plaintiffs were willing to return, they must show that they would have accepted any reasonable offer of favored work put forth by Cadillac.¹⁶ A conditional "offer” to return does not operate to transform strikers into involuntary strikers; rather, it represents a repositioning of the union with regard to its demands and concessions.¹⁷ An analogy to employer liability for backpay to a striking worker is instructive on this issue.

In general, an employer is not obligated to a striking employee for backpay. The exception to this rule arises when the striking worker submits an unconditional application for reinstatement to his job that the employer rejects. The employer’s refusal to reinstate the worker triggers the accrual of backpay, beginning after the denial of the striking employee’s request for reinstatement.¹⁸

Applying this to the case at bar, it is clear that an unconditional offer would have demonstrated plaintiffs’ willingness to return to work. An offer conditioned upon the employer’s acceptance of certain terms does not.

The wcab concluded that the January 18, 1982, "offer to return” was nothing more than "another proposal in a very lengthy series of negotiations.”¹⁹ Support for this conclusion was found in the facts that this "offer” attempted to accept an offer that had been expressly withdrawn, the union’s "offer” was not in writing, as had been the practice, and the union members had not voted to ratify such a proposal.

We agree with the wcab’s analysis of the "offer” and conclude that plaintiffs’ "offer to return” was merely another proposal in the negotiation process. The "offer” did not rise to the level of the unconditional offer necessary to establish the requisite willingness to return, thereby transforming plaintiffs into involuntary strikers. Hence, it should not serve to terminate the suspension of benefits.

Additionally, plaintiffs argue that Cadillac’s announcement of its intention to hire permanent replacement workers had the effect of withdrawing its offer of favored work from its striking employees, thus entitling the plaintiffs to a resumption of benefits. We disagree.

The announcement by management of the use of permanent replacements has considerable effect on the dynamics of a labor dispute, particularly in view of the fact that to a striking worker, it represents a threat not only to the benefits sought by the union, but also introduces the possibility of permanent job loss. The effect on a favored-work striker, however, is quite different. Such an employee, at most, sees a loss of favored work, which, in turn, may result in a resumption of work loss benefits without the need to perform favored work.²⁰ While favored-work strikers certainly should not be disadvantaged by the outcome of the use of permanent replacements, they also should not improve their position as a result of the use of replacement workers.

Therefore, in view of the divergent effects of the use of permanent replacements on injured versus noninjured striking employees, we think that the rules for placing the burden of establishing a readiness to offer or accept favored work should be the same as would obtain had there been a voluntary cessation of favored work outside a labor dispute;²¹ we do not believe the hiring of replacement workers during a labor dispute should operate to shift this burden.²²

Accordingly, we reject plaintiffs’ argument that Cadillac’s announcement of its intention to hire permanent replacement workers operated to withdraw its offer of favored work and trigger the resumption of benefits.²³ The announcement of permanent replacements was preceded by plaintiffs’ refusal to accept favored work; the permanent replacements were not the cause of the cessation of favored work.²⁴ Furthermore, because the employees did not offer to return to work at anytime before the commencement of this action, we need not undertake a determination of what other circumstances could serve to restore benefits following an offer to return.²⁵

We conclude that plaintiffs failed to indicate individually or collectively an unconditional offer to return to their favored work either during the strike or when it was announced that their jobs would be filled by permanent replacements.²⁶ Accordingly, at least plaintiff Nederhood was without recourse to collect work loss benefits.

IV

In Zimmerman, we must address the additional issue whether a supervening, non-work-related heart attack operates to reinstate plaintiff’s right to benefits. We conclude that it does.

As we have previously stated, the general rule is that an injured employee who refuses an offer of favored work that the employee is physically capable of performing is not entitled to worker’s compensation benefits. See Pigue, supra at 318-319. A corollary to this rule is the supervening events rule, which states that a supervening event causing cessation of favored work will terminate an employee’s right to benefits if the supervening event either is within the employee’s control or is attributable to him. Bower, supra at 188. Applying these rules to plaintiff Zimmerman, it is undisputed that after his heart attack, he was no longer physically capable of performing his favored work. Under the physically capable rule, Zimmerman would be entitled to benefits.²⁷ But the supervening events rule is also applicable to Zimmerman because the strike was a voluntary action on his part. Under that rule, Zimmerman would not be entitled to benefits. Because a different result is reached under each rule, they must be reconciled.

As a preliminary matter, we note that in Powell v Casco Nelmor Corp, 406 Mich 332; 279 NW2d 769 (1979), this Court held that the inability of a worker to continue favored work does not preclude the payment of benefits where that inability was occasioned by a supervening non-work-related injury beyond the employee’s control. However, we note that in Powell, unlike the facts in this case, the injured employee was performing favored work at the time of the supervening, non-work-related injury.

In deciding this issue, we again must bear in mind the remedial nature of the Worker’s Disability Compensation Act. It should be construed liberally so as not to unnecessarily deny benefits. When we are dealing with an issue of benefits, we must favor an interpretation that awards, rather than denies, benefits.

We must also consider the extent and circumstances of the disability. Zimmerman’s heart attack has rendered him totally disabled. We are not presented with a case of partial disability that may have little or no effect on the future employment prospects of an employee. We are faced with a situation in which the employee’s injury may prevent him from obtaining any further employment. A denial of benefits in this case would work an unquestionable hardship.

Consideration should also be given to the extent of the refusal to perform favored work. In general, a refusal to perform favored work predicated upon participation in a strike is not viewed as a permanent refusal. In contrast, we can envisage other cases where the original refusal will be of a more permanent nature.²⁸ The fact that this refusal was not intended to be of a permanent nature counsels against a denial of benefits where there is a subsequent non-work-related disability._

Finally, we note that the heart attack did not arise out of the refusal to perform favored work. This is not the case where a striking employee suffered injuries while picketing. The heart attack here was unrelated both to the work and to the strike and did not stem from the refusal to perform favored work.

On the basis of these considerations, we would hold that the occurrence of plaintiff’s heart attack while on strike does not preclude the recovery of wage loss benefits. In reaching this conclusion, we have considered the remedial nature of worker’s compensation, the certainty and extent of the total disability, the length of the refusal to perform favored work at the time of the heart attack,²⁹ and the fact that Zimmerman’s heart attack did not arise out of his refusal to perform favored work; it was a supervening event neither within his control nor attributable to him. We note that a contrary result would require a permanent forfeiture of benefits on the basis of his original cessation of favored work, a consequence we have rejected today. For the foregoing reasons, we would hold that Zimmerman is entitled to wage loss benefits as of February 4, 1982, the date upon which his heart attack rendered him physically unable to perform favored work.³⁰

CONCLUSION

We would hold that a voluntary cessation of favored work by a striking employee results in a suspension of wage loss benefits. Neither a conditional offer to return by a worker’s union nor the hiring of permanent replacement workers by the employer operates to automatically restore benefits to the striking employee. However, benefits will be restored once the employee expresses a good-faith willingness to return to favored work, provided such willingness is communicated to the employer within a reasonable period following the cessation of favored work. Additionally, we would hold that the resumption of such an employee’s right to benefits upon the occasion of a supervening heart attack that renders such employee totally disabled depends on the certainty and extent of the injury, the length of the refusal to perform favored work before the injury, and the lack of a causal nexus between the refusal of favored work and the resulting heart attack.

Accordingly, we would affirm the decisions of the wcab and the Court of Appeals with respect to their findings that the plaintiffs have not established the requisite willingness to perform favored work and are therefore not entitled to wage loss benefits from the commencement of the strike. We would reverse the decisions with respect to Zimmerman, who is entitled to work loss benefits from the time of his totally disabling heart attack.

1 The September 30, 1981, proposal contained a provision allowing seniority retention during layoff for only twenty-four months. The provision in the expired collective bargaining agreement had provided for retention of seniority during layoff for a period of time equal to the length of employment with the company.

2 Although these cases were not consolidated below, both cases were heard by the same referee and were reviewed by the same panel of the Court of Appeals.

3 1989 WCABO 239; 1989 WCABO 471.

4 Favored work has been defined as

work offered by the employer to a disabled worker that was limited or restricted so as to be within the worker’s capacity to perform. [Welch, Worker’s Compensation in Michigan: Law & Practice (rev ed), § 10.11, p 10-13.]

Cadillac accommodated Zimmerman’s limitations by providing him work in the core room, where the maximum weight to be lifted was five pounds. Nederhood’s limitations were accommodated by assigning him unskilled common labor to perform.

5 See, e.g., Bower v Whitehall Leather Co, 412 Mich 172, 188; 312 NW2d 640 (1981) (“interruptions of work caused by voluntary actions of the employee, such as abandonment of work to participate in a strike . . . result[] in a forfeiture of benefits”); Pigue v General Motors Corp, 317 Mich 311; 26 NW2d 900 (1947) (an employee forfeits the right to benefits for the period in which he refused favored work that he could perform).

Although Bower focused on the actions of the employee, we see no reason to distinguish between the actions of the union and those of the employees because plaintiffs’ unwillingness to work is evidenced irrespective of whether we focus our analysis on the actions of the employee or those of the union.

6 See 1C Larson, Workmen’s Compensation, § 57.66(c), pp 10-492.75 to 10-492.76.

7 Note that in the area of discharges based on moral turpitude, this Court has spoken, seemingly concluding that a permanent forfeiture results. In Todd v Hudson Motor Car Co, 328 Mich 283; 43 NW2d 854 (1950), the partially disabled employee had been terminated for engaging in criminal activity while on favored work. The Court reversed an award of benefits, holding that where an employee

engages in criminal gambling activities while at work and is discharged for that cause, he will not be entitled to compensation for the resultant loss of earnings. His favored employment has ceased through his own volition and turpitude and not by reason of his accidental injury. . . .

It was not through physical inability to perform the work, arbitrary caprice of the employer, or some ordinary cause for dismissal that this employment was terminated. [Id. at 289.]

See also Garrett v Chrysler Corp, 337 Mich 192; 59 NW2d 259 (1953), where a permanent forfeiture resulted when the plaintiff was discharged for coming to work under the influence of alcohol. However, in neither case did the Court expressly state that the forfeiture was permanent; it was only implicit in the holding.

8 1C Larson, supra, § 57.64(a), p 10-492.27. But see, Todd v Hudson Motor Car Co, n 7 supra, and Garrett v Chrysler Corp, n 7 supra (seemingly contemplating permanent forfeiture).

9 See, e.g., Rodge v United Van Bus Delivery, 330 NW2d 715 (Minn, 1983) (compensation was denied where a truck driver lost his license because of a dwi conviction).

10 See, e.g., Kurowski v Kittson Memorial Hosp, 396 NW2d 827 (Minn, 1986) (an employee was determined to be eligible for rehabilitation benefits, despite being fired for fraudulent use of sick leave).

11 Pursuant to Administrative Order No. 1984-2, the Russell panel certified that its decision conflicted with the Court of Appeals decision in Hartsell. Russell rejected the blanket rule laid down in Hartsell that the employee’s right to benefits is suspended only for the duration of the employee’s unreasonable refusal of favored work. Russell holds that the employer need only keep open an offer of favored work for a reasonable time. This holding was premised on the idea that the employee’s unreasonable refusal triggered the forfeiture and that, after a period of time, it becomes unreasonable to assume that the employee might accept the offer he once rejected.

12 MCL 418.301(5)(a); MSA 17.237(301)(5)(a).

13 The decision in Russell, supra, is also in accord with this conclusion, if it is read as holding that a permanent forfeiture does not stem from the initial refusal of favored work, but, instead, follows from the failure of the employee to accept the favored work within a reasonable period.

14 This case arose out of the same strike as in the case at bar.

15 This is supported by the fact that, in applying for reinstatement, a striking worker need not make an individual request. The request may come from the union on behalf of a group of employees. Trinity Valley Iron & Steel Co v NLRB, 410 F2d 1161 (CA 5, 1969).

16 See Pigue, supra (an injured employee who refuses an offer of favored work that the employee is physically capable of performing is not entitled to wage loss benefits).

17 Plaintiffs have advanced a similar argument with respect to their December 4, 1981, proposal, in which the union offered to return to work under the same terms that existed in the expired contract. Plaintiffs argue that in light of Pigue, this proposal compels a resumption of benefits. The Pigue Court reasoned:

In the case at bar plaintiff could have continued his employment under the same terms and conditions as existed prior to going out on strike. The incapacity of plaintiff to earn wages during this period was not occasioned by his previous injury, but by the intervention of a labor union of which he was a member. Employment for plaintiff was available under conditions existing prior to the strike. Plaintiff is thus in the position of having refused employment until those conditions were modified. Plaintiffs’ employment did not cease by reason of any overt act upon the part of his employer or because of his inability to work by reason of his accidental injury. [Id. at 318. Emphasis added.]

We are not persuaded by plaintiffs’ argument.

There is no support for plaintiffs’ implicit contention that "terms and conditions” as used in Pigue refers to wages, hours, and conditions of employment, which are essentially the mandatory subjects of collective bargaining. Pigue failed to define what it meant by such "terms and conditions.” Thus, its meaning must be determined from the context in which the case arose, namely, a labor dispute.

To hold that it refers to wages, hours, and conditions of employment existing at the time of the strike would be tantamount to imposing worker’s compensation liability on any employer whose expired collective bargaining contract resulted in a strike, where the employer refused to agree to a contract with the same "terms and conditions.” In essence, it would preclude the employer from negotiating a more favorable contract without having to compensate striking workers.

We conclude that "terms and conditions” refers to the nature of the work, namely, the clerical work at issue in Pigue or the favored work at issue in the case at bar.

18 See Gorman, Labor Law, ch 17, § 6, p 348.

19 1989 WCABO 239, 256.

20 See Kolenko v United States Rubber Products, Inc, 285 Mich 159; 280 NW 148 (1938) (an employer must prove that it offered the injured employee work that the employee could perform; the employer’s inability to meet this burden results in an award of benefits to the employee).

21 The rule, as stated above, is that the party refusing favored work bears the burden of proving the expression of a willingness to perform such work. Such willingness must be expressed within a reasonable period of time.

22 Furthermore, it would be a rare occasion when there would be a sufficient number of favored-work striking employees as a percentage of the total number of striking employees to affect the dynamics of a labor dispute.

23 In her opinion, Justice Boyle characterizes the majority’s conclusion as being that "as a matter of law, the hiring of permanent replacement workers cannot serve as a withdrawal of favored work.” Post at 259. Our holding, however, is that the hiring of replacement workers, without more, cannot serve as a withdrawal of favored work. As we attempt to make clear in the following footnote, the hiring of permanent replacement workers in conjunction with an employer’s refusal of an employee’s offer to return to work may operate as a withdrawal of favored work, thereby triggering the resumption of benefits.

24 The opinion of Justice Boyle states that "the striking workers in this case may well have viewed permanent replacement workers as eliminating their positions . . . .” Post at 262. The workers did not, nor do we, have to speculate; they needed only to make known that they wished to return to their favored work positions. If this offer were declined, it would then be possible to determine whether the employer had kept the positions open for a reasonable period.

25 Specifically, we need not address the question whether the employees’ offer to return was expressed within a reasonable time, in light of our determination that the employees never offered to return to work at anytime before the commencement of this action.

26 Nor is there any indication that they have subsequently requested reinstatement.

27 We think the dissent misreads our opinion when it states that we misconstrue the supervening events doctrine in granting Zimmerman a windfall. Post at 273-274. As our opinion makes clear, we are not granting Zimmerman relief on the basis of the supervening events doctrine.

28 For example, we can conceive of a situation in which an injured employee refuses favored work and then moves to another state or country. The permanent nature of this refusal would weigh heavily against a plaintiff seeking benefits upon the occurrence of a supervening, non-work-related injury.

29 We caution that in a case presenting a longstanding refusal of favored work, and an injury less certain or pronounced, we would place more weight on the refusal of favored work and less weight on the physical inability to perform work.

30 While the dissent’s position on the effects of Zimmerman’s heart attack is certainly defensible in view of the lack of authority on point, we remain convinced that Zimmerman should receive benefits in light of the reasons stated above and the remedial nature of the act.