IN THE COURT OF APPEALS OF NORTH CAROLINA
2022-NCCOA-595
No. COA21-804
Filed 6 September 2022
North Carolina Industrial Commission, I.C. No. 19-034789
CLARENCE RICHARDS, Employee, Plaintiff,
v.
HARRIS TEETER, INC., Employer, SELF-INSURED (SEDGWICK CLAIMS MANAGEMENT SERVICES, Third-Party Administrator), Defendants.
Appeal by defendants from opinion and award entered 26 August 2021 by the
North Carolina Industrial Commission. Heard in the Court of Appeals 10 August
2022.
Hunter & Everage, by S. Camille Payton, for plaintiff-appellee.
Pope Aylward Sweeney & Santaniello, LLP, by Alexander J. Elmes and Edward A. Sweeney, for defendants-appellants.
ZACHARY, Judge. ¶1 Defendants Harris Teeter, Inc., (“Defendant”) and Sedgwick Claims
Management Services (collectively, “Defendants”) appeal from an Opinion and Award
entered by the North Carolina Industrial Commission in which the Full Commission
concluded that the Seagraves test did not apply in this case. After careful review, we
affirm.
I. Background
¶2 Plaintiff Clarence Richards began working as a truck driver for Defendant in
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2016. On 3 August 2019, Plaintiff was injured in a single-vehicle accident on
Interstate 85 when his truck “ran off the road returning from Virginia.” Vance County
EMS transported Plaintiff to Maria Parham Health’s emergency department. The
EMS record reports that Plaintiff “said he didn’t know he was listening to the radio
and then the accident . . . says he may have just drifted thinking about something.”
The hospital record states that Plaintiff “lost control of his vehicle this morning just
after taking a sip of Gatorade and wound up wrecking into a grassy field.” ¶3 Plaintiff’s physician wrote Plaintiff out of work while he received medical
treatment. On 13 August 2019, Plaintiff filed a Form 18 Notice of Accident to
Employer and Claim of Employee, Representative, or Dependent with the Industrial
Commission. On 30 August 2019, Defendants filed a Form 63 Notice of Payment of
Compensation Without Prejudice, accepting Plaintiff’s claim for workers’
compensation benefits for a “low back” injury as a result of the 3 August accident.
Defendants began paying indemnity benefits and medical compensation to Plaintiff,
and did not contest the compensability of Plaintiff’s claim within the statutory
deadline, thereby accepting the compensability of his “low back” injury. See N.C. Gen.
Stat. § 97-18(d) (2021). ¶4 Shortly after the accident, Defendant terminated Plaintiff’s employment,
effective 29 August 2019. Brian Barnhardt, a workers’ compensation claims manager
for Defendant, testified before the Deputy Commissioner that Defendant’s “review
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committee” determined that Plaintiff’s “accident was preventable.” Defendant’s
personnel records indicate that Plaintiff was terminated for a “Violation of
Established Safety Procedures”—namely, that Defendant’s camera in the cab of the
truck showed that Plaintiff closed his eyes for approximately seven to ten seconds,
which led to the single-vehicle accident—and that therefore Plaintiff was “Not
Eligible for Rehire.” ¶5 Barnhardt also testified regarding Defendant’s “mandatory return-to-work
program for a workers’ comp injury[,]” and the availability of “numerous temporary
positions an associate can do if they have restrictions.” However, Barnhart testified
that because Plaintiff was “not eligible for rehire[,]” Defendant would not offer
Plaintiff any job, including positions “that [Defendant] claim[ed] [Plaintiff] could do.”
Defendant also declined to provide “any vocational rehabilitative services to assist
Plaintiff in locating suitable employment.” ¶6 Meanwhile, Plaintiff was released to return to “sedentary work only” on 15
August 2019, but he was prohibited from driving a truck professionally “due to
functional limitations.” From 23 September 2019 through 3 February 2020, Plaintiff
received treatment for his lower back and right knee from Dr. Ronald Gioffre, a board-
certified orthopedic surgeon. Plaintiff also attended physical therapy, which Dr.
Gioffre reported “seem[ed] to be helping greatly[,]” although Dr. Gioffre noted that
Plaintiff “still cannot stand more than thirty minutes and sit about 1 hour, before he
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starts to have pain.” ¶7 Later, in his deposition, Dr. Gioffre elaborated on his decision regarding
Plaintiff’s work restrictions:
So I basically didn’t feel in the few times that I saw him that even if he had a job that I would have let him go back to work with his back and hip, because I couldn’t see how he could possibly get up – step up into one of those trucks with the hip the way it was, and his back was an issue.
....
I know what he had to do as a truck driver, and I said, No, you can’t go back to work. I didn’t know what else they wanted me to do with restrictions. If they would have had a sedentary type job, I’d have sent him back. There was no reason he couldn’t do sedentary work.
When presented with Defendant’s job descriptions for two positions—Cashier and
Self-Checkout Cashier (also referred to as a “U-Scan Cashier”)—Dr. Gioffre testified
that he thought Plaintiff would “have a hard time all day doing [the Cashier] work
eight hours a day”; nonetheless, it was his opinion that Plaintiff would be able to
perform the work of a U-Scan Cashier if he were permitted to sit periodically. ¶8 After being released from Dr. Gioffre’s care on 3 February 2020, Plaintiff
sought employment through various job search websites, across various industries.
Plaintiff testified before the Deputy Commissioner that he looked for jobs that do not
require constant sitting or standing, consistent with his restrictions, but that he had
not received any replies from prospective employers. With regard to his resume,
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Plaintiff testified that he was 64 years old at the time of the hearing before the Deputy
Commissioner, with three years of college education. He was employed for 12 years
as a corrections officer, and for 27 years as a truck driver; he has never worked in an
office and is “computer illiterate.” ¶9 On 30 April 2020, Plaintiff’s counsel filed a Form 33 Request that Claim be
Assigned for Hearing, alleging that “Defendants have failed and refused to pay past
due [temporary total disability] benefit underpayment.” On 15 June 2020,
Defendants filed a Form 33R Response to Request that Claim be Assigned for
Hearing, replying, inter alia, that “Plaintiff has received all benefits to which he is
entitled.” The matter came on for hearing before the Deputy Commissioner on 8 July
2020, and by Opinion and Award entered 12 January 2021, the Deputy Commissioner
ordered that Defendants pay temporary total disability “until Plaintiff returns to
work, until further order of the Industrial Commission, or until compensation is
otherwise legally terminated.” ¶ 10 Defendants timely filed notice of appeal to the Full Commission of the North
Carolina Industrial Commission, which heard this matter on 9 June 2021. By Opinion
and Award entered 26 August 2021, the Full Commission awarded Plaintiff the same
payment of temporary total disability and attorneys’ fees, and added that “[s]ubject
to the provisions of N.C. Gen. Stat. § 97-25.1, Defendant shall pay medical expenses
incurred or to be incurred as a result of Plaintiff's admittedly compensable injury as
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may reasonably be required to effect a cure, provide relief, or lessen the period of
disability.” ¶ 11 Defendants timely filed notice of appeal to this Court.
II. Discussion
¶ 12 On appeal, Defendants first argue that the Full Commission erred by failing
to find that Plaintiff constructively refused suitable employment, and by failing to
apply the test for constructive refusal of suitable employment first articulated by this
Court in Seagraves v. Austin Co. of Greensboro, 123 N.C. App. 228, 472 S.E.2d 399
(1996), and subsequently adopted by our Supreme Court in McRae v. Toastmaster,
Inc., 358 N.C. 488, 597 S.E.2d 695 (2004). Assuming application of the Seagraves test,
Defendants also argue that the Full Commission erred by failing to find that
Defendants had not shown that Plaintiff’s termination was unrelated to his
compensable injury, and by concluding that Plaintiff remains disabled or that he
conducted a reasonable job search.
A. Standard of Review
¶ 13 “Appellate review of an award from the Industrial Commission is generally
limited to two issues: (i) whether the findings of fact are supported by competent
evidence, and (ii) whether the conclusions of law are justified by the findings of fact.”
Chambers v. Transit Mgmt., 360 N.C. 609, 611, 636 S.E.2d 553, 555 (2006), reh’g
denied, 361 N.C. 227, 641 S.E.2d 801 (2007). Because the Commission “is the sole
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judge of the weight and credibility of the evidence,” its “findings of fact are conclusive
on appeal if supported by competent evidence[.]” Blackwell v. N.C. Dep’t of Pub.
Instruction, 2022-NCCOA-123, ¶ 5 (citations omitted). ¶ 14 “Findings not supported by competent evidence are not conclusive and will be
set aside on appeal. But findings supported by competent evidence are conclusive,
even when there is evidence to support contrary findings.” Johnson v. Covil Corp.,
212 N.C. App. 407, 408–09, 711 S.E.2d 500, 502 (2011) (citations and internal
quotation marks omitted). “Unchallenged findings of fact are presumed to be
supported by competent evidence and are binding on appeal.” Fields v. H&E Equip.
Servs., LLC, 240 N.C. App. 483, 485–86, 771 S.E.2d 791, 793–94 (2015) (citation
omitted). ¶ 15 The Commission’s conclusions of law are reviewed de novo. Blackwell, 2022-
NCCOA-123, ¶ 5. Under de novo review, this Court “considers the matter anew and
freely substitutes its own judgment for that of the lower tribunal.” Fields, 240 N.C.
App. at 486, 771 S.E.2d at 793–94 (citation omitted).
B. Constructive Refusal of Suitable Employment
¶ 16 The parties stipulated that “Plaintiff was injured during the scope of his
employment” with Defendant. The initial compensability of Plaintiff’s lower back
injury resulting from the accident is also undisputed. Rather, this appeal concerns
whether Plaintiff constructively refused suitable employment where Defendant
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deemed him ineligible for participation in Defendant’s “return-to-work” program. ¶ 17 Before the Full Commission, Defendants argued that “Plaintiff constructively
refused suitable employment because he was terminated for cause, and that but for
the termination for cause, Plaintiff would have remained employed at his preinjury
wages because Defendant would have accommodated Plaintiff’s post-injury
restrictions.” On appeal, Defendants argue that the Full Commission erred by failing
to extend the Seagraves test for constructive refusal of suitable employment. We
disagree. ¶ 18 Under our Workers’ Compensation Act, “[i]f an injured employee refuses
suitable employment as defined by G.S. 97-2(22), the employee shall not be entitled
to any compensation at any time during the continuance of such refusal, unless in the
opinion of the Industrial Commission such refusal was justified.” N.C. Gen. Stat. § 97-
32. “In Seagraves, the Court of Appeals examined the question of whether an
employee can be deemed to have refused suitable employment, thereby precluding
injury-related benefits, if she is terminated for misconduct that is unrelated to her
workplace injuries.” McRae, 358 N.C. at 493, 597 S.E.2d at 698.
In lieu of an employee’s termination for misconduct serving as an automatic bar to benefits, the court in Seagraves adopted a test that measures whether the employee’s loss of earning capacity is attributable to the wrongful act that caused the employee’s termination from employment, in which case benefits would be barred, or whether such loss of earning capacity is due to the employee’s work-related
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disability, in which case the employee would be entitled to benefits intended for such disability.
Id. at 493, 597 S.E.2d at 699. ¶ 19 The McRae Court adopted the Seagraves test: “to bar payment of benefits, an
employer must demonstrate initially that: (1) the employee was terminated for
misconduct; (2) the same misconduct would have resulted in the termination of a
nondisabled employee; and (3) the termination was unrelated to the employee’s
compensable injury.” Id. “An employer’s successful demonstration of such evidence is
deemed to constitute a constructive refusal by the employee to perform suitable work
. . . .” Id. at 493, 597 S.E.2d at 699 (citation and internal quotation marks omitted).
The employee’s constructive refusal “would bar benefits for lost earnings, unless the
employee is then able to show that his or her inability to find or hold other
employment at a wage comparable to that earned prior to the injury is due to the
work-related disability.” Id. at 493–94, 597 S.E.2d at 699 (citation and internal
quotation marks omitted). ¶ 20 Further, our Supreme Court reiterated that, under the Seagraves test, the
employer bears the burden “to show, by the greater weight of the evidence, that a
plaintiff’s termination was unrelated to his or her work-related injuries; the burden
is not on a plaintiff to show that the termination was so related.” Id. at 499, 597
S.E.2d at 702.
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Opinion of the Court ¶ 21 Importantly for the present case, the Full Commission noted in its Opinion and
Award that the injured employee in Seagraves “had been provided light-duty,
rehabilitative employment after contracting a compensable occupational disease[,]”
see Seagraves, 123 N.C. App. at 229, 472 S.E.2d at 398, while the injured employee
in McRae “was terminated for inadvertent errors she committed while performing a
job to which she was reassigned subsequent to undergoing surgery for a compensable
occupational disease[,]” see McRae, 358 N.C. at 491, 597 S.E.2d at 697–98. That the
injured employees in Seagraves and McRae were terminated from rehabilitative
employment was a significant factor to the Full Commission, which observed that
Plaintiff “was not terminated from rehabilitative employment for misconduct
unrelated to his admittedly compensable injury. Rather, Plaintiff in this case was
terminated from his regular job for his role in the very accident that caused his
admittedly compensable injury.” Accordingly, the Full Commission concluded that
“[t]he operative facts in the case before us are substantially different than those in
Seagraves and McRae” and therefore, “[g]iven these fundamental factual differences,
the Seagraves test is not applicable in this case.” ¶ 22 Defendants argue that the Full Commission erred by distinguishing the case
at bar from Seagraves and McRae on the basis of those injured employees’
termination from rehabilitative employment, asserting that “[i]t is unclear why the
Commission believes the temporal factor is required in the analysis of earning
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capacity and disability.” Instead, Defendants contend that “[t]he fact that . . .
Plaintiff’s misconduct resulted in his termination for cause deprived . . . Defendant
the opportunity to return him to suitable employment[.]” According to Defendant, it
“has a job for . . . Plaintiff but for the fact he was terminated for unsafe driving when
he fell asleep and drove his truck off the road[,]” an undisputed violation of
Defendant’s established safety protocols. Because it “has a job approved by the
authorized treating physician which would have been available to . . . Plaintiff, but
for his termination, the fact that termination did not occur during rehabilitative
employment appears irrelevant.” We cannot agree. ¶ 23 In seeking to apply the Seagraves test to cases such as this—in which the
injured employee was terminated for causing the accident that resulted in his injury
and so, pursuant to the employer’s policies, has not and avowedly will not be offered
suitable employment—Defendants essentially ask this Court to impose a for-cause
bar to recovery of workers’ compensation benefits when the employee is unable to find
suitable employment elsewhere. Defendants’ position is fundamentally incompatible
with the well-established principles and purposes of the workers’ compensation
system, which deliberately eliminates negligence from its calculus in all but certain
narrowly defined instances. ¶ 24 The Workers’ Compensation Act has been carefully calibrated to balance the
needs of compensably injured employees with the potential risks posed to employers.
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“The social policy behind the Workers’ Compensation Act is twofold. First, the Act
provides employees swift and certain compensation for the loss of earning capacity
from accident or occupational disease arising in the course of employment. Second,
the Act insures limited liability for employers.” Frost v. Salter Path Fire & Rescue,
361 N.C. 181, 184, 639 S.E.2d 429, 432 (2007) (citation omitted). ¶ 25 As part of this mutually beneficial exchange, our Supreme Court has long
recognized that under the Workers’ Compensation Act “not even gross negligence is
a defense to a compensation claim. Only intoxication or injury intentionally inflicted
will defeat a claim.” Hartley v. N.C. Prison Dep’t, 258 N.C. 287, 289, 128 S.E.2d 598,
600 (1962). Since Hartley was decided, only the unauthorized use of controlled
substances has been added to this limited list of exceptions. See N.C. Gen. Stat. § 97-
12 (providing that an employee forfeits compensation in the event of “intoxication,”
“being under the influence of any controlled substance” not properly prescribed, or
“willful intention to injure or kill himself or another”). Therefore, an “employee’s
violation of a safety rule does not of itself constitute a bar to recovery of compensation
where it may be determined that his injury arose in the course of the employment.”
Spratt v. Duke Power Co., 65 N.C. App. 457, 466, 310 S.E.2d 38, 44 (1983). ¶ 26 In the instant case, Defendants clarify that they do not argue on appeal that
fault has any place in the compensability determination, and they do not dispute that
Plaintiff’s injury was compensable. Nevertheless, Defendants argue that fault does
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have a place—or at least, it should—in the workers’ compensation system, when it
comes to determining when an employer may subsequently terminate workers’
compensation benefits. ¶ 27 Our Supreme Court considered similar concerns when it first adopted the
Seagraves test in McRae: “We . . . recognize that the current benefit scheme faces the
potential for abuse by employees. If injury-related benefits continued without regard
to an employee’s misconduct, injured employees conceivably could commit misconduct
in order to be terminated without suffering the appropriate financial consequences.”
358 N.C. at 495, 597 S.E.2d at 700. Yet the McRae Court contrasted that concern with
its opposite: “[A]ny rule that would allow employers to evade benefit payments simply
because the recipient-employee was terminated for misconduct could be open to
abuse. Such a rule could give employers an incentive to find circumstances that would
constitute misconduct by employees who were previously injured on the job.” Id. In
the end, our Supreme Court concluded that the Seagraves test “is an appropriate
means to decide cases of this nature” because it “is intended to weigh the actions and
interests of employer and employee alike. Ultimately, the Seagraves rule aims to
provide a means by which the Industrial Commission can determine if the
circumstances surrounding a termination warrant preclusion or discontinuation of
injury-related benefits.” Id. ¶ 28 We thus are bound to reject Defendants’ argument, and hold that the Full
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Commission did not err by concluding that the Seagraves test does not apply in the
instant case. ¶ 29 Each of Defendants’ remaining arguments assumes the applicability of the
Seagraves test in this case. Accordingly, we need not address those arguments in light
of our decision.
III. Conclusion
¶ 30 For the foregoing reasons, the Full Commission’s Opinion and Award is
affirmed.
AFFIRMED.
Judges WOOD and GRIFFIN concur.