MIGUEL MEDINA, Appellant, v. MIAMI DADE COUNTY and RISK MANAGEMENT OF DADE COUNTY, Appellees. 1st District. Case No. 1D19-1410. July 15, 2020. On appeal from an order of the Judge of Compensation Claims. Margret G. Kerr, Judge. Date of Accident: August 8, 2017. Counsel: Mark L. Zientz of Law Offices of Mark L. Zientz, P.A., Miami, for Appellant. Lynda S. Slade, Miami, for Appellees.

(M.K. THOMAS, J.) Claimant appeals those portions of the Judge of Compensation Claims’ (JCC) order denying his claim for temporary disability compensation benefits and directing reinstatement of personal leave benefits. Because the sick and vacation leave that was paid constitutes an employer-provided alternative benefit that cannot be used to avoid paying workers’ compensation, and the JCC lacked subject matter jurisdiction to reinstate personal leave benefits, we reverse.

After Claimant’s knee surgery, the Employer made two payments of temporary disability compensation benefits to Claimant but did not issue compensation checks for two other periods. The claims adjuster testified that Claimant was not issued workers’ compensation benefit checks for the time periods of January 8 to January 27 and February 11 to February 24 because Claimant had received “full pay” through the Employer’s payroll. For those periods, the adjuster issued checks directly to the Employer for reimbursement of amounts due under workers’ compensation. The adjuster confirmed that the “full pay” to Claimant from the Employer payroll was docked against Claimant’s bank of personal sick or leave time. He further testified that because the payments were related to a compensable work accident, Claimant’s leave-time used would eventually be reinstated. As of the final hearing, the adjuster could not confirm whether the reinstatement had occurred, as he had no authority over leave — a matter within the purview of the Employer’s payroll department. No representative of the payroll department was called as a witness at the final hearing.

Claimant testified that the Employer’s policy allows him to accumulate sick leave. After twenty-five years with the Employer, he had accumulated a bank of personal sick leave, which entitled him to a cash payment for up to 1,000 hours of sick time. Since his workers’ compensation accident, Claimant’s leave time was substantially depleted. He could not provide any testimony as to the details of the Employer leave policy in terms of how it was negotiated, funded, or administered.

Following the merits hearing, the JCC denied Claimant’s request for temporary disability benefits. In the order on appeal, the JCC determined as follows:

I accept E/C’s argument that Claimant was entitled to and has been paid temporary disability benefits from 1/8/2019 through the date of the Final Hearing. As he was paid salary and used sick and vacation time for certain periods, I accept E/C’s acknowledgment that he is entitled to have those periods reinstated to his sick/vacation bank in accordance with [Employer] policies. No penalties and interest are owed to Claimant as he continued to receive his benefits uninterruptedly.

Claimant argues reversal is warranted because the Employer did not pay workers’ compensation benefits as required by section 440.09(1), Florida Statutes, and the JCC lacked subject matter jurisdiction to direct reinstatement of his sick leave.¹ We agree.

In Nolan, the injured employee opted to use sick and vacation leave at full pay following a compensable work accident, but later filed a claim for payment of temporary disability benefits under workers’ compensation for the same period. Id. at 1077. At the time, Delta had in place a leave policy under which any employee injured in a workplace accident would receive full salary for thirteen weeks, and the amounts were not charged against the employee’s sick leave. Id. After the initial thirteen weeks, the employee could choose either workers’ compensation or payment under one of three available alternative benefit options — each charging against personal sick or vacation leave. Id. at 1077-8. Delta’s leave options were not funded through employee contributions. Id. at 1077. At a hearing, Nolan argued that the option of personal leave or workers’ compensation benefits violated section 440.21(2), Florida Statutes (1987) (providing that no agreement by an employee to waive the right to compensation is valid). Id. at 1078. In raising her claims under workers’ compensation, she did not include a request that the JCC reinstate her leave time. In defense of the claims, Delta argued that Nolan was not “compelled” to use personal leave but did so on her own volition and continued full-pay status. Id. The JCC denied Nolan’s claim concluding that to award compensation benefits for the same periods during which she had received full pay would result in Nolan receiving a windfall and, in contravention of section 440.21, more than 100% of her average weekly wage (AWW) for those weeks. Id. at 1077.

On appeal, this Court reversed the JCC’s denial of compensation benefits, holding as follows: 1) Section 440.09(1), Florida Statutes (1987), dictates that compensation “shall” be paid, except for certain situations enumerated in the section that did not apply; and 2) Delta’s policy violated section 440.21(2) which exists to “redress employers’ misapplication of other employee entitlements in (legally ineffective) efforts to discharge workers’ compensation obligations.” Id. at 1078 (quoting Williams v. Fort Walton Beach, 691 So. 2d 580, 581 n.2 (Fla. 1st DCA 1997)). Delta’s argument that Nolan was given the option of workers’ compensation or use of her leave time was rejected as an “illusory choice” — one choice gave her full pay while the other less than half due to applicable maximum compensation rate caps. Id. ²

Here, the Employer argues that Nolan is distinguishable because Delta improperly allowed an employee to elect use of sick and vacation leave in lieu of payment of workers’ compensation benefits. The Employer contends that unlike Nolan, Claimant did not satisfy his burden of proof in the following two respects: 1) failing to introduce evidence detailing the Employer leave policy regarding reinstatement of sick time; and 2) failing to prove his use of sick leave or the promised reinstatement of that leave time were in place of workers’ compensation benefits. We disagree because this ignores section 440.09(1), which requires that “the employer must pay compensation or furnish benefits required by this chapter if the employee suffers an accidental compensable injury.” The record establishes that Claimant received full wages but only by paying himself through personal sick leave. No evidence was introduced that the Employer “bought back” Claimant’s sick leave or that the alternate benefits were employer provided.

The Employer also raises the argument that the wages paid to Claimant were in lieu of benefits. However, payment of wages in lieu of compensation must be an act clearly understood between the employer and the employee. See City of St. Augustine v. Allen, 404 So. 2d 1115, 1118 (Fla. 1st DCA 1981) (holding that “the employer [must intend], or the employee [must] reasonably [believe that] the employer intended, to pay wages in lieu of Chapter 440 disability benefits — not as sick pay, not as a gratuity, not as the act of enlightened labor management, but specifically in lieu of Chapter 440 benefits considered to be due”); see also Davis v. Kyle, 529 So. 2d 1240, 1241 (Fla. 1st DCA 1988). This “in lieu of” act is not satisfied when the employer pays wages through a right that the claimant has to receive it, which is not related to or dependent in any way upon the existence or non-existence of a workers’ compensation claim. See Coca-Cola Bottling Co. v. Rambo, 576 So. 2d 394, 394 (Fla. 1st DCA 1991). Here, the Employer was not paying wages in lieu of workers’ compensation because it was sourcing the funds from Claimant’s bank of personal leave.

In Woods v. St. Anthony’s Hospital, 586 So. 2d 415, 418-19 (Fla. 1st DCA 1991), this Court found similar arguments as those made by the Employer here unpersuasive. After a compensable accident, Woods claimed she was entitled to full workers’ compensation benefits, but the employer instead required use of her accrued “free time” or “vacation.” Id. at 418. The employer argued that because Woods may have been compelled to use her paid vacation time by the end of the year or lose it without pay, she was not prejudiced by its failure to pay her benefits. Id. This Court rejected these arguments as legally invalid, holding that “[a]n employer has no right to refuse to pay a claimant vacation benefits it was contractually obligated to pay by refusing to reimburse the claimant vacation time the claimant was required to expend in lieu of workers’ compensation benefits the claimant was entitled to receive.” Id. at 418-19 (citing Marion Corr. Inst., Fla. Dep’t of Corr. v. Kriegel, 522 So. 2d 45 (Fla. 5th DCA 1988)).

An important distinction between the use of personal leave in conjunction with receipt of compensation benefits under Chapter 440 and the use of personal leave in lieu of compensation benefits is worthy of emphasis. In Nolan, this Court clarified that its holding did not bar the former. 733 So. 2d at 1079 (noting that an employer may allow an injured employee to use another benefit, such as sick leave or personal leave, to cover the difference in the amount between the workers’ compensation benefits and the employee’s full compensation). Our reasoning here is consistent with Nolan. Although section 440.21(2) makes any agreement by an employee to waive his or her compensation benefits invalid, the statute does not invalidate a system where the employer supplemented the workers’ compensation with additional benefits.

Because the Employer did not pay workers’ compensation benefits as required by section 440.09(1) or pay wages in lieu of those benefits, the JCC erred in denying the temporary disability benefits to Claimant for the periods for which he received full pay funded by his personal sick leave.

To activate an “employer offset” under section 440.20(14), the alternate benefits received by the claimant must be of a qualifying nature — that is, benefits paid or funded by the employer and not the claimant. See Domutz, 339 So. 2d at 637 (holding that Brown applied to pension benefits to which the employer did not contribute); Brown, 305 So. 2d at 194 (holding that employer is not entitled to a set-off for sick leave benefits provided through group insurance paid for solely by the employer); Kriegel, 522 So. 2d at 47 (holding that an employer has no right to refuse to pay a claimant vacation benefits it was contractually obligated to pay by refusing to reimburse the claimant for vacation time the claimant was required to expend in lieu of workers’ compensation benefits the claimant was entitled to receive); Belle v. Gen. Elec. Co., 409 So. 2d 182, 183 (Fla. 1st DCA 1982) (holding that it was error to allow offsets for disability benefits received by claimant under the group sickness and accident insurance policy furnished by the employer). In some instances, the alternate benefits received by a claimant are not subject to offset, and the combination of payments may exceed more than 100% of the AWW. See Jewel Tea Co., Inc. v. Fla. Indus. Comm’n, 235 So. 2d 289, 291 (Fla. 1969) (holding that the claimant was entitled to full compensation benefits in addition to any benefits under insurance plan to which claimant had contributed); Rambo, 576 So. 2d at 395 (holding that the claimant was entitled to temporary benefits because the money paid to the claimant was not “salary continuation in lieu of compensation” but severance pay, which was not related to or dependent in any way upon the existence or nonexistence of a workers’ compensation claim).

Proving entitlement to an offset is the burden of the party seeking such offset. Dep’t of Highway Safety & Motor Vehicles, Div. of Risk Mgmt. v. McBride, 420 So. 2d 897, 898 (Fla. 1st DCA 1982). Additionally, an employer must timely raise the defense. See Woods, 586 So. 2d at 418. Here, the Employer did not raise the offset defense, in the event workers’ compensation benefits were awarded, and no evidence was introduced that the alternate benefits received by Claimant were of a qualifying nature.⁵

“The Judges of Compensation Claims are ‘vested only with certain limited quasi-judicial powers relating to the adjudication of claims for compensation and benefits.’ ” Guckenberger v. Seminole County, 979 So. 2d 407, 408 (Fla. 1st DCA 2008) (quoting Smith v. Piezo Tech. & Prof’l Adm’rs, 427 So. 2d 182, 184 (Fla. 1983)). This Court has previously determined that a JCC has jurisdiction to order reinstatement of sick and vacation leave depleted in connection with a workers’ compensation accident — but only under limited circumstances. See Jewel Tea Co. 235 So. 2d at 291 (recognizing that a determination of a claimant’s right to compensation under Chapter 440 requires a JCC’s consideration of section 440.21 which is within its jurisdiction); Gen. Tel. Co. of Fla. v. Willcox, 509 So. 2d 1270, 1273 (Fla. 1st DCA 1987) (holding that the JCC must address the decisive factor of “whether the combination of benefits from the employer exceed claimant’s average weekly wage”); see also Domutz, 339 So. 2d at 637; McBride, 420 So. 2d at 897; Chancey v. Fla. Pub. Utilities, 426 So. 2d 1140, 1141 (Fla 1st DCA 1983); Belle, 409 So. 2d at 183.

The perimeters of a JCC’s subject matter jurisdiction regarding employment-related personal leave was identified in Larke v. City of Fort Lauderdale, 568 So. 2d 58 (Fla. 1st DCA 1990). In Larke, a claimant received workers’ compensation disability benefits and used sick and vacation time to supplement the additional one-third to receive full pay. Id. at 59. The claimant then filed a claim with the JCC requesting only reinstatement of sick and vacation benefits with no claim for indemnity or disability compensation benefits. Id. at 59. The JCC dismissed the claim for lack of jurisdiction. Id. Citing section 440.25(1), this Court affirmed dismissal of the claim for lack of subject matter jurisdiction over the issues presented, finding the dispute centered on the employer’s right to deduct from claimant’s accrued vacation time and sick leave in order to pay him the additional one-third amount over and above the required workers’ compensation rate due. Id. The additional sum, although performing the same function as compensation and payable under the same general conditions, was not compensation. Id. The use of the leave time to pay the additional one-third amount was determined to be a private contractual right, and, as such, enforcement of the payment must follow the procedural rules for general contract. Id. Thus, the proper forum was not before the JCC, but state court. Id. In a specially concurring opinion, Judge Wentworth clarified:

I agree with the majority opinion except with respect to the advisory dictum that the judge “is not precluded from deciding such an issue,” e.s., referencing the reinstatement of leave time. Evidence as to those issues may of course be considered incident to deciding a claim for statutory benefits, but a right to reinstatement may not, under the cited cases, be decided so as to require reinstatement, since only statutory benefits may be decided or adjudicated.

Id. at 60.

In the wake of Larke, a JCC’s subject matter jurisdiction to reinstate personal leave has been consistently defined. See Nolan, 733 So. 2d at 1079 (awarding disability benefits and clarifying that if Delta sought the offset, the JCC had jurisdiction to reinstate Nolan’s sick leave and vacation leave benefits in amounts proportionate to the offset taken); City of W. Palm Beach v. Burbaum, 632 So. 2d 145 (Fla. 1st DCA 1994) (holding that the JCC could consider issue of reinstatement of workers’ sick leave only in specific instances in which statutory disability benefits were awarded); City of Fort Lauderdale v. Abrams, 561 So. 2d 1294 (Fla. 1st DCA 1990) (reversing JCC’s award restoring claimant’s sick when claimant conceded that the JCC awarded payment of only medical bills).

Concisely stated, the subject matter jurisdiction of a JCC extends to personal leave matters only when 1) statutory disability compensation benefits are awarded to a claimant; 2) the claimant has received employer-provided benefits for the same period of time covered by the disability compensation award; and 3) the employer-provided benefits qualify for an offset under section 440.20(14). See Kriegel, 522 So. 2d at 47 (holding that in the event the employer requests the JCC to make such an offset, the JCC has jurisdiction to reinstate the employee’s sick leave and vacation leave benefits in proportionate amounts to the offset taken by the employer). As the JCC is vested only with certain limited quasi-judicial powers relating to the adjudication of claims, a compensation award and applicable offset under section 440.20(14) are the preconditions for a JCC’s subject matter jurisdiction over personal leave reinstatement.

Here, the order on appeal denied Claimant’s request for temporary disability compensation benefits. Accordingly, even if Claimant had made the request, the JCC lacked subject matter jurisdiction to direct reinstatement of personal leave. Likewise, our reversal and award of compensation benefits does not create subject matter jurisdiction regarding reinstatement of personal leave in the absence of a qualifying offset and a claim for reinstatement.

__________________

¹Claimant also contends he never requested reinstatement of his leave benefits. He retired from the Employer prior to this litigation.

²In conjunction with Nolan, this Court addressed a related matter in Heric v. City of Ormond Beach, 728 So. 2d 1247 (Fla. 1st DCA 1999). In Heric, this Court declared that the reasoning of Nolan also applied to collective bargaining agreements. Id. at 1249-50.

³Nolan cites to section 440.20(15); however, as of January 1, 1994, section 440.20(15) now appears as subsection (14).

⁴Section 440.21, Florida Statutes (1985), precludes offsets for collateral benefits until an injured worker has received 100% of his average weekly wage in combined benefits, regardless of whether the collateral benefits were funded by the employer alone or in part by employee contributions. Barragan v. City of Miami, 545 So. 2d 252, 255 (Fla. 1989). “However, the total benefits from all sources cannot exceed the employee’s weekly wage.” Id. at 254 (citing Domutz v. S. Bell Tel. & Tel. Co., 339 So. 2d 636 (Fla. 1976); Brown v. S.S. Kresge Co., 305 So. 2d 191 (Fla. 1974)).

⁵Following the merits hearing, the Employer filed a supplemental Trial Memorandum asserting the leave benefits were controlled by a collective bargaining agreement. However, this does not constitute evidence.

__________________

(RAY, C.J., concurs in result with written opinion.) In the sole issue presented in this appeal, Claimant argues that the JCC erred when she denied his claims for temporary disability compensation benefits for certain time periods beginning January 8, 2019. In the order, the JCC found these benefits were not due because Claimant received payment for sick and vacation leave that the E/C later acknowledged should be reinstated. In doing so, the JCC erred because sick and vacation leave constitutes an employer-provided benefit that cannot be used to avoid paying workers’ compensation benefits. See Nolan v. Delta Airlines, 733 So. 2d 1076, 1079 (Fla. 1st DCA 1999) (holding payment of sick or vacation pay does not satisfy employer/carrier’s statutory obligation to pay benefits for workplace injury). As a result, and in light of the JCC’s other factual findings, Claimant is entitled to an award of temporary disability benefits for the time periods of January 8, 2019, to January 27, 2019, and February 11, 2019, to February 24, 2019, together with penalties, interest, costs, and attorney’s fees.