Title: General Motors v. Kane

State: delaware

Issuer: Delaware Supreme Court

Document:

IN THE SUPREME COURT OF THE STATE OF DELAWARE 
 
GENERAL MOTOR CORPORATION, 
) 
 
 
 
 
 
 
 
)  No. 540, 2005 
 
 
Employer Below,  
 
) 
 
 
Appellant,  
 
 
)  Court Below:  Superior Court 
 
 
 
 
 
 
 
)  of the State of Delaware in 
v. 
 
 
 
 
 
 
)  and for New Castle County 
 
 
 
 
 
 
 
) 
JAMES KANE, 
 
 
 
 
)  C.A. No. 04A 08 003 
 
 
 
 
 
 
 
) 
 
 
Claimaint Below,  
 
) 
 
 
Appellee. 
 
 
 
) 
 
Submitted:  March 29, 2006 
Decided:  June 13, 2006 
 
Before STEELE, Chief Justice, HOLLAND, and JACOBS, Justices. 
 
O R D E R 
 
 
This 13th day of June, 2006, upon consideration of the briefs of the parties, it 
appears to the Court that: 
 
(1) 
General Motors Corporation, employer-below appellant, appeals from 
a Superior Court order affirming the Industrial Accident Board decision that denied 
GM’s petition to terminate claimant-appellee James Kane’s total disability 
benefits. GM first claims that the Board and the Superior Court legally erred by 
finding that Kane was a displaced worker, because Kane did not present this issue 
before the board. Second, GM claims that the Board’s decision was unsupported 
by substantial evidence for two reasons: (1) the evidence contradicts the Board’s 
determination that Kane was not definitively informed that GM would never 
 
2
provide him with a job, as required under Hoey v. Chrysler Motor Corp.,1 and (2) 
the board misinterpreted testimony by finding that GM’s ADAPT placement 
program gave Kane reason to believe continued employment at GM would be 
available.  
 
(2) 
We conclude that the Board and the Superior Court did not legally err 
and that substantial evidence supports the Board’s decision. Accordingly, we 
affirm.   
 
(3) 
James Kane is a union employee of GM, who has been employed 
there since May 1985. In August 1999, Kane injured his right wrist while working 
on the assembly line. He underwent surgery for the injury in 2001, and since then 
has received total disability benefits.  
 
(4) 
Kane’s treating physician released him to return to light duty work in 
June 2002. Kane enrolled in GM’s ADAPT program, a seniority-based program 
that places injured employees with work restrictions in available jobs at GM.2 
Under a national collective bargaining agreement (“CBA”) with the United Auto 
Workers Union, GM must follow a certain procedure to terminate a union 
employee and cannot terminate an employee because he has sustained an injury. At 
the hearing, Paul Dobos, a GM human resources administrator, testified that he did 
                                                 
1  
1994 Del. LEXIS 401 (Del.1994) (Order).  
 
2  
GM also has a “Job Bank” program specifically for employees that have been laid off. 
Kane was ineligible for this program because he was receiving worker’s compensation benefits.  
 
 
3
not know whether GM had taken any of the required steps to terminate Kane’s 
employment.  
 
(5) 
Under the CBA, GM also has a contractual obligation to place an 
injured employee with restrictions in another position. ADAPT is GM’s attempt to 
meet its contractual obligations under the CBA. Despite the fact that Kane enrolled 
in ADAPT, GM never placed Kane in a job because none were available within his 
restrictions and his seniority was not sufficient to place him ahead of other 
employees.  
 
(6) 
Kane is still employed by GM, continues to accrue seniority, receives 
employee benefits, and periodically reports to company physicians as required by 
GM. He has not sought employment elsewhere because he believes that GM is still 
attempting to place him in a position compatible with his disability.  
 
(7) 
In August 2003, Kane’s attorney received a letter from GM’s counsel 
stating that, based on Kane’s seniority and work restrictions, GM did not have a 
job available at that time or in the foreseeable future. The letter also advised that 
Kane should seek employment “in the open labor market as appropriate to his 
education, vocational background and physical restrictions.” 
 
(8) 
On December 12, 2003, GM filed a petition with the Board to 
terminate Kane’s total disability benefits claiming that Kane was physically able to 
return to work, that GM had no positions available for Kane within his restrictions 
 
4
and did not expect such a position to become available in the foreseeable future, 
and that GM had notified Kane accordingly. On July 12, 2004, after conducting a 
hearing, the Board issued a comprehensive decision finding that Kane was a 
displaced worker. The Board, therefore, denied GM’s petition and awarded Kane 
total disability benefits because it concluded that GM had not “definitively 
informed” him that “he would not be given a light duty position within his 
restrictions and would be discharged from GM,” as required under Hoey.3 In a 
well-reasoned opinion, the Superior Court affirmed the IAB’s decision.4 GM 
appealed.  
 
(9) 
When reviewing an appeal from the Board, the limited role of this 
Court and the Superior Court is to determine whether the Board’s decision is 
supported by substantial evidence and is free from legal error.5 Substantial 
evidence is relevant evidence that a reasonable mind might accept as adequate to 
                                                 
3  
 See Kane v. General Motors Corp., IAB Hearing No. 1153957 (July 12, 2004), at 8-9. 
  
4  
See GMC v. Kane, 2005 Del. Super. LEXIS 331 (Del. Super. Ct. 2005). After the 
Superior Court judge issued his ruling in this case, and while GM’s appeal was pending, we 
decided Saunders v. Daimlerchrysler, 2006 Del. LEXIS 84 (Del. 2006)(order). GM relies 
heavily on Saunders but we think it necessary to discuss Saunders. Had we not decided Saunders 
while GM’s appeal was pending, we would have been inclined to affirm for the reasons stated in 
the Superior Court judge’s opinion.  
 
5  
Std. Distrib. v. Hall, 2006 Del. LEXIS 2, *5 (Del. 2006) (citing General Motors Corp. v. 
Freeman, 53 Del. 74, 164 A.2d 686, 688 (Del. 1960); Johnson v. Chrysler Corp., 213 A.2d 64, 
66 (Del. 1965)).  
 
 
5
support a conclusion.6 Because the appeal is determined on the record and is not de 
novo, it is well-established that we do not sit as the trier of fact, rehear the case, 
reweigh the evidence, make credibility determinations, or substitute our own 
judgment for that of the Board.7 We do, however, review questions of law de 
novo.8 
 
(10) GM first claims that the board committed legal error when it 
concluded that Kane was entitled to displaced worker status because Kane “never 
listed the displaced worker argument on his pretrial memorandum and never once 
made any claim during opening or closing arguments that [Kane] was a displaced 
worker.” Generally speaking, we will not consider on appeal issues not fairly 
presented to the trier of facts in the first instance.9  In this case, however, GM’s 
argument lacks merit. The hearing transcript clearly reveals that, in both his 
opening and closing arguments before the Board, Kane argued that Hoey was 
factually indistinguishable and governed the outcome of his case.  GM also 
                                                 
6  
Saunders v. Daimlerchrysler, 2006 Del. LEXIS 84, *4-5 (Del. 2006) (Order) (citing 
Histed v. E.I. DuPont de Nemours & Co., 621 A.2d 340, 342 (Del. 1983)).  
 
7  
Hall, 2006 Del. LEXIS 2 at *6 (citing Johnson, 213 A.2d at 66-67); Saunders, 2006 Del. 
LEXIS at *5. 
 
8  
 Saunders, 2006 Del. LEXIS 84 at *5 (citing Anchor Motor Freight v. Ciabattoni, 716 
A.2d 154, 156 (Del. 1998)) 
 
9  
SUPR. CT. R. 8; See Jenkins v. State, 305 A.2d 610 (Del. 1973).  
 
6
addressed the “displaced worker” issue in its closing argument to the Board. 
Therefore, the parties fairly presented the issue below. 
 
(11) GM next argues that the Board’s decision is not supported by 
substantial evidence. The allegedly incorrect factual conclusions the Board 
reached, GM claims, resulted in a misapplication of Hoey. First, GM claims that 
Kane’s case is factually distinguishable from Hoey because GM’s counsel’s 
August 2003 letter and Dobos’s testimony established that Kane was advised that 
no jobs were available at GM. Because GM properly notified Kane to look for 
work elsewhere, GM contends, the Board erred by finding that Kane had a 
reasonable expectation of continued employment at GM and was therefore entitled 
to disability benefits as a displaced worker.  
 
(12) In Saunders we recently summarized the law as it applies to displaced 
workers: 
Under the displaced worker doctrine, an employer who petitions to 
terminate an employee's total disability benefits must show that the 
employee is physically capable of returning to work. If the employer 
satisfies that burden, to retain his disability benefits the employee 
must show that, although physically capable, he is a displaced worker. 
A displaced worker is one that is so handicapped by a compensable 
injury that he will no longer be employed regularly in any well known 
branch of the competitive labor market and will require a specially-
created job if he is to be steadily employed.10 
 
                                                 
10  
Saunders, 2006 Del. LEXIS 84 at *6 (citing Torres v. Allen Family Foods, 672 A.2d 26, 
30 (Del. 1995)) (quotations, footnotes, and citation omitted).  
 
 
7
The employee may establish that he is “displaced” in one of two 
ways: (1) by making a prima facie showing that his physical 
impairment, coupled with his mental capacity, education, training or 
age, renders  him displaced; or (2) by demonstrating that he has made 
reasonable efforts to secure suitable employment, but because of the 
injury has been unsuccessful….11  
 
 
(13) In this case, the evidence established, and Kane conceded, that: (i) he 
is physically capable of performing work within his restrictions; and (ii) he never 
conducted a reasonable job search outside of GM. On the facts of this case, neither 
circumstance defeats Kane’s entitlement to disability compensation.  
 
(14) In Hoey we “elaborated the displaced worker analysis by holding that 
‘[a] displaced employee … who does not know or have reason to know that [he] is 
a displaced employee cannot be expected to seek new employment.’”12 As we 
explained in Saunders: 
[T]he claimant in Hoey was a long time employee of Chrysler, and 
had continued to be an employee and to receive benefits after her 
injury.  Hoey had been required to report to the company physician 
for evaluations, she had continued to participate in a “work-hardening 
program,” and she knew that Chrysler had provided other injured 
employees with new job placements to accommodate their injuries. In 
those circumstances, this Court concluded that it was unreasonable to 
expect Hoey to seek alternate employment until the employer had 
advised her that no light-duty work was available for her, and that she 
would be discharged. Until Chrysler had so notified Hoey and unless 
                                                 
11  
Id. at *6-7. (citation omitted).  
 
12  
Id. at *7 (quoting Hoey v. Chrysler Motor Corp., 1994 Del LEXIS 401 (Del. Super. 
1994)).  
 
 
8
Hoey had failed thereafter to seek other employment, her total 
disability benefits would not terminate.13 
 
 
(15) The Board and the Superior Court correctly applied Hoey to the facts 
of this case. Here, substantial evidence supports the Board’s finding that GM did 
not definitively inform Kane that he would never be given a light-duty position at 
GM within his restrictions, nor did GM inform Kane that it planned to terminate 
his employment. Like the claimant in Hoey, Kane was a long-time employee who 
was never terminated, who continued to receive benefits, and who continued to 
report to company physicians. Moreover, as a union member, Kane was protected 
by the CBA that required GM to place him in another position if he became 
injured.  
 
(16) This case differs from Hoey in one respect.  Here, unlike Hoey, GM’s 
counsel sent Kane’s counsel a letter in August 2003 advising counsel to inform 
Kane that “there was no job available for [Kane] within his restrictions and that 
none could be expected in the foreseeable future.”14  The Board made the factual 
finding that “GM [had] not previously notified [Kane] of this situation,”15 and 
continued thusly: 
                                                 
13  
Id. at *7-8 (citing Hoey, 1994 Del LEXIS 401 at *2-4).(footnotes omitted).  
 
14  
Kane, IAB Hearing No. 1153957 (July 12, 2004), at 8 (emphasis added).  
 
15  
Id. The actual sentence that appeared in the Board’s decision was, “While there was 
additional evidence of an August 2003 letter from employer’s counsel to Claimant’s counsel that 
 
9
Nevertheless, GM continues to pay [Kane] extended disability 
benefits and has not terminated him….Under the circumstances of this 
case, particularly the collective bargaining agreement and the regular 
return to work programs that GM has implemented for employees 
with restrictions, the Board does not find it reasonable to expect 
[Kane] as a displaced worker, to seek employment elsewhere … until 
he is definitively informed that he would not be given a light duty 
position within his restrictions and would be discharged from GM. 
The Board did not find Mr. Dobos’ testimony persuasive that GM has 
taken such action to date. Indeed, his testimony underscored the fact 
that GM has taken such actions, through its regular placement 
programs like ADAPT …, to foster the reasonable belief in [Kane] 
that suitable work would be made available to him at some point.16  
 
 
(17) GM takes great issue with the Board’s “inexplicable” and “wrongful” 
finding that GM did not previously notify Kane of “this situation,” noting that 
Dobos testified during direct examination that as early as August 19, 2002, Kane 
was informed that “there were no jobs available within his restrictions.”  Even if, 
as of August 19, 2002, GM informed Kane that there were no jobs available, it 
does not appear that GM informed him then that “none could be expected in the 
near future.”  Given the context, the Board’s reference to “this situation” appears to 
refer to two facts:  (i) that there were no jobs available and (ii) that none could be 
expected in the foreseeable future. In any event, the Board specifically concluded 
that it did not find persuasive Dobos’s testimony that GM had definitively 
informed Kane that “he would not be given a light duty position within his 
                                                                                                                                                             
there was no job available for Claimant within his restrictions and that none could be expected in 
the foreseeable future, GM has not previously notified Claimant of this situation.” 
 
16  
Id. 8-9. (emphasis added). 
 
10
restrictions and would be discharged from GM.” This finding is based on a 
credibility determination that we cannot overturn on appeal. 
 
(18) Moreover, we agree with the Superior Court judge’s conclusion that: 
…the August 2003 letter does not state that Kane will be discharged 
from GM, it merely states GM cannot place Kane in a light-duty 
position in the foreseeable future and he should begin looking in the 
open market for employment. Under these circumstances, a long term 
employee like Mr. Kane could reasonably conclude that he was not 
being terminated since a definitive statement of termination is not 
written within the August 2003 letter and his benefits continued. As 
such, it appears that Kane reasonably believed that his union's 
bargaining agreement would protect his employment status and he had 
no obligation to obtain a new job outside of GM.17 
 
 
(19) GM argues that Saunders, not Hoey, governs Kane’s case. In 
Saunders, the claimant was a long time employee of Chrysler, was still employed 
and receiving benefits, underwent periodic examinations by employer physicians, 
had not sought employment elsewhere, and Saunders’s counsel had received a 
letter from Chrysler’s counsel stating that there were no positions available within 
his restrictions at that time or in the foreseeable future.  Despite the letter, Saunders 
sought and Chrysler provided three different positions of employment in which 
Saunders was unable to perform the work because of his physical restrictions. 18 
                                                 
17  
GMC v. Kane, 2005 Del. Super. LEXIS 331 at *12-13.  
 
18  
Saunders, 2006 Del. LEXIS 84 at *3-4.  
 
 
11
The Board found as fact that Saunders had no reasonable expectation of continued 
employment.19 The Superior Court affirmed, as did we.  
 
(20) We concluded that substantial relevant evidence supported the 
Board’s conclusion because Saunders received the letter, Saunders’s physician 
informed him that he could not perform assembly line work, and the unsuccessful 
attempts to place him in a position reinforced the notice given in the letter that 
there were no available positions that could accommodate Saunders’s restrictions.20  
 
(21) GM’s reliance on Saunders is inapposite, however, because here as in 
Saunders, our function is limited to determining whether a factual finding of the 
board is supported by substantial evidence and whether the board’s decision is free 
from legal error.21  While the operative facts of Saunders and this case are similar, 
the decisions in both cases turn on witness credibility and the weighing of the 
evidence. The evaluation of both is the exclusive function of the Board.22  
 
(22) In Saunders, the Board found that Saunders’s testimony that Chrysler 
was continuing to look for positions for him was not credible and was outweighed 
                                                 
19  
Id. at *8-9.  
 
20  
Id. at *9-10.  
 
21  
Id. at *4.  
 
22  
Anderson v. GMC, 748 A.2d 406 (Del. 2000) (Order) (citing Vasquez v. Abex Corp., 
1992 Del. LEXIS 431 (Del. 1992)).  
 
 
 
12
by the clear text of the letter and the failed placement attempts.  Here, the Board 
determined that Dobos’s testimony that GM had no light duty positions available 
and that GM had notified him of this fact, was not credible and was inconsistent 
with GM’s obligations under the CBA and Kane’s placement in the ADAPT 
program.  We are not free to substitute our own judgment on witness credibility for 
that of the Board, even if we would reach a different conclusion based upon the 
facts presented.23 
 
(23) GM also cites Greene v. Kraft Gen. Foods 24 in support of its position. 
The Superior Court judge properly distinguished Greene from this case as follows: 
In Greene the Court determined Greene is not entitled to benefits 
because Kraft did nothing to lead Greene to think Kraft would 
continue searching for a light-duty position. Here, Kane participated 
in a company-run program to place displaced workers in a light-duty 
position. By GM doing this, Kane assumed he would remain with the 
company, and if that status was changed, it is a reasonable obligation 
to impose upon the company to clearly and precisely advise the long-
term employee of its position.25 
 
 
(24) GM seizes on certain language from Greene to support an additional 
argument: “Under the Hoey scenario, a worker who reasonably expects to be given 
a light duty job soon is not to be expected to look for work elsewhere during the 
                                                 
23  
Id. (citing Johnson 213 A.2d at 66-67 (1965)). 
 
 
24  
1998 Del. Super. LEXIS 651 (Del. Super. Ct. 1998) 
 
25  
GMC v. Kane, 2005 Del. Super. LEXIS 331 at *13. 
 
 
13
interim.”26 GM suggests that the word “soon” is essential and that “there is no 
evidence in the record to support the inference that Kane believed he was going to 
receive a light duty job soon.”  Dobos testified, however, that each time Kane goes 
back for a physical evaluation it makes it more likely, given the uncertainty of his 
standing relative to others with seniority, that there will be a job for him within 
restrictions.  Dobos also testified that it was possible that there would be a job for 
Kane at the time of his next evaluation. Moreover, it appears that Kane was 
scheduled to report to GM’s medical staff on November 18, 2004, several months 
after the June 15, 2004 hearing before the Board, to undergo an evaluation and to 
see if there was a job available to him. Finally, Dobos testified that there would be 
no job within Kane’s restrictions in the foreseeable future, which he “guessed” 
would be “a minimum of two to three years.” 
 
(25) The “soon” language from Greene is not dispositive here.  The Board 
had evidence before it on how long it might take for GM to find Kane a job within 
his restrictions.  Given Kane’s status as a union employee and given the CBA and 
the ADAPT program, even accepting Dobos’s perhaps less-than-generous “guess” 
that two to three years were needed before a position within Kane’s restrictions 
                                                 
26  
Greene, 1998 Del. Super. LEXIS 651 at * 7.  
 
 
14
would be available, there was substantial evidence to support the Board’s 
conclusion that Kane had a reasonable expectation of continued employment.27  
 
 
(26) GM’s final claim is that the Board’s decision is unsupported by 
substantial evidence because the Board misinterpreted testimony concerning the 
function of the ADAPT program.  That misinterpretation, GM argues, caused the 
Board to determine erroneously that these programs gave Kane reason to believe 
he would have continued employment at GM. GM suggests that it is being treated 
differently than other employers and is being punished for having a program that 
assists its employees when they are injured.  
 
(27) Specifically, GM claims that Dobos’s testimony shows that Kane was 
not qualified for job placement through the ADAPT program and that therefore, 
the program was legally incapable of fostering a reasonable belief of future 
employment in his case.  What the testimony shows, however, is that the issue was 
                                                 
27 
GM also contends that Zigman v. State, 1995 Del. Super. LEXIS 383 (Del. Super. Ct. 
1995) should apply in this case. Zigman is also factually distinguishable. There physical 
restrictions prevented the injured employee from returning to her previous position and the 
employer assigned a vocational rehabilitation expert to provide the employee with job placement 
assistance. Id. at *2. The employee completed job applications and went on job interviews, but 
was not offered any positions. Id. at *4. As the Zigman Court noted, “[claimant] knew she could 
not return to her previous position and she was told that [the employer] did not have any light 
duty positions available…. The [employer] also provided her with job placement assistance 
through a referral agency thereby placing her on notice that there might not be a light duty 
position available for her with the employer.” Id. at 13. Zigman stands for the proposition, that 
“under Hoey, a claimaint [can] lose total disability benefits, even without a formal notice of 
termination, if the facts establish… that the claimant [has] no reasonable expectation of 
continued employment yet did not seek other employment.” See Saunders, 2006 Del. LEXIS 84 
at *11. Here, the Board concluded that Kane had a reasonable expectation of continued 
employment and, therefore, Zigman is inapplicable.  
 
15
not whether Kane was unqualified or ineligible for the program, but whether any 
positions were available to him, given his restrictions and insufficient seniority. 
The testimony established that positions might become available to Kane in the 
future, although when that would happen was unclear.  Moreover, GM created the 
ADAPT program to meet its obligations under the CBA.  Employees like Kane 
were entitled to rely on this program.  There is no evidence that GM is being 
treated differently than other employers because of a contractual obligation to its 
employees that GM voluntarily assumed.  
 
(28) Substantial evidence supports the Board’s decision and we find no 
legal error in the Board’s application of the law.  NOW, THEREFORE, IT IS 
ORDERED that the judgment of the Superior Court is AFFIRMED.  
 
 
 
 
 
 
BY THE COURT: 
 
 
 
 
 
 
 
 
/s/ Myron T. Steele 
 
 
 
 
 
 
Chief Justice