Michigan Supreme Court
Lansing, Michigan 48909
____________________________________________________________________________________________
Chie f Justice Justices
Maura D. Corrigan Michael F. Cavanagh
Opinion
Elizabeth A. Weaver
Marilyn Kelly
Clifford W. Taylor
Robert P. Young, Jr.
Stephen J. Markman
____________________________________________________________________________________________________________________________
FILED MARCH 26, 2003
TONY J. DANIEL,
Plaintiff-Appellee,
v No. 120460
DEPARTMENT OF CORRECTIONS,
Defendant-Appellant.
____________________________________
BEFORE THE ENTIRE COURT
WEAVER, J.
In this case we address whether plaintiff, who was
disciplined by, the Department of Corrections (his employer),
for sexually harassing female attorneys, and who suffered
depression as a result of the disciplinary proceedings, is
barred from worker’s compensation benefits pursuant to MCL
418.305. MCL 418.305 provides, “If the employee is injured by
reason of his intentional and wilful misconduct, he shall not
receive compensation under the provisions of this act.” We
hold that MCL 418.305 precludes benefits in this case and,
therefore, we reverse the judgment of the Court of Appeals and
reinstate the Worker’s Compensation Appellate Commission’s
(WCAC’s) order denying plaintiff benefits.
I
Plaintiff worked as a probation officer with defendant
Department of Corrections beginning in 1984. His employment
required him to attend probation violation hearings held in
circuit court several times a month to interact with defense
attorneys representing probationers.
In February 1995, a female defense attorney filed a
complaint with plaintiff’s immediate supervisor alleging that
plaintiff sexually harassed her in August 1994 and February
1995. The attorney testified that it was plaintiff’s failure
to take her rejection of his advances seriously that prompted
her to file her complaint.1 The attorney’s complaint was soon
followed by allegations of sexual harassment by plaintiff from
1
The attorney alleged that in August 1994 plaintiff
obscenely propositioned her. She testified that when she
rejected plaintiff’s advances, he told her that they would
have to be “discreet” since he was married with children.
Then, in the middle of a probation hearing that day, he showed
her a note stating that she would have to lose ten pounds
first. The attorney testified that she and her boss
successfully arranged her schedule to avoid further contact
with plaintiff. However, in February 1995, she was again
scheduled with plaintiff. The attorney testified that
plaintiff doggedly pursued his previous proposition. When
rejected, plaintiff told the attorney that she’d need to lose
twenty pounds and said to her, “[y]ou want me; you know you
want me.”
2
three other female defense attorneys.2
Plaintiff’s supervisor initiated an investigation into
the complaints. Over the following months, she interviewed
the attorneys and other witnesses. When questioned, plaintiff
denied all the allegations. At the close of her
investigation, plaintiff’s supervisor recommended that a
disciplinary conference be held regarding five separate counts
of sexual harassment.
A disciplinary conference was held on June 20, 1995.
Plaintiff continued to deny the allegations. On the advice of
his union representative, however, plaintiff offered nothing
in his own defense. The plaintiff was informed that the
possible discipline ranged from a written reprimand to
dismissal. At the conclusion of the conference, the presiding
official found “a strong basis” on which to conclude that
plaintiff violated Michigan Department of Corrections work
rules as described in all five counts.3 Ultimately, plaintiff
2
It was alleged that plaintiff told one attorney that he
was attracted to Caucasian women and that he was turned on by
a woman’s thighs. It was alleged by another that plaintiff
asked if she would date a black man. A third attorney alleged
that when she was pregnant, plaintiff had asked her if she was
having a girl or boy. When she replied that she was having a
girl, she alleged that plaintiff said, “too bad, a boy means
you had deep penetration.”
3
The work rules at issue prohibit “[s]peech, action,
gesture or movement that causes physical or mental
intimidation, humiliation, or harassment,” and “conduct of an
employee which may adversely affect the reputation of the
Department . . . .”
3
was disciplined for the two counts of sexual harassment
arising from the August 1994 and February 1995 incidents. He
was suspended for ten days without pay.4
After his return to work in August 1995, plaintiff
testified that he felt harassed by both his immediate
supervisor and the defense attorneys who had accused him of
sexual harassment. He felt “out of control,” and, on
January 27, 1996, began being treated by psychologist Daniel
DeWitt. Dr. DeWitt diagnosed plaintiff as suffering from
depression caused by the disciplinary investigation and
proceedings as well as the subsequent stresses at work. As a
result, plaintiff began a leave of absence in February 1996.
In March 1996, Dr. DeWitt felt that plaintiff could work
again, but at a different job for a different supervisor.
Plaintiff submitted a request for reasonable accommodation in
the form of a transfer to another part of the Department of
Corrections. His request was rejected by the department’s
Americans with Disabilities Act Coordinator because
plaintiff’s disability was deemed temporary and not
substantially limiting in nature. In June 1996, plaintiff
filed a claim for worker’s compensation benefits premised on
a mental disability arising from the disciplinary proceedings.
4
Plaintiff subsequently filed a grievance with his union,
claiming the discipline was without just cause and in
violation of his contractual rights. The resolution of the
grievance does not appear in the record.
4
During the time leading to the trial, plaintiff saw three
other doctors at the state’s request.
After four days of trial between March and September of
1998, the magistrate concluded that the “discipline, and post
discipline employment events up to February 2, 1996,
contributed in a significant manner to [plaintiff’s]
development of a disabling condition of depression, anxiety,
and uncontrolled anger.” The magistrate did not address MCL
418.305 or make specific findings regarding whether
plaintiff’s conduct was intentional and wilful or otherwise
not compensable under that section. Rather, the magistrate’s
conclusion that plaintiff was entitled to benefits was based
on the finding that plaintiff’s injury arose out of his
employment pursuant to Gardner v Van Buren Public Schools, 445
Mich 23; 517 NW2d 1 (1994), overruled in part by Robertson v
DaimlerChrysler Corp, 465 Mich 732; 641 NW2d 567 (2002).
However, the magistrate commented:
It is clear to me that Plaintiff’s problems
started with his discipline for the improprieties
of which he was accused. It is difficult to have
much sympathy for this claimant, since he brought
these troubles on himself by his own misconduct.
But compensation, like the rain, falls on the just
and the unjust alike.
The magistrate awarded plaintiff a closed award of worker’s
compensation benefits.
Defendant appealed, raising MCL 418.305 as an affirmative
defense. The WCAC agreed with the essence of the magistrate’s
5
finding that the plaintiff’s injury was self-inflicted, but
concluded that MCL 418.305, “puts up an umbrella to prevent
compensation from falling on this particular ‘unjust’
claimant.”5 The WCAC found that plaintiff was on notice of
the rules that prohibited the conduct for which he was
ultimately accused and disciplined, but had done “it anyway,
in a consistent and repeated pattern over a long period of
time.” The WCAC concluded that plaintiff’s injury arose from
his own intentional and wilful misconduct and, therefore, that
MCL 418.305 precluded an award of benefits.
Plaintiff appealed and, as will be discussed below, the
Court of Appeals reversed the WCAC decision in a two-to-one
decision. The Court of Appeals majority concluded that
plaintiff’s acts did not rise to the level of intentional and
wilful misconduct contemplated by MCL 418.305. 248 Mich App
95 (2001).
In dissent, Judge O’Connell noted that “whether an
individual engaged in wilful and intentional misconduct is a
factual determination” and “that the Legislature, through MCL
418.861a(14), has provided the WCAC with the authority to make
factual findings.” 248 Mich App 109-110. Moreover, Judge
5
The WCAC is empowered to make independent findings of
fact on matters where the magistrate’s findings are lacking,
as long as the record is sufficient for administrative
appellate review and the WCAC is not forced to speculate.
Mudel v Great Atlantic & Pacific Tea Co, 462 Mich 691, 730;
614 NW2d 607 (2000).
6
O’Connell noted, the WCAC’s finding in this case that
plaintiff engaged in wilful and intentional misconduct was
conclusive and binding in the absence of fraud. Id. at 110,
citing Mudel, supra at 701, 711, 712. Judge O’Connell opined
“that the WCAC’s conclusion that plaintiff engaged in wilful
and intentional misconduct was well-grounded,” 248 Mich App
110, in the record and that, therefore, the Court of Appeals
was required to affirm its decision.
We granted defendant’s application for leave to appeal.
466 Mich 889 (2002).
II
We review de novo questions of law. DiBenedetto v West
Shore Hosp, 461 Mich 394, 401; 605 NW2d 300 (2000). Whether
plaintiff’s injury arose by reason of intentional and wilful
misconduct as contemplated by MCL 418.305 is a question of
fact. McMinn v C Kern Brewing Co, 202 Mich 414, 429; 168 NW
542 (1918); Day v Gold Star Dairy, 307 Mich 383, 390; 12 NW2d
5 (1943). On judicial review, “[t]he findings of fact made by
the commission acting within its powers, in the absence of
fraud, shall be conclusive. . . .” MCL 418.861a(14).
III
The focus of our inquiry is solely on the proper
application of MCL 418.305.6 As quoted above, MCL 418.305
6
The Court of Appeals majority and dissent debated the
relevance of Calovecchi v Michigan, 461 Mich 616; 611 NW2d 300
(continued...)
7
provides, “If the employee is injured by reason of his
intentional and wilful misconduct, he shall not receive
compensation under the provisions of this act.” This
provision has remained essentially unchanged since it was
first adopted by the Legislature in 1912 as part of the
original worker’s compensation legislation. See 1912 (1st Ex
Sess) PA 10, part 2, § 2.7
The Court of Appeals majority below divided its analysis
of MCL 418.305 into two parts. It focused first on whether
plaintiff’s mental injury arose “by reason of” his misconduct,
and, second, on whether plaintiff’s misconduct was
“intentional and wilful.” We address and reject the panel
majority’s analysis of each of these questions.
A
“By reason of”
The panel majority first focused on what it termed the
6
(...continued)
(2000), to the interpretation of MCL 418.305. In Calovecchi,
an employee’s alleged misconduct off the job was investigated,
but the allegations were ultimately dismissed. Calovecchi
held that mental injuries caused by acts of discipline may be
compensable under MCL 418.301(1), because “acts of employer
imposed discipline are a predictable part of the working
environment.” Calovecchi, supra, p 625. The majority and
dissent speculated whether Calovecchi would somehow encourage
employers to find employees guilty of alleged misconduct. In
response, we note that MCL 418.305 was not raised by the
parties or addressed at any level in Calovecchi and that such
policy considerations are properly left to the Legislature,
not the courts.
7
The only change has been to the word “employee,” which
was originally spelled “employe.”
8
question of causation, i.e., whether plaintiff was injured “by
reason of” his intentional and wilful misconduct. The
majority rejected the WCAC’s finding that plaintiff’s injury
was “the direct result of his intentional and wilful
misconduct,” by concluding that the question of “who started
it?” was “inapposite to the intention of the WDCA.” 248 Mich
App 103. The majority concluded that plaintiff’s injury was
“too attenuated for [it] to have occurred ‘by reason of’ his
acts,” id., p 102, and that plaintiff “was not injured at the
time of his act,” but was “injured solely because of his
status as an employee . . . .” Id., p 103.
To support its conclusion, the majority analogized to two
cases in which fighting or horseplay between employees
escalated and resulted in physical injuries. See, e.g.,
Crilly v Ballou, 353 Mich 303; 91 NW2d 493 (1958), and Andrews
v Gen Motors Corp, 98 Mich App 556; 296 NW2d 309 (1980).8 Our
review of those cases reveals that they do not support the
panel majority’s causation analysis. Indeed, neither case,
8
Crilly involved an injury caused by employees throwing
shingles and nails at one another. The Court conducted an
exhaustive review of cases involving on-the-job “sportive
assaults” and concluded that injuries received are not outside
the realm of the course of employment and were compensable as
long as they did not rise to the level of intentional and
wilful misconduct. Crilly, supra, pp 326-327. Andrews
involved injuries sustained during a fight between employees.
The Court of Appeals affirmed the Worker’s Compensation Appeal
Board’s award of benefits, concluding that the conduct did not
involve “such a degree of ‘moral turpitude’ . . . so as to
preclude” benefits. Andrews, supra, p 561.
9
nor any other we have found, addressed whether the injuries
were “by reason of” misconduct pursuant to MCL 418.305.
Rather, the causation inquiry in those cases, and our case
law, pertains to the question whether such misconduct can be
said to have arisen out of the course of the employment as
required by MCL 418.301. See Crilly, supra, pp 324-327, and
Andrews, supra, pp 558-559.9
Significantly, defendant no longer disputes, and the
magistrate, the WCAC, and the Court of Appeals agreed, that
plaintiff’s mental disability arose out of and in the course
of his employment pursuant to MCL 418.301(1). Thus, the
majority’s reliance on Crilly and Andrews was misplaced.
Moreover, we decline to impose a more direct causation
requirement than that plainly expressed by the statute. “By
reason of” is defined as “[b]y means, acts, or instrumentality
of.” Black’s Law Dictionary (6th ed). As noted by the Court
of Appeals dissenter, the phrase does not require that an
injury arise contemporaneously with the misconduct. Rather,
as stated by Judge O’Connell:
[I]t cannot be disputed that [plaintiff’s]
misconduct was the starting point for the resultant
9
Whether misconduct that causes an injury arose out of
and in the course of employment under MCL 418.301(1) is a
preliminary question that must be answered affirmatively
before the issue whether that misconduct was “intentional and
wilful” in light of MCL 418.305 is reached. See Bischoff v
American Car & Foundry Co, 190 Mich 229, 231; 157 NW 34
(1916); Clem v Chalmers Motor Co, 178 Mich 340, 344-345; 144
NW 848 (1914).
10
disciplinary proceedings that ultimately caused his
injury. Had plaintiff not engaged in sexual
harassment, he would not have been subjected to the
disciplinary proceedings, and he would not have
been suspended from his job. . . . [T]he
disciplinary proceedings, from which plaintiff’s
mental disability arose, flowed directly and
predictably from plaintiff’s misconduct as surely
as night follows day. [248 Mich App 115-116.]
We agree with Judge O’Connell and conclude that the
record amply supports the WCAC’s finding that plaintiff was
injured “by reason of” his intentional and wilful misconduct.
Because the magistrate failed to address the applicability of
§ 305 to plaintiff’s claim, the WCAC acted within its
authority in engaging in supplemental fact-finding and in
concluding that plaintiff’s injury—although it may well have
arisen out of employment events—was nevertheless barred
because it occurred by reason of his intentional and wilful
misconduct.10 Therefore, as constrained by our limited
judicial appellate review, we abide by the findings of fact by
the WCAC. Mudel, supra, p 700.
B
“Intentional and Wilful”
The Court of Appeals majority next concluded that
plaintiff’s acts did not amount to “intentional and wilful
10
Indeed, the WCAC’s fact-finding in this regard is
consistent with the magistrate’s finding that plaintiff
“brought these troubles on himself by his own misconduct.”
Therefore, we cannot agree with Justice Cavanagh, who opines
in dissent that the WCAC improperly substituted its own
findings for those of the magistrate.
11
misconduct” under MCL 418.305. The majority reasoned that
plaintiff’s conduct, though “voluntary, crude, and
unprofessional,” did not rise to “intentional and wilful
misconduct” as it has been interpreted in this state. 248
Mich App 104.
Our case law has consistently distinguished “intentional
and wilful misconduct” from acts of negligence and gross
negligence. Benefits are awarded despite MCL 418.305 where an
employee is injured by his own negligence. See, e.g., Gignac
v Studebaker Corp, 186 Mich 574; 152 NW 1037 (1915); Day,
supra. However, this Court has held that benefits are
precluded under the statute where an employee was injured by
conduct of a quasi-criminal nature. Fortin v Beaver Coal Co,
217 Mich 508, 510; 187 NW 352 (1922). Fortin described
“quasi-criminal” conduct as “involving the intentional doing
of something with knowledge that it is dangerous and with
wanton disregard of consequences . . . .” Id.
Although plaintiff denies that he made the comments of
which he is accused, his denials were not believed at any
level reflected in the record. At the disciplinary
conference, “a strong basis” was found to support the
allegations. The magistrate found that plaintiff had “brought
these troubles on himself by his own misconduct.” The WCAC
found that “[p]laintiff knew what he was doing was wrong” and
yet he persisted. Even the Court of Appeals majority called
12
the plaintiff’s behavior “voluntary, crude, and
unprofessional.” 248 Mich App 104. Nevertheless, the
majority decided that plaintiff’s behavior did not rise to a
level of moral turpitude that could be called “intentional and
wilful.” Id.
In our view, the WCAC’s conclusion that plaintiff’s
misconduct was voluntary is amply supported by the record.
His repeated acts of sexual harassment were well beyond the
realm of mere negligence or gross negligence. That said, it
has long been understood that the question whether misconduct
is “intentional and wilful” is one of fact. McMinn, supra, p
429, and Day, supra, p 390.11 On judicial review, “[t]he
findings of fact made by the commission acting within its
powers, in the absence of fraud, shall be conclusive.” Mudel,
supra, p 700. Thus, the Court of Appeals panel majority’s
rejection of the WCAC’s findings regarding whether plaintiff’s
misconduct was “intentional and wilful” and its substitution
of its own fact-finding on the issue does not comport with its
11
In Crilly, supra, p 327, we noted:
[T]his exclusion of acts of a degree of moral
turpitude, it will be observed, is by the
legislature itself, not a judicial retrogression to
principles of tort. Further than this in
definition we do not attempt to go. The precise
future line of demarcation will be marked out, in
the traditional manner, by the case-to-case
decision. [Emphasis supplied.]
13
limited judicial appellate review. We, therefore, reverse the
judgment of the Court of Appeals.
C
We note one final disagreement with the panel majority’s
reasoning. Regarding whether the plaintiff knew his conduct
was prohibited, the panel majority found persuasive the fact
that, although plaintiff’s comments were alleged to have been
made over several years, he “suffered no adverse consequences
from his behavior” until 1995. 248 Mich App 103. It reasoned
that “[p]laintiff’s history of conduct in this case indicates
that the rule was not strictly enforced and there are no facts
in the record indicating otherwise.” Id., p 105. While this
Court has concluded that MCL 418.305 does not operate to
preclude benefits where an employee was injured while
violating a work rule that had not been enforced by the
employer, see, e.g., Rayner v Sligh Furniture, Co, 180 Mich
168; 146 NW 665 (1914), the record in this case reflects that
plaintiff’s immediate supervisor had conducted several
investigations into other alleged violations of work rules by
other employees during her supervisory tenure. More
critically, that plaintiff’s accusers did not file formal
complaints triggering the enforcement process is not
demonstrative of the defendant’s enforcement, or lack thereof,
of workplace rules.
IV
14
For the reasons stated, we reverse the judgment of the
Court of Appeals and reinstate the WCAC order denying benefits
to this plaintiff.
Elizabeth A. Weaver
Maura D. Corrigan
Clifford W. Taylor
Robert P. Young, Jr.
Stephen J. Markman
15
S T A T E O F M I C H I G A N
SUPREME COURT
TONY J. DANIEL,
Plaintiff-Appellee,
v No. 120460
DEPARTMENT OF CORRECTIONS,
Defendant-Appellant.
___________________________________
CAVANAGH, J. (dissenting).
I respectfully disagree with the majority’s conclusion
that plaintiff is precluded from receiving worker’s
compensation benefits for his mental injury. The majority
relies on the intentional and wilful misconduct exclusion in
MCL 418.305 to hold that, though plaintiff’s depression was a
result of defendant’s disciplinary proceedings, such
disciplinary proceedings were necessitated by plaintiff’s
intentional and wilful misconduct, i.e., plaintiff’s sexual
harassment of female attorneys. I would affirm the decision
of the Court of Appeals and award benefits to plaintiff.
I agree with the Court of Appeals majority that the
connection between plaintiff’s acts and his injury is too
attenuated for the injury to have occurred “by reason of” his
acts. The majority rejects this position, fearing it would
impose a requirement that the injury arise contemporaneously
with the employee’s misconduct. However, saying that
plaintiff’s acts of sexual harassment and his injury are “too
attenuated,” does not necessarily impose a requirement that
the injury arise contemporaneously with the misconduct.
In this case, plaintiff’s injury followed not only
plaintiff’s own conduct, but also action taken by defendant.
One must consider not only the amount of time that elapsed
between the employee’s conduct and the injury, but also the
events that occurred during that time. The disciplinary
proceedings conducted by defendant in this case occurred after
plaintiff’s misconduct, but before his mental injury.
Therefore, one could conclude, as the magistrate did, that the
discipline was the cause of plaintiff’s mental injury.
Additionally, the Worker’s Compensation Appellate
Commission improperly substituted its own findings for those
of the magistrate. The magistrate found that “[p]laintiff’s
problems started with his discipline,” and that “plaintiff’s
discipline and post-discipline employment events up to
February 2, 1996, contributed in a significant manner to”
plaintiff’s mental injury. Findings of fact by the magistrate
are to be considered conclusive by the WCAC if supported by
2
“competent, material, and substantial evidence on the whole
record.” MCL 418.861a(3); Holden v Ford Motor Co, 439 Mich
257, 261; 484 NW2d 227 (1992).
The WCAC majority found that the record supported the
magistrate’s finding that defendant’s discipline of plaintiff,
which followed the sexual harassment, was the direct cause of
plaintiff’s injury. Its review should have ended there, but
the WCAC improperly replaced the magistrate’s finding that
plaintiff’s injury was caused by defendant’s disciplinary
proceedings with its own finding that plaintiff’s injury was
caused by his intentional and wilful conduct. The WCAC
exceeded the scope of its review; therefore, the magistrate’s
finding that plaintiff’s injury was the result of the
disciplinary proceedings should be upheld.
Because I would affirm the judgment of the Court of
Appeals and reinstate plaintiff’s benefits, I, respectfully,
dissent.
Michael F. Cavanagh
Marilyn Kelly
3