CLARENCE J. MORSE, Employee-Appellant, v. SHELDAHL, INC., and ST. PAUL FIRE & MARINE INS. CO., Employer-Insurer, and GENERAL EQUIPMENT CO., INC., and FEDERATED MUT. INS. CO., Employer-Insurer.
WORKERS= COMPENSATION COURT OF APPEALS
AUGUST 23, 2000
PRACTICE & PROCEDURE - MATTERS AT ISSUE; JOB OFFER. The compensation judge improperly considered the suitability of job offers made to the employee at the hearing. The only issues at hearing were the suitability of job offers made in July and August 1999.
Determined by: Rykken, J., Johnson, J., and Pederson, J.
Compensation Judge: Rolf G. Hagen
MIRIAM P. RYKKEN, Judge
The employee appeals the compensation judge=s findings that the employee=s earning capacity should be determined by, and temporary partial disability benefits should be calculated on, an imputed wage based upon job offers from the employee=s date of injury employer made at the hearing below. We vacate these findings and the related order.
On March 17, 1992, Clarence J. Morse, the employee, sustained an admitted injury to his right shoulder while employed by Sheldahl, Inc. (Sheldahl). On that date, Sheldahl was insured for workers= compensation liability by St. Paul Fire & Marine Insurance Company (St. Paul). Born on June 3, 1947, the employee was 54 at the time of his injury, and earned an average weekly wage of $457.60.
At the time of his injury on March 17, 1992, the employee worked the third shift for Sheldahl, working as an image placement operator. The employee received medical treatment at the Veterans Administration Medical Center in Minneapolis, where he underwent right rotator cuff repair in the spring of 1992, followed by physical rehabilitation. He reported minimal improvement following that surgery. As a result of his injury, he was disabled from work for approximately two and a half months, and then returned to work at Sheldahl. From May until October 1992, Sheldahl provided rehabilitation assistance to the employee, primarily in the nature of monitoring the employee=s medical treatment and return to work.
On February 15, 1993, the employee was examined by Dr. Daniel Lussenhop, at the request of Sheldahl and St. Paul. Dr. Lussenhop determined that the employee had reached maximum medical improvement (MMI) and that he had sustained 3 percent permanent partial disability of the body as a whole due to his March 17, 1992 right shoulder injury. St. Paul served the employee with notice of MMI on February 25, 1993.
Due to recurrent symptoms Sheldahl assigned a disability case manager to work with the employee in August 1993. The employee underwent an examination with Dr. Thomas J. Raih on September 30, 1993. Dr. Raih diagnosed a recurrent right rotator cuff repair and recommended repeat surgery. On November 3, 1993, the employee underwent repair of a large rotator cuff tear and acromioplasty. The employee received follow-up medical treatment from Dr. Raih, who recommended limited use of his right shoulder, restricted the employee from work, and who, by February 1994, determined that the employee had recovered to the point where he was able to undergo physical therapy. By mid-March, Dr. Raih determined the employee could return to work at a light duty position which involved no overhead lifting. Dr. Raih assigned a 15 pound lifting limit, and stated that the employee Aprobably will not be able to return to the job@ that he previously performed. (Er Ex 3.) The employee returned to Sheldahl, working in a bias sealing position, eventually earning the same wage he had earned at the time he was injured. This position was within the physical work restrictions imposed by Dr. Raih, the employee=s treating physician. The employee testified that although he was assigned to do the bias seal tasks, he instead was given a variety of miscellaneous duties, such as sweeping. (T. 88.) On March 29, 1994, Dr. Raih again examined the employee, and determined that he should continue working on a light-duty basis, four hours per day, and that he should receive additional physical therapy.
On April 4, 1994, the employee accepted a severance package and voluntarily terminated his employment from Sheldahl; at the time, Sheldahl offered the employee and other employees a voluntary severance package, which included both severance pay and educational benefits through a dislocated worker program. According to a Sheldahl representative who testified at hearing, if the employee had continued to work at Sheldahl in April 1994, he would not have been laid off, due to his seniority status in his job classification. (T. 28.)
The employee testified that he left Sheldahl in April 1994 because he felt Avery insecure there,@ based on Awhat [he] had seen over the years, layoffs, jobs change, people come and go, upsetting your life.@ (T. 83-84.) The employee testified that he had observed job changes periodically during his 11 years= employment with Sheldahl, and felt that this option of a voluntary resignation was Aan offer in [his] favor@ due to job search assistance, severance pay, eligibility for unemployment, and an opportunity for a fresh start. (T. 84.) He also testified that AI felt my shoulder couldn=t hardly handle eight hours, and I=m stuck with this [shoulder injury] the rest of my life.@ (T. 84.) The employee was also concerned that his department would be switched over from an eight hour shift to a continuous or a twelve-hour shift, as other departments maintained that schedule. (T. 84.)
On May 3, 1994, Dr. Raih advised the employee that he should not return to any work which requires overhead activities, and that he had a permanent lifting limit up to 30 pounds on a non-repetitive basis. (Er. Ex. 3.) By July 27, 1994, Dr. Raih released the employee to work full time, within that 30-pound lifting restriction.
After resigning from Sheldahl, the employee worked at other positions for a variety of employers, including General Equipment Company, Inc. (General Equipment) for whom he began working in October 1995. The employee=s right shoulder symptoms persisted, and he continued to undergo periodic examinations by Dr. Raih. On January 8, 1997, the employee re-injured his right shoulder in the course of his employment with General Equipment. On that date, General Equipment was insured for workers= compensation liability by Federated Mutual Insurance Company (Federated). According to treatment chart notes in the record from Dr. Raih, dated January 23, 1997, the employee was restricted from working until at least early February 1997. Following his injury, the employee was not offered continued employment with General Equipment.
On January 30, 1997, the employee filed a rehabilitation request, requesting an initial rehabilitation consultation with Nancy Johnson, QRC. That rehabilitation request stated that
Employee has recently suffered yet another aggravation. The treating doctor has imposed severe restrictions which make a return to work problematical. The doctor has therefore recommended that the employee have a QRC to assist in vocational and medical management areas.
On February 10, 1997, the employee filed a claim petition alleging entitlement to temporary total and temporary partial disability benefits, medical expenses and rehabilitation assistance as a result of his injuries on March 17, 1992 and January 8, 1997. Sheldahl and St. Paul denied liability for the employee=s claimed benefits, alleging that the disability and any need for medical treatment or rehabilitation assistance were solely the result of either superseding/intervening injuries or non work-related injuries, or other work-related injuries sustained while in the employ of other employers. General Equipment and Federated also denied liability for the employee=s claimed benefits.
In July 1997, the employee, Sheldahl, General Equipment and both insurers entered into a stipulation for settlement, under which Sheldahl and St. Paul agreed to pay accrued temporary total and temporary partial disability benefits in addition to ongoing temporary partial disability benefits, and also agreed to provide rehabilitation assistance to the employee. General Equipment agreed to reimburse Sheldahl and St. Paul for 17.5 percent of past and future benefits paid. The parties agreed that the designated QRC would be Josie Hardy.
On January 14, 1998, the employee sustained a low back injury while working for Apothecary Products, Inc. That injury is not the subject matter of these proceedings (Finding No. 11) and is not involved in this matter, other than as to its effect on the employee=s permanent physical work restrictions resulting from that injury. According to a medical report by Dr. Mark B. Sigmond, dated August 26, 1999, he diagnosed the employee as having a lumbar strain with spinal stenosis and disc disease. Dr. Sigmond recommended conservative treatment, and assigned permanent physical work restrictions as a result of that 1998 low back injury, including a 25 pound lifting and carrying limit, with such lifting done occasionally, no repetitive bending, twisting, or lifting, no lifting in an awkward position, and good back support for long sitting. Dr. Sigmond determined that the employee could drive a bus, and might possibly need epidural injections in the future and surgical treatment, although not recommended at the time. Dr. Sigmond assigned a 10 percent permanent partial disability of the body as a whole, as a result of the January 14, 1998 injury.
The employee conducted a job search, and located alternative employment; on January 29, 1998, he commenced working for Cavalier Coaches, Owatonna Bus Company, as a bus and van driver. On July 16, 1998, Ms. Hardy issued an R-8 form, Notice of Rehabilitation Closure, indicating that the employee was working at suitable employment. On that form, the QRC answered Ano@ to the question as to whether the employee needs additional rehabilitation services, stating: AEmployee working suitable employment; settlement of claim.@ (Ee. Ex. E.)
By July 23, 1998, Dr. Raih determined that the employee had reached MMI from his 1992 right shoulder injury as of July 20, 1998, and assigned a 6 percent permanent partial disability of the body as a whole due to that injury. St. Paul again served the employee with notice of MMI on September 3, 1998. (Er. Ex. 9.)
In August 1998, the employee, Sheldahl, St. Paul and intervenor Minnesota Department of Economic Security entered into a second stipulation for settlement, which resolved to-date claims for payment of temporary partial disability and reimbursement of re-employment insurance benefits.
The employee continued working for Cavalier Coaches, and by late 1998, the employee worked part-time for both Cavalier Coaches and Tollman Huntley, driving a bus or a van. He worked approximately 32 hours per week for Cavalier, earning $9.00 per hour and approximately 20 hours per week for Tollman Huntley, earning $6.00 per hour. By the spring of 1999, the employee was offered full-time employment with Tollman Huntley, and he therefore reduced his hours at Cavalier Coaches. Although he earned a lower wage at Tollman Huntley, he accepted this full-time position as it provided employee benefits and the opportunity to work at a full-time job. (T. 71-72.) At the time of hearing, the employee worked 39 to 40 hours per week for Tollman Huntley, earning $6.25 per hour, and five to ten hours per week at Cavalier Coaches, earning $9.25 per hour. (T. 73, 74.) The employee also testified that he continued to search for other work, through newspaper advertisements and listings with the state employment office to Asee if there=s any possibility for a better part-time or full-time position.@ (T. 92.)
By March 18, 1999, Dr. Thomas J. Raih again examined the employee, who reported tenderness over the acromion, some limited forward flexion, crepitation on internal/external rotation, plus sings of impingement. Dr. Raih diagnosed a persistent impingement status post rotator cuff repair and recommended a continued 30-pound lifting limit and very minimal overhead activity. (Er. Ex. 1.)
During the time the employee worked for Cavalier Coaches and Tollman Huntley, he was paid temporary partial disability benefits by Sheldahl and St. Paul, who had paid ongoing temporary partial disability benefits intermittently since his 1992 injury. Following the employee=s decision to reduce his hours at Cavalier Coaches and work full-time at Tollman Huntley, however, the employee=s earnings were reduced, thereby increasing his claim for temporary partial disability benefits.
On July 1, 1999, Sheldahl therefore sent the employee a letter (Er. Ex. 1) offering the employee a position as circuit hand worker on either the second or third shift, scheduled to commence on July 19, 1999. To that letter, Sheldahl attached a copy of Dr. Raih=s March 18, 1999, chart note and a document entitled AEmployer Job Offer,@ which stated that Ajob duties will be consistent with those of Circuit Hand Worker as outlined in the Collective Bargaining Unit.@ Sheldahl claimed that the activities of this job were within the physical work restrictions outlined by Dr. Raih, but attached no written description of the job. (Er. Ex. 1.) The offered job would have paid $393.60 per week for the second shift or $399.60 per week for the third shift; in addition, employee benefits were included, such as medical benefits, dental coverage, short-term disability benefits, vision/eye care coverage, sick pay, holiday pay and a 401(k) plan. (T. 40.)
The employee did not accept this offer, and the position therefore was posted and filled by an internal candidate from Sheldahl. (T. 41.) On July 23, 1999, Sheldahl and St. Paul filed a Notice of Intention to Discontinue Benefits (NOID). The NOID stated the following:
The employer offered employee full time suitable work within his physical work restrictions with a wage that would exceed his AWW [average weekly wage] at the time of injury. See attached job offer. This job offer was within the restrictions of the treating physician Dr. Raih. Mr. Morse refused this position. TPD [temporary partial disability] is being terminated as of 7/22/99, as the employee refused a job within his restrictions which also exceed his AWW. We also do not feel the employee=s current earnings reflect his actual earning capacity. Upon receipt of check stubs TPD will be paid through 7/22/99.
On August 12, 1999, a compensation judge at the St. Paul Settlement Division of the Office of Administrative Hearings issued an Order on Discontinuance pursuant to Minn. Stat. ' 176.239. The compensation judge determined that the employee had sustained his right to entitlement of ongoing temporary partial disability benefits, and denied the Notice of Intention to Discontinue temporary partial disability benefits. Those benefits were therefore reinstated as of July 22, 1999.
On August 18, 1999, Sheldahl sent a second letter to the employee, offering the employee a position as a multi-process worker, scheduled to commence September 6, 1999. (T. 42.) This job was scheduled for third shift, which was the shift the employee had worked at the time of his March 1992 left shoulder injury. Sheldahl again attached a copy of Dr. Raih=s March 18, 1999 chart note, along with two documents entitled AEmployer Job Offer@ and AHourly Job Posting.@ Although Sheldahl attached no written job description to the job offer letter, the attached documents stated that AJob duties will be consistent with those of multi process worker as outlined in the Collective Bargaining Agreement,@ and that a Acomplete job description is available in Human Resources@ (Er. Ex. 1.) The letter sent by Sheldahl also stated:
Please be informed that the multi process worker job activity is new since your employment at Sheldahl and consists of as many as 15 different job activities, none of which include operating a Itron screener as you have in the past as an image placement operator. I wanted to clarify this now to alleviate any concerns that you may have regarding your past work activity as an image placement operator.
(Er. Ex. 1.)
The employee did not accept this job offer. On September 22, 1999, Sheldahl and St. Paul filed a Petition to Discontinue temporary partial disability benefits, in which they argued that the employee=s current earnings did not reflect his earning capacity and that the employee had turned down job offers that were either gainful employment or suitable jobs.
The Petition to Discontinue was addressed at hearing on December 2, 1999. The compensation judge found that the employee=s failure to respond to the July 1, 1999, and August 18, 1999, job offers was reasonable since there were no job descriptions attached nor did the job offers indicate that the employee=s physical work restrictions would be accommodated. Therefore, the compensation judge found that the employee=s actual earnings were an accurate reflection of his earning capacity at those times.
However, at the hearing, Sheldahl=s engineer of environment, health and safety testified that while those job openings had been filled in 1999, the job offers were still available to the employee. The compensation judge found as credible the testimony, presented by Sheldahl=s representative, that the jobs offered to the employee were within all of the employee=s right shoulder and low back restrictions. The judge therefore found that these renewed offers of employment made to the employee at the hearing were offers of gainful employment within his restrictions, and that, as of the date of the hearing, the employee=s actual earnings no longer accurately reflected the employee=s earning capacity. The compensation judge indicated that the employee had two weeks from the date that the Findings and Order were served and filed to accept or reject one of Sheldahl=s job offers, and that if the employee rejected the offers, his temporary partial disability benefits would be calculated upon an imputed wage of $462.40, based upon the multi process worker job offer, which was the second job offer presented to the employee, in August 1999. The employee appeals.
STANDARD OF REVIEW
On appeal, the Workers' Compensation Court of Appeals must determine whether "the findings of fact and order [are] clearly erroneous and unsupported by substantial evidence in view of the entire record as submitted." Minn. Stat. ' 176.421, subd. 1 (1998). Substantial evidence supports the findings if, in the context of the entire record, "they are supported by evidence that a reasonable mind might accept as adequate." Hengemuhle v. Long Prairie Jaycees, 358 N.W.2d 54, 59, 37 W.C.D. 235, 239 (Minn. 1984). Where evidence conflicts or more than one inference may reasonably be drawn from the evidence, the findings are to be affirmed. Id. at 60, 37 W.C.D. at 240. Similarly, findings of fact should not be disturbed, even though the reviewing court might disagree with them, "unless they are clearly erroneous in the sense that they are manifestly contrary to the weight of the evidence or not reasonably supported by the evidence as a whole.@ Northern States Power Co. v. Lyon Food Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975).
A decision which rests upon the application of a statute or rule to essentially undisputed facts generally involves a question of law which the Workers' Compensation Court of Appeals may consider de novo. Krovchuk v. Koch Oil Refinery, 48 W.C.D. 607, 608 (W.C.C.A. 1993).
The employee appeals the compensation judge=s finding that the employee=s actual earnings are not a true and accurate reflection of his earning capacity, and that an imputed wage of $462.40, representing earnings as a multi process worker for Sheldahl, more accurately reflects the employee=s current earning capacity. In order to be eligible for temporary partial benefits, the employee must establish a reduction in earning capacity which is causally related to the work injury. Arouni v. Kelleher Constr., Inc., 426 N.W.2d 860, 41 W.C.D. 42 (Minn. 1988); Morehouse v. Geo. A. Hormel & Co., 313 N.W.2d 8, 34 W.C.D. 314 (Minn. 1981); Einberger v. 3M Co., 41 W.C.D. 727 (W.C.C.A. 1989). "[T]emporary partial benefit awards are generally based on post-injury wages because post-injury wages are presumptively representative of an employee's reduced earning capacity. In appropriate circumstances, however, this presumption can be rebutted with evidence indicating that employee's ability to earn is different than the post-injury wage." Einberger, 41 W.C.D. at 739 (citations omitted).
The compensation judge found that the employee=s actual earnings were an accurate reflection of his earning capacity at the time the offers were originally made. At the hearing, Sheldahl=s representative indicated that while those job openings had been filled, the job offers were still available. The compensation judge found that these offered jobs were within the employee=s restrictions and that as of the date of the hearing, the employee=s actual earnings no longer accurately reflected the employee=s earning capacity. The compensation judge indicated that the employee had two weeks from the date that the Findings and Order were served and filed to accept or reject one of the employer=s job offers, and that if the employee rejected the offers, his temporary partial disability benefits would calculated upon an imputed wage based upon the multi process worker position for Sheldahl.
On appeal, the employee argues that the compensation judge improperly considered the job offers made at the time of the hearing. In determining whether the compensation judge properly considered the issue of the employee=s earning capacity based upon job offers made at the hearing, "the primary question becomes one of whether employee had adequate notice and opportunity to present evidence." Giving v. Hanna Mining Co., slip op. (W.C.C.A. June 28, 1989); see Kulenkamp v. Timesavers, Inc., 420 N.W.2d 891, 40 W.C.D. 869 (Minn. 1988); Rextraw v. F.M.C. Corp., slip op. (W.C.C.A. Feb. 15, 1989). Sheldahl and St. Paul argue that the issues to be addressed at the hearing were the employee=s earning capacity and the impact of the job offers in determining the employee=s earning capacity, whether at the time the offers were made or at the time of the hearing, and therefore that the employee had adequate notice and opportunity to be heard at the hearing.
We disagree. The issue before the compensation judge as presented in the petition to discontinue was the suitability of the job offers made on July 1, 1999, and August 18, 1999. The suitability of a job offer is generally evaluated considering the circumstances that exist at the time of the offer. See Kornell v. Hennepin County, 45 W.C.D. 429, 433 (W.C.C.A. 1991), summarily aff=d, (Minn. Nov. 26, 1991). Subsequent modifications do not retroactively re-characterize the job offer. Bertilson v. Boise Cascade Corp, 41 W.C.D. 980 (W.C.C.A. 1989), summarily aff=d, (Minn. May 15, 1989). Any job offers presented at the hearing were not properly before the judge. The employee had no notice of any additional offers or opportunity to review these offers. Further, we note that there was no vocational testimony regarding these jobs and no testimony or explanation of these jobs other than that presented by Sheldahl=s representative, and there was no on-site job analysis conducted on these jobs, nor was there any current medical report, such as a functional capacities evaluation, documenting that the employee=s current restrictions would enable him to perform these jobs. The employee was provided with no written job descriptions to review with his doctor or a QRC. Sheldahl=s representative testified that the multi process worker position had 15 primary job activities and that each of these activities had a functional job description from four to eight pages long, which was available in the human resources office upon request but which was not sent with the job offer. (T. 108.) These descriptions were still not provided at the hearing. Job offers this complicated most likely required QRC assistance and an on-site analysis in order to determine suitability.
In any event, the job offers made at hearing were not properly before the compensation judge. Therefore, we vacate the compensation judge=s findings numbers 19 and 20, regarding the employee=s current earning capacity, and order number 2 which would allow temporary partial disability benefits to be calculated upon an imputed wage.