TIMOTHY J. SHAUGHNESSY, Employee, v. DALBEC ROOFING, SELF-INSURED/BERKLEY RISK ADM=RS, Employer/Appellant.
WORKERS' COMPENSATION COURT OF APPEALS
AUGUST 10, 2000
TEMPORARY PARTIAL DISABILITY - EARNING CAPACITY. The self-insured employer did not rebut the presumption of a diminished post-injury earning capacity from the employee=s actual earnings where their only evidence was of a job they initially offered to the employee but for which they failed to hire him because he failed the drug test and which was no longer available during the period for which discontinuance of temporary partial disability benefits was sought.
Determined by Wheeler, C.J., Wilson, J., and Pederson, J.
Compensation Judge: Ronald E. Erickson
STEVEN D. WHEELER, Judge
The self-insured employer appeals from the compensation judge=s determination denying their request for discontinuance of temporary partial disability compensation. We affirm.
The employee, Timothy J. Shaughnessy, was born in 1951. After attending the tenth grade, the employee dropped out of school, but later obtained a GED. In 1968 the employee joined the army where he served as a cook. Following discharge from the army, the employee first performed railroad work and then worked on a river barge for about eight years. In 1987, the employee became enrolled as an apprentice roofer. (T. 10-11, 94-96.)
The employee began working for the employer, Dalbec Roofing, as an apprentice roofer sometime between 1989 and early 1991. On May 6, 1992 the employee sustained an admitted injury to the low back when he was lifting cut sections of roofing into a cart. The employee subsequently underwent surgery, in the form of a microdiscectomy at L5-S1 on the left side with removal of an extruded disc. (T. 11-13, 96-98; Exh. C.)
The employee began receiving rehabilitation services from a qualified rehabilitation consultant (AQRC@), Michael Willard, in July 1992, but was not released to return to work by his physician until February 1993. Medical restrictions at that time included no lifting over 25 pounds occasionally, and no balancing or ladder climbing. Bending, twisting and stooping were limited to occasionally and sitting, standing and walking were each limited to no more than four hours in an eight-hour work day. These restrictions prevented the employee from returning to work as a roofer. The employee began a job search with the assistance of his QRC and found work within his restrictions delivering flowers for Nedved=s Flowers. The employee began this job on a part-time basis at $5.85 per hour. Based on representations by the new employer, the employee anticipated that his overall hours would approach an average of 40 hours per week as a result of overtime Nedved=s projected might be available during holiday periods when flower orders were greater. Rehabilitation services were placed on a monitoring basis to see whether the employee would be able to perform this job. On May 18, 1993 the QRC recommended closing the rehabilitation file, offering the opinion that A. . . this position with Nedved Flowers is as good a job as [the employee] will reasonably be able to obtain.@ (Exh. E.)
On July 22, 1998 the employee=s attorney requested a rehabilitation consultation, which was approved by the employer. The consultation was performed on August 4, 1998 by Roxanne Tarrant, a QRC. Ms. Tarrant noted that the employee=s restrictions as defined by a 1994 functional capacities evaluation included bending/stooping, squatting, crouching and kneeling limited to occasional, lifting limited to 39 pounds and carrying to 51.4 pounds, bilaterally. There had not been significant advancement in salary or hours in the job at Nedved=s Flowers, and Ms. Tarrant recommended that the employee receive job search assistance to review the labor market to see if he could find a more suitable position. (Exh. E: 8/5/98 report.)
General ability testing was performed which showed that the employee read at an average level but had below average abilities in spelling and basic arithmetic. The employee scored somewhat above average in spacial perception, but significantly lower than average in general learning ability, verbal perception, numerical perception and form perception. He demonstrated difficulty in fine finger dexterity and in manual dexterity tasks. The QRC recommended that the employee continue working for Nedved=s Flowers while performing a part time job search with the assistance of a placement specialist. (Exh. E: 8/31/98 report.)
Beginning in September 1998 the employee=s QRC developed job leads for the employee and he submitted applications and interviewed with various potential employers, but was not offered any employment. In late November 1998 the employee informed his QRC that his current employer, Nedved Flowers, had offered him full-time work and a salary increase to $7.50 per hour. The employee began performing the full-time hours at the higher wage for Nedved=s on or about December 7, 1998, but continued to search for higher-paying work with the assistance of his QRC. (Exh. E: 11/30/98 - 1/25/99 reports.)
On December 10, 1998 the employer served and filed a notice of intent (ANOID@) to discontinue temporary partial disability benefits, alleging that the employee=s earnings were not indicative of his earning capacity, that the employee had voluntarily limited himself to part-time work, and that the employee was not cooperating with rehabilitation. The employee filed a request for an administrative conference on December 24, 1998. An administrative hearing was scheduled for January 22, 1999 but the outcome of the conference is not reflected in the judgment roll. The QRC=s reports suggest that the matter may have been continued. The employee filed an objection to the notice of discontinuance on January 11, 1999. However, the matter was stricken from the calendar at the Office of Administrative Hearings on March 31, 1999, subject to reinstatement, following a motion made by the employer as a result of the employee missing an independent medical examination. (Judgment Roll; Exh. E: 1/25/99 report.)
On January 25, 1999 the employee=s QRC opined that, given the employee=s physical restrictions, lack of transferable skills, prior heavy labor work history, and problems with his driving record, the position at Nedved=s was vocationally suitable if full time and if there were continuing evaluations of the employee by Nedved=s for potential yearly raises. However, the employee continued job search efforts with QRC assistance through May 1999 while working full-time at Nedved=s Flowers. (Exh. E.)
The employee attended an independent medical evaluation performed on behalf of the employer and insurer by Dr. William T. Simonet on April 26, 1999. Dr. Simonet opined that the employee could work full time with a fifty-pound lifting restriction. He based the need for this restriction 50 percent on the May 1992 work injury and 50 percent on pre-existing lumbar disc degeneration. (Exh. 1: Dep. Exh. 1.)
On May 10, 1999, the employer sent the employee a job offer as a shop yard assistant within the employee=s restrictions, at $16.61 per hour, the employee=s pre-injury wage rate. The employee met with the employer on May 21, 1999 to discuss the offer, and accepted the employment. The employer made the final hiring contingent on the employee=s successful completion of a drug screening test no later than May 26, 1999. The employee underwent testing on May 26, 1999 but the drug screening revealed traces of marijuana. The employer and insurer, accordingly, rescinded the offer of employment. (T. 63-75; Exhs. F, I.)
On July 16, 1999 the employer filed a petition seeking to discontinue temporary partial disability compensation on the basis that the wage rate associated with it=s job offer represented the employee=s earning capacity, and that any wage loss sustained by the employee from and after June 1, 1999 was Awholly personal and not related to the May 6, 1992 injury.@ On July 22, 1999 the employer withdrew its prior NOID in favor of the petition to discontinue. (Judgment Roll.)
In an attempt to qualify for the position with the employer, the employee underwent voluntary chemical dependency treatment through the Minneapolis Veterans= Affairs Medical Center and received a certificate of successful rehabilitation on September 30, 1999. He then requested that the employer reconsider him for the shop yard helper position, but the employer refused to reconsider its withdrawal of the job offer. Except for time off to attend the drug treatment program, the employee continued to work at Nedved=s Flowers through the date of hearing below, December 1, 1999. (T. 14, 15, 24, Exhs. L, M, N.)
The employer=s petition to discontinue came on for hearing before a compensation judge of the Office of Administrative Hearings on December 1, 1999. Following the hearing, a compensation judge denied the employer=s petition to discontinue temporary partial disability compensation after September 30, 1999. The self-insured employer appeals.
STANDARD OF REVIEW
In reviewing cases on appeal, the Workers= Compensation Court of Appeals must determine whether Athe 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 (1992). Substantial evidence supports the findings if, in the context of the entire record, Athey 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, A[f]actfindings are clearly erroneous only if the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed.@ Northern States Power Co. v. Lyon Food Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975). Findings of fact should not be disturbed, even though the reviewing court might disagree with them, Aunless 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.@ Id.
Question of law. The issues on appeal in this matter involve the interpretation and application of case law to undisputed facts. While this court may not disturb a compensation judge's findings of fact unless clearly erroneous and unsupported by substantial evidence in the record as a whole, Minn Stat. ' 176.421, subd. 1(3) (1992), a decision which rests upon the application of the law to undisputed facts involves a question of law which this court may consider de novo.
The employer sought discontinuance of temporary partial disability compensation on the basis that the wage rate associated with its job offer represented the employee=s earning capacity as of the date of the offer, and that any wage loss sustained by the employee from and after June 1, 1999 was Awholly personal and not related to the May 6, 1992 injury.@ The job offer was at a rate which represented no loss of earning capacity as compared to the wage rate effective for the 1992 work injury. It was undisputed that the duties of the offered job were within the employee=s medical restrictions. The employer contended that the cause of any lost earning capacity after this offer was made was the employee=s failure to obtain the job because he failed to meet the offer=s requirement of a negative finding on the drug screening test, which then supplanted his disability as a cause of lost earning capacity.
The compensation judge found that the employer=s union contract required that union employees who failed a drug screening test be given an opportunity to retain their employment by successfully completing chemical dependency treatment, and further found that the employee had never been formally terminated from employment by the employer following the injury, so as to be brought within the ambit of this contractual provision. The judge also noted that the employer had refused to reopen their offer to the employee after he voluntarily completed chemical dependency treatment in an effort to obtain the job. The employer objects on appeal both to the factual support for the findings regarding the applicability of the union contract to this employee and to the judge=s apparent reasoning that the employer should have reoffered the light duty job to the employee. The employer argues that the judge erred in considering these factors in determining whether to grant the discontinuance of benefits.
We agree with the appellants that the judge=s reasoning does not completely reflect consideration of the principles of law applicable in this case, but affirm the result on other grounds as the same result adheres upon considering the undisputed facts under the appropriate standard. As a result of the procedural posture of this case, and the nature of the issues and evidence presented, the appeal presents a single issue for our determination -- whether the self-insured employer=s causation theory is legally valid. There is sufficient evidence in the record to support a continuation of the employee=s entitlement to temporary partial disability benefits and we conclude that the legal defense raised by the self-insured employer is not tenable.
In order to show entitlement to temporary partial disability compensation, an employee must show (1) a physical disability, (2) an ability to work subject to the disability, and (3) an actual loss of earning capacity that is causally related to the disability. Morehouse v. Geo. A. Hormel & Co., 313 N.W.2d 8, 34 W.C.D. 314 (Minn. 1981); Dorn v. A.J. Chromy Constr. Co., 310 Minn. 42, 245 N.W.2d 451, 29 W.C.D. 86 (1976). An employee's entitlement to temporary partial disability benefits is based on the difference between the employee's wage on the date of injury and the wage the employee is able to earn in his or her partially disabled condition. Minn. Stat. ' 176.101.
Generally, post-injury wages are held to be presumed to represent the employee's reduced earning capacity. However, in appropriate circumstances, this presumption can be rebutted with evidence indicating the employee's ability to earn is different than the post‑injury wage. Schwan v. Fabcon, 45 W.C.D. 209, 211 (W.C.C.A. 1991). Rebuttal of this presumption takes a showing by the employer and insurer of "something more than a theoretical possibility" of a different position or wage. Patterson v. Denny's Restaurant, 42 W.C.D. 868, 875 (W.C.C.A. 1989).
Here, the employee sustained an admitted injury which, it is not disputed, resulted in disability and restrictions. Upon his initial release to return to work he conducted a job search with rehabilitation assistance resulting in employment at a significant wage loss with Nedved=s Flowers. It was anticipated that this job would provide the equivalent of full-time hours in an average year, but it apparently did not do so at first. The employee then resumed a part-time job search for several months, again with rehabilitation assistance, which did not result in other employment. In December 1998 the post-injury employer was ultimately able to provide full time work for the employee, and also provided a wage increase bringing the employee=s hourly post-injury wage more closely in line with the employee=s vocational placement targets as identified by his QRC, although still at a significant wage loss as compared to the wage rate effective for the employee=s date of injury. The employee continued to perform a part-time job search in an attempt to find higher-paying work which would further reduce the wage loss, but again was unable to find such work despite cooperating with placement efforts. At the hearing below, the employer did not seek to dispute that the employee had performed a reasonably diligent job search and cooperated with rehabilitation.
A disabled employee's earning capacity is the level of compensation afforded by employment the employee can do which is actually available to the employee in his or her employment community. Patterson v. Denny's Restaurant, 42 W.C.D. 868 (W.C.C.A.1989); Serra v. Hanna Mining Co., slip op. (W.C.C.A. Feb. 2, 1989). Earning capacity thus necessarily corresponds closely to an employee's value in the labor market in light of an employee=s age, experience, disabilities and restrictions. Tottenham v. Eaton Char‑Lynn Corp., 43 W.C.D. 71 (W.C.C.A. 1990). Accordingly, for the period between the 1992 work injury and the date of the employer=s offer in May 1999, the evidence establishes that, within his labor market, in the context of employment he was physically capable of performing in his disabled condition, the employee had sustained a loss of earning capacity causally related to his 1992 work injury. For that reason, the employer, until December 1998, voluntarily paid temporary partial disability benefits based on the employee=s flower shop earnings.
The employer asserts a legal theory that the wage rate associated with its job offer in May 1999 for work as a shop yard assistant rebuts the presumption that the employee=s actual post-injury wages from his job with Nedved=s Flowers continued to be representative of a reduction of earning capacity due to the effects of the employee=s injury and associated disability. The employer argues that if the employee had not failed the drug screening test on which their job offer was contingent, the employee would be working for them at no wage loss. Accordingly, they claim, any subsequent wage loss is due not to the effects of the employee=s injury, but only to his having used marijuana and to his consequent failure to pass the pre-employment drug screening. Evidence concerning the physical and economic suitability of this job, and about the reason the employee failed to obtain it, was all that was offered or relied upon to demonstrate that work providing greater post-injury earnings to the employee than the earnings provided by the job at Nedved=s Flowers was available to him in his disabled condition. No evidence was offered that there were other jobs also available to the employee which exceeded the wages earned at the flower shop.
We note, first, that the employee was never actually accepted for the shop yard assistant job as he failed to meet one of the conditions of hire - - that he had not used certain drugs, in this case marijuana, whether on or off the job, prior to the date of a pre-employment drug test. According to the testimony of Kevin T. Krolczyk, president of employer Dalbec Roofing, the job was offered conditioned on a successful result on pre-employment drug testing, which was scheduled promptly to prevent a potential employee from concealing recent drug use by postponing the test beyond the date that traces of drugs already in their system would no longer be detected. As a result of failing the drug test, the employee did not meet the employer=s conditions for hiring. As a result of the employee=s failure of this test, the employer permanently withdrew its job offer and would not consider the fact that the employee subsequently underwent treatment or was later able to pass a pre-employment drug test. Consistent with the employer=s hiring policies, this job was never again offered to the employee. (See T. 65, 68-70, 72, 74-65.)
As a general rule, a job which an employee seeks but for which the employee is rejected does not form a basis for calculation of post-injury earning capacity, and, while there are limited exceptions to this principle, this case does not fall into an exception to this general rule. The shop yard assistant job was effectively no different than any other post-injury job for which an employee applied but for which he or she was ultimately not hired due to failure to meet the stated or unstated hiring prerequisites of the potential employer.
This court has repeatedly emphasized that where an employer seeks to rebut the earning capacity imputed from actual post-injury earnings by claiming that an employee can earn more in other work, there must be a showing that such work is actually available to the employee on a continuous basis during the period the employee was claiming the benefits. See, e.g., Tottenham, supra, 43 W.C.D. 71; Thyer v. Dallas Stars Hockey Club, slip op. (W.C.C.A. Aug. 4, 2000). Here, the discontinuance was sought for a period specifically beginning from and after June 1, 1999. As of that date, the evidence incontrovertibly establishes that the shop yard assistant job was absolutely and permanently unavailable to the employee. As such, that job cannot form the basis for rebuttal of the employee=s imputed post-injury earning capacity. Nor does the shop yard assistant job itself independently form a sufficient basis for an alternative imputation of the employee=s post-injury earning capacity. Tottenham, supra, 43 W.C.D. 71.
The employee in this case demonstrated an established post-injury loss of earning capacity, which was not rebutted by the evidence of a job for which the employer elected not to hire the employee and which was no longer available during the period for which discontinuance was sought. Accordingly, we affirm the denial of the request for discontinuance of temporary partial disability benefits after September 30, 1999, and his award of benefits is affirmed.
 The Department of Labor and Industry file for this employee=s injury discloses that there is a motion pending before the Office of Administrative Hearings (AOAH@) by the employer for a future credit for the cost of the failed medical examination, which presumably will be taken up by OAH on the resumption of OAH jurisdiction over the case following this appeal.
 We note, for example, that there was no contention by the employer that the employee=s marijuana use was undertaken deliberately in order to effect a constructive refusal of its job offer, nor does anything in the evidence suggest this conclusion. It appears that the employee=s use of marijuana had predated the time at which he was first informed that a job offer would be contingent on successfully passing a pre-employment drug screening test.
 Even if one assumes that the employee=s situation was akin to being terminated for misconduct, he would still be entitled to benefits after some period of time. Marsolek v. Geo. A. Hormel Co., 438 N.W.2d 922, 41 W.C.D. 964 (Minn. 1989); Kurowski v. Kittson Memorial Hosp., 396 N.W.2d 827, 39 W.C.D. 169 (Minn. 1985).
 The compensation judge suspended the employee=s TPD benefits from July 16, 1999 to September 30, 1999, apparently as a penalty for having failed the drug test. This disposition was not appealed and our decision will have no effect on benefits during this period.