TODD HOLT, Employee, v. FORD MOTOR CO., SELF-INSURED, Employer/Appellant, and PAR, INC., Intervenor.
WORKERS’ COMPENSATION COURT OF APPEALS
APRIL 10, 2009
No. WC08-232
HEADNOTES
WAGES - IRREGULAR. Where the employee’s earnings had been irregular in both the 26-week pre-injury period and during the year prior to his injury, where there was no evidence that the employee had been guaranteed 40 hours of work a week and no evidence to establish how many hours or how many days the employee typically worked per week, and where the employee gave only a “ballpark estimate” of his hourly wage on the date of injury, the compensation judge erred in calculating the employee’s weekly wage by multiplying the employee’s hourly estimate by 40, especially given that both of the parties had based their wage calculations on the employee’s pay in the 26-week pre-injury period.
TERMINATION OF EMPLOYMENT - VOLUNTARY TERMINATION; TEMPORARY PARTIAL DISABILITY - EARNING CAPACITY;. Where the employee had permanent restrictions and had been working at a job inconsistent with those restrictions when he elected to accept the employer’s buyout offer, he was entitled to temporary partial disability based on actual earnings in his subsequent employment. Wage loss claims for employees who accept retirement incentives or buyouts are not analyzed differently from claims involving employees who voluntarily terminate their employment for other reasons.
REHABILITATION - FEES & EXPENSES. The intervening rehabilitation provider was not entitled to payment of expenses related solely to the litigation, in this case, expenses related to preparing the petition for intervention.
Affirmed in part, modified in part, and reversed in part.
Determined by: Wilson, J., Pederson, J., and Rykken, J.
Compensation Judge: Cheryl LeClair-Sommer
Attorneys: Joseph J. Osterbauer and Kirsten M. Tate, Osterbauer Law Firm, Minneapolis, MN, for the Respondent. Kathryn Hipp Carlson, Miller & Carlson, Minneapolis, MN, for the Appellant.
OPINION
DEBRA A. WILSON, Judge
The self-insured employer appeals from the compensation judge’s decision as to weekly wage, her award of temporary partial disability benefits, and her award of rehabilitation expenses. We reverse the judge’s finding as to weekly wage, affirm the award of temporary partial disability benefits, as modified to reflect our determination as to weekly wage, and affirm the award of rehabilitation expenses, except those expenses related to litigation.
BACKGROUND[1]
The employee began working on the assembly line of Ford Motor Company [the employer] in 1992. In 1995 and again in 2004, he sustained right shoulder injuries arising out of and in the course of his employment. He underwent surgery to treat his work-related shoulder condition after the first injury and, in October of 2005, a second procedure performed by Dr. Daniel Buss. Dr. Buss subsequently imposed permanent restrictions, limiting the employee’s lifting, reaching, and arm use above shoulder level.
The employee returned to what was classified as light-duty work with the employer after his second surgery, gradually increasing his hours over time. At a prior hearing in this matter, he testified that the employer was not fully able to accommodate his restrictions and that he experienced increased right shoulder symptoms after six hours of work. He also indicated that he had been assigned to perform only one job, contrary to medical advice to rotate jobs on an every-other-day basis.
The plant at which the employee worked was expected to close, and the employer offered plant workers a buyout program in the fall of 2006. The employee accepted the buyout and worked his last day for the employer on December 14, 2006. Several months later, in March of 2007, he obtained a job as a car salesperson for Apple Valley Ford/Lincoln Mercury, earning about $450.00 per week, less than he had earned in his pre-injury job at the employer. As it turned out, the employer’s plant did not shut down, contrary to expectations.
The matter initially came on for hearing before a compensation judge in early May of 2007. The sole issue at that time was whether the employee was a “qualified employee” for purposes of entitlement to rehabilitation assistance.[2] The compensation judge ruled in the employee’s favor, and the employer appealed from the judge’s determination, arguing that substantial evidence did not support the judge’s finding that the employee could not reasonably be expected to return to suitable gainful employment with the date-of-injury employer. In this regard, the employer contended that the employee was not working for the employer only because he had accepted the employer’s buyout package.
In our decision on appeal, this court affirmed the compensation judge’s decision that the employee was eligible for rehabilitation services, concluding that the employee was a qualified employee because he continued to have restrictions, he was not able to perform his pre-injury job as a result of those restrictions, the light-duty work he had been performing at the employer was not consistent with his restrictions, and he could not reasonably be expected to return to suitable, gainful employment with the employer due to the effects of his injury. We also expressly rejected the employer’s contention that an employee who accepts a buyout should be treated differently, for purposes of rehabilitation benefit eligibility, from an employee who voluntarily terminates employment for other reasons. Holt v. Ford Motor Co., No. WC07-181 (W.C.C.A. Dec. 21, 2007).
In the fall of 2007, the employee obtained a job, through a temporary agency, at Marshall Manufacturing, performing precision measuring for $17.00 per hour. He subsequently became a permanent employee of this company in January 2008, with a raise to $17.25 per hour. In June of 2008, the temporary agency advised the employee of a job opening at a company called Napco International, which was thought to have more opportunity for higher pay and advancement. The employee took that position, earning $18.00 an hour to start. However, after several weeks, he was terminated by Napco due to that employer’s dissatisfaction with his work.
The employee continued to receive rehabilitation assistance through the date of the most recent hearing. Much of the assistance was provided by QRC interns, and some mistakes were made. For example, some rehabilitation records indicate, erroneously, that the employee had only been earning $10.25 per hour from his jobs at Marshall Manufacturing and/or Napco.
The employee filed a claim petition alleging entitlement to temporary partial disability benefits as a result of his 2004 right shoulder injury, and the matter came on for hearing before a compensation judge on July 15, 2008. Issues included the employee’s weekly wage on the date of the 2004 injury; whether the employee had a reduction in earning capacity, for purposes of temporary partial disability benefit eligibility, during the periods of his employment following his termination from the employer; and whether rehabilitation services provided by PAR, Inc., from and after October 1, 2007, were compensable. PAR, Inc., intervened in the matter to recover payment for services, and, at hearing, the employer agreed to pay for services rendered by PAR prior to October 1, 2007, the date the employee began working for Marshall Manufacturing.
Evidence submitted at hearing included testimony by the employee and by QRC Leon Olson from PAR, Inc., the supervisor of the QRC interns who had been working with the employee; rehabilitation records; and a wage record provided by the employer. Both the employee and the employer based their wage calculations on the employee’s earnings in the 26-week pre-injury period, but they disagreed about whether to include overtime and how to treat certain weeks in which the employee received some pay but had no “base” earnings.
In a decision issued on September 15, 2008, the compensation judge concluded that the employee’s weekly wage should be calculated by multiplying an hourly rate of $26.10 by 40 hours, resulting in a weekly wage figure of $1,044.00. The judge further concluded that the employee was entitled to temporary partial disability benefits for the periods claimed and that the disputed rehabilitation services were compensable. The employer 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 (2008). 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 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).
DECISION
1. Weekly Wage
Pursuant to Minn. Stat. § 176.011, subd. 18, an employee’s “weekly wage”
is arrived at by multiplying the daily wage by the number of days and fractional days normally worked in the business of the employer for the employment involved. If the employee normally works less than five days per week or works an irregular number of days per week, the number of days normally worked shall be computed by dividing the total number of days in which the employee actually performed any of the duties of employment in the last 26 weeks by the number of weeks in which the employee actually performed such duties. . . .
The “daily wage” provision reads, in relevant part, as follows:
“Daily wage” means the daily wage of the employee in the employment engaged in at the time of injury . . . . If the amount of the daily wage received or to be received by the employee in the employment engaged in at the time of injury was irregular or difficult to determine, or if the employment was part time, the daily wage shall be computed by dividing the total amount of wages, vacation pay, and holiday pay the employee actually earned in such employment in the last 26 weeks, by the total number of days in which such wages, vacation pay, and holiday pay was earned . . . . If the employee worked or earned less than a full day’s worth of wages, vacation pay, or holiday pay, the total amount earned shall be divided by the corresponding proportion of that day.
Minn. Stat. § 176.011, subd. 3.
In the present case, the wage record submitted by the employer establishes that the employee’s weekly earnings varied considerably in both the year and the 26-week period preceding his July 27, 2004, injury.[3] However, there is no evidence in the record to establish how many days the employee actually worked. Similarly, the employer’s wage record does not include the employee’s hourly wage, and there are earnings categories in that record that were not explained by other evidence, such as a category entitled “other” and a COLA adjustment that varied nearly every week.
Both the employer and the employee based their proposed wage calculations on the employee’s gross earnings in the 26-week pre-injury period. The employee, however, sought to exclude three weeks from that calculation on grounds that the earnings shown for those weeks, categorized on the wage record as “other” or vacation pay, did not accurately reflect earnings for work performed or vacation taken that week. The employee also sought to include overtime pay. The employer, on the other hand, sought to include the weeks in which the employee received the “other” and vacation pay but sought to exclude overtime. Accordingly, the employee was asking for a weekly wage finding of $858.81, while the employer contended that the employee’s weekly wage was $763.18.
The compensation judge rejected both of the wage figures proposed by the parties and also the use of any kind of 26-week averaging formula. Instead, the judge arrived at her wage determination by multiplying an hourly wage of $26.10 by 40 hours per week, resulting in a weekly wage determination of $1,044.00, nearly $200.00 a week more than the employee had claimed. The judge did, however, conclude that overtime pay should not be included because it was not regular or frequent as specified by statute. See Minn. Stat. § 176.011, subd. 18.
On appeal, the employer argues that the judge erred in ignoring the employee’s earnings history and by basing her wage calculation on the employee’s testimony about his hourly wage, as multiplied by 40, given that the employee’s hourly wage varied and given that the employee had never been guaranteed 40 hours of work per week. The employer also argues that the parties had agreed that the “irregular earnings” formula should be used to arrive at the appropriate wage. We agree that the judge’s decision is clearly erroneous and unsupported by substantial evidence.
As previously indicated, the earnings record submitted by the employer did not contain the information necessary to determine how many days or hours the employee worked per week prior to his injury. While it is true that the employee testified that he had been classified, “generally,” as a full-time employee, he also testified that it was “typical” to have days that he did “not work” or “[was] sent home,” and, again, the earnings record for the year prior to his injury illustrates that his weekly earnings varied significantly. Moreover, when asked, “do you remember your hourly wage at the time [of the 2004 injury],” the employee replied only,
A. I want to say it was like in the ballpark of $26.10 an hour in 2004.
This testimony - - the only specific evidence as to hourly wage in the record - - is hardly sufficient to justify using the $26.10 figure as the basis for a weekly wage determination, especially, again, in view of the substantial variations in the employee’s actual weekly earnings. In fact, in his closing argument, the employee’s own attorney acknowledged that “we don’t have the exact hourly earnings.”
The object of a wage determination is to arrive at a fair approximation of the employee’s earning capacity as impaired or destroyed by a work-related injury. Bradley v. Vic’s Welding, 405 N.W.2d 243, 39 W.C.D. 921 (Minn. 1987); Knotz v. Viking Carpet, 361 N.W.2d 872, 37 W.C.D. 452 (Minn. 1985). In the present case, the judge’s decision to multiply the employee’s estimate of his hourly wage by a supposed 40-hour work week flies in the face of the employee’s admission that it was “typical” in his employment to be sent home or told not to work. Moreover, the judge’s calculation is clearly contrary to the evidence establishing the employee’s actual earnings during the year prior to his injury. We would also note that, because both parties based their wage calculations on a 26-week averaging method, the employer had no reason to introduce evidence to try to refute the employee’s “ballpark” estimate of his hourly wage. The only disputes were over inclusion of overtime and the employee’s pay during three specific weeks.
Because the record as a whole clearly establishes that the employee’s actual earnings were very irregular, it is most appropriate to base calculation of the employee’s weekly wage on his earnings during the 26-week pre-injury period. See Minn. Stat. § 176.011, subd. 3 and 18. In fact, it seems to us that the averaging method was designed expressly for workers such as the employee. Given that there was no evidence regarding the number of days worked, the method used by both parties - - that is, dividing the employee’s total earnings by the number of weeks worked - - most accurately represents the employee’s earning capacity on the date of injury. The only other wage issue remaining on appeal is how to treat the three weeks in which the employee had only earnings characterized as “other” or, in one case, vacation, on the employer’s wage record.
The employee could not recall just what might be represented by the “other” pay for the two weeks in question, and the employer offered no explanation, either. However, the employee apparently did not work at all and received no “base pay” during those two weeks. The employee testified that the pay in question was in “no way” reflective of what he earned for a typical week of work. Given the lack of evidence as to the reason for the “other” pay in those two weeks[4] or even evidence establishing that the “other” pay qualified as a wage attributable to those weeks, as opposed to some kind of reimbursement, we conclude that those two weeks should be excluded from consideration. We further conclude, however, that the disputed week of vacation pay should be included in the wage calculation. While we acknowledge that the employee earned less than usual that week, use of a 26-week averaging method in this case is necessary precisely because the employee’s weekly earnings varied. To simply exclude weeks in which the employee earned less than average would unrealistically inflate his wage, and the employee has offered no persuasive reason to treat that week differently from other weeks in which he received paid vacation.[5] We therefore hold that the employee’s weekly wage on the date of injury was $818.02.
2. Temporary Partial Disability Benefits
In order to establish entitlement to temporary partial disability benefits, an employee must show that he has a work-related disability, that he is able to work subject to that disability, and that he has a loss of earning capacity causally related to the disability. Krotzer v. Browning-Ferris/Woodlake Sanitation Serv., 459 N.W.2d 509, 43 W.C.D. 254 (Minn. 1990); Dorn v. A.J. Chromy Constr. Co., 310 Minn. 42, 245 N.W.2d 451, 29 W.C.D. 86 (1976). An employee’s post-injury wage is presumptively representative of his reduced earning capacity. Roberts v. Motor Cargo, Inc., 258 Minn. 425, 104 N.W.2d 546, 21 W.C.D. 314 (1960). That presumption may be rebutted, however, by evidence establishing that the employee’s earning capacity is different than his actual earnings or that his loss of earnings is not causally related to his disability. See, e.g., Borchert v. American Spirits Graphics, 582 N.W.2d 214, 215, 58 W.C.D. 316, 318 (Minn. 1998).
In the present case, it is undisputed that the employee has permanent restrictions as a result of his work-related shoulder injuries. In her finding on the issue of earning capacity, the judge concluded as follows:
The employee sustained a reduction in earning capacity as a result of the work injuries of July 27, 2004, and March 2, 1995 to entitle him to temporary partial disability benefits from March 16, 2007 through June 9, 2007 and October 1, 2007 through June 22, 2008. No option exists to return to work for Ford Motor Co. to a position within the physical restrictions. The actual earnings presumptively represent the earning capacity and no evidence was submitted to rebut that presumption. With the employee’s vocational background, education, age, and experience, the physical restrictions are a substantial contributing factor to the reduction in earning capacity.
In her memorandum, the judge further noted that the employee’s last position prior to taking the buyout was not within his restrictions and that the employee had decided to take the buyout in part because he felt that “the employer was not cooperative in offering work within [the employee’s] physical limitations.” The judge went on to note that the employee had obtained work following his termination from the employer and that the employee had continued to seek higher-paying employment even while working, and she concluded that the presumption of earning capacity raised by the employee’s actual earnings had not been rebutted.
The employer’s sole argument on appeal is that the employee’s wage loss was due to his decision to take the buyout, not to his work injury. The argument has no merit whatsoever. As previously noted, the compensation judge concluded that the job the employee had been performing prior to his termination was not consistent with his restrictions, and her decision to this effect is amply supported by the record. Moreover, the employer offered no evidence to support the conclusion that the employer could have or would have provided physically appropriate work for the employee had he not taken the buyout. Furthermore, in our last decision in this matter, we found no reason to distinguish workers who accept buyouts from workers who voluntarily quit for other reasons, at least for purposes of evaluating eligibility for rehabilitation assistance. Holt v. Ford Motor Co., No. WC07-181 (W.C.C.A. Dec. 21, 2007); see also Stever v. Ford Motor Co., No. WC07-206 (W.C.C.A. Mar. 19, 2008) (“There is no basis for distinguishing an employee’s voluntary termination from work after accepting an incentive package from other voluntary termination situations”). Finally, in another case, Boutto v. U.S. Steel Corp., No. WC06-288 (W.C.C.A. July 18, 2007), we held that the employee’s acceptance of an early retirement incentive - - while the employee was still able to perform his post-injury job with the employer - - had no relevance to the question of whether the employee’s subsequent wage loss was causally related to his work injury, and we affirmed the compensation judge’s wage loss benefit award. Given that the employee in the present matter was not working within his restrictions when he took the buyout, he has an even stronger claim for benefits.
Because the record in this matter amply supports the judge’s decision that the employee has a loss of earning capacity causally related to his work injury, and because the judge properly concluded that the employer did not rebut the presumption of earning capacity raised by the employee’s actual earnings, we affirm the judge’s determination that the employee is entitled to temporary partial disability benefits based on actual post-injury earnings, but we modify the award to reflect our decision as to the employee’s weekly wage.
3. Rehabilitation Expenses
In her finding on the issue of disputed rehabilitation services, the compensation judge wrote as follows:
The rehabilitation services at PAR, Inc., from October 1, 2007 through the date of the hearing are reasonable and necessary. The employee has sustained a loss of earning capacity as a result of the work injury and requires rehabilitation services to seek a position as close as possible to the preinjury wage. PAR, Inc. has monitored the employment situation, which has been. . . . both in temporary and permanent positions. Continued rehabilitation services were necessary despite the employment since the employee was attempting a position at [Napco] where he lacked the training and experience. Ultimately, the employee was not able to continue employment is this position. PAR, Inc., has provided job leads and vocational counseling to assist in the return to work process.
In their appeal from the compensation judge’s award of expenses for rehabilitation services, the employer argues in part that the rehabilitation plan should have been closed within 30 days of October 1, 2007, the day the employee began “physically, economically, and vocationally suitable employment” with Marshall Manufacturing. However, at that point, the employee’s position was only temporary, and it was reasonable for rehabilitation providers to monitor the employee’s employment status. The employer also argues that many subsequent rehabilitation activities, such as investigation of retraining, for example, were not reasonable and necessary. This argument has somewhat more merit, and we too are troubled by the fact that, at least for some period, continued rehabilitation services were apparently premised on the assumption that the employee was earning only $10.25 in his job with Marshall Manufacturing, when he was earning considerably more, and that the employee had been earning $28.00 an hour in his job with the employer, when he had been earning at least somewhat less. Certainly we share the employer’s concerns about the efficiency of the services provided here. However, under the particular circumstances of this case, we decline to overturn the judge’s award.
First, and perhaps most importantly, the employer challenged very few specific charges by the rehabilitation firm at hearing, choosing to argue instead that all claims for services rendered after October 1, 2007, should simply be denied. At least some rehabilitation assistance was warranted during the period in question, for the reasons articulated by the judge, and, given the employer’s posture at hearing, it was not the compensation judge’s responsibility to analyze the compensability of every specific service.
We do, however, agree that the charges related to PAR’s intervention in the proceedings are not the employer’s responsibility. Generally, services that do not advance the rehabilitation plan but rather are merely related to the litigation are not compensable. See Gluba v. Bitzman & Ohren Masonry, No. WC06-124 (W.C.C.A. Sept. 13, 2006); see also Kavula v. MAACO Auto Painting and Body Shop, slip op. (W.C.C.A. Feb. 3, 1994); Chrz v. Sacred Heart Hospice, slip op. (W.C.C.A. Feb. 13, 1990); Mattson v. Don’s Leather Cleaning, slip op. (W.C.C.A. May 1988). Intervenors are generally liable for their own litigation expenses. See id. We therefore reverse the judge’s award of the charge related to preparing the petition for intervention, but we affirm the remainder of the rehabilitation expense award.
[1] Some of the background information in this decision was taken from a prior opinion by this court, Holt v. Ford Motor Co., No. WC07-181 (W.C.C.A. Dec. 21, 2007).
[2] The employee, who had received rehabilitation assistance through the date of his termination by the employer, was also seeking a change of QRC. The employer agreed at hearing that, if the employee was found to be entitled to rehabilitation services, QRC John Richardson could work as his QRC.
[3] Even excluding the weeks the employee contends should not be considered for wage calculation purposes, the employee earned as little as $504.99 and as much as $1,396.36 per week in the 26-week pre-injury period. In the calendar year prior to the injury, the employee earned as little as $207.84 and as much as $1,847.04.
[4] The employee also received “other” pay for some weeks in which he also received base pay, but there is no argument about the payments in those weeks.
[5] The vacation pay at issue was $261.00.