JAYSUN LARSON, Employee, v. PDI FOODS d/b/a MCDONALD’S and AMERICAN FAMILY INS., Employer-Insurer/Appellants, and TWIN CITIES SPINE CTR., BLUE CROSS BLUE SHIELD OF ILL., FIRSTLIGHT HEALTH SYS., MINN. DEP’T OF HUMAN SERVS./BRS, and CAMBRIDGE MED. CTR., Intervenors.

WORKERS’ COMPENSATION COURT OF APPEALS
FEBRUARY 18, 2014

No. WC13-5628

HEADNOTES:

WAGES.  The compensation judge’s conclusion that the employer and insurer are not allowed to reduce the employee’s weekly wage in effect on the date of injury based on a post-injury change in wage from salary to hourly is affirmed where Minnesota Statutes § 176.101, subds. 1.(a) and 2.(a) and related case law establish that the benefits calculated are based on the wage at the time of the injury.

Affirmed.

Determined by:  Hall, J., Milun, C.J., and Wilson, J.
Compensation Judge:  Jane Gordon Ertl

Attorneys:  Lucas V. Cragg, Teplinsky Law Group, Minneapolis, MN, for the Respondent.  Christine L. Tuft, Arthur, Chapman, Kettering, Smetak & Pikala, Minneapolis, MN, for the Appellants.

 

OPINION

GARY M. HALL, Judge

The employer and insurer appeal from the compensation judge’s finding that the employee’s average weekly wage on his date of injury determined his average weekly wage.  We affirm.

BACKGROUND

The employee, Jaysun Larson, was working as a manager at the Hinckley location for the employer herein, PDI Foods (d/b/a McDonald’s Restaurant), on January 2, 2011.  That day, the employee fell and sustained injuries to his neck, upper back, and shoulder area.  The employee reported the injury and completed a first report of injury.  The employee underwent medical treatment, but he continued to work.  He was transferred to the Pine City McDonald’s on February 1, 2011.  The employee testified that he continued to have ongoing problems, including constant neck pain and shoulder pain.  The employee eventually underwent surgery and, as a result, incurred periods of temporary total and temporary partial disability.

The employer and insurer denied that the employee sustained anything more than a temporary injury in January 2011, and the case came on for hearing before Compensation Judge Jane Gordon Ertl on July 2, 2013.  Among other things, the compensation judge was asked to decide whether the employee’s injury was temporary in nature and whether the employee was entitled to temporary total and temporary partial disability amounts as claimed.

At the outset of the hearing, the employer and insurer indicated that they were disputing the amount of the employee’s average weekly wage and the calculations of the wage loss claim as submitted by the employee.  At the time of the employee’s injury, he was being paid a salaried amount.  About three months after the employee’s injury, however, the employer changed the employee’s wage payments from a salaried amount to an hourly amount following a company-wide change.

The employer and insurer submitted exhibits outlining two different average weekly wage calculations:  one based on the employee’s salaried wage and the other based on the employee’s hourly wage.  They calculated the employee’s average weekly wage during the period before his injury at $732.31.[1]  The employer and insurer calculated the employee’s average weekly wage after the change to hourly payments at $500.55.  During her opening arguments, counsel for the employer and insurer argued that “the average weekly wage should actually be based upon the hourly wage that [the employee] had when he switched his jobs and not based upon the average weekly wage prior to his date of injury because the wage based upon his hourly wage when he switched is actually a fair approximation of what his wage loss would be because he wouldn’t be earning the earnings he had before when he was a salaried employee.”

After opening statements, the parties went off the record to discuss possible stipulations, including an average weekly wage.  When the parties were back on the record, counsel for the employer and insurer indicated that “we have a stipulation as far as average weekly wage.”  Counsel for the employee then indicated that the parties were stipulating to an average weekly wage of $745.88.

At the conclusion of the hearing on July 2, 2013, the compensation judge agreed to leave the record open for recalculation of the employee’s claims based on the stipulated average weekly wage.  The compensation judge also confirmed that she would review a new amended exhibit and review calculation of the employee’s claims.

On July 12, 2013, the employee’s attorney sent a letter to the compensation judge confirming that the parties had stipulated at the hearing to an average weekly wage of $745.88.  However, he indicated that counsel for the employer and insurer informed his office that they would be alleging an alternative average weekly wage of $505.55.

Counsel for the employer and insurer also submitted a letter to the compensation judge on July 12, 2013, stating that “[a]s I argued at the hearing, however, there are two potential AWWs:  1) One based upon the 26 week period prior to the employee’s date of injury ($745.88); and 2) The other based upon the employee’s AWW following his change from being a salaried employee to an hourly employee which was company-wide ($500.55).”  The employer and insurer were arguing that the correct AWW should be $500.55 because “it represents what would be a fair approximation of the employee’s wage loss should you find the employee’s ongoing condition to be work-related.”

In a subsequent letter, counsel for the employee argued that the parties had agreed to utilize an average weekly wage of $745.88 and that said agreement should be controlling in terms of average weekly wage.  The employer and insurer responded, arguing that both alternative calculations were introduced into evidence and that they “only stipulated to the AWW based on the 26 week period IF that is the AWW [the compensation judge chooses] to adopt.”

The compensation judge awarded the employee’s claims and ordered that the employer and insurer pay temporary total and temporary partial disability as well as the various medical expenses at issue.  The compensation judge also determined that “the employee’s average weekly wage on his date of injury determines his average weekly wage for purposes of his workers’ compensation benefits in this case.”  In her memorandum of law, the compensation judge noted that although the employer changed wage payments to an hourly system three months after the date of injury, this change was not controlling on the issue of average weekly wage at the time of the injury.  Therefore, she determined that the parties’ stipulated average weekly wage of $745.88 on the January 2011 date of injury was controlling.

STANDARD OF REVIEW

In reviewing cases 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.  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, “[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 Foods 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, “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.”  Id.

“[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).

DECISION

On appeal, the employer and insurer argue that they only agreed to a $745.88 average weekly wage if the compensation judge determined that the employee’s average weekly wage should be calculated based on the pre-injury wage and not on the employee’s wage following the company-wide, post-injury change to hourly payments.  Thus, the employer and insurer argue that it was error for the compensation judge to find that the parties had stipulated to the $745.88 average weekly wage.  We disagree.  The employer and insurer did stipulate at hearing, and in their post-hearing correspondence, that the $745.88 average weekly wage would be correct if the compensation judge based her wage calculations on the 26-week period before the employee’s injury.

The employer and insurer further argue that the compensation judge erred in finding that the $745.88 wage was controlling and that the employee’s average weekly wage should have been calculated based on the employee’s post-injury change from salary to hourly wages.  According to the employer and insurer, that calculation would result in an average weekly wage of $500.55.

Minn. Stat. § 176.101, subds. 1.(a) and 2.(a) provide that temporary total and temporary partial disability benefits are based on the weekly wage of the employee “at the time of injury.”  “Weekly wage at the time of injury is a relatively concrete quantity, and the statutory method for measuring weekly wage for purposes of temporary partial compensation and for the general purpose of fixing the benefit rate is the same.”  Jellum v. McGough Constr. Co., Inc., 479 N.W.2d 718, 719, 46 W.C.D. 182, 183 (Minn. 1992) (citing Minn. Stat. § 176.011, subds. 3 and 18).

The employer and insurer argue that the weekly wage in effect on the date of injury here is not a reliable measure of the employee’s future earning power.  Rather, they argue that the lower wage calculated after the change to hourly wages would have been a more reliable measure of the employee’s future earning power.

In support of their position, the employer and insurer cite to the “object” of wage determination, which is to “arrive at a fair approximation of [the employee’s] probable future earning power which has been impaired or destroyed because of the injury.”  Knotz v. Viking Carpet, 361 N.W.2d 872, 874, 37 W.C.D. 452, 455 (Minn. 1985) (quoting Sawczuk v. Special Sch. Dist. No. 1, 312 N.W.2d 435, 34 W.C.D. 282 (Minn. 1981)).

Sawczuk, Knotz, and their progeny deal with the computation of the employee’s weekly wage during the period of time leading up to the date of injury.  See also Bradley v. Vic’s Welding, 405 N.W.2d 243, 39 W.C.D. 921 (Minn. 1987) (denying inclusion of overtime in the computation of the weekly wage leading up to the employee’s date of injury because it did not realistically reflect the employee’s future wage loss).  These cases, however, do not allow a reduction of an employee’s average weekly wage because of a post-injury change.  See Abbett v. Superwood Corp., 50 W.C.D. 469, 470 (W.C.C.A. 1994).

In Abbett, the employee’s union contract was renegotiated after the date of injury, resulting in a lower wage that became effective after the date of injury.  50 W.C.D. at 469-70 (W.C.C.A. 1994).  The employer attempted to discontinue ongoing temporary partial disability benefits, arguing that the employee’s average weekly wage should be recalculated based on his current lower earnings pursuant to the new union contract.  Id. at 470.  As in the present case, the employer was arguing that the weekly wage in effect on the date of injury was not an accurate measure of the employee’s future earning power that had been impaired because of his injury.  Id.  This court rejected that argument, noting that Minn. Stat. § 176.101 “requires that compensation be based on the employee’s weekly wage at the time of injury.”  Id. (citing Kerkow v. Stang Concrete Co., 46 W.C.D. 108 (W.C.C.A. 1991)).  This court also noted that cases such as Knotz and Bradley “do not stand for the proposition that the employee’s weekly wage may be reduced because of some development occurring after the injury.”  Id.  Accordingly, we affirmed the compensation judge’s conclusion that the employee’s benefits must be based on his weekly wage on the date of injury.  Id. at 471.

The employer and insurer also cite Raghubir v. Walker Methodist Health Ctr., slip op. (W.C.C.A. Aug. 17, 2006); Lang v. Nash-Finch Co., 42 W.C.D. 1228 (W.C.C.A. 1990), summarily aff’d (Minn. June 26, 1990); and Johnson v. Northwest Airlines, Inc., 30 W.C.D. 311 (1978) in support of their position that the post-injury change in status from a salary to hourly wages should result in a decreased calculation of average weekly wage.

In Lang, the employee filed a discrimination/equal pay suit against the employer, and the parties entered into a settlement with regard to that claim.  42 W.C.D. at 1231-32.  Based on the stipulation, a state district court judge ordered that the employee’s salary should be retroactively increased to the hourly rate of $9.59 ($383.60 a week).  Id. at 1232.  In the subsequent workers’ compensation proceeding, the compensation judge also determined that the employee’s average weekly wage should be based on the increased rate of $9.59.  Id.  On appeal, the employer and insurer argued that the compensation judge committed an error of law because she did not base the employee’s weekly wage on the wage that the employee actually received at the time of injury.  Id.  This court, however, affirmed the increased wage that had been awarded by the district court because it represented “a fair approximation of [the employee’s] probable future earning power.”  Id. (citing Knotz, 361 N.W.2d at 874, 37 W.C.D. at 455).

In Raghubir, slip op., the employee changed from part-time to full-time status one week before sustaining a work injury.  Citing Knotz, this court affirmed the compensation judge’s decision to calculate the employee’s wage based entirely on a full-time schedule because it would be most nearly representative of the employee’s probable future earning power.  Again, as in cases such as Knotz and Sawczuk, the change in the employee’s status took place before the date of injury and affected the wages calculations at the time of injury.

In Johnson, the employer and the employee’s union entered into an agreement, subsequent to the employee’s date of injury, which retroactively raised the employee’s wage rate during the time period before the employee’s date of injury.  30 W.C.D. at 312.  This court held that the employee’s wage at the time of injury included the retroactive pay raise because it would have been applicable to the period prior to the injury, but for the protracted negotiations.  Id. at 313.  This court could “find no reason to discriminate against an employee who receives an injury during labor negotiations . . . .”  Id.

In the case before us, the employee’s injury took place well before the change to his method of payment from salaried to hourly.  There was sufficient information available to calculate the average weekly wage at the time of the injury, such that the employer and insurer stipulated to that wage being $745.88.  Temporary total and temporary partial disability benefits are to be based on the weekly wage of the employee “at the time of injury.”  Minn. Stat. § 176.101, subds. 1.(a) and 2.(a).  The compensation judge found that the wage on the date of injury was controlling here, the employer and insurer stipulated that $745.88 was appropriate at the time of injury, and they provided no indication that the post-injury change from salary to hourly wages would have affected the employee’s wage at the time of injury.  Therefore, we affirm.



[1] The employee argued that the salaried wage should have been higher because of a bonus that was not included in the employer and insurer’s calculations.