DESA INTERNATIONAL, INC. V. FELICIA BARLOW; SPECIAL FUND; JOHN W. MANN, Arbitrator; DONALD G. SMITH, Administrative Law Judge; and WORKERS' COMPENSATION BOARD ROBERT L. WHITTAKER, Director of SPECIAL FUND V. FELICIA BARLOW; DESA INTERNATIONAL, INC.; DONALD G. SMITH, Administrative Law Judge; and WORKERS' COMPENSATION BOARD
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RENDERED: AUGUST 23,200l
2000-SC-097%WC
DESA INTERNATIONAL, INC.
V.
APPEAL FROM COURT OF APPEALS
NO. 1999-CA-002320-WC
WORKERS’ COMPENSATION BOARD NO. 98-01194
FELICIA BARLOW; SPECIAL FUND;
JOHN W. MANN, Arbitrator;
DONALD G. SMITH,
Administrative Law Judge; and
WORKERS’ COMPENSATION BOARD
AND
2000-SC-0994-WC
ROBERT L. WHITTAKER, Director of SPECIAL FUND
V.
APPELLEES
APPELLANT
APPEAL FROM COURT OF APPEALS
NO. 1999-CA-002320-WC
WORKERS’ COMPENSATION BOARD NO. 98-01194
FELICIA BARLOW; DESA INTERNATIONAL, INC.;
DONALD G. SMITH, Administrative Law Judge; and
WORKERS’ COMPENSATION BOARD
APPELLEES
OPINION OF THE COURT
REVERSING
An Administrative Law Judge (ALJ) determined that the claimant was partially
disabled by carpal tunnel syndrome as a result of her work for a manufacturer of
residential heating units and that the condition became manifest in July, 1996, and
disabling in July, 1998. Based upon evidence that she was normally laid off at the
beginning of each year and recalled in late spring or early summer due to the seasonal
demand for the employer’s product, the ALJ determined that she was a seasonal
employee for the purposes of calculating her average weekly wage and also refused to
include unemployment benefits in the calculation. The decision was affirmed by a
majority of the Workers’ Compensation Board (Board), but the Court of Appeals
reversed with regard to the finding that the claimant was a seasonal employee. The
Court’s rationale was that the plain language of KRS 342.140(2) limited its application
to business activities that for reasons beyond the employer’s control could only be
carried out during certain periods of the year. These appeals by the employer and the
Special Fund followed.
The claimant was hired in 1994 and worked for the defendant-employer during
the following periods: September 1, 1994 - January 10, 1995; April 26, 1995 December 11, 1995; June 3, 1996 - January 9, 1997; May 6, 1997 - December 29,
1997; July 6, 1998 - July 7, 1998, at which point she quit due to her injury.
If she
worked elsewhere when she was laid-off, she submitted no evidence of any wages from
other employment, and she argued that unemployment benefits that she received when
not working should be included in the wage calculation. There was evidence that the
defendant-employer usually produces heaters during about 40 weeks of the year due to
the economics of the business and that its competitors follow a similar production
schedule. Inventory is not accumulated until close to the selling season, and fewer
heaters are produced in the year following a warm winter because orders decrease.
There was also evidence that newly-hired production workers are informed that they will
be laid off when heaters are not being produced, that the plant is shut down for two
weeks of vacation in the summer, and that some employees work year-round
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maintaining the plant.
Income benefits are awarded to compensate an injured worker for having
sustained an occupational disability. KRS 342.001 I(1 1) defines an occupational
disability in terms of “a decrease of wage earning capacity,” and consistent with that
definition, KRS 342.730 makes the amount of an income benefit a function of the
worker’s average weekly wage. Various methods for calculating a worker’s average
weekly wage are set forth in KRS 342.140.
KRS 342.140(l)(a)-(c) contain methods that are applicable to wages that are
fixed by the week, month, or year. KRS 342.140(1)(e) and (f) contain special provisions
that apply to workers who have worked fewer than 13 weeks or whose hourly wage has
not been fixed or cannot be ascertained. KRS 342.140(1)(d) contains a method for
wages that are fixed by the day, hour, or output. In instances where the worker’s wages
are fixed by the hour, the wages earned in each 13-week period of the year preceding
the injury are added and then divided by 13. The average weekly wage for the period
that is most favorable to the worker is used for calculating the benefit.
KRS 342.140(2) addresses “seasonal” employment and provides as follows:
In occupations which are exclusively seasonal and therefore cannot be
carried on throughout the year, the average weekly wage shall be taken to
be one-fiftieth (l/50) of the total wages which the employee has earned
from all occupations during the twelve (12) calendar months immediately
preceding the injury.
Although KRS 342.140(1)(d) and (2)(e) have been renumbered since their enactment in
1964, they have otherwise remained unchanged.
KRS 342.140(5) provides that if an injured worker works concurrently for more
than one employer, the wages for both employments may be considered in the average
weekly wage calculation if the defendant-employer knows of the concurrent
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employment prior to the injury. KRS 342.140(6) includes certain other types of
payments for services rendered in the average weekly wage calculation. The claimants
argument that her unemployment benefits should be included was based upon
subsection (6).
The claimant’s history with the defendant-employer indicated that she worked
approximately 7-8 months per year. Both KRS 342.140(1)(d) and (2) take into account
the injured worker’s earnings during the year preceding the compensable injury.
Applying subsection(l)(d), the lay-offs would have a minimal effect, if any, on the
average weekly wage that was used to calculate the claimants benefit because the
benefit would be based upon the average amount she earned per week during the
highest 13-week period of the year. Applying subsection (2) the earnings for the entire
year are averaged over a 50-week period and, therefore, the claimants lack of earnings
during the lay-offs would result in an average that was considerably less than the
amount she earned during the weeks that she worked. Simply put, the claimants
income benefit would be greater under subsection (l)(d). Hence, the controversy.
In Department of Parks v Kinslow, Ky., 481 S.W.2d 686, 688 (1972) the injured
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worker did general maintenance and garbage pickup at a state park from April to
October but was unemployed from October to the next April when services at the park
were drastically curtailed. Focusing upon the statute’s use of the word “occupations,”
he argued that because maintenance and garbage pickup were occupations that both
can and must be performed year-round, they were not seasonal; however, such a
construction of KRS 342.140(2) would have resulted in a workers’ compensation benefit
that exceeded his earnings for the year. Based upon the seasonal nature of the
patronage at the park and, therefore, the seasonal need for his services, we concluded
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that the employment was seasonal and that for the purposes of KRS 342.140(2) his
occupation was seasonal. We characterized as overly broad a construction of
KRS 342.140(2) that would have viewed an occupation as being seasonal only if it
could not be carried on throughout the year. Citing a fruit picker in California as being
the “classic example” of a worker who was engaged in a seasonal occupation, we
refused to adopt the view that the occupation was not seasonal simply because it was
done somewhere in the United States at all times of the year. We explained that the
apparent intent of the legislature was to reduce a worker’s recovery if the employment
was “with a business that carried on naturally for only a particular season of the year”
and that, other things being equal, seasonal workers should not receive the same
compensation as those who work year-round.
We revisited this matter in May v. James H. Drew Shows, Inc., Ky., 576 S.W.2d
524 (1978), wherein the injured worker was a high school student who worked as a
roustabout for a traveling carnival while it visited his hometown. Reversing a finding
that the occupation was seasonal, we explained that whether an occupation is
considered to be seasonal is based upon what the injured worker’s job, itself, entails. A
job is not seasonal simply because the worker plans to work only for the summer.
Thus, work as a lifeguard at an outdoor pool in Kentucky is seasonal; whereas, work as
a roustabout for a traveling carnival is not. Reconciling the decision with Department of
Parks v. Kinslow, supra, we explained that Kinslow did not address whether a migrant
fruit picker who moved with the harvest in order to work continuously was or was not a
seasonal worker. We concluded that a roustabout with Drew Shows moved with the
carnival and worked throughout the year; thus, the injured worker was not a seasonal
employee simply because he chose to work only for the summer or because carnivals
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do not play in Kentucky during the winter. Id. at 526-27.
More recently, we affirmed a finding that work performed by a particular pavingcompany employee was not seasonal. In that case, evidence established that the
injured worker assisted with maintenance work in the company shop during the winter
months, that the company filled potholes with cold mix at that time, that the company’s
paving work was affected by the weather year-round, and that other local paving
companies worked year-round. Affirming, we pointed out that the findings required by
KRS 342.140(2) must take into account the unique circumstances of each case and
that the fact that the injured worker worked for the company year-round should not be
overshadowed by the fact that paving is dictated by the weather. Travelers Insurance
Co v. Duvall
A--,Ky., 884 S.W.2d 665, 667 (1994).
Although the Court of Appeals has adopted a literal construction of
KRS 342.140(2), such a construction is contrary to the views that were expressed in the
prior decisions of this Court and, we believe, to the purpose of the provision.
Furthermore, despite undertaking several major revisions of Chapter 342, the
legislature has not seen fit to amend KRS 342.140(2) in the many years since those
decisions were rendered. Under those circumstances, we are persuaded that the
legislature views the construction of KRS 342.140(2) that we have expressed in
Kinslow, supra. May. supra, and Duvall. supra, as being consistent with its intent.
The purpose of KRS 342.140 is to determine a given worker’s wage-earning
capacity so that the resulting income benefit will be based upon a realistic estimation of
what the worker would have expected to earn had the injury not occurred. In other
words, by operation of KRS 342.140 and KRS 342.730, the amount of the benefit
increases in proportion to the amount of income that the worker has lost due to injury.
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Where a worker is employed by the defendant-employer for more than a year preceding
the compensable injury, calculation of the worker’s average weekly wage under either
subsection (l)(d) or (2) takes into account the worker’s earnings during the entire year
preceding the injury. All other things being equal, the annual wage-earning capacity of
a worker whose job involves only 7-8 months of work per year will not be as great as
that of a worker who works year-round and, for that reason, such a worker is not
entitled to receive as great an income benefit as a worker who works year-round.
We conclude that the ALJ did not misconstrue KRS 342.140(2). The finding that
the claimant was a seasonal employee was properly supported by the evidence, and it
should not have been reversed by the Court of Appeals. For those reasons, the
decision of the Court of Appeals is hereby reversed, and the decision of the ALJ is
reinstated.
All concur.
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..
COUNSEL FOR DESA INTERNATIONAL, INC.:
Hon. W. Cravens Priest, Ill
ENGLISH, LUCAS, PRIEST, & OWSLEY
1101 College Street, P.O. Box 770
Bowling Green, KY 42101-0770
COUNSEL FOR WHITTAKER:
Hon. David R. Allen
Labor Cabinet, Special Fund
1040 U.S. Highway 127 South, STE 4
Frankfort, KY 40601-9979
COUNSEL FOR APPELLEE BARLOW:
Hon. Ray B. White
319 East 1 Oth Avenue
P.O. Box 1154
Bowling Green, KY 42102-I 154
COUNSEL FOR APPELLEE SPECIAL FUND:
Hon. David R. Allen
Hon. David W. Barr
Labor Cabinet, Special Fund
1040 U.S. Highway 127 South, STE 4
Frankfort, KY 40601-9979
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DESA INTERNATIONAL, INC.
V.
APPELLANT
APPEAL FROM COURT OF APPEALS
1999-CA-2320-WC
WORKERS’ COMPENSATION BOARD NO. 98-1194
FELICIA BARLOW; SPECIAL FUND;
JOHN W. MANN, Arbitrator; DONALD G. SMITH,
Administrative Law Judge; and
WORKERS’ COMPENSATION BOARD
2000-SC-0994-WC
AND
ROBERT L. WHITTAKER,
Director of SPECIAL FUND
V.
APPELLEES
APPELLANT
APPEAL FROM COURT OF APPEALS
1999-CA-2320-WC
WORKERS’ COMPENSATION BOARD NO. 98-l 194
FELICIA BARLOW; DESA INTERNATIONAL, INC.;
DONALD G. SMITH, Administrative Law Judge; and
WORKERS’ COMPENSATION BOARD
APPELLEES
ORDER DENYING PETITION FOR REHEARING
AND MODIFYING OPINION
Appellee Felicia Barlow’s petition for rehearing of this Court’s opinion rendered
on August 23, 2001 is hereby denied.
On the Court’s own motion, the opinion is modified by the substitution of new
pages 1 and 2, attached hereto, in lieu of pages 1 and 2 of the opinion as originally
rendered. Said modification does not affect the holding, and is made to clarify the facts
of this case.
All concur.
ENTERED: November 21,200l.
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