ABB C-E Services, Inc., et al. v. WCAB (Rushing) (Majority Opinion)
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IN THE COMMONWEALTH COURT OF PENNSYLVANIA ABB C-E Services, Inc. and Gallagher : Bassett Services, Inc., : Petitioners : : v. : : Workers' Compensation Appeal Board : (Rushing), : Respondent : BEFORE: No. 24 C.D. 2008 Submitted: May 2, 2008 HONORABLE DORIS A. SMITH-RIBNER, Judge HONORABLE ROBERT SIMPSON, Judge HONORABLE JIM FLAHERTY, Senior Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE SMITH-RIBNER FILED: August 5, 2008 ABB C-E Services, Inc. (Employer) and Gallagher Bassett Services, Inc., petition the Court for review of a December 6, 2007 order of the Workers' Compensation Appeal Board (Board) reversing that part of the November 9, 2006 order of the Workers' Compensation Judge (WCJ) which granted Employer's Petition to Review Compensation Benefits and reduced Madison Rushing's (Claimant) average weekly wage (AWW) under Section 413(a) of the Workers' Compensation Act (Act), Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §771. Employer's statement of the questions presented is whether the Board committed an error of law by reversing the WCJ's calculation of the AWW where it was based on substantial, competent evidence and represented an accurate and realistic measure of what Claimant could have expected to earn. The facts are not in dispute. Claimant, 54 years old, suffered injuries on May 28, 1999 when he fell from scaffolding while working for Employer at the Washingtonville Power Plant in Pennsylvania as a boilermaker/welder; he and others were laid off at the end of that day. Claimant was expected to work for Employer six days a week, ten hours a day, with an hourly rate of $24.30 and an overtime rate of $36.45. During his employment of eleven days, he completed one 60-hour work week with gross earnings of $1,701. He resides in Surrency, Georgia and had received many jobs, assigned through a union hall, in other states. Claimant was totally disabled from May 28, 1999 to January 31, 2000 and returned to work as a boilermaker in New Hampshire, Tennessee and Georgia until August 2002. His claim petition for total disability was resolved by the WCJ's order of December 3, 2002 approving the parties' stipulation providing, inter alia, that the work injury was a herniated nucleus pulposus of C5 - 6 and pituitary insufficiency and that the AWW was $1,701, with a maximum rate of $588 per week. For the pituitary insufficiency, Claimant began testosterone treatment in October 1999 to normalize his testosterone levels; he treated with Denise A. Morris, M.D., board-certified in internal medicine. The treatment also produced polycythemia (abnormal increase in red blood cells), which was added to the NCP pursuant to a review petition, and required further treatment with phlebotomy by Akhil Baranwal, M.D., board-certified in hematology, oncology and internal medicine. Because of Claimant's frequent and regular testing and treatment for pituitary insufficiency and polycythemia requiring his immediate availability, Dr. Baranwal directed him to find a job in Georgia that did not require out-of-state travel. The WCJ found that a Georgia doctor could not order necessary treatment in other states and that using out-of-state medical facilities might cause delay and inconsistency in laboratory work and treatment. Claimant began working as a police officer in Baxley, Georgia on August 14, 2002, earning $9.48 per hour. 2 On March 24, 2003, Claimant filed a reinstatement petition asserting that his physician's directive to remain in one geographic area in Georgia to treat his work-related injuries prevented him from working as a boilermaker, which would require him to work in other states. Employer filed a review petition on October 25, 2004 alleging that Claimant's AWW of $1,701 is incorrect. It asserted that, based on evidence of Claimant's 1998 and 1999 tax returns, the AWW should be $769.71 because it reflected more accurately his expected earning capacity. The WCJ granted Employer's review petition to modify the AWW to $769.71 based on the following Conclusion of Law 4: The WCJ concludes that the [$1,701 AWW] calculated on the basis of Claimant's expectations to work for Defendant ABB C-E for three (3) weeks on the job assignment does not result in a calculation of wages that would be an accurate and realistic measurement of what the employee would have expected to earn had he not been injured and that [it] ¦ would result in the Claimant being overcompensated and the employer unduly burdened. The WCJ concludes that it is unrealistic to expect Claimant to have earned over [$88,000] a year as a boilermaker/welder in light of Claimant's 1998 gross wages of [$40,025] and his 1999 wages through the date of his injury, May 28, 1999 of [$26,022]. The WCJ concludes that the accurate realistic measurement of Claimant's average weekly wage would be [$769.71], representing the 1998 wages of [$40,025] divided by fifty-two (52) weeks. The Board reversed in part, after concluding that the WCJ erred in modifying Claimant's AWW based on his calendar year 1998 earnings. Citing Jones v. Workers' Compensation Appeal Board (Northern Tioga School District), 786 A.2d 1026 (Pa. Cmwlth. 2001), it stated that the determination of AWW is a question of law fully reviewable on appeal. It noted that Section 309(a), (b) and (c) of the Act, 77 P.S. §582, provide methods of calculating AWW when the 3 employee's wages are fixed by the week, month or year and that Section 309(d), (d.1), and (d.2) provides methods of calculating AWW where wages are fixed otherwise: (d) If at the time of the injury the wages are fixed by any manner not enumerated in clause (a), (b) or (c), the average weekly wage shall be calculated by dividing by thirteen the total wages earned ¦ in each of the highest three of the last four consecutive periods of thirteen calendar weeks in the fifty-two weeks immediately preceding the injury and by averaging the total amounts earned during these three periods. (d.1) If the employe has not been employed by the employer for at least three consecutive periods of thirteen calendar weeks in the fifty-two weeks immediately preceding the injury, the average weekly wage shall be calculated by dividing by thirteen the total wages earned ¦ for any completed period of thirteen calendar weeks immediately preceding the injury and by averaging the total amounts earned during such periods. (d.2) If the employe has worked less than a complete period of thirteen calendar weeks and does not have fixed weekly wages, the average weekly wage shall be the hourly wage rate multiplied by the number of hours the employe was expected to work per week under the terms of employment. Board Opinion, pp. 3 - 4. The Board then quoted from Reifsnyder v. Workers' Compensation Appeal Board (Dana Corp.) (emphasis in original), 584 Pa. 341, 356 - 357, 883 A.2d 537, 546 - 547 (2005), which further explained: Section 309(d) governs employees with the longest work/employment histories. ¦ Subsections (d.1) and (d.2) address progressively shorter employment relationships: (d.1) governs employees employed for at least one, but less than three consecutive periods of thirteen calendar weeks; while (d.2) addresses cases of recent hires, i.e., employees who worked less than a single complete period of thirteen calendar weeks at the time they suffered a work injury. 4 ¦ [S]ubsection (d.2) has no ¦ long-term focus, and indeed, it provides for a prospective calculation of potential earnings. By its terms, (d.2) contemplates persons for whom there is little work history with the employer upon which to calculate the AWW. ¦ Instead, we conclude that subsection (d.2) was intended for instances that it plainly covers; i.e., those instances of work injuries to recently-hired employees for whom there was, by definition, no accurate measure of AWW other than taking the existing hourly wage and projecting forward on the basis of the hours of work expected under the employment agreement. Citing Follett v. Workmen's Compensation Appeal Board (Mass. Mut. Life Ins. Co.), 551 A.2d 616 (Pa. Cmwlth. 1988), the Board stated that except for seasonal employees under Section 309(e) of the Act, only the wages from current employers may be considered in determining a claimant's AWW. The Board therefore concluded in the matter sub judice: Upon review, the Judge erred in using wage information from prior employers rather than from only his current employer where Claimant is not a seasonal employee, and erred in failing to apply the statutory language of Section 309(d.2) of the Act where Claimant has worked less than thirteen weeks (only eleven days) with his current employer and does not have wages fixed by the week, month or year. Pursuant to Section 309(d.2), Claimant's AWW is to be determined based on the number of hours he was expected to work per week under the terms of his employment. Here, Claimant was employed on a "six/ten" schedule, meaning he was to work six days a week, ten hours a day, with a pay rate of $24.30 per hour for the first 40 hours and an overtime rate of $36.45 per hour. He worked only one full 60 hour work week ¦ with a gross pay of $1701.00, which was the amount of his AWW as determined pursuant to the prior award. As the amount of Claimant's AWW was already correctly determined pursuant to Section 309(d.2) based on the 60 hours per week he was expected to work, we will reverse the Judge's determination granting Defendant's Review Petition. 5 Board Opinion, p. 6 (citations omitted).1 Employer argues that the WCJ's modification of the AWW should be affirmed, considering the unusual facts and circumstances presented and applying the principles in Hannaberry HVAC v. Workers' Compensation Appeal Board (Snyder, Jr.), 575 Pa. 66, 834 A.2d 524 (2003), and Colpetzer v. Workers' Compensation Appeal Board (Standard Steel), 582 Pa. 295, 870 A.2d 875 (2005). It asserts that the issue is whether the correct method was used to calculate the AWW. Claimant worked eleven days, received assignments throughout the country and testified that layoffs were frequent and normal. The WCJ considered Claimant's work arrangement and the tax records and found that the stipulated AWW calculated under Section 309(d) of the Act was not an accurate and realistic measure of his expected earnings. Employer contends that the Court's concern in Follett was that the prior employer's higher wages may prejudice the current employer by inflating the AWW. Applying Section 309(d.2) reinstates the inflated AWW and inflicts the very harm that the Court sought to avoid. It cites Colpetzer and Hannaberry for the principles that the scheme under Section 309 was designed "to ensure that an injured worker does not receive more on workers' compensation than the amount he would have earned had he not been injured" and that "the employee was not overcompensated and the Employer not overburdened." Petitioner's Brief, p. 15 (quoting Colpetzer, 582 Pa. at 314, 870 A.2d at 886 - 887). Employer claims that it is overburdened because the $769.71 AWW would result in a weekly compensation rate of $512.63 instead of $588 based on the $1,701 AWW; 1 The Court's review is limited to determining whether constitutional rights have been violated, whether an error of law has been committed or whether the findings of fact are supported by substantial evidence. Lord & Taylor v. Workers' Compensation Appeal Board (Bufford), 833 A.2d 1223 (Pa. Cmwlth. 2003). 6 although Claimant earns $380 per week as a police officer Employer cannot modify the benefits because the current AWW is $1,701. Claimant's counter-argument is that Employer is asking the Court to ignore Section 309(d.2) and Follett, in which the Court stated that "in calculating [the AWW] of an employee whose occupation is not exclusively seasonal under Section 309(f), only wages earned in the employ of employers by which the claimant was employed on the date of the injury can be considered." Follett, 551 A.2d at 620. The decision in Hannaberry is factually distinguishable: the court there held that subsection (d) did not control the AWW calculation where it would lead to a "grossly and demonstrably" inaccurate measure of the claimant's AWW and that his part-time wages earned while in high school should not be permitted to dilute the benefit due to the claimant as a result of injury suffered after he became a full-time employee. Hannaberry, 575 Pa. at 82 - 83, 834 A.2d at 534. The decision in Colpetzer is distinguishable inasmuch as the court there addressed whether a claimant who receives benefits from a work injury and then returns to work and suffers a new injury should be penalized by including in the AWW calculation the periods when the claimant earned no wages because of the initial work injury. Claimant submits that the decisions in Hannaberry and Colpetzer resulted in higher AWW calculations, consistent with the humanitarian purposes and liberal construction of the Act. He argues that neither Section 309(d.2) nor the decision in Follett is ambiguous. The legislature could have provided an exception to Section 309(d.2) for employees assigned jobs through a union hall, similar to the one for seasonal employees, but it did not. The length of jobs assigned through a union hall is not subject to any regular schedule of duration: it may be short, long 7 or permanent. Adopting Employer's argument would require the courts to create a test to determine "how long is long enough for the employer finally to be considered the employer for purposes of calculating an [AWW.]" Respondent's Brief, p. 7. Section 309(d.2) applies where, on the date of injury, he had worked for Employer for less than a period of thirteen weeks as a non-seasonal employee. Section 309(d.2) of the Act "provides for a prospective calculation of potential earnings" and "contemplates persons for whom there is little work history with the employer upon which to calculate the AWW." Reifsnyder, 584 Pa. at 356 - 357, 883 A.2d at 546 - 547 (emphasis in original). It applies in those instances where "there [is], by definition, no accurate measure of AWW other than taking the existing hourly wage and projecting forward on the basis of the hours of work expected under the employment agreement." Id. at 547. Here, the Board was correct in applying Section 309(d.2) and in arriving at the AWW of $1,701 by multiplying the hourly wage by the expected number of work hours. The Court rejects Employer's argument based on Hannaberry and Colpetzer, and it emphasizes that Employer stipulated to the AWW of $1,701 during the claim petition proceedings before the WCJ. Employer does not assert, and the WCJ did not find, that the hourly rate or expected number of work hours used in calculating the $1,701 AWW was unrealistic or inflated. In Hannaberry and Colpetzer the court was presented with unusual situations rendering uncertain the applicability of Section 309(d), which would have resulted in an artificially deflated AWW. To provide an accurate, realistic measure of the claimant's earning capacity and to give effect to the Act's remedial nature, the court carved out exceptions for those particular cases to give relief to the injured workers. The facts presented here are distinguishable from those in Hannaberry and Colpetzer. 8 Claimant's case is clearly contemplated by Section 309(d.2) without any need for the application of an exception. Reifsnyder. Moreover, the WCJ's conclusion that Claimant's earnings from prior employers represent an accurate and realistic measure of his earning capacity as a non-seasonal employee is without factual support and is contrary to law. Follett. Employer's argument that Claimant is overcompensated while it is overburdened therefore lacks merit. Lastly, the scheme under Section 309 demonstrates "the General Assembly's intention that the baseline figure from which benefits are calculated should reasonably reflect the economic reality of a claimant's recent pre-injury earning experience, with some benefit of the doubt to be afforded to the claimant in the assessment." Triangle Bldg. Ctr. v. Workers Compensation Appeal Board (Linch), 560 Pa. 540, 548, 746 A.2d 1108, 1112 (2000). From its review of this matter, the Court must conclude that the Board correctly applied the law and thus committed no error when it reversed the WCJ's order granting Employer's review petition. The Court affirms. DORIS A. SMITH-RIBNER, Judge 9 IN THE COMMONWEALTH COURT OF PENNSYLVANIA ABB C-E Services, Inc. and Gallagher : Bassett Services, Inc., : Petitioners : : v. : : Workers' Compensation Appeal Board : (Rushing), : Respondent : No. 24 C.D. 2008 ORDER AND NOW, this 5th day of August, 2008, the order of the Workers' Compensation Appeal Board is affirmed. DORIS A. SMITH-RIBNER, Judge
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