In an effort help our clients stay informed on legal issues affecting their business, Spicer Rudstrom’s attorneys strive to make sense of the complex challenges and recent legal developments in the ever-changing world of workers’ compensation law. Our attorneys summarize the cases handed down in the Tennessee Workers’ Compensation Appeals Board each week, providing insight on the recent legislation as a resource to employers across industries, as well as insurance providers and carriers.
Tara Marshall v. Mueller Company
Docket No. 2015-01-0147
State File No. 63950-2014
Filed July 11, 2016
This is a case before the Appeals Board on Employee’s appeal from the trial court’s compensation hearing order denying Employee’s request for increased PPD benefits at the end of the compensation period. Employee alleges that even though she continued to work for Employer at all relevant times, at the end of the compensation period, she returned to work but was “receiving wages or a salary that is less than one hundred percent (100%) of the wages or salary [she] received from [Employer] on the date of the injury,” and therefore, is entitled to increased PPD benefits pursuant to Tenn. Code Ann. § 50-6-207(3)(B) (2015). In fact, Employee’s base pay was $0.30/hour higher than it was at the time of the injury, but at the time of the injury, her hourly rate of pay included a “summer hours” bonus that was not in effect at the time of the expiration of the compensation period on October 13, 2015, as it ended on September 30, 2015. This “summer hours” bonus applied to all employees in certain departments, including Employee’s department, and had been in effect since 2013, with all of the employees getting the bonus during the summer months and then going back to their regular base pay at the end of summer.
Employee argued that because the 2013 amendments to the Workers’ Compensation Act deleted the provisions regarding “economic conditions” that result in layoffs or reduction in pay affecting more than 50% of the employees at the Employer’s location, the statute should be applied based on a clear reading of the statute. However, the Appeals Board disagreed with Employee.
Holding: The Appeals Board noted that this case presented an issue of first impression. It considered the previous versions of the Workers’ Compensation Act and case law concerning the meaning of “wage, the deletion of sections 50-6-241(a) and (b), and the revised method of calculating PPD benefits in the 2013 amendments. It explained that Tenn. Code Ann. § 50-6-207(3)(B) began with the 1992 reforms to the Workers’ Compensation Act, and an important element of the reform was that an injured worker’s PPD was limited to 2.5x the permanent medical impairment rating if the employee returned to work “at a wage equal to or greater” than the wage the employee was receiving at the time of the injury, and this was later reduced to 1.5x the rating. Additionally, the 1992 reforms provided for “reconsideration” of an employee’s industrial disability in cases where the employee lost her job with the pre-injury employer within the time period provided the statute. In 2004, the statute was amended to allow reconsideration rights to employees who suffered “a reduction in wages” to a level less than the wage the employee was earning at the time of the injury. See Tenn. Code Ann. § 50-6-241 (2005). In 2010, the statute was further amended to provide that a reduction of employees’ hour rate of pay or number of hours “due to economic conditions” did not entitle the employees to reconsideration if the reduction in hours or pay affected at least 50 percent of all hourly employees operating at or out of the same location. See Tenn. Code Ann. § 50-6-241 (2010).
The Appeals Board noted that the Workers’ Compensation Act was significantly reformed in 2013, and that among some of the changes, one of the most significant ones was the deletion of § 50-6-241(a) and (b) for injuries occurring on or after July 1, 2014. Under the amendments, PPD awards can be increased after the expiration of the initial compensation period if “the employee has not returned to work with any employer or has returned to work and is receiving wages or a salary that is less than one hundred percent (100%) of the wages or salary the employee received from [her] pre-injury employer on the date of the injury.” Tenn. Code Ann. § 50-6-207(3)(B). However, the 2013 Reform Act did not define the term “wages” as used in the statute, and earlier provisions of the statute did not define the term either. The Appeals Board reviewed and discussed case law defining the term, highlighting that the Tennessee Supreme Court held in Powell v. Blalock Plumbing & Elec. & HVAC, 78 S.W.3d 893 (Tenn. 2002), that the term “wage” did not mean “average weekly wage” but rather “means the hourly rate of pay for an employee who is compensated on an hourly basis.” The Appeals Board also examined cases in which the employee sustained a loss of wages due to reductions in wages or hours as a result of economic conditions in which the employees’ PPD awards were not increased upon request by the employees for reconsideration.
The Appeals Board explained that the 2013 amendments replaced the “two-tiered system” created in Tenn. Code Ann. § 50-6-241 as discussed in Robinson v. Bridgestone Ams. Tire Operations, LLC, 2012 Tenn. LEXIS 840 (Tenn. Workers’ Comp. Panel Nov. 21, 2012) with § 50-6-207(3)(B), which includes provisions designed to protect the interests of several categories of employees, including those who are unable to return to work because of the effect of their work injuries and also those who are able to return to work but at a lesser wage or salary than what they were receiving at the time of their injury. The Appeals Board stated that the second category of employees is addressed in § 50-6-207(3)(B) where the statute provides that “if appropriate,” the injured workers’ PPD award shall be increased. The Appeals Board found no basis in the statute to conclude that the General Assembly intended that an employee receiving a “summer hours” bonus or a “shift differential” at the time of a work injury should be entitled to increased benefits if the expiration of the compensation period results in the employee making less wages than at the time of the injury and stated that the General Assembly’s failure to provide a definition of “wages” suggests that the interpretation applied under pre-reform law would continue to be applicable to new law cases. Moreover, the Appeals Board explained that it would be inconsistent for some employees to be entitled to increased benefits while other similarly situated employees are not, depending on when the injury occurred and when the expiration of the compensation period occurred. The Appeals Board analogized to a situation in which an employee earning overtime at the time of the injury but not at the time of the expiration of the compensation period and stated that, even when Tennessee’s Workers’ Compensation statutes were remedially construed, the courts determined that such an interpretation was inconsistent with legislative intent.
Thus, applying a fair and impartial interpretation of the applicable law, the Appeals Board held that Employee was not entitled to increased benefits.
Jared S. Renfroe is an attorney for Spicer Rudstrom PLLC. He focuses his legal practice on litigation throughout Tennessee. His concentrates primarily in premises liability, business and commercial representation, employment practices litigation, professional liability, insurance defense and workers’ compensation.