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Workers’
Compensation Board
OPINION
ENTERED: September 22, 2016
CLAIM NO. 201496661
COX INTERIOR, INC. PETITIONER
VS. APPEAL FROM HON. OTTO
DANIEL WOLFF, IV,
ADMINISTRATIVE LAW JUDGE
JOSHUA A. PERKINS
and HON. OTTO DANIEL WOLFF, IV,
ADMINISTRATIVE LAW JUDGE RESPONDENTS
OPINION
AFFIRMING
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BEFORE: ALVEY, Chairman, STIVERS and RECHTER, Members.
STIVERS,
Member.
Cox Interior, Inc. ("Cox Interior")
appeals from the April 29, 2016, Opinion, Order, and Award and the June 13,
2016, Order on Petition for Reconsideration of Hon. Otto Daniel Wolff, IV,
Administrative Law Judge ("ALJ"). The ALJ awarded temporary total
disability ("TTD") benefits, permanent partial disability
("PPD") benefits, and medical benefits. On appeal, Cox Interior
asserts the ALJ's calculation of average weekly wage ("AWW")
utilizing a 40-hour work week was not supported by substantial evidence.
The Form 101 alleges Joshua Perkins (“Perkins”)
injured his right hand on January 29, 2014, in the following manner:
"right hand got caught in a conveyor belt."
Perkins filed a Motion to Amend 101 to
include a claim for psychological impairment secondary to his physical injury of
January 29, 2014. By order dated September 17, 2014, the motion was sustained.
The February 10, 2016, Benefit Review
Conference ("BRC") order lists the following contested issues:
benefits per KRS 342.730; work-relatedness/causation as to Perkins' alleged
psychological injury; Perkins' AWW; unpaid or contested medical expenses as it pertains
to Perkins' alleged psychological injury; injury as defined by the Act as it
pertains to Perkins' alleged psychological injury; extent of Perkins'
entitlement to TTD benefits; the merit of each parties’ claims of a safety
violation; and Perkins' entitlement to vocational rehabilitation benefits.
Under "Other" is the following: "1. an issue of AWW includes
apprentice/trainee because only worked less than 13 weeks w/ potential to be
promoted. 2. whether Def's special defense of safety violation untimely
filed."
Wage records filed by Cox Interior
specify Perkins worked for six weeks before being injured. He earned $8.50 per
hour, and worked from 13 to 29 hours per week during those six weeks. Also
filed by Cox Interior is a list of the hours available to work during the weeks
spanning from October 31, 2013, to January 29, 2014, for "same or similar
occupations," and the hours available are all indicated as "29."
Perkins was deposed on August 19,
2014. Perkins testified he had a set schedule when he worked for Cox Interior
which was 6 a.m. to 2:30 p.m., and he was paid hourly wages of $8.50. He worked
29 hours a week. He testified as follows:
Q: And you were there from November until
January; were you in a training program of any kind or were you set up to work
29 hours a week every [sic] until when you got hurt?
A: What we were told was that if we stayed
there long enough and if we got good at our jobs we would be moved to full-time
and there may have- it was implied that there may have been a pay increase when
that happened.
Q: And when were you told that, like when you
applied for the job or during some type of orientation program?
A: During the orientation.
Q: Was there any indication of how long that
would take?
A: If I'm remembering correctly it was
somewhere in the area of three months, two or three months.
Q: And at the time you got injured you had
been there for about two months?
A: I think I had been there for a month.
Perkins was deposed again on October
14, 2015, and testified at the February 24, 2016, hearing. However, none of
this testimony is relevant to the issue on appeal.
The deposition of Ricky Myers (“Myers”),
Cox Interior’s Human Resources Director was introduced. Myers testified
extensively regarding Cox Interior’s full-time and part-time employees in 2014:
Q: It's my understanding that you had, at
least in January of 2014, both full-time employees and part-time employees, is
that correct?
A: Prior to that, probably- I don't know,
maybe two or four months prior to that.
Q: So something was started pretty recently?
A: In the wintertime.
Q: Okay. And- and as far as the part-time employees, did you
have a few, multiple, do you know how many you had back then?
A: I don't know how many at the time. Just a-
just a few.
Q: What was the purpose of starting up a
part-time program versus your regular full-time staff?
A: It was in the- it was in the winter, and
we wanted to cut some costs and if we wanted to have the employees work less
than 30 hours, which would be full-time, and they lowered- and in order to-
well, we wanted to save on the insurance and the benefits, so we hired them as
part-time.
Q: Okay. And those employees that were
part-time, how many hours were they getting per week?
A: 29- well, 29 or less.
Q: Okay. And were you able to keep them busy
pretty much those 29 hours?
A: Yes.
Q: Okay.
A: Yes.
Q: And how did that work, did they come in
part of the time every day, did they come in just a few days a week, how were
you all generally-
A: They come in three and-a-half days a week.
Q: Okay.
A: We'd give them 29 hours.
Q: Okay. And it's my understanding that you all didn't continue
with that particular program, is that fair to say?
A: Right, we did not continue.
Q: And I know it's been a while, but do you
know at one point in time you decided that this just wasn't-
A: It just wasn't working for Cox Interior.
It just wasn't working.
Q: Okay. Do you know when that was, just from
the start?
A: It was probably- it was probably in the
spring of 2014, I would say spring or summer.
Q: Okay. And why- and why was that particular
policy not working out for you guys?
A: Because- because employees would tell me
that they would- when they could go to Amazon or go to Murakami or to another
company and get more hours, and they couldn't afford to work on- as a part-time
employee.
Q: Okay. I think you answered, these workers
didn't receive any- any benefits, is that correct?
A: Sir?
Q: These workers didn't receive any benefits?
A: No, they did not.
Q: Okay. What was the- I guess the turnover
like during that time period?
A: Probably about 40 percent.
Q: Okay. So were you all having trouble
keeping people?
A: We did.
Q: As far as when you hired these people on
part-time, was there any promise that they would go full-time for you all?
A: No promise.
Q: Okay. You all didn't have a trainee
transition into full-time policy or anything like that?
A: We had no policy.
Q: Okay. Were some of the employees that were
on this part-time program, did you all decide to hire them full-time?
A: Some of them.
Q: Okay.
A: Some of them.
Q: What were you looking for and how many
percent [sic] would you decide to go full-time, if you know?
A: We were looking for a person that was-
attendance was nearly perfect, they get along with others well, their safety
was zero, didn't have no [sic] safety issues, and they were good workers.
Q: Okay. So at some point would just a
supervisor identify somebody, say, 'I think this person may be good full-time,'
or how did- how did that-
A: The supervisor would get in conjunction
with a plant manager, and then they would discuss putting them full-time and
they would call me and say, 'We want to put this person full-time,' because-
because they reason, he was a good worker, had good attendance, and got along
well with others and done [sic] his job well.
Q: Okay. But there is no written policy that
you guys have regarding that?
A: No.
Q: Okay. When you did have these part-time
workers that you decided to hire full-time, you mentioned a certain percentage
of those would come up full-time, have any idea- and I don't want you guessing,
but are we talking just a few or are we talking most, how- how many- how many
people part-time would go full-time?
A: Just a few.
Q: Okay.
A: Just a few.
Q: Under half, over half, any idea?
A: I would say under half.
Q: Okay.
A: Under half.
Regarding Perkins, Myers testified as
follows:
Q: Okay. And in Mr. Perkins' case, we talked
earlier, he was part-time, was [sic] there any promises ever made to him that
he would be initially put on full-time after a certain amount of time?
A: No promises.
Myers testified everyone at Cox
Interior started at an $8.50 per hour wage. Myers testified it is reasonable
for Cox Interior employees to expect raises if they stayed and performed their
job well.
Myers testified Perkins worked for six
weeks prior to his work injury. In January 2014, Cox Interior had about 350
employees, and around 65-75% of them were manual laborers like Perkins. He
further testified as follows:
Q: Okay. Was the plant busy during that time
period?
A: No, it was not, not really.
Q: Okay. You already testified, it slacked
off- business was a little slow-
A: Right.
Q: -and that's why you- you hired some
part-time workers?
A: Right.
Q: But you did have almost all of those
employees were full-time?
A: Almost.
When Cox Interior ended the
experimental part-time program in the spring of 2014, none of the remaining
part-time employees were offered full-time positions.
In his March 21, 2016, brief to the
ALJ, Perkins asserted his AWW should be calculated utilizing a 40-hour work
week.
In the April 29, 2016, Opinion, Order,
and Award, the ALJ determined as follows regarding AWW:
The parties were unable to stipulate as to
Plaintiff’s average weekly wage (AWW) at the time of his injury. At the time of
his injury Plaintiff was a part-time employee working 29 hours a week, earning
$8.50 per hour. Plaintiff did not work for Defendant 13 continuous weeks
immediately prior to his work incident.
KRS 342.140 sets forth appropriate ways to
determine an employee’s average weekly wage. When an employee has worked less
than 13 weeks immediately prior to his injury the goal of KRS 342.140 (1) (d)
and (e) is to determine a realistic estimation of what a worker would have been
expected to earn in a normal 13-week period of employment. It was acknowledged
by the Supreme Court in Huff v. Smith
Trucking, 6 S.W.3d 819 (Ky. 1999) that when an employee has worked less
than 13 weeks or [sic] his earnings are effected by the availability of work,
the pre-injury earnings, and a realistic estimate of the workers’ earning
capacity, [sic] many factors may be considered by the ALJ.
Defendant’s [sic] Ricky Myers testified, had
Plaintiff been able to do so, there was a sufficient amount of work for him to
have worked 40 hours per week during the 13-week period preceding his injury.
It is undisputed Plaintiff was as a part-time employee earning $8.50 per hour.
Had Plaintiff been able to work 40 hours per week at $8.50 per hour his average
weekly wage would have been $340.00 ($8.50 x 40) per week. There is no reason
to question whether this number is a reasonable gauging of Plaintiff’s earning
capacity at the time of his injury; consequently, it is determined Plaintiff’s
average weekly wage at the time of his injury was $340.00, which yields a comp
rate of $226.67 ($340 X 2/3).
Cox Interior filed a Petition for
Reconsideration asserting Perkins' AWW should be based upon a 29-hour work week
and not a 40-hour work week.
In the June 13, 2016, Order on
Petition for Reconsideration, regarding his AWW calculations, the ALJ explained:
Defendant
seeks reconsideration of the determination Plaintiff’s average weekly wage was
$340.00 per week. Defendant contends, since Plaintiff was working as a
temporary employee - 29 hours per week - his average weekly wage should be
based upon 29 hours per week. In the Opinion it was determined Plaintiff’s
average weekly wage (weekly earning weekly capacity) was $340.00 based
upon Plaintiff working 40 hours per week.
Under
KRS 342.140 computation of an injured employee’s average weekly wage, when the
employee has not worked for the employer for 13 consecutive weeks immediately
preceding his or her work injury, is based upon the amount earned by similarly
situated employees during the full 13 weeks immediately preceding the work
injury. When making a determination in such a situation the unique facts and
circumstances of the work, including the temporary nature of employment, is
based upon the employee’s earning capacity, not the employee’s actual earnings.
Subsection
(1) (e) of KRS 342.140 is designed to arrive at an average weekly wage based
upon an employee’s average weekly earning capacity, the average weekly wage is
not necessarily always based upon actual wages earned. C & D Bulldozing, Co. v. Brock, 820 S.W.2d 482 (Ky. 1991).
Actual
wages received over a short period of time may have no relation to a worker’s
earning capacity. Lexington Mining Co. v. Richardson, 150 S.W.2d 889 (Ky. 1941).
The
proof herein indicates Defendant employed many full-time employees who
performed the exact same work Plaintiff performed but on a part-time basis.
This would seem to indicate Plaintiff’s average weekly earning capacity, rather
than his actual wages, would be the best indication of his earning capacity.
Defendant’s
[sic] Ricky Myers testified Plaintiff, when injured, was working as a
participant in a temporary part-time employment program. Participating workers were allowed to only
work 29 hours as explained by Mr. Myers, “…we wanted to have the employees work
less than 30 hours, which would be full-time, then they lowered—and in order
to—well, we wanted to save on the insurance and the benefits, so we hired them
as part-time. (Myers' [sic] p.7).
The
experiment failed because the participants went to other employers and got
full-time work. (Myers’ [sic] p. 8).
Mr.
Myer testified what Plaintiff was doing was similar to the work full-time
employees were doing. (Myers’ [sic] P. 21).
An
injured employee’s average weekly earning capacity should not be based upon his
working part-time in a temporary experimental program instituted by an employer
to avoid paying benefits to employees, [sic] Plaintiff’s earning capacity
determination was based upon the demonstrated earning capacity of similarly
situated workers.
Determination
of Plaintiff’s average weekly wage was set forth on pages 21 through 22 of the
Opinion, consequently, Defendant’s Petition for Reconsideration on this issue
is Overruled.
The determination
Plaintiff was working as a trainee when injured, (as above determined) and his
average weekly earning capacity was, based upon what full-time employees earned
(the determination made above) is not inconsistent. Plaintiff’s AWW is based upon his earning
capacity whereas the title of Plaintiff’s work status (trainee v. full-time
employee) has little, if anything, to do with his earning capacity.
An ALJ may
draw reasonable references from the evidence, reject any testimony, and believe
or disbelieve various parts of the evidence, regardless of whether it comes
from the same witness or the same adversary party’s total proof. Jackson v. General Refractories Co.,
581 S.W.2d 10 (Ky. 1979); Caudill
v. Maloney’s Discount Stores, 560 S.W.2d 15 (Ky. 1977).
Although a party may note evidence that would have supported a different
outcome than that reached by an ALJ, such proof is not an adequate basis to
reverse on appeal. McCloud v.
Beth-Elkhorn Corp., 514 S.W.2d 46 (Ky. 1974). Rather, it must be shown
there was no evidence of substantial probative value to support the decision. Special
Fund v. Francis, 708 S.W.2d 641 (Ky. 1986).
The function of the Board in
reviewing an ALJ’s decision is limited to a determination of whether the
findings made are so unreasonable under the evidence that they must be reversed
as a matter of law. Ira A. Watson Department Store v. Hamilton, 34
S.W.3d 48 (Ky. 2000). The Board, as an appellate tribunal, may not usurp the
ALJ's role as fact-finder by superimposing its own appraisals as to weight and
credibility or by noting other conclusions or reasonable inferences that otherwise could have been drawn from the
evidence. Whittaker v. Rowland, 998 S.W.2d 479 (Ky. 1999).
KRS 342.140(1)(e)
governs the circumstances of this claim and states AWW:
[S]hall be computed under
paragraph (d), taking the wages (not including overtime or premium pay) for
that purpose to be the amount he or she would have earned had he or she been so
employed by the employer the full thirteen (13) calendar weeks immediately
preceding the injury and had worked, when work was available to other employees
in a similar occupation.
In Huff v. Smith
Trucking, 6 S.W.3d 819, 821 (Ky. 1999), the Supreme Court of Kentucky
stated as follows regarding the purpose of the statutory provision:
KRS 342.140(1)(e) applies to injuries
sustained after fewer than 13 weeks' employment. It utilizes the averaging
method set forth in KRS 342.140(1)(d) and attempts to estimate
what the worker's average weekly wage would have been over a typical 13–week
period in the employment by referring to the actual wages of workers performing
similar work when work was available. As was recognized in Brock, the goal of KRS 342.140[sic](d) and (e) is to obtain a realistic
estimation of what the injured worker would be expected to earn in a normal
period of employment.
In calculating AWW
pursuant to KRS 342.140(1)(d), the ALJ "must take into consideration the
unique facts and circumstances of each case." Id. at 822.
In the case sub judice, the ALJ primarily relied upon the testimony of Myers in
calculating Perkins' AWW. Specifically, the ALJ opined, in the June 13, 2016,
Order on Petition for Reconsideration, that Perkins' AWW should not be based on
Perkins working in an experimental part-time program implemented by Cox
Interior in order to avoid paying benefits. We agree. This is particularly
within the ALJ's discretion in light of Myers' testimony, as cited by the ALJ,
indicating the experimental part-time program failed and part-time workers went
to other employers and found full-time work. Myers' testimony indicates that
the turnover rate for part-time workers in the program was 40%. Myers'
testimony further indicates that the experimental part-time program was
discontinued in the spring of 2014 which is shortly after Perkins sustained his
injury in January 2014. While Myers' testimony indicates none of the remaining
part-time workers were offered full-time positions after the experimental
part-time program was discontinued, his testimony indicates that under half of
the part-time employees were offered full-time positions at the time the
experimental part-time program was still active. Particularly relevant is
Myers' testimony indicating 65-75% of Cox Interior's roughly 350 employees in
January 2014 were manual laborers just as Perkins was, and of those 350
employees, "just a few" were in the experimental part-time program.
Perkins, had he not been injured,
could have been one of the part-time employees promoted to a full-time position.
It is important to reiterate that when calculating AWW pursuant to KRS
342.140(1)(d), not only does the ALJ have the discretion to "take into
consideration the unique facts and circumstances of each case," rather,
the ALJ "must" do so. Id. at 822. “Substantial evidence” is defined as evidence of relevant
consequence having the fitness to induce conviction in the
minds of reasonable persons. Smyzer v. B. F. Goodrich Chemical Co., 474
S.W.2d 367 (Ky. 1971), and there is substantial evidence in the record in
support of the ALJ's calculation of AWW utilizing a 40-hour work week instead a
29-hour work week.
Accordingly, the April 29, 2016,
Opinion, Order, and Award and the June 13, 2016, Order on Petition for
Reconsideration are AFFIRMED.
ALL CONCUR.
COUNSEL
FOR PETITIONER:
HON GEORGE T T KITCHEN III
600 E MAIN ST STE 100
LOUISVILLE KY 40202
COUNSEL
FOR RESPONDENT:
HON JACKSON W WATTS
131 MORGAN ST
VERSAILLES KY 40383
CHIEF
ADMINISTRATIVE LAW JUDGE:
HON ROBERT L SWISHER
657 CHAMBERLIN AVE
FRANKFORT KY 40601
