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Alexander v. Portland Natural Gas
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MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2001 ME 129
Docket: WCB-00-445
Argued: June 13, 2001
Decided: August 7, 2001
Panel: WATHEN, C.J., and CLIFFORD, RUDMAN, DANA, SAUFLEY, ALEXANDER, and
CALKINS, JJ.
Majority: RUDMAN, DANA, SAUFLEY, and ALEXANDER, JJ.
Dissenting: WATHEN, C.J., and CLIFFORD, and CALKINS, JJ.
STEVEN ALEXANDER
v.
PORTLAND NATURAL GAS et al.
RUDMAN, J.
[¶1] Portland Natural Gas (PNG) appeals from a decision of a Hearing
Officer of the Workers' Compensation Board granting Steven Alexander's
petition for an award. Applying 39-A M.R.S.A. § 102(4)(B) (2001), the
Hearing Officer calculated an average weekly wage of $2,056.16. PNG
contends, however, that subsection B cannot be "fairly applied" because, in
the years immediately preceding the injury, Alexander had earned an
average of $19,000 annually, and the application of paragraph B results in a
greatly inflated average weekly wage reflecting an annual income exceeding
$100,000. See 39-A M.R.S.A. § 102(4)(D) (2001). We agree with PNG that
the Hearing Officer erred by failing to consider the so-called "fallback"
provision, 39-A M.R.S.A. § 102(4)(D) (2001), to determine the employee's
average weekly wage. Accordingly, we vacate and remand to the Board for a
new calculation of the average weekly wage, and for a new determination of
the employee's level of incapacity.
I. FACTS
[¶2] Prior to his work-related injuries, Steven Alexander worked on
pipeline construction projects for over thirty years. He became a side-boom
operator in 1975, and for 29 years, he had worked for a single employer.
That employer provides pipeline workers and boom operators to pipeline
projects around the United States and the world. Alexander testified that,
prior to 1995, he worked year-round, taking one to three weeks off in
between projects. In 1995, Alexander had a "falling out" with his employer
and voluntarily reduced his workload. He testified that "[i]n 1995, Uncle
Sam took a lot more of my money in taxes than I appreciated, and I just
decided that my kids were grown and I didn't need to make that much
money, and I just kind of took a break for those two years." Alexander
reported annual earnings, for tax purposes, of $18,232 in 1996 and $19,477
in 1997.
[¶3] In July 1998, Alexander began work on a gas pipeline project in
Maine for PNG.{1} The Maine pipeline project was scheduled to last between
four and six months. Alexander suffered compensable injuries on
July 30, 1998, and October 30, 1998. As a result of his injuries, Alexander
was, at his request, laid off in October 1998 and remained out of work until
August 1999, when he returned to work as a side-boom operator for a
different company, Delta Gulf, with special work accommodations. He was
laid off by Delta Gulf in October 1999 as part of a general layoff.
[¶4] Alexander filed petitions for an award of workers' compensation
benefits relating to his injuries while employed at PNG. Alexander
contended before the Hearing Officer that his average weekly wage should
be calculated pursuant to 39-A M.R.S.A. § 102(4)(B), based on his earnings
during the PNG project. PNG argued for a more flexible approach pursuant
to subsection 102(4)(D), which requires, in part, that the party asserting
application of subsection D provide evidence of the earnings of comparable
employees. Bossie v. S.A.D. #24, 1997 ME 233, ¶ 5, 706 A.2d 578, 579-80.
PNG's evidence consisted of a stipulation between the parties that the
comparable "boom operators all made comparable wages [to] Mr. Alexander,
which is anywhere between . . . $1,800 to $2,200 and $2,400 a week." PNG
also presented evidence that side-boom operators typically work discrete
jobs for several months with breaks of varying lengths between jobs and that
Alexander had intentionally reduced employment after 1995.
[¶5] Applying subsection 102(4)(B), the Hearing Officer calculated an
average weekly wage of $2,056.16, a figure derived by dividing Alexander's
total earnings from PNG by the number of weeks he worked for PNG. The
Hearing Officer rejected PNG's evidence of comparable employees, stating:
The parties' agreement that employees comparable to Mr.
Alexander earned between $2200.00 and $2400.00 a week adds
little to the analysis. Assuming that that agreement fulfills the
employer's obligation to produce the wages of comparable
employees, Mr. Alexander['s] wage must be computed under
§102(4)(B) of the Act. Mr. Alexander did not work for the
employer nor have earning[s] regular enough to compute his
wage under subsection (A); the work he did was not seasonal;
thus Mr. Alexander's wage falls under subsection (B) and his
earning[s] must be divided by . . . the number of weeks worked.
This indeed yields a wage very close to the wage of the
comparable employee[s].
[¶6] The Hearing Officer awarded ongoing "total compensation"{2}
benefits with an offset for his temporary period of post-injury employment at
Delta Gulf. The Hearing Officer concluded that Alexander's employment at
Delta Gulf did not reflect a post-injury work-capacity, stating:
I accept Mr. Alexander's testimony that Delta Gulf
accommodated him in order to get him to work for them for
that short time by giving him a ride to his home much the way
Portland gas pipeline did for him after the July 19, 1998 injury
and also by limiting the amount he had to lift and even enabling
him to see a chiropractor three times a week while he was on
the job. His earning[s] for Delta Gulf therefore [are] not a[n]
accurate reflection of his post injury earning capacity. Hardy v.
Trailer Sales, 448 A.2d 895 (Me. 1981).
[¶7] The Hearing Officer denied PNG's motion for further findings of
fact and conclusions of law, and we granted PNG's petition for appellate
review pursuant to 39-A M.R.S.A. § 322 (2001).
II. ANALYSIS
A. Average weekly wage
[¶8] Incapacity benefits are calculated as 80% of the difference
between an employee's after-tax average weekly wage at the time of the
injury and the employee's post-injury earning capacity, if any. 39-A M.R.S.A.
§§ 212-214 (2001). The average weekly wage is intended to provide a fair
and reasonable estimate of what the employee in question would have been
able to earn in the labor market in the absence of a work-injury. As we have
stated, "[t]he purpose of calculating an average weekly wage is to arrive at an
estimate of the 'employee's future earning capacity as fairly as possible.'"
Nielson v. Burnham & Morrill, Inc., 600 A.2d 1111, 1112 (Me. 1991)
(quoting Fowler v. First Nat'l Stores, Inc., 416 A.2d 1258, 1260 (Me. 1980)).
[¶9] Calculation of the "average weekly wage" is governed by four
alternative methods outlined in 39-A M.R.S.A. §§ 102(4)(A), (B), (C) & (D)
(2001). Paragraph 102(4)(A) applies to employees who have worked at least
200 days in the year prior to the injury and is inapplicable here. 39-A
M.R.S.A. § 102(4)(A) (2001).{3} Paragraph 102(4)(B) applies to employees
who worked less than 200 days in the year preceding the injury, or whose
earnings during that year have varied from week to week.{4} Paragraph B
provides:
B. When the employment or occupation did not continue
pursuant to paragraph A for 200 full working days, "average
weekly wages, earnings or salary" is determined by dividing the
entire amount of wages or salary earned by the injured employee
during the immediately preceding year by the total number of
weeks, any part of which the employee worked during the same
period. The week in which employment began, if it began
during the year immediately preceding the injury, and the week
in which the injury occurred, together with the amounts earned
in those weeks, may not be considered in computations under
this paragraph if their inclusion would reduce the average
weekly wages, earnings or salary.
39-A M.R.S.A. § 102(4)(B). Paragraph 102(4)(C) applies to "seasonal
employees," and neither party contends that Alexander was a seasonal
employee. 39-A M.R.S.A. § 102(4)(C) (2001).{5}
[¶10] Paragraph 102(4)(D) is a fallback provision, applicable when
none of the foregoing methods can be "reasonably and fairly applied." 39-A
M.R.S.A. § 102(4)(D). Paragraph D provides:
D. When the methods set out in paragraph A, B or C of arriving
at the average weekly wages, earnings or salary of the injured
employee can not reasonably and fairly be applied, "average
weekly wages" means the sum, having regard to the previous
wages, earnings or salary of the injured employee and of other
employees of the same or most similar class working in the
same or most similar employment in the same or a neighboring
locality, that reasonably represents the weekly earning capacity
of the injured employee in the employment in which the
employee at the time of the injury was working.
39-A M.R.S.A. § 102(4)(D).
[¶11] We have said that the methods in section 102(4) should be
applied in the order listed whenever possible. Frank v. Manpower Temp.
Servs., 687 A.2d 623, 625 (Me. 1996); Landry v. Bates Fabrics, Inc., 389
A.2d 311, 312 (Me. 1978). Alexander contends that, once it is determined
that paragraphs A, B, or C can be applied in a given situation, it is erroneous
to apply paragraph D. We disagree. As a matter of logic, one of the
paragraphs, either A, B, or C, can be applied in all employment cases. The
employee's interpretation, therefore, would preclude the application of
paragraph D in all cases. By its plain language, paragraph D is not triggered
when the preceding paragraphs cannot be applied; but rather, it is triggered
when they cannot "reasonably and fairly be applied." 39-A M.R.S.A. §
102(4)(D). The Hearing Officer may not rule out resorting to the fallback
provision simply because one of the preceding paragraphs is applicable on
its face. Paragraph D applies to all cases in which the ordinary calculation
methods would lead to an unfair or unreasonable result.
[¶12] PNG persuasively contends that the Hearing Officer should have
considered paragraph D in the present case. Paragraph B looks only to the
employee's earnings with the employer at the time of the injury, regardless
of the brevity of that employment, or the employee's intermittent
relationship to the labor market. 39-A M.R.S.A. § 102(4)(B). The fact that
employment is of a very short duration does not preclude a reasonable and
fair application of paragraph B when the facts suggest that the employee had
established a new occupation, which, but for the injury, would have yielded a
fair estimate of the employee's uninjured earning capacity. See Fowler, 416
A.2d at 1260 (stating that paragraph B applicable when employee promoted
to new occupation one week prior to injury).{6} When the employment does
not establish a new occupation, however, but reflects part of a pattern of
discrete, short-term employments, paragraph B may result in an inflated
average weekly wage.
[¶13] Alexander's relationship with the labor market, at least since
1995, consisted of a series of discrete, short-term employments which can
best be described as "consistently intermittent." See 5 A. Larson & Lex K.
Larson, Larson's Workers' Compensation Law § 93.02[3][c] (2000). It is
generally accepted that, in order to fairly and accurately determine the
average weekly wage in cases of consistently intermittent employment, the
factfinder should consider whether the employee's part-time employment is
a matter of choice or due to a temporary industry-wide work slowdown. Id.
at 93.02[2][d]. In some cases, when the employee is willing to work full-
time, but the employee's recent work history is consistently intermittent
due to a general economic slowdown, it may not be fair to assume that the
work slowdown will continue into the indefinite future. In such situations, it
may be fairer to treat the employee as a full-time employee for purposes of
calculating the average weekly wage. Id. When the employee voluntarily
limits employment to part-time work, however, it is often appropriate to
look to the fall-back method to determine the average weekly wage. Id. at
§ 93.02[3][c]. See also Bossie v. S.A.D. #24, 1997 ME 233, ¶¶ 5-6, 706 A.2d
578, 579-80; St. Pierre v. St. Regis Paper Co., 386 A.2d 714, 718-19
(Me. 1978).
[¶14] In Bossie, for example, the employee worked as a cook in a
school cafeteria for twenty-four years prior to her work-related injury,
working 36 weeks a year from August to June. Bossie, 1997 ME 233, ¶ 2,
706 A.2d at 579. Because the employee worked too many weeks to fall
within the seasonal worker statute, and because paragraph B would result in
an inflated wage, the hearing officer applied the fallback provision. Id.
[¶15] We agreed in dicta that paragraph D may have been the best
calculation method under the circumstances:
S.A.D. #24 argues that although subsection B is applicable
on its face, subsection D would be the best method for calculating
the average weekly wage of an employee, like Bossie, with a long-
term history of employment for substantially less than the normal
full working year. As Professor Larson states in his treatise, the
average weekly wage determination is not based solely on what
that employee is theoretically capable of earning, but on the
employee's actual work-history, e.g., the employee's willingness
to work full-time and the availability of full-time employment in
the competitive labor market. 2 A. Larson, The Law of
Workmen's Compensation, §§ 60.21(c), 60.22(a) (1993).
Professor Larson is critical of jurisdictions that determine the
earnings of long-term part-time employees based on what those
employees might earn in hypothetical full-time employment:
The flaw in this reasoning is that the purpose of the
wage calculation is not to arrive at some theoretical
concept of loss of earning capacity; rather it is to
make a realistic judgment on what the claimant's
future loss is in the light of all the factors that are
known. One of these factors is the established fact of
claimant's choice of a part-time relation to the labor
market. If this is clear, and above all there is no
reason to suppose it will change in the future period
into which the disability extends, then it is
unrealistic to turn a part-time able-bodied worker
into a full-time disabled worker.
. . . . Id. at § 60.21(c)
. . . [W]e agree with S.A.D. #24 that subsection D might have
been the best method of determining the average weekly wage in
this case. . . .
Id. at ¶¶ 5-6, 706 A.2d at 579-80. (emphasis in original). Although we
agreed that paragraph D might provide the best method for determining the
employee's average weekly wage in Bossie, we vacated the Hearing Officer's
decision because the employer failed to offer into evidence the earnings of
comparable employees. Id. at ¶ 6, 706 A.2d at 580-81; see also St. Pierre,
386 A.2d at 718-19.
[¶16] In the present case, on the other hand, PNG duly met the
evidentiary requirements of paragraph D. First, PNG presented evidence of
the earnings of comparable employees to establish Alexander's average
weekly earnings during the pipeline project. Second, PNG offered evidence
to establish that pipeline projects, in general, are of limited duration, and
that Alexander's relationship to the labor market was consistently
intermittent. The Hearing Officer declined to apply paragraph D, however,
concluding that the calculation prescribed by paragraph B "yields a wage
very close to the wage of the comparable employee[s]," who "earned
between $2200.00 and $2400.00." Accordingly, the Hearing Officer
concluded that examination of the earnings of comparable employees "adds
little to the analysis." To the extent that the Hearing Officer considered
paragraph D, the Hearing Officer appears to have concluded that in order for
the evidence of comparable employees to be useful, the party asserting
application of paragraph D must provide not only evidence of the earnings of
comparable employees, but evidence of comparable employees whose
relationship to the labor market matches that of the employee. We disagree.
[¶17] By its express language, paragraph D requires the factfinder to
give "regard to the previous wages, earnings or salary of the injured
employee," in addition to the earnings of comparable employees. 39-A
M.R.S.A. § 102(4)(D) (emphasis added). Subsection D is flexible and does
not require rigid adherence to any mathematical formula. See, e.g., Roberts
v. Smith, 415 A.2d 1089, 1090 (Me. 1980) ("it [is] not necessary that [the]
computation reflect an exact average of other employees' actual earnings").
As we have noted,
[the fallback provision] in effect broadly requires regard to be
given to any factors relevant in determining the injured
employee's earning capacity on his job just prior to the
injury. . . . Under appropriate circumstances [the fallback
provision's] reference to 'the previous wages, earnings or salary
of the injured employee' must be extended to wages received
from other employers; that is, the scope of the search for
relevant evidence of the employee's own earning capacity under
[the fallback provision] extends beyond computing the
arithmetic averages of the prior wages he had received from a
single employer prescribed by paragraphs A and B.
St. Pierre, 386 A.2d at 719.{7}
[¶18] Paragraph D is intended to apply to unique employment
situations like those present here. Conceivably, none of PNG's employees
may have fit the mold of a "consistently intermittent" employee with
earnings similar to Alexander. Paragraph D does not require employers to
perform a nationwide search for comparable employees. It permits the
Hearing Officer to consider the employee's own earnings and the
employee's own unique relationship with the labor market. PNG provided
evidence of the earnings of comparable employees and evidence that
Alexander's relationship to the labor market was "consistently
intermittent." 5 A. Larson, Larson's Workers' Compensation Law § 93.02[3][c].
Under these facts, we conclude that the Hearing Officer erred by failing to
consider 102(4)(D) because paragraph B can not be reasonably and fairly
applied.
B. Determination of incapacity
[¶19] PNG next challenges the Hearing Officer's award of total
incapacity benefits.{8} An employee can prove entitlement to total incapacity
benefits by showing: (1) the unavailability of work within the employee's
local labor market; and (2) the physical inability to perform full-time work in
the statewide labor market, regardless of availability. See Lamphier v. Bath
Iron Works Corp., 2000 ME 121, ¶ 1, 755 A.2d 489, 490; Adams v. Mt. Blue
Health Ctr., 1999 ME 105, ¶ 18, 735 A.2d 478, 483-84.
[¶20] The Hearing Officer stated: "Even assuming that Mr. Alexander
could find work in a competitive labor market within his limitations for ten
dollars an hour for forty hours a week, he would continue to be entitled to
total compensation." We agree with PNG that this statement is erroneous
on its face. The physical ability to perform full-time work in the competitive
labor market precludes an award of "total compensation" pursuant to the
total incapacity statute. Lamphier, 2000 ME 121, at ¶ 1, 755 A.2d at 490;
Adams, 1999 ME 105, at ¶ 18, 735 A.2d at 483-84.
[¶21] Alexander contends that the Hearing Officer's use of the phrase
"total compensation" was not intended to refer to total incapacity benefits
pursuant to section 212, but to the maximum level of partial benefits
permissible under the Act. See 39-A M.R.S.A. §§ 211, 213 (2001).
Workers' compensation benefits are capped at a maximum dollar amount as
provided in 39-A M.R.S.A. § 211 (2001). Alexander contends that, because
his average weekly wage was calculated at over $2,000 a week, he would be
limited to the maximum level of benefits even if he returned to work
earning $10 an hour for a forty-hour work week. See 39-A M.R.S.A. § 213(1)
(2001) (Partial benefits are calculated as 80% the difference between the
employee's after-tax average weekly wage and post-injury wages).
[¶22] Nevertheless, because partial incapacity benefits are potentially
subject to a maximum week-limitation, see 39-A M.R.S.A. § 213, and total
incapacity benefits have no such limitation, see 39-A M.R.S.A. § 212, the
applicable statute can have important long-term consequences to the
employer and employee. PNG is, therefore, entitled to a determination as to
whether Alexander is physically able to perform full-time work in the
statewide labor market in order to determine whether Alexander is entitled
to benefits pursuant to section 212 or section 213. Moreover, because the
Hearing Officer's determination of incapacity was based on the employee's
average weekly wage, and because the Hearing Officer may have erred in its
determination of that wage, we must remand to the Board for a new
calculation of Alexander's entitlement to incapacity benefits.
[¶23] Finally, PNG contends that the Hearing Officer erred, as a
matter of law, in suggesting that accommodations made by the Delta Gulf,
during Alexander's post-injury employment, automatically prevents the
employment from being regarded as reflecting his post-injury earning
capacity. We disagree with PNG's contentions that the Hearing Officer's
findings reflect an automatic assumption that, just because the employer
accommodated the injury, the employment must be discounted out of hand.
As we have stated, the fact that the employee is earning the same or more
after the injury than before does not preclude a finding of an earning
incapacity. Severy v. S.D. Warren Co., 402 A.2d 53, 55 (Me. 1979). In light
of the substantial job-modifications made by the employer to accommodate
Alexander's work-injuries, the Hearing Officer's finding that Alexander's
short-term employment with Delta Gulf did not reflect the employee's post-
injury earning capacity was not clearly erroneous.
III. CONCLUSION
[¶24] In summary, the Hearing Officer erred by failing to consider the
fallback provision in 39-A M.R.S.A. § 102(4)(D) when determining the
employee's average weekly wage; and it was error for the Hearing Officer to
award "total compensation" without a determination of the employee's
physical capacity to perform full-time work in the statewide labor market, as
required by 39-A M.R.S.A. § 212(1). Moreover, because the Hearing
Officer's determination of incapacity was based on a potentially erroneous
determination of the average weekly wage, we remand to the Board for a
new determination of the employee's incapacity.
The entry is:
The decision of the Workers' Compensation Board is
vacated. Remanded to the Workers' Compensation
Board for further proceedings consistent with the
opinion herein.
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