Sjoberg's Case

• Decision Date: 08 April 1985
• Parties: Kenneth A. SJOBERG'S CASE.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 196

476 N.E.2d 196

394 Mass. 458

Kenneth A. SJOBERG'S CASE.

Supreme Judicial Court of Massachusetts,

Worcester.

Argued Dec. 6, 1984.

Decided April 8, 1985.

Arthur W. Nichols, Jr., Worcester, for insurer.

Raymond H. Giguere, Worcester, for employee.

Before HENNESSEY, C.J., and LIACOS, ABRAMS, LYNCH and O'CONNOR, JJ.

ABRAMS, Justice.

We granted further appellate review to consider whether an injured employee whose average post-injury earnings ultimately exceed his average pre-injury weekly wage solely because of his working substantial overtime hours, is precluded from receiving partial compensation under G.L. c. 152, § 35. ¹ The Appeals Court held that the Industrial Accident Board (board) and the Superior Court correctly concluded that the employee was not so precluded. Sjoberg's Case, 18 Mass.App. 1, 462 N.E.2d 353 (1984). We agree that there is no error in the board's determination and we affirm the judgment of the Superior Court except for the matter of the award of interest.

We summarize the facts as found by the single member of the board. On August 22, 1977, the employee first suffered pain in his back and stomach while performing work as a pressman and molder. He received weekly compensation benefits from that date until his return to work on September 22, 1977. On June 12, 1978, in similar circumstances, he felt a snapping sensation in his back. He was out of work from June 13 through June 16, 1978, and from July 12 through July 30, 1978, during which periods he received weekly workers' compensation benefits. On returning to work, the employee's back remained stiff and sore. When he learned that he did not get a less strenuous job for which he had put in a bid, he submitted his resignation effective October 20, 1978. The employee filed a claim for compensation on November 24, 1978, for partial incapacity from October 20, 1978, and continuing.

The employee's average weekly wage at the time of the June 12, 1978, industrial injury was $302.31. The employee obtained various jobs after his resignation and in 1981, "[w]orking over 50 hours a week ... his average weekly wage was $317.48." The single member noted that "[n]one of the jobs which the employee ... performed since leaving the employer have been as physically demanding as his work for the employer." The single member stated that "[w]hile average weekly wage before and after an industrial injury are important pieces of evidence, this evidence is not conclusive on the issue of loss of earning capacity." He awarded the employee $40 a week for his diminished earning capacity.

The board affirmed and adopted the findings and decision of the single member on September 16, 1982. Liberty Mutual Insurance Company (insurer) filed a complaint in the Superior Court denying any liability for compensation claimed by the employee after July 30, 1978. A judge of the Superior Court dismissed the insurer's complaint and the insurer appealed. The Appeals Court saw "no reason to deny compensation because the diminution of earning capacity [was] concealed by the longer hours worked." Sjoberg's Case, supra at 3-4, 462 N.E.2d 353. The Appeals Court held that "the award for impaired earning capacity under G.L. c. 152, § 35, was not 'tainted by error of law.' Haley's Case, 356 Mass. 678, 680 (1970)." Sjoberg's Case, supra at 4, 462 N.E.2d 353.

The insurer raises three issues on appeal: first, that the award to the employee of $40 per week in partial compensation was excessive; second, that there was no medical evidence before the board to warrant a finding that the employee was disabled after May 7, 1979; and, third, that the trial court erred in its computation of interest due the employee on the judgment. We address each argument in turn.

The insurer contends that an award of partial compensation is controlled by the actual post-injury earnings of the employee and cannot exceed the difference between the prior average weekly wage and the amount he earns. According to the insurer, the Massachusetts Workers' Compensation Act is "based on the wage-loss-replacement principle." Thus, the insurer concludes that the language of G.L. c. 152, § 35, must be strictly construed to mean that "earnings by the employee exceeding his average weekly wage preclude partial compensation benefits."

We reject this reasoning. The Legislature has not specified a method for computing "the average weekly wage [the employee] is able to earn thereafter." G.L. c. 152, § 35. In deciding whether the board erred, we must be "mindful of the deference due the [board's] specialized knowledge, technical competence, and experience, regarding issues within the scope of [its] statutorily delegated authority." Workers' Compensation Rating & Inspection Bureau of Mass. v. Commissioner of Ins., 391 Mass. 238, 245-246, 461 N.E.2d 1178 (1984).

When the employee resigned in October, 1978, he was earning in excess of eight dollars an hour and worked some thirty-seven hours a week for an average weekly wage of $302.31. In 1981, he was earning $4.50 an hour and worked over fifty hours a week for an average weekly wage of $317.48. The board interpreted the language of G.L. c. 152, § 35, as necessitating the exclusion of the overtime hours worked by the employee after his injury in determining his capacity for work. "[U]nder the statute, G.L. c. 152, § 35, it is not the wages actually earned after the injury that are the basis of deciding the earning capacity.... [The employee] is to be paid for the loss of earnings caused by the injury ...." Korobchuk's Case, 277 Mass. 534, 536, 179 N.E. 175 (1931). See Nowak's Case, 2 Mass.App. 498, 500, 314 N.E.2d 455 (1974). The board properly could find that the employee had "a significant impairment of earning capacity concealed within an income equal to his former wage" by virtue of his "working long hours at a lower hourly rate...." L. Locke, Workmen's Compensation § 343, at 402 (1981). Thus, it was not error for the board to conclude that overtime payments, income from special projects, or income derived from non-employment sources should not be included in the employee's post-injury "average weekly wage." ²

This result was prefigured in earlier decisions of this court in which we acknowledged several instances in which post-injury earnings were artificially inflated so as to mask the claimant's true impairment of earning capacity. In Shaw's Case, 247 Mass. 157, 141 N.E. 858 (1923), the employee's post-injury earnings were supplemented by a gratuity from his employer; in Sensk's Case, 247 Mass. 232, 141 N.E. 877 (1924), the employee raised his post- injury earnings by begging in the streets; in Federico's Case, 283 Mass. 430, 186 N.E. 599 (1933), the claimant, a partner in a contracting firm, received income in part from invested capital. In each case, we held the claimant entitled to partial compensation despite the seemingly undiminished earnings.

The result reached by the board is consistent with case law from other jurisdictions interpreting statutory provisions which are substantially similar to G.L. c. 152, § 35. "It is uniformly held ... without regard to statutory variations in the phrasing of the test, that a finding of disability may stand even when there is evidence of some actual post-injury earnings equaling or exceeding those received before the accident. The position may be best summarized by saying that actual post-injury earnings will create a presumption of earning capacity commensurate with them, but the presumption may be rebutted by evidence independently showing incapacity or explaining away the post-injury earnings as an unreliable basis for estimating capacity. Unreliability of post-injury earnings may be due to a number of things; increase in general wage levels since the time of accident; claimant's own greater maturity or training; longer hours worked by claimant after the accident; payment of wages disproportionate to capacity out of sympathy to claimant; and the temporary and unpredictable character of post-injury earnings." 2 A. Larson, Workmen's Compensation § 57.21, at 10-79--10-100 (1983) (citations omitted) (emphasis added).

Several courts have interpreted the applicable workers' compensation statutes to require the exclusion of extraneous factors in determining partial compensation for impaired earning capacity. See, e.g., Goodyear Tire & Rubber Co. v. Downey, 266 Ala. 344, 96 So.2d 278 (1957); Goodyear Tire & Rubber Co. v. Corfman, 424 So.2d 1326 (Ala.Civ.App.1982); Hewing v. Peter Kiewit & Sons, 586 P.2d 182 (Alaska 1978); Arizona Pub. Serv. Co. v. Industrial Comm'n, 16 Ariz.App. 274, 492 P.2d 1212 (1972); Ruddy v. I.D. Griffith & Co., 237 A.2d 700 (Del.1968); Maxey v. Major Mechanical Contractors, 330 A.2d 156 (Del.Super.1974); Fermo v. Superline Prods., 175 Mont. 345, 574 P.2d 251 (1978).

Other courts specifically have held that post-injury earnings must be adjusted appropriately to reflect overtime hours worked. See, e.g., Arizona Pub. Serv. Co. v. Industrial Comm'n, 16 Ariz.App. at 278, 492 P.2d 1212; Devlin v. Iron Works Creek Const. Corp., 164 Pa.Super. 481, 485-486, 66 A.2d 221 (1949). See also Reukauf v. Mobil Oil Corp., 44 A.D.2d 856, 355 N.Y.S.2d 189 (1974) (where claimant's pre- and post-injury weekly earnings fluctuated due to overtime, board must select "reasonable period" and average earnings); Franklin County Coal Corp. v. Industrial Comm'n, 398 Ill. 528, 76 N.E.2d 457 (1947) (overtime earnings excluded from computation by statute). Cf. Texas Employers' Ins. Ass'n v. Wilson, 563 S.W.2d 685 (Tex.Ct.App.1978) (finding of total and permanent incapacity not precluded by fact of employee's working substantial overtime hours after injury due to economic necessity). Contra Reeves v. Echota Cotton Mills, 123 Ga.App. 649, 182 S.E.2d 126 (1971) (claimant not entitled to partial compensation under statute because post-injury earnings exceeded pre-injury wages, despite his working longer hours at lower...