MT Court Weighs Difficult AWW Issues in Concurrent Employment Claim

In a decision that illustrates the tender balance attempted in state Workers’ Compensation Acts between fairness to the injured employee and fairness to the employer and/or carrier, the Workers’ Compensation Court of Montana earlier this year held that an injured employee’s compensation rate for her 10-percent whole person impairment must be based upon her average weekly wage from all her concurrent employment at the time of the injury and not at the time she reached maximum medical improvement and was released by her physician to return to her primary job without restrictions (she was not so released to return to her part-time position with another employer [Barnhart v. Montana State Fund, 2022 MTWCC 1, 2022 MT WRK. COMP. LEXIS 1 (Jan. 11, 2022), reh’g denied, 2022 MTWCC 4, 2022 MT WRK. COMP. LEXIS 3 (Feb. 11, 2022)]. The State Fund had argued that the employee’s compensation rate should be limited to her wage basis at the concurrent job to which she could not return.

Background

Barnhart sustained injuries in a motor vehicle accident that occurred in the course of her employment with Youth Dynamics. She suffered a left L5-S1 herniation and the State Fund accepted liability for the injury. For her job at Youth Dynamics, Barnhart worked an average of 40.6 hours per week and made $14.47 per hour. Accordingly, her AWW was $587.40. If considered alone, Barnhart’s PPD rate for her work at Youth Dynamics is $ 384 [Author’s note: In Montana, the benefit for PPD may not exceed one-half of the state’s AWW, see 39-71-703(6), MCA].

Barnhart also had concurrent employment at Dairy Queen. She worked an average of 15.2 hours per week and made $18.55 per hour. Her AWW was $281.91. If considered alone, Barnhart’s PPD rate for her work at Dairy Queen is $187.94.

The aggregate AWW of Barnhart’s concurrent employments was $869.31, which results in a PPD rate of $384, the state maximum.

Maximum Medical Improvement, 10 Percent Impairment

Upon reaching MMI, Barnhart’s physician released her to work for Youth Dynamics, but not to her concurrent position at Dairy Queen. The physician also opined that Barnhart had a class 2, 10-percent whole person impairment rating under the AMA Guides.

The State Fund argued that it should pay PPD benefits based solely upon her wages from the job at which she could no longer work, essentially arguing that, for a claimant with concurrent employments, § 39-71-123(4)(c), MCA, provided that Barnhart’s PPD benefits were to be based on the wages from the employment from which she was disabled at MMI.

Barnhart moved for summary judgment, asserting that, under § 39-71-123(3) and (4), MCA, her wages should be calculated based upon the aggregate average wages from her concurrent employments at the time of her injury [emphasis added]. Thus, the State Fund contended Barnhart’s PPD benefits should be paid at the rate of $187.94 per week, whereas Barnhart contended the rate should be $384.

Workers’ Compensation Court Stresses “Time of Injury” Controls Issue

The Workers’ Compensation Court granted Barnhart’s motion for summary judgment and determined that her compensation rate should be $384. The Court reasoned that the sole purpose of § 39-71-123, MCA, was to calculate a claimant’s wages at the time of her injury. For a claimant with concurrent employments, § 39-71-123(4)(c), MCA, states that her wages are to be “based on the aggregate of average actual wages of all employments … from which the employee is disabled by the injury incurred.”

The Court stressed that the phrase “from which the employee is disabled by the injury incurred” in § 39-71-123(4)(c), MCA, is to be assessed at the time of injury, and not when the claimant reached MMI. That meant that, for a claimant with concurrent employment, the earnings from the employments from which she is disabled at the time of injury are to be included in the calculation of her wages. A claimant’s wages are then used throughout her claim to calculate the rates for each benefit to which she is entitled.

Commentary

At first blush, the relevant statute and the decision seem unfair to the employer/carrier. After all, coverage had been provided to the primary employer, Youth Dynamics. The employee sustained an injury while employed with the primary employer, received appropriate benefits based on the total concurrent wages during the period she was temporarily totally disabled, and then was released to return to work at her primary employer. What could be fairer than to base any additional PPD award solely on the wages she was not permitted to earn at the second employer?

As we see from time to time on both sides of the compensation equation, the issue really isn’t one of fairness. Consider the following hypothetical. A young attorney works as an associate for a law firm. She is injured in an auto accident while investigating a claim. She sustains a back injury, undergoes surgery, and is eventually released to return to her job, albeit with a 10-per cent whole person impairment. She returns to her job at her former income level. She seeks workers’ compensation benefits based upon her whole person impairment. Is it fair that she should be awarded PPD benefits when she has returned to her job at full pay?

Under the Acts of the vast majority of states, fairness doesn’t enter the picture when it comes to her entitlement. Under the Acts of the vast majority of states, she need not show any loss of earnings or loss of earning power; she is proceeding under “the schedule” for PPD.

I think the same force is at work here in the Montana case. Fairness might dictate that the employer/carrier only be responsible for the wage loss due to the employee’s inability to return to her second job. Had there been no 10-percent whole body impairment—i.e., had she been relying upon a wage loss argument, that back pain or other issues associated with her injury prevented her from completing the 55-hour work week that she had “enjoyed” before the injury, the employer/carrier would have been correct in arguing her benefits should be based only upon the wages she had lost. Again, however, to be somewhat repetitive, her entitlement to PPD benefits isn’t linked to her inability to hold down the second job, but rather on her scheduled impairment.

One caveat: There may be some nuance in Montana law that I’m missing. My research this morning was limited to reading a few cases and reviewing Larson’s Workers’ Compensation Law § 93.03, which handles the AWW computation issue when it comes to concurrent employment. I’m going to reach out to some Montana colleagues for additional thoughts and guidance.