JACOBSON TRANSPORTATION COMPANY and LIBERTY MUTUAL INSURANCE, Appellants, vs. RUSSELL HARRIS, Appellee.
No. 08–0065
IN THE SUPREME COURT OF IOWA
Filed February 12, 2010
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Polk County, Robert B. Hanson, Judge.
Employee seeks further review of court of appeals’ decision reversing workers’ compensation commissioner’s calculation of a weekly compensation rate. DECISION OF COURT OF APPEALS VACATED; DISTRICT COURT JUDGMENT AFFIRMED.
Michael L. Mock of Bradshaw, Fowler, Proctor & Fairgrave, P.C., Des Moines, for appellee.
HECHT, Justice.
In this appeal, we must determine whether the workers’ compensation commissioner properly excluded three weeks of earnings from the calculation of an injured employee’s compensation rate. We conclude the commissioner did not err by excluding three weeks of low earnings and replacing them with earnings from three earlier weeks which more fairly represented the employee’s customary earnings.
I. Factual and Procedural Background.
Russell Harris (Harris) was hired by Jacobson Transportation Company (Jacobson) in April 2003 as an over-the-road truck driver. He was paid by the mile, and he was not guaranteed a minimum amount of work each week. Accordingly, the number of miles he drove each week varied depending on the assignments he received from Jacobson, but also on other factors such as traffic, speed limits, road construction, and weather. Harris’s weekly earnings during his employment were as follows:1
| 04/26/2003 | $702.08 | 08/23/2003 | $958.72 |
| 05/03/2003 | $851.20 | 08/30/2003 | $667.20 |
| 05/10/2003 | $295.84 | 09/06/2003 | $892.64 |
| 05/17/2003 | $1117.12 | 09/13/2003 | $247.36 |
| 05/24/2003 | $764.80 | 09/20/2003 | $1036.48 |
| 05/31/2003 | $833.76 | 09/27/2003 | $944.00 |
| 06/07/2003 | $0.00 | 10/04/2003 | $227.52 |
| 06/14/2003 | $1710.08 | 10/11/2003 | $1223.76 |
| 06/21/2003 | $1068.64 | 10/18/2003 | $0.00 |
| 06/28/2003 | $538.24 | 10/25/2003 | $1183.52 |
| 07/05/2003 | $542.08 | 11/01/2003 | $870.72 |
| 07/12/2003 | $355.68 | 11/08/2003 | $1012.00 |
| 07/19/2003 | $698.59 | 11/15/2003 | $1128.32 |
| 07/26/2003 | $0.00 | 11/22/2003 | $940.16 |
| 08/02/2003 | $806.51 | 11/29/2003 | $662.40 |
| 08/09/2003 | $708.48 | 12/06/2003 | $453.92 |
| 08/16/2003 | $875.52 |
On December 9, 2003, while unloading freight in California, Harris injured his low back. The injury was diagnosed as a lumbosacral and thoracic spine strain, and Harris was restricted to light-duty work by a physician. Harris received a series of spinal injections after returning to work, but in March 2004 he was unable to continue driving because of the injury.
From June 2004 through September 2005, Harris sought treatment from several different doctors. Their diagnoses were generally similar, although they disagreed about the best course of treatment and whether Harris had reached maximum medical improvement. Each of the doctors believed Harris was capable of light-duty work and recommended that he not return to truck driving.
In March 2005, Harris filed a claim for workers’ compensation benefits. After an arbitration hearing on November 8, 2005, a deputy workers’ compensation commissioner determined that Harris was permanently and totally disabled. The deputy commissioner calculated Harris’s average weekly rate pursuant to
When calculating Harris’s weekly compensation rate, the commissioner cited Hanigan v. Hedstrom Concrete Products, Inc., 524 N.W.2d 158 (Iowa 1994), noting the “purpose of weekly compensation is to replace the probable earnings that were lost due to the injury.” The commissioner then engaged in a lengthy analysis of Harris’s compensation.
The weekly earnings range from a high of $1,223.76 to a low of $227.52. When reviewing the distribution of earnings I find that there are five weeks in which claimant earned $1,012.00 or more per week. There were two weeks in which claimant earned $247.36 per week or less. Over the 30 weekly pay periods that claimant worked for the employer his total earnings were $24,317.34 . . . . The weekly average of claimant’s total earnings is thus $810.58. For the thirteen weeks immediately prior to his work injury, claimant earned more than $810.58 in ten of those weeks.6 . . . It is concluded that claimant’s average weekly wage should be calculated by discarding the weeks ending December 6, 2003 ($453.92), October 4, 2003 ($227.52), and September 13, 2003 ($247.36). By discarding those three weeks and adding earnings for the weeks ending August 30, 2003 ($667.20), August 23, 2003 ($958.72), and August 16, 2003 ($875.52) it is concluded that claimant’s gross earnings for the period are $12,395.44. When divided by thirteen weeks the average weekly gross earnings are $953.50.
II. Scope of Review.
Our review of a decision of the workers’ compensation commissioner varies depending on the type of error allegedly committed by the commissioner. If the error is one of fact, we must determine if the commissioner’s findings are supported by substantial evidence.
In this case, the commissioner concluded three of the thirteen weeks prior to Harris’s injury did not fairly reflect his customary earnings and replaced them with weeks that he concluded did represent Harris’s customary earnings. There is no factual dispute concerning the amount of Harris’s wages in the weeks prior to the injury. The dispute centers instead on the commissioner’s interpretation of the words “customary earnings” in
III. Discussion.
In the case of an employee who is paid on a daily or hourly basis, or by the output of the employee, the weekly earnings shall be computed by dividing by thirteen the earnings, not including overtime or premium pay, of the employee earned in the employ of the employer in the last completed period of thirteen consecutive calendar weeks immediately preceding the injury. If the employee was absent from employment for reasons personal to the employee during part of the thirteen calendar weeks preceding the injury, the employee’s weekly earnings shall be the amount the employee would have earned had the employee worked when work was available to other employees of the employer in a similar occupation. A week which
does not fairly reflect the employee’s customary earnings shall be replaced by the closest previous week with earnings that fairly represent the employee’s customary earnings.
Jacobson alleges the commissioner misinterpreted the last sentence of this provision authorizing the replacement of weeks which do not reflect the employee’s “customary earnings.” Because Harris’s weekly earnings fluctuated based on the number of miles he drove and because Harris was not guaranteed a uniform number of miles each week, Jacobson posits that the only customary feature of Harris’s earnings is their variability. Accordingly, in the case of an employee like Harris, Jacobson argues, the statute does not authorize the commissioner to exclude weekly earnings simply because they are significantly lower than other weeks without an explanation for the low wages that provides a rationale beyond the expected fluctuation in miles occurring from week to week.
Our goal, when interpreting a statute, is to give effect to the intent of the legislature. Griffin Pipe Prods. Co. v. Guarino, 663 N.W.2d 862, 864 (Iowa 2003). To determine the intent of the legislature, we look first to the words of the statute itself as well as the context of the language at issue. Id. at 865. We seek to “interpret [the provision] in a manner consistent with the statute as an integrated whole.” Id. Mindful that a fundamental purpose of the workers’ compensation statute is to benefit the injured workers, we interpret
Consistent with the remedial nature of workers’ compensation laws, statutes for computation of wage bases are “meant to be applied, not mechanically nor technically, but flexibly, with a view always to achieving the ultimate objective of reflecting fairly the claimant’s probable future earning loss.”
Hanigan, 524 N.W.2d at 160 (quoting 2 Arthur Larson, Workmen’s Compensation Law § 60.11, at 10-622 (1994) (now found at 5 Arthur Larson & Lex Larson, Larson’s Workers’ Compensation Law § 93.01[1][c], at 93–7 (2009))).
We think our decision in Griffin Pipe, interpreting
Why a particular week may not reflect the employee’s customary hours is important only insofar as it might be relevant to whether the hours worked in that week are in fact customary. . . .
We agree with the agency that the issue under
section 85.36 “is whether the hours of work in any particular workweek are representative of the hours typically or customarily worked by an employee during a typical or customary full week of work.”
Although not in effect at the time of Guarino’s injury, we also discussed the 2000 amendment to
confirmed this court’s interpretation of
section 85.36 . . . . Accordingly, to determine what weeks should be included in the compensation rate calculation one must ask whether the earnings attributable to a particular week are customary, not whether a particular absence from work is anticipated.
Griffin Pipe, 663 N.W.2d at 867.
Thus, in our interpretation of
Next, then, we must address whether an employee whose earnings fluctuate each week can ever have atypical weekly earnings justifying replacement under
We do not interpret the word “customary” so rigidly as to conclude that just because an employee’s schedule or output is neither fixed nor guaranteed, the employee cannot have “customary” earnings. “Customary” means “based on or established by custom“; “commonly practiced, used or observed“; or “usual.” Merriam-Webster’s Collegiate Dictionary 285 (10th ed. 2002). We have previously defined “customary” as “typical.” Griffin Pipe, 663 N.W.2d at 866. Ascertainment of an employee’s customary earnings does not turn on a determination of what earnings are guaranteed or fixed; rather, it asks simply what earnings are usual or typical for that employee. As discussed above, an employee need not justify the variance with a particular explanation. The amount of the variance alone, by the magnitude of its departure from the usual earnings of the employee, may suffice to justify the exclusion of a week’s earnings from the weekly rate calculation. Put another way, even an employee whose wages fluctuate can have an unusually low or abnormally high week of output and resulting earnings. We think it is important that when the legislature clarified its intent in the 2000 amendment to have atypical weeks excluded from the calculation, it added the language to
We believe the commissioner’s interpretation of “customary earnings” is compatible with the legislature’s directive that injured employees’ weekly rate of compensation shall be based on their “average spendable weekly earnings” at the time of the injury.
Our interpretation of “customary earnings” is further supported by the fact that all calculations of Harris’s average weekly earnings, whether performed by either of the parties or by the agency, have replaced the October 18 week of zero earnings with an earlier week in which Harris had earnings. Although no explanation has been provided for this replacement, we think it demonstrates a common sense understanding of what is considered customary. Even for an employee like Harris whose earnings vary each week, a week of zero earnings is not customary. This raises the question: If a week of zero earnings is so low that it must be excluded as not typical, where should the line be drawn? What of a week of $100 earnings? Because we think the determination of what
We must next decide whether the commissioner’s decision to replace the three weeks of Harris’s earnings was illogical, irrational, or wholly unjustifiable in this case. The commissioner’s appeal decision discloses a careful and thorough consideration of Harris’s earnings during each of the thirteen weeks immediately prior to the injury and a thoughtful comparison of how the earnings in those weeks compared with those paid to Harris during earlier weeks of employment with Jacobson. After reviewing the weekly earnings and comparing them to the average weekly earnings for Harris’s prior career as an employee of Jacobson, the commissioner concluded the earnings from three of the weeks were so low as to be not customary and replaced them with the immediately preceding three weeks of earnings. In deciding whether Harris’s earnings during the three disputed weeks were so substantially lower than what he usually earned as to be unrepresentative, we conclude the commissioner aptly compared the earnings from those weeks with Harris’s broader earnings history. When viewed in this way, the three weeks excluded by the commissioner were so far afield from Harris’s usual earnings as to be fairly characterized as unrepresentative of customary earnings.
While we do not believe the analysis undertaken by the commissioner in this case is the only appropriate method of arriving at a determination of whether earnings are customary, we conclude it was reasonable under the circumstances presented here.
Jacobson contends that even if the commissioner did not err in excluding the three lowest weeks of earnings, it was irrational and arbitrary to exclude only the lowest weeks and not the highest weeks.11
As we have already noted, workers’ compensation statutes are to be interpreted and applied liberally and flexibly for the benefit of the worker. Griffin Pipe, 663 N.W.2d at 865; Hanigan, 524 N.W.2d at 160. The commissioner’s decision that Harris’s compensation during the three low weeks was exceptionally low, while the high weeks were not unusually high when compared to the earnings history was not arbitrary or unreasonable in this case. As acknowledged by the commissioner, nearly half of the thirteen weeks prior to the injury produced earnings of more than $1012.00, but only two weeks had income of $247.36 or less. The commissioner reasonably determined that most of the thirteen weeks of earnings exceeded $810.58, Harris’s average weekly earnings for his entire preinjury career at Jacobson. When the range of Harris’s weekly earnings is considered, as well as the distribution of the earnings, with most of the weekly earnings near the high end, the commissioner’s decision to replace only the three lowest weeks because they were significantly lower than Harris’s career average is not unreasonable. Given our standard
IV. Conclusion.
We agree with the workers’ compensation commissioner’s interpretation of
DECISION OF COURT OF APPEALS VACATED; DISTRICT COURT JUDGMENT AFFIRMED.