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Thompson v. UPS (2/5/99), 975 P 2d 684
Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
SHELAINE M. THOMPSON, )
) Supreme Court No. S-8376
Appellant, )
) Superior Court No.
v. ) 3AN-96-8706 CI
)
UNITED PARCEL SERVICE, ) O P I N I O N
)
Appellee. ) [No. 5078 - February 5, 1999]
______________________________)
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
Sigurd E. Murphy, Judge, pro tem.
Appearances: Charles W. Coe, Anchorage, for
Appellant. Joseph A. Pollock and Shelby Nuenke-Davison, Davison &
Davison, Inc., Anchorage, for Appellee.
Before: Matthews, Chief Justice, Compton,
Eastaugh, Fabe, and Bryner, Justices.
FABE, Justice.
I. INTRODUCTION
Shelaine M. Thompson left her full-time job as a cargo
handler for MarkAir when it went bankrupt. She started working for
United Parcel Service (UPS), which classified her, like all UPS air
rampers, as a part-time employee. After only two weeks at UPS,
Thompson injured her knee while working. Alaska Statute 23.30.220
contains a formula for determining workers' compensation awards
based on the prior work history of the injured employee. Believing
it unfair to compensate Thompson based on prior full-time work
since UPS classified her as part-time, the Alaska Workers'
Compensation Board deviated from the statute and lowered Thompson's
disability award. Because UPS did not show that application of the
statutory formula was arbitrary and unfair as applied to Thompson,
we reverse and remand to the Board for redetermination of
Thompson's award.
II. FACTS AND PROCEEDINGS
Shelaine M. Thompson worked full-time as an air cargo
handler for MarkAir in 1993 and 1994. During those years she
earned an annual salary of $25,050.59 and $28,142.08, respectively,
including overtime. When MarkAir declared bankruptcy in 1995,
Thompson began working for UPS in a permanent part-time hourly
position as an air ramper earning $8.00 an hour. All UPS
employees, with the exception of management and truck drivers, are
classified as permanent part-time employees; they receive full-time
benefits but generally work five-day work weeks averaging between
three hours and four and a half hours each day.
UPS employees may work a double shift and occasionally
work over eight hours a day -- enough to qualify for overtime pay.
But an employee who "double shifts"is guaranteed neither overtime
nor an eight-hour day. The availability of second shifts is
determined by seniority. Thompson maintained that she intended to
work as many double shifts as possible in order to sustain a salary
comparable to the one she received at MarkAir. She also
investigated obtaining additional part-time employment; she applied
for jobs at the United States Postal Service and Alaska Airlines.
Because UPS could not guarantee full-time hours, many workers on
Thompson's shift similarly worked double shifts, other part-time
jobs, or both.
On August 3, 1995, only two weeks after starting work at
UPS, Thompson injured her knee when her leg fell through the
grating of an aircraft she was unloading. Although Thompson's
hours were not restricted for medical reasons, she was released
back to work on August 15 with instructions that she perform light
duty for three weeks.
During the two weeks prior to the accident, Thompson
spent one full week in training but still managed to double shift
enough to earn overtime on two occasions during the second week.
After the accident, Thompson continued working at UPS until
December 1, 1995, but in a less physically demanding position. In
the months following the accident, Thompson did some double
shifting but only managed to qualify for overtime two more times,
both while working light duty. According to Thompson, her
physician told her to work at her own pace and restricted her from
working on her knees, as required of cargo handlers working in the
bellies of cargo jets. Thompson attended a training course at
Alaska Airlines but was never offered a position there; she claims
this is because she was no longer capable of performing the work.
She was offered a position with the Postal Service, but the offer
was withdrawn when a Postal Service doctor discovered Thompson's
knee injury.
In December 1995 Thompson voluntarily left UPS for
personal reasons unrelated to her injury. On February 20, 1996,
Thompson had arthroscopic surgery on her knee. She was unemployed
and sought no work between the time she left UPS and had the
surgery. After the surgery, Thompson remained unemployed until
switching professions and beginning work for GCI as a warehouse
specialist on May 1.
UPS paid Thompson's medical and rehabilitation bills and
Temporary Total Disability (TTD) benefits while she recovered from
surgery -- a seven-week period running from February 20 to April 9.
UPS calculated the TTD benefits to be $154 a week for a total of
$1,100, based on Thompson's total gross earnings at UPS.
On February 26, 1996, Thompson filed an Application for
Adjustment of Claim to increase her compensation rate to reflect
her full-time earnings at MarkAir. UPS controverted Thompson's
claim. The parties differed as to how to interpret AS
23.30.220(a), [Fn. 1] the statute governing the calculation of the
TTD benefits.
The Workers' Compensation Board heard the matter,
including Thompson's claim for attorney's fees and costs, on
September 17, 1996. Thompson argued that under the 1995 amendments
to the governing statute, [Fn. 2] the compensation rate should have
been based on her best thirteen weeks of the fifty-two weeks prior
to the injury. In the alternative, she argued the same amount
would be reached using the old version of AS 23.30.220(a)(1). That
calculation would incorporate salary from MarkAir and would have
reflected her intention to work double shifts and seek part-time
work elsewhere to supplement the part-time salary that all UPS
workers receive. Under this measure, Thompson calculated her
weekly gross earnings to be $531.92. [Fn. 3]
UPS contended that, according to Gilmore v. Alaska
Workers' Compensation Board, [Fn. 4] applying sec. 220(a)(1) to
Thompson would be unconstitutional because the award would not be
fair to both employee and employer. UPS argued that basing the
compensation rate on Thompson's MarkAir full-time salary when she
only worked part-time at UPS would be unfair. Thus UPS urged the
Board to use the alternative method of calculating the TTD rate
under sec. 220(a)(2) -- gross earnings at time of injury. Under
that
measure, UPS calculated Thompson's weekly gross earnings to be
$181, [Fn. 5] yielding a TTD benefit of $154.
The Board agreed with UPS, finding the differences in
these measures to be substantial and holding that Thompson's
calculation of $531.92 did not accurately reflect her future
earning potential:
[A]fter the period to which the AS
23.30.220(a)(1) formula applies, the employee changed from working
full-time to working part-time. We find double shifting was the
exception more than the rule. . . . [T]he double shift work went to
employees on a seniority basis, and as a new hire, [] the employee
was not part of that group. Also [the UPS employee supervisor]
reviewed the employee's records and found she only worked double
shift[s] on four occasions.
After examining the nature of Thompson's work and work
history, the Board adopted UPS's calculation under sec. 220(a)(2),
concluding:
As we found previously, after the employee
left employment with Mark Air, she went from full-time to part-time
work for a period of approximately 20 weeks. Whether this change
was brought about by economic factors or the employee's desires, it
reflects that during the period of disability (February 20, 1996 -
April 10, 1996), it would have been highly unlikely the employee
would have worked full-time with the earnings she previously made
with Mark Air.
Because it denied Thompson's claim for a TTD rate increase, the
Board also denied and dismissed Thompson's claims for attorney's
fees and costs.
Thompson appealed to the superior court, which affirmed
the Board's denial of a TTD rate increase. Thompson appeals.
III. DISCUSSION
A. Standard of Review
This court independently reviews the merits of an agency
determination and does not defer to the decision of a superior
court acting as an intermediate court of appeal. [Fn. 6] In
reviewing an agency's factual findings, we employ the "substantial
evidence"test. [Fn. 7] Substantial evidence is
such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion. The Board's
decision need not be the only possible solution to the problem, for
it is not the function of the court to reweigh the evidence or
choose between competing inferences, but only to determine whether
such evidence exists.[ [Fn. 8]]
When an agency decision involves expertise regarding
either complex subject matter or fundamental policy formulation,
this court defers to the decision "so long as it is reasonable,
supported by the evidence in the record as a whole, and there is no
abuse of discretion."[Fn. 9] The substitution of judgment test
is "used for questions of law where no agency expertise is
involved."[Fn. 10] This is especially true in the context of
"statutory interpretation or other analysis of legal relationships
about which courts have specialized knowledge and experience."[Fn.
11]
B. The Version of AS 23.30.220(a) in Effect at the Time of
the Injury Applied to Thompson.
Under AS 23.30.185, TTD benefits are calculated by taking
eighty percent of an injured employee's "spendable weekly wages."
Alaska Statute 23.30.220(a), defining spendable weekly wages, is
the substance of this appeal. A threshold question is whether we
apply the 1995 amendments, effective one month after Thompson was
injured, or the 1988 version of AS 23.30.220(a), the law in effect
at the time of the injury. Thompson argues that we should apply
the 1995 amended version; UPS urges that we look to the law in
effect when Thompson was injured.
We presume that statutes only have prospective effect
"unless a contrary legislative intent appears by express terms or
necessary implication."[Fn. 12] We have previously applied the
version of AS 23.30.220 that existed at the time of injury, despite
subsequent amendments. [Fn. 13] And since the 1995 amendments to
AS 23.30.220 evidence no intent that the provision be applied
retrospectively, the Board has applied the 1988 version of AS
23.30.220(a) to cases where the injury occurred -- like Thompson's
-- prior to September 4, 1995. [Fn. 14] We see no reason to
disagree with the Board's rulings. Thus, the Board correctly
determined that the applicable law was the version of AS 23.30.220
in effect at the time of Thompson's injury.
C. Under Gilmore, a Party Must Show Substantial Evidence
that Past Wages Are Inaccurate Predictors of Losses from Injury in
Order to Justify Deviating from AS 23.30.220(a)(1).
UPS reads Gilmore v. Alaska Workers' Compensation Board
[Fn. 15] to mean that "the Board was required to determine what was
fair, both as to the employee and the employer." Because the
Gilmore decision rested on principles of constitutional law, we
review its interpretation under a substitution of judgment
standard. [Fn. 16] We decline to adopt the broad reading of
Gilmore advocated by UPS.
Gilmore concerned the application of AS 23.30.220(a) to
an employee who worked for only thirty-nine weeks in the one
hundred weeks prior to his injury. We found in Gilmore that AS
23.30.220(a) violated the equal protection clause of the Alaska
Constitution. We noted that the
gross weekly wage determination method of AS
23.30.220(a) creates large differences in compensation between
similarly situated injured workers, bears no relationship to the
goal of accurately calculating an injured employee's lost wages for
purposes of determining his or her compensation, is unfair to
workers whose past history does not accurately reflect their future
earning capacity, and is unnecessary to achieve quickness,
efficiency, or predictability.[ [Fn. 17]]
But Gilmore held that AS 23.30.220(a) was unconstitutional as
applied, not facially unconstitutional. We noted that "section
220(a) may be applied constitutionally in a number of
circumstances, for example, where an injured worker has had the
same occupation for all of the past two calendar years."[Fn. 18]
Gilmore's case was not such a circumstance. If he had worked
either more or less in the two calendar years preceding his injury,
his award would have been substantially higher than the amount he
received under the AS 23.30.220(a) formula. [Fn. 19]
In order to determine whether AS 23.30.220(a) could be
constitutionally applied to a particular employee, Gilmore focused
on the predictability of past wage levels. Accordingly, the first
question under Gilmore is not whether an award calculated according
to AS 23.30.220(a)(1) is "fair." Rather, it is whether a worker's
past employment history is an accurate predictor of losses due to
injury. UPS is correct, as a general matter, that if past wage
levels have no rational tendency to show earning capacity,
application of the AS 23.30.220(a)(1) formula may be unfair to
either employer or employee. But where past wage levels are
accurate predictors, the Board must apply the statutory formula.
The decision to depart from the statute must be based on
substantial evidence supporting the conclusion that past wage
levels will lead to an irrational workers' compensation award. The
Board erred here when it conducted a generalized fairness inquiry
rather than asking whether Thompson's past earnings could
accurately be used to determine what she would have earned had she
not been injured.
The Board first determined that there was a "substantial
difference"between Thompson's award under AS 23.30.220(a)(1) and
her gross weekly earnings at the time she was injured. The Board
concluded that, solely due to the disparity, "computation of GWE
under the formula does not accurately reflect the employee's future
earning capacity"and then deviated from the statutory formula.
This analysis puts the cart before the horse; the disparity is only
relevant if past wages do not accurately predict future earning
potential. The disparity does not per se indicate a lack of
predictive value.
In fact, a primary purpose of our workers' compensation
laws is to predict accurately what wages would have been but for a
worker's injury. In Johnson v. RCA-OMS, Inc., [Fn. 20] we
explained that under past versions of the statute at issue here,
the "entire objective of wage calculation is to arrive at a fair
approximation of claimant's probable future earning capacity."[Fn.
21] We reiterated this theme in Gilmore with regard to the 1988
version of the statute involved in this case when we quoted Johnson
with approval. [Fn. 22]
D. The Board Lacked Substantial Evidence to Depart from the
Statutory Formula in Determining Thompson's Award.
Because UPS seeks deviation from the statutory formula in
the calculation of Thompson's disability award, UPS carries a heavy
burden. UPS must show that the application of AS 23.30.220(a)(1)
is irrational as a measure of earning capacity. Since the question
of the reliability of Thompson's past work history as a predictor
is factual in nature, we review the issue under the substantial
evidence test, [Fn. 23] viewing whether the evidence relied upon
was substantial in light of the record as a whole. [Fn. 24]
The Board here failed to consider several crucial facts
in its determination that Thompson's award should not be calculated
under AS 23.30.220(a)(1). Although the Board accurately noted that
Thompson had recently moved from full-time to part-time work, it
treated this decision as indicative of an intent to make a
lifestyle change. Yet despite the Board's assertion that Thompson
may have switched to part-time employment due to her own desire,
all the evidence indicates that Thompson moved to a part-time
position only because her previous employer went out of business
and the only positions at UPS for workers in her job category were
classified as part-time. Rather than earn only a part-time wage,
she intended to work double shifts in order to obtain the
functional equivalent of full-time work. Thompson testified that
she wanted to "double shift every day to try to make a 40-hour
week, so that . . . I would be able to . . . compensate from going
from a higher-paying job."
Alternatively, Thompson intended to obtain other part-
time cargo handling work to make up the difference between her
MarkAir salary and that at UPS. These intentions were frustrated
only by her injury. Thompson completed a training course at Alaska
Airlines but could no longer perform the work after the accident.
She was offered a job with the Postal Service but could not take it
when a Postal Service physical examination revealed her recent knee
injury. And since moving to a desk job at GCI, Thompson has
continued to work full-time, including overtime. The Board had no
contrary evidence before it. Thompson, quite simply, is not the
worker we hypothesized in Gilmore's footnote 13 when we stated that
the statutory formula might overcompensate a worker who recently
moved from full-time to part-time work. [Fn. 25]
The Board declined to give weight to Ms. Thompson's
intent to double shift because "double shifting was the exception
more than the rule"and because it was allocated on a seniority
basis, placing Thompson at the end of the line for availability.
But the Board made no mention in its decision of Thompson's intent
to work in another part-time job along with her work at UPS. UPS
urges that reliance on Thompson's intentions is "far too
speculative and had little correlation to the existing factual
circumstances." We have recognized, however, that "intentions as
to employment in the future are relevant to a determination of
future earning capacity"in determining proper compensatory awards.
[Fn. 26]
Moreover, the Board seems to have used Thompson's lack of
double shifting after her injury as a factor in determining her
earning capabilities. The Board found that UPS's employee
relations supervisor "reviewed the employee's records and found she
only worked double shift on four occasions."[Fn. 27] But this
analysis fails to account for the fact that Thompson was injured
after only two weeks at UPS, one of which was spent in training.
Limited working hours following injury are not particularly
relevant to a determination of a worker's probable work patterns
had no injury been sustained.
In light of the fact that the Board refused to consider
Thompson's supplemental part-time job options and appeared to use
her lack of overtime pay following the injury to determine her
earning potential, we cannot say that there exists "substantial
evidence in light of the whole record that a reasonable mind might
accept as adequate to support the board's conclusion."[Fn. 28]
Accordingly, we hold that the Board lacked the proper evidentiary
basis to justify its departure from the statutory formula. UPS has
not met its burden of showing that application of subsection (a)(1)
inadequately predicted Thompson's probable wages had she not been
hurt on the job.
E. Attorney's Fees
Because we reverse, Thompson is entitled to receive
reasonable attorney's fees and legal costs pursuant to AS
23.30.145.
IV. CONCLUSION
The Board was correct to apply the version of AS
23.30.220(a) in effect at the time of the injury. But its
determination that Thompson's past wages were an insufficiently
accurate predictor of the losses caused by her injury was
unsupported by substantial evidence, and thus the Board should not
have deviated from the statutory formula. We REVERSE and REMAND to
the Board to award Thompson compensation calculated under the
formula in AS 23.30.220(a)(1) as well as reasonable attorney's fees
and costs.
FOOTNOTES
Footnote 1:
At the time Thompson was injured, AS 23.30.220 read in
relevant part:
(a) The spendable weekly wage of an
injured employee at the time of an injury is the basis for
computing compensation. It is the employee's gross weekly earnings
minus payroll tax deductions. The gross weekly earnings shall be
calculated as follows:
(1) the gross weekly earnings are
computed by dividing by 100 the gross earnings of the employee in
the two calendar years immediately preceding the injury;
(2) if the employee was absent from the
labor market for 18 months or more of the two calendar years
preceding the injury, the board shall determine the employee's
gross weekly earnings for calculating compensation by considering
the nature of the employee's work and work history, but
compensation may not exceed the employee's gross weekly earnings at
the time of the injury . . . .
Footnote 2:
Legislative changes to AS 23.30.220 became effective September
4, 1995, about a month after Thompson's injury. The statute now
reads in relevant part:
(a) Computation of compensation under
this chapter shall be on the basis of an employee's spendable
weekly wage at the time of injury. An employee's spendable weekly
wage is the employee's gross weekly earnings minus payroll tax
deductions. An employee's gross weekly earnings shall be
calculated as follows:
(1) if at the time of injury the
employee's earnings are calculated by the week, the weekly amount
is the employee's gross weekly earnings;
(2) if at the time of injury the
employee's earnings are calculated by the month, the employee's
gross weekly earnings are the monthly earnings multiplied by 12 and
divided by 52;
(3) if at the time of injury the
employee's earnings are calculated by the year, the employee's
gross weekly earnings are the yearly earnings divided by 52;
(4) if at the time of injury the
(A) employee's earnings are calculated
by the day, hour, or by the output of the employee, the employee's
gross weekly earnings are the employee's earnings most favorable to
the employee computed by dividing by 13 the employee's earnings,
not including overtime or premium pay, earned during any period of
13 consecutive calendar weeks within the 52 weeks immediately
preceding the injury;
(B) employee has been employed for less
than 13 calendar weeks immediately preceding the injury, then,
notwithstanding (1)-(3) of this subsection and (A) of this
paragraph, the employee's gross weekly earnings are computed by
determining the amount that the employee would have earned, not
including overtime or premium pay, had the employee been employed
by the employer for 13 calendar weeks immediately preceding the
injury and dividing this sum by 13;
(5) if at the time of injury the
employee's earnings have not been fixed or cannot be ascertained,
the employee's earnings for the purpose of calculating compensation
are the usual wage for similar services when the services are
rendered by paid employees;
. . . .
(7) when the employee is working under
concurrent contracts with two or more employers, the employee's
earnings from all employers are considered as if earned from the
employer liable for compensation.
Footnote 3:
($25,050.59 + $28.142.08)/100.
Footnote 4:
882 P.2d 922 (Alaska 1994).
Footnote 5:
UPS used the following calculation: ($3,570.72/138) x 7 --
(income earned/# days worked) x (seven days in a week) [Fn. 29].
Footnote 6:
See Handley v. State, Dep't of Revenue, 838 P.2d 1231, 1233
(Alaska 1992) (citation omitted).
Footnote 7:
Jager v. State, 537 P.2d 1100, 1107 (Alaska 1975).
Footnote 8:
Interior Paint Co. v. Rodgers, 522 P.2d 164, 170 (Alaska 1974)
(footnotes and internal citation omitted).
Footnote 9:
See Ellis v. State, Dep't of Natural Resources, 944 P.2d 491,
493 (Alaska 1997) (quoting Kodiak W. Alaska Airlines, Inc. v. Bob
Harris Flying Serv., Inc., 592 P.2d 1200, 1203 n.7 (Alaska 1979)).
Footnote 10:
Bruner v. Peterson, 944 P.2d 43, 47 n.5 (Alaska 1997)
(citation omitted).
Footnote 11:
Earth Resources Co. v. State, Dep't of Revenue, 665 P.2d 960,
965 (Alaska 1983) (quoting Kelly v. Zamarello, 486 P.2d 906, 916
(Alaska 1971)).
Footnote 12:
Pan Alaska Trucking, Inc. v. Crouch, 773 P.2d 947, 948 (Alaska
1989).
Footnote 13:
See Phillips v. Houston Contracting, Inc, 732 P.2d 544, 545-46
(Alaska 1987); Johnson v. RCA-OMS, Inc., 681 P.2d 905, 906 & n.2
(Alaska 1984).
Footnote 14:
See, e.g., Reiter v. C.-Express Moving & Storage, 1996 WL
444404 at *3 (Alaska Work. Comp. Bd. May 9, 1996).
Footnote 15:
882 P.2d 922 (Alaska 1994).
Footnote 16:
See Bruner v. Peterson, 944 P.2d 43, 47 n.5 (Alaska 1997);
Earth Resources Co. v. State, Dep't of Revenue, 665 P.2d 960, 965
(Alaska 1983) (quoting Kelly v. Zamarello, 486 P.2d 906, 918
(Alaska 1971)).
Footnote 17:
Gilmore, 882 P.2d at 929.
Footnote 18:
Id. at 930 n.17.
Footnote 19:
See id. at 925 n.8.
Footnote 20:
681 P.2d 905 (Alaska 1984).
Footnote 21:
Id. at 907 (quoting 2 Larson, The Law of Workmen's
Compensation sec. 60.11(d) at 10-564 (1983)); see also State Dep't
of
Transp. & Pub. Facilities v. Gronroos, 697 P.2d 1047, 1049 (Alaska
1985).
Footnote 22:
Gilmore, 882 P.2d at 927.
Footnote 23:
See Jager v. State, 537 P.2d 1100, 1107 (Alaska 1975).
Footnote 24:
See Delaney v. Alaska Airlines, 693 P.2d 859, 863 & n.2
(Alaska 1985) (citing Keiner v. City of Anchorage, 378 P.2d 406
(Alaska 1963)), overruling on other grounds recognized in Yahara v.
Construction & Rigging, Inc., 851 P.2d 69, 72 (Alaska 1993).
Footnote 25:
See 882 P.2d at 928 n.13. Indeed, that footnote refers to
State Department of Transportation & Public Facilities v. Gronroos,
697 P.2d 1047 (Alaska 1985), a case in which we overturned the
Alaska Workers' Compensation Board's award of compensation based on
year-round wage calculations for a seasonal worker. See id. at
1049. Unlike Thompson, Gronroos "found that the seasonal job was
ideal for his circumstances"because it "supplemented his
retirement income, yet permitted him vacation time in Hawaii." Id.
at 1048. This is the type of situation in which a move to part-
time work justifies a finding that past earnings are not indicative
of future earning potential; Thompson's situation stands in marked
contrast.
Footnote 26:
Gronroos, 697 P.2d at 1049 n.2 (citing Vetter v. Alaska
Workmen's Compensation Board, 524 P.2d 264, 266 (Alaska 1974)).
Footnote 27:
This finding of fact, as well as being misleading, is also
inaccurate. In fact, the UPS supervisor testified that Thompson
double shifted enough to lead to four overtime periods, not four
double shifts. Since a worker in Thompson's position would work
only between 15 and 22.5 hours a week without double shifting, and
overtime is work over eight hours a day (forty hours a week), this
is a significant difference. To the extent that this particular
finding is the basis for the Board's holding, then, that holding is
completely unsupported by the evidence.
Footnote 28:
Delaney v. Alaska Airlines, 693 P.2d 859, 863 (Alaska 1985),
overruling on other grounds recognized in Yahara v. Construction &
Rigging, Inc., 851 P.2d 69, 72 (Alaska 1993).
Footnote 29:
8 Alaska Administrative Code (AAC) 45.210(a) requires the
Board to calculate spendable weekly wages based on a seven day work
week.
