### IN THE SUPREME COURT OF TENNESSEE AT JACKSON April 3, 2001 Sessio

n

DOROTHY WILKINS v. THE KELLOGG COMPANY

Appeal from the Circuit Court for Shelby County No. 91639T.D. John R. McCarroll, Judge

No. M1999-00676-SC-R3-CV - Filed July 3, 2001

A DOLPHO A. B IRCH , J R ., J., filed a dissenting opinion, in which William M. Barker, J., joined.

The majority holds that

the difference between pre- and post-injury wa ges for an employee whose weekly wage fell from $1,433.82 to $860.80 is $0. This holding, in my view, contravenes legislativeintent, creates the pot ential for abuse of the benefit sc

heme, and muddles

benefit calculation. In order to more effectively pr omote the Worker’s Compens at ion Act’s intended objectives and clarify benefit calculation, I w ould define “wage” in the temporary partial disability provision to mean “average weekly wag e,” not “hourly rate of

p ay.” Acco

rdingly, I respectfully dissent.

The intended purpose of the Act is

to reimburse employees for the financial consequences of wo rkplace injur ies. See Betts v. Tom Wade G in , 810 S.W.2d 140, 142 (T enn. 1991) (“[T]his Court must interpret [the Act] in a manner designed to protect workers and their families from the economic devastation that . . . canfollow on- the-job injuries.”). In common-sense terms, when a work-related

injury harms an employee financ ially, the Act provides relief by off setting the reduced earning capa cit y caus ed b y the inj ury. The maj ori ty decision to define “wage” as “hourly rate of pay” when calculatin

g temporary

partial disability

benefits undermi

nes this principle

because hourly rate of pay, unlik

e average we

ekly wage

, is not a reliable ind icator of the economic impact of a workplace injury.

An example illustrates the lack of correlation between the economic impact of

an injury and hourly rate

of pay:

Two employees, A and B, work 40 hours per week and are

each paid $ 10 pe r hour, a weekly wage of $400. Both sustain injuries which render them temporari ly, partially disabled, and both are assigned light duty work. A is paid a light duty rate of $5 pe r hour andworks 40 ho urs per week, while B continues to receive $10 per hour but receives only 20 hours per week of light duty work.1 The majority asserts that basing b enefits on ave rage week ly wage would cause emp loyees like W ilkins to

receive a “windfall” bec ause temp orary partial d isability benefits mig ht sharply exce ed tempo rary total disab ility benefits

. This assertion, however, is not convinci ng. The majority notes that Wilkins’s benefi ts would have been subje c t to a maximum weekly be

nefit “cap” of $454. 13 had she rec eived te mpor ary tota l disability benefits. B ecause W ilkins’s weekly wage already exceed ed this cap, it argues, benef its based on average we ekly wage wo uld unfairly result in disprop ortionate benefits. This conclusion,

howe ver, fails to consi der that the temporary parti

al disabil ity provis

ion states that it is “ subject

to the s ame maximum as stated in [th

e temporary

total disabil

ity pr ovision ].” Tenn. Code Ann. § 50-6- 207(2)(1997). Were th e Court co ncerned th at Wilkins w ould receive a “win dfall,” it could prev ent such a resu lt, with fewerpolicy ramifications, by holding that the emplo yee’s light duty wage plus the tempora ry partial disab ility benefits paid by the e mployer c annot exce ed the max imum statutor y benefit for tem porary tota l disability.

-2- A and B both have su

ffered an ident

ical weekly

economic loss of $2

00 because of the

ir injur y. Under the majority holding, however, B receives no benef

its because B’s hourly pay remained unchanged, wherea s A r eceives $133.33 per week because A’s hourly pa y was reduced. Even though the two injuries have caused the same financial consequences , the results are markedly different

. Under the majorit y holding, t

he benefits an em

ployee rec

eives depend not u

pon th e economic impact of an injury but upon employer decisions reg arding pay rates f

or light duty

work. This surely is not the result the legislature intended. Temporarily partially disabled employees who suffer financially because they

work fewer hours are no less deser ving of compensa

tion than those who work full time at lower rates of p ay. In my view, a result whi ch differentia

tes so arbitraril

y betweensimilarly-si

tuated employ

ees seems contrary t

o our duty to u

phold the equal protection of law.

The majority holding creates the potential for abuse by employers. Again, an example may be instructive:

E works 40 hours per week at $10 per hour, a weekly wage of $400. A work-related in

jury rende

rs E temporaril

y partially disabled. E’s employer assigns E ten hour

s per week of lig

ht duty work. E receives the same hou rly p ay, $10 per hour, but loses 30 hours of work time,

a weekly loss of $300. Had E been total ly disab led for the same period, he would have received $266.67 (66 2/3 percent of $400) per week in benefits,but becau se he is working t en hours a week a

t his pre-injury hourly rate

he is not entitled to b

enefits.

Under the majority holding, E’s employer has a strong incentive to offer small amounts of light duty work to avoid pay

ing benefits. I

f E accepts the li

ght duty assignment, he w

ill suffer financ

ially; if he refu ses , it may j eop ardi ze h is j ob. By th e si mpl e ex ped ien t ofass igni ng pa rti all y disab led employeesfewer light duty hours but leaving hourly pay rates un

chan ged, employ

ers can avoid liability for

benefits. This Cour

t should not encour

age such resul

ts. 1

The majority impli

es that itsholding is compelled by the “obvious meaning” of the statute’s terms. See

majority op. at

___ (citin g Pollard v. Knox County , 886 S.W.2d 759, 760 (Tenn. 1994)). But the meaning of “

wage” in the sta

tute is not obvious. I

ndeed, the majori

ty concl usion is not2 No tably, McCracken ’s holding that av erage wee kly wage do es not app ly to perman ent partia l disability benefit s

fornon-schedule i

njuries has

been legislatively overr uled. See Tenn. Code Ann. § 50-6-207(3)(2) (noting that permanent partial disabil ity aw ards , includ ing those apportioned to the body as a whole, are based on 66 2/3 percent of the employee ’s a verage weekly wage). The legislature’s amendment of the statute after McCracken lends support to the contention that average week ly wage should be dee med the intended b asis for computation of all disability benefits.

3 Ironically, the reas on McC racken’s average we ekly wage was higher immed iately before his injury was because he was working overtime hours when he wa s injured. McCracken , 264 S.W.2d at 2 27. Thus, McCracken ’s holding was

c rafted t o take overtime wages into ac count, whereas the majo rity holding ignores the financial consequenc es of lost overtime p ay.
-3- supported by

precedent,

and it tends to contradict statements made by this Court in prior cases . In Continental Insurance Co. v. Dowdy, for example, this Court upheld the trial court’s award of temporary

partial disability

benefits base

d upon 66 2/3 percent of the difference between the employee’s weekly

wage and the amount the employee earned after her injury

. See 560 S.W.2d 619, 622 (Tenn. 1978).

Likewise, in McCracken v

. Rhyne , upon which the majority relies, the Court interpreted “wage at the tim e of t he i nju ry” in the then-existing permanent partial disability benefits provision 2 not to mean hourly

rate of pay

, but average weekly wage immediately preceding the injury (rather than the average for the

entire year). 264 S.W.2d 226, 227 (Tenn. 1953) (noting that McCracken’s average weekly wage for a 52-week period was $33.22, but his average wee kly wage i

mmediately precedinghis injury was $42.80). 3 Critical to the rationale of McCracken was that average

weekly wage at t he t ime of t he i nju ry, as opposed to the yearly avera ge weekly wage, better mea sured “the effect of [work-related] injuries on the ear ning cap acity of the employee.” Id. at 228. As the majority states, “it is difficult to see why the result in Wilkins’s case s hou ld b e any different.” Majority op. at ___.

Adm itt edl y, the statut e’s literal language refers to “wage” ins tead of “aver age weekly wage.” But other provisions of

the Act sugge

st that the legisla

ture intended tem

porary pa rtial disabi lity benefitsto be based on average weekly wag e. The use of phrases such as “wage of the worker at the timeof the inju ry” instead of “a verage weekly wa ge” is not unique

to the temporary

partial disability provision. The phrase “wage received at the time of the injury ” ap pear s in the permanent total disability provision, Tenn. Code Ann. § 50-6-207(4)(A)(i)(1977). There, however, it is clear that the legislature inte

nded to refer to a

verage week

ly wage, f or the provision la

ter mentions average weekly wage in its discussion of maximum and minimum weekly benefits. Reading the two sections together, it appears that the legislature used “average weekly wage” and “wage a

t the time of the injury” interchangeably

.
Fin all y, today’s holding will prove confusing for the trial judges who will be asked to apply it. Certainly, benefits calculation is straightforward where an employ

ee is paid a lower

hourly rate for light duty work but continue s to w ork full time. In such a case, the court simply awards twothirds (66 2/3 percent) of the difference between the pre-injury hourly rate and

the post-injury

hourly rate, presumably

multiplied by t

he number of hour

s worked. If

the employe

e receives a low

er hourly4 The ma jority also fails to explai n why Wilki

ns is i neligi ble for benefits u

nder its own hol

ding. Wilkins was paid a higher hou rly rate for her o vertime wo rk, which she lo st as a dir ect result of he r work-related injury. The majority’s conclusi

on that Wilkins is not entitled to b enefits fails to acco unt for the differe nce betwe en the overtim e rate of pay Wilkins was earning prior to her injury and t he hourly rate she earned in her partial ly disabled condition.

-4- rate of pay for light duty work and works fewer hours, however, ma ny questions arise. Are benefits basedon the employee’s full-time hours, or is the reduction in hour s worked taken into

account? If the reduction in hours is considered in such a case, why is Wilkins’s loss of twenty hours per week irrelevant?

Are overtime hours simply ignored when calculating benefits? If so, what is the statutory justification for treating overtime hours dif fere ntl y? 4 These questions r emain unanswere

d and will necessitate futu

re clarificati

on by the Cour

t.

For the foregoingreasons, I w ould hold that “wage” should be defined in Tenn. Code Ann. § 50-6-207(2) to mean average weekly w age. The use of

average weekly wage as the basis for benefit calculation would better achieve the results intended by the legislatur e, woul d ensure that employeesare fairly

compensated for

the economic impa

ct of work-rela

ted injuries,

and would

ensure clarity and fairness in the calculation of temporary partial disabili ty benefits. Because the majority opin

ion fails to accomp

lish any of th

e above-enumer

ated ends, I r

espectfully

dissent.
I am authorized to state that Justice Barker joints in this dissenting opinion.

___________________________________ ADOLPHO A. B IRCH, JR., JUSTI CE