Opinion ID: 1349673
Heading Depth: 1
Heading Rank: 3

Heading: The Implications of Sobotka

Text: Because the decision in Sobotka has spawned disagreement at the administrative level and at the Court of Appeals, we turn to discussion of the lead opinion in that case before applying the general principle that an employee must prove an impairment of wage-earning capacity. We again note that the source of this disagreement may be confusion over the difference between the concepts of a reduction in wage earning capacity and residual wage earning capacity in the context of a worker claiming partial disability. In Sobotka, an employee was found to be partially disabled from a 1978 injury, [27] and claimed that this personal injury had totally prevented him from earning a wage under subsection 361(1). [28] The following portion of the defendant's brief accurately summarized the questions presented in Sobotka: The difference between MTLA's/plaintiff's fall-back position, on the one hand, and defendant's position, on the other, can be illustrated as follows. Plaintiff and MTLA would have the factfinder ask itself two questions in cases like this: (1) Does the employee have some degree of disability? (2) If so, has the employee earned any wages after the commencement of that disability? If the factfinder's answer to these questions is that the employee is disabled to any degree and no wages have actually been earned after the commencement of the disability, then the employee is to be automatically awarded the maximum rate of compensation. [Emphasis added.] Defendant's position is that if the employee is partially disabled and if no wages have actually been earned thereafter, then the factfinder must ask: (3) Why has the employee earned no wages since the commencement of the disability? [Emphasis in the original.] If the answer to the question is that the employee has earned no wages because of the work injury, then the employee should receive the maximum rate of compensation to which he or she is entitled. On the other hand, if the answer to the question is that a partially disabled employee is not earning wages within his or her residual capacity for reasons other than the work injury, then the employee does not necessarily receive the maximum rate of compensation. Instead, he or she receives the rate commensurate with the diminution in wage-earning capacity that is the result of the work injury. [See also Sobotka, at 18-19, 523 N.W.2d 454.] We held that  361 did not require that plaintiff's award be reduced by the amount he is hypothetically able to earn after the injury. We also addressed what appeared to us to be a straightforward question: Could benefits ever be denied where plaintiff was injured and unemployed? We answered: Yes, where the defendant carries the burden of showing the plaintiff's employability. Fellows v. Fuller Brush Co, 1996 Mich. ACO 151, 161. [29] Our response was intended simply (1) to reject the plaintiff's claim that the mere fact that a claimant remained unemployed after injury automatically established an absence of wage-earning capacity under  361, [30] (2) to accept the claim that if the employee has earned no wages because of the work injury, he should receive the maximum benefits to which he is entitled, and (3) to reject the claim that a partially disabled employee who is not earning wages receives the rate of benefits that is commensurate with the diminution in wage-earning capacity that is the result of the work injury. Thus, although we agreed with the defendant that absence of wages not truly related to the work injury did not justify an award of compensation and held that a magistrate could infer that a plaintiff is avoiding work, Sobotka at 27, 523 N.W.2d 454, we rejected the defendant's claim that a partially disabled worker who is not receiving wages must prove that the absence of wages is due to absence of residual wage-earning capacity. Id. The lead opinion in Sobotka was therefore not intended to resurrect the approach that benefits must be calculated and reduced on the basis of residual earning capacity and furnishes no authority for the proposition that subsection 301(5)(b) requires employees to prove loss of residual earning capacity. [31] Unemployment or reduced wages must be causally linked to work-related injury, and a plaintiff may not reject actual wages reasonably offered or avoid or refuse actual wages. [32] While the lead opinion rejected the interpretation that able to earn in subsection 361(1) is only synonymous with actual wages earned or refused, see Sobotka, supra at 19, 21-22, 523 N.W.2d 454 (Boyle, J., lead opinion), relying in part on Pulley v. Engineering & Machine Co., 378 Mich. 418, 423, 428, 145 N.W.2d 40 (1996), and Hood v. Wyandotte Oil & Fat Co., 272 Mich. 190, 192-193, 261 N.W. 295 (1935), [33] we quoted with approval this Court's previous conclusion that the `real inquiry [for determining loss of wages] relates to the monetary worth of the injured workman's services in the open labor market under normal employment conditions.' Sobotka, supra at 24-25, 523 N.W.2d 454 (Boyle, J., lead opinion), quoting Jones v. Cutler Oil Co., 356 Mich. 487, 490, 97 N.W.2d 74 (1959). However, we did not intend to imply that residual wage earning capacity was relevant to proof of wage loss. Rather, we intended our analysis to reflect the fact that the magistrate's role in judging the credibility of the employee's evidence is central to determining whether he is entitled to an award. [34] Although we rejected the plaintiff's claim that wage loss from any source and a personal injury automatically mandated maximum benefits, we held, as the Court of Appeals correctly concluded in Brown v. Contech, 211 Mich.App. 256, 262, 535 N.W.2d 195 (1995), that where unemployment of a partially disabled employee is found to be directly attributable to a compensable injury, maximum benefits may be awarded. [35] We observed: Where, on account of an injury, an employee is, in fact, unemployed, the employee is entitled to the maximum benefit allowable under  361(1), because the employee is not able to earn wages post-injury. [ Sobotka at 7-8, 523 N.W.2d 454.] Most importantly, we rejected the principle that the employer of a partially disabled employee should be credited with a wage-earning capacity in the absence of post-injury employment. As we specifically stated, this means that it is not part of the plaintiff's burden in proving disability that other factors are not the cause of his unemployment. Plaintiff need not prove what he is theoretically able to earn after the injury, that other factors are not the cause of his unemployment, or that the amount of residual capacity is diminished. [36] If the magistrate credits testimony that there is a direct link between wages lost and a work-related injury, plaintiff need not prove anything in addition. [37] By the language and structure of the statute and previous interpretation of the Court, an employee must prove a reduction in earning capacity. However, Sobotka furnishes no authority for the proposition that plaintiffs must prove absence of residual earning capacity, i.e., an inability to earn the same wages when considering all the jobs within his qualifications and training. Further, except as otherwise indicated, subsection 301(5) does not require an adjustment of benefits on the basis of existence of a residual wage-earning capacity. Whether disability is total or partial, actual loss of wages causally linked to a work related injury is loss of wage-earning capacity. [38] In summary, absent clear Legislative direction to the contrary, [39] we conclude that for an employee to carry his burden of proving an impairment of wage-earning capacity, he must prove (1) a work-related injury, (2) subsequent loss in actual wages, and (3) that the injury caused the subsequent wage loss. Where the employee has carried his burden of proving wage loss, he will, as a practical matter, have proven that he is unable to perform a single job within his qualifications and training, and, therefore, that he is disabled.