Powell v. Casco Nelmor Corp.

Coleman, C.J.

(concurring in part, dissenting in part). Between the loose language employed in the Worker’s Disability Compensation Act, MCL 418.101 et seq.; MSA 17.237(101) et seq., and the interpretations variously superimposed upon it, we frequently find ourselves mired in obscure, if not meaningless, catch-words. Some such words have lost in transit, through undiscriminating application, any specific meaning. Such is the basic problem in this case. The words "favored work’’ have evolved into meaning almost anything or nothing. As an analytical tool, they are inadequate as employed in the majority opinion. It is the indiscreet use of these words which leads to the partial dissent.

We concur in the majority’s holding, given the facts of this case, that the redemption of plaintiffs claim for benefits deriving from an alleged occupational disease (cancer of the larynx) does not preclude recovery on her claim for benefits for pre-cancer occupational injuries. Pursuant to the language of the redemption agreement, entered into without any determination of liability, the occupational nexus issue remains unresolved and the dispute settled. Thus, we agree that there is no factual or legal basis upon which the redemption could be said to preclude benefits for the pre-exist-ing hand injuries. However, we do not agree that Herrala v Jones & Laughlin Steel Corp, 43 Mich *357App 154; 203 NW2d 752 (1972), is reliable authority for this decision.1

Our colleagues’ analysis of the legal and factual effects of plaintiff’s post-injuries work.history and the intervention of cancer upon her entitlement to worker’s disability benefits is based upon the use of the "favored work” concept as a net to catch any and all work performed subsequent to an injury for the same employer. The Workmen’s Compensation Appeal Board (WCAB) stated that plaintiff’s post-injuries employment was "favored, vis-á-vis her pre-injuries work capacity”. Accepting this finding of fact and applying previous decisions of this Court holding that favored work cannot establish a wage-earning capacity,2 the majority reversed the WCAB and the Court of Appeals and held that as a matter of law plaintiff did not (indeed, could not) establish a wage-earning capacity in her post-injury employment. Therefore, in our colleague’s opinion, the termination of that "favored work” because of subsequent cancer necessarily left plaintiff with a compensable disability.

The problems with the development of this case are basically twofold. First, there is the WCAB’s assertion that plaintiff’s post-injuries employment *358was "favored, vis-á-vis her pre-injuries work capacity”. This bald statement is not supported by any analysis which would indicate that plaintiffs post-injuries employment was not regular employment with ordinary conditions of permanency. It may bé that the WCAB meant that because plaintiff could not perform her pre-injuries employment, her post-injuries employment was necessarily favored work. Conversely, the WCAB may have determined that the post-injuries employment was similar to odd-lot, nondescript or "manufactured” work. We do not know the meaning of the WCAB’s label.

Moreover, fitting post-injury employment into favored or nonfavored categories provides little assistance in the resolution of this type of situation. The proper focus of analysis in such cases has been dictated by the Legislature. The set-off proviso of § 371 reads:

"The compensation payable, when added to his wage earning capacity after the injury in the same or another employment, shall not exceed his average weekly earnings at the time of such injury.” MCL 418.371; MSA 17.237(371). (Emphasis added.)

The relevant inquiry when determining the amount of compensation to which a disabled worker is entitled is whether the employee’s wage-earning capacity has been impaired and, if so, to what extent. The language quoted above clearly says that a claimant may be disabled and still have an earning capacity "in the same or another employment”. The WCAB did not address itself to this crucial issue of fact; thus we would remand to the WCAB for a determination of whether plaintiffs wage-earning capacity had been impaired and, if so, to what extent. Entitlement to benefits should be computed accordingly.

*359Secondly, we cannot agree that, as a matter of law, post-injury employment in a different kind of work can never establish an earning capacity. When determining whether a disability is compen-sable, the issue is the same whether post-injury work is labeled favored or nonfavored: has claimant’s wage-earning capacity been impaired and, if so, to what extent? If claimant’s general disability (as distinguished from scheduled disabilities) still allows him/her to perform a regularly recognized job with ordinary conditions of permanency, then that fact is relevant and material to ascertaining the degree of impairment of earning capacity.

Similarly, even if post-injury employment is necessarily less strenuous because of the injury, the fact that claimant is able to work in some capacity should be considered by the finder of fact.

We would hold that any post-injury earnings create a rebuttable presumption of current wage-earning capacity equal to the amount of said earnings.

However, such a presumption may be rebutted and overcome by other factors. Consideration also should be given to physical and mental abilities, education, training, age, availability of employment within these abilities, and whether any post-injury employment was a regular job with ordinary conditions of permanency or more similar to odd-lot, nondescript or "manufactured” work. Claimant should be allowed an opportunity to show that the post-injury employment is an unreliable basis for measuring wage-earning capacity or to establish incapacity through independent evidence.

We would remand this case to the WCAB for proceedings consistent with this opinion. The effect of plaintiffs cancer upon her wage-earning capac*360ity should not be considered because it is legally unrelated to plaintiffs claim.

I

The employer-defendant, Casco Nelmor Corporation, produced exterior automobile mirrors. On March 16, 1967, while operating an automatic buffing machine, plaintiff was injured when a piece of stock flew out of the loader and struck her left wrist. Disability compensation was paid during her recovery period. Ignoring medical advice to submit to an operation, plaintiff returned to work after about two months. Because of the injury, diagnosed as De Quervain’s disease, she could not manipulate her left hand sufficiently to operate the buffer, so she was assigned to a burring wheel.

Plaintiff’s task was to debur, or grind, sharp edges from the mirrors by pressing them against the wheel. The weakness in her left hand caused her to compensate by pressing harder with her right hand and thumb. Consequently, by November 16, 1967 plaintiff had developed a "trigger thumb” on her right hand and was disabled until March of 1968. In the interim, she underwent surgery for the thumb condition and received disability benefits.

Upon returning to work, plaintiff was assigned to a bagging or packing job which entailed placing the finished parts in boxes prior to shipping. Plaintiff finally consented to surgery upon her left wrist in September of 1968. She returned to work in January of 1969 and briefly performed a clerical job before returning to the packing position. Periodically, the employer would try plaintiff at the burring wheel, but the same problems (pain and swelling of the hands) quickly reoccurred. Thus, *361she remained a packer where she experienced no further hand problems until the termination of her employment in April of 1972. From her change of work in 1967 until she quit in 1972 because of cancer, her wages increased from their pre-injury level.

Plaintiff began to experience problems with her throat in 1971, which were finally diagnosed as cancer of the larynx. A laryngectomy was performed in August of 1971. Plaintiff returned to work after the operation but soon had to quit. The environment of defendant’s plant was unsuitable to plaintiff. She now breathes through an opening in her neck, thus by-passing the filtering mechanisms of the nose and throat of a normal person. Eventual medical advice was to discontinue working in such an atmosphere. Plaintiff testified that her voluntary termination of employment was in no way occasioned by a hand problem.

A compensation claim was filed alleging that the factory’s pollutants caused her cancer and claiming work-related injuries to both hands. The cancer claim was redeemed without a finding of causation and the administrative law judge found plaintiff totally disabled because of work-related injuries to her hands. The WCAB found that plaintiff was partially disabled, but that the disability was noncompensable because her post-injuries employment was terminated by a supervening, independent, nonoccupational cause (cancer). Because she suffered no wage loss, even though partially disabled because of the hand injuries, no benefits were awarded. The WCAB said, "Here an event intervened in no way imputable to the employer.”

The Court of Appeals affirmed on the ground that no impairment of earning capacity was established by the plaintiff.

*362II

Analysis of this case must begin with the recognition that plaintiff is partially disabled because of a "personal injury arising out of and in the course of [her] employment”.3 The broad question then becomes whether that disability is compensable. Compensability (or amount of benefits, if any) turns on the impairment of wage-earning capacity issue.4 The rate of compensation is set at a percentage of claimant’s average weekly wage loss, MCL 418.351, 418.361; MSA 17.237(351), 17.237(361), and the weekly wage loss must "fairly represent the proportionate extent of the impairment of his earning capacity in the employment in which he was working at the time of the injury”. MCL 418.371(1); MSA 17.237(371X1). (Emphasis added.)

The WCAB opinion and the record reveal that *363plaintiffs earning capacity as an operator of a buffing or burring machine is definitely impaired, probably totally. However, the compensability of plaintiffs disability is limited by the set-off proviso of § 371, which reads:

"The compensation payable, when added to his wage earning capacity after the injury in the same or another employment, shall not exceed his average weekly earnings at the time of such injury.” MCL 418.371(1); MSA 17.237(371X1). (Emphasis added.)

Thus, once the finder of fact has determined that a claimant is disabled by a work-related personal injury, analysis must focus upon claimant’s post-injury wage-earning capacity to determine the rate of compensation, if any, which is due. Wage-earning capacity in other work, as well as in the pre-injury employment, must be considered.

Conceptually, then, the act (MCL 418.101, et seq.; MSA 17.237[101], et seq.) calculates benefits by comparing actual, pre-injury earnings with post-injury earning capacity.5 These two elements of the equation are different. Actual wages are a definite, fixed quantity. Wage-earning capacity, however, is a more nebulous, theoretical concept. Earning capacity has many component parts of which actual earnings are merely one. As Professor Larson states:6

*364"It is uniformly held, therefore, without regard to statutory variations in the phrasing of the test, that a finding of disability may stand even when there is evidence of some actual post-injury earnings equaling or exceeding those received before the accident. The position may be best summarized by saying that actual post-injury earnings will create a presumption of earning capacity commensurate with them, but the presumption may be rebutted by evidence independently showing incapacity ór explaining away the post-injury earnings as an unreliable basis for estimating capacity. ” 2 Larson’s Workmen’s Compensation Law, § 57.21, pp 10-28 — 10-37. (Emphasis added.)

Evaluation of the degree of impairment of a disabled worker’s earning capacity requires consideration of a myriad of factors. Yet, it is reasonable to presume that if a claimant has actual earnings after a disabling injury, then an earning capacity exists commensurate with those wages. See, e.g., Wieland v Dow Chemical Co, 334 Mich 427; 54 NW2d 708 (1952), MacDonald v Great Lakes Steel Corp, 274 Mich 701; 265 NW 776 (1936). Given that actual wages are but one part of a claimant’s earning capacity, however, it is also fair to conclude that this presumption may be rebutted by Showing that these earnings are an unreliable basis for estimating capacity. For example, if the employment was "manufactured” work, temporary, sporadic, nondescript, or Of the "odd-lot” variety, then the force of the presumption is diluted. See, e.g., Hood v Wyandotte Oil & Fat Co, 272 Mich 190; 261 NW 295 (1935). See also, 2 Larson’s Workmen’s Compensation Law, §§ 57.21, 57.50 et seq. Similarly, evidence independently establishing incapacity, such as the claimant’s actual physical condition after the injury, can also rebut this presumption. See, e.g., Shaw v General Motors Corp, 320 Mich 338; 31 NW2d 75 (1948), 2 *365Larson’s Workmen’s Compensation Law, §§ 57.30 et seq.

Post-injury earnings are the clearest evidence of claimant’s earning capacity. This is particularly true when the post-injury work is in regularly recognized employment with ordinary conditions of permanency. It has been previously stated that:

"When an employee accepts work and receives wages therefor in a recognized regular employment, with the ordinary conditions of permanency, as here, there is no room for argument that he has not thereby established a present earning capacity equal to such wages, whatever may be his physical condition.” Markey v SS Peter & Paul’s Parish, 281 Mich 292, 299-300; 274 NW 797 (1937). See, also, Pulley v Detroit Engineering & Machine Co, 378 Mich 418; 145 NW2d 40 (1966).

Consequently, we would create a rebuttable presumption that a claimant has an earning capacity equal to his/her post-injury wages. This presumption can be overcome by showing that these wages are ah unreliable basis for measuring earning capacity or by independently establishing impairment of capacity.

Ill

At least two cases hold that favored work does not establish an earning capacity. Evans v United States Rubber Co, 379 Mich 457, 465; 152 NW2d 641 (1967), Lynch v Briggs Manufacturing Co, 329 Mich 168, 172; 45 NW2d 20 (1950). While the persuasive force of these opinions is open to question,7 we do agree that the existence of post-injury *366employment cannot be solely determinative of the earning capacity issue. If post-injury earnings were determinative, then the unscrupulous employer could unfairly avoid paying benefits.8

However, the procedure of characterizing such employment as favored or nonfavored and then saying that as a matter of law no wage-earning capacity can ever be established in favored work undermines the function of § 371’s set-off proviso. While not solely determinative, any type of post-*367injury employment is relevant and material to finding whether claimant has a "wage earning capacity after the injury in the same or another employment”. Consequently, we support the principle that any post-injury earnings create a rebut-table presumption of earning capacity commensurate with said wages.

A further objection to the use of the favored-nonfavored dichotomy is the lack of a simple, coherent definition of favored work. We have not unearthed any workable definition of the concept and none has been cited to us. A perusal of the cases suggests that when a worker is assigned to less strenuous work after an occupational injury, this new job constitutes favored work. In the typical case, almost any post-injury employment would be categorized as favored and be prevented from establishing an earning capacity by Lynch, Evans, and the majority opinion herein. However, a determination of whether performance of certain work establishes an earning capacity should depend upon consideration of all relevant factors including the nature, permanency and availability of such work evaluated in light of the claimant’s disabilities.

Although we agree that in many cases post-injury employment would not establish a wage-earning capacity because of other factors (medical incapacity, manufactured work, odd-lot doctrine, such work generally unavailable, etc.), this is no reason to exclude post-injury work from any consideration of the finder of fact. A far better approach, and one which we espouse, is to avoid useless labels and to confront the task of ascertaining the extent of impairment of claimant’s earning capacity. We would end the practice of characterizing post-injury work by catch-words of no reliability in deter*368mining the compensability of occupational injuries. So far as Lynch and Evans conflict with this opinion, we would overrule the cases.

IV

The majority opinion states that "the 'subsequently disabling cancer’ had no effect whatsoever on plaintiff’s right to compensation for her prior hand injury”. We agree that the intervention of cancer has no legal or factual bearing on plaintiff’s entitlement to benefits. As the Court of Appeals stated:

"An independent, intervening event, which follows a personal injury arising out of and in the course of employment, does not alone justify the denial, suspension, reduction, or increase of disability benefits for a continuing work-related injury. In the present case, plaintiff’s throat cancér itself would not alter her right to collect workers’ disability benefits if her hand injuries in fact diminished hér wage earning capacity.”

Plaintiff’s entitlement to benefits should be evaluated in light of her pre-cancer wage-earning capacity.

We would remand this case to the WCAB for further proceedings. Focus should be lipón plaintiff’s post-injuries and pre-cancer earning capacity. We would hold that plaintiff’s post-injuries employment created a rebuttable presumption of earning capacity commensurate with those wages. Evidence should be accepted which may show that this employment is an unreliable basis for measuring earning capacity or which independently establishes incapacity.

We would remand to WCAB for proceedings consistent with this opinion.

Fitzgerald and Ryan, JJ., concurred with Coleman, C.J.

Herrala involved a claimant who suffered work-related injuries in 1954 and 1959. Two claims were filed in 1959, but benefits were only awarded for the 1954 injury. That award was redeemed in 1965 and claimant refiled for the 1959 injury in 1966. The Court of Appeals awarded full benefits, distinguishing Harrison v Lakey Foundry Co, 361 Mich 677; 106 NW2d 521 (1960), on the grounds that Harrison only prohibits double collection of benefits in the same period of time.

The Herrala Court misread Harrison. The thrust of Harrison was that there could not be two recoveries for the loss of one earning capacity even though there were two distinct work-related injuries. In this case, if Mrs. Powell’s cancer had been first determined to be work-related and then redeemed, pursuant to Harrison she would not have a viable claim for benefits due to her hand injuries.

Evans v United States Rubber Co, 379 Mich 457, 465; 152 NW2d 641 (1967), Lynch v Briggs Manufacturing Co, 329 Mich 168, 172; 45 NW2d 20 (1950).

MCL 418.301; MSA 17.237(301). There is no dispute that the injuries are work-related. Furthermore, plaintiff is disabled within the meaning of the statute. " 'Disability’ means the state of being disabled from earning full wages at the work in which the employee was last subject to the conditions resulting in disability.” MCL 418.401(a); MSA 17.237(401)(a).

In Pigue v General Motors Corp, 317 Mich 311, 316; 26 NW2d 900 (1947), it was said:

"The principle upon which compensation is awarded is, that the employee has suffered a loss in his wage-earning capacity as a result of a compensable injury suffered while in the employ of his employer.”

The validity of this statement is borne out by the language of MCL 418.351, 418.361, 418.371; MSA 17.237(351), 17.237(361), 17.237(371). A more complete explanation was provided by Leskinen v Employment Security Commission, 398 Mich 501, 508-509; 247 NW2d 808 (1976), where the Court said:

'!Eligibility for benefits under the act is established when an, employee proves that he has suffered a personal injury which arose 'out of and in the course of his employment’. * * * It is only after this threshold determination that the amount of benefits is then computed. The statutes and the prior decisions of this Court make apparent the fact that 'earning capacity’ is a factor in calculating the amount of beneñts, not whether a claimant has suffered a work-related personal injury. ”

As explained by Professor Larson, 2 Larson’s Workmen’s Compensation Law, § 57.21, this is the same procedure used by most other states to calculate the degree of disability, not the amount of benefits owed.

As noted in footnote 5, supra, Professor Larson is speaking about earning capacity and post-injury employment in terms of calculating degree of disability. The Michigan act defines disability as the inability to perform the work claimant was doing at the time of injury. MCL 418.401(a); MSA 17.237(401)(a). Earning capacity relates only to the amount of benefits payable. Yet, in terms of the impact of post-injury employment upon the evaluation of post-injury earning capacity, the language set out in the text is relevant.

In Lynch, a mere plurality opinion, the Court cites Smith v Pontiac Motor Car Co, 277 Mich 652, 657; 270 NW 172 (1936), for the proposition that "Lynch’s favored work after his total disability did not, however, establish his wage-earning capacity”. There is ho fur*366ther analysis or discussion of this point in Lynch. A close reading of the Smith case, however, reveals that it was misread by the Lynch Court. Smith, supra, 656-658, merely says that post-injury earnings are but one of the many factors constituting earning capacity and that such earnings are not necessarily determinative of earning capacity. Post-injury employment could establish an earning capacity, but it does not necessarily do so. No distinction was made between favored and nonfavored work.

The Evans case creates even more confusion. There, the defendant admitted in a brief before the WCAB that claimant’s post-injury job " 'was favored due to his alleged inability to do his regular job’ ”. Evans, supra, 465. Yet, because the lighter work "was a regularly recognized job which existed and had been done regularly by others before and after plaintiff did it”, the WCAB held that plaintiff had "established a wage-earning capacity in a recognized common labor occupation” and denied benefits. Evans, supra, 464. Citing no authority (not even Lynch), the Court held that performance of favored work (i.e., less strenuous post-injury work) cannot establish a wage-earning capacity even if it is regularly recognized employment with ordinary conditions of permanency.

There is little wisdom in the utilization of such an absolute, all-encompassing rule. We prefer a more flexible and balanced approach which allows the finder of fact to consider any post-injury employment when determining the extent of impairment of earning capacity.

See, e.g., Pulley v Detroit Engineering & Machine Co, 378 Mich 418, 423; 145 NW2d 40 (1966), where the Court said:

"It is not difficult to perceive, however, that an ill-intentioned employer desirous of avoiding compensation payments could rehire an injured and disabled employee, establish his capacity to earn as much or more than before his injury and terminate his employment. Then, if the bare elements of proof of what the employee was paid were construed as establishing his 'earning capacity’ the whole purpose of the act would be vitiated.

"Thus', the method of determining the employee’s earning capacity, as that term is used in the act, is a complex of fact issues which are concerned with the nature of the work performed and the continuing availability of work of that kind, and the nature and extent of the disability and the wages earned."(Emphasis added.)