Jackson Park Hospital v. Illinois Workers' Compensation Comm'n ( 2016 )

2016 IL App (1st) 142431WCNO. 1-14-2431WC
Opinion filed: January 8, 2016
________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
FIRST DISTRICT
WORKERS' COMPENSATION COMMISSION DIVISION
________________________________________________________________________
JACKSON PARK HOSPITAL, ) Appeal from the
) Circuit Court of
Appellant, ) Cook County.
)
v. ) No. 13-L-051034
)
THE ILLINOIS WORKERS' COMPENSATION ) Honorable
COMMISSION et al. (Kathy Jenkins, ) Edward S. Harmening,
Appellee). ) Judge, presiding.
_______________________________________________________________________
JUSTICE STEWART delivered the judgment of the court, with opinion.
Presiding Justice Holdridge and Justices Hoffman, Hudson, and Harris concurred
in the judgment and opinion.
OPINION
¶1 The claimant, Kathy Jenkins, worked as a stationary engineer for the employer,
Jackson Park Hospital. She sustained injuries to her neck, low back, and left knee in a
work-related accident and can no longer perform the job duties required of a stationary
engineer. She filed a claim pursuant to the Illinois Workers' Compensation Act (the Act)
(820 ILCS 305/1 et seq. (West 2006)). During the course of litigating the claimant's
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compensation claim, numerous contested issues arose between the parties. At this point
in the proceeding, however, it is undisputed that the claimant is permanently and partially
disabled because of her workplace accident and can no longer pursue the duties of her
usual and customary line of employment. What remains in dispute is what benefits she is
entitled to receive because of her permanent partial disability.
¶2 Section 8(d) of the Act governs this issue. It provides for the "amount of
compensation which shall be paid to the employee for an accidental injury not resulting
in death." 820 ILCS 305/8(d) (West 2012). Section 8(d) details two alternative types of
compensation for employees who are permanently and partially disabled. Section 8(d)(1)
provides for a wage differential award; alternatively, section 8(d)(2) provides for a
percentage-of-the-person-as-a-whole award. 820 ILCS 305/8(d)(1), (2) (West 2012).
The claimant argues that she is entitled to an award under section 8(d)(1), while the
employer argues that she is entitled to an award under section 8(d)(2).
¶3 Although the claimant can no longer perform the duties required of a stationary
engineer, at the time of the arbitration hearing, the employer continued to employ the
claimant as a public safety officer at the same wage that she would have earned as a
stationary engineer. The Commission, therefore, concluded that the claimant was not
entitled to a wage differential award under section 8(d)(1) because she had not suffered
any loss in wages. This finding lies at the heart of this appeal.
¶4 There is considerable procedural history leading up to this appeal that is critical to
understanding and addressing the parties' contentions. Therefore, we will first briefly
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outline the proceedings below before detailing the factual background relevant to our
analysis.
¶5 The parties' first hearing before an arbitrator took place on September 12, 2006,
and was an expedited hearing pursuant to section 19(b) of the Act (820 ILCS 305/19(b)
(West 2006)). The arbitrator awarded the claimant medical expenses, temporary total
disability benefits, and penalties. The arbitrator's findings and awards made at that
hearing are not at issue in this appeal.
¶6 The parties appeared before an arbitrator a second time almost five years later, on
April 11, 2011, for a hearing on additional issues, including the claimant's request for
permanent partial disability (PPD) benefits. The claimant requested a PPD award based
on a wage differential pursuant to section 8(d)(1) of the Act. The arbitrator, however,
denied the claimant's request for an award under section 8(d)(1) and awarded her PPD
benefits based on a percentage of the person as a whole under section 8(d)(2).
¶7 The arbitrator based his decision concerning the proper PPD award on a finding
that the claimant had not suffered any reduction in her income because of her disability.
The arbitrator acknowledged that the claimant could no longer perform the duties of a
stationary engineer. However, the arbitrator focused on evidence that the employer
continued to pay the claimant her previous wage rate while employing her in a light-duty,
security officer position. The arbitrator concluded, therefore, that, because the claimant
could not show an actual reduction in her income, she was not entitled to a wage
differential award under section 8(d)(1). The claimant sought a review of the arbitrator's
decision before the Commission.
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¶8 Prior to the oral arguments in the review hearing before the Commission, the
employer terminated the claimant's employment so that she no longer worked as a public
safety officer and no longer earned the wage on which the arbitrator relied in denying her
request for a wage differential award. Therefore, the claimant filed an emergency motion
to remand the case to the arbitrator in order to reopen proofs to allow additional evidence
of her termination.
¶9 The Commission denied her request to reopen the proofs. Subsequently, after oral
arguments, it affirmed and adopted the arbitrator's decision without additional comment,
denying the claimant's request for a PPD award under section 8(d)(1) and affirming and
adopting the arbitrator's PPD award under section 8(d)(2). The claimant appealed the
Commission's decision to the circuit court. The circuit court reversed the Commission's
award under section 8(d)(2), finding that it was against the manifest weight of the
evidence. The court remanded the claim to the Commission with directions for the
Commission to enter a wage-differential award under section 8(d)(1).
¶ 10 On remand, the Commission entered a wage differential award. The employer
appealed this decision to the circuit court, which entered a judgment that confirmed the
Commission's decision on remand. The employer now appeals the circuit court's
judgment.
¶ 11 On appeal, the employer asks this Court to reinstate the Commission's original
PPD award under section 8(d)(2), arguing that it was not against the manifest weight of
the evidence. The claimant asks us to affirm the Commission's wage differential award
that it entered on remand under section 8(d)(1). Alternatively, she asks us to vacate both
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PPD awards and remand her claim to the Commission for an additional hearing on her
request for a wage differential based upon the following claims: (1) the Commission
abused its discretion in refusing to reopen proofs so she could present evidence of her
employment termination, and (2) the Commission abused its discretion at the time it
entered the original PPD award under section 8(d)(2) by limiting the admission of certain
evidence that was relevant to her request for an award under section 8(d)(1).
¶ 12 For the reasons explained below, we agree with the claimant's latter contention.
The Commission abused its discretion by limiting the admission of an evidentiary
stipulation the parties' submitted. In addition, the Commission failed to consider other
evidence relevant to the issue of whether the claimant is entitled to a wage differential
award. Therefore, we reverse the judgment of the circuit court that confirmed the
Commission's decision on remand, vacate the circuit court's order that remanded this case
to the Commission for a wage differential award, vacate both of the Commission's PPD
awards, and remand this matter to the Commission for further proceedings on the
claimant's request for a PPD award under section 8(d)(1).
¶ 13 BACKGROUND
¶ 14 The claimant's job as a stationary engineer required her to address all maintenance
issues throughout the employer's hospital facility, including HVAC, plumbing, electrical,
and other duties. The claimant's workplace accident occurred on October 25, 2005, when
she attempted to gain entry into a locked office through a sliding glass window. She
climbed through the window, into a dark office, and onto an unsteady desk. She then
stepped onto a desk chair that rolled away from her. She fell toward the ground and
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twisted her body. She immediately experienced pain in her left lower back. The pain
went down her left leg and to her knee.
¶ 15 Following the accident, the claimant underwent a course of medical treatment for
neck, knee, and low back pain. Her treatments included an emergency room visit,
physical therapy, medications, and trigger point injections. Her treating physician, Dr.
Herman Morgan, released her to light-duty work on January 18, 2006, with a restriction
of lifting no more than 30 pounds. The employer did not offer the claimant light-duty
work at that time. Due to financial hardship, the claimant requested that Dr. Morgan
release her to full-duty work, which he did effective January 30, 2006. The claimant
returned to full-duty work on that day.
¶ 16 After the claimant returned to full-duty work, she noticed increased pain in her left
lower back and left knee. Dr. Morgan took the claimant off work and referred her to Dr.
Egwele. On April 29, 2006, Dr. Egwele performed surgery on the claimant's left knee.
Dr. Egwele's postoperative diagnoses involved various left knee conditions, including an
unstable undersurface tear of the posterior horn of the medial meniscus, chondromalacia
of the patella and medial femoral condyle, hypertrophic synovitis, and contusion of the
anterior cruciate ligament. Following the surgery, the claimant underwent physical
therapy, and Dr. Egwele released the claimant to return to work in a sedentary position as
of June 1, 2006. At that time, the employer did not offer the claimant any work within
her restrictions.
¶ 17 The parties appeared before an arbitrator on September 12, 2006, for an expedited
hearing pursuant to section 19(b) of the Act (820 ILCS 305/19(b) (West 2006)). At the
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hearing, the claimant testified that she suffered from pain and stiffness in her left knee
and occasionally in her left low back, especially while walking, standing, or climbing
stairs. At that time, she remained under the care of Dr. Egwele, had not returned to work
anywhere, and had not been released to full duty work.
¶ 18 The arbitrator found that the claimant sustained an injury that arose out of and in
the course of her employment. The arbitrator also found that there was a causal
relationship between the accident and the claimant's "conditions of ill-being involving her
neck/right shoulder area, low back[,] and left leg." The arbitrator awarded the claimant
medical expenses, temporary total disability benefits, and section 19(l) penalties (820
ILCS 305/19(l) (West 2006)). Neither party sought review of this decision, and it
became a final award of the Commission.
¶ 19 After the September 12, 2006, 19(b) hearing, the claimant continued treating with
Dr. Egwele, and her treatments included physical therapy for her low back and left knee
pain and stiffness. In February 2007, she underwent a functional capacity evaluation,
which placed her at the light physical demand level and unable to perform the job duties
required of her previous position as a stationary engineer. The evaluator noted that the
claimant was unable to perform any prolonged stooping, kneeling, or squatting; was
unable to lift or carry loads up to 50 pounds; and was unable to perform any prolonged
standing or walking. After the evaluation, Dr. Egwele concluded that the claimant could
return to work only at the sedentary level on a permanent basis.
¶ 20 On February 19, 2007, the employer first offered the claimant light-duty work in
its accounting department. She returned to work and performed clerical duties that
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included sorting, stapling, and filing papers. She testified that she experienced left knee
stiffness and low back pain if she sat more than one hour, but she could handle the job
because it allowed her to sit and stand as needed and only required minimal walking. She
performed this job for approximately three months, and the employer paid her
compensation at the same rate as a stationary engineer. The employer then transferred
her to its employee health department where she performed similar clerical duties for two
months at the same rate of pay.
¶ 21 In July 2007, the employer transferred the claimant to its security department
where she worked as a public safety officer. The evidence presented at the arbitration
hearing established that the claimant did not meet the employer's requirements to work as
a public safety officer and that the employer's public safety officers earned less than a
stationary engineer. Nonetheless, the employer transferred the claimant to perform the
duties of a safety officer and paid her the same wage that she would have earned as a
stationary engineer.
¶ 22 Initially, the claimant's duties included watching monitors, and she could alternate
her sitting and standing positions while she performed this job. She noticed that her left
knee and low back got stiff and painful if she sat for longer than one hour. After working
in this capacity for two months, the employer relocated her to its security tower, which
required her to climb stairs into the tower and watch over the parking lot. She also rode
in a van once a month to drop off and pick up documents. She occasionally filled in for
another safety officer in the hospital's lobby over the lunch hour. While performing these
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job duties, she was able to alternate her sitting and standing with sufficient frequency to
minimize her low back pain and left knee pain and stiffness.
¶ 23 On June 21, 2011, the parties appeared before an arbitrator for a hearing to
determine additional medical expenses, causal connection, the nature and extent of her
work-related injury, and her request for PPD benefits. At the time of the June 21 hearing,
the claimant still worked as a public safety officer for the employer, and the arbitrator
found that this job was within her work restrictions.
¶ 24 The evidence at the arbitration hearing established that the employer employed 25
public safety officers. The claimant testified that the employer's public safety officers
started at a wage of $8.34 per hour and that they were required to (1) undergo a 20-hour
certification class and (2) possess a high school diploma. She testified that she never
underwent the certification class and did not have a high school diploma. She had an
eighth grade education and had failed the GED test on two occasions.
¶ 25 The evidence presented at the arbitration hearing included a stipulation entered
into between the parties. The stipulation arose because the claimant subpoenaed two
hospital employees to testify at the hearing: the security department supervisor and the
payroll coordinator. In order to "alleviate the necessity of those two individuals missing
work," the parties stipulated to two issues of fact to which the witnesses would have
testified. The first stipulation was that the witnesses would testify that "ever since [the
employer] has been providing [the claimant] light duty work, [the employer has]
maintained her pay at her stationary engineer union pay rate, $23.61 per hour." The
second stipulation was that the witnesses would testify that, at the time of the hearing, the
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claimant was "working as a public safety officer" for the employer and that the
employer's "other public safety officers [were] presently paid between $8 and $10 per
hour."
¶ 26 Although the employer stipulated to the facts to which the witnesses would have
testified, it objected to the relevancy of the testimony. The arbitrator ruled that the
stipulated facts were relevant "only as far as an [8(d)(2)] award, but not relevant to any
kind of wage loss because she doesn't have a wage loss, at this time." In response, the
claimant made an "offer of proof" by requesting that the "facts be admitted for all
purposes" and "[s]pecifically *** for a potential [8(d)(1)] or wage differential
consideration or award."
¶ 27 The claimant testified that she had a stationary engineer license issued by the City
of Chicago but had no other professional licenses or certifications. She had never
undergone any training as a security guard, did not possess a Permanent Employee
Registration (PERC) card or a Firearm Owner Identification (FOID) card, did not have a
license to carry a weapon, and was not licensed by the State of Illinois as a security
guard.
¶ 28 The evidence presented at the arbitration hearing included a vocational assessment
report prepared by a certified vocational rehabilitation counselor, Edward J. Rascati.
Rascati concluded that, in the Chicago area, security guard positions usually pay between
$9 and $11 per hour and that the claimant's earnings in excess of $23.00 per hour were
not indicative of other security positions in the Chicago area. Rascati opined that the
claimant's vocational potential was limited by her lack of a GED and because her skills as
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a stationary engineer were no longer transferable due to her work restrictions. He
concluded that, because of her restrictions and lack of a GED, she was at a "severe
disadvantage" in the competitive job market. Rascati went as far as to conclude that
"there is not presently a viable and stable labor market for [the claimant]." However, he
believed that "if she were able to find an employer willing to hire her without a
degree/GED," then she might be suitable for employment as a cashier, gas station
attendant, parking lot attendant, or central station monitor, positions that would pay
between $8 and $9 per hour.
¶ 29 At the conclusion of the arbitration hearing, the arbitrator found that the claimant
was unable to perform the required physical activities of her prior occupation of
stationary engineer. However, the arbitrator also concluded that the claimant had not
proven an impairment of earning capacity as a result of her physical incapacity.
Therefore, he denied her request for a wage differential award. Specifically, the
arbitrator found as follows:
"[The claimant] is presently not suffering any impairment of earnings as
she continues to earn the same rate of pay that she would have been earning as a
[s]tationary [e]ngineer. Nonetheless, she is incapacitated from pursuing other
suitable occupations and as such significantly limits her ability to locate suitable
employment in the labor market. As such, the [arbitrator] concludes that as a
result of her October 25, 2005, work injury, [the claimant] has sustained a 40%
loss of use, man as a whole, pursuant to Section 8(d)(2) of the Act."
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¶ 30 The claimant and the employer both sought a review of the arbitrator's decision
before the Commission. The Commission originally scheduled oral arguments in the
matter for April 5, 2012, but the claimant's attorney stated that he did not receive notice
of the hearing. Therefore, the Commission rescheduled the arguments for a later date.
¶ 31 On April 16, 2012, the employer terminated the claimant's employment. Eleven
days later, her attorney filed an emergency motion to continue oral arguments before the
Commission and to reopen the proofs before the arbitrator in order to present evidence of
her employment termination. The claimant argued in the motion that her termination was
relevant to her pending request for a wage differential award.
¶ 32 The Commission conducted a hearing on the motion to reopen proofs on May 8,
2012. On August 12, 2012, the Commission entered an order denying the claimant's
request to reopen proofs. In denying the motion, the Commission stated that "there is no
ambiguity claimed in the record herein to warrant reopening the proofs." The
Commission also stated that, "other than the lay-off, there is no change in [the claimant's]
condition from the time of hearing to justify remanding the matter to re-open proofs."
The Commission added that, but-for the claimant's attorney's claim that he did not receive
notice of the April 5, 2012, hearing, the case would have been heard and decided before
the claimant's "unfortunate lay-off." The Commission further explained its ruling as
follows:
"[The claimant] at hearing failed in their [sic] attempt to prove wage
differential given [the claimant] was earning her same wages then working in
security under permanent light duty restrictions. To remand this matter to the
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[a]rbitrator at this time in order to re-open proofs would give [the claimant] a
second chance at proving wage differential while unjustly prejudicing [the
employer]. The Review is still pending and oral arguments should proceed
thereon for the Commission's consideration and determination as to whether the
award was appropriate or not. [The claimant's] motion is herein denied and orders
the matter to proceed for oral arguments under the pending Review."
¶ 33 The matter proceeded to oral argument before the Commission. On November 5,
2012, the Commission entered an order affirming and adopting the arbitrator's decision
without further comment.
¶ 34 The claimant appealed the Commission's decision to the circuit court and
challenged the Commission's award of benefits under section 8(d)(2) of the Act. In
addition, she argued that the Commission abused its discretion by refusing to grant her
motion to remand the case to the arbitrator to reopen the proofs and in limiting the
purpose for the submission of the parties' factual stipulation concerning the wages earned
by the employer's public safety officers.
¶ 35 On judicial review, the circuit court held that the Commission's award of section
8(d)(2) benefits was against the manifest weight of the evidence. The court remanded the
case to the Commission for the determination of a wage differential award pursuant to
section 8(d)(1) of the Act.
¶ 36 On remand, the Commission stated in its decision that it found no evidence in the
record that warranted altering its prior decision. However, in compliance with the circuit
court's order, it modified its PPD award and granted the claimant a wage differential of
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$389.60 per week, from February 19, 2007, through the duration of her disability, under
section 8(d)(1) of the Act. The Commission noted that the "wage differential represents
2/3 of the difference between the 23.61/hour [the claimant] would be able to earn in the
full performance of her occupation as a [s]tationary [e]ngineer and the $9.00/hour she
would be able to earn in some suitable alternative employment."
¶ 37 The employer appealed the Commission's decision on remand, and the circuit
court entered a judgment confirming the decision. The employer now appeals the circuit
court's final judgment.
¶ 38 ANALYSIS
¶ 39 The employer does not dispute the Commission's finding that the claimant has
sustained a work-related permanent partial disability. Under the Act, when a claimant
sustains a disability, an issue arises concerning what type of compensation she is entitled
to receive, a wage differential award (8(d)(1)) or a percentage-of-the person-as-a-whole
award (8(d)(2)). 820 ILCS 305/8(d) (West 2012); Gallianetti v. Industrial Comm'n, 315
Ill. App. 3d 721, 727, 734 N.E.2d 482, 487 (2000). The supreme court has expressed a
preference for wage-differential awards. Id. (citing General Electric Co. v. Industrial
Comm'n, 89 Ill. 2d 432, 438, 433 N.E.2d 671, 674 (1982)). The purpose of a wage
differential award under section 8(d)(1) is to compensate an injured claimant for her
reduced earning capacity. Dawson v. Workers' Compensation Comm'n, 382 Ill. App. 3d
581, 586, 888 N.E.2d 135, 139.
¶ 40 Section 8(d)(1) of the Act sets out the two requirements for a wage differential
award. Under section 8(d)(1), an impaired worker is entitled to a wage differential award
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when (1) she is "partially incapacitated from pursuing [her] usual and customary line of
employment" and (2) there is a "difference between the average amount which [she]
would be able to earn in the full performance of [her] duties in the occupation in which
[she] was engaged at the time of the accident and the average amount which [she] is
earning or is able to earn in some suitable employment or business after the accident."
(Emphasis added.) 820 ILCS 305/8(d)(1) (West 2012).
¶ 41 Alternatively, section 8(d)(2) of the Act provides for a PPD award based on a
percentage-of-the-person-as-a-whole, rather than a wage differential, under three
circumstances (only one of which is relevant in the present case): when the claimant's
injuries do not prevent her from pursuing the duties of her employment but she is
disabled from pursuing other occupations or is otherwise physically impaired; when her
"injuries partially incapacitate [her] from pursuing the duties of [her] usual and
customary line of employment but do not result in an impairment of earning capacity;" or
when the claimant having suffered an "impairment of earning capacity *** elects to
waive [her] right to recover under [8(d)(1)]." (Emphasis added.) 820 ILCS 305/8(d)(2)
(West 2012).
¶ 42 When section 8(d)(1) is construed in conjunction with section 8(d)(2), it becomes
clear that the crucial issue in the present case in determining which type of PPD award is
appropriate is whether the claimant has suffered an impairment of her "earning capacity."
The employer does not dispute the Commission's finding that the claimant is
incapacitated from pursuing her "usual and customary line of employment." Therefore, a
percentage-of-the-person-as-a-whole award under 8(d)(2) would be appropriate only if
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she has suffered no loss in her "earning capacity," or having suffered a loss in "earning
capacity," she elected to waive her right to an award under 8(d)(1). 820 ILCS
305/8(d)(2) (West 2002); Lenhart v. Illinois Workers' Compensation Comm'n, 2015 IL
App (3d) 130743WC, ¶ 48, 29 N.E.2d 648; Gallianetti, 315 Ill. App. 3d at 728, 734
N.E.2d at 488 ("the plain language of section 8(d) prohibits the Commission from
awarding a percentage-of-the-person-as-a-whole award where the claimant has presented
sufficient evidence to show a loss of earning capacity"). (Emphasis added.).
¶ 43 The claimant in the present case has not waived her right to a section 8(d)(1)
award. Therefore, the linchpin factual issue in the present case is a determination of
whether the claimant's work-related injuries have resulted in an "impairment of earning
capacity." 820 ILCS 305/8(d)(2) (West 2002)
¶ 44 The Commission in the present case did not evaluate the claimant's "earning
capacity." Instead, the Commission simply looked at the claimant's post-injury wages
and denied her request for a wage differential award because "she does not have any
wage loss, at this time." This analysis is flawed. The supreme court has held that
"[a]lthough wages are indicative of earning capacity, they are not necessarily
dispositive." Cassens Transport Co. v. Industrial Comm'n, 218 Ill. 2d 519, 531, 844
N.E.2d 414, 425 (2006). The test does not focus exclusively on the amount earned, but
instead focuses on the capacity to earn. Id. "[P]ost-injury earnings and earning capacity
are not synonymous" because other evidence can show that "the actual earnings do not
fairly reflect claimant's capacity." 4 A. Larson & L. Larson, Larson's Workers'
Compensation Law § 81.03[1] (2005). For example, "[w]ages paid an injured employee
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out of sympathy, or in consideration of long service with the employer, clearly do not
reflect his or her actual earning capacity *** and should be discounted accordingly." 4
A. Larson & L. Larson, Larson's Workers' Compensation Law § 81.06 (2005).
¶ 45 Therefore, whether the claimant has sustained an impairment of earning capacity
cannot be determined by simply comparing pre- and post-injury income. The analysis
requires consideration of other factors, including the nature of the post-injury
employment in comparison to wages the claimant can earn in a competitive job market.
¶ 46 In the present case, the Commission did not conduct any analysis to determine
whether the claimant's post-injury wages reflected her true earning capacity in a
competitive job market. On the contrary, at the arbitration hearing, the claimant
attempted to present evidence that her income as a public safety officer was not a true
representation of her earning capacity, but the Commission refused to consider the
evidence. The claimant presented evidence, by way of the stipulation, that although she
was earning $23.61 per hour as a safety officer for the employer, all of the employer's
other safety officers earned between $8 and $10 per hour. The Commission refused to
admit this stipulation for purposes relevant to the claimant's request for a wage
differential award. It admitted the stipulation "only as far as an [8(d)(2)] award."
¶ 47 We review evidentiary rulings made during the course of a workers'
compensation proceeding under the abuse of discretion standard. Greaney v. Industrial
Comm'n, 358 Ill. App. 3d 1002, 1010, 832 N.E.2d 331, 340 (2005). An abuse of
discretion occurs when no reasonable person would take the view adopted by the
Commission. Hagemann v. Illinois Workers' Compensation Comm'n, 399 Ill. App. 3d
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197, 204, 941 N.E.2d 878, 884 (2010). In the present case, the Commission abused its
discretion in limiting the admission of the stipulation.
¶ 48 The evidence presented at the arbitration hearing also included testimony that the
claimant had only an eighth-grade education and that her job skills as a stationary
engineer were not transferable because of her physical limitations. The only vocational
expert who testified at the hearing, Rascati, offered an unrebutted opinion that the
claimant might be able to procure entry level, unskilled employment as a cashier, gas
station attendant, parking lot attendant, or central station monitor. In these positions, the
claimant would earn between $8 and $9 per hour, far less than the $23.61 per hour the
employer paid the claimant at the time of the hearing. The evidence presented at the
hearing included testimony that the claimant did not actually meet the qualifications
necessary to work as a public safety officer for the employer and that safety officers in
the Chicago area, including all of the employer's other safety officers, typically earned
between $8 and $11 per hour. Rascati told the Commission in his report that the
claimant's earnings in excess of $23 per hour were not indicative of other security
positions in the Chicago area.
¶ 49 Despite this evidence, the Commission concluded that the claimant's earning
capacity was unaffected by her work-related disability and based its decision entirely on
the post-injury wages that the employer paid the claimant at the time of the hearing.
Because the Commission failed to consider and analyze all of the evidence that is
relevant to the claimant's true earning capacity in the competitive job market, we must
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vacate the Commission's PPD awards and remand for a proper hearing on the claimant's
request for a wage differential PPD award.
¶ 50 We acknowledge that the employer's argument on appeal raises a competing
concern, i.e., that the Commission's focus solely on the claimant's post-injury income is
proper because, otherwise, there is a danger that a person could be awarded a wage
differential award while still earning the same wages. However, under the Act, the
claimant is entitled to a wage differential award if there has been an impairment of her
earning capacity, and, as noted above, the supreme court has held that income and
capacity are not synonymous. Cassens Transport Co., 218 Ill. 2d at 531, 844 N.E.2d at
425. Therefore, the Commission's analysis cannot focus exclusively on a comparison of
pre- and post-injury income when other evidence is offered that is relevant to the
employee's earning capacity in the competitive job market.
¶ 51 Furthermore, under the employer's interpretation of the Act, an injured worker
could be denied a wage differential award simply because the employer pays the injured
worker an inflated wage in an employer-controlled job that does not otherwise exist in the
labor market and which may be temporary in duration. If other employers would not hire
the employee with her limitations at a comparable wage level, the post-injury wage
cannot be considered an accurate reflection of the claimant's earning capacity. Denying
such a claimant a wage differential award undermines the purpose of such awards, which
is to compensate the injured worker for her reduced earning capacity. Dawson, 382 Ill.
App. at 586, 888 N.E.2d at 139. It is essential for the Commission to consider all of the
evidence relevant to the claimant's actual earning capacity in the competitive job market
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in determining whether the claimant is entitled to a wage differential award. 1 In the
present case, because the Commission did not conduct the proper analysis and limited the
admission of relevant evidence, we must vacate the Commission's PPD awards and
remand for further proceedings on this issue.
¶ 52 In remanding this case to the Commission for additional proceedings, we find the
case of Smith v. Industrial Comm'n, 308 Ill. App. 3d 260, 719 N.E.2d 329 (1999), to be
instructive. In that case, the claimant worked as a security supervisor officer, injured her
shoulder in a work-related accident, and could no longer perform her job duties as a result
of the accident. An arbitrator awarded the claimant PPD benefits based on a wage
differential award under section 8(d)(1), but the Commission vacated that award and
granted a PPD award under section 8(d)(2). Id. at 264, 719 N.E.2d at 332. On appeal,
the court held that the Commission's finding that the claimant failed to prove a reduced
earning capacity was against the manifest weight of the evidence. Therefore, the court
reinstated the arbitrator's wage differential award. Id. at 267-68, 719 N.E.2d at 335.
¶ 53 In Smith, the claimant earned $14.70 per hour in the year preceding her accident.
After being off work for some time, she returned to work for the employer in a position
within her impairment restrictions, earning $9.75 per hour, which was the same rate as
1
Although this case involves a claim that the claimant's wages were artificially
inflated, we also note that an employer who believes that a claimant's current earnings
are artificially low should be allowed to present evidence that those earnings do not
represent the claimant's true earning capacity. Such evidence should be considered by
the Commission to determine whether the claimant is entitled to a wage differential
award and, if so, in what amount.
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other employees working in the same capacity and with the same seniority. However, the
employer subsequently increased the claimant's wage to $15 per hour and did not provide
her with any reason for the wage increase. Id. at 266, 719 N.E.2d at 333-34. Her duties
remained the same, and other employees working in the same capacity continued to earn
$9.75 per hour. Id. at 266, 719 N.E.2d at 334. The employer's security manager
"acknowledged that he might have been involved in conversations wherein claimant's
workers' compensation supervisor told him to raise her wages due to the pending workers'
compensation case." Id
¶ 54 In determining whether a wage differential award was appropriate, the
Commission in Smith made the same error as the Commission in the present case; it
simply looked at the claimant's wage at the time of the hearing and concluded that an
award under section 8(d)(2) was more appropriate without considering any other factors
relevant to the claimant's true earning capacity. Id. On appeal, however, the court held
that the $15 per hour that the claimant was being paid at the time of the hearing did not
truly reflect what she was able to earn; the court stated that the employer artificially
raised her wage above what is normally paid for the services she performed. Id. at 267,
719 N.E.2d at 334. The court held that the claimant's actual earning capacity was the
normal pay rate of $9.75 per hour. Id. The court further explained as follows:
"Here, although at the time of hearing claimant was being paid at the rate of
her previous position as a security supervisor officer, we cannot ignore the fact
that the arbitrator, the Commission, and the circuit court all recognized that the
employer raised claimant's wages in an attempt to avoid a [wage differential]
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award. This fact, in and of itself, supports a finding that claimant's actual earning
capacity was $9.75 per hour. We believe, therefore, that claimant proved impaired
earning capacity, and as a result, the Commission's decision not to affirm the
arbitrator's [wage differential] award was against the manifest weight of the
evidence." Id. at 267, 719 N.E.2d at 334-35.
¶ 55 In the present case, the record includes evidence that the employer paid the
claimant to perform job duties that she was not qualified to perform and paid her a wage
"above what is normally paid for such services." See, Id. at 267, 719 N.E.2d at 334. The
Commission did not consider this evidence but simply adopted the arbitrator's incorrect
conclusion that the evidence "was not relevant to any kind of wage loss because she does
not have a wage loss, at this time." For the reasons noted above, this evidence is relevant
in analyzing the factual issue of whether the claimant has suffered an impairment to her
earning capacity, which is the crucial issue in determining whether the claimant is
entitled to a wage differential award.
¶ 56 The employer argues that Smith is distinguishable because, in Smith, there was
evidence that the employer artificially raised the employee's wage in an attempt to defeat
the employee's wage differential claim. We agree with the employer that, in contrast, in
the present case, there is no evidence in the record to support a finding that the employer
artificially inflated the claimant's wages for the specific purpose of defeating her claim
for a wage differential award. Nonetheless, this fact does not make Smith irrelevant to
our analysis.
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¶ 57 In Smith, the court's task was to review the record to determine whether the
claimant proved an impairment to her "earning capacity." Id. at 267, 719 N.E.2d at 334-
34 ("We believe *** that claimant proved impairment of earning capacity, and as a
result, the Commission's decision to not affirm the arbitrator's [wage differential] award
was against the manifest weight of the evidence."). (Emphasis added.). The court's task
was not to review the record to determine whether there was a basis to penalize the
employer for its conduct. The court's analysis in Smith focused on whether the wage that
the employee earned at the time of the arbitration hearing accurately reflected her earning
capacity. The facts in Smith included evidence that the employer artificially inflated the
claimant's wage in an attempt to avoid a wage differential award, and the court found that
this fact was enough to conclude that the employee's wages at the time of the hearing did
not accurately reflect her earning capacity and that her actual earning capacity was $9.75
per hour.
¶ 58 In the present case, the Commission's task is identical to its task in Smith. That
task is to admit and consider all evidence relevant to the claimant's earning capacity,
including evidence relevant to the issue of whether the post-injury wage that the claimant
earned at the time of the arbitration hearing accurately reflected her true earning capacity.
Although the facts of the present case do not include evidence of an intentional effort on
the part of the employer to defeat the claimant's wage differential claim by manipulating
her wage, the facts of the present case include other evidence relevant to determining
whether $23.61 per hour accurately represents the claimant's true earning potential in a
competitive job market. The Commission erred in failing to consider this evidence.
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¶ 59 In addition to Smith, cases from other jurisdictions support our analysis. In Allen
v. Industrial Comm'n, 347 P.2d 710 (Ariz. 1959), a salesperson who was injured in a
work-related accident returned to work after the accident. Id. at 711-12. His doctor
testified that he could not work as efficiently as before the accident, and other evidence
established that the employee would not be employed by other similar companies and
that the employer would not have hired a person in the employee's condition if not for the
company's policy to keep disabled workers on the job at the same pay. Id. at 712.
¶ 60 The Arizona Industrial Commission found that the employee suffered no loss of
earning capacity because he was employed after his injury at no reduction in wages. Id.The Arizona Supreme Court reversed, holding that post-accident earnings were not the
conclusive measure of earning capacity. Id. at 716. The court noted that other
considerations must be factored to determine whether post-injury earnings exaggerated
the injured workers earning capacity and were only temporary in nature. Id. The court
noted that the only evidence in support of the Commission's finding was the actual post-
injury earnings. Id. at 717-18. The court concluded that the Commission erred in not
evaluating the earnings in light of other relevant evidence, including the employer's
policy to retain injured workers at their previous wages. Id. The court concluded,
"Thus, wages may reflect not the employee's earning capacity in a competitive situation
but rather a company policy which, if abrogated for any reason by the employer, will
force the employee into a position where he will be unable, because of his injuries, to
continue to earn such wages or secure equivalent employment." Id. at 718.
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¶ 61 In Peoples v. Cone Mills Corp., 316 N.C. 426, 437-38 (1986), the Supreme Court
of North Carolina highlighted the problem with blindly accepting an employer's payment
(or offer of payment) of post-injury wages as the measure of earning capacity without
considering it in reference to the competitive job market. The court stated:
"The rationale behind the competitive measure of earning capacity is
apparent. If an employee has no ability to earn wages competitively, the employee
will be left with no income should the employee's job be terminated. Termination
of the employee would not necessarily signal a bad motive on the part of the
employer. An employer facing a business decline reasonably could determine that
continued retention of the employee was not feasible. The employee could also be
dismissed for misconduct. The employer could, for reasons beyond its control,
simply cease doing business." Id. at 438.
See also, Magma Copper Co. v. Industrial Comm'n, 395 P.2d 616, 619 (Ariz. 1964)
("[T]he proper test in finding the loss of earning capacity is to determine as nearly as
possible whether in a competitive labor market the subject in his injured condition can
probably sell his services and for how much."); Doles v. Industrial Comm'n of Arizona,
810 P.2d 602, 605 (Ariz. 1991) ("Earning capacity *** cannot be accurately measured by
make-work or sheltered work.");
¶ 62 In the present case, it was the duty of the Commission to admit and factor all of
the evidence concerning the nature of the claimant's post-injury employment with the
employer, not simply compare her pre- and post-injury wages. It was also the duty of the
Commission to factor other evidence concerning positions available to the claimant in the
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competitive job market based on her restrictions and job skills and determine whether her
disability has resulted in an impairment of earning capacity. The Commission did not do
so. Therefore, we must remand this case for further hearings on the issue of the
claimant's request for a wage differential award, during which the Commission shall
admit and consider all evidence relevant to the claimant's actual earning capacity in the
competitive job market.
¶ 63 CONCLUSION
¶ 64 For the foregoing reasons, we reverse the judgment of the circuit court entered on
July 15, 2014, that confirmed the Commission's decision. We also vacate the
Commission's October 21, 2013, PPD award on remand under section 8(d)(1), vacate the
circuit court's May 29, 2013, order remanding the case to the Commission with directions
to enter a wage differential award under section 8(d)(1), vacate the Commission's PPD
award under section 8(d)(2) that was entered on November 5, 2012, and remand to the
Commission for further proceedings consistent with this opinion.
¶ 65 Circuit court's judgment reversed; circuit court's remand order vacated;
Commission's decisions vacated, in part; cause remanded.
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