Maxey v. Major Mechanical Contractors
330 A.2d 156, 1974 Del. Super. LEXIS 128 (1974)
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Rule of Law:
When calculating an injured employee's loss of earning capacity for workers' compensation, post-injury earnings must be adjusted to the general wage level in force at the time the pre-injury earnings were calculated, provided such evidence is specific to the industry and type of work.
Facts:
- Cyrus Maxey, a non-licensed plumber, was injured in a compensable industrial accident on September 3, 1969.
- At the time of his injury, Maxey earned $180 per week as a plumber ($4.50 per hour).
- In July 1970, Maxey obtained employment at a gas station, receiving $500 per month ($2.50 per hour) for a 50-hour week.
- In April 1973, Maxey became supervisor of a Kayo Gas Station, earning $700 per month ($3.22 per hour) for a 50-hour week, subject to 24-hour call.
- On October 10, 1973, Maxey was transferred to another Kayo Station as manager, earning $625 per month ($3.10 per hour) for a 50-hour week, no longer subject to 24-hour call.
- Maxey contended that inflation accounted for his increased post-injury wages and that his compensation should remain $50 per week.
- David Golland, Research Analyst Chief of the Delaware Department of Labor, testified that the average weekly wage of covered employees in Delaware increased from $143 in 1969 to approximately $170 in 1973, indicating a 19% inflationary trend.
Procedural Posture:
- Cyrus Maxey suffered a compensable industrial accident on September 3, 1969.
- The Industrial Accident Board awarded Maxey compensation for permanent partial disability in the amount of $50 per week.
- On July 5, 1973, the employer (appellee) petitioned the Industrial Accident Board to reduce Maxey’s weekly compensation.
- At a hearing held on November 13, 1973, the Industrial Accident Board refused to take into account the change in wage scales since 1969.
- The Board determined Maxey was entitled to compensation of $34.13 per week for the period between April 1973 and October 10, 1973, and $43.80 per week for the compensable period thereafter.
- Maxey appealed the Industrial Accident Board's decision to the Delaware Superior Court.
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Issue:
Does the Industrial Accident Board err as a matter of law by failing to consider the increase in general wage levels between the time of injury and the time of post-injury employment when calculating an injured employee's earning capacity under 19 Del.C. § 2325?
Opinions:
Majority - Bifferato, Judge
Yes, the Industrial Accident Board erred as a matter of law by failing to consider the increase in general wage levels when calculating Maxey’s earning capacity. The court clarified that 'earning power' under 19 Del.C. § 2325 means earning capacity or ability, not merely actual earnings. Citing precedent from Ruddy v. I. D. Griffith & Co. and Larson's treatise on Workmen’s Compensation, the court emphasized that several factors must be considered to accurately assess post-injury earning power, including a general change in wage scale for the specific type of work or industry. The ultimate goal is to determine the wage that would have been paid to the claimant as injured, using wage levels from the exact same period as pre-injury earnings, to isolate the impact of the injury. The court affirmed Larson's view that post-injury earnings must be corrected to correspond with the general wage level existing at the time pre-injury earnings were calculated. The court rejected the employer's argument that this adjustment only applies when post-injury wages exceed pre-injury wages, noting contrary authority. However, the court found that Maxey's evidence of a general statewide wage increase was not specific enough to reflect the change in wage scale for the industry in which he is now employed or the type of work he performs (gas station manager). Therefore, the case was remanded to the Board with instructions that if Maxey introduces specific evidence of the 1969 wage scale for a comparable gas station manager, the Board must apply that 1969 wage scale to determine his compensation.
Analysis:
This case is significant for clarifying the interpretation of "earning power" in workers' compensation statutes, ensuring that it encompasses earning capacity rather than merely actual earnings. It establishes a critical principle that general wage level changes, such as inflation, must be accounted for when comparing pre-injury and post-injury earning potential, thus preventing injured workers' compensation from being unfairly reduced by economic factors unrelated to their injury. The ruling reinforces the compensatory purpose of workers' compensation and provides a framework for fair assessment. Future litigants must provide specific evidence of wage scale changes relevant to the claimant's specific industry and type of work, not just general economic data.
