April 07, 2007

All Overtime Earnings Excluded from Average Weekly Wage as Overtime Was Not Mandatory

April 07, 2007

Airborne Express, Inc. v. Industrial Commission No. 1-06-1960WC

A most significant case has just been decided by the Special Appellate Court and will frequently be cited as the Airborne Express case.  Ron Bronke, a delivery driver for Airborne Express, was involved in three accidents, two in 2000 and one in 2001.  The three cases were consolidated for hearing and decisions rendered in all three.  Airborne objected to only one decision, that being the accident of October 8, 2001, not because of the finding of disability but only for the fact that overtime was included by the Commission when deciding the average weekly wage, leading to increased amounts for temporary total disability and maintenance.

Bronke began working for Airborne in 1994 on a regular eight-hour shift extending from 7:00 a.m. to 4:00 p.m., Monday through Friday.  It was company policy to have the driver finish all of the packages on his truck before returning to Airborne’s facility,no matter how long it takes.  The driver was not to bring back undelivered freight unless he had permission to do so from a supervisor or manager.  Over and above completion of a driver’s own route, overtime may be compulsory at Airborne but only if the driver has not obtained seniority status.  Most of the claimant’s overtime occurred in 2001 because he used his seniority and requested overtime from his supervisors.

Joseph Yates, an Airborne manager, testified that the claimant had sufficient seniority so that he would not be forced to work overtime in 2001.  The drivers who were forced to work overtime fell into the lower 20% to 25% on the seniority list, whereas, the claimant fell in the upper 30%.  According to Yates, the overtime that the claimant worked in 2001 was voluntary overtime for which he bid based on seniority.

The claimant worked only 32 weeks during the 52-week period prior to his injury on October 8, 2001.  His regular wages for that period amounted to $901.41 per week.  Additionally, the claimant worked 538.70 hours of overtime in that same 32-week period.  As a result, the Commission added the straight time rate for the 538.70 hours of overtime, which was calculated at $21.59 per hour, thereby increasing his average weekly wage of $901.41 to $1,246.86 per week.  Consequently, the TTD and maintenance rates were increased from $600.94 per week to $843.24 per week and formed the basis for Airborne’s appeal.

Section 10 of the Act provides that “average weekly wage” means:

the actual earnings of the employee in the employment in which he was working at the time of the injury during the period of 52 weeks ending with the last day of the employee’s last full pay period immediately preceding the date of his injury, illness, or disablement excluding overtime, and bonus divided by 52; but if the injured employee lost 5 or more calendar days during such period, whether or not in the same week, then the earnings for the remainder of such 52 weeks shall be divided by the number of weeks and parts thereof remaining after the time so lost has been deducted.

However, as the court noted, Section 10 of the Act stated that overtime is to be excluded in calculating an employee’s average weekly wage but the Statute fails to define “overtime.”  The court utilized Webster’s Third New International Dictionary to define overtime as working time in excess of a minimum total set for a given period.  On that basis, the court reluctantly reversed the Commission decision on a factual basis.  The reversal is necessary because the clearly, evident, plain and indisputable weight of the evidence compels an opposite conclusion.

The court explained:

The 538.70 hours of overtime which the Commission included in its calculation of the claimant’s average weekly wage were not part of the claimant’s regular hours of employment and they were not hours that the claimant was required to work as a condition of his employment.  Although the claimant consistently worked overtime, he did not work a set number of overtime hours each week. The Commission correctly noted that Airborne’s operational needs required overtime work by its drivers.  However, the claimant’s seniority ensured that he would not have been required to work overtime if he did not request to do so.  These uncontradicted facts lead us to conclude that the Commission’s calculation of the claimant’s average weekly wage and its dependent calculations of the weekly TTD and maintenance benefits to which the claimant is entitled are against the manifest weight of the evidence.

It is interesting to note that the unanimous opinion written by Judge Hoffman states that the court’s prior decisions involving an interpretation of the overtime exclusion of Section 10 of the Act are consistent with this definition.  Certainly, in each and all of the prior cases, beginning with the Edward Hines Lumber Company case, the overtime was mandatory, but the calculation of the overtime rate excluded only the premium portion of the overtime rate.  The significant part of this decision involves the court’s exclusion of any portion of the time payment even the straight-time portion thereof.  In the explanation, the court noted:

Section 10 of the Act explicitly states that overtime is to be excluded in calculating a claimant’s average weekly wage.  No rule of construction authorizes this court to declare that the legislature did not mean what the plain language of section 10 imports.  We are simply not at liberty, by forced or subtle construction, to alter the plain meaning of the words employed by the legislature.  If merely working overtimeon a regular, voluntary basis were sufficient to include the overtime hours worked in the calculation of an employee’s average weekly wage, the overtime exclusion in section 10 of the Act would be rendered meaningless.

The 538.70 hours of overtime which the claimant worked in the 32 weeks prior to his accident were overtime within the meaning of section 10 of the Act and should not have been included in the Commission’s calculation of the claimant’s average weekly wage.

Editor’s Note:

Since this decision does not involve any change in the Statute and since the court is actually clarifying the Statute rather than finding the prior cases inconsistent, this elimination of overtime wages should be applicable to all cases presently pending.  If an overpayment has been made because of the inclusion of the overtime wages, that overpayment should be utilized as a credit in the pending case.  I have been informed that the claimant has filed a petition for rehearing and a request that the court certify that the case should be granted leave to file an appeal to the supreme court.  The success of this request for certification is questionable because the appellate court was unanimous in its decision.  But, at this moment, the decision represents the law in Illinois. We will keep you advised as this matter progresses.

Your Editor believes that while this decision is important we must keep in mind the various lessons that the court provides.

  1. In Airborne Express, the facts were undisputed.  Both the claimant and his supervisor described the claimant as requesting the overtime and both acknowledged that claimant’s seniority exempted him from compulsory overtime.
  2. Often a factual dispute exists as to whether the overtime was mandatory as opposed to voluntary.  If the Commission would decide in favor of the claimant on that question of fact, the appellate court would be unlikely to reverse the Commission on its finding.In a somewhat similar situation, Section 11 was amended to eliminate injuries caused at company outings and other recreational activities.  To protect the employers, the legislature provided that the injuries would not be compensable unless the employees were “ordered” or “assigned” to attend.  Since that time, the Commission has found compensability in cases where the employee’s attendance was questionably ordered or assigned and yet found to be compensable.  Both company outings and overtime cases have similar issues.  Was the overtime “mandatory” or “voluntary?”  Was the employee at the company outing “ordered or assigned?”  The clarification by the employee is paramount.  Testimony by knowledgeable witnesses will be necessary.  Documents concerning employer’s policy may help decide the case.
  3. In the Airborne Express opinion, the court noted that the claimant did not work a set number of hours each week.  However, that factor does not seem to be controlling if the overtime is mandatory. The argument may be made that “a set number of hours per week” would actually be a description of “regular hours.”  The difference between “regular” hours and “mandatory” hours, may be difficult to ascertain.
  4. If the overtime is mandatory, the court will follow the language in the Hinesdecision which includes only the straight-time hourly rate of the overtime and does not include the premium time.
  5. As stated by the appellate court, the term “overtime” as used in Section 10 of the Act, does not simply mean any time over eight hours per day.  Different occupations have different regular hours of employment.  The appellate court further stated:The fact that it was mandatory for claimant to work up to eight hours of overtime, coupled with the contents of the wage statement, leads us to conclude that claimant’s work week was 48 hours per week. … We hold that overtime hours should be included in the average weekly wage calculation at straight time, so as to reflect overtime earnings.

Conclusion

As stated previously, the very nature of the voluntary overtime in Airborne Express is quite clear.  An employer must be prepared to provide proof when the issue is contested.

Airborne Express, Inc. v. Industrial Commission No. 1-06-1960WC, decided March 20, 2007

Frank J. Wiedner, Editor Wiedner & McAuliffe, Ltd One North Franklin, #1900 Chicago, IL 60606 (312) 855-1105