At issue in Jackson Park Hospital v. IWCC (Jenkins) was how to determine a Permanent Partial Disability award - the single most litigious facet of workers' compensation law.
Kathy Jenkins had worked as a stationary engineer for Jackson Park Hospital, in Chicago. It was her job to address plumbing, heating, and electrical maintenance issues throughout the hospital facility.
Jenkins hurt her back in October 2005 while trying to climb into a locked office through a sliding glass window.
Her treating doctor authorized her to return to sedentary work in February 2007. The hospital offered Jenkins a clerical position in its accounting department. The hospital later moved Jenkins to another clerical position in its employee health department, and then to its security department.
Even though the hospital continued to pay Jenkins at the same rate she had earned as a stationary engineer in each of these positions, Jenkins still filed a request for PPD benefits based on Section 8(d)(1).
Section 8(d)(1) of the Illinois workers' compensation statute provides that a worker is entitled to a wage differential award when she is partially incapacitated from pursuing her usual employment, and there is a difference between the average amount that she would be able to earn in her time-of-injury job and in the average amount which she would be able to earn after her accident.
Alternatively, Section 8(d)(2) provides for a PPD award based on a percentage-of-the-person-as-a-whole when the worker is disabled from continuing to her time-of-injury job, but she does not suffer an impairment of earning capacity.
The arbitrator in the Jenkins case determined that Section 8(d)(1) was inapplicable because Jenkins had suffered no actual reduction in her income. He instead awarded her PPD benefits based on a percentage of the person as a whole under Section 8(d)(2).
Jenkins appealed to the Illinois Workers' Compensation Commission. The hospital terminated her while her appeal was pending. She filed an emergency motion to remand the case to the arbitrator in order to reopen proofs to allow additional evidence of her termination.
The commission denied her motion, and later affirmed the arbitrator and adopted the arbitration decision as its own ruling.
Jenkins sought judicial review. The Circuit Court Judge reversed the commission, stating the commission's decision to award benefits under Section 8(d)(2) instead of 8(d)(1) went against the manifest weight of the evidence. He ordered the case remanded for the commission to issue Jenkins a wage-differential award.
On remand, the commission awarded Jenkins $389.60 per week, from Feb. 19, 2007, through the duration of her disability.
The hospital appealed, which was upheld by the Circuit Court, so the hospital petitioned the Appellate Court for relief.
On Friday, the Appellate Court said the "crucial issue" in determining whether an award is appropriate under Section 8(d)(1) or 8(d)(2) is whether the claimant has suffered an impairment of her earning capacity.
"Earning capacity" is not simply the amount that a worker is making.
Since a worker may not have any actual loss of income if she is receiving "an inflated wage in an employer-controlled job that does not otherwise exist in the labor market," the court said that an impairment of earning capacity cannot be determined by simply comparing a worker's pre- and post-injury earnings.
The relevant inquiry needs to be what Jenkins' actual earning capacity would be, in light of her physical limitations from a decade-old back injury and her 8th-grade education, the court said.
If another employer would not hire her for the $23.61 per hour that Jackson Park Hospital was paying her as a security guard, the court said Jenkins' post-injury wages could not be considered an accurate reflection of her earning capacity.
Judicial interpretations can be frustrating for employers in situations such as the Jenkins case, where they thought they were doing the right thing by maintaining an employee in a wage class higher than the replacement job duties dictate.
Business likes stability and predictability - cases like Jenkins are frustrating because there is neither.
And the judicial football that this case highlights challenges some of the basic tenets of the 1917 US Supreme Court's constitutional blessing on compulsory workers' compensation in NY Central Railroad vs. White: no protracted disputes about damages, limited and fixed obligation of the employer, and a speedy remedy.
The employee suffers too - I wonder if Jenkins would still have a job if this dispute about earning capacity had not dominated her case.
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