Tennessee Workers’ Compensation Average Weekly Wage Calculation

In Tennessee, your Workers’ Compensation benefits are based on two-thirds of your Average Weekly Wage. Many claimants complain that the rate they are paid is far less than the two-thirds they are owed. The Goodman v. HBD Industries, Inc., 208 S.W.3d 373 (2006) case discussed below gives guidance on how to find out if you are being shortchanged. Make sure, for example, that days out for sickness are not counted against you.

Phillip Goodman (“Goodman”) had been employed by HBD Industries, Inc. (“HBD”) for approximately twenty-six years prior to his injury. Goodman was a member of the Collective Bargaining Union (“the union”) at HBD and participated in a twenty-eight-week strike organized by the union. Less than a month after returning to work, Goodman, while performing his duties, was pulling a hose by hand when it got stuck and jerked him to the ground. HBD sent Goodman to an orthopedic surgeon for treatment.

Goodman filed a complaint for workers’ compensation benefits in the Chancery Court for Scott County. The trial court found that Goodman had been injured within the course of his employment and held that he permanent partial disability. The lump-sum judgment granted by the trial court totaled $102,529.68, which was equivalent to 264 weeks of benefits at the rate of $388.77 per week. The trial court deducted the twenty-eight weeks Goodman was on strike from the weekly compensation rate. If the weeks on strike had been included, the weekly compensation rate would have been $149.38. In the fifty-two weeks prior to his injury, Goodman made $11,651.24. HBD appealed only the trial court’s computation of the average weekly wage and weekly compensation rate.

Chief Justice Barker delivered the opinion of the Court. The only issue before the Court was whether the trial court had erred in excluding the twenty-eight weeks Goodman was on strike. HBD relied on Hartley v. Liberty Mut. Ins. Co. (1954) to argue that the time spent not working due to a strike is a voluntary absence and therefore should not be excluded when calculating the weekly wage. In Hartley, an employee had taken part in a sixteen-week strike, but for eight of those sixteen weeks the plant was closed for repairs. The trial court deducted eight weeks for the repairs to the plant but included the other eight weeks of the strike when calculating the average weekly wage. Goodman argued that because Hartley had “never been followed,” failed to deal with the issue at hand, and was very old, it should not influence the outcome of the case before the Court. The Court disagreed with Goodman and held that Hartleywas still good law, therefore the twenty-eight weeks were to be included when calculating his average weekly wage.

“‘Average weekly wage’ means the earnings of the injured employee in the employment in which the injured employee was working at the time of the injury during the period of fifty-two (52) weeks immediately preceding the date of the injury divided by fifty-two (52) …” Tenn. Code Ann. §50-6-102(3)(A)(2005). The compensation rate is two thirds of the average weekly wage. Deducting days not worked from the calculation benefits the employee. If the weeks spent on strike were included, Goodman’s average weekly wage would be $224.06, which would make the weekly rate of compensation $149.38, instead of the $388.77 awarded by the trial court.

“The determination of whether days an employee does not work should be deducted from the computation of the average weekly wage is dependent upon the facts and circumstances of each case.” Goodman v. HBD Indus., Inc., 208 S.W.3d 373, 377 (Tenn. 2006). When making this determination, “we ask whether the employee lost time from work due to ‘the employee’s voluntary act, or … the act and choice of the employer for [the employer’s] benefit and convenience.’” Goodman v. HBD Indus., Inc., 208 S.W.3d 377 (Tenn. 2006). Voluntary absences from work should not be deducted from the fifty-two-week period, however, absences from work as a result of sickness, disability, or other fortuitous circumstances must be deducted.

Goodman argued that his absence from work was not voluntary, as he felt he was required to join the strike organized by the union. Tennessee Code Annotated sections 50-1-201 through 204 prohibit requirements that an individual participate in or not participate in a union. Goodman could not have been required to join the strike; thus, his absence was voluntary. Additionally, other employees in the union continued to work at HBD throughout the strike. There was no valid reason to overturn Hartley, thus the rule was applied, and the twenty-eight weeks of strike were included in the calculation of the average weekly wage.

Goodman alternatively argued that his benefits should be calculated using Tennessee Code Annotated section 50-6-102(3)(B) as his period of employment with HBD was less than fifty-two weeks because of the strike. However, there is no evidence Goodman’s employment relationship with HBD was ever severed and therefore this section does not apply.

The Court reaffirmed Hartley and held that the weekly compensation rate should be $149.38 instead of $388.77.

If you have questions about your Tennessee Workers’ Compensation claim, contact the Lawyers of Brown and Roberto at (865) 691-2777.