Jacobson Transportation Company and Liberty Mutual Insurance v. Russell Harris

Summary

The Supreme Court of Iowa held that the workers’ compensation commissioner properly excluded three unusually low-earning weeks from Russell Harris’s average weekly wage calculation and replaced them with earlier weeks that more fairly represented his customary earnings. The court interpreted Iowa Code section 85.36(6) to permit replacement of atypical weeks even when an employee’s earnings ordinarily fluctuate. It vacated the court of appeals’ decision and affirmed the district court judgment.

Holdings

1. An employee paid by output may have customary earnings even when weekly earnings fluctuate. Under Iowa Code section 85.36(6), a week may be replaced when its earnings do not fairly represent the employee's usual or typical earnings; the employee need not provide a specific explanation for the variance, and the magnitude of the departure from usual earnings may itself justify replacement.
2. The commissioner reasonably excluded Harris's three exceptionally low-earning weeks and replaced them with earlier weeks that more fairly represented his customary earnings. The decision to exclude the low weeks but not the high weeks was not irrational, illogical, or wholly unjustifiable.

Questions Presented

1. Whether Iowa Code section 85.36(6) permits the workers' compensation commissioner to replace weeks of unusually low earnings when the employee's weekly earnings normally fluctuate because the employee is paid by output.
2. Whether the commissioner acted irrationally, illogically, or wholly unjustifiably by excluding three low-earning weeks but not excluding higher-earning weeks in calculating Harris's average weekly earnings.

Disposition

vacated