Synopsis provided by Michael W. Ballance, Dickey, McCamey & Chilcote, PC
Luon Nay v. Cornerstone Staffing
(Court of Appeals - Unpublished – 18 August 2020
Facts: The employer Cornerstone was a staffing agency that provided employees to companies in “temp-to-perm” placements with the expectation of long-term employment. At least 95% of the positions filled by the employer were temp-to-perm positions. Plaintiff was employed by Cornerstone and on placement with a company when he injured his back in 2015. He had earned a total of $5,805.25 while working for Cornerstone. A dispute subsequently arose about how to properly calculate plaintiff’s average weekly wage (AWW).
Cornerstone claimed that plaintiff was a “temporary” employee, and as such, plaintiff’s AWW should be calculated by using Method 5 and dividing the total wages earned by 52 weeks under the decision in Tedder v. A&K Enterprises. This resulted in an AWW of $111.64. Plaintiff argued that, because he was a temp-to-perm employee with an expectation of continued employment, Method 3 should be used. This method resulted in an AWW of $419.20.
Both the Deputy Commissioner and Full Commission held that Method 5 was appropriate. Plaintiff appealed to the Court of Appeals.
Ruling: The Court of Appeals reversed the Commission and held Method 3 was correct.
Reasoning: In determining which of the five methods should be used in calculating AWW under N.C.G.S. § 97-2(5), the Court noted that there are two overriding concerns. First, the AWW should reflect what the plaintiff would have been earning had the injury never occurred. Second, the AWW must be fair and just to both parties.
The Court then distinguished this case from Tedder. In Tedder, the plaintiff was hired for a specific period of only seven weeks to fill in while an employee was undergoing surgery. There was no expectation of employment beyond seven weeks, and but for his injury, plaintiff would not have worked for the employer more than seven weeks. Therefore, it would have been unfair to the employer to pay plaintiff an AWW contemplated by a regular employee, so Method 5 was appropriate.
In this case, plaintiff worked for a temporary agency, but there was no “definitive employment end date” set with Cornerstone. Had his injury not occurred, plaintiff could have continued to work for Cornerstone indefinitely as any other at-will employee in North Carolina. Thus, Method 3 would most accurately reflect what plaintiff would have made if the injury had never occurred.
Practical Impact: This was an unpublished opinion, so the precedential authority of the case is limited. However, I think it is an interesting decision that helps further define when an employee is a “temporary” employee under the Court’s prior decision in Tedder. When deciding how to calculate the AWW of a “temporary” employee, the Court seems to be signaling that the employer’s designation of the employee as a “temp” does not necessarily control. The Court here stated there must be a “definitive employment end date” before Tedder applies and it is appropriate to use Method 5. Therefore, if your employer clients use temporary workers, it is essential to counsel them on the importance of establishing in writing the beginning and ending dates of their employment at the outset of the employment relationship. Failure to do so could result in employers paying substantially higher compensation rates to an injured worker.
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