Bennett v. Cracker Barrel Old Country Store

THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR. THE STATE OF SOUTH CAROLINA In The Court of Appeals Kathleen Ragin Bennett, Respondent, v. Cracker Barrel Old Country Store, Employer, Gallagher Bassett, Carrier, Appellants. Appeal From Clarendon County George C. James, Jr., Circuit Court Judge Unpublished Opinion No. 2009-UP-392 Heard June 10, 2009 – Filed July 16, 2009 REVERSED Darryl D. Smalls, of Columbia, for Appellants. Richard W. Simmons, II, of Columbia, for Respondent. PER CURIAM: After suffering a shoulder injury at work, Kathleen Ragin Bennett sought workers' compensation benefits from her employer, Cracker Barrel Old Country Store, and its insurance carrier, Gallagher Bassett (collectively "Cracker Barrel"). The single commissioner and the Appellate Panel of the Workers' Compensation Commission (Appellate Panel) awarded her benefits based upon her hourly wage and reported tips, and the circuit court reversed. Cracker Barrel appeals from the circuit court's order requiring recalculation of Bennett's average weekly wage and compensation rate. We reverse and reinstate the order of the Appellate Panel. FACTS Bennett worked an average of thirty-two hours a week as a server at Cracker Barrel. She was compensated at a rate of $2.41 per hour plus tips. As was customary for wait staff, Bennett reported eight percent of her sales as tips to Cracker Barrel. These reported tips placed Bennett's earnings above the federally mandated hourly minimum wage. She did not report the actual amount of her tip earnings, which she and Cracker Barrel agreed exceeded eight percent of her sales, to Cracker Barrel or to the Internal Revenue Service. On November 18, 2004, Bennett injured her left shoulder while lifting a large urn of tea at work. Despite the injury, Bennett worked for two additional weeks before seeing a doctor, and her shoulder ultimately required surgery. Bennett filed an application for workers' compensation benefits. The single commissioner awarded Bennett medical and temporary total disability benefits using an average weekly wage based only upon the wage and tip earnings she reported to Cracker Barrel. The Appellate Panel affirmed. Bennett appealed the calculation of her average weekly wage to the circuit court, which reversed and remanded. Cracker Barrel appealed to this court. STANDARD OF REVIEW In reviewing workers' compensation decisions, the appellate court ascertains "whether the circuit court properly determined whether the [A]ppellate [P]anel's findings of fact are supported by substantial evidence in the record and whether the [P]anel's decision is affected by an error of law." Baxter v. Martin Bros., Inc., 368 S.C. 510, 513, 630 S.E.2d 42, 43 (2006); see also S.C. Code Ann. § 1-23-380(5) (Supp. 2008). Generally, "'[c]ourts defer to the relevant administrative agency's decisions with respect to its own regulations unless there is a compelling reason to differ.'" Neal v. Brown, 374 S.C. 641, 649, 649 S.E.2d 164, 168 (Ct. App. 2007), cert. granted May 30, 2008 (quoting S.C. Coastal Conservation League v. S.C. Dep't of Health & Envtl. Control, 363 S.C. 67, 75, 610 S.E.2d 482, 486 (2005)). LAW/ANALYSIS Cracker Barrel argues the circuit court erred in remanding this matter to the Appellate Panel for recalculation of Bennett's average weekly wage. We agree. The compensation rate for a total disability award is equal to sixty-six-and-two-thirds percent of the claimant's average weekly wage. S.C. Code Ann. § 42-9-10(A) (Supp. 2008). A claimant's average weekly wage means: [T]he earnings of the injured employee in the employment in which he was working at the time of the injury during the period of fifty-two weeks immediately preceding the date of the injury . . . . "Average weekly wage" must be calculated by taking the total wages paid for the last four quarters immediately preceding the quarter in which the injury occurred as reported on the Employment Security Commission's Employer Contribution Reports divided by fifty-two or by the actual number of weeks for which wages were paid, whichever is less. . . . . When for exceptional reasons the foregoing would be unfair, either to the employer or employee, such other method of computing average weekly wages may be resorted to as will most nearly approximate the amount which the injured employee would be earning were it not for the injury. Whenever allowances of any character made to an employee in lieu of wages are a specified part of a wage contract they are deemed a part of his earnings. S.C. Code Ann. § 42-1-40 (Supp. 2008). If the claimant and the employer are unable to agree on a fair rate of temporary compensation, and subsequently if the claimant disagrees with the Workers' Compensation Commission's administrative recommendation, the claimant may file a Form 50 requesting a hearing. 25A Reg. 67-1603(C) (Supp. 2008). In these circumstances, the average weekly wage and compensation rate are issues to be determined at the hearing. 25A Reg. 67-606 (Supp. 2008). Here, Cracker Barrel bore the initial burden of providing wage information. The information it provided consisted of Bennett's hourly wage plus the tips she reported. However, no evidence indicates anyone other than Bennett ever possessed information about her tip earnings beyond what she voluntarily reported. The record reflects Cracker Barrel's payroll records included a notation that "servers must report one hundred percent (100%) of all tips received." Despite this notation and her assertion she consistently earned more than she reported, Bennett elected to report to Cracker Barrel an amount equal to eight percent of her sales, the minimum amount that would enable her to pass her employer's daily audit.[1] Aside from Bennett's reports, we see no indication Cracker Barrel had any means of ascertaining her actual tip earnings. By filing a Form 50 challenging Cracker Barrel's calculation of her average weekly wage, Bennett invoked an "exceptional reasons" analysis of her earnings. See § 42-1-40; Reg. 67-1603(C). Subsequently, Bennett presented testimonial evidence supporting her claim of unreported tip earnings to the single commissioner, who then awarded Bennett benefits. The Appellate Panel adopted the order of the single commissioner and therefore all the findings of fact and conclusions of law therein. In doing so, the Appellate Panel concluded the law required that "[e]arnings for a tipped employee such as a waitress include hourly wages and tips." This conclusion did not exclude any unreported tip earnings. Rather, the order approved use of the exceptional reasons analysis and consideration of any wage records Bennett submitted into evidence. As a result, we find the decision of the Appellate Panel included consideration of all tip earnings, reported and unreported, as well as an implicit finding the evidence of unreported tips Bennett presented was not credible. Consequently, the circuit court erred in remanding this matter for recalculation. CONCLUSION We find the decision of the Appellate Panel properly included consideration of all tip earnings. Accordingly, the order of the circuit court remanding this matter for recalculation is reversed, and the order of the Appellate Panel is reinstated. REVERSED. THOMAS and KONDUROS, JJ., and CURETON, A.J., concur. [1] Bennett notes in her brief that it is common in the restaurant industry for employers to require servers to report eight percent of their sales as tips. It appears Cracker Barrel enforced this requirement by conducting a daily audit that compared each server's sales with her reported tips. A server who reported tips equaling less than eight percent of her total sales was required to make up the deficit in the tips she reported the next day.