Petitt v. Sause Brothers

Under the Longshore and Harbor Workers' Compensation Act, scheduled wage increases which are not dependent upon a worker's performance are general wage increases for the purposes of determining the wage-earning capacity of an individual.

Joseph Petitt hurt his back while working as a welder for $15 per hour at Sause Brothers. Petitt underwent two surgeries and was able to return to his job briefly, but was ultimately unable to continue working as a welder. Petitt left Sause in 2004. Three years later, he began working at K&K sound Systems, assembling electronics for $7.80 per hour. As a part of company policy, all production and clerical employees received a $0.25 per hour raise every three months, with a maximum hourly wage of $13.50. At the time Petitt started working for K&K, Sause was still paying Petitt partial disability benefits, based on the difference between his salary at Sause and his new salary at K&K. Sause reduced Petitt’s benefits based on his quarterly raises. Petitt claims that Sause should not decrease his disability compensation based on his scheduled quarterly raises. The Administrative Law Judge decided in favor of Sause; the Benefits Review Board affirmed. Petitt appealed. The Ninth Circuit held that under the Longshore Act, scheduled wage increases not dependent upon an employee’s performance, paid by a non-union employer are general wage increases. Only merit-based wage increases are factored in to an employee’s wage-earning capacity. Therefore, the quarterly raises should not be calculated into the wage-earning capacity. PETITION GRANTED; VACATED AND REMANDED.