Articles Posted in Case Law Update

Loyal readers of our blog know that it can be very difficult to have a psychological injury accepted as compensable in Pennsylvania workers’ compensation. However, what you may not realize is that psychological injuries are divided into three classes, and only one of those classes carries this higher burden of proof.

Under PA workers’ comp, a psychological injury is referred to as either mental/physical, physical/mental or mental/mental. The first meaning a mental stimulus causes a physical injury (like stress causing a heart attack), the second meaning a physical injury causes a mental injury (like depression from chronic pain), and the third meaning a psychological stimulus causes a psychological injury.

Only the mental/mental class has that increased burden of proof. As we have discussed in the past, these types of cases require a showing that the mental stimulus comes from an exposure to “abnormal working conditions.” Obviously, then, it would be very beneficial if an injured worker could move his or her case into the physical/mental category. Recently, Commonwealth Court of Pennsylvania addressed the distinction between the two.

Once workers’ compensation benefits in PA are started, usually by issuance of a Notice of Compensation Payable (NCP), under the Pennsylvania Workers’ Compensation Act, generally a workers’ comp insurance carrier cannot stop the payment of such benefits without a Supplemental Agreement, a Notice of Benefits Offset or a judicial order. Typically, if a workers’ comp insurance carrier uses “self help” and stops the payment of benefits in this situation, without proper basis, penalties will be assessed.

In a recent decision by the Commonwealth Court of Pennsylvania, however, the majority of the judges permitted such an unlawful stoppage of benefits with no consequences. The injured worker in Krushauskas v. Workers’ Compensation Appeal Board (General Motors) hurt his shoulder and an NCP was issued. While receiving workers’ compensation benefits, the injured worker accepted a retirement pension. We already know from prior case law that acceptance of a retirement pension can lead to a suspension of workers’ compensation wage loss benefits (a switching of burdens which continues to annoy and confuse us, but that is another blog entry for another day).

Rather than file a Petition for Suspension, which would almost certainly have been successful, the workers’ comp insurance carrier simply stopped paying the workers’ compensation benefits without any legal basis to do so. The injured worker then filed a Petition for Penalties.

The Pennsylvania Workers’ Compensation Act, in Section 306(b)(3), requires that an insurance carrier provide notice (in the form of a “Notice of Ability to Return to Work”) to an injured worker when the carrier receives information that the injured worker is able to work in any capacity. This notice is generally a threshold requirement before the carrier can move to modify or suspend workers’ compensation benefits based on a job offer or a Labor Market Survey.

Therefore, if a Notice of Ability to Return to Work is not issued, typically, the carrier cannot prevail on a Petition to Modify or Suspend workers’ comp benefits. There are exceptions to this rule, including a situation where an injured worker has already returned to gainful employment. Recently, the Commonwealth Court of Pennsylvania dealt with another situation where the injured worker did not receive the Notice of Ability to Return to Work before a job offer was made.

In Smith v. Workers’ Compensation Appeal Board (Caring Companions, Inc.), the injured worker’s attorney received a medical report releasing the injured worker to light duty work. Since there was currently litigation (Claim Petition) pending, the attorney then properly sent a copy of this report to the workers’ comp insurance carrier. A job offer letter was sent to the injured worker after the receipt of this report, but a Notice of Ability to Return to Work was not issued.

Ordinarily, to be compensable as a work injury in Pennsylvania, an injury must take place while the injured worker is in the “scope and course” of his or her employment. Interestingly, the phrase “scope and course” is not even mentioned in the Pennsylvania Workers’ Compensation Act, though the concept, derived from case law, has great importance.

An injured worker with a fixed place of employment (“stationary employee”) is generally covered for an injury away from the fixed place of employment only if he or she is actually furthering the affairs of the employer. In contrast, a travelling employee (one with no fixed place of employment), has a greater latitude of when he or she is within the scope of employment.

Recently, the Commonwealth Court of Pennsylvania issued a decision in Pennsylvania State University v. Workers’ Compensation Appeal Board (Rabin, Deceased), finding that the injured worker, a stationary employee, was still within the scope and course of his work when he was injured at the salad bar at a nearby restaurant.

As we have discussed previously, generally, an injury which takes place at work is compensable by Pennsylvania workers’ compensation benefits. Our previous blogging noted one exception, being “violation of a positive work order.” Recently, this issue was again addressed by the PA Courts.

In the case of Miller v. Workers’ Compensation Appeal Board (Millard Refrigerated Services), the Commonwealth Court of Pennsylvania affirmed the decision of a Workers’ Compensation Judge (WCJ), denying a Claim Petition. In this case, the injured worker finished his shift and was driving a forklift to the area where he would punch out for the day. In so doing, he managed to crush his foot against a pole. The problem is that he was not certified to drive a forklift, knew he was not permitted to drive a forklift, and testified that he was using the forklift simply because it was “fun to drive.”

The WCJ noted, and the Commonwealth Court agreed, that all of the elements of the violation of a positive work order defense were present. Specifically, citing the famous 1995 Commonwealth Court case of Nevin Trucking v. Workmen’s Compensation Appeal Board (Murdock), the Court said:

Generally, the coverage of employees for Pennsylvania workers’ compensation benefits is mandatory. There are narrow exceptions to this rule, as there are exceptions to most rules. One of those exceptions deals with Section 104 of the Pennsylvania Workers’ Compensation Act (WCA), wherein an executive officer of a corporation, who holds an ownership interest in the corporation, may be able to elect NOT to be an “employee” under the WCA.

To make sure this election is intentional, certain forms must be completed and signed by the executive at issue to accomplish the exclusion from workers’ comp coverage. But what happens if the executive did not actually mean to be excluded from coverage?

The Commonwealth Court of Pennsylvania faced such an issue in Anthony Wagner v. Workers’ Compensation Appeal Board (Anthony Wagner Auto Repairs & Sales, Inc.). Here, the injured worker was an owner and executive officer of a corporation. In setting up the corporation and insurance, the injured worker simply signed all of the papers he was given without really reading them (yet another example of the insanity of doing such a thing). The injured worker did not mean to exclude himself from workers’ compensation coverage.

Though it is somewhat less critical since the advent of the Uninsured Employers’ Guaranty Fund (UEGF), the concept of “statutory employer” still has an important place in the Pennsylvania workers’ compensation system. Basically, the theory of statutory employer is used when a subcontractor is the employer of an injured worker, and the subcontractor fails to carry PA workers’ compensation coverage (which, by the way, is against the law in PA). Under this theory, the injured worker may be able to recover against the workers’ compensation insurance held by the general contractor.

For many years, the ability for an injured worker to use the statutory employer concept was greatly limited by a restrictive “test” established in the 1930 Pennsylvania Supreme Court decision in McDonald v. Levinson Steel Co. (for many years, simply known as the “McDonald Test”). Recently, the PA Supreme Court took another look at the requirements to meet statutory employer in Six L’s Packing Co. v. Workers’ Compensation Appeal Board (Williamson).

Thanks to the efforts of the injured worker’s attorney in Williamson, and the fine assistance from the Pennsylvania Association for Justice, the Supreme Court eased the situations when the narrow McDonald Test is now required. Specifically, the Court held that, “Viewing the statutory scheme as a whole, however, and employing the principle of liberal construction in furtherance of the Act’s remedial purposes . . . we find it to be plain enough that the Legislature meant to require persons (including entities)

We have previously blogged about “specific loss” benefits in Pennsylvania workers’ comp. These are benefits available to an injured worker, other than indemnity (wage loss) and medical. When an injured worker loses the use of a body part (or suffers from facial disfigurement), he or she may be eligible for these “specific loss” benefits.

The issue in these types of cases often revolves around what constitutes “lose of use.” The Pennsylvania Workers’ Compensation Act, and interpreting case law, tells us that the body part must have been lost “for all practical intents and purposes.” What that phrase means, of course, is often litigated.

The Commonwealth Court of Pennsylvania recently addressed this issue in Miller v. Workers’ Compensation Appeal Board (Wal-Mart). As so frequently is the case, this was a very serious injury; the parties stipulated that the work injury would be described as “left spiral humeral fracture post-operative, left shoulder adhesive capsulitis and weakness, and radial nerve palsy.”