Articles Posted in Case Law Update

We have discussed Section 204(a), part of the 1996 amendments to the Pennsylvania Workers’ Compensation Act, previously on our blog. This Section gives the workers’ comp insurance carrier a right to a credit, or offset, on other types of benefits, including Social Security Retirement, unemployment compensation, severance and pension benefits.

The offset regarding a pension is available to an employer only “to the extent funded by the employer directly liable for the payment of compensation.” In many situations, this can be a complicated calculation. There are generally two types of pension plans – “defined contribution” and “defined benefit.” In a defined contribution plan, the employee contributes a specific percentage of his earnings to the plan, as does the employer. In those cases, calculations are generally less confusing. The problem comes more with defined benefit plans, where the employee is paid a set amount from a pool of money.

Since payments in defined benefit plans are made from a pool of money, rather than individual accounts, it is virtually impossible for an employer to identify how much it contributed to any one individual’s pension. The Courts have addressed this issue and made clear that “an employer can meet its burden of proving the extent of its contribution to a claimant’s defined-benefit pension by credible actuarial evidence; it need not identify actual contributions to the claimant’s pension.”

Whether an injured worker in PA has “voluntarily withdrawn from the labor market” has been a frequent topic on this blog. There has been a great deal of litigation on this issue in the appellate courts over the past several years. We are seeing that the details and facts in each case really have great meaning for which way the courts may decide.

In City of Pittsburgh v. Workers’ Compensation Appeal Board (Marinack), we saw some additional clarification of the relative burdens of proof in this situation. Here, the injured worker, a firefighter, suffered a rotator cuff tear in his shoulder, an aggravation of degenerative disc disease in his lumbar spine, and anxiety and depression. The injured worker filed for a disability pension, but was ineligible because he was terminated for cause.

The workers’ comp insurance carrier filed a Petition for Suspension, alleging that the fact the injured worker filed for a disability pension meant that he was voluntarily leaving the labor market. In such a case, the workers’ comp insurance carrier would not be required to prove job availability to obtain relief. The Workers’ Compensation Judge (WCJ) agreed that Claimant had voluntarily left the labor market. Further, the WCJ found that the injured worker did not prove he was looking for work, so the WCJ granted the Suspension Petition.

On many occasions, we have explored the evolution of the Pennsylvania Workers’ Compensation Act as it pertains to whether an injured worker has “voluntarily left the labor market.” Typically, we see this situation when the injured worker has filed for a retirement pension, or given some other indicia of “retirement.” Until now, we have not seen the Pennsylvania Courts punish an injured worker for merely taking Social Security Disability benefits.

Unfortunately, that ended with Burks v. Workers’ Compensation Appeal Board (City of Pittsburgh), where the Commonwealth Court of Pennsylvania upheld the suspended of workers’ comp benefits merely because the injured worker was receiving Social Security Disability benefits.

In that case, the injured worker had both a work-related injury (knee sprain) and non-work-related conditions (many, primarily involving her hip and low back). The Court found that the injured worker was capable of light duty work with regard to the work injury, but that she was totally disabled with the addition of the non-work-related conditions. As such, the Court concluded:

Generally speaking, the goal is to return an injured worker in Pennsylvania to gainful employment. Along those lines, under the Pennsylvania Workers’ Compensation Act, when an injured worker in PA is not able to keep working, due to the effects of the work injury, workers’ comp benefits should be reinstated.

The key element to whether benefits will be reinstated is often whether the loss of earnings is truly related to the work injury. A good example of this concept came recently in the case of Verity v. Workers’ Compensation Appeal Board (The Malvern School), decided by the Commonwealth Court of Pennsylvania.

Here, Ms. Verity (Claimant) suffered a strain to her left hip and low back. After being released to modified duty, Claimant returned to work under those restrictions. Subsequent to her going back to work, Claimant had additional restrictions placed upon her by her physician, which included “no going up/down stairs.” The employer said they had nothing within those restrictions, and Claimant filed a Petition for Reinstatement.

Many changes to the Pennsylvania Workers’ Compensation Act, much to the detriment of the injured worker, took place in the sweeping 1996 amendments to the Act. One of the more substantial changes was the amendment to Section 204(a), allowing PA workers’ comp insurance carriers to enjoy an offset, or credit, for such things as severance, unemployment compensation and Social Security retirement (known as “Old Age,” though we certainly won’t use that term) benefits.

Looking specifically at Social Security retirement, Section 204(a) permits the PA workers’ compensation insurance company to take an offset equal to 50% of an injured worker’s Social Security retirement benefit. The Supreme Court of Utah found a similar provision in that State’s workers’ compensation system to be unconstitutional. With that decision in mind, attorneys representing injured workers in PA had high hopes for a similar result from the Pennsylvania Court System.

So far, unfortunately, our hopes have been dashed. The Commonwealth Court of Pennsylvania has decided, in Caputo v. Workers’ Compensation Appeal Board (Commonwealth of Pennsylvania), that the PA workers’ comp system is different than that in Utah, and the offset in Section 204(a) of the PA Workers’ Compensation Act is indeed constitutional. Hope remains the Supreme Court of Pennsylvania will review this issue, but for now the 50% offset in Section 204(a) will remain.

Under PA workers’ comp, wage loss benefits are stopped (suspended) when an injured worker returns to work at no loss in wages (medical treatment continues, regardless of wage loss, however). What if the injured worker (“claimant”) voluntarily quits a job? Can he or she get reinstated to workers’ compensation benefits in PA? Well, it depends.

The Commonwealth Court of Pennsylvania faced this issue in Allen v. Workers’ Compensation Appeal Board (Delaware County SPCA, Inc.). Here, on August 24, 2007, the claimant injured his shoulder at work, but then subsequently returned to work, at his pre-injury job, at no loss in wages, causing the workers’ comp benefits to be suspended. The injured worker then voluntarily quit his job on January 3, 2008, because there was a “deterioration of the relationship” with the company, and he was having increased pain in his shoulder. On January 29, 2008, the injured worker saw a doctor who found that he was not physically capable of his pre-injury job as of that date.

A Workers’ Compensation Judge (WCJ) granted the Petition for Reinstatement, as of January 29, 2008, since the injured worker proved he had a change of condition as of that date. Upon appeal, the Workers’ Compensation Appeal Board (WCAB) reversed the WCJ, finding that claimant was not entitled to a reinstatement of his workers’ comp benefits, because he had voluntarily quit his job.

Before recent changes in PA Workers’ Compensation law, an insurance carrier could “accept” a claim using a Notice of Denial (NCD). This left the status of the work injury in doubt, so, in 2011, the PA Bureau of Workers’ Compensation redesigned the NCD form to no longer allow such an action.

With the previous NCD, we had seen a Claim Petition denied, despite an acknowledged work injury. As attorneys who represent injured workers, we found this result illogical, and just plain wrong.

As if in a confirmation that an illogical result was intended, the Commonwealth Court of Pennsylvania decided the case of Zuchelli v. Workers’ Compensation Appeal Board (Indiana University of Pennsylvania), again denying a Claim Petition because disability was not proven (the NCD used to “accept” the claim was done before 2011).

When we settled a workers’ comp case in Pennsylvania (usually done by what is called a “Compromise & Release Agreement”), there was often a question from our client about whether he or she could then file for unemployment compensation benefits. Usually, as part of a workers’ compensation settlement, the employer/insurance carrier wants a resignation as part of the deal. Until recently, we told them the honest answer – maybe. It depended on the identity of the Unemployment Compensation Referee (UCR), the wording of the resignation and the status of the medical clearance (one must be capable of some type of employment to be eligible for unemployment compensation).

When the Commonwealth Court of Pennsylvania recently decided Lee v. Unemployment Compensation Board of Review, however, we were given a pretty specific answer – no, you cannot. Here, the injured worker gave both a resignation and a release (waiving her rights to other causes of action, including unemployment compensation benefits) as part of her workers’ compensation settlement. Following the approval of the settlement, the injured worker filed for unemployment compensation benefits.

Benefits were granted by the UCR, who found the resignation was not “voluntary,” since it was required as part of a workers’ compensation settlement. The Unemployment Compensation Board of Review reversed, finding the injured worker not eligible for unemployment compensation benefits. Upon further appeal, this was affirmed by the Commonwealth Court of Pennsylvania.

When a work injury in Pennsylvania is not obvious, the injured worker must present expert medical testimony to explain how the work duties caused the work injury. This gets even more complicated when the condition at issue is caused by a combination of the work duties and pre-existing pathology, such as in the case of a heart attack (in that situation, the injured worker (known as the “Claimant”) must prove that the work-related cause is a substantial contributing factor to the disability).

Recently, the Commonwealth Court of Pennsylvania addressed this issue in Bemis v. Workers’ Compensation Appeal Board (Perkiomen Grille Corp.). Here, the injured worker, a chef and manager, suffered a heart attack when he was moving kegs of beer and when he was lifting a heavy pot of chili. A Claim Petition was filed and the case was litigated before a Workers’ Compensation Judge (WCJ). The WCJ noted that Claimant’s medical expert said the work duties “certainly could have” and “probably” caused the heart attack. The WCJ found this opinion “equivocal” and denied the Claim Petition. The Workers’ Compensation Appeal Board (WCAB) affirmed.

Upon further appeal, however, the Commonwealth Court of Pennsylvania reversed this decision. The Court observed that the WCJ erred by taking some statements by the doctor out of context. The mere fact an expert witness says “could have” or “probably” does not render an opinion equivocal. The entire testimony must be reviewed. When this is done, said the Court, it is clear the doctor found the heart attack was related to, and caused by, the work duties. Again, in this situation, the work duties do not have to be the sole cause, only a “substantial contributing factor.” As such, the Court felt the Claim Petition should have been granted, and remanded (sent the case back) to the WCJ, to grant the Claim Petition.