Articles Posted in Case Law Update

Under the Pennsylvania Workers’ Compensation Act, an insurance carrier can stop paying benefits to an injured worker who is “incarcerated after a conviction.” The Commonwealth Court of Pennsylvania recently emphasized that there must be a conviction before workers’ compensation benefits can be suspended.

In Rogele Inc.v. Workers’ Compensation Appeal Board (Mattson), which the Court decided on April 2, 2009, the Workers’ Compensation Judge (WCJ) assessed penalties against the workers’ comp insurance carrier, after the carrier stopped paying benefits to the injured worker. In that case, the injured worker was in jail, in the process of pleading guilty to a felony which was to entail significant jail time. At the time benefits were stopped, however, there had been no conviction.

The Court affirmed the decision of the WCJ, finding that in PA, as anywhere in the United States, one is innocent until proven guilty. Whether one later pleads guilty is irrelevant. The plain language in the Pennsylvania Workers’ Compensation Act requires the claimant be “incarcerated after a conviction.”

In Liveringhouse v. Workers’ Compensation Appeal Board, decided on March 19, 2009, the Commonwealth Court of Pennsylvania reversed the decision of a Workers’ Compensation Judge (WCJ), which denied claimant’s Petition to Review. In this case, the injured worker filed her Petition to Review to add carpal tunnel syndrome to her accepted PA work injury.

The WCJ denied that Claimant suffered from carpal tunnel syndrome at all. Since all three medical experts testified (two for the workers’ compensation insurance carrier) that Claimant did have carpal tunnel syndrome, the Court found that the decision of the WCJ was defective. “It is well settled that a WCJ is not competent to make independent medical determinations.” The WCJ also erroneously stated that the injured worker never testified that she had to twist using her pliers, when in fact the record showed such evidence. Still, the two doctors who testified for the workers’ compensation insurance carrier found that the carpal tunnel syndrome was not work-related.

One of those doctors based his opinion primarily on his belief that carpal tunnel syndrome “could be related to job duties only when the jobs involve the use of significant vibratory tools over long periods of time.” In what would normally seem to be a determination of credibility, made solely by a WCJ, the Court found this opinion completely defective. Specifically, the Court stated, “Courts consistently have regarded carpal tunnel syndrome as a condition that arises as a classic cumulative trauma or repetitive stress injury that may result from use of the hands in a variety of job settings, and they have never limited benefits for carpal tunnel to cases involving use of ‘significant vibratory tools’ over long periods.”

Ordinarily in a Pennsylvania workers’ compensation case, litigation costs incurred by an injured worker (or his or her lawyer) are reimbursed by the PA workers’ comp insurance carrier if the injured worker was successful “in whole or in part.” This is a very important concept; if claimant attorneys cannot get their litigation costs reimbursed, some meritorious workers’ comp cases will be declined, as the attorneys will not be able to afford litigating them.

A recent decision by the Commonwealth Court of Pennsylvania, Reyes v. Workers’ Compensation Appeal Board (WCAB), limits the injured worker’s attorney in recovering costs, despite being successful on a Claim Petition, at least in part.

In Reyes, the claimant was injured in a work-related motor vehicle accident. A Notice of Denial (NCD) was issued, which acknowledged the injury, but denied disability. The injured worker filed a Claim Petition. The Workers’ Compensation Judge (WCJ) granted the Claim Petition for a closed period of time, finding that the work injury fully resolved on the date on the Independent Medical Examination (IME). The WCJ denied an award of wage loss benefits, finding that claimant failed to prove he was ever disabled from work. Finally, the WCJ denied an award of litigation costs, saying that the claimant was not successful at all.

Under the Pennsylvania Workers’ Compensation Act, an injured worker is generally covered for all of the effects of the work injury. Things that would not have happened “but for” the work injury often can be included in the workers’ compensation case. Thus, typically, if an injured worker in PA has a car accident on the way to therapy (for the work injury), the injuries suffered in the subsequent car accident are also covered by workers’ comp.

A recent decision by the Commonwealth Court of Pennsylvania, Matthews v. Workers’ Compensation Appeal Board (WCAB), however, restricts this concept. The injured worker must provide evidence of each aspect of his or her claim, as with any PA workers’ comp claim. Here, Ms. Matthews hurt her knee at work in January, 2003, then had a car accident, while going to therapy for her knee, in September, 2003. Medical evidence showed the January, 2003 injury had healed, but Claimant was disabled from the injuries from the car accident. The Workers’ Compensation Judge (WCJ) found that the work injury should be expanded to include the injuries from the car accident, and awarded ongoing workers’ comp benefits.

On appeal, the WCAB reversed the decision of the WCJ, finding the car accident could not be considered part of the work injury because Claimant never gave notice to her employer of the car accident (though she did notify her employer of the original work injury to her knee). The Commonwealth Court of PA agreed with the WCAB.

What happens when an injured worker in Pennsylvania is released by his or her doctor to return to work, without restriction, but the injured worker has no job waiting for him or her? Recently, the Commonwealth Court of PA answered this question and put a smile on the face of this PA workers’ comp attorney.

In Consol PA Coal Co. v. Workers’ Compensation Appeal Board, the injured worker broke his arm. His treating orthopedic surgeon eventually released him to return to work, without restriction. Rather than offer him a job, the Employer instead filed a Petition to Suspend his workers’ compensation benefits. Employer took the position that if the injured worker had no physical limitations, the loss in wages could not possibly be due to the work injury.

The Commonwealth Court disagreed with the Employer (as had the Workers’ Compensation Judge and the WCAB below), holding that to win a Petition for Suspension, an Employer must prove a job was actually available to the injured worker. Without this evidence, the Employer could not prevail.

Section 204(a) of the Pennsylvania Workers’ Compensation Act entitles workers’ comp insurance carriers to an offset if the injured worker receives unemployment compensation benefits, Social Security Retirement benefits, severance benefits or pension benefits. Most of these benefits, and their offsets, are easily calculated. However, when one gets into the area of pensions, in particular “defined benefit” plans, things get more complicated.

In a “defined benefit” plan, the amount of money paid to the recipient is certain; therefore, the party funding the plan takes the risk of the plan not being adequately funded to make the necessary payments to recipients. The money paid into the plan is put into a general fund, which is then used to pay all recipients. Contrast this with a “defined contribution” plan, where the employer pays a certain amount on behalf of each employee, and that account is then used to only pay that employee. That employee then only receives the payments that his own account can support. Thus, the employee takes the risk of underfunding.

A Pennsylvania workers’ comp insurance company can only obtain an offset from a pension plan “to the extent funded by the employer directly liable for the payment of compensation.” The issue, then, becomes how much that employer funded the plan. This can get complicated in a “defined benefit” plan, where the injured worker was employed by multiple employers over his or her career.

Ordinarily, when an injured worker in Pennsylvania has his or her workers’ compensation benefits modified or suspended, such as by a return to work, having the benefits reinstated to total disability is not difficult provided that the loss of such work is not due to the fault of the injured worker, and the work-related disability continues.

The situation is much different, however, when the injured worker’s PA workers’ comp benefits are modified or suspended due to “bad faith conduct.” As explained by the Commonwealth Court of Pennsylvania in a recent case, Ward v. Workers’ Compensation Appeal Board (WCAB), decided on March 2, 2009, if the injured worker’s benefits were modified due to bad faith, then the injured worker has the burden to prove his or her medical condition worsened such that he or she is no longer capable of performing the job which had previously been found to be available.

The claimant in Ward was injured in 1992. In 1999, the PA workers’ comp insurance company was successful in litigating a Petition to Modify benefits. Specifically, the Workers’ Compensation Judge (WCJ) found that jobs were available to claimant, within his physical restrictions, but that he did not apply for the jobs. The WCJ ordered the total disability benefits modified to “partial disability benefits.”

As an attorney representing injured workers in Pennsylvania, I find “no work” jobs to be one of the nastier and more insulting actions an employer can take. Like they sound, “no work” jobs are positions offered to injured workers by their pre-injury employers, where the injured worker is to sit at a desk and literally do nothing. One of the favorite tricks of nasty employers is to offer such a job, wait for the employee to fall asleep, then fire the employee for sleeping on the job.

Though Courts in PA have held that “no work” jobs are “real” jobs, and have suspended workers’ comp benefits to injured workers who refuse such jobs without reason, a recent case shows the PA Courts do recognize limits to such actions. In Channellock, Inc. v. Workers’ Compensation Appeal Board (Reynolds), the Commonwealth Court of Pennsylvania held that a “no work” job was not within the injured worker’s physical capabilities.

The injured worker was taking medications which made him drowsy. A Workers’ Compensation Judge found both the injured worker, and his doctor, credible on this point. The injured worker tried the “no work” job and fell asleep. The worker was threatened with termination if this happened again. The Court found that proved that the job required that Claimant stay awake and that the credible evidence showed Claimant cannot stay awake due to his medication. As such, the job was not available to the injured worker and workers’ comp benefits were to continue.

The last major changes to the Pennsylvania Workers’ Compensation Act came in 1996. Among other things, workers’ comp insurance carriers were given a credit for some other benefits an injured worker might receive, such as unemployment compensation, severance benefits, Social Security Retirement benefits and pension benefits [Section 204(a) of the PA Workers’ Compensation Act]. These offsets were designed to avoid an injured worker receiving a “double” recovery.

As attorneys representing injured workers, we were disappointed when two cases were decided by the Commonwealth Court of PA, holding that these offsets were to be taken on the gross (before tax) amount of these benefits, rather than on the net amount. In fairness, if the injured worker is paying part of his benefits back for tax, he or she did not actually “receive” the entire benefit being offset. Indeed, then the injured worker in PA, in effect, is getting less in workers’ comp benefits than the amount the Pennsylvania legislature intended.

This issue was even more disturbing, and perplexing, when the Pennsylvania Bureau of Workers’ Compensation issued regulations, stating that the offsets under Section 204(a) should be on the net amount. These regulations were issued just before the first of the above-mentioned two cases, though neither case mentioned the regulations.