Injured Worker in PA Did Not Voluntarily Leave the Workforce; Suspension of PA Workers’ Compensation Benefits Reversed

One of the pitfalls in the Pennsylvania workers’ compensation system is the concept of “withdrawal from the labor market.” Without intending to do anything but receive additional income, an injured worker in PA can easily cause his or her workers’ compensation benefits to stop accidentally. This is one of the many reasons we urge every injured worker to have the representation of an attorney Certified as a Specialist in Workers’ Compensation law (as are both of the attorneys at Brilliant & Neiman LLC).

A recent decision from the Commonwealth Court of Pennsylvania, Hi-Tech Flooring, Inc. v. Workers’ Compensation Appeal Board (Santucci), reminds us of the perils of an alleged “withdrawal from the labor market.” Here, the injured worker suffered what was initially accepted as a “right knee contusion.” Later litigation expanded the injury to a more accurate injury description of “ongoing progressive degenerative changes of the right knee as a result of the August 18, 2014 work incident.”

A few years after the injury, seeking to have additional income, the injured worker filed for pension benefits from his union and filed for Social Security Disability (SSD) benefits. Each application was accepted. The decision approving the SSD application noted that Claimant had the following ailments or conditions, “lumbar and cervical disc disease, status post C5-6 cervical discectomy and fusion; bilateral knee degenerative osteoarthritis, status post bilateral arthroscopic procedures; right hip degenerative joint disease; and status post total hip replacement.” According to the Court, the determination granting the SSD benefits did also mention “resulting synovitis in Claimant’s right knee and ongoing right knee pain.”

Based on the actions of the injured worker, the workers’ comp insurance carrier filed a Petition for Suspension, alleging that the injured worker had voluntarily withdrawn from the labor market, by filing for his pension and seeking SSD benefits (for conditions other than the work-related injury). There was also a Petition for Termination filed, alleging a full recovery, but that is not relevant to our discussion.

In litigating the case, the injured worker testified to his ongoing and severe right knee pain, and his inability to do any kind of work, other than his pre-injury trade (tile setter). There was no dispute that the injured worker was not actively seeking employment within his physical capabilities. Upon reviewing the evidence, the Workers’ Compensation Judge (WCJ) granted the Petition for Suspension, finding that the evidence showed the injured worker had, according to the Court, “voluntarily left the workforce by retiring.” This, of course, caused the workers’ compensation wage loss benefits to stop.

Upon appeal to the Workers’ Compensation Appeal Board (WCAB), the decision of the WCJ was reversed. The WCAB noted that the taking of a pension alone is not dispositive. A workers’ compensation insurance carrier must show more. As the Court relayed, quoting the WCAB, “’[t]here is no presumption of retirement arising from the fact that a claimant seeks or accepts a pension[;] rather, the acceptance of a pension’ only creates a permissive inference of such.” Once a voluntary withdrawal is shown, the burden moves to the injured worker to demonstrate that he or she either is looking for work, or “has been forced to withdraw from the entire workforce because of his or her work-related injury.”

Since the WCJ found the injured worker credible with regard to his ongoing pain and limitations in the knee, preventing him from performing his pre-injury employment, and the workers’ compensation insurance carrier failed to show any job referrals, the WCAB found that the totality of the circumstances could not support a finding that the injured worker had retired. The filing for the pension, and the failure to look for work, could not rise to the requisite level of proof. Said the WCAB, “Claimant did not
voluntarily remove himself from the workforce, but, in fact, [the] work-related disability was preventing [Claimant] from obtaining further employment.”

The Commonwealth Court of Pennsylvania affirmed the decision of the WCAB, finding that the denial of the Petition for Suspension was the correct result on this evidence. The Court cited a prior decision from the Supreme Court of Pennsylvania, holding that, “[t]here is no presumption of retirement arising from the fact that a claimant seeks or accepts a pension, much less a disability pension; rather, the worker’s acceptance of a pension entitles the employer only to a permissive inference that the claimant has retired.”

Importantly, the Court discussed the difference between a “disability” benefit or pension and a “retirement” benefit or pension. Here, both the union pension and SSD were of the disability type. While the approval of both benefits did include diagnoses in addition to the work-related knee condition, the evidence showed that the right knee pain and limitation continued, and that the right knee condition alone would prevent an ability to return to the pre-injury position. The union pension, explained the Court, stood only for his disability from his particular trade (from which he is disabled by the work injury), not a “voluntary removal from the entire workforce.”

The Court further noted that neither benefit program implicated here is based on age, which may require a different result (contrast SSD benefits with Social Security “Old Age” or Retirement benefits). Since the injured worker only was a tile setter for over 30 years, he knew of no type of sedentary duty work he could perform. The Court found this significant, “This does not evidence an intent to retire from the workforce but, rather, a lack of understanding what options may be available to Claimant to remain in the workforce.”

Based on the evidence of record, the Court agreed with the WCAB that the totality of circumstances “do not support Employer’s assertion that Claimant voluntarily retired and left the workforce.”

While this case did end successfully for the injured worker, that is not always the result in these “voluntary withdrawal” cases. The cases are often fact-specific. As we noted above, they can be dangerous pitfalls for a well-meaning, but uninformed, injured worker.