An Employer successfully defended a Petition for Penalties, where Employee's total disability benefits were suspended upon acceptance of Employer's "Special Attrition Plan" retirement pension benefits.
Employee argued the Employer violated the work comp act by unilaterally suspending total disability benefits without a compensation agreement or WCJ order. In the Employee petition, the WCJ found the Employee was not credible regarding his intention to retire on July 1, 2006 when he signed the Special Attrition Plan documents, which included language that he was not under duress and acknowledged that he would not be entitled to "disability pay of benefits".
He was paid a lump sum of $35,000, in addition to the pension benefits.
WCJ found Employer's witnesses credible, in support of a finding that Employee voluntarily retired from the workforce. WCJ retroactively granted a suspension of work comp benefits as of July 1, 2006, the date of Employer's unilateral suspension. As no work comp benefits were due to Employee after July 1, 2006, WCJ did not assess a penalty for the violation of the act (finding Employee met his burden of proof in this regard).
Commonwealth Court affirmed the WCJ order. Primary reasoning, was that WCJ could take appropriate action based upon evidence presented, as strictness of pleadings is not required in work comp cases. (a tenet often cited to provide employee's relief).
An important consideration is whether Employee had notice of Employer's intention to request a suspension of benefits and the opinion recited the evidence in support of "notice" to Employee. In the absence of prejudice to Employee, there was notice and an opportunity to defend against the suspension request.
Judge Pellegrini filed a dissenting opinion, emphasizing that Employer violated the act and should be required to file a petition. He would award benefits and penalties during the illegal suspension.
#1. Better Practice would be to concurrently file a work comp suspension petition and coordinate the two programs.
#2 Best practice would be to file a petition to seek approval of a Compromise and Release to "close out" the work comp benefits.
#3. Another retirement/ withdraw from workforce case from the Commonwealth Court, following the "general rule" that one looks to the totality of circumstances surrounding the retirement and acceptance of a pension.
SEE: Krushauskas v. WCAB (General Motors)