Tuesday, April 9, 2013

Voluntary Retirement = Suspension (is a Petition Required?)

An injured worker, who has retired from the workforce, may not be entitled to indemnity wage loss benefits.

On March 25, 2013 the Supreme Court of Pennsylvania affirmed the decision of the Commonwealth Court at Robinson v. WCAB (City of Pittsburgh) (Pa. 2013) to utilize a "totality of the circumstances" standard when reviewing the Employer entitlement to a Suspension of indemnity wage loss benefits, where the allegation is that the employee has "retired" and voluntarily withdrawn from the (entire) workforce.

Typically the Employer will file a Petition for Suspension and/or Modification, where the employee receives a pension benefit and has not demonstrated any connect to the workforce, via job application.

At times, this "retirement" issue arises in the context of litigation of another petition or another issue.
Is the filing of a separate Petition or Amendment to a pending Petition required? ... Maybe not...

Fitchett v. WCAB School District of Philadelphia), No. 1713 C.D. 2011, a reported decision of a panel of the Commonwealth Court of Pennsylvania was authored by Judge Simpson on April 8, 2013.

Factual & Procedural Background

Employee filed a Penalty Petition in October 2003, alleging Employer unilaterally suspended work comp benefits. Employer sent Employee an LIBC 760 form, requesting information regarding her employment, self-employment and physical condition. By statute, If this form is not returned within 30 days, the employer/insurer may suspend benefit payments until the form is returned. Section 311.1
She alleged she never received the form. The Employer filed a Notice of Suspension LIBC-762.

The Employer filed a Petition for Termination alleging a full medical recovery as of September 2003.
Employee later filed a second penalty petition.

At an initial hearing, the WCJ interlocutory order directed Employer to reinstate benefits after employee produced the LIBC-760 form. A credit was granted for pension and Social Security benefits, against the reinstated work comp benefits.
The Termination Petition supersedeas request was denied.

Employee testified that she filed and received pension benefits beginning April 2002 and social security retirement benefits beginning October 2004. She testified she filed for these benefits for financial reasons. She did not look for work since the February 2001 work injury.

First IME opined Employee was fully recovered and was physically capable of returning to work without restriction in September 2003.
Second IME opined reached  a similar conclusion in April 2007.
Employee medical expert opined she could not return to work due to unresolved nerve, shoulder, neck and headache conditions.

Testimony regarding Work Intentions
Employee testified she planned to find work as a babysitter but did not do so because she feared her work injuries would limit her capabilities.

When asked: "Are you retired at this point?" She replied "YES". [ slip opinion page 7].

On redirect she clarified that by "retired" she meant she had to leave work due to her injuries and she would be working if not for her injury.

WCJ Decision
Employee Penalty petitions granted, in part.

Employer Termination Petition, not granted as left shoulder injury has not fully resolved...
BUT WCJ found:

d) that as of June 4, 2005 [Claimant] was essentially retired and had voluntarily withdrawn from the workforce.
The WCJ suspended benefits as of that date.

Commonwealth Court Decision
Employee arguments:

 1. the WCJ erred in Suspending benefits as the Employer never requested a suspension due to "retirement" via amendment to the Termination petition or issuing a suspension notice.
(LIBC form?)

Employee was not placed on notice of the suspension issue, she could not answer that averrment and was deprived of her due process rights.

2. WCJ did not issue a "reasoned decision". [ addressed and rejected in footnote #6].

Commonwealth Court Reasoning
A. The WCJ has the authority to suspend benefits in the absence of a formal petition...
where doing so would not prejudice the claimant.
citing Krushaukas v. WCAB (General Motors) (Pa. Cmwlth. 2012)
[Claimant Petition for Allowance of appeal, just denied by Pa. Supreme Court on April 3, 2013!]

A claimant is not prejudiced, when placed on notice that a termination or suspension is possible and is given the opportunity to defend against it.

HERE, Employee was on notice of the Employer's termination request.

ALSO, Employee was placed on notice of suspension request, by the Employer filing of the LIBC 762, the Notice of Suspension for Failure to Return Form LIBC-760.
This remained an issue as Employee filed a Penalty petition for employer failure to timely reinstate benefits. The WCJ interlocutory order only partially resolved these issues pending further evidence and final decision.

"Significantly for current purposes, the WCJ's interlocutory order also granted Employer a credit for pension and Social Security benefits against the reinstated benefits".

So Employee had notice Employer was seeking:
     i. a termination based upon medical exam,
     ii. a suspension based upon failure to timely return the LIBC form,
     iii. a credit for pension and Social Security benefits ...
          [ I don't see any mention of the retirement issue?]

"More importantly, as in Krushauskas, the parties fully litigated the issue of whether Claimant voluntarily retired from the workforce". slip opinion page 11.

In his dissenting opinion, President Judge Pellegrini states the claimant retirement was incidentally raised on cross exam and was never the focus of this litigation. Based on scant testimony the WCJ suspended benefits finding claimant had voluntarily retired from the work force.
The issue of retirement was never raised by petition or motion.
President Judge Pellegrini believed the "totality of the circumstances" issue was not sufficiently raised for the WCJ to be able to consider it. [ dissent page 2].

The Majority reviewed the evidence in support of a suspension based upon "retirement":

i. Claimant applied and receives a retirement pension from Employer,
ii. Employee receive Social Security "old-age" retirement benefits,
iii. she completed the IME intake form noting "retired",
iv. she told her M.D. she had retired,
v. she has not applied for or looked for any work.

WCJ found Employee had essentially retired from the entire labor force, as of June 4, 2005, the date corresponding to the day after, her benefits were reinstated.

Commonwealth Court Majority believed the findings of fact reflect the WCJ provided claimant an adequate opportunity to defend against a suspension. [does anyone else see a big leap of logic here?]
[I'm still not sure how the Employee was placed on notice of suspension?]

BUT, I think there was ample evidence to support a finding of fact that based upon the totality of the circumstances that it appears Employee has withdrawn from the work force and considers herself retired.

Commonwealth Majority cites the recent Pa. Supreme court decision in Robinson for the standard that, where a claimant accepts a retirement pension, she is presumed to have voluntarily retired from the workforce. In such a case, the employer is entitled to a suspension unless the claimant can show she is seeking employment or that her work injury forced her to retire. slip opinion page 14, citing Robinson.

Here the WCJ did not believe Employee intended to return to the workforce.
This credibility determination is within the WCJ province as fact-finder.

The Commonwealth opinion addresses several other issues regarding:
credits and offsets;
right shoulder injury relationship;
LIBC-760 form suspension;
litigation cost reduction;
unreasonable contest attorney fees.
For the purposes of this blog post, I wanted to focus upon the retirement and suspension issues.

Practice Pointers:

1. File Petition , Amend Petition, or file a motion, to clearly place the "retirement" issue and suspension request before the WCJ.

2. Marshall the type of evidence this Employer demonstrated.
Review medical records for "retirement" language or comments regarding return to work intentions.

3. Review benefit plan applications to establish a chronology.

4. Review financial documents, tax documents, loan applications, etc
   ... how does claimant describe their work status?

Rarely will a claimant state on cross-exam that they are "retired".
If they do, you will see the response on re-direct exam, as noted above, that they really did not mean retirement. For this reason I believe you need to review other sources, where claimant may have responded to a question regarding their work status.

This evidence will build your totality of circumstances argument for Suspension.

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