Monday, December 9, 2013

Back to the FUTURE... Son of Kachinski

Back to the FUTURE ...
In 1996 the Pennsylvania Legislature amended the Workers' Compensation Act, to allow an Employer a remedy for Modification of wage-loss benefits based upon proof of the post-injury earning capacity of an injured worker via Vocational Expert opinion evidence.

Prior to the 1996 amendments, an Employer was required to establish the proof of the post-injury earning capacity via production of a job referral (a job offer) to employee. If employee was not hired, wage-loss benefits continued ... 

Unless the employee was not hired due to a "bad faith" effort in the job application process. In that instance,  the Work Comp Insurer would produce testimony and documentary evidence from the Vocational Expert and prospective employer(s) to provide substantial evidence of a bad faith response of the injured worker. 
If the WCJ found evidence of bad faith, the Employer could be granted a Modification of benefits, even without an actual job offer or a actual return-to work.

This Wage-Loss Benefit  Modification method was known as the "Kachinski" standard, based upon the 1987 decision of the Pennsylvania Supreme Court. 
(Kachinski v. WCAB (Vepco Construction Co., 532 A.2d 374 (Pa. 1987).

One may read the dozens (hundreds) of appellate case reports which addressed the factual matrix for a "good faith" job application by employee versus a "bad faith" presentation.

... it appears we will now re-visit this laborious process, based upon the recent decision reported at Phoenixville Hospital v. WCAB (Shoap), No. 32 EAP 2011, authored by Mr. Justice McCaffery on November 21, 2013.

Factual Background
In 2003 Shoup injured her left shoulder at work.
Total disability wage loss benefits were commence via NCP.
Employer filed a Petition for Modification of Total disability benefits to Partial Disability benefits, based upon medical and vocational expert reports that employee had a post-injury earning capacity.

Employer medical Expert Sattel opined she could return to sedentary duty work.
Employer Vocational Expert Kimmich opined she has a post-injury earning capacity based upon the identification of 5 "open & available" job.

There were 2 Labor Market Survey (LMS) reports, July [3jobs] and August [2jobs] of 2007

Employee Medical Expert and Vocational expert testified she could not work at any of the 5 positions identified in the Kimmich LMS.

Employee testified that she actually applied to the first 3 positions on July 30, 2007 after she received the July LMS report. She applied to jobs 4 and 5, had telephone interviews, but was not hired. Employer #5 told her she was not qualified as she lacked familiarity with a certain computer program.

WCJ Decision
WCJ found Employer's Medical & Vocational Experts more credible that Employee's Medical and Vocational experts.

...BUT the WCJ found Employee was credible that she made a "genuine effort" to secure any one of the 5 jobs in the LMS, and she did not receive a job offer.

The WCJ found that Employee "has established that in good-faith, she followed through on all of the jobs referred to her by the Employer and that none of the referrals resulted in an offer of employment'. [ note the "Kachinski-esque" language].
For this reason, Employer failed to establish its right to a Modification of benefits under Section 306(b).

WCAB Decision Affirmed
Modification of Benefits could not be based simply on whether Employer had identified job listings within Employee physical restrictions and geographic area, where Employee produced credible evidence that the jobs were in actuality not available to her.

Commonwealth Court REVERSED
Employer met its burden of proof under Section 306(b), as the LMS jobs were "open & available" at the time the LMS was conducted.

It was not relevant that Employee "followed through" on these job listings in "good faith".
[slip opinion page 9].

... BUT Commonwealth Court would not consider job #5, as the job remained open after her interview... the job opening "existed" but it was not available to her. [hmmmm ...?]

Supreme Court Reinstates WCJ denial of Modification
Their  reasonable reading of Section 306(b) ...
one that comports with a commonsense reading of the statutory language "substantial gainful employment that exists" (as well as the Act's humanitarian purposes) is an interpretation that "the proof required to modify/suspend employee's wage loss benefits must rest upon the existence of meaningful employment opportunities and not the simple identification of jobs in want ads or employment listings.
[this is not a term in the statute passed by the Pa Legislature]

Vocational Expert opinion evidence under Section 306(b) functions, not only as a means of demonstrating that there are open jobs that exist within an employee's limitations BUT also as a mechanism for providing the employee with NOTICE of the existence of these jobs, which thus provides A SERIOUS OPPORTUNITY TO SECURE EMPLOYMENT. [slip opinion page 21].

Accordingly an employee must have latitude, greater than that allowed by the Commonwealth Court, to PRESENT EVIDENCE REGARDING HER EXPERIENCE WITH APPLYING FOR THE JOBS IDENTIFIED BY THE EMPLOYER'S VOCATIONAL EXPERT WITNESS.
[slip opinion page 22].



1. Continue to assign Vocational Experts and obtain Post-Injury Earning Power Assessment evidence via Labor Market Surveys. 

This remains a valuable remedy in the handling of PA work comp cases.

2. Confirm that your Vocational Expert will continue to monitor the Employee's post-report application efforts with the prospective employers identified in the LMS.

3. Obtain notarized statements form each prospective employer regarding the details of employee's application. Anticipate that you will need to produce these witnesses as rebuttal to Employee's assertions.

4. One "old" Kachinski strategy was to schedule an application time and/or interview time for the Employee so that the vocational Expert could attend and observe the application process with the prospective employer ... this may remain an effective strategy!

I will refrain from my personal commentary regarding the complete abrogation of the statutory language that "earning power" SHALL ( one of those mandatory... got to do it... words)
be determined by expert opinion evidence. These words are plain, easy to understand (for most) and an unambiguous expression on the Legislative intent of Section 306(b).

Unfortunately, this opinion corrupts that Legislative intent.

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