Is there any time limit upon the Employee's review/challenge to the AWW and TTD calculations?

[ ***After writing this note, I thought I should apologize for use of all of the legal terms (which I try to avoid), but emphasize that this opinion of the Commonwealth Court provides a clear explanation for several legal terms that we often hear ... and often hear, incorrectly used.]

 What is the Time Limit for an Employee review of his AWW and TTD calculations?

An employee is entitled to indemnity wage loss benefits based upon a calculation of his "average weekly wage" as defined at Section 309, 77 P.S. 582 of the Pennsylvania Workers' Compensation Act.
Generally an employee is paid a total disability rate of 66 2/3% of his average weekly wage, up to a maximum compensation rate.

"Average Weekly Wage" is a simple, yet complicated notion. Overtime, bonuses and vacation pay are included. Health insurance, life insurance and "fringe" benefits are excluded. There are rules for seasonal and concurrent employment. The nuances of AWW calculations are beyond the scope of this brief review.

One question that arises, with some frequency, is WHEN may one review a mistake in the AWW calculation. Is there a Statute of Limitations? At what point are the parties "locked" into these figures?

City of Pittsburgh v. WCAB (Britton), No. 1544 C.D. 2012, an unreported memorandum opinion of a panel of the Commonwealth Court of Pennsylvania, authored by Judge McCullough on August 6, 2013, addressed this Review/Correction issue in the context of Employee and Employer petitions.

Factual and Procedural Background

Employee sustained a left knee injury in the course of his work duties on July 13, 1985.
Although the evidentary record did not contain a Notice of Compensation Payable (LIBC-495) the parties did not dispute the injury description or receipt of full wages in lieu of compensation from the day of injury, to his return to work after May 12, 1989. [presumably he received his full salary payments pursuant to the Employer's "Heart and Lung" benefit program].   

Employee returned to work for about 2 months. He stopped working as of July 12, 1989.
A January 11, 1990, Supplemental Agreement (LIBC-337) reinstated total disability benefits. The compensation rate of $312.99 was referenced, however, employee would receive his full salary in lieu of the workers' compensation benefit rate.

On October 23, 1991, Employer filed a Petition for Suspension as employee failed to respond in good faith to a modified duty job offer.

On May 27, 1994, WCJ Cohen issued a decision denying Employer's petition. This decision recited the AWW of $469.49 with the corresponding TTD rate of $312.99.
Employer appealed but the WCAB affirmed the WCJ order on July 30, 1996.

During the WCAB appeal, the parties executed a 2nd Supplemental Agreement reflecting Employee had "retired" from active duty, but he remained eligible for workers compensation benefits as he did not retire from the workforce, in general.
This November 13, 1995 Supplemental Agreement stated that Employee was entitled to compensation payable at the rate of $336.00 per week. [the maximum rate for a 1985 work injury].

May 28, 2008, Employer filed a Suspension petition based upon an April 2008 medical exam and the legal argument that Employee has voluntarily removed himself from the workforce.

January 30, 2009, Employee filed a Petition for Review and Modification of his compensation benefits, alleging he was entitled to partial disability benefits when he returned to work (in 1989?).

Employee filed a Penalty Petition for Employer failure to file an NCP (in 1985??).

A 2nd Review Petition was subsequently filed by Employee, alleging that his Employer had under-calculated his AWW rate (in 1985??).
[if this petition was filed "later" than the January 30, 2009 petition, it was filed more than 1228 6/7 weeks or 8,602 days after the date of injury!]

WCJ Decision
Denied Employer Suspension petition, there was no voluntary withdraw from the workforce.
Denied Employee Review/Modification petition for 1989 partial disability.
Denied Employee Penalty petition for failure to file NCP as there was no prejudice to employee.
GRANTED 2nd Review and amended AWW to $568.86.
However Employee would continue to receive his TTD benefits at the maximum rate for a 1985 work injury which was $336.00. [ no change in benefits rate!!!]

City of Pittsburgh Appeal
Employer appealed the 2nd Review petition award.
Employer argued the petition was barred by:
1. technical res judicata;
2. collateral estoppel;
3. the doctrine of laches.

Employer also argued:
4. the AWW findings were not supported by substantial evidence, as the evidence was not properly authenticated;
5. the collective bargaining agreement excluded call-back pay, holiday pay,and longevity pay from the calculation of wages in determining the AWW.

WCAB Appeal affirmed WCJ decision.

Commonwealth Court Decision and Reasoning:

1. Technical Res Judicata would apply where there is an "indentity" of (i) the thing sued for, (ii) the parties to the action, (iii) the capacity of the parties sued.

Technical res judicata may apply to bar claims actually litigated, as well as those matters which should have been litigated.

When a final judgment on the merits exists, a future suit between the parties on the same cause of action is precluded. See: Henion v. WCAB (Firpo & Sons Inc.) 776 A2d 362, (Pa. Cmwlth. 2001).

[ end of case... right... the employee should have litigated the AWW in the prior WC litigation?!?].

No...

2. Collateral Estoppel, is a rule designed to prevent relitigation of an issue in a later action, despite the fact that the later action is based on a cause of action, which is different from the one previously litigated. See: Pucci v. WCAB (Woodville State Hospital), 707 A2d 646 (Pa. Cmwlth. 1998).
Collateral estoppel applies where:
(i) the issue decided in the prior case is identical to the one presented in the later case;
(ii) thee was a final judgment on the merits;
(iii) the party the rule applies against was a party (or in privity with a party) in the prior case and had a full and fair opportunity to litigate the issue;
(iv) the determination in the prior proceeding was essential to the judgment.

[ ... end of case ... right?]

Technical Res Judicata and Collateral Estoppel did not bar Employee's 2nd Review Petition (the one where the WCJ changed the AWW rate).
Employer argued the prior Supplemental Agreement in 1989 and/or the prior WCJ decision in 1994 in Employer's Suspension petition provided Employee with the opportunity to litigate the AWW issue.
WCAB and Commonwealth Court disagreed.

The Supplemental Agreements only reflected the TTD rate, they did not contain any AWW numbers.
The WCJ decision merely mentioned the AWW number.

The issues litigated in the Suspension petition were Employee's good faith response to the modified job offer. The AWW rate was not a claim or issue that was actually litigated or decided in the matter. The WCJ simply noted the information contained in the Statement of Wage form,  prepared by the Employer. slip opinion page 10.

The Supplemental Agreement form was described as a voluntary contract between the parties, which is meant to avoid litigation. On this basis, the Agreement cannot constitute a final judgment for purposes of application of technical res judicata or collateral estoppel.

3. Laches is an equitable doctrine which is available in administrative proceedings, where there is no time limit applicable, when a party fails to exercise due diligence in commencing an action or where there is prejudice to another party by the time delay.

In the present case. Section 413(a) of the Act provides a time limit, the WCJ "may at any time, review and modify or set aside a notice of compensation payable and an original or supplemental agreement... if it be proved that such notice of compensation payable or agreement was in any material respect incorrect".

Prior appellate case decisions have determined that a party seeking to review/correct an agreement,
must do so within 3 years after the date of the most recent payment of compensation.

As Section 413(a) provides a strict time limitation for filing petition, the doctrine of laches does not apply.

Here, Employee's compensation was ongoing! His petition was timely.

4. Substantial Evidence supported the findings of the WCJ. The WCJ correctly placed the burden upon Employee to demonstrate, in support of his review petition, that the agreement had a material mistake.
The evidentary records reflects the original NCP form was unavailable. The original Statement of Wage form was available, but was blank. The evidence presented by Employee was the "Records of Dues Received" document from the City of Pittsburgh Pension office. The pension office witness testified the forms reflect employee's complete W-2 wages, including overtime. Employer witness testified the payroll records are destroyed after 7 years. She stated she had no reason to question the accuracy of the pension document information.

This testimony and these documents were substantial evidence in support of the WCJ and WCAB, AWW re-calculation.

5. Collective Bargaining provisions, such as those mentioned to exclude overtime, call-back or holiday pay, are not binding upon the Work Comp Act in calculating the AWW. Past appellate decisions have included these types of "wages" in the AWW calculation. Citing: Harper & Collins v. WCAB (Brown) 672 A2d 1319 (Pa. 1996).

Practice Pointers:
1. Where an injured worker is continuing to receive workers compensation benefits, the Section 413(a) statute of limitations does not commence, to limit Employee's possible litigation of issues, as basic as the average weekly wage calculation. The difficulty with this scenario is demonstrated in this case, where the employer did not retain the original wage documents for an extended time period. Fortunately (for employee, as he had the burden of proof) there were secondary records available.

2.   Is there any time limit? YES, not a specific one, but there is a limit on employee's future review of issues. Where the issue was litigated or should have been litigated, employee should be precluded from re-exploring these issues at some remote time. In this case the Review petition was filed more than 23 years after the original date of injury.

3. In my humble defense-oriented opinion, I believe that employee should have litigated the issue of the review of the AWW, at the time of the reinstatement to total disability in 1990. I am  unpersuaded that the AWW issue was not an integral part of that agreement.
If the Supplement Agreement is a contract between the parties to avoid litigation, Why is it not a binding contract, to avoid this litigation?

Likewise, I am unpersuaded that the AWW rate was not a significant fact in the 2008 Suspension petition litigation. This was a petition to determine if employee's benefits would continue... which benefits? ... the benefits rate determined by the AWW figure.

When Employers attempt to "correct" any past miscalculations, often they are denied the opportunity, where there is an intervening agreement... the WCJ will rule that you have lost your opportunity for review.

Perhaps ... what is good for the goose...