Thursday, December 31, 2015
2016 New Maximum Workers' Compensation Rate
2016 Pennsylvania Maximum compensation rate
For injuries occurring on and after January 1, 2016, the Pennsylvania Department of Labor and Industry has determined that the maximum wage loss benefit payable shall be $978.00 per week.
For Medical Treatment rendered on or after January 1, 2016, for purposes of calculating payments, the percentage increase in the Statewide Average Weekly Wage is 2.9 percent.
Monday, December 28, 2015
Proper and Timely Notice of a Work-Related Injury in the "old" injury versus "new" injury claim
The Proper and Timely Notice of a Work-Related Injury, in the context of the "old" injury versus "new" injury analysis.
The Pennsylvania Workers' Compensation Act requires an injured employee to provide notice of the work injury to the Employer.
This notice of injury must inform the employer that:
a certain employee,
received an injury,
described in ordinary language,
occurring in the course of his/her employment,
on or about a specific time,
at or near a place specified.
See: Section 312 language.
The notice of injury may be given to the immediate or other superior of the employee, to the employer or to any agent of the employer.
Actual knowledge of the occurrence of the injury by the employer (or its agents) is "notice" of injury imputed to the Employer. See: Section 313 language.
The time parameters for notice of injury are discussed at Section 311.
The employee must provide notice to the employer within 21 days after the injury.
No compensation shall be due until notice is given.
If notice is not given within 120 days after the occurrence of the injury, no compensation shall be allowed. This is a rather harsh rule, but its effect is somewhat mitigated by the following exception ...
... and in cases where the nature of the injury or its relationship to the employment is not known to the employee ...
in this circumstance, the time for notice does not begin to run until the employee knows of the existence of the injury and its possible relationship to his/her employment.
The employee must exercise reasonable diligence to learn of the existence of an injury and its possible relationship to his/her employment. What is reasonable?
This later category - the situations where the occurrence of an injury or its possible relationship to one's employment is not known - may raise an interesting question of credibility -
Exactly when did the employee learn these facts?
When did a physician tell Employee that he/she has a work-related injury?
How much later did the Employee inform the Employer?
(this is one of the most common factual scenarios).
NOTE: The question of the proper and timely notice of injury by the Employee to the Employee is a necessary finding of fact, to be made by the Worker's Compensation Judge, based upon legally competent and credible evidence. This issue is typically decided on a case-by-case basis. Specific facts are decisive in the finding of this necessary element of the proof for a compensable work injury.
The analysis of the presence/absence of proper and timely notice of injury is further complicated when two possible injuries or two possible causes are implicated. An appeal of a claim denial reviewed and addressed these notice issues at:
Gahring v. WCAB (R and R Builders and Stoudt's Brewing Company), No. 534 C.D. 2015, a decision of a panel of the Commonwealth Court of Pennsylvania authored by Judge Leavitt on November 23, 2105.
Factual and Procedural Background
In this type of notice dispute, a careful review of the facts is necessary.
In 1997 Employee sustained a work-related lower back injury with R and R Builders (Employer #1).
The work injury was described as a disc herniation at L3-4 and L4-5 with chronic lower back pain. This condition required surgery.
In 2002 Employer #1 entered into a C&R lump sum settlement for future indemnity wage loss benefits. Employer #1 remained responsible for future reasonable and necessary work-related medical expenses.
In 2010 Employee began to work with Stoudt's Brewing Company (Employer #2).
In 2011 he began to experience increased back pain.
On November 17, 2012 Employee underwent surgery.
On January 24, 2013 Employee was released to return to work with physical restrictions by his physician. Employer #2 could not accommodate these physical restrictions. Employee was terminated by Employer #2. Employee received Unemployment Compensation benefits.
On February 6, 2013 Employee filed a Penalty petition against Employer #1 for non-payment of medical expenses alleged to be treatment of the 1997 work injury.
On March 11, 2013, at the first hearing, Employer #1 said it would file to join Employer #2 to the litigation of the responsibility for the medical expenses. The joinder petition alleged the medical expenses were solely related to the employment with Employer #2.
On March 19, 2013, Employee filed two Claim petitions:
1. against Employer #1 for payment of the 2012 surgical expenses.
2. against Employer #2 for a work injury suffered in April 2012, when he was burned on his left elbow. * (not a claim petition for the aggravation of a pre-existing low back condition?).
WCJ Decision
A. Left Elbow Injury Claim Petition against Employer #2 was granted. Employee supervisor witnessed this accident. This was notice to the employer.
A.1. Employee was released to return to work. He did return with another employer. His benefits were suspended.
B. Employer #1 Joinder Petition was considered a "claim petition" against Employer #2.
B.1. Employee medical evidence was credible to establish a work-related aggravation of Employee's pre-existing low back condition while working with Employer #2.
B.2. BUT Employee failed to give Employer #2 notice of this aggravation injury withing 120 days from his last day of employment with Employer #2.
B.3. the Joinder/Claim petition against Employer #2 was denied as barred by the Section 311 notice provisions.
Evidence regarding notice to Employer #2
Employee testified.
Employee physician testified regarding the date and cause of Employee's work injury.
Employer's supervisor testified.
Employer's office manager testified.
Employee testified he treated for ongoing back pain with his family doctor since 2002.
At a February 2012 office visit, Doctor Oliveri diagnosed Employee with sacroiliitis related to his 1997 work injury.
In October 2012 Employee's work hours increased at Employer #2 when another worker left.
Employee said "it (my back) started hurting mid-October through our busy season. (Carr, his supervisor) would keep asking me what was wrong with me and i just told him that my back was really bothering me". slip opinion page 5.
Employer #2 supervisor Carr testified Employee complained of back pain on a number of occasions. He confirmed Employee told him the additional work hours were making his back worse.
Carr made notes of the days when Employee's back pain caused him to miss time from work. He did not give these notes to the office manager, rather he told her that Employee's back pain was worsening and Employee needed surgery. A work comp injury report was not prepared.
Dr. Oliveri testified at his June 2013 deposition and opined that Employee's work at Employer #2 aggravated his post surgical condition and caused the sacroiliac condition which was addressed in the November 2012 surgery.
He explained the bone for the 2002 spinal fusion procedure (to treat the 1997 work injury) was harvested from the iliac joint, but Employee did not experience symptoms in this area until the 2012 work duties. The Employer #2 work duties aggravated the sacroiliac condition, which had its origins in the 1997 work injury.
... from all of this testimony, the WCJ found the date of the work-related aggravation injury was the last day of work, November 10, 2012.
Employer #2 learned there may have been an aggravation injury as a result of its work duties at the April 2013 hearing, more that 120 days from the "date of injury". This was not timely notice to Employer #2.
WCAB Affirmed, The Employee's statements to Employer #2 supervisor were not sufficient to place them on notice that Employee may have a work-related injury.
Commonwealth Court reversed and remanded the Claim petition Denial.
The Commonwealth Court reviewed the general rules for proper and timely notice of injury to an employer, as per Section 311. Notice is required. Notice is a necessary element of the claimant burden of proof.
In an aggravation or cumulative trauma injury, " the last day of employment is the critical date of injury for purposes of determining timely notice". citing: City of Philadelphia v WCAB (Williams) (Pa. 2004).
However, the claimant must have knowledge that his injury is work-related. Section 311 states that the time for giving notice does not begin to run until the employee knows that his injury is work-related.
The Pennsylvania Supreme Court decision in Gentex Corporation v WCAB (Morack) (Pa. 2011) was reviewed for its precedential value. The worker experienced pain and swelling in her hands with increased work hours. She informed her supervisor she could no longer tolerate this pain and left work. She applied for sort-term disability benefits noting her swollen hands were due to her non-work high blood pressure and fibromyalgia.
About one month later, her physician diagnosed tendonitis and carpal tunnel syndrome as a result of her work duties.She then informed the employer of this work relationship. The Supreme Court concluded this worker satisfied the requirements for timely notice of injury to the employer.
Notice of injury may occur over collective communications - verbal statement, telephone calls, etc.
The worker does not need to state with certainty that the injury is work-related, as long as the employer is informed of the possibility it is work-related. Gentex at page 536.
The worker statements on the STD documents was not fatal to her subsequent work comp claim.
A result similar to the Gentex decision was reported at Morris v. WCAB (Ball Corp.) (Pa. Cmwlth. 2015). Morris told his supervisor that he was beaten down and hurting. He had problems with his back, hands and legs, "because of all of the hours I'm working". This was sufficient notice.
HERE- the Employee statements to his supervisor Carr, that increased back symptoms followed his increased work hours, was sufficient to inform Employer #2 of the possibility that this 2012 back pain was work-related.
[QUERY: If the employee statements to his supervisor were not sufficient to put the employer on notice of the possibility of a work-relationship of his increased back symptoms, then the focus would be upon the date when claimant knew of a possible work-relationship.
Was there a time before the June 2013 deposition of Dr. Oliveri that claimant should have known through the exercise of reasonable diligence that his 2012 increased back symptoms were related, in some fashion, to his 2012 increased work hours??? This is another argument for another day. ]
Both Carr and Employee believed his back problems were related to the original 1997 work injury, UNTIL they learned otherwise from Dr. Oliveri's opinions regarding an aggravation-type of injury.
Similar to Gentex, this Employee's mistaken belief was not fatal to his work comp claim.
The case was remanded for a calculation of the benefits payable by Employer #2 for an aggravation-type injury.
PRACTICE POINTERS:
1. Notice of the possibility of a work-relationship of a worker's complaints, is a minimal threshold.
In the training of supervisory personnel regarding the reporting of work injuries, Employer's should emphasize the necessity to record all information and make it available for further review by appropriate Insurer, HR or legal departments. Just as the courts do not require the worker to properly diagnose their complaints, we should not require supervisory personnel to make these judgments.
2. NOTE the above-cited Section 312 requirements for proper notice are rather stringent. The "leniency" for notice requirements arises in the situation described in Section 311, where "the nature of injury or its possible work relationship is not known by the employee".
Carefully review the medical records and worker statements to determine if there is any evidence that the employee knew or should have known of the existence of a work-relationship, through the exercise of reasonable diligence.
This evidence may not result in a claim petition denial based upon an untimely notice argument, BUT it may raise a question as to the credibility of Claimant's version of events... and that question of credibility may arise in other areas of the claim, so as to impact the overall decision.
3. The "OLD" injury versus "NEW" injury case assessment is impacted by the existence of a prior injury Compromise and Release settlement of indemnity wage loss benefits. A Claimant will have only one avenue for future indemnity benefits - that is, a claim for the NEW injury.
Consider the C&R where both indemnity and future medical expense liability are settled. In that context, the only available remedy for additional work comp benefits is the successful litigation of the NEW injury claim.
QUERY: where the claimant has "been through the system before", should we hold that claimant to be more familiar with the notice requirements?
In my opinion, this can be another element of the credibility assessment of claimant testimony.
The Pennsylvania Workers' Compensation Act requires an injured employee to provide notice of the work injury to the Employer.
This notice of injury must inform the employer that:
a certain employee,
received an injury,
described in ordinary language,
occurring in the course of his/her employment,
on or about a specific time,
at or near a place specified.
See: Section 312 language.
The notice of injury may be given to the immediate or other superior of the employee, to the employer or to any agent of the employer.
Actual knowledge of the occurrence of the injury by the employer (or its agents) is "notice" of injury imputed to the Employer. See: Section 313 language.
The time parameters for notice of injury are discussed at Section 311.
The employee must provide notice to the employer within 21 days after the injury.
No compensation shall be due until notice is given.
If notice is not given within 120 days after the occurrence of the injury, no compensation shall be allowed. This is a rather harsh rule, but its effect is somewhat mitigated by the following exception ...
... and in cases where the nature of the injury or its relationship to the employment is not known to the employee ...
in this circumstance, the time for notice does not begin to run until the employee knows of the existence of the injury and its possible relationship to his/her employment.
The employee must exercise reasonable diligence to learn of the existence of an injury and its possible relationship to his/her employment. What is reasonable?
This later category - the situations where the occurrence of an injury or its possible relationship to one's employment is not known - may raise an interesting question of credibility -
Exactly when did the employee learn these facts?
When did a physician tell Employee that he/she has a work-related injury?
How much later did the Employee inform the Employer?
(this is one of the most common factual scenarios).
NOTE: The question of the proper and timely notice of injury by the Employee to the Employee is a necessary finding of fact, to be made by the Worker's Compensation Judge, based upon legally competent and credible evidence. This issue is typically decided on a case-by-case basis. Specific facts are decisive in the finding of this necessary element of the proof for a compensable work injury.
The analysis of the presence/absence of proper and timely notice of injury is further complicated when two possible injuries or two possible causes are implicated. An appeal of a claim denial reviewed and addressed these notice issues at:
Gahring v. WCAB (R and R Builders and Stoudt's Brewing Company), No. 534 C.D. 2015, a decision of a panel of the Commonwealth Court of Pennsylvania authored by Judge Leavitt on November 23, 2105.
Factual and Procedural Background
In this type of notice dispute, a careful review of the facts is necessary.
In 1997 Employee sustained a work-related lower back injury with R and R Builders (Employer #1).
The work injury was described as a disc herniation at L3-4 and L4-5 with chronic lower back pain. This condition required surgery.
In 2002 Employer #1 entered into a C&R lump sum settlement for future indemnity wage loss benefits. Employer #1 remained responsible for future reasonable and necessary work-related medical expenses.
In 2010 Employee began to work with Stoudt's Brewing Company (Employer #2).
In 2011 he began to experience increased back pain.
On November 17, 2012 Employee underwent surgery.
On January 24, 2013 Employee was released to return to work with physical restrictions by his physician. Employer #2 could not accommodate these physical restrictions. Employee was terminated by Employer #2. Employee received Unemployment Compensation benefits.
On February 6, 2013 Employee filed a Penalty petition against Employer #1 for non-payment of medical expenses alleged to be treatment of the 1997 work injury.
On March 11, 2013, at the first hearing, Employer #1 said it would file to join Employer #2 to the litigation of the responsibility for the medical expenses. The joinder petition alleged the medical expenses were solely related to the employment with Employer #2.
On March 19, 2013, Employee filed two Claim petitions:
1. against Employer #1 for payment of the 2012 surgical expenses.
2. against Employer #2 for a work injury suffered in April 2012, when he was burned on his left elbow. * (not a claim petition for the aggravation of a pre-existing low back condition?).
WCJ Decision
A. Left Elbow Injury Claim Petition against Employer #2 was granted. Employee supervisor witnessed this accident. This was notice to the employer.
A.1. Employee was released to return to work. He did return with another employer. His benefits were suspended.
B. Employer #1 Joinder Petition was considered a "claim petition" against Employer #2.
B.1. Employee medical evidence was credible to establish a work-related aggravation of Employee's pre-existing low back condition while working with Employer #2.
B.2. BUT Employee failed to give Employer #2 notice of this aggravation injury withing 120 days from his last day of employment with Employer #2.
B.3. the Joinder/Claim petition against Employer #2 was denied as barred by the Section 311 notice provisions.
Evidence regarding notice to Employer #2
Employee testified.
Employee physician testified regarding the date and cause of Employee's work injury.
Employer's supervisor testified.
Employer's office manager testified.
Employee testified he treated for ongoing back pain with his family doctor since 2002.
At a February 2012 office visit, Doctor Oliveri diagnosed Employee with sacroiliitis related to his 1997 work injury.
In October 2012 Employee's work hours increased at Employer #2 when another worker left.
Employee said "it (my back) started hurting mid-October through our busy season. (Carr, his supervisor) would keep asking me what was wrong with me and i just told him that my back was really bothering me". slip opinion page 5.
Employer #2 supervisor Carr testified Employee complained of back pain on a number of occasions. He confirmed Employee told him the additional work hours were making his back worse.
Carr made notes of the days when Employee's back pain caused him to miss time from work. He did not give these notes to the office manager, rather he told her that Employee's back pain was worsening and Employee needed surgery. A work comp injury report was not prepared.
Dr. Oliveri testified at his June 2013 deposition and opined that Employee's work at Employer #2 aggravated his post surgical condition and caused the sacroiliac condition which was addressed in the November 2012 surgery.
He explained the bone for the 2002 spinal fusion procedure (to treat the 1997 work injury) was harvested from the iliac joint, but Employee did not experience symptoms in this area until the 2012 work duties. The Employer #2 work duties aggravated the sacroiliac condition, which had its origins in the 1997 work injury.
... from all of this testimony, the WCJ found the date of the work-related aggravation injury was the last day of work, November 10, 2012.
Employer #2 learned there may have been an aggravation injury as a result of its work duties at the April 2013 hearing, more that 120 days from the "date of injury". This was not timely notice to Employer #2.
WCAB Affirmed, The Employee's statements to Employer #2 supervisor were not sufficient to place them on notice that Employee may have a work-related injury.
Commonwealth Court reversed and remanded the Claim petition Denial.
The Commonwealth Court reviewed the general rules for proper and timely notice of injury to an employer, as per Section 311. Notice is required. Notice is a necessary element of the claimant burden of proof.
In an aggravation or cumulative trauma injury, " the last day of employment is the critical date of injury for purposes of determining timely notice". citing: City of Philadelphia v WCAB (Williams) (Pa. 2004).
However, the claimant must have knowledge that his injury is work-related. Section 311 states that the time for giving notice does not begin to run until the employee knows that his injury is work-related.
The Pennsylvania Supreme Court decision in Gentex Corporation v WCAB (Morack) (Pa. 2011) was reviewed for its precedential value. The worker experienced pain and swelling in her hands with increased work hours. She informed her supervisor she could no longer tolerate this pain and left work. She applied for sort-term disability benefits noting her swollen hands were due to her non-work high blood pressure and fibromyalgia.
About one month later, her physician diagnosed tendonitis and carpal tunnel syndrome as a result of her work duties.She then informed the employer of this work relationship. The Supreme Court concluded this worker satisfied the requirements for timely notice of injury to the employer.
Notice of injury may occur over collective communications - verbal statement, telephone calls, etc.
The worker does not need to state with certainty that the injury is work-related, as long as the employer is informed of the possibility it is work-related. Gentex at page 536.
The worker statements on the STD documents was not fatal to her subsequent work comp claim.
A result similar to the Gentex decision was reported at Morris v. WCAB (Ball Corp.) (Pa. Cmwlth. 2015). Morris told his supervisor that he was beaten down and hurting. He had problems with his back, hands and legs, "because of all of the hours I'm working". This was sufficient notice.
HERE- the Employee statements to his supervisor Carr, that increased back symptoms followed his increased work hours, was sufficient to inform Employer #2 of the possibility that this 2012 back pain was work-related.
[QUERY: If the employee statements to his supervisor were not sufficient to put the employer on notice of the possibility of a work-relationship of his increased back symptoms, then the focus would be upon the date when claimant knew of a possible work-relationship.
Was there a time before the June 2013 deposition of Dr. Oliveri that claimant should have known through the exercise of reasonable diligence that his 2012 increased back symptoms were related, in some fashion, to his 2012 increased work hours??? This is another argument for another day. ]
Both Carr and Employee believed his back problems were related to the original 1997 work injury, UNTIL they learned otherwise from Dr. Oliveri's opinions regarding an aggravation-type of injury.
Similar to Gentex, this Employee's mistaken belief was not fatal to his work comp claim.
The case was remanded for a calculation of the benefits payable by Employer #2 for an aggravation-type injury.
PRACTICE POINTERS:
1. Notice of the possibility of a work-relationship of a worker's complaints, is a minimal threshold.
In the training of supervisory personnel regarding the reporting of work injuries, Employer's should emphasize the necessity to record all information and make it available for further review by appropriate Insurer, HR or legal departments. Just as the courts do not require the worker to properly diagnose their complaints, we should not require supervisory personnel to make these judgments.
2. NOTE the above-cited Section 312 requirements for proper notice are rather stringent. The "leniency" for notice requirements arises in the situation described in Section 311, where "the nature of injury or its possible work relationship is not known by the employee".
Carefully review the medical records and worker statements to determine if there is any evidence that the employee knew or should have known of the existence of a work-relationship, through the exercise of reasonable diligence.
This evidence may not result in a claim petition denial based upon an untimely notice argument, BUT it may raise a question as to the credibility of Claimant's version of events... and that question of credibility may arise in other areas of the claim, so as to impact the overall decision.
3. The "OLD" injury versus "NEW" injury case assessment is impacted by the existence of a prior injury Compromise and Release settlement of indemnity wage loss benefits. A Claimant will have only one avenue for future indemnity benefits - that is, a claim for the NEW injury.
Consider the C&R where both indemnity and future medical expense liability are settled. In that context, the only available remedy for additional work comp benefits is the successful litigation of the NEW injury claim.
QUERY: where the claimant has "been through the system before", should we hold that claimant to be more familiar with the notice requirements?
In my opinion, this can be another element of the credibility assessment of claimant testimony.
Monday, November 30, 2015
Employee Voluntary Withdraw from Workforce- proceed with Caution!
An employer may pursue a petition for suspension of indemnity wage loss benefits based upon (1) an offer of a job, (2) performance of an Earning Power Assessment (EPA), or (3) proof that the employee has voluntarily withdrawn from the workforce.
The "withdrawn" argument does not require the Employer to prove the employee is physically able to work or that available work was offered or referred. The Employer need not show a change of physical condition or proof of job availability. See: Mendes v. WCAB (Lisbon Contractors Inc. ) Pa. Cmwlth. 2009.
However, assertion of the withdraw argument is not a simple remedy. A number of additional legal arguments are intertwined. This is where pursuit of this remedy can get confusing.
There are several indicia of "withdrawn".
One is not actively seeking employment.
One is receiving a disability pension.
One has physically relocated.
... Or a combination of the above.
Chesik v. WCAB (Department of Military and Veterans' Affairs) No. 758 C. D. 2015, is a decision of a panel of the Commonwealth Court, authored by President Judge Pellegrini on November 9, 2015.
The withdraw argument is discussed in terms of .........
Factual and Procedural Background
Employee suffered a work injury in July 2009, a cervical sprain/strain. She moved from Scranton PA to Lovelock Nevada in December 2012. Employer filed a petition to Suspend indemnity wage loss benefits in March 2013, asserting Employee voluntarily removed herself from the workforce.
Employee testified she moved to Nevada for the warmer climate as she did not do well with the Scranton weather. She said she has (non-work related) lupus and fibromyalgia and "that was the main reason I moved to a warmer climate ". She met a friend online, visited in 2012, "researched" Southwest climates and then relocated. She has a Nevada drivers license. It is her intention to remain indefinitely. She has not worked or looked for work in any capacity. She went for one local physician visit in February 2013 but she has not pursued any other care. She did not consult with her PA physicians before relocating.
Employee retired from her position with Employer in October 2012 and she applied for disability pension benefits in December 2012. She has no income beyond her work comp, Medicare and disability pension.
She described daily pain in her neck, hands and arms as a result of the work injury. She acknowledged that when she relocated she could not work anywhere in Scranton. "...by moving to Nevada (she) took (herself) out of the work force at least in Scranton PA and in the region".
... But somewhat inconsistently, she said (the obligatory) it was not her intention to remove herself from the workforce when she moved to Nevada , stating , "if there's a possibility that I could work, I would love to work". (Just not yet doing so).
(NOTE: this type of testimony - "window-shopping" - was discounted by Judge Pelegrini in the earlier 2008 Hensal decision ).
WCJ Decision
Employer suspension petition GRANTED.
WCJ reasoned Employee voluntarily removed herself from the workforce - not because of her work related condition - rather because of her non-work related conditions of lupus and fibromyalgia, which preexisted for 12 years. She did not consult with her physicians, the decision to move was solely her own, along with her decision to take her pension and remove herself from the workforce.
WCAB affirmed the WCJ Suspension order.
Commonwealth Court Decision
Suspension reversed.
(1) Employee's permanent change of residence does not constitute a voluntary removal from the workforce. (Distinguishing the decisions in Blong, Smith and Mendes).
(2) There were no other objective facts - in addition to her acceptance of the disability pension - to support a conclusion that she withdrew from the workforce.
Why does the Employer lose?
I'm not certain.
The Pennsylvania Supreme Court clarified/established the "withdrawn from the workforce" rule in City of Pittsburgh v. Robinson 67 A.3d 1194 (Pa. 2013) (Robinson ll).
Where the Employer asserts the employee has withdrawn from the workforce, the Employer has the burden to prove that the employee has voluntarily left the workforce. Employee has not left due to disability from the work injury.
Acceptance of a pension- much less a disability pension- does not lead to a presumption that the employee has retired. Acceptance of a pension may support an inference of retirement- one which must be considered in the context of the totality of the circumstances.
Evidence of retirement includes receipt of a pension together with employee's own statements
relating to work and the efforts or non-efforts at seeking employment.
Employer is not required to prove employee's subjective state of mind regarding work/retirement.
If the Employer establishes sufficient evidence to support a finding that the employee has voluntarily
left the workforce, then the burden shifts to employee to show that there has been a compensate loss of earning power.
Employee can assert that post-injury physical conditions limit the ability to work.
Generally, if the Employer fails to prove retirement or withdraw from the workforce, then Employer must produce (1) medical evidence of a change in employee's physical condition and (2) evidence of a job referral to an open job which fits the occupational category for which employee has been given medical clearance. (See: Kachinski).
In CHESIK, the court discusses:
(1) "Earning Power" is determined at Section 306(b)(2) ... Partial disability applies if claimant is able to perform work ... considering residual productive skill, education. age...
(2) 306(b)(2) Language stating ... If claimant does not live in the Commonwealth ... THIS contemplates a claimant could relocate and these provisions direct how one is to determine earning power ...
WAIT a minute... Why are we not talking about retirement, pension, job search issues???
YES, if Employer does not prove retirement or withdrawal from the workforce, then you need to do the Kachiski thing or the Labor Market thing.
In CHESIK the WCJ is said to err in concluding Employee removed herself from the workforce by relying ONLY on her permanent relocation to Nevada.
Similarly the WCJ can not solely rely upon her receipt of a disability pension to find a permanent separation from the workforce.
... OK.
I agree each alone does not automatically meet Employer burden of proof ...
But both are present here ... PLUS Employee's statements - she relocated due to her non-occupational medical conditions ... AND her actions- or non-action in seeking employment!
In Hensal we are told a good faith job search includes actual job applications not just surfing the Internet or reading the newspaper. HERE that effort is lacking ... But does not merit any discussion or consideration.
PRACTICE POINTER:
(1) Pursue the "Withdrawn from the workforce" argument with caution. You may prevail before the fact-finder, but lose on appellate review ... Based upon an unsatisfactory analysis.
(2) Consider pursuing two alternative arguments (A) withdrawn from the workforce, and (B) job offer evidence, and (C) earning power assessment evidence. Yes this is somewhat duplicative and redundant ... But you have three chances to prevail.
The "withdrawn" argument does not require the Employer to prove the employee is physically able to work or that available work was offered or referred. The Employer need not show a change of physical condition or proof of job availability. See: Mendes v. WCAB (Lisbon Contractors Inc. ) Pa. Cmwlth. 2009.
However, assertion of the withdraw argument is not a simple remedy. A number of additional legal arguments are intertwined. This is where pursuit of this remedy can get confusing.
There are several indicia of "withdrawn".
One is not actively seeking employment.
One is receiving a disability pension.
One has physically relocated.
... Or a combination of the above.
Chesik v. WCAB (Department of Military and Veterans' Affairs) No. 758 C. D. 2015, is a decision of a panel of the Commonwealth Court, authored by President Judge Pellegrini on November 9, 2015.
The withdraw argument is discussed in terms of .........
Factual and Procedural Background
Employee suffered a work injury in July 2009, a cervical sprain/strain. She moved from Scranton PA to Lovelock Nevada in December 2012. Employer filed a petition to Suspend indemnity wage loss benefits in March 2013, asserting Employee voluntarily removed herself from the workforce.
Employee testified she moved to Nevada for the warmer climate as she did not do well with the Scranton weather. She said she has (non-work related) lupus and fibromyalgia and "that was the main reason I moved to a warmer climate ". She met a friend online, visited in 2012, "researched" Southwest climates and then relocated. She has a Nevada drivers license. It is her intention to remain indefinitely. She has not worked or looked for work in any capacity. She went for one local physician visit in February 2013 but she has not pursued any other care. She did not consult with her PA physicians before relocating.
Employee retired from her position with Employer in October 2012 and she applied for disability pension benefits in December 2012. She has no income beyond her work comp, Medicare and disability pension.
She described daily pain in her neck, hands and arms as a result of the work injury. She acknowledged that when she relocated she could not work anywhere in Scranton. "...by moving to Nevada (she) took (herself) out of the work force at least in Scranton PA and in the region".
... But somewhat inconsistently, she said (the obligatory) it was not her intention to remove herself from the workforce when she moved to Nevada , stating , "if there's a possibility that I could work, I would love to work". (Just not yet doing so).
(NOTE: this type of testimony - "window-shopping" - was discounted by Judge Pelegrini in the earlier 2008 Hensal decision ).
WCJ Decision
Employer suspension petition GRANTED.
WCJ reasoned Employee voluntarily removed herself from the workforce - not because of her work related condition - rather because of her non-work related conditions of lupus and fibromyalgia, which preexisted for 12 years. She did not consult with her physicians, the decision to move was solely her own, along with her decision to take her pension and remove herself from the workforce.
WCAB affirmed the WCJ Suspension order.
Commonwealth Court Decision
Suspension reversed.
(1) Employee's permanent change of residence does not constitute a voluntary removal from the workforce. (Distinguishing the decisions in Blong, Smith and Mendes).
(2) There were no other objective facts - in addition to her acceptance of the disability pension - to support a conclusion that she withdrew from the workforce.
Why does the Employer lose?
I'm not certain.
The Pennsylvania Supreme Court clarified/established the "withdrawn from the workforce" rule in City of Pittsburgh v. Robinson 67 A.3d 1194 (Pa. 2013) (Robinson ll).
Where the Employer asserts the employee has withdrawn from the workforce, the Employer has the burden to prove that the employee has voluntarily left the workforce. Employee has not left due to disability from the work injury.
Acceptance of a pension- much less a disability pension- does not lead to a presumption that the employee has retired. Acceptance of a pension may support an inference of retirement- one which must be considered in the context of the totality of the circumstances.
Evidence of retirement includes receipt of a pension together with employee's own statements
relating to work and the efforts or non-efforts at seeking employment.
Employer is not required to prove employee's subjective state of mind regarding work/retirement.
If the Employer establishes sufficient evidence to support a finding that the employee has voluntarily
left the workforce, then the burden shifts to employee to show that there has been a compensate loss of earning power.
Employee can assert that post-injury physical conditions limit the ability to work.
Generally, if the Employer fails to prove retirement or withdraw from the workforce, then Employer must produce (1) medical evidence of a change in employee's physical condition and (2) evidence of a job referral to an open job which fits the occupational category for which employee has been given medical clearance. (See: Kachinski).
In CHESIK, the court discusses:
(1) "Earning Power" is determined at Section 306(b)(2) ... Partial disability applies if claimant is able to perform work ... considering residual productive skill, education. age...
(2) 306(b)(2) Language stating ... If claimant does not live in the Commonwealth ... THIS contemplates a claimant could relocate and these provisions direct how one is to determine earning power ...
WAIT a minute... Why are we not talking about retirement, pension, job search issues???
YES, if Employer does not prove retirement or withdrawal from the workforce, then you need to do the Kachiski thing or the Labor Market thing.
In CHESIK the WCJ is said to err in concluding Employee removed herself from the workforce by relying ONLY on her permanent relocation to Nevada.
Similarly the WCJ can not solely rely upon her receipt of a disability pension to find a permanent separation from the workforce.
... OK.
I agree each alone does not automatically meet Employer burden of proof ...
But both are present here ... PLUS Employee's statements - she relocated due to her non-occupational medical conditions ... AND her actions- or non-action in seeking employment!
In Hensal we are told a good faith job search includes actual job applications not just surfing the Internet or reading the newspaper. HERE that effort is lacking ... But does not merit any discussion or consideration.
PRACTICE POINTER:
(1) Pursue the "Withdrawn from the workforce" argument with caution. You may prevail before the fact-finder, but lose on appellate review ... Based upon an unsatisfactory analysis.
(2) Consider pursuing two alternative arguments (A) withdrawn from the workforce, and (B) job offer evidence, and (C) earning power assessment evidence. Yes this is somewhat duplicative and redundant ... But you have three chances to prevail.
Friday, November 6, 2015
Franchisor is not Employer of Franchisee's worker
The existence of an Employer-Employee relationship is an essential element of the burden of proof for a workers' compensation claim of the injured worker.
Appellate court decisions have identified the existence of the right to control the manner in which the work is performed as a key indicator of an employment relationship.
The control test is utilized the analyze the elements of the existence of an employment relationship in cases involving issues of: status as an employee; independent contractor status; casual employee; statutory employer and borrowed employee.
At times, an argument can be made that more than one business entity has some element of control in relation to a worker ... in these circumstances, Who is the employer responsible for workers' compensation benefit payment?
A recent case raised the question - Can a Franchiser be an employer?
Answer: Yes.
Question: Can a Franchiser be the "employer " of a worker with uninsured Franchisee?
Answer ... Maybe; Maybe not.
Saladworks, LLC v. WCAB (Gaudioso and UEGF), No. 1789 CD 2014, is a reported decision of a panel of the Commonwealth Court of Pennsylvania authored by Judge McGinley on October 6, 2015. This decision assessed this employment relationship question and discussed the impact of the franchisee status as an uninsured entity and the statutory employer implications for the franchisor.
Factual and Procedural Background
Gaudioso worked at a Saladworks restaurant and performed various tasks, such as: placing food orders; kitchen prep work; making salads; working the cash resister. While disposing boxes he slipped and twisted both knees. He filed a claim petition against Saladworks as his employer. He requested penalties as Employer did not accept or deny his claim, a violation of Section 406.1 of the Act. 77 P.S. 717.1.
Subsequently, Claimant Gaudioso filed a separate claim petition against the Uninsured Employers Guaranty Fund (UEGF) as his direct employer did not have workers' compensation insurance.
The direct employer name was amended/corrected to reflect it was actually a franchisee of Saladworks. The franchisee was known as G21, LLC d/b/a Saladworks (G21).
We will call the direct employer the G21 store.
UEGF counsel filed a petition for joinder of Saladworks, the franchisor and alleged there was joint and several liability for the possible claimant work comp benefits. Saladworks moved to dismiss /strike this joinder, alleging it had no employer relationship with claimant, rather it was a franchiser which granted certain rights to the G21 store to use registered trademarks and its system, pursuant to a franchise agreement.
Saladworks WCJ Hearing Testimony
The director of franchise administration for Saladworks appeared and testified before the WCJ. Roseann Maille testified Saladworks is a franchisor and they sell franchises to prospective franchisees to open their business with the Saladworks concept.
Under the Franchise Agreement, Saladworks does not:
WCJ Claim Petition Decision
UEGF argued the WCJ erred as she did not consider Saladworks to be the "statutory employer" of the claimant, as he was the employee of an uninsured business.
WCAB agreed. WCJ was Reversed.
WCAB reasoned, cases involving franchisors and franchisees must be analyzed in a case-by-case basis. Saladworks fits the definition of a statutory employer under Section 302(a).
Section 302(a) applies to the class of statutory employers, which are not in control of the business premises and use subcontractors for services that are in a "regular or recurrent" part of the business.
Section 302(b) does not apply here,as Saladworks did not own or occupy the premises where claimant was injured.
The Section 306(b) test to determine if there is a statutory employer, sets forth 5 factors: (1) the entity is under contract with an owner or one who is in a position of an owner; (2) the entity occupies or controls the premises where the injury took place; (3) the entity entered into a subcontract; (4) the entity entrusted a portion of its regular business to the subcontractor; (5) the injured party was employed by the subcontractor. See: McDonald v. Levinson Steel Company, 153 A. 424 (Pa. 1930).
WCAB reasoned that Saladworks contracted with G21 store to have work performed which is a regular and recurrent part of the Saladworks' business. The purpose of the statutory employer doctrine is to place responsibility for benefit payment on the first business in the contract chain, when an injured workers direct employer, the subcontractor, fails to secure work comp insurance.
Saladworks Commonwealth Court Appeal
Saladworks argued:
In contrast, the goal of the franchisor Saladworks is to sell more franchises, so it may reap fees and royalties. The goal of Saladworks is not trying to sell more salads itself.
Section 302(a) provides that an entity must contract to have work performed that is a regular or recurrent part of its business, in order to be considered a statutory employer.
Commonwealth Court reversed the WCAB.
The WCJ dismissal of joinder of Saladworks is affirmed.
Saladworks is in the business of selling franchises to franchisees.
While Saladworks and G21 store are connected through the Franchise Agreement, the appellate court would not adopt the reasoning of the WCAB. Saladworks did not contract with G21 store to perform work which was a regular and recurrent part of the Saladworks franchisor business.
While Saladworks provides certain services to independent franchisees like G21 store,
Saladworks is not in the business of actually making and selling salads.
Claimant was injured while working in the employ of a franchisee who was in the business of selling salads. Claimant was not an employee of Saladworks. G21 store was the employer of claimant at the time of his work injury. G21 is liable for work comp benefit payments. As G21 store lacked work comp insurance, the UEGF was responsible for benefit payments pursuant to Section 1602(c) of the Act, 77 P.S. 2702(c).
Practice Pointers:
1. This case is a good example of the complexity that arises when one must interpret and determine the application of two different sections of the Workers Compensation Act. As noted by the Commonwealth Court, the question of statutory employer typically arises in the context of construction work. However, if one is unfamiliar with the application/interpretation of the statutory employer provisions, your assessment of the case may be wrong. It behooves the Employer and Insurer to obtain an experienced legal opinion at the outset of litigation.
2. When one reviews the facts presented and analysis employed by the Court, it seems that a situation could arise where the facts may implicate the Franchisor as an Employer of the injured worker. For example, in the early stage of store set-up and training, the Franchisor may direct the workers in performing tasks the proper "Saladworks way". Thus training of the franchisee may extend to the workers. Again, it is essential to conduct an early review and identification of all of the pertinent facts, policies and procedures.
3. The Franchise Agreement required the franchisee to have workers compensation insurance. Someone missed this item on their checklist. Franchisors must be diligent to assure their franchisees comply with their basis legal obligations, before they open their doors for business.
Factual and Procedural Background
Gaudioso worked at a Saladworks restaurant and performed various tasks, such as: placing food orders; kitchen prep work; making salads; working the cash resister. While disposing boxes he slipped and twisted both knees. He filed a claim petition against Saladworks as his employer. He requested penalties as Employer did not accept or deny his claim, a violation of Section 406.1 of the Act. 77 P.S. 717.1.
Subsequently, Claimant Gaudioso filed a separate claim petition against the Uninsured Employers Guaranty Fund (UEGF) as his direct employer did not have workers' compensation insurance.
The direct employer name was amended/corrected to reflect it was actually a franchisee of Saladworks. The franchisee was known as G21, LLC d/b/a Saladworks (G21).
We will call the direct employer the G21 store.
UEGF counsel filed a petition for joinder of Saladworks, the franchisor and alleged there was joint and several liability for the possible claimant work comp benefits. Saladworks moved to dismiss /strike this joinder, alleging it had no employer relationship with claimant, rather it was a franchiser which granted certain rights to the G21 store to use registered trademarks and its system, pursuant to a franchise agreement.
Saladworks WCJ Hearing Testimony
The director of franchise administration for Saladworks appeared and testified before the WCJ. Roseann Maille testified Saladworks is a franchisor and they sell franchises to prospective franchisees to open their business with the Saladworks concept.
Under the Franchise Agreement, Saladworks does not:
- own or occupy the location,
- know the identity of employees at franchised locations,
- do the hiring or firing of employees at franchise locations,
- dictate employee work hours,
- provide any training for the day to day operational employees of a franchise.
Saladworks does:
- provide training to the owner of the franchise,
- provide assistance with franchisee marketing,
- assist franchisee prior to the opening of the location,
- conducts operational performance reviews of franchisees
- provides a confidential business manual which instructs the franchisee how to run the business,
- establish policies for the layout and look of individual locations,
- retains authority to terminate a franchise if a requested store remodel is not performed,
- retain proprietary items and trademarks,
- reviews and approves franchisee proposed advertising,
- requires a certain amount of advertising per year,
- requires the franchisee to maintain certain types of insurance, including Workers' Compensation insurance.
- Employer, G21 store did not timely file an answer to the claim petition. Accordingly, all well-pled allegations of the Claim petition are deemed admitted and Employer is prevented from presenting any evidence to challenge the allegations in the petition or presenting any affirmative defenses. Citing: Yellow Freight, Inc. v. WCAB (Madara) (Pa. Cmwlth. 1981).
- Saladworks witness was credible. Saladworks does not have any control over the franchisee's employees. Franchisee, G21 store controls the employees.
- The WCJ granted the motion to strike the joinder motion filed by UEGF. Saladworks was dismissed from this litigation.
UEGF argued the WCJ erred as she did not consider Saladworks to be the "statutory employer" of the claimant, as he was the employee of an uninsured business.
WCAB agreed. WCJ was Reversed.
WCAB reasoned, cases involving franchisors and franchisees must be analyzed in a case-by-case basis. Saladworks fits the definition of a statutory employer under Section 302(a).
Section 302(a) applies to the class of statutory employers, which are not in control of the business premises and use subcontractors for services that are in a "regular or recurrent" part of the business.
Section 302(b) does not apply here,as Saladworks did not own or occupy the premises where claimant was injured.
The Section 306(b) test to determine if there is a statutory employer, sets forth 5 factors: (1) the entity is under contract with an owner or one who is in a position of an owner; (2) the entity occupies or controls the premises where the injury took place; (3) the entity entered into a subcontract; (4) the entity entrusted a portion of its regular business to the subcontractor; (5) the injured party was employed by the subcontractor. See: McDonald v. Levinson Steel Company, 153 A. 424 (Pa. 1930).
WCAB reasoned that Saladworks contracted with G21 store to have work performed which is a regular and recurrent part of the Saladworks' business. The purpose of the statutory employer doctrine is to place responsibility for benefit payment on the first business in the contract chain, when an injured workers direct employer, the subcontractor, fails to secure work comp insurance.
Saladworks Commonwealth Court Appeal
Saladworks argued:
- the WCAB erred when they reversed the WCJ dismissal of the joinder.
- Section 302 (a) does not apply to franchisor/franchisee agreements.
- the WCAB misunderstood the nature of the business of Saladworks.
- Saladworks is not involved in the day-to-day operations of the franchisee location.
- Saladworks is in the business of selling franchises to franchisees who open their own businesses using the Saladworks concept.
In contrast, the goal of the franchisor Saladworks is to sell more franchises, so it may reap fees and royalties. The goal of Saladworks is not trying to sell more salads itself.
Section 302(a) provides that an entity must contract to have work performed that is a regular or recurrent part of its business, in order to be considered a statutory employer.
Commonwealth Court reversed the WCAB.
The WCJ dismissal of joinder of Saladworks is affirmed.
Saladworks is in the business of selling franchises to franchisees.
While Saladworks and G21 store are connected through the Franchise Agreement, the appellate court would not adopt the reasoning of the WCAB. Saladworks did not contract with G21 store to perform work which was a regular and recurrent part of the Saladworks franchisor business.
While Saladworks provides certain services to independent franchisees like G21 store,
Saladworks is not in the business of actually making and selling salads.
Claimant was injured while working in the employ of a franchisee who was in the business of selling salads. Claimant was not an employee of Saladworks. G21 store was the employer of claimant at the time of his work injury. G21 is liable for work comp benefit payments. As G21 store lacked work comp insurance, the UEGF was responsible for benefit payments pursuant to Section 1602(c) of the Act, 77 P.S. 2702(c).
Practice Pointers:
1. This case is a good example of the complexity that arises when one must interpret and determine the application of two different sections of the Workers Compensation Act. As noted by the Commonwealth Court, the question of statutory employer typically arises in the context of construction work. However, if one is unfamiliar with the application/interpretation of the statutory employer provisions, your assessment of the case may be wrong. It behooves the Employer and Insurer to obtain an experienced legal opinion at the outset of litigation.
2. When one reviews the facts presented and analysis employed by the Court, it seems that a situation could arise where the facts may implicate the Franchisor as an Employer of the injured worker. For example, in the early stage of store set-up and training, the Franchisor may direct the workers in performing tasks the proper "Saladworks way". Thus training of the franchisee may extend to the workers. Again, it is essential to conduct an early review and identification of all of the pertinent facts, policies and procedures.
3. The Franchise Agreement required the franchisee to have workers compensation insurance. Someone missed this item on their checklist. Franchisors must be diligent to assure their franchisees comply with their basis legal obligations, before they open their doors for business.
Wednesday, October 28, 2015
PROTZ IRE Decision Part II
Protz v. WCAB (Derry Area School District) was decided by the Commonwealth Court of Pennsylvania on September 18, 2015. That decision held that the Impairment Rating Evaluation [Section 306 (a.2)] statute requirement for the application of the "most recent edition" of the American Medical Association Guides to the Evaluation of Permanent Impairment was an unconstitutional delegation of legislative authority.
The PA Legislature could not properly draft a statute that placed the IRE standard in the hands of the AMA Guides. Those Guides can change. Therefore the law would change ... without any action by the legislature.
The Commonwealth Court vacated the WCAB decision and directed a remand to the WCJ to apply the AMA Guides 4th edition standard, ie, the edition of the Guides in effect when section 306 (a.2) was enacted.
Claimant Appeal
On October 16, 2015, Counsel for Protz, Thomas C. Baumann, Esquire, filed a Petition for Allowance of Appeal to the Supreme Court of Pennsylvania.
Protz argues:
1. Section 306 (a.2), as written is unconstitutional.
2. The Commonwealth Court may not salvage this unconstitutional provision by mandating the use of the 4th Edition of the AMA Guides, when the statutory language calls for the use of the" most recent edition".
3. Protz argues the PA Legislature never expressed its intention to require use of the 4th Edition. If this statutory language is unconstitutional, then it must be thrown out, not interpreted or modified.
Employer Appeal
On October 15, 2015, Counsel for Derry Area School District, David H. Dille, Esquire, filed a Petition for Allowance of Appeal to the Supreme Court of Pennsylvania.
Derry argues:
1. The Commonwealth Court decision is inconsistent with prior appellate decisions which have allowed the Legislature to incorporate evolving standards into laws, without violating this non-delegation doctrine.
2. The Commonwealth Court previously rejected the argument regarding delegation of rule-making to a non-governmental entity. A law is only unconstitutional where there are insufficient guidelines. Here the guides are definite and reasonable.
3. The Commonwealth Court has directed that the "most recent edition" of the AMA Guides are not to be used, rather it directed use of the 4th Edition, on remand of the underlying case. This will impact the ability of physicians to conduct IREs.
4. Third party standards are utilized in a number of statutes, as enumerated by Derry counsel.
Acceptance of a case for Allowance of Appeal to the Supreme Court of Pennsylvania, is a decision made, at the discretion of the court. There is no right to have an appeal heard.
Now we wait for a determination by the court regarding the grant of further appellate review to these parties.
PRACTICE POINTERS:
... In the mean time ... the Bureau has directed IRE physician to prepare IREs utilizing the 4th Edition of the AMA Guides.
... Employer counsel are requesting "addendum" reports from the IRE physicians, including a 6th Edition calculation.
The "gray areas" remain for the IRE cases in pending litigation.
Will the WCJ allow an addendum report?
Will the WCAB remand for an addendum report?
The Commonwealth Court directed this action by its remand order ... but does that ruling just apply to that case ... or to all pending cases?
Legal scholars can continue this discussion.
As a practical matter, if you have a pending case ... call your attorney for legal advice..
The PA Legislature could not properly draft a statute that placed the IRE standard in the hands of the AMA Guides. Those Guides can change. Therefore the law would change ... without any action by the legislature.
The Commonwealth Court vacated the WCAB decision and directed a remand to the WCJ to apply the AMA Guides 4th edition standard, ie, the edition of the Guides in effect when section 306 (a.2) was enacted.
Claimant Appeal
On October 16, 2015, Counsel for Protz, Thomas C. Baumann, Esquire, filed a Petition for Allowance of Appeal to the Supreme Court of Pennsylvania.
Protz argues:
1. Section 306 (a.2), as written is unconstitutional.
2. The Commonwealth Court may not salvage this unconstitutional provision by mandating the use of the 4th Edition of the AMA Guides, when the statutory language calls for the use of the" most recent edition".
3. Protz argues the PA Legislature never expressed its intention to require use of the 4th Edition. If this statutory language is unconstitutional, then it must be thrown out, not interpreted or modified.
Employer Appeal
On October 15, 2015, Counsel for Derry Area School District, David H. Dille, Esquire, filed a Petition for Allowance of Appeal to the Supreme Court of Pennsylvania.
Derry argues:
1. The Commonwealth Court decision is inconsistent with prior appellate decisions which have allowed the Legislature to incorporate evolving standards into laws, without violating this non-delegation doctrine.
2. The Commonwealth Court previously rejected the argument regarding delegation of rule-making to a non-governmental entity. A law is only unconstitutional where there are insufficient guidelines. Here the guides are definite and reasonable.
3. The Commonwealth Court has directed that the "most recent edition" of the AMA Guides are not to be used, rather it directed use of the 4th Edition, on remand of the underlying case. This will impact the ability of physicians to conduct IREs.
4. Third party standards are utilized in a number of statutes, as enumerated by Derry counsel.
Acceptance of a case for Allowance of Appeal to the Supreme Court of Pennsylvania, is a decision made, at the discretion of the court. There is no right to have an appeal heard.
Now we wait for a determination by the court regarding the grant of further appellate review to these parties.
PRACTICE POINTERS:
... In the mean time ... the Bureau has directed IRE physician to prepare IREs utilizing the 4th Edition of the AMA Guides.
... Employer counsel are requesting "addendum" reports from the IRE physicians, including a 6th Edition calculation.
The "gray areas" remain for the IRE cases in pending litigation.
Will the WCJ allow an addendum report?
Will the WCAB remand for an addendum report?
The Commonwealth Court directed this action by its remand order ... but does that ruling just apply to that case ... or to all pending cases?
Legal scholars can continue this discussion.
As a practical matter, if you have a pending case ... call your attorney for legal advice..
Thursday, September 24, 2015
IRE process is Unconstitutional - as per Commonwealth Court
Pennsylvania Workers' Compensation Impairment Rating Evaluations based upon the AMA Guides to the Evaluation of Permanent Impairment.
In 1996 the Pennsylvania Workers' Compensation Act was amended to provide a "new" remedy to the Employer and Insurer, the Impairment Rating Evaluation (IRE) for modification of the injured Employee status from total disability (unlimited duration) to a partial disability status (500 week duration). Section 306(a.2).
As expressed in prior posts, we believe the IRE remedy is the most important remedy available to the Employer and Insurer to limit future indemnity wage loss exposure. In a relatively straight-forward process, after the Employee receives 104 weeks of total disability benefits, the Employer may request the designation by the Bureau of a physician to conduct an impairment rating evaluation, in accord with the AMA Guides to the Evaluation of Permanent Impairment. [LIBC-766 Request for Designation].
Where the degree of impairment is determined to be less than 50% (according to the Guides formula) the Employee status is converted from total disability to partial disability.[LIBC-764 Notice of Change of WC Disability Status].
The IRE converts the duration of Employee disability status from total disability to a partial disability status of a duration of 500 weeks. The rate of indemnity wage loss benefits is not altered by this process.
Protz v. WCAB (Derry Area School District, No. 1024 C.D. 2014, an en banc decision of the Commonwealth Court of Pennsylvania authored by President Judge Pellegrini on September 18, 2015, determined that a provision of the IRE process is an UNCONSTITUTIONAL delegation of state legislative authority.
The Commonwealth Court concluded that when the Pennsylvania State Legislature drafted the Section 306(a.2) language to allow use of the most recent edition of the AMA Guides to assess the level of impairment, that was wrong. That was a delegation of its legislative power to a private body.
Why? Because any future change in the AMA Guides would be an "automatic" change in the Work Comp law, thus it is a change made by a private body, the AMA, not a change made by the state legislature.
What does this mean for pending IRE determinations?
The Protz case was remanded to the WCJ with instruction to apply the Fourth Edition of the AMA Guides and to adjudicate the Employer petition for modification.
... So, to recap, the entire IRE process was not tossed out.
The Court wants all IRE determinations to be made based upon the Fourth Edition Guides, not the subsequent 5th of current 6th Editions.
PRACTICE POINTERS:
1. Where the IRE physician has conducted a physical examination and documented his/her findings, they must now use the Fourth edition formulas and tables to convert those physical exam findings into a Fourth Edition Impairment rating.
2. This may be accomplished by making a request to the IR Physician to author a supplemental report, based upon the prior documented physical examination.
3. Look at your files. If there is a pending IR exam, write to the IR physician and request that they calculate impairment in accord with the Fourth Edition, in addition to a Sixth Edition assessment. We anticipate this Protz decision will be reviewed by the Supreme Court and they may direct the use of the Sixth Edition, at some future point. So you will want to have evidence of both Editions of the Impairment Rating.
4. We anticipate that Employee counsel will make a request to the WCJ to re-open any pending IRE petition. We anticipate that some Employee counsel will file an appeal to the WCAB within 20 days of any past IRE determination, to have this new ruling applied to that case.
5. HOWEVER... cooler heads may prevail ... as a practical matter ... if the Employee has a "low" impairment rating, let's say in the range of 5% according to the 6th Edition... as a practical matter, application of the 4th edition of the AMA guides will not result in an IRE determination in excess of 50%.
6. ... BUT for a more detailed review of the differences between the 5th and 6th editions of the AMA guides, SEE: the NCCI Workers Compensation Legislative Research article,
" Impact on Impairment Ratings from Switching to the AMA's 6th Edition of the Guides to the Evaluation of Permanent Impairment", by Robert Moss, David McFarland, CJ Mohin and Den Haynes, July 2012.
One of the conclusions of this article is that the application of the 6th Edition would result in a LOWER impairment figure than by application of the 5th Edition !
In the several states studied in this article the DECREASE in the impairment rating when the 6th edition was used rather than the 5th Edition was in a range of 25% to 32% for a whole body impairment rating!
PENNSYLVANIA was not part of this study.
In 1996 the Pennsylvania Workers' Compensation Act was amended to provide a "new" remedy to the Employer and Insurer, the Impairment Rating Evaluation (IRE) for modification of the injured Employee status from total disability (unlimited duration) to a partial disability status (500 week duration). Section 306(a.2).
As expressed in prior posts, we believe the IRE remedy is the most important remedy available to the Employer and Insurer to limit future indemnity wage loss exposure. In a relatively straight-forward process, after the Employee receives 104 weeks of total disability benefits, the Employer may request the designation by the Bureau of a physician to conduct an impairment rating evaluation, in accord with the AMA Guides to the Evaluation of Permanent Impairment. [LIBC-766 Request for Designation].
Where the degree of impairment is determined to be less than 50% (according to the Guides formula) the Employee status is converted from total disability to partial disability.[LIBC-764 Notice of Change of WC Disability Status].
The IRE converts the duration of Employee disability status from total disability to a partial disability status of a duration of 500 weeks. The rate of indemnity wage loss benefits is not altered by this process.
Protz v. WCAB (Derry Area School District, No. 1024 C.D. 2014, an en banc decision of the Commonwealth Court of Pennsylvania authored by President Judge Pellegrini on September 18, 2015, determined that a provision of the IRE process is an UNCONSTITUTIONAL delegation of state legislative authority.
The Commonwealth Court concluded that when the Pennsylvania State Legislature drafted the Section 306(a.2) language to allow use of the most recent edition of the AMA Guides to assess the level of impairment, that was wrong. That was a delegation of its legislative power to a private body.
Why? Because any future change in the AMA Guides would be an "automatic" change in the Work Comp law, thus it is a change made by a private body, the AMA, not a change made by the state legislature.
What does this mean for pending IRE determinations?
The Protz case was remanded to the WCJ with instruction to apply the Fourth Edition of the AMA Guides and to adjudicate the Employer petition for modification.
... So, to recap, the entire IRE process was not tossed out.
The Court wants all IRE determinations to be made based upon the Fourth Edition Guides, not the subsequent 5th of current 6th Editions.
PRACTICE POINTERS:
1. Where the IRE physician has conducted a physical examination and documented his/her findings, they must now use the Fourth edition formulas and tables to convert those physical exam findings into a Fourth Edition Impairment rating.
2. This may be accomplished by making a request to the IR Physician to author a supplemental report, based upon the prior documented physical examination.
3. Look at your files. If there is a pending IR exam, write to the IR physician and request that they calculate impairment in accord with the Fourth Edition, in addition to a Sixth Edition assessment. We anticipate this Protz decision will be reviewed by the Supreme Court and they may direct the use of the Sixth Edition, at some future point. So you will want to have evidence of both Editions of the Impairment Rating.
4. We anticipate that Employee counsel will make a request to the WCJ to re-open any pending IRE petition. We anticipate that some Employee counsel will file an appeal to the WCAB within 20 days of any past IRE determination, to have this new ruling applied to that case.
5. HOWEVER... cooler heads may prevail ... as a practical matter ... if the Employee has a "low" impairment rating, let's say in the range of 5% according to the 6th Edition... as a practical matter, application of the 4th edition of the AMA guides will not result in an IRE determination in excess of 50%.
6. ... BUT for a more detailed review of the differences between the 5th and 6th editions of the AMA guides, SEE: the NCCI Workers Compensation Legislative Research article,
" Impact on Impairment Ratings from Switching to the AMA's 6th Edition of the Guides to the Evaluation of Permanent Impairment", by Robert Moss, David McFarland, CJ Mohin and Den Haynes, July 2012.
One of the conclusions of this article is that the application of the 6th Edition would result in a LOWER impairment figure than by application of the 5th Edition !
In the several states studied in this article the DECREASE in the impairment rating when the 6th edition was used rather than the 5th Edition was in a range of 25% to 32% for a whole body impairment rating!
PENNSYLVANIA was not part of this study.
Monday, August 31, 2015
Employee vs Independent Contractor status? The Construction Workplace Misclassification Act decides!
Determining the existence of an Employment Relationship.
The injured worker must prove all of the elements of a workers' compensation claim.
Where the Employer disputes the existence of an Employee- Employer relationship, there must be sufficient, competent and credible evidence to support a finding of fact by the Worker's Compensation Judge.
Many past appellate decisions review the factual details of the work relationship, to determine if the essential indicia of an employment relationship exist.
There was a perceived recurring problem in the construction industry regarding the correct identification of individuals as "employees", which was addressed by the 2010 enactment of the Construction Workplace Misclassification Act.
A recent case reports the impact of this act in a rather typical construction employment relationship. The result is reviewed at: Scott Lee Staron d/b/a Lee's Metal Roof Coatings & Painting v. WCAB (Farrier), No. 2140 CD 2014, a panel decision of the Commonwealth Court of Pennsylvania, authored by Senior Judge Friedman on July 17, 2015.
Factual and Procedural Background
Employee slipped and fell off of a roof on May 6, 2011, striking his head and subsequently undergoing surgery to his left ankle and right knee. He was not released to regular duty work.
A Claim Petition was filed, as Employer denied the existence of an Employer-Employee relationship.
Their "relationship" reflects:
Employee answered Employer's advertisement seeking a painter.
Employee had 20 years experience. He worked for different contractors. He did a lot of "sub" work.
Employee was self-employed. He usually did his own work.
Employee owned his truck, tools and some equipment.
They met and discussed Employee's work experience and terms of hire.
Employer agreed to pay him $100 per day.
Employer told Employee he would need to sign a document, in order to work for Employer.
(no agreement was signed before he started working).
Employee started painting on May 3. He used his own brushes, caulk gun, painter pants and knee pads.
Employer provided ladders and other necessary requirement.
Employee met at Employer's residence and traveled to the job site together.
On the 1st day, Employer told Employee to clean and paint the front part of a roof.
After that ... Employer did not provide any further instructions.
AFTER the injury, Employee met with Employer after his hospital release. Employer presented an Independent Contractor - Sub-Contractor Agreement. This document bears Employee's signature and is dated May 6, 2011, the date of injury. In his testimony, Employee declined to identify his signature. He "might have" signed it.
Employee retrieved his car and his tools. He was paid $300 for his 3 days of work.
Employee did not return to work, in any capacity after May 6, 2011.
WCJ Decision
Employee was found credible regarding his hiring and work for Employer.
He was credible regarding his injuries, treatment and disability.
[He was not credible regarding the declining to identify his signature on the Agreement].
WCJ found Employee had not entered into the Agreement at the time he sustained his work-related injury on May 6, 2011.
Accordingly, he was an Employee not an independent contractor, at the time of his injury.
WCAB affirmed WCJ.
Commonwealth Court Decision
WCJ decision is affirmed. He was an Employee.
Employer argued the Construction Workplace Miscalculation Act (CWMA) did not require the individual to sign a written contract prior to an injury, in order to be considered an independent contractor. This argument was rejected.
HERE, Employee worked for Employer for three (3) days in exchange for remuneration and did not sign an Agreement, until after his injury.
Section 3(a)(1) of the CWMA is unambiguous:
"An Individual who performs services in the construction industry for remuneration IS an independent contractor ONLY IF ... [he] has a written contract to perform such services.
[emphasis added]. 43 P.S. section 933.3(a)(1).
It is simple. As there was no written contract, Employee could not be considered an independent contractor under the CWMA. The fact that employee later signed a written contract did not change his employment status, as it existed at the time of his injury.
Practice Pointers:
1. It is difficult to judge with much accuracy, BUT prior to the enactment of the CWMA, would this individual be considered an Independent-Contractor?
There certainly are sufficient facts presented for a Worker Compensation Judge to conclude that the parties intended that this Individual was an Independent-Contractor.
Prior appellate decisions looked at all of the facts - workers' experience, tools, method of payment, uniforms ...
but the most important element to establish an Employer-Employee relationship is the control over the details of the work performed by the worker. The greater control exerted over the individual, the more likely one would be considered and employee.
Query: Here was it the "pre-injury" intention of the parties to enter into an Independent-Contractor relationship? Did they "ratify" their pre-injury intentions by the post-injury document? Now, these thoughts are not controlling.
As we see from this Commonwealth court decision, the unambiguous language of the CWMA will be interpreted and rather strictly applied.
This result reflects the intention of the CWMA; to eliminate this type of post-injury "he said; she said" episodes.
2. Word to the Wise ... Insurers and Employers ... get your documents in order. Establish a business practice to prepare, sign and retain this type of agreement.
The injured worker must prove all of the elements of a workers' compensation claim.
Where the Employer disputes the existence of an Employee- Employer relationship, there must be sufficient, competent and credible evidence to support a finding of fact by the Worker's Compensation Judge.
Many past appellate decisions review the factual details of the work relationship, to determine if the essential indicia of an employment relationship exist.
There was a perceived recurring problem in the construction industry regarding the correct identification of individuals as "employees", which was addressed by the 2010 enactment of the Construction Workplace Misclassification Act.
A recent case reports the impact of this act in a rather typical construction employment relationship. The result is reviewed at: Scott Lee Staron d/b/a Lee's Metal Roof Coatings & Painting v. WCAB (Farrier), No. 2140 CD 2014, a panel decision of the Commonwealth Court of Pennsylvania, authored by Senior Judge Friedman on July 17, 2015.
Factual and Procedural Background
Employee slipped and fell off of a roof on May 6, 2011, striking his head and subsequently undergoing surgery to his left ankle and right knee. He was not released to regular duty work.
A Claim Petition was filed, as Employer denied the existence of an Employer-Employee relationship.
Their "relationship" reflects:
Employee answered Employer's advertisement seeking a painter.
Employee had 20 years experience. He worked for different contractors. He did a lot of "sub" work.
Employee was self-employed. He usually did his own work.
Employee owned his truck, tools and some equipment.
They met and discussed Employee's work experience and terms of hire.
Employer agreed to pay him $100 per day.
Employer told Employee he would need to sign a document, in order to work for Employer.
(no agreement was signed before he started working).
Employee started painting on May 3. He used his own brushes, caulk gun, painter pants and knee pads.
Employer provided ladders and other necessary requirement.
Employee met at Employer's residence and traveled to the job site together.
On the 1st day, Employer told Employee to clean and paint the front part of a roof.
After that ... Employer did not provide any further instructions.
AFTER the injury, Employee met with Employer after his hospital release. Employer presented an Independent Contractor - Sub-Contractor Agreement. This document bears Employee's signature and is dated May 6, 2011, the date of injury. In his testimony, Employee declined to identify his signature. He "might have" signed it.
Employee retrieved his car and his tools. He was paid $300 for his 3 days of work.
Employee did not return to work, in any capacity after May 6, 2011.
WCJ Decision
Employee was found credible regarding his hiring and work for Employer.
He was credible regarding his injuries, treatment and disability.
[He was not credible regarding the declining to identify his signature on the Agreement].
WCJ found Employee had not entered into the Agreement at the time he sustained his work-related injury on May 6, 2011.
Accordingly, he was an Employee not an independent contractor, at the time of his injury.
WCAB affirmed WCJ.
Commonwealth Court Decision
WCJ decision is affirmed. He was an Employee.
Employer argued the Construction Workplace Miscalculation Act (CWMA) did not require the individual to sign a written contract prior to an injury, in order to be considered an independent contractor. This argument was rejected.
HERE, Employee worked for Employer for three (3) days in exchange for remuneration and did not sign an Agreement, until after his injury.
Section 3(a)(1) of the CWMA is unambiguous:
"An Individual who performs services in the construction industry for remuneration IS an independent contractor ONLY IF ... [he] has a written contract to perform such services.
[emphasis added]. 43 P.S. section 933.3(a)(1).
It is simple. As there was no written contract, Employee could not be considered an independent contractor under the CWMA. The fact that employee later signed a written contract did not change his employment status, as it existed at the time of his injury.
Practice Pointers:
1. It is difficult to judge with much accuracy, BUT prior to the enactment of the CWMA, would this individual be considered an Independent-Contractor?
There certainly are sufficient facts presented for a Worker Compensation Judge to conclude that the parties intended that this Individual was an Independent-Contractor.
Prior appellate decisions looked at all of the facts - workers' experience, tools, method of payment, uniforms ...
but the most important element to establish an Employer-Employee relationship is the control over the details of the work performed by the worker. The greater control exerted over the individual, the more likely one would be considered and employee.
Query: Here was it the "pre-injury" intention of the parties to enter into an Independent-Contractor relationship? Did they "ratify" their pre-injury intentions by the post-injury document? Now, these thoughts are not controlling.
As we see from this Commonwealth court decision, the unambiguous language of the CWMA will be interpreted and rather strictly applied.
This result reflects the intention of the CWMA; to eliminate this type of post-injury "he said; she said" episodes.
2. Word to the Wise ... Insurers and Employers ... get your documents in order. Establish a business practice to prepare, sign and retain this type of agreement.
Wednesday, August 26, 2015
IRE Determination remains Valid despite subsequent expansion of Injury Description
The Impairment Rating Evaluation Remedy
and the impact of the changing Injury Description.
An Employer may change the workers' compensation benefit status of an injured Employee from an unlimited "total disability" status to a "partial disability" status, limited to a duration of 500 weeks. This remedy is accomplished via the request for an Impairment Rating Evaluation (IRE) pursuant to Section 306(a.2) of the Pennsylvania Workers' Compensation Act.
After an Employee has received total disability benefits for a period of 104 weeks, the Employee must submit to an IRE, when requested by the Employer. The IRE remedy is automatic if the IRE request was made within 60 days of the 104th week and the impairment rating is less than 50% according to the AMA Guides. The Employer may request an IRE, at any point beyond the 60 day window, but this remedy is not automatic and requires the filing of a petition.
What is the character or nature of the work injury changes?
The 2009 Pennsylvania Supreme Court decision in Cinram Manufacturing v. WCAB (Hill) discussed 2 types of Review Petitions. The review/correction of the description of injury, is proper where there was a mistake in the injury description since the original compensation document.
The 2nd type of review is an amendment/expansion of the injury description, to address injury which subsequently arises as a consequence of the original injury.
We previously discussed the effect of the review of the description of the work injury upon the Employer Termination petition remedy. ( See: Harrison v. WCAB (Auto Truck Transport at October 10, 2013 Blog Post).
These filings seem to be a recurring theme... Employer files a Termination petition ... Employee files a Review to expand the injury beyond the scope of the Termination medical exam.
A recent appellate decision addressed the impact of a subsequent WCJ decision to grant a review/expansion of the work injury description upon the earlier successful Employer IRE.
See: Duffey v. WCAB (Trola-Dyne Inc.) a reported decision of a panel of the Commonwealth Court of Pennsylvania authored by Judge Cohn-Jubelirer on June 26, 2015.
Factual and Procedural Background
In March of 2009 Employee sustained bilateral hand injuries as a result of handling electrical wires while repairing a machine. Employer voluntarily accepted responsibility for this injury via Notice of Compensation Payable (LIBC-495). This work injury was described as "bilateral hands, electrical burn, striping some wire".
In March of 2011 Employer requested an IRE when Employee received 104 weeks of total disability benefits. A Request for designation of a Physician to Perform an IRE (LIBC-766) was filed. The work injury was described as "bilateral hands - nerve and joint pain". An appointment was scheduled and accomplished.
Bruce E. Sicilia, MD conducted an IRE on June 2, 2011 and issued an Impairment Rating Determination Face Sheet (LIBC-767) with the accompanying report. Impairment was 6%.
On June 28, 2011, Employer issued a Notice of Change of Workers' Compensation Disability Status (LIBC-764) based upon Dr. Sicilia's report.
On July 14, 2011, Employee filed a Petition to Review Compensation Benefit Offset, alleging the IRE was invalid, without further explanation.
On December 16, 2011, Employee asserted the IRE was invalid as the description of injury was incomplete.
Employee Review Petition - Medical Evidence
WCJ Review Petition Decision
WCJ accepted Employee testimony and medical expert evidence in granting Employee Review Petition.
WCJ added the diagnoses of adjustment disorder with depressed mood and PTSD to the work injury description.
WCJ concluded IRE was invalid as it did not address these additional work-related injuries. Employee could not modify Employee disability status from TTD to PPD.
WCAB reversed WCJ Decision
IRE was valid as Employee never sought to amend the NCP description of work injury until December 16, 2011 petition (amendment). This was after the June 2, 2011 IRE Determination.
Dr. Sicilia determined Employee was at MMI, he properly performed an IRE based upon the accepted injuries and the 6% impairment was not refuted.
Commonwealth Court Affirmed WCAB
Section 306(a.2) governs the manner in which an employer may obtain a change in an employee's disability status based upon an IRE, as well as how an employee may challenge an IRE.
An employee has the right to immediately challenge the IRE and/or appeal the reduction of his/her disability status before the reduction becomes effective, during the post-IRE 60 day notice period. citing: Johnson v. WCAB (Sealy Components Group) and Barrett v. WCAB (Sunoco Inc.).
After the 60 day notice of modification period ends, the employee may challenge the IRE change of disability status, by attempting to Reinstate total disability status, via evidence that a subsequent IRE establishes an impairment rating of 50% or greater. See: Wingrove v. WCAB (Allegheny Energy).
Here, Employee was diagnosed with adjustment order with depressed mood in August 2010. Section 413(a) allows a petition for review and modification of a compensation agreement at any time. He did not seek to review and amend the description of injury until after the IRE.
Employer argued, as a practical matter, the IRE physician can only assess impairment for injuries that are accepted as work-related.
Employee argued that the prior decision at Harrison v. WCAB (Auto Truck Transport Corp) acknowledged instances where the WCJ may review and amend the description of injury in the course of IRE petition proceedings.
Employer argued acceptance of Employee's arguments would allow one to challenge a past IRE based upon injuries that were not yet determined to be work-related!
Commonwealth Court Reasoning
The purpose of an IRE is to determine the degree of impairment due to the compensable injury. The term "compensable injury" is used throughout this section . See statutory language at 306(a)(2); 77 PS 511.2(1).
The Harrison decision states that the NCP establishes the description of the work injury.
Prior decisions note, it is the claimant's physical condition at the time of IRE that governs the validity of the IRE. Westmoreland Regional Hospital v. WCAB (Pickford).
Wingrove v. WCAB (Allegheny Energy) [relied upon by Employee] discussed the litigation of Review Petitions of the work-related injury description in 2009, about 4 years after the IRE. The WCJ granted one Review Petition, and amended the description of the work injury However, this expansion of the work injury did not negate the validity of the 2005 IRE. After 60 days, IRE became fixed and beyond challenge ... in the absence of an IRE demonstrating 50% or greater impairment.
The focus in determining the validity of an IRE is the state of the claimant and the compensable injury, as described in the NCP at the time the IRE is performed. (slip opinion p 9).
The reform goals of the 1996 amendments are not advanced by allowing invalidation of an otherwise valid IRE, just because one can subsequently establish that work-related injuries exist.
"Employee's position would not improve the efficiency of the WC system...". slip opinion p 12.
Employee's position would effectively strip the Employer of the one opportunity to obtain a self-executing change in employee disability status [during the 60 day window after 104 weeks of TTD] by adding injuries to the NCP at a time after the IRE is performed.
A tactic to delay the review of the description of work injury, as a litigation strategy, does not serve the purpose of the 1996 amendments.
"... our conclusion encourages claimants to be proactive as the end of the 104 week period is approaching and determine whether any work related injuries should be added to the NCP, so they are considered, if or when an IRE is requested and performed". slip opinion p 13.
PRACTICE POINTERS:
1. It would appear the Employers and Insurers should more vigorously argue the Legislative History and Intent of the 1996 Amendments. In the reasoning of this opinion, the Court references:
and the impact of the changing Injury Description.
An Employer may change the workers' compensation benefit status of an injured Employee from an unlimited "total disability" status to a "partial disability" status, limited to a duration of 500 weeks. This remedy is accomplished via the request for an Impairment Rating Evaluation (IRE) pursuant to Section 306(a.2) of the Pennsylvania Workers' Compensation Act.
After an Employee has received total disability benefits for a period of 104 weeks, the Employee must submit to an IRE, when requested by the Employer. The IRE remedy is automatic if the IRE request was made within 60 days of the 104th week and the impairment rating is less than 50% according to the AMA Guides. The Employer may request an IRE, at any point beyond the 60 day window, but this remedy is not automatic and requires the filing of a petition.
What is the character or nature of the work injury changes?
The 2009 Pennsylvania Supreme Court decision in Cinram Manufacturing v. WCAB (Hill) discussed 2 types of Review Petitions. The review/correction of the description of injury, is proper where there was a mistake in the injury description since the original compensation document.
The 2nd type of review is an amendment/expansion of the injury description, to address injury which subsequently arises as a consequence of the original injury.
We previously discussed the effect of the review of the description of the work injury upon the Employer Termination petition remedy. ( See: Harrison v. WCAB (Auto Truck Transport at October 10, 2013 Blog Post).
These filings seem to be a recurring theme... Employer files a Termination petition ... Employee files a Review to expand the injury beyond the scope of the Termination medical exam.
A recent appellate decision addressed the impact of a subsequent WCJ decision to grant a review/expansion of the work injury description upon the earlier successful Employer IRE.
See: Duffey v. WCAB (Trola-Dyne Inc.) a reported decision of a panel of the Commonwealth Court of Pennsylvania authored by Judge Cohn-Jubelirer on June 26, 2015.
Factual and Procedural Background
In March of 2009 Employee sustained bilateral hand injuries as a result of handling electrical wires while repairing a machine. Employer voluntarily accepted responsibility for this injury via Notice of Compensation Payable (LIBC-495). This work injury was described as "bilateral hands, electrical burn, striping some wire".
In March of 2011 Employer requested an IRE when Employee received 104 weeks of total disability benefits. A Request for designation of a Physician to Perform an IRE (LIBC-766) was filed. The work injury was described as "bilateral hands - nerve and joint pain". An appointment was scheduled and accomplished.
Bruce E. Sicilia, MD conducted an IRE on June 2, 2011 and issued an Impairment Rating Determination Face Sheet (LIBC-767) with the accompanying report. Impairment was 6%.
On June 28, 2011, Employer issued a Notice of Change of Workers' Compensation Disability Status (LIBC-764) based upon Dr. Sicilia's report.
On July 14, 2011, Employee filed a Petition to Review Compensation Benefit Offset, alleging the IRE was invalid, without further explanation.
On December 16, 2011, Employee asserted the IRE was invalid as the description of injury was incomplete.
Employee Review Petition - Medical Evidence
- Debra A. Bell, MD, the Employee family physician, diagnosed an "adjustment disorder with depressed mood" on August 18, 2010.
- Scott M. Cherry, MD, a board-certified specialist in neurology and internal medicine (together with Dr. Bell) diagnosed post-traumatic stress disorder (PTSD).
- Employer presented the medical expert deposition testimony of Dr. Sicilia regarding his IRE exam findings and the 6% impairment rating for Employee.
- Timothy J. Michals, MD, a board-certified psychiatrist, forensic psychiatrist and neurologist, acknowledged the diagnosis of adjustment disorder, but opined Employee fully recovered. He disagreed with the PTSD diagnosis.
WCJ Review Petition Decision
WCJ accepted Employee testimony and medical expert evidence in granting Employee Review Petition.
WCJ added the diagnoses of adjustment disorder with depressed mood and PTSD to the work injury description.
WCJ concluded IRE was invalid as it did not address these additional work-related injuries. Employee could not modify Employee disability status from TTD to PPD.
WCAB reversed WCJ Decision
IRE was valid as Employee never sought to amend the NCP description of work injury until December 16, 2011 petition (amendment). This was after the June 2, 2011 IRE Determination.
Dr. Sicilia determined Employee was at MMI, he properly performed an IRE based upon the accepted injuries and the 6% impairment was not refuted.
Commonwealth Court Affirmed WCAB
Section 306(a.2) governs the manner in which an employer may obtain a change in an employee's disability status based upon an IRE, as well as how an employee may challenge an IRE.
An employee has the right to immediately challenge the IRE and/or appeal the reduction of his/her disability status before the reduction becomes effective, during the post-IRE 60 day notice period. citing: Johnson v. WCAB (Sealy Components Group) and Barrett v. WCAB (Sunoco Inc.).
After the 60 day notice of modification period ends, the employee may challenge the IRE change of disability status, by attempting to Reinstate total disability status, via evidence that a subsequent IRE establishes an impairment rating of 50% or greater. See: Wingrove v. WCAB (Allegheny Energy).
Here, Employee was diagnosed with adjustment order with depressed mood in August 2010. Section 413(a) allows a petition for review and modification of a compensation agreement at any time. He did not seek to review and amend the description of injury until after the IRE.
Employer argued, as a practical matter, the IRE physician can only assess impairment for injuries that are accepted as work-related.
Employee argued that the prior decision at Harrison v. WCAB (Auto Truck Transport Corp) acknowledged instances where the WCJ may review and amend the description of injury in the course of IRE petition proceedings.
Employer argued acceptance of Employee's arguments would allow one to challenge a past IRE based upon injuries that were not yet determined to be work-related!
Commonwealth Court Reasoning
The purpose of an IRE is to determine the degree of impairment due to the compensable injury. The term "compensable injury" is used throughout this section . See statutory language at 306(a)(2); 77 PS 511.2(1).
The Harrison decision states that the NCP establishes the description of the work injury.
Prior decisions note, it is the claimant's physical condition at the time of IRE that governs the validity of the IRE. Westmoreland Regional Hospital v. WCAB (Pickford).
Wingrove v. WCAB (Allegheny Energy) [relied upon by Employee] discussed the litigation of Review Petitions of the work-related injury description in 2009, about 4 years after the IRE. The WCJ granted one Review Petition, and amended the description of the work injury However, this expansion of the work injury did not negate the validity of the 2005 IRE. After 60 days, IRE became fixed and beyond challenge ... in the absence of an IRE demonstrating 50% or greater impairment.
The focus in determining the validity of an IRE is the state of the claimant and the compensable injury, as described in the NCP at the time the IRE is performed. (slip opinion p 9).
The reform goals of the 1996 amendments are not advanced by allowing invalidation of an otherwise valid IRE, just because one can subsequently establish that work-related injuries exist.
"Employee's position would not improve the efficiency of the WC system...". slip opinion p 12.
Employee's position would effectively strip the Employer of the one opportunity to obtain a self-executing change in employee disability status [during the 60 day window after 104 weeks of TTD] by adding injuries to the NCP at a time after the IRE is performed.
A tactic to delay the review of the description of work injury, as a litigation strategy, does not serve the purpose of the 1996 amendments.
"... our conclusion encourages claimants to be proactive as the end of the 104 week period is approaching and determine whether any work related injuries should be added to the NCP, so they are considered, if or when an IRE is requested and performed". slip opinion p 13.
PRACTICE POINTERS:
1. It would appear the Employers and Insurers should more vigorously argue the Legislative History and Intent of the 1996 Amendments. In the reasoning of this opinion, the Court references:
- the purpose of the IRE remedy,
- the reform effort of the 1996 amendments "to reduce rising Workers'Compensation costs and restore efficiency to the Workers' Compensation system"
- employee position would not improve the efficiency of the WC system,
- employee position would not reduce costs of the WC system,
- employer has only one opportunity to obtain the self-executing version of an IRE,
- delay strategies should not be encouraged.
2. It seems like a "fairness" argument underlies this reasoning.
3. IMHO the IRE remedy remains the MOST effective tool to reduce future worker compensation indemnity wage loss benefit liability.
4. An IRE should be scheduled in every case (with a few remote exceptions).
5. As we have witnessed in past appellate challenges to successful IRE determinations:
- be certain claimant is at MMI;
- be certain the description of the accepted work-related injury is clear, as the NCP may be implicitly amended by a WCJ decision ... don't just read the NCP;
- do not file a premature IRE request.
Friday, July 10, 2015
Proper Calculation of Interest Payable in the PA Work Comp Award
Interest is due on all unpaid workers compensation indemnity wage loss benefits. Section 406.1 (a) of the Pennsylvania Workers Compensation Act states that "interest shall accrue on all due and unpaid compensation at the rate of ten (10) percentum per annum".
It seems that every few years a question arises as to how this interest payment is to be calculated.
Is it a "simple interest" calculation?
Is it a "compound interest" calculation?
Section 406.1(a) is silent on this point.
As we celebrate the 100th anniversary of the enactment of the Pennsylvania Workers' Compensation Act ... one might ask ...
Why is there still a question regarding such a simple (no pun intended) aspect of workers compensation law?
The "mature" members of the workers' compensation community will recall that in the past, the Bureau of Workers' Compensation would provide one with an interest calculation.
Initially this request was accomplished via a telephone call with a real person.
Later this was accomplished via visit to the Bureau website and use of the "interest calculator".
A rather simple process.
At some point it time this interest calculator was removed. Urban legend has it, that claimant attorneys complained (of course!). It was argued that the Bureau should not provide an interest calculation, as an "official" calculation, where the Act was silent on a calculation method.
The Bureau explanation was somewhat of a non-sequitur, stating the parties " should select their own interest calculation method based upon the facts of each individual workers' compensation case".
I don't find that very helpful, do you?
NOW, we have another appellate case law precedent that determines the interest due on unpaid workers' compensation benefits is SIMPLE interest, it is not COMPOUND interest.
See the decision of a panel of the Commonwealth Court of Pennsylvania at: Tobler v WCAB (Verizon Pennsylvania, Inc.), No. 2211 C.D. 2014 authored by Judge Simpson on July 9, 2015.
Factual and Procedural Background
The Employee Penalty petition litigation was limited to the issue of the proper calculation and payment of statutory interest on reinstated indemnity wage loss benefits.
In prior litigation, the Employee established entitlement to reinstatement of total disability benefits. Initially, the WCJ decision and order directed reinstatement of indemnity wage loss benefits as of March 2, 2005. After appellate review this reinstatement date was revised to November 21, 2002.
[prior unreported decision is at: same case caption, filed March 30, 2011.]
In May 2012, Employer issued payment of the reinstated total disability benefits, commencing as of the November 21, 2002 date. The payment of $117,278.74, represented compensation due plus interest.
Employee filed a penalty petition, asserting entitlement to the payment of interest, calculated by a compound interest method, which would result in a total payment of $139,929.39.
WCJ & WCAB & Commonwealth Court Decisions
The penalty petition was denied by the WCJ.
There was no penalty, as simple interest was payable to Employee, not compound interest.
The Commonwealth Court referenced the authorities cited in the WCJ and WCAB opinions.
WCJ Rago cited several early decisions of the Pennsylvania Superior Court.
The 1936 Superior Court decision at Kessler v. North Side Packing Co. explained that prior to a 1927 amendment, the Pennsylvania Workers' Compensation Act did not specifically provide for interest payment on past due compensation. The 1936 Superior Court decision at Petrulo v. O'Herron Co., determined that the Commonwealth general interest statute applied, even to work comp cases before the 1927 amendment, such that claimant's were entitled to payment of simple interest at six (6) percent. [In 1972 the interest rate was raised to ten (10) percent].
Employee argued to the WCAB that interest is consider additional compensation to the worker.
Interest is not to be considered a penalty against the employer.
Employee reasoned:
Section 406.1(a) requires that interest "accrue" on all due and unpaid compensation.
Interest gained is unpaid compensation.
Therefore that compensation should also accrue interest.
Employee argued he should have been awarded compound interest from the date each weekly payment became due.
This is the "interest upon interest" argument.
WCAB reasoning was that interest has been treated different from compensation in the Act.
Section 406.1(a) does not specify "simple" or compound" interest.
The Pennsylvania Supreme Court has held that compound interest is not favored in the law.
Also, the General Interest Act, section 202 reference to the "legal rate of interest" has been construed to refer mean simple interest. Citing Carroll v. City of Philadelphia Board of Pensions & Retirement Municipal Pension Fund, 735 A.2d 141 (Pa. Cmwlth. 1999).
The Commonwealth Court reasoning rejected the arguments of Employee and the amicus curiae brief of the Pennsylvania Association for Justice.
Employee argued interest gained on unpaid indemnity wage loss benefits must be considered unpaid compensation and therefore it should accrue interest. Employee argued that 406.1 is designed to put the parties in the position they would have occupied had benefits been paid when they were due. This requires the payment of benefits with compound interest. Base upon economic realities, compound interest is necessary to fully compensate injured workers. Citing the 1998 WCAB decision at Bernotas v PECO Energy Co.
Commonwealth Court reviewed the 1936 cases and statutory language at Section 406.1(a).
The work comp statute does not specify whether interest is simple of compound.
Significantly, the use of compound interest was determined to be permitted only where the parties provide for it in an agreement or a statute expressly authorizes it. In Powell v. County Retirement Board, 246 A.2d 110 (Pa. 1968), the Pennsylvania Supreme Court directed the trial court to use simple rather than compound interest in calculating the amount of an award.
The Pennsylvania Supreme Court in PSEA v. Appalachia Intermediate Unit 08, 476 A.2d 360 (Pa. 1984) determined that a labor arbitrator lacked the authority to award compound interest where there was no contractual or statutory authority for compound interest. [See also: Ralph Myers Contracting Corp. v. Department of Transportation, 436 A.2d 612 (Pa. 1981) for the proposition: absent any contractual or statutory authority providing for compound interest, a contractor was entitled to receive simple interest on the unpaid balance of an award.].
The "legal rate of interest" cases were reviewed and cited for the proposition that simple interest is soundly favored over compound interest. "...the legal rate of interest is simple and may not be compounded". Carroll, 735 A.2d at 146-47.
Consequently, in light of the longstanding judicial policy disfavoring the awarding of compound interest absent explicit statutory authority providing for it, we must conclude there is no proper authority for an award of compound interest under Section 406.1 of the Act".
see: slip opinion at page 14.
PRACTICE POINTERS:
1. Confirm with all of your workers' compensation insurance claims representatives that statutory interest calculations on unpaid compensation must be made with a simple interest calculation.
2. The request for payment of compound interest is a recurring request in my litigated cases.
NOW, we have a recent clear opinion that specifically considers and rejects claimant's arguments ... including the ubiquitous statement "the Act must be liberally construed to effectuate its humanitarian objectives".
3. IMO the claimant request for payment of compound interest renders the Employer litigation to be "reasonable", so as to contest a valid legal issue.
4. IMO we will continue to see the claimant demand for the payment of compound interest, in a continued concerted effort to effectively revise this section of the Act, in the absence of amendment.
It seems that every few years a question arises as to how this interest payment is to be calculated.
Is it a "simple interest" calculation?
Is it a "compound interest" calculation?
Section 406.1(a) is silent on this point.
As we celebrate the 100th anniversary of the enactment of the Pennsylvania Workers' Compensation Act ... one might ask ...
Why is there still a question regarding such a simple (no pun intended) aspect of workers compensation law?
The "mature" members of the workers' compensation community will recall that in the past, the Bureau of Workers' Compensation would provide one with an interest calculation.
Initially this request was accomplished via a telephone call with a real person.
Later this was accomplished via visit to the Bureau website and use of the "interest calculator".
A rather simple process.
At some point it time this interest calculator was removed. Urban legend has it, that claimant attorneys complained (of course!). It was argued that the Bureau should not provide an interest calculation, as an "official" calculation, where the Act was silent on a calculation method.
The Bureau explanation was somewhat of a non-sequitur, stating the parties " should select their own interest calculation method based upon the facts of each individual workers' compensation case".
I don't find that very helpful, do you?
NOW, we have another appellate case law precedent that determines the interest due on unpaid workers' compensation benefits is SIMPLE interest, it is not COMPOUND interest.
See the decision of a panel of the Commonwealth Court of Pennsylvania at: Tobler v WCAB (Verizon Pennsylvania, Inc.), No. 2211 C.D. 2014 authored by Judge Simpson on July 9, 2015.
Factual and Procedural Background
The Employee Penalty petition litigation was limited to the issue of the proper calculation and payment of statutory interest on reinstated indemnity wage loss benefits.
In prior litigation, the Employee established entitlement to reinstatement of total disability benefits. Initially, the WCJ decision and order directed reinstatement of indemnity wage loss benefits as of March 2, 2005. After appellate review this reinstatement date was revised to November 21, 2002.
[prior unreported decision is at: same case caption, filed March 30, 2011.]
In May 2012, Employer issued payment of the reinstated total disability benefits, commencing as of the November 21, 2002 date. The payment of $117,278.74, represented compensation due plus interest.
Employee filed a penalty petition, asserting entitlement to the payment of interest, calculated by a compound interest method, which would result in a total payment of $139,929.39.
WCJ & WCAB & Commonwealth Court Decisions
The penalty petition was denied by the WCJ.
There was no penalty, as simple interest was payable to Employee, not compound interest.
The Commonwealth Court referenced the authorities cited in the WCJ and WCAB opinions.
WCJ Rago cited several early decisions of the Pennsylvania Superior Court.
The 1936 Superior Court decision at Kessler v. North Side Packing Co. explained that prior to a 1927 amendment, the Pennsylvania Workers' Compensation Act did not specifically provide for interest payment on past due compensation. The 1936 Superior Court decision at Petrulo v. O'Herron Co., determined that the Commonwealth general interest statute applied, even to work comp cases before the 1927 amendment, such that claimant's were entitled to payment of simple interest at six (6) percent. [In 1972 the interest rate was raised to ten (10) percent].
Employee argued to the WCAB that interest is consider additional compensation to the worker.
Interest is not to be considered a penalty against the employer.
Employee reasoned:
Section 406.1(a) requires that interest "accrue" on all due and unpaid compensation.
Interest gained is unpaid compensation.
Therefore that compensation should also accrue interest.
Employee argued he should have been awarded compound interest from the date each weekly payment became due.
This is the "interest upon interest" argument.
WCAB reasoning was that interest has been treated different from compensation in the Act.
Section 406.1(a) does not specify "simple" or compound" interest.
The Pennsylvania Supreme Court has held that compound interest is not favored in the law.
Also, the General Interest Act, section 202 reference to the "legal rate of interest" has been construed to refer mean simple interest. Citing Carroll v. City of Philadelphia Board of Pensions & Retirement Municipal Pension Fund, 735 A.2d 141 (Pa. Cmwlth. 1999).
The Commonwealth Court reasoning rejected the arguments of Employee and the amicus curiae brief of the Pennsylvania Association for Justice.
Employee argued interest gained on unpaid indemnity wage loss benefits must be considered unpaid compensation and therefore it should accrue interest. Employee argued that 406.1 is designed to put the parties in the position they would have occupied had benefits been paid when they were due. This requires the payment of benefits with compound interest. Base upon economic realities, compound interest is necessary to fully compensate injured workers. Citing the 1998 WCAB decision at Bernotas v PECO Energy Co.
Commonwealth Court reviewed the 1936 cases and statutory language at Section 406.1(a).
The work comp statute does not specify whether interest is simple of compound.
Significantly, the use of compound interest was determined to be permitted only where the parties provide for it in an agreement or a statute expressly authorizes it. In Powell v. County Retirement Board, 246 A.2d 110 (Pa. 1968), the Pennsylvania Supreme Court directed the trial court to use simple rather than compound interest in calculating the amount of an award.
The Pennsylvania Supreme Court in PSEA v. Appalachia Intermediate Unit 08, 476 A.2d 360 (Pa. 1984) determined that a labor arbitrator lacked the authority to award compound interest where there was no contractual or statutory authority for compound interest. [See also: Ralph Myers Contracting Corp. v. Department of Transportation, 436 A.2d 612 (Pa. 1981) for the proposition: absent any contractual or statutory authority providing for compound interest, a contractor was entitled to receive simple interest on the unpaid balance of an award.].
The "legal rate of interest" cases were reviewed and cited for the proposition that simple interest is soundly favored over compound interest. "...the legal rate of interest is simple and may not be compounded". Carroll, 735 A.2d at 146-47.
Consequently, in light of the longstanding judicial policy disfavoring the awarding of compound interest absent explicit statutory authority providing for it, we must conclude there is no proper authority for an award of compound interest under Section 406.1 of the Act".
see: slip opinion at page 14.
PRACTICE POINTERS:
1. Confirm with all of your workers' compensation insurance claims representatives that statutory interest calculations on unpaid compensation must be made with a simple interest calculation.
2. The request for payment of compound interest is a recurring request in my litigated cases.
NOW, we have a recent clear opinion that specifically considers and rejects claimant's arguments ... including the ubiquitous statement "the Act must be liberally construed to effectuate its humanitarian objectives".
3. IMO the claimant request for payment of compound interest renders the Employer litigation to be "reasonable", so as to contest a valid legal issue.
4. IMO we will continue to see the claimant demand for the payment of compound interest, in a continued concerted effort to effectively revise this section of the Act, in the absence of amendment.
Thursday, June 11, 2015
PA Supreme Court - "Best Practice" for NARTW form
The Proper use of the Notice of Ability to Return to Work (NARTW) form (LIBC- 757) and the Employer Modification Remedy via Vocational Evidence.
The Act 57 Amendments to the Pennsylvania Workers' Compensation Act in 1996 included a new remedy, whereby an employer could establish a post-injury earning capacity of an injured employee, via Vocational Expert evidence of a Labor Market Survey and an Earning Power Assessment.
This new remedy supplements the existing Employer Suspension/Modification remedy based upon an actual job offer to the injured worker.
This Earning Power Assessment remedy was intended as an improvement of the "job-placement-job-offer" type of evidence produced in accord with the PA Supreme Court decision at Kachinski v. WCAB (Vepco Construction Co.) 532 A.2d 374. (Pa. 1987). The Kachinski decision resulted in hundreds of decisions analyzing the details of job offers and employee responses for "good faith" and "bad faith" presentations.
The Earning Power Assessment standard did not include the requirement that a job opportunity was "offered" to employee, rather the standard was that a job must be "open and available to the employee.
[NOTE: the PA Supreme Court decision at Phoenixville Hospital v. WCAB (Shoap) 81 A.3d 830 (Pa. 2013) made a substantial revision of this standard. This decision held an employee must receive notice of the job opportunities which form the basis for the earning power assessment and have a reasonable opportunity to apply! Otherwise that proffered job is not "available", so as to modify benefits]
A pre-condition of the Earning Power Assessment remedy was the requirement that "prompt written notice" is provided to the employee, that he/she was able to return to work in any capacity. Section 306(b)(3) of the amended statute stated:
" if the insurer receives medical evidence that the claimant is able to return to work in any capacity, then the insurer must provide prompt written notice, on a form prescribed by the department, to the claimant, which states the following:
(i) the nature of the employee's physical condition or change of condition.
(ii) that the employee has an obligation to look for available employment.
(iii) that proof of available employment opportunities may jeopardize the employee's right to receipt of ongoing benefits.
(iv) that the employee has the right to consult with an attorney in order to obtain evidence to challenge the insurer's contentions."
Section 306(b)(3), 77 P.S. 512(3).
The form prescribed by the Department is the LIBC-757, Notice of Ability to Return to Work. (NARTW).
* * * * * * * * * * * *
When must the Employer/Insurer issue this LIBC form to the Employee?
Under what circumstances?
School District of Philadelphia v WCAB (Hilton), No. 34 EAP 2014, a decision of the Supreme Court of Pennsylvania authored by Justice Baer on May 26, 2015 addressed several scenarios where this LIBC form is required and resolved the dispute as to when this form is NOT required.
Factual and Procedural Background
Employee was a school teacher at Pastorius Elementary from November 2008 to March 2009. These 2nd graders engaged in "significant misbehavior, including using profanity and engaging in physical violence". Employee suffered dizziness, tension headaches, heart palpitations and nausea.
Her PCP (Dr. Wilfreta Baugh) informed Employer that employee would not be returning to work due to the overly stressful environment. A few weeks later, Employer medical examiner (Dr. James Lamprakos) concluded she would return to work. Employee returned for just 4 days.
Importantly, the Employer issued a Notice of Workers' Compensation Denial, LIBC-496 form on May 29, 2009.
In June 2009 Employer assigned Employee to teach in the fall semester at a different school, Jaye Cooke School. Employee toured the school and found it to be the opposite of Pastorius, it was very quiet and instructors were able to teach effectively.
At the time of this job offer, Employee had not filed a claim petition.
Employee did not return to work at Jaye Cooke in September 2009.
October 2009, Employee filed a Claim Petition, alleging a disability stress related work injury.
Claim Petition Litigation
Employee testified she was 70 years old. She recounted her stress-related conditions. She acknowledged the Employer assigned her to Jay Cooke in June 2009 and her observations of that quiet school environment. She believed she could not return to work as she continued to seek medical care.
Employee medical witness testified the stressful work environment exacerbated Employee's pre-existing medical conditions. However she testified Employee was capable of teaching in a less stressful environment.
Employer medical witness testified Employee was able to work, without restriction. He did not related her symptom to the work environment.
WCJ Decision
WCJ found Employee suffered a work-related injury in March 2009, in the nature of exacerbated lupus and a vocal cord injury. This injury totally disabled her from working in the stressful assignment.
However, Employee medical evidence did not establish a general disability from all teaching.
WCJ credited Employee's own testimony that the Jaye Cooke School position was made available to her and she found this to be a quiet school with excellent teaching.
On this basis, her benefits were suspended as of September 2009 !
WCAB affirmed the award BUT reversed as to Suspension of Benefits.
Suspension was reversed as Employer did not provide Employee with a NARTW form.
The Appeal Board believed the employer's obligation to issue a NARTW form was mandatory.
Commonwealth Court affirmed award BUT reinstated WCJ Suspension of benefits.
Court held NARTW form was not required. Employee medical evidence only established disability until September 30, 2009. As the Jaye Cooke job remained available, that fact supported a suspension of benefits.
Pennsylvania Supreme Court Decision
The Supreme Court agreed with Commonwealth Court.
Under these circumstances - where the Claimant was not receiving work comp benefits, the Employer was not required to issue the NARTW form.
Employer's offer of alternative employment was made before the injured employee filed a claim petition thus, at the time of the job offer, she had not proven any entitlement to workers' compensation benefits. Accordingly, Employer had no duty to provide the NARTW form pursuant to Section 306(b)(3).
Reasoning:
The plain language of Section 306(b)(3) reflects the focus is upon the Employer receipt of medical evidence of a change in the nature of Employee's physical condition and the Employer's duty to apprise Employee of that evidence.
This language supports the determination that Section 306(b)(3) presumes that:
The legislative history of Section 306(b)(3) reflects the LIBC notice form was intended in the context of the employer's attempt to suspend (or modify) benefits payable after a compensable injury, it was not meant to impose a requirement upon employers, in all circumstances where alternative employment is offered.
This fact distinguishes this case from situations cited by Employee which suggest the LIBC notice is required in a "Claim Setting" ie, during litigation of the initial claim petition.
The Supreme Court reviewed the Hoover and Allegis Group cases cited by Employee for the obligation to issue the NARTW form during claim petition litigation.
In Allegis Group that employer issued a Notice of Temporary Compensation Payable NTCP for an alleged work injury. The Employer made a job offer before the NTCP was revoked.This fact distinguishes this case from the present matter. Allegis Group was precluded from prevailing in a suspension petition based upon that job offer, as the NARTW notice was required.
In Hoover that employer denied liability for the alleged work injury. A light duty position was offered during the litigation of a claim petition, but before an adjudication of liability. The Commonwealth Court denied modification of benefits as employer did not issue the NARTW form.
The Supreme Court did not distinguish the Hoover decision, rather the Court declined to adopt the Hoover's court application of Section 306(b)(3), where the employer has not accepted liability for a claim and employee has not yet proven his/her entitlement to work comp benefits. (slip opinion p 21).
PRACTICE POINTERS:
1. The NARTW form is required where liability for a work injury is admitted via Compensation Agreement or adjudicated by decision.
This includes the temporary acceptance of liability via a Notice of Temporary Compensation Payable LIBC-501.
2. The NATRW form is not required during Claim Petition litigation (this is a new twist).
3. The NARTW form should be issued when each medical report is received, which reflects a change in the physical restrictions or capabilities of the injured worker.
4. At least one decision states that subsequent NARTW forms are not required when there are slight modifications of the workers restrictions. Ashman v. WCAB (Help Mates Inc.) 989 A.2d 57 (Pa. Cmwlth. 2010).
5. My recommendation is to issue a NARTW form when there is a change:
(a) in the classification of work release (sedentary, light, medium, heavy)
(b) in a specific activity which is directly relevant to the job offer.
The Act 57 Amendments to the Pennsylvania Workers' Compensation Act in 1996 included a new remedy, whereby an employer could establish a post-injury earning capacity of an injured employee, via Vocational Expert evidence of a Labor Market Survey and an Earning Power Assessment.
This new remedy supplements the existing Employer Suspension/Modification remedy based upon an actual job offer to the injured worker.
This Earning Power Assessment remedy was intended as an improvement of the "job-placement-job-offer" type of evidence produced in accord with the PA Supreme Court decision at Kachinski v. WCAB (Vepco Construction Co.) 532 A.2d 374. (Pa. 1987). The Kachinski decision resulted in hundreds of decisions analyzing the details of job offers and employee responses for "good faith" and "bad faith" presentations.
The Earning Power Assessment standard did not include the requirement that a job opportunity was "offered" to employee, rather the standard was that a job must be "open and available to the employee.
[NOTE: the PA Supreme Court decision at Phoenixville Hospital v. WCAB (Shoap) 81 A.3d 830 (Pa. 2013) made a substantial revision of this standard. This decision held an employee must receive notice of the job opportunities which form the basis for the earning power assessment and have a reasonable opportunity to apply! Otherwise that proffered job is not "available", so as to modify benefits]
A pre-condition of the Earning Power Assessment remedy was the requirement that "prompt written notice" is provided to the employee, that he/she was able to return to work in any capacity. Section 306(b)(3) of the amended statute stated:
" if the insurer receives medical evidence that the claimant is able to return to work in any capacity, then the insurer must provide prompt written notice, on a form prescribed by the department, to the claimant, which states the following:
(i) the nature of the employee's physical condition or change of condition.
(ii) that the employee has an obligation to look for available employment.
(iii) that proof of available employment opportunities may jeopardize the employee's right to receipt of ongoing benefits.
(iv) that the employee has the right to consult with an attorney in order to obtain evidence to challenge the insurer's contentions."
Section 306(b)(3), 77 P.S. 512(3).
The form prescribed by the Department is the LIBC-757, Notice of Ability to Return to Work. (NARTW).
* * * * * * * * * * * *
When must the Employer/Insurer issue this LIBC form to the Employee?
Under what circumstances?
School District of Philadelphia v WCAB (Hilton), No. 34 EAP 2014, a decision of the Supreme Court of Pennsylvania authored by Justice Baer on May 26, 2015 addressed several scenarios where this LIBC form is required and resolved the dispute as to when this form is NOT required.
Factual and Procedural Background
Employee was a school teacher at Pastorius Elementary from November 2008 to March 2009. These 2nd graders engaged in "significant misbehavior, including using profanity and engaging in physical violence". Employee suffered dizziness, tension headaches, heart palpitations and nausea.
Her PCP (Dr. Wilfreta Baugh) informed Employer that employee would not be returning to work due to the overly stressful environment. A few weeks later, Employer medical examiner (Dr. James Lamprakos) concluded she would return to work. Employee returned for just 4 days.
Importantly, the Employer issued a Notice of Workers' Compensation Denial, LIBC-496 form on May 29, 2009.
In June 2009 Employer assigned Employee to teach in the fall semester at a different school, Jaye Cooke School. Employee toured the school and found it to be the opposite of Pastorius, it was very quiet and instructors were able to teach effectively.
At the time of this job offer, Employee had not filed a claim petition.
Employee did not return to work at Jaye Cooke in September 2009.
October 2009, Employee filed a Claim Petition, alleging a disability stress related work injury.
Claim Petition Litigation
Employee testified she was 70 years old. She recounted her stress-related conditions. She acknowledged the Employer assigned her to Jay Cooke in June 2009 and her observations of that quiet school environment. She believed she could not return to work as she continued to seek medical care.
Employee medical witness testified the stressful work environment exacerbated Employee's pre-existing medical conditions. However she testified Employee was capable of teaching in a less stressful environment.
Employer medical witness testified Employee was able to work, without restriction. He did not related her symptom to the work environment.
WCJ Decision
WCJ found Employee suffered a work-related injury in March 2009, in the nature of exacerbated lupus and a vocal cord injury. This injury totally disabled her from working in the stressful assignment.
However, Employee medical evidence did not establish a general disability from all teaching.
WCJ credited Employee's own testimony that the Jaye Cooke School position was made available to her and she found this to be a quiet school with excellent teaching.
On this basis, her benefits were suspended as of September 2009 !
WCAB affirmed the award BUT reversed as to Suspension of Benefits.
Suspension was reversed as Employer did not provide Employee with a NARTW form.
The Appeal Board believed the employer's obligation to issue a NARTW form was mandatory.
Commonwealth Court affirmed award BUT reinstated WCJ Suspension of benefits.
Court held NARTW form was not required. Employee medical evidence only established disability until September 30, 2009. As the Jaye Cooke job remained available, that fact supported a suspension of benefits.
Pennsylvania Supreme Court Decision
The Supreme Court agreed with Commonwealth Court.
Under these circumstances - where the Claimant was not receiving work comp benefits, the Employer was not required to issue the NARTW form.
Employer's offer of alternative employment was made before the injured employee filed a claim petition thus, at the time of the job offer, she had not proven any entitlement to workers' compensation benefits. Accordingly, Employer had no duty to provide the NARTW form pursuant to Section 306(b)(3).
Reasoning:
The plain language of Section 306(b)(3) reflects the focus is upon the Employer receipt of medical evidence of a change in the nature of Employee's physical condition and the Employer's duty to apprise Employee of that evidence.
This language supports the determination that Section 306(b)(3) presumes that:
- the work-related injury has caused a disability,
- the employee is receiving ongoing benefits for that compensable injury,
- the employer seeks to use medical evidence to reduce benefits payable.
The legislative history of Section 306(b)(3) reflects the LIBC notice form was intended in the context of the employer's attempt to suspend (or modify) benefits payable after a compensable injury, it was not meant to impose a requirement upon employers, in all circumstances where alternative employment is offered.
This fact distinguishes this case from situations cited by Employee which suggest the LIBC notice is required in a "Claim Setting" ie, during litigation of the initial claim petition.
The Supreme Court reviewed the Hoover and Allegis Group cases cited by Employee for the obligation to issue the NARTW form during claim petition litigation.
In Allegis Group that employer issued a Notice of Temporary Compensation Payable NTCP for an alleged work injury. The Employer made a job offer before the NTCP was revoked.This fact distinguishes this case from the present matter. Allegis Group was precluded from prevailing in a suspension petition based upon that job offer, as the NARTW notice was required.
In Hoover that employer denied liability for the alleged work injury. A light duty position was offered during the litigation of a claim petition, but before an adjudication of liability. The Commonwealth Court denied modification of benefits as employer did not issue the NARTW form.
The Supreme Court did not distinguish the Hoover decision, rather the Court declined to adopt the Hoover's court application of Section 306(b)(3), where the employer has not accepted liability for a claim and employee has not yet proven his/her entitlement to work comp benefits. (slip opinion p 21).
PRACTICE POINTERS:
1. The NARTW form is required where liability for a work injury is admitted via Compensation Agreement or adjudicated by decision.
This includes the temporary acceptance of liability via a Notice of Temporary Compensation Payable LIBC-501.
2. The NATRW form is not required during Claim Petition litigation (this is a new twist).
3. The NARTW form should be issued when each medical report is received, which reflects a change in the physical restrictions or capabilities of the injured worker.
4. At least one decision states that subsequent NARTW forms are not required when there are slight modifications of the workers restrictions. Ashman v. WCAB (Help Mates Inc.) 989 A.2d 57 (Pa. Cmwlth. 2010).
5. My recommendation is to issue a NARTW form when there is a change:
(a) in the classification of work release (sedentary, light, medium, heavy)
(b) in a specific activity which is directly relevant to the job offer.
Monday, May 18, 2015
Average Weekly Wage Calculation can alter the Employer's Remedies
The Importance of the AWW Calculation in Workers' Compensation Cases.
There are several basic elements in a workers' compensation case.
The Average Weekly Wage (AWW) is a significant element in every case.
The calculation of the AWW determines the Employee benefit rate for Total Disability, Partial Disability and Specific Loss.
This AWW figure remains significant throughout the disability claim.
Calculation of the AWW is addressed at Section 309 of the Act, 77 P.S. 582.
There are 7 subsections, each describing different alternatives.
The Bureau of Workers' Compensation LIBC-494C form reflects 8 difference calculation methods.
Since the enactment of the PA Workers' Compensation Act in 1915 (that's one hundred years ago), one might presume that all of the AWW issues have been addressed and settled ... not quite.
AWW issues continue to vex Employees and Employers alike.
In litigated cases, we see a gravitation to the principles of "economic reality" and my personal favorite ..advancing the humanitarian purposes of the Act.
We can easily handle the AWW calculation for salaried employees and hourly employees...
but those other types of compensation... they still provide fodder for our disputes.
Anderson v WCAB (F.O. Transport and UEGF), No. 181 CD 2104, is a published decision of a panel of the Commonwealth Court of Pennsylvania, authored by Judge Leadbetter on March 10, 2015. This decision addresses issues related to AWW calculation and demonstrates the significant of the AWW calculation, through out the life of the case.
Factual and Procedural Background
Employee filed a claim petition for an ankle and foot injury sustained on December 27, 2007, in his employment as a truck driver. Two claim petitions were filed, one against employer and one against the Uninsured Employer Guarantee Fund.
At the time of hire in November 2007 Employer told him he would be paid 30% of the Employer's charges for a load to be delivered.
It was estimated Employee would earn $1,100 to $1,200 per week.
Employee would receive an additional $100 for each run to pay "lumpers", a person paid to unload a truck.
Employee' 1st run was December 20, 2007. Employee unloaded the truck himself and kept the $100 lumper fee.
Employee's 2nd run was December 21, 2007. He paid the lumpers the $100 fee.
Employee's 3rd run was December 27, 2007. The run was from Philadelphia to Springfield, on to Hatfield Massachusetts. At Hatfield Employee unloaded his truck, as he alleged he did not have money to pay the lumpers. He injured his right leg while unloading.
Employer testified that, at the time of hire, he told Employee he could have 5-6 runs per week and earn about $900 to $1,000.
Employer purchased an insurance policy for his drivers, which paid Employee disability benefits.(credit?)
WCJ Decision
Employee was "an employee", not an independent contractor.
Employee Medical witness Pekkar Mooar, MD was credible, that Employee sustained a bimalleolar fracture of the ankle and was unable to return to work as a truck driver.
Employer medical expert, Paul Horenstein, MD was not found credible regarding his opinion claimant was able to return to work as a truck driver as of the January 21, 2009 IME.
The AWW of Employee was calculated by the WCJ, using an alternative method, payments of $270 x 3 runs equals $810, divided by 2 weeks of employment equals a $405.00 AWW.
Employee WCAB Appeal
WCAB affirmed WCJ calculation of AWW...
but remanded to determine if the "lumper fees" should be included in the Employer AWW.
WCAB remanded on issue of a credit to Employer for Employer funded disability benefits paid to Employee.
WCJ decision made Employer and UEGF "jointly liable" to pay work comp benefits to Employee. WCAB amended WCJ order to make Employer primarily responsible and Fund secondarily responsible.
***
During Appeal, Fund filed a Petition to Modify/Suspend Employee benefits as of January 13, 2011, alleging Employee had an earning power equal to, or greater than his AWW.
WCJ on Remand
Awarded Employer a credit for insurance policy payments to Employee.
Determined "lumper fees" should not be included in Employee's AWW.
WCJ on Fund's Modify/Suspend Petition
WCJ found Fund's medical expert Dr. Horenstein and vocational expert Christopher Terranova to be credible.
Dr. Horenstein released Employee to full-time medium duty work as the ankle fracture had healed with slightly decreased range of motion.
Christopher Terranova conducted a labor market survey, he located 10 open and available full-time positions within Employee's physical capabilities. The earning capacity ranged from $360 to $440.
Employee's past criminal record would not impact his ability to obtain employment.
WCJ found Employee's post-injury earning capacity was $440 per week. On this basis he suspended Employee wage loss benefits as of the January 13, 2011 labor market survey. (Suspension was based upon the $405 AWW figure).
WCAB affirmed the WCJ decision.
Employee Appeal - Round 2 - Commonwealth Court
1. AWW calculation.
Employee argued his AWW should be $810.
This was the total amount he earned before his work injury.
(... earned over the course of several weeks!)
Alternative Employee AWW argument.
AWW should be $900 to $1,200 based upon Employee testimony and/or testimony of Employer, as to the amount of his expected earnings.
Employee also argued the "lumper fees' should be included in his AWW figure.
Commonwealth Court reviewed the shortcomings of Section 309(d.2) of the Act, which addresses the situation where an individual has worked less than one period of 13 calendar weeks.
" the hourly wage rate multiplied by the number of hours the employee was expected to work per week under the terms of employment".
Here, this Employee did not have a fixed hourly rate. The number of hours expected per week could not be determined, as he was paid per trip.
"Where the Act does not address a method of calculating the AWW for a particular situation, the AWW is calculated using an alternative method which will advance the overall humanitarian purpose of the Act" . citing Hannaberry v. WCAB (Snyder) 834 A.2d 524, 533 (Pa. 2003).
The AWW should reasonably reflect the economic reality of a claimant's recent pre-injury earning experience, with some benefit of the doubt to be afforded to the claimant in the assessment. citing Triangle Building Center v WCAB (Linch) 746 A..2d 1108, 1112 (Pa. 2000).
As a controlling precedent the Commonwealth Court cited its earlier decision in Burkhart Refractory Installation v. WCAB (Christ), 896 A.2d 9 (Pa. Cmwlth. 2006.
In Burkhart, the worker did not have an expected number of work hours.He earned wages in only 12 weeks during his 16 week employment. Calculating this claimant's AWW according to Section 309(d.2) would not reflect the economic reality of his pre-injury earnings.
The WCAB calculated his AWW by excluding the 4 weeks without earnings and divided his gross wages by 12 weeks in which he actually earned wages.
The Court found this approach accurately captured the economic reality and advanced the humanitarian purpose of the Act.
Here, the WCJ calculation is inconsistent with Burkhart.
Employee earned no wages is his first week of "employment", as the Employer did not have work available to him. Inclusion of that week, would not reflect the economic reality.
Therefore the Court calculated the AWW of this Employee to be his earnings during his 2nd week of employment, or $810.
2. AWW inclusion/exclusion of lumper fees.
The Court would not disturb the credibility determination of the WCJ regarding the exclusion of the lumper fees from the AWW calculation. Employer testified that Employee was not supposed to unload trucks and keep the lumper fees. If he needed more money to pay lumpers, Employer would have provided it.
3. WCJ Suspension Order
The Court would not disturb the WCJ findings of fact, accepting Employer's medical expert and vocational expert as credible evidence of Employee's post-injury earning capacity.
The Employee argument that Employer medical evidence was equivocal on the issue of work-relationship of degenerative arthritis was rejected. This medical witness did not deny a causal relation of the ankle arthritis and work injury, rather he opined Employee was not fully recovered, but Employee could perform the positions in the labor market survey.
The Court would not disturb the WCJ credibility determination of the vocational expert testimony regarding the appropriateness of specific jobs or the impact of remote criminal convictions.
Suspension of benefits was reversed, based upon the "new" AWW figure.
The case was remanded for the WCJ to modify benefits based upon the evidence.
Practice Pointers:
1. Do not be reluctant to ask for advice regarding the correct calculation of the AWW figure.
You are not alone. This can be confusing. There can be legal arguments which seem conflicting. It behooves you to get it right the first time ... as this AWW figure will control the benefit payments through out the claim.
Yes, you may file a Petition for Review and "correct" any calculation error. BUT if it is a unilateral mistake, you may face an argument that you can not recover any difference in benefit amounts.
2. In my experience, certain employers may pay their employees from different accounts due to the different nature of the compensation, such as a salary account, a business expense account, a bonus account or a commissions account.
3. Tell the employer that you need figures and documents for all types of compensation paid to the injured employee, during the 52 weeks preceding the date of injury.
Get the annual W-2, 1099 or Year-to-date figures. Do the figures add up?
4. Do the Employee compensation records raise a question as to Employee vs Independent Contractor status?
5. Do the Employee compensation records address an issue of compensibility or "Scope" of employment? Was the Employee paid for travel time, or paid for attendance time?
6. At times, a careful review of the compensation records may answer questions ... or raise additional questions. Get the records and review.
There are several basic elements in a workers' compensation case.
The Average Weekly Wage (AWW) is a significant element in every case.
The calculation of the AWW determines the Employee benefit rate for Total Disability, Partial Disability and Specific Loss.
This AWW figure remains significant throughout the disability claim.
Calculation of the AWW is addressed at Section 309 of the Act, 77 P.S. 582.
There are 7 subsections, each describing different alternatives.
The Bureau of Workers' Compensation LIBC-494C form reflects 8 difference calculation methods.
Since the enactment of the PA Workers' Compensation Act in 1915 (that's one hundred years ago), one might presume that all of the AWW issues have been addressed and settled ... not quite.
AWW issues continue to vex Employees and Employers alike.
In litigated cases, we see a gravitation to the principles of "economic reality" and my personal favorite ..advancing the humanitarian purposes of the Act.
We can easily handle the AWW calculation for salaried employees and hourly employees...
but those other types of compensation... they still provide fodder for our disputes.
Anderson v WCAB (F.O. Transport and UEGF), No. 181 CD 2104, is a published decision of a panel of the Commonwealth Court of Pennsylvania, authored by Judge Leadbetter on March 10, 2015. This decision addresses issues related to AWW calculation and demonstrates the significant of the AWW calculation, through out the life of the case.
Factual and Procedural Background
Employee filed a claim petition for an ankle and foot injury sustained on December 27, 2007, in his employment as a truck driver. Two claim petitions were filed, one against employer and one against the Uninsured Employer Guarantee Fund.
At the time of hire in November 2007 Employer told him he would be paid 30% of the Employer's charges for a load to be delivered.
It was estimated Employee would earn $1,100 to $1,200 per week.
Employee would receive an additional $100 for each run to pay "lumpers", a person paid to unload a truck.
Employee' 1st run was December 20, 2007. Employee unloaded the truck himself and kept the $100 lumper fee.
Employee's 2nd run was December 21, 2007. He paid the lumpers the $100 fee.
Employee's 3rd run was December 27, 2007. The run was from Philadelphia to Springfield, on to Hatfield Massachusetts. At Hatfield Employee unloaded his truck, as he alleged he did not have money to pay the lumpers. He injured his right leg while unloading.
Employer testified that, at the time of hire, he told Employee he could have 5-6 runs per week and earn about $900 to $1,000.
Employer purchased an insurance policy for his drivers, which paid Employee disability benefits.(credit?)
WCJ Decision
Employee was "an employee", not an independent contractor.
Employee Medical witness Pekkar Mooar, MD was credible, that Employee sustained a bimalleolar fracture of the ankle and was unable to return to work as a truck driver.
Employer medical expert, Paul Horenstein, MD was not found credible regarding his opinion claimant was able to return to work as a truck driver as of the January 21, 2009 IME.
The AWW of Employee was calculated by the WCJ, using an alternative method, payments of $270 x 3 runs equals $810, divided by 2 weeks of employment equals a $405.00 AWW.
Employee WCAB Appeal
WCAB affirmed WCJ calculation of AWW...
but remanded to determine if the "lumper fees" should be included in the Employer AWW.
WCAB remanded on issue of a credit to Employer for Employer funded disability benefits paid to Employee.
WCJ decision made Employer and UEGF "jointly liable" to pay work comp benefits to Employee. WCAB amended WCJ order to make Employer primarily responsible and Fund secondarily responsible.
***
During Appeal, Fund filed a Petition to Modify/Suspend Employee benefits as of January 13, 2011, alleging Employee had an earning power equal to, or greater than his AWW.
WCJ on Remand
Awarded Employer a credit for insurance policy payments to Employee.
Determined "lumper fees" should not be included in Employee's AWW.
WCJ on Fund's Modify/Suspend Petition
WCJ found Fund's medical expert Dr. Horenstein and vocational expert Christopher Terranova to be credible.
Dr. Horenstein released Employee to full-time medium duty work as the ankle fracture had healed with slightly decreased range of motion.
Christopher Terranova conducted a labor market survey, he located 10 open and available full-time positions within Employee's physical capabilities. The earning capacity ranged from $360 to $440.
Employee's past criminal record would not impact his ability to obtain employment.
WCJ found Employee's post-injury earning capacity was $440 per week. On this basis he suspended Employee wage loss benefits as of the January 13, 2011 labor market survey. (Suspension was based upon the $405 AWW figure).
WCAB affirmed the WCJ decision.
Employee Appeal - Round 2 - Commonwealth Court
1. AWW calculation.
Employee argued his AWW should be $810.
This was the total amount he earned before his work injury.
(... earned over the course of several weeks!)
Alternative Employee AWW argument.
AWW should be $900 to $1,200 based upon Employee testimony and/or testimony of Employer, as to the amount of his expected earnings.
Employee also argued the "lumper fees' should be included in his AWW figure.
Commonwealth Court reviewed the shortcomings of Section 309(d.2) of the Act, which addresses the situation where an individual has worked less than one period of 13 calendar weeks.
" the hourly wage rate multiplied by the number of hours the employee was expected to work per week under the terms of employment".
Here, this Employee did not have a fixed hourly rate. The number of hours expected per week could not be determined, as he was paid per trip.
"Where the Act does not address a method of calculating the AWW for a particular situation, the AWW is calculated using an alternative method which will advance the overall humanitarian purpose of the Act" . citing Hannaberry v. WCAB (Snyder) 834 A.2d 524, 533 (Pa. 2003).
The AWW should reasonably reflect the economic reality of a claimant's recent pre-injury earning experience, with some benefit of the doubt to be afforded to the claimant in the assessment. citing Triangle Building Center v WCAB (Linch) 746 A..2d 1108, 1112 (Pa. 2000).
As a controlling precedent the Commonwealth Court cited its earlier decision in Burkhart Refractory Installation v. WCAB (Christ), 896 A.2d 9 (Pa. Cmwlth. 2006.
In Burkhart, the worker did not have an expected number of work hours.He earned wages in only 12 weeks during his 16 week employment. Calculating this claimant's AWW according to Section 309(d.2) would not reflect the economic reality of his pre-injury earnings.
The WCAB calculated his AWW by excluding the 4 weeks without earnings and divided his gross wages by 12 weeks in which he actually earned wages.
The Court found this approach accurately captured the economic reality and advanced the humanitarian purpose of the Act.
Here, the WCJ calculation is inconsistent with Burkhart.
Employee earned no wages is his first week of "employment", as the Employer did not have work available to him. Inclusion of that week, would not reflect the economic reality.
Therefore the Court calculated the AWW of this Employee to be his earnings during his 2nd week of employment, or $810.
2. AWW inclusion/exclusion of lumper fees.
The Court would not disturb the credibility determination of the WCJ regarding the exclusion of the lumper fees from the AWW calculation. Employer testified that Employee was not supposed to unload trucks and keep the lumper fees. If he needed more money to pay lumpers, Employer would have provided it.
3. WCJ Suspension Order
The Court would not disturb the WCJ findings of fact, accepting Employer's medical expert and vocational expert as credible evidence of Employee's post-injury earning capacity.
The Employee argument that Employer medical evidence was equivocal on the issue of work-relationship of degenerative arthritis was rejected. This medical witness did not deny a causal relation of the ankle arthritis and work injury, rather he opined Employee was not fully recovered, but Employee could perform the positions in the labor market survey.
The Court would not disturb the WCJ credibility determination of the vocational expert testimony regarding the appropriateness of specific jobs or the impact of remote criminal convictions.
Suspension of benefits was reversed, based upon the "new" AWW figure.
The case was remanded for the WCJ to modify benefits based upon the evidence.
Practice Pointers:
1. Do not be reluctant to ask for advice regarding the correct calculation of the AWW figure.
You are not alone. This can be confusing. There can be legal arguments which seem conflicting. It behooves you to get it right the first time ... as this AWW figure will control the benefit payments through out the claim.
Yes, you may file a Petition for Review and "correct" any calculation error. BUT if it is a unilateral mistake, you may face an argument that you can not recover any difference in benefit amounts.
2. In my experience, certain employers may pay their employees from different accounts due to the different nature of the compensation, such as a salary account, a business expense account, a bonus account or a commissions account.
3. Tell the employer that you need figures and documents for all types of compensation paid to the injured employee, during the 52 weeks preceding the date of injury.
Get the annual W-2, 1099 or Year-to-date figures. Do the figures add up?
4. Do the Employee compensation records raise a question as to Employee vs Independent Contractor status?
5. Do the Employee compensation records address an issue of compensibility or "Scope" of employment? Was the Employee paid for travel time, or paid for attendance time?
6. At times, a careful review of the compensation records may answer questions ... or raise additional questions. Get the records and review.
Thursday, April 30, 2015
PA Supreme Court says: NO Direct Action for Subrogation Recovery
The Pennsylvania Workers Compensation Act provides a right of recovery where a compensable work injury is caused by a third party tortfeasor. The Employer is "subrogated" to the right of the employee against the third party tortfeasor, to the extent of benefits paid under the Act.
(See: Section 319).
The question arises: Can an Employer directly sue the third party tortfeasor?
The Pennsylvania Supreme Court provides an answer to this question at:
Liberty Mutual Insurance Company, as subrogee of George Lawrence v. Domtar Paper Co. et.al.,
No. 19 WAP 2014 decided April 27, 2015.
The Supreme Court reaffirmed the right of action against a third party tortfeasor remains in the injured employee and the Employer/Workers Compensation Insurer's right of subrogation under Section 319 must be achieved through a single action, brought in the name of the injured employee OR joined by the injured employee.
(See: Section 319).
The question arises: Can an Employer directly sue the third party tortfeasor?
The Pennsylvania Supreme Court provides an answer to this question at:
Liberty Mutual Insurance Company, as subrogee of George Lawrence v. Domtar Paper Co. et.al.,
No. 19 WAP 2014 decided April 27, 2015.
The Supreme Court reaffirmed the right of action against a third party tortfeasor remains in the injured employee and the Employer/Workers Compensation Insurer's right of subrogation under Section 319 must be achieved through a single action, brought in the name of the injured employee OR joined by the injured employee.
Tuesday, April 21, 2015
The Dreaded Late Claim Petition Answer - and a successful Defense
A Late Answer to a Claim Petition requires special attention and Employer Rebuttal Evidence.
"Yellow Freight" is the term use to describe the effect of a late answer by an Employer to a claim petition filing. It is a reference to a Commonwealth Court decision reported at Yellow Freight System, Inc. v. WCAB (Madara) 423 A.2d 1125 (Pa. Cmwlth. 1981).
The general rule is that when an Employer fails to file an answer within twenty (20) days after any claim petition has been served, without adequate excuse, every well-pleaded factual allegation in the claim petition is admitted as true and the employer is barred from presenting any affirmative defenses and is barred from challenging the factual allegations in the claim petition. See: Section 416, 77 P.S. 821 and Chik-Fil-A v. WCAB (Mollick) 792 A.2d 678 (Pa. Cmwlth. 2002).
If the employer's answer is found untimely, the employer may challenge only the legal sufficiency of the claimant's claim, elements of the claim that are not well pleaded and facts, such as continuing disability for time periods after the date the answer was due.
Q. What should an Employer, an Insurer and Defense Attorney do when confronted with the "late answer" problem?
A. Carefully examine the facts.
Washington v. WCAB (National Freight Industries, Inc.), No. 1070 C.D. 2014, is a reported decision of a panel of the Commonwealth Court of Pennsylvania, authored by Senior Judge Colins on March 4, 2015, which addressed the "Yellow Freight" issue and the successful rebuttal by Employer.
Procedural and Factual Background
The underlying facts of this claim petition are somewhat out of the ordinary.
Employee was a truck driver. In February 2009, he was involved in a non-work-related motor vehicle accident with his personal vehicle.He missed 7 days of work and returnee to full duty work. After his accident, he experienced pain in his shoulders, arms and hands, which worsened over time.
On February 13, 2011 (2 years later!) Employee stopped working due to his pain.
In the civil action arising from the non-work motor vehicle accident, Employee alleged he was no longer able to work, as a result of injuries from that accident.
On October 31, 2011, Employee filed a work comp claim petition, seeking total disability as of February 14, 2011 and payment of medical expenses.The alleged work injury was an aggravation of his neck, shoulders, arms, hands and bilateral carpal tunnel syndrome as a result of the repetitive motion, lifting and driving in his work duties with Employer.
The Claim petition listed Employer's address as "72 West Park Avenue, Vineland, NJ".
On November 3, 2011, the Bureau mailed the claim petition (and notice of assignment) to Employer at that address.
Employer's correct address is 71 West Park Avenue, Vineland NJ!
Employer answer was filed 43 days after the Bureau claim petition assignment.
WCJ Decision
Claim Petition Denied.
Employee and Employee medical witness were found credible as to the symptoms and injuries as a result of the non-work-related motor vehicle accident.
They were found not credible that Employee's work duties contributed to his injuries.
Employer's medical witness was found credible that Employee's condition was caused solely by he non-work accident.
The WCJ did not discuss or rule upon Employee's contention that Employer's answer was filed late.
Employee Appeal
Employer's late answer was the sole basis for Employee's appeal.
WCAB affirmed WCJ.
Employee failed to show Employer's answer was late as it was not mailed to the correct address.
Remand request to submit additional evidence regarding the address was denied.
Commonwealth Court Appeal and Decision
Court rejected Employee argument that WCJ erred in permitting Employer to contest the injury was work-related, as Employer answer was filed late.
HERE, The claim petition was mailed to an incorrect address.
Section 416 does not bar Employer from contesting the claim petition absent other proof that the claim petition was received more than 20 days before the answer was filed.
Employee did not prove the Employer answer was filed more than 20 days after Employer actually received the claim petition. Remember, Employee did not submit any evidence on this point.
The WCJ correctly ruled on this issue and properly decided the claim petition, based on the merits of the evidence submitted.
Employee argued the address error should have been disregarded, as the 72 Park Avenue address is a property owned by Vineland Construction, a company that is allegedly an affiliate of this Employer.
ALSO Employee argued, a different letter sent to Employer at the 72 Park Avenue address - after the Employer filed its answer - WAS received by this Employer.
The Court rejected these two arguments.
"Yellow Freight" is the term use to describe the effect of a late answer by an Employer to a claim petition filing. It is a reference to a Commonwealth Court decision reported at Yellow Freight System, Inc. v. WCAB (Madara) 423 A.2d 1125 (Pa. Cmwlth. 1981).
The general rule is that when an Employer fails to file an answer within twenty (20) days after any claim petition has been served, without adequate excuse, every well-pleaded factual allegation in the claim petition is admitted as true and the employer is barred from presenting any affirmative defenses and is barred from challenging the factual allegations in the claim petition. See: Section 416, 77 P.S. 821 and Chik-Fil-A v. WCAB (Mollick) 792 A.2d 678 (Pa. Cmwlth. 2002).
If the employer's answer is found untimely, the employer may challenge only the legal sufficiency of the claimant's claim, elements of the claim that are not well pleaded and facts, such as continuing disability for time periods after the date the answer was due.
Q. What should an Employer, an Insurer and Defense Attorney do when confronted with the "late answer" problem?
A. Carefully examine the facts.
Washington v. WCAB (National Freight Industries, Inc.), No. 1070 C.D. 2014, is a reported decision of a panel of the Commonwealth Court of Pennsylvania, authored by Senior Judge Colins on March 4, 2015, which addressed the "Yellow Freight" issue and the successful rebuttal by Employer.
Procedural and Factual Background
The underlying facts of this claim petition are somewhat out of the ordinary.
Employee was a truck driver. In February 2009, he was involved in a non-work-related motor vehicle accident with his personal vehicle.He missed 7 days of work and returnee to full duty work. After his accident, he experienced pain in his shoulders, arms and hands, which worsened over time.
On February 13, 2011 (2 years later!) Employee stopped working due to his pain.
In the civil action arising from the non-work motor vehicle accident, Employee alleged he was no longer able to work, as a result of injuries from that accident.
On October 31, 2011, Employee filed a work comp claim petition, seeking total disability as of February 14, 2011 and payment of medical expenses.The alleged work injury was an aggravation of his neck, shoulders, arms, hands and bilateral carpal tunnel syndrome as a result of the repetitive motion, lifting and driving in his work duties with Employer.
The Claim petition listed Employer's address as "72 West Park Avenue, Vineland, NJ".
On November 3, 2011, the Bureau mailed the claim petition (and notice of assignment) to Employer at that address.
Employer's correct address is 71 West Park Avenue, Vineland NJ!
Employer answer was filed 43 days after the Bureau claim petition assignment.
- There was no evidence in the record as to when or how the Employer received the claim petition of notice of its filing.
WCJ Hearing
At the WCJ hearing on September 20, 2012, Employee testified and trial deposition testimony of Employee and 2 medical witnesses was received.
At the close of this hearing the issue arose as to the Employer's ability to dispute the factual allegations of the claim, under Yellow Freight.
- No motion by Employee to bar Employer appears in the record.
- Employee asserted (on appeal) he raised this issue at an earlier hearing and this issue was not resolved.
- The Bureau mailed the claim petition to Employer on November 3, 2011 and it was not returned by the postal authorities.
- the parties stipulated that the address to which the claim petition was mailed was not Employer's address and was off by one number.
- Employee did not introduce any evidence as to what is located at 72 West Park Avenue.
- the WCJ gave the parties 60 days to brief the Yellow Freight issue ... but no briefs from either party appears in the record, nor was there any further evidence.
WCJ Decision
Claim Petition Denied.
Employee and Employee medical witness were found credible as to the symptoms and injuries as a result of the non-work-related motor vehicle accident.
They were found not credible that Employee's work duties contributed to his injuries.
Employer's medical witness was found credible that Employee's condition was caused solely by he non-work accident.
The WCJ did not discuss or rule upon Employee's contention that Employer's answer was filed late.
Employee Appeal
Employer's late answer was the sole basis for Employee's appeal.
WCAB affirmed WCJ.
Employee failed to show Employer's answer was late as it was not mailed to the correct address.
Remand request to submit additional evidence regarding the address was denied.
Commonwealth Court Appeal and Decision
Court rejected Employee argument that WCJ erred in permitting Employer to contest the injury was work-related, as Employer answer was filed late.
- Contrary to the Employee's contentions, Employee did not show that the Employer's answer was untimely!
- the 20 day period to file an answer begins to run when the Bureau serves the claim petition on the Employer.
- this records showed that the Bureau mailed the claim petition on November 3, 2011, BUT it was undisputed that the address used by the Bureau was not Employer's correct address.
The Court discussed the common law origin of the "mail box rule".
This rule indicates, proof of mailing raises a presumption that the mailed item was received only if it is shown that the item was mailed to the party's correct address.
This rule is included in the PA Workers' Compensation Act. Section 406, 77 P.S. 717 states:
"any notice or copy shall be deemed served on the date when mailed, properly stamped and addresses, and shall be presumed to have reached the party to be served; but any party may show by competent evidence that any notice or copy was not received, or that there was an unusual or unreasonable delay in its transmission through the mails".
Under the Workers' Compensation Act, ONLY a mailing to a party's CORRECT ADDRESS constitutes service on the date of mailing.
HERE, The claim petition was mailed to an incorrect address.
Section 416 does not bar Employer from contesting the claim petition absent other proof that the claim petition was received more than 20 days before the answer was filed.
Employee did not prove the Employer answer was filed more than 20 days after Employer actually received the claim petition. Remember, Employee did not submit any evidence on this point.
The WCJ correctly ruled on this issue and properly decided the claim petition, based on the merits of the evidence submitted.
Employee argued the address error should have been disregarded, as the 72 Park Avenue address is a property owned by Vineland Construction, a company that is allegedly an affiliate of this Employer.
ALSO Employee argued, a different letter sent to Employer at the 72 Park Avenue address - after the Employer filed its answer - WAS received by this Employer.
The Court rejected these two arguments.
- These arguments were raised for the first time on appeal to the WCAB.
- The WCAB has broad discretion to grant or deny a rehearing to permit introduction of previously available evidence.
- The WCAB is not required to permit a party to produce additional evidence to attempt to cure a failure to satisfy his burden of proof before the WCJ.
- Service of a document on an address owned by an affiliate of a corporation does not constitute service upon the corporation.
- The mere fact that one piece of mail sent to an erroneous address was successfully received does not support the inference that all mail sent to the erroneous address was promptly received by that party.
PRACTICE POINTERS:
1. When confronted with a "late answer" issue, carefully review the documents, the dates and the correctness of information reflected on the Claim Petition and on the Bureau Notice of Assignment.
There was a recurring issue in the early days (months) of the WCAIS program regarding accuracy.
Addresses of many attorneys, employers and insurers were incorrectly stated.
Check this basic information.
2. In this case there was an issue of whether employee raised and preserved the late answer issue with the WCJ. The Court noted the WCJ directed the parties to submit briefs on this issue.
When a late answer issue is raised, advise the WCJ and Employee counsel of the available Employer evidence and testimony to be submitted on this point.
Many WCJ's will not allow the presentation of any evidence to controvert the allegations of the claim petition, until the Employer clears this threshold.
3. If a late answer has occurred, remember you may still controvert issues in the time frame after the date that the Employer answer was due.
4. Examine the Claim Petition.
Is each paragraph of the Claim petition- well pleaded?
Did Employee counsel complete each paragraph?
Pay particular attention to Paragraph 14.
Does the section for total disability include dates?
Does the section reflect any dates for partial disability?
Is payment of medical expenses demanded?
Is there a request for counsel fees, to be paid by employer?
Subscribe to:
Posts (Atom)