Post-Protz Commonwealth Court decision reinstates total disability status as of the Petition filing date, not as of the unconstitutional IRE date, rejecting the "void ab initio" argument.

Commonwealth Court Reinstates Worker's Total Disability benefit status as of the Petition filing date, not as of the date of the prior unconstitutional IRE, thus rejecting the "void ab initio" argument. 

Ellison v. WCAB (SEPTA), No. 1080 C.D. 2020 MEMORANDUM OPINION;   August 20, 2021

Another appellate decision addresses the date of reinstatement of total disability status following the PA Supreme Court decision in Protz. The Commonwealth Court has consistently held that the date of reinstatement is the date of the filing of the Worker's Petition to Reinstate. Arguments for Reinstatement as of the date of the unconstitutional IRE have been rejected. In Ellison, the Court rejects an argument based upon the "void ab initio" doctrine.

Factual & Procedural Background 

Claimant appealed a WCAB order which affirmed a WCJ decision to grant Claimant’s petition to reinstate disability benefits, in part, and reinstated benefits as of July 18, 2017, which is the filing date of Claimant's petition. 

Claimant sustained a work related injury on February 11, 1998. Employer issued a NTCP which accepted a work-related injury of a “lumbar strain/sprain.” A 2007 WCJ decision granted Claimant’s Petition to Review the injury description to include two lumbar surgeries.

A 2009 IRE resulted in a whole person impairment of 29%.  Employer issued a Notice of Change of Workers’ Compensation Disability Status and Claimant benefits status was changed effective September 24, 2009,  Claimant did not appeal the change of his disability status.

In 2017 Claimant filed a Petition to Reinstate Compensation Benefits. The 500-week period of partial disability benefits had expired on July 11, 2015, before Claimant filed the Reinstatement Petition.

Following an initial WCJ decision denying the Reinstatement Petition, and a remand by the Board, following further hearings, the WCJ issued a new decision granting the Reinstatement Petition in part, and directing Employer “to reinstate Claimant’s workers’ compensation benefits to total disability status as of July 18, 2017.

Claimant appealed the WCJ’s decision to the Board, arguing that under Protz II, the IRE provisions of former Section 306 (a.2) of the Act were determined to be void ab initio, so his disability benefits should have been reinstated as of September 24, 2009, the date of his unconstitutional IRE and not as of July 18, 2017, the date that he filed his Reinstatement Petition. The Board rejected this claim citing Whitfield.

In his Commonwealth Court appeal, Claimant argued the Board erred in affirming the WCJ’s decision as the Board erroneously applied the Whitfield decision - which Claimant argued was effectively overruled by Commonwealth v. McIntyre (Pa. 2020)

In McIntyre, the PA Supreme Court, applied the void ab initio doctrine in a criminal proceeding, which challenged a purportedly invalid judgment of sentence. Claimant argued, his disability benefits should have been reinstated as of the date of the unconstitutional IRE, i.e., September 24, 2009, and not the date of his filing of the Reinstatement Petition, July 18, 2017.

The Commonwealth Court rejected this argument, noting that in Weidenhammer, they considered the application of the void ab initio doctrine in Glen-Gery (a Pa. 2006 case), and applied it to the reinstatement of disability benefits under Protz II, explaining, in relevant part:

The right to disability benefits for a work injury was created by the Act. The Act has imposed limits and conditions on an injured workers right to benefits. A WCJ may reinstate, suspend or terminate compensation "at any time".

Section 413 (a) acts as a statute of repose. A claimant whose benefits were suspended may seek reinstatement within three (3) years of the last benefit payment or the 500 weeks allowed for partial disability, which ever is later. 

In Weidenhammer the claimant’s statutory right to total disability compensation had been extinguished at the point in time that she filed her reinstatement petition. To allow claimant to resuscitate her right to disability compensation would violate Section 413(a) of the Act, 77 P.S. §772. Claimant may be correct that Protz II rendered former Section 306(a.2) of the Act, formerly 77 P.S. §511.2(1), void ab initio, but it does not follow that the Pennsylvania Supreme Court intended its ruling in Protz II to be given a fully retroactive effect or to nullify the statute of repose in Section 413(a) of the Act.

Importantly, this Court also noted the distinction between applying the void ab initio doctrine in a criminal matter, as in McIntyre, and applying it in proceedings under the Act, observing - "full retroactive effect is generally reserved for criminal cases where life or liberty is at stake. Citing: Weidenhammer, 232 A.3d at 995 n.12.

Based upon it's analysis, the Commonwealth Court stated -  it is clear that Claimant’s assertion that the Supreme Court’s opinion in McIntyre effectively overruled this Court’s holding in Whitfield is patently without merit. 

To the contrary, like the claimant in Weidenhammer, Claimant’s statutory right to total disability compensation had been extinguished at the point in time that he filed his reinstatement petition. To allow Claimant to resuscitate his right to disability compensation would violate Section 413(a) of the Act.

Recommendations:

We anticipate continued appeals of IRE reinstatement petition decisions, until the PA Supreme Court rules on these issues and arguments.

IMO, it is noteworthy that the PA Supreme Court denied a claimant's application for allowance of appeal in the Pierson v. WCAB (Consol Coal Co.) 59 WAL 2021 (08/17/2021). (04/26/2021 order for publication of CW CT decision).

In Pierson, Claimant raised several constitutional issues for review: 

- Act 111 should not apply to injury dates before its enactment; 

- credit should not be given for pre-Act 111 TTD weeks for the 104 week threshold; 

- Act 111 language does not have clear language to have a retroactive effect; 

- as prior IRE procedures were unconstitutional, they should not be applied to calculation of compensation; 

- Act 111 interferes with vested benefit rights.

***

We recommend continued use of the IRE remedy as an effective means to limit the duration of future wage loss benefit liability.

PA Work Comp benefits paid pursuant to A Notice of Temporary Compensation Payable may be changed via a timely Medical Only NCP document

 

Changing the benefit status of a PA Work Comp injured worker, who is compensated via a Notice of Temporary Compensation Payable (NTCP) LIBC-501 document is now less cumbersome.

An Employer may file a “Medical Only” Notice of Compensation Payable (MO-NCP) to change the benefit status of the injured worker, when the MO- NCP  is filed within the ninety-day temporary compensation payable period. In this circumstance, the Employer is not required to also file a Notice Stopping Temporary Compensation Payable (NSTCP) and a Notice of Compensation Denial (NOCP). This case was successfully argued by Chartwell Law founding partner Andrew Greenberg.

See: Raymour & Flanigan v. WCAB (Obeid);  No. 371 C.D. 2020 Filed: August 16, 2021.

The Commonwealth Court reversed a decision of the PA Workers’ Compensation Appeal Board, noting this was an issue of first impression. The Board decision reinstated ongoing indemnity wage loss benefits payable to Claimant, back to the date the Employer stopped those indemnity payments  pursuant to the filing of the MO-NCP. The Board concluded the Employer violated the Act as the NTCP “converted” to a NCP after 90 days - by operation of law – in the absence of the filing of the Notice Stopping Benefits and Notice of Compensation Denial.

Factual & Procedural Background

This litigation commenced when the injured worked file a Petition for Penalties and requested reinstatement of indemnity wage loss benefits. Initially, after the report of a work-related injury,  the Employer commenced work comp benefits to the injured worker via NTCP an injury described as inflammation of her coccyx/sacrum . Sixteen days later the Employer issued a MO-NCP.

The WCJ found that under Section 121.17(d) of the workers’ compensation regulations, 34 Pa. Code § 121.17(d), there was no requirement to file a Notice Stopping Temporary Compensation Payable if, during the 90 day temporary compensation payable period, the employer decided to issue a notice of compensation payable The WCJ  concluded that Claimant failed to prove that Employer violated the Act and dismissed the penalty petition.

The Appeal Board concluded that under its interpretation of Section 406.1(d)(5)-(6) of the Act and Section 121.17(d) of the regulations, that the Employer had violated the Act and the Board ordered reinstatement of indemnity benefits as of the date as indemnity payments were stopped and further ordered continuing benefits.  Employer appealed this ruling.

The Commonwealth Court reviewed the statutory language at Section 406.1, which addresses the requirements for commencement of work comp benefits via NCP or NTCP. The Court noted that an employer may initiate compensation payments without prejudice and without admitting liability pursuant to a notice of temporary compensation payable.

If an employer decides to stop making payments pursuant to a NTCP the employer must provide notice to the injured worker via, a form prescribed by the Bureau.

If the employer does not file a notice within the ninety-day period during which temporary compensation is paid, then the employer is deemed to have admitted liability and the notice of temporary compensation payable is converted to a notice of compensation payable.

Reasoning & Holding

The Commonwealth Court reviewed Section 121.17(d) of the Bureau’s regulations. This regulation states that if temporary payments are stopped, an employer must do one of the following:

-          file both a notice stopping temporary compensation, Form LIBC-502, and a notice of compensation denial, Form LIBC-496;

or

-          file a notice of compensation payable, Form LIBC-495;

or

-           file an agreement for compensation for disability or permanent injury, Form LIBC-336

In the instant case – the Employer filed a version of the NCP the “Medical Only” version. The NCP form LIBC-495 included a check box – which was checked by the Employer – stating “Check only if compensation for medical treatment (medical only, no loss of wages) will be paid subject to the Act.” The Court concluded -  by filing a NCP, albeit a “Medical Only” the Employer clearly complied with the regulation. The NCP was sufficient notice to the injured worker that their work comp benefit status had changed.

Employer arguments relied upon the prior decisions at City of Philadelphia v. WCAB (Brown) and Waldameer Park v. WCAB (Morrison) for the proposition that the acknowledgement of compensability, accomplished by filing a Medical Only NCP, is sufficient to meet the Employer’s obligations under Section 406.1. The Court agreed.

Practice Pointers & Recommendations

1.      A work-related injury may be recognized via: a Notice of Compensation Payable LIBC-495; A Notice of Temporary Compensation Payable LIBC-501; an Agreement for Compensation for Disability of Permanent Injury LIBC- 336.

The NTCP provides the Employer and Insurer with a period of 90 days for review and possible revocation.

2.      A NTCP may be revised and/or corrected via an Amended NTCP during the 90 day temporary compensation benefit period.

3.      A NCP may be “amended” to expand the description of injury and/or to increase the benefit rate.

4.      Consistent with this Commonwealth Court decision – a NTCP may be followed by a Medical Only NCP, to change the benefit status of an injured worker from indemnity/medical liability to medical only liability.

5.      A NTCP may be followed by a Notice Stopping Temporary Compensation Payable LIBC-502 and a Notice of Compensation Denial LIBC-496 – IF the Employer and Insurer wish to totally deny liability for the alleged work-related injury.

6.      As the Workers’ Compensation Judge may assess attorney fees for an unreasonable contest of the claim – one must be judicious when making the claim acceptance/denial decision.

As always … when you have questions regarding the proper LIBC document to be issued in a specific factual situation … contact your workers compensation attorney to discuss your options. As a matter of strategy, one form may provide more appropriate handling options that you wish to pursue.

 

 

 

 

Examining the PA Work Comp Criteria to Establish the Existence of an Employer - Employee Relationship

Examining  the Pennsylvania Workers Compensation Criteria to Establish the Existence of an Employer - Employee Relationship 

One of the early published decisions of the newly constituted Commonwealth Court was the J. Miller Co. v. Mixter decision in 1971. That decision determined the existence of an employer-employee relationship via application of the "control test".  This analysis remains the standard, to this day.

The existence of an Employer-Employee relationship is an essential element of a compensable workers compensation disability claim. New positions in developing service industry areas (rideshare drivers) give rise to new questions of the existence of an employment relationship.

We will assess the existence of an employment relationship in these new economy endeavors ... by application of existing caselaw and past precedents. . Past caselaw decisions have reviewed many relationships in the trucking industry. A recent case examines the employment relationship.

Berkebile Towing & Recovery v. WCAB (Harr, SWIF & UEGF) No. 220 C.D. 2020 Memorandum Opinion by Judge Fizzano Cannon filed May 10, 2021.

 QUESTION PRESENTED:

Was the worker performing tow truck operator duties functioning as an “Employee” or as an “Independent Contractor” at the time of injury?

 BACKGROUND FACTS:

The Commonwealth Court provided a rather detailed analysis of the evidence presented to determine if an individual functioned as an “Employee” within the intent and meaning of section 104 of the  Pennsylvania Workers Compensation Act. Worker’s when he sustained a fatal injury in the performance of his duties as a tow truck operator

As Appellate decisions assessing the existence of an employment relationship delve into the details of the relationship of the parties, to determine the degree of “control” maintained and exercised by the purported Employer, we recite the detailed facts found in the WCJ decision to award fatal claim benefits.

The WCJ reviewed the facts presented in the context of the Universal Am-Can case and expressly considered the extent of Berkebile’s right of control over the work to be completed by Decedent Harr and other drivers.  The WCJ reviewed the factors concerning: the nature of work; the skills required to do the work; the centrality of the work to Berkebile’s business; Berkebile’s supply of the tools and equipment; their right to terminate the relationship. 

Berkebile owned the tow trucks, set the rates, and collected payment for the jobs.  Berkebile prohibited drivers from using Berkebile trucks to take tow calls from other companies.  The WCJ found these facts were analogous to those that established an employment relationship in Sarver Towing v. WCAB (Bowser), 736 A.2d 61 (Pa. Cmwlth. 1999)

The WCJ concluded that although Berkebile did not “micromanage” any individual tow job, Berkebile did maintain extensive domain over Harr’s work day.  Trucks had very large placards with the Berkebile name and very small signage that the trucks were driver leased.  Berkebile maintained a significant degree of control over how the drivers could and could not use the trucks – they could take them home but they could not use them to perform jobs for other towing companies.  Drivers did not set the prices. If customers paid directly, the payment was turned over to Berkebile.  If a driver declined too many calls, then Berkebile could stop assigning calls and reclaim its truck.  The WCJ found these facts overrode the existence of other facts in favor of contractorship - such as the IC Agreement, the driver ability to decline jobs, payment by the job rather than time, and the driver’s responsibility for taxes.

Appellate Court HOLDING

The Commonwealth Court denied the Employer appeal from the award of fatal claim benefits and challenge to the conclusion that Decedent Harr was an employee of Berkebile Towing rather than an independent contractor.  The Commonwealth Court performed a detailed analysis of the factual evidence presented, in accord with the “control” standard.

“While no hard and fast rule exists to determine whether a particular relationship is that of employer-employee or owner-independent contractor, certain guidelines have been established and certain factors are required to be taken into consideration.”  Universal Am-Can Ltd. WCAB (Minteer), 762 A.2d 328 (Pa. 2000). 

“The following indicia and principles are part of the inquiry: control of manner (in which) work is to be done; responsibility for result only; terms of agreement between the parties; the nature of the work or occupation; skill required for performance; whether once is engaged in a distinct occupation or business; which party supplied the tools; whether payment is by the time or by the job; whether work is part of the regular business of the employer and also the right to terminate the employment at any time.”

“Whether some or all of these factors exist in any given situation is not controlling.  Further, while each factor is relevant, there are certain guidelines that have been elevated to be dominant considerations … [C]ontrol over the work to be completed and the manner in which it is to be performed are the primary factors in determining employee status.  Moreover, it is the existence of the right to control that is significant irrespective of whether the control is actually exercised.”  

The Commonwealth Court reviewed the instant case in the context of prior similar decisions regarding the employment status of the tow truck drivers such as Sarver Towing v. WCAB (Bowser), 736 A.2d 61 (Pa. Cmwlth. 1999) (where the right to control the manner of the claimant’s work was critical even if that right is not exercised) and Baykhanov v. WCAB (Onixe Express), (Pa. Cmwlth. 245 C.D. 2018 filed October 12, 2018) (where a car carrier driver was found to not be an employee). 

In the Baum case, a truck driver was found to be an employee even though he had some degree of ability to decline work which was found to be evidence of flexibility in work scheduling rather than a negation of an employment relationship.  The instant Court noted the facts found by the WCJ in the Berkebile case - Berkebile ownership control over the availability and use of trucks - favored a finding an employer-employee relationship, but contrasted the Baykhanov case, where similar facts led to a finding of an independent contractor relationship. 

This Court assessed these two case law precedents and distinguished weight afforded a published decision in Sarver from the unreported divided opinion in Baykhanov.  Additionally, in the instant case, the WCJ found Harr’s witnesses to be credible regarding the employment relationship, which was not true in Baykhanov.

In support of its conclusion that an Employee-Employer relationship existed, the Court reviewed the detailed evidence and testimony that was available to the WCJ –

Harr drove a tow truck with a permanent Berkebile placard.  Harr did not own the truck. He did not pay any formal lease or rental payments.  Harr did not pay for the truck’s registration, inspections, or insurance.  Berkebile provided a fuel card. Berkebile testified he had verbal agreements with the drivers to lease the truck for a 10% fee. Berkebile did not maintain workers’ compensation insurance. 

Berkebile’s tow trucks were fully equipped so drivers did not bring their own tools or equipment.  Harr wore clothing with Berkebile’s name.  Harr had no employers and did not do any (similar) side work.  Harr did not have a set schedule, he received calls from Berkebile’s dispatcher on a 24/7 basis.  He did not get paid if he did not go out on calls. Berkebile had drivers perform odd jobs at the shop when they were not dispatched.  Berkebile provided little training and did not supervise Harr when he performed tow jobs or service calls. Berkebile negotiated mandatory corporate clients rates.  If customers paid Harr, he would turn over the payment to Berkebile.

RECOMMENDATIONS:

This appellate case law review provides a lengthier and more detailed factual review, when compared to the typical workers’ comp case review.

This is intentional – as a means to demonstrate the amount of detail the WCJ, WCAB and Commonwealth Court will analyze in the weighing of evidence of the presence or absence of an Employee – Employer relationship.

Consequently – this level of detail in the evidence presented - reflects the detail the workers’ comp defense attorney must strive to present – to allow a full assessment of the evidence and testimony in support of the existence of an employment or independent contractor relationship.

Discovery of Employer documents and witness interviews are essential components of the initial case review and litigation preparation process. One must emphasize to the Employer/Insurer client that our early involvement and client cooperation with evidence production are essential to an attempt to achieve a successful litigation result or a favorable negotiated resolution.

 

 

Best Practices – WCAB Appeals and Medical Expense Denials

 

Best Practices – WCAB Appeals and Medical Expense Denials

A recent Memorandum Opinion of the Commonwealth Court highlighted the necessity for the Workers’ Compensation practitioner to carefully draft the averments in the Appeal Documents filed with the Pennsylvania Workers’ Compensation Appeal Board.

The Court also reviewed the appropriateness of an assessment of penalties where there is a unilateral cessation of medical expense reimbursement where the employer liability for medical expenses has been established.  The “risk” involved in the denial of medical expenses based upon a causal relation argument was reviewed.

In W&W Contractors v. WCAB (Holmes); 836 C.D. 2020; Commonwealth Court Memorandum Opinion filed June 28, 2021 An Employer appealed the decision of the Workers’ Compensation Judge and WCAB to grant in part and deny in part, the Employer’s termination petition and to grant claimant’s unreasonable contest attorney’s fee request and penalty petition. (the termination issue was not appealed).

The Commonwealth Court affirmed the underlying decision that found the Employer contest of certain medical expenses was unreasonable and further, that unilateral cessation of medical expense payments was a violation of the Act, particularly where the employer liability for medical expenses has been established. 

As noted above, the Commonwealth Court found the Employer did not preserve their argument on appeal regarding the assessment of attorney fees for an unreasonable contest.  Although the Employer prepared the proper appeal document and listed the contested findings of fact and conclusions of law “by number” that were the subject of appellate review, the Employer did not make a statement of the particular grounds upon which the appeal is based.  The citation of the finding of fact by number alone, is insufficient and the appealing party must provide a description of the grounds on which the appeal is filed.

The Claimant penalty petition was filed based upon the Employer unilaterally ceasing payment of certain medical supplies such as heating pads, electrical stimulation supplies, etc.  When the medical supply company attempted to file a fee review, that request was denied because the Employer contested the causal relationship of the expenses.  The Employer presented a medical opinion of an IME physician approximately one year after the medical expense denials.  That IME opinion found that the claimant had fully recovered and the medical supplies were not necessary or related to the accepted injury.  Claimant presented the testimony of his treating physician to relate the expenses to the work injury.  The Judge found the Claimant’s physician to be more credible and found that the Employer violated the Act by the unilateral cessation of medical expense payments. 

The Commonwealth Court rejected the Employer’s argument that the Termination petition was filed to address a genuinely-disputed issue.  Employer argued the issue of – What is the “scope” of medical supplies where the supplies were not “medical” in nature, such as alcohol patches, lotion and the batteries for the electrical stim unit. 

The Court explained that if the Employer unilaterally ceases the payment of medical expenses, it takes the risk that the WCJ will hold that those bills are related.  In this circumstance, there is a violation of the Act.  Employer cited the prior cases where there was no penalty assessed -  where the Workers’ Compensation Judge did not find a causal relationship of the denied medical expenses.  The Commonwealth Court cited Section 306(f.1) for the proposition that an employer has a responsibility to pay for reasonable and necessary medical expenses that are causally related.  Once liability is established, the employer may not unilaterally cease payment.

 The Court noted there is a clear line between the argument of “reasonableness” or argument of “causation” when addressing liability for medical expense reimbursements.  If the employer questions the causal relationship of the medical expense, there is no penalty if the WCJ ultimately decides the expense was not related.  Claimant argued on appeal that the employer changed its argument as they originally alleged that the medical supplies were not causally related to the accepted work injuries.  It was said that they later raised the issues of the “scope” of what is a “medical” supply and the alleged inflation of medical costs.  These arguments were unpersuasive to the Court. The assessment of a Penalty was affirmed.

Practice Pointers:

1. Regarding WCAB Appeals – carefully draft the appeal document to identify each finding of fact and each conclusion of law that should be the subject of review on appeal. Then add the particular legal argument to identify the alleged error of law. One may broadly draft or specifically state their reasons for assertion of an error.

2. Regarding Medical Expense Denials - The Employer and Insurer may contest the causal relationship of any medical expense. But as noted above – this position comes with the risk - that the WCJ may disagree and may further assess a penalty. One may increase their chance for success by having medical evidence to support their assessment that an expense is not related to the work injury. If the WCJ does not rule in favor of the Employer position, the existence of medical evidence may result in the avoidance of a penalty.

3. Regarding Challenge to the Reasonableness of a Medical Expense – the Employer remedy is to file an application for Utilization Review.

Indicia of the Independent Contractor versus Employer – Employee Relationship

 

Indicia of the Independent Contractor versus Employer – Employee Relationship

The Pennsylvania Workers’ Compensation Act does not have a “hard and fast rule” that governs the distinction between an employer-employee relationship and an owner-independent contractor relationship. 

Past cases were decided on a case-by-case basis. Specific facts may alter the outcome of the assessment of a purported employer-employee relationship.

The Construction Workplace Misclassification Act (43 P.S. 933.3 effective 02/10/2011) was a significant step to advancing certainty in the assessment of the presence/absence of an independent contractor in the construction industry. An individual who performs services for renumeration in the construction industry is an independent contractor only if all three of the following criteria are satisfied:

1. The individual has a written contract to perform such services;
2. The individual is free from control or direction over performance of such services both under contract of service and in fact;
3. As to such services, the individual is customarily engaged in an independently established trade, occupation, profession or business.

A recent memorandum appellate decision addressed the presence/absence of an independent contractor relationship in the soon-to-be archaic - newspaper delivery boy position. The court gave review of the independent contractor status in Pennsylvania Workers’ Compensation Law and the indicia necessary to establish an employer-employee relationship.

See: the Commonwealth Court Decision at Shannon v. WCAB (Ogden Newspapers of Pennsylvania), No. 46 C.D. 2020, Memorandum Opinion filed August 25, 2020.  

An application for allowance of appeal was recently denied by the Supreme Court of Pennsylvania at 292 WAL 2020 on April 1, 2021. 

The facts are not remarkable.  Claimant was engaged in delivery work for the Altoona Mirror, a newspaper owned by Ogden Newspapers. (Ogden hereinafter). He was injured in a customer’s icy driveway.  (NOTE: The case was bifurcated for the issue of employee status; therefore, the Appeal Board and Commonwealth Court did not evaluate the medical evidence presented).

The ”modern” newspaper delivery person is unlike quintessential figure of a teen riding a bicycle with a canvas carrying bag - Claimant worked for Ogden for approximately nine years.  On an average day, he would receive 500-600 newspapers at his home between 2:00 a.m. and 3:00 a.m.  He traveled approximately 70 miles per day to deliver these papers.  Ogden imposed a 6:00 a.m. deadline for delivery to all customers in homes, stores, and newspaper vending machines.  Claimant did not select his own delivery route but was instead instructed by Ogden.

Ogden imposed several requirements in addition to delivery time and manner.  At times, claimant was required to deliver newspapers to non-customers, in hope they would become customers.  Claimant was also provided with advertising inserts he was required to place within the newspapers.  At times claimant was required to use holiday-themed advertising bags as delivery packaging.  Claimant did not have control or discretion over these requirements.  He did not collect money from customers or select customers to be included on his route.  If customers had complaints or concerns, claimant did not handle,  it was directed to Ogden. 

One customer complained her newspaper was being thrown in her driveway and it should be delivered on her front porch.  As a result, claimant was required to get out of his car and walk on the customer’s driveway to deliver the newspaper.  On December 17, 2017, claimant left his vehicle, walked on the customer’s driveway to deliver her newspaper to her front porch as requested.  While walking on the driveway he slipped and fell, fracturing his ankle.  He was hospitalized for 11 days. 

Claimant previously signed an independent contractor agreement.  This document stated claimant was “an independently established business enterprise”, and that as an independent contractor, he understood that he was not entitled to employee benefits from Ogden, including workers’ compensation benefits.

The claim petition was denied by the Workers’ Compensation Judge and the Appeal Board affirmed that denial.  On appeal to the Commonwealth Court, claimant argued his case is distinguishable from prior case law based upon the evolution and change in the newspaper delivery boy position.

The Commonwealth Court denied the claim petition based upon an analysis and assessment of the employment relationship.  As often stated – the existence of the employer-employee relationship is a question of law based upon the Workers’ Compensation Judge findings of fact.  Claimant had the burden to establish an employment relationship existed at the time of the injury and the injury was related to the employment.  As often stated - the findings of a Workers’ Compensation Judge can only be disturbed if there is no competent evidence to support those findings.  Citing:  Universal Cyclops Steel Corporation, 305 A.2d 757 (Pa. Cmwlth. 1973).

The Court noted that Pennsylvania does not have a “hard and fast rule” that governs the distinction between an employer-employee relationship and an owner-independent contractor relationship.  Citing Hammermill Paper Company v. Rust (Pa. 1968). 

Factors to be considered in the establishment of an employment relationship include:

1. control of the manner of work to be done;
2. responsibility for result only;
3. terms of agreement between the parties;
4. the nature of the work or occupation;
5. skills required for performance;
6. whether one is engaged in a distinct occupation or business;
7. which party supplied the tools;
8. whether payment is by the time or by the job;
9. whether work is part of the regular business of the employer;
10. also the right to terminate the employment at any time.

While each factor is relevant, certain guidelines have been elevated to be dominant considerations, such as control over the work to be completed and the manner in which it is to be performed are primary factors in determining employee status.  Citing JFC Temps Incorporated (Pa. 1996).  Claimant argued Ogden controlled the manners and methods by which he was required to deliver newspapers: they set a delivery time deadline, a delivery route, and the means of delivery (although not explicitly stated, his motor vehicle).

The Workers’ Compensation Judge identified 11 factors that suggested that claimant entered into an independent contractor relationship with Ogden.  This was based upon testimony of Ogden’s District Manager.  He stated he would often not see claimant for months.  The WCJ considered this was an indication there is not a degree of supervision that one normally sees in an employment relationship and is more akin to the standard independent contractor relationship.  Also while claimant was shown the quickest delivery route by Ogden, he was free to use his own route.  He was required to supply his own vehicle for use in deliveries but he was not reimbursed for mileage or use.  The WCJ noted that employees are generally reimbursed for use of their privately-owned vehicles for activities in the furtherance of the business affairs of their employers.

The controlling case in this area is Johnson v. Workers’ Compensation Appeal Board (Dubois Courier Express).  In Johnson, the Commonwealth Court held a 13-year-old newspaper carrier was an independent contractor because the newspaper did not exercise substantial control over his activities.  As in the present case - the 13-year-old was only told to deliver papers by a specific time, he was never directed otherwise as to the time or mode of delivery or the route traveled.  Following drop-off of the newspapers, the company had no further investigation or supervision regarding delivery of the papers.  That carrier was also eligible to deliver competing newspapers and was permitted to substitute a person to deliver his papers without giving the newspaper company notice or receiving prior approval. 

In the instant case, Claimant also had the opportunities for “unrestricted substitutions” and additional delivery routes for competing publications.  Claimant asked the Court to consider the erosion of the newspaper boy independence that has occurred since the Johnson case; however, the Court thought this consideration was beyond its scope of review. 

Claimant attempted to distinguish the prior case law by noting that they involved newspaper distributors who purchased the newspapers from the publishing company and after making sales to customers, kept the profits.  These newspaper distributors were considered to be independent contractors.  Claimant attempted to draw a distinction which was not convincing.  Citing: Balinski (Pa. Superior 1935) and Rodgers (Pa. Super. 1960). 

Claimant attempted to distinguish a more recent case, Gallagher (Pa. Cmwlth. 2015).  The Court did not accept this argument.  Claimant was similar to the carrier in Gallagher in that he was able to enlist a substitute without prior notice or permission and there is no prohibition on delivering competing newspapers.  However, this supports the conclusion that the individual company did not control claimant’s work or the manner of his performance, only the results.  On this basis, claimant’s position was not distinguishable from the prior caselaw reflecting the understanding of a newspaper delivery person to be an independent contractor.  The company’s lack of control over claimant’s newspaper delivery constituted an independent contractor relationship. 

Although the newspaper delivery position had been historically somewhat unique, the analysis of the employer-employee relationship employed by the Court for workers’ compensation purposes was not.  The Court has employed the “control test” as a determining factor in the assessment of the existence of employment relationship or an independent contractor relationship. 

It is noteworthy that one of the early decisions of the then-newly constituted Commonwealth Court addressed the employee-employer relationship question.  See:  J. Miller Company v. Mixter, 277 A.2d 867 (Pa. Cmwlth. 1971).  It is safe to say that this may be one of the few legal principles that has remained untouched by the Commonwealth Court since 1971. 

“Control in an employment relationship exists where the alleged employer possesses the right to select the employee, the right and power to discharge the employee, the power to direct the manner of performance and the power to control an employee.  See:  American RD Lines v. WCAB (Royal), (Pa. Cmwlth 2012). 

Recommendation

Although each case may present a unique set of facts, the assessment of the presence or absence of an employer-employee relationship will be made based upon a review of the facts presented and application of these legal principles. 

When addressing the question of the presence or absence of an employment relationship, obtain as many factual  details as available regarding the relationship of the parties, the “control” exercised by the purported employer and the “freedom” of the purported employee to conduct his/her affairs.

A Changing Work Injury description may defeat an attempt to Terminate Benefits.

 A Changing Work Injury description may defeat an attempt to Terminate Benefits.

A recent Commonwealth Court Memorandum decision highlights the difficulty of addressing  a Changing Injury Description during Termination Petition Litigation.

A Petition to Terminate benefits will be denied where the Employer medical evidence does not address the full extent of the work-related injury.

When a Petition to Terminate is filed, we sometimes observe a Petition to Review is filed in response – to  correct/amend/expand the description of the work related injury.

In the instant case, the Employer medical expert addressed the issue of the extent of the work related injury. However the WCJ did not find the employer medical evidence to be credible.

In City of Allentown, a Commonwealth Court decision affirmed a WCJ denial of an Employer’s Petition to Terminate benefits, as the Employer failed to prove that Claimant was fully recovered from the work-related injury. The description of the injury was amended/enlarged by the Workers Compensation Judge decision in the Termination petition litigation.

See: City of Allentown v. WCAB (Bryant, Jr.) No. 593 C.D. 2020, (March 11, 2021) a memorandum opinion authored by President Judge Leavitt.

SYNOPSIS OF DECISION

The Commonwealth Court affirmed the decision of the WCJ that Claimant’s work-related injuries exceeded what had been listed on the Notice of Compensation Payable (NCP). For this reason, the Employer failed to prove that Claimant was fully recovered from the work-related injuries, as described in the WCJ in his corrected injury description.  

The Employer medical expert addressed the question of any work-relation of the cervical disc herniations. He stated the neck pain and right shoulder pain were work related but had resolved. He believed the cervical disc displacement was not work related - but expressed the opinion- that he did not know the origin of that condition. This opinion of causation was not assigned credibility by the WCJ.

On appeal, the Employer multiple arguments were not persuasive -

(1)    Expansion of the work injury description to include cervical disc herniations violated Employer’s due process rights and,

(2)    also violated the three-year statute of limitations in Section 413;

(3)    WCJ erred in overruling Employer’s objection to the claimant medical evidence, which was the basis for revising the injury description;

(4)    It was an error to deny the termination petition as Employer proved Claimant had fully recovered from the “accepted” work injury;

(5)    Claimant’s medical testimony was equivocal

(6)    WCJ finding that Claimant was not fully recovered was not supported by substantial evidence.

Detailed Review of Commonwealth Court Decision

Background Facts

In City of Allentown, Claimant was injured on December 9, 2013 in the course of his duties as a firefighter. He felt right scapula pain while lifting a patient.  Employer issued a Medical-Only NCP describing this work injury as “upper back strain”.  Employer issued an amended NCP, describing the work injury as “acute strain to the thoracic spine”. Claimant was paid benefits until his return to work on July 3, 2014.  

A Petition to Terminate benefits was filed by Employer on August 22, 2018, asserting Claimant had fully recovered.  At the initial hearing, the WCJ and attorneys discussed the proper description of the work-related injury. The Commonwealth Court opinion recited this discussion, as it was relevant to their rejection of Employer’s arguments:

WCJ noted the first NCP, medical-only, described an “upper back” injury. In their discussions (off the record) he was advised the area of the body under discussion is “cervical” with possible symptomatology going into the “thoracic region”. 

WCJ: “So the upper back seems to be a fairly good way to describe it.  However, everyone is in agreement that we are also talking (about) the neck.  So we’re not being that specific about thoracic levels or cervical levels, we’re talking about neck and upper back area – does that fairly accurately summarize the discussions we had off the record about the body part(s) and the injury we’re talking about?  Employer’s counsel: Yes, Judge, it does. 

 

Employer Medical Evidence for Termination

Employer’s medical evidence was the independent medical evaluation (IME) report of Dr. Don Ko of December 28, 2017. Claimant was working full time, with continued right shoulder pain.  He reported good results with cervical epidural steroid injections.

Dr. Ko testified Claimant’s physical examination was unremarkable except for trigger point tenderness in the right paraspinal cervical muscles and right upper trapezius muscle; which he attributed to a “sprain/strain type of injury”. The cervical spine MRI of January 11, 2016 showed a disc protrusion at the C6-C7 level.

Dr. Ko opined Claimant suffered from neck pain attributed to the cervical strain and right shoulder pain attributed to the thoracic strain and right cervical disc displacement at the C6-C7 level.  The neck pain and right shoulder pain were work related but had resolved - - as a soft tissue injury would not last beyond six months. 

The cervical disc displacement was not work related.  Claimant’s right shoulder pain was not attributed to the right cervical disc herniation at C6-C7 - as herniation at that level would cause radiating pain in the arm and hand, not into his shoulder region.

On cross-examination, Dr. Ko agreed 2015 and 2016 cervical MRIs both showed a right-side disc protrusion at the C5-C6 level.  There were no medical records of any pre-existing condition or any other injury.  The Commonwealth Court opinion footnote recited testimony of Dr. Ko that he “did not know” the cause of trigger point tenderness noted at IME. 

 

Claimant Testimony & Medical Evidence

Claimant testified and described his medical treatment since the 2013 injury.  In 2016, as he continued to experience right scapular pain with radiation into his neck, he was referred to Dr. Wertz for cervical injections which reduced symptoms for three-four months.  

Claimant’s medical witness, Dr. Wertz, commenced treatment in February 2016 as Claimant complained of pain at the neck and right shoulder blade. Cervical MRI 2016 revealed two small disc herniations at C5-C6 and C6-C7.  Dr. Wertz believed these herniations caused Claimant’s pain and treated him with cervical epidural injections. Cervical MRI 2018 also showed disc herniations at the C5-C6 and C6-C7 levels.  These cervical herniated discs caused axial pain. Claimant’s complaints were consistent and matched the MRI results. He opined the disc herniations were caused by Claimant’s work injury from which he has not fully recovered.

Employer objected to Dr. Wertz’s testimony as he attributed Claimant’s right shoulder pain to the cervical disc herniations, which were not accepted in the NCP.  Employer asserted that Claimant was barred by a three-year statute of limitations in Section 413 from amending the description of injury to include the cervical disc herniations.

WCJ Decision

WCJ denied Employer’s termination petition based upon Claimant’s credible testimony that he continues to experience pain in the neck and scapular area which is relieved by cervical epidural injections.  The WCJ credited the testimony of Dr. Wertz over Dr. Ko.

WCJ found Claimant’s cervical disc herniations were work related based on Dr. Wertz’s testimony.  Conflicting testimony of Dr. Ko was rejected.  

WCJ found the work injury description in the NCP to be “materially incorrect” and amended it to include “annular tears/disc herniations at C5-C6 and C6-C7, from which claimant had not fully recovered”.  The WCJ stated this amendment more accurately described the “upper back strain” that Employer accepted in its medical-only NCP. 

WCJ rejected Employer’s statute of limitations argument on the basis that Section 413 authorizes an amendment of an incorrect NCP at any time.  WCJ overruled Employer’s objection to the testimony of Dr. Wertz.

Employer WCAB Appeal

WCAB held the WCJ did not violate Section 413 or Employer’s due process rights by amending the NCP.  Employer had notice the injury description was an issue. The WCAB concluded the WCJ acted within his discretion to credit Dr. Wertz’s testimony to find Claimant had not fully recovered from his work-related cervical disc herniations. 

Employer Commonwealth Court Appeal

Employer alleged several errors of law: (1) WCJ expansion of the work injury description to include cervical disc herniations violated Employer’s due process rights and (2) also violated the three-year statute of limitations in Section 413; (3) WCJ erred in overruling Employer’s objection to the testimony of Dr. Wertz, which was the basis for revising the accepted work injury described in the NCP; (4) Employer argued WCJ and WCAB erred in denying the termination petition as Employer proved Claimant had fully recovered from the accepted work injury; (5) Dr. Wertz’s testimony was equivocal regarding Claimant’s herniated cervical disc condition; (6) WCJ finding that Claimant was not fully recovered was not supported by substantial evidence.

Commonwealth Court Analysis

Review/Amendment of Injury Description

The Commonwealth Court began its analysis with a review of Section 413 which states, in part:

“… a Workers’ Compensation Judge may, at any time, review and modify or set aside a Notice of Compensation Payable  … in course of the proceedings under any petition pending before such WCJ, if it is proved that such Notice of Compensation Payable or Agreement was in any material respect incorrect.  

“… no Notice of Compensation Payable agreement or award shall be reviewed or modified or reinstated unless a petition is filed with the Department within three years after the date of the most recent payment of compensation made prior to the filing of such petition.”

The Court explained in its analysis, that an NCP may not be modified unless a petition is filed within three years of the most recent payment of compensation, but it may be “corrected at any time”. 

Previously, the Pennsylvania Supreme Court interpreted the first paragraph of Section 413 to mean that “corrective amendments” to an accepted work injury do not require a review petition.  Rather, the WCJ can order a correction where the evidence supports it.  See: Cinram Manufacturing Inc. v. WCAB (Hill), (Pa. 2009).

Due process requires that an employer be given a reasonable opportunity to contest a corrective amendment: “… moreover, the procedures applied by a Workers’ Compensation Judge must obviously comport with due process norms … and therefore reasonable prior notice and an opportunity to respond must be provided to the employer, prior to the implementation of a corrective amendment ….”. Cinram, supra.

In Cinram Manufacturing, the NCP described the work injury as a lumbar strain/sprain.  In the termination proceeding, claimant’s medical expert testified work injury was an aggravation of a pre-existing disc condition that caused nerve impingement.  The WCJ accepted that evidence  and amended the NCP to include nerve impingement. The termination was denied. The Supreme Court affirmed the WCJ’s corrective amendment as the medical experts addressed nerve impingement in their testimony.  Further, the employer did not specify what other evidence it would have presented had it been given express notice that claimant sought a corrective amendment.

The Court cited another similar result. In Walter, a WCJ amended a NCP in a termination petition proceeding to include left suprascapular neuropathy.  The WCAB reversed the WCJ as the employer did not have notice that the injury description was at issue.  The Commonwealth Court reversed and concluded the employer had adequate notice of the corrective amendment as it was announced at the first hearing and medical experts of both parties testified about the claimant’s chronic suprascapular neuropathy.  The Court concluded the employer had a fair opportunity to contest the corrective amendment, as it was unclear what additional evidence the employer could have presented.

In the instant case - the City of Allentown issued both the medical-only NCP and the NCP which described the work injury as an acute strain of the upper back and thoracic spine.  However, Claimant was treating for cervical pain and Employer paid for cervical epidural injections.  At the first hearing, the WCJ and parties agreed they were dealing with Claimant’s neck and upper back area.  Also, Employer’s medical expert testified Claimant’s work injury involved a neck strain, but he opined the herniated cervical discs were not work related. Employer cross-examined Claimant’s medical witness on whether the work injury included cervical disc herniations.  Again – it is unclear what other evidence Employer would have presented had it been given notice of a corrective amendment.  For these reasons, the Commonwealth Court concluded the employer had a fair opportunity to contest the corrective amendment to claimant’s NCP in this case.

Three-Year Statute of Limitations Argument

The Commonwealth Court rejected the Employer’s argument that the three-year statute of limitations in Section 413 requires a different result.  Citing: Fitzgibbons v. WCAB (City of Philadelphia) (Pa.Cmwlth. 2010).

The Court explained the first paragraph of Section 413 applies when a party is seeking to correct an NCP. The second paragraph applies when a party is seeking to expand the description of the work injury to include consequential injuries, i.e., injuries that occurred as a result of the work injury after issuance of the NCP.  

In either case, a petition must be filed within three years of the most recent payment of compensation.  In the instant case, the WCJ decision corrected the NCP injury description based upon evidence presented in litigation of the termination petition.  The Court noted the WCJ is allowed to do so “at any time … in the course of the proceedings under any petition pending … if it is proved that such Notice of Compensation Payable … was in any material respect incorrect”.  Citing Section 413; 77 P.S. § 771.

The WCJ corrective amendment of the NCP - to include cervical disc herniations - did not violate Section 413 of the Act or the Employer’s due process rights.  The WCJ appropriately allowed Dr. Wertz’s testimony that the work injury involved more than an acute strain of the upper back and cervical spine.

Substantial Evidence Argument

The Court rejected Employer’s argument that substantial evidence does not support the WCJ finding that cervical disc herniations were part of the 2013 work injury.  Employer argued the termination petition should have been granted as Dr. Ko testified that cervical disc herniations would cause radiating pain, which Claimant did not have.  Dr. Ko testified that claimant had fully recovered from injury listed on NCP. 

However, Dr. Ko did not contest the MRI findings of cervical disc herniations.  Claimant argued Dr. Ko’s testimony - that claimant had fully recovered from the work injury is not supported by his IME results.  There was no evidence of a pre-existing condition or an intervening event. The Court concluded the WCJ did not err in crediting Dr. Wertz’s testimony. 

Dr. Wertz testified that complaints of pain correlated with the MRI findings and have been consistent since 2016. Cervical disc herniations were caused by the 2013 work injury as there was no evidence of any other trauma. The WCJ credited the testimony of Dr. Wertz over Dr. Ko and that is the prerogative of the finder of fact.  The WCJ determines the credibility of witnesses and the weight to be accorded evidence. Citing: Casne v. WCAB (Stat Couriers Inc.), (Pa.Cmwlth. 2008).

The Commonwealth Court repeated the often-cited principle that a substantial evidence analysis - is not whether there is evidence in the record which supports a finding contrary to that made by the WCJ - but rather, whether there is any evidence which supports the WCJ’s factual finding.  Citing: Hoffmaster v. WCAB (Sunoco Products Inc.), (Pa.Cmwlth 1998). 

An Appellate Court must view the evidence in the light most favorable to the party that prevailed before the WCJ. The Court concluded there was substantial evidence to support the WCJ finding Claimant had not fully recovered from the 2013 work injury which included cervical disc herniations. 

The Court concluded the WCJ was empowered under Section 413 of the Act to amend the description of claimant’s work injury - where the evidence proved that the NCP was materially incorrect.  Employer had a fair opportunity to contest the corrective amendment.

Substantial evidence supported the WCJ’s findings that Claimant sustained cervical disc herniations in the 2013 work injury and had not fully recovered from those injuries.  As such, the WCJ did not err in amending the NCP to include cervical disc herniations.

Best Practices Recommendations:

1. Before the scheduling of an IME appointment – confirm the description of work-related injury to be addressed by your medical expert -

a.       Was the injury description is amended by subsequent Agreement?

b.      … by Subsequent WCJ decision?

c.       … or by subsequent actions – paying for the medical treatment?

2. Obtain all medical records of treatment to assess the presence/absence of any other condition or event that could cause the symptoms under review.
3. Identify to the IME expert – any disputed issues regarding causal relationship of any medical conditions to be addressed in the IME report.
4. Consider a pre-IME medical records review to address any medical causation issues.

The City of Allentown decision highlights the unpredictable nature of litigation. The Employer presented medical expert evidence which addressed the causation issues … but the WCJ did not find that evidence to be credible.