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).      
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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 Supreme Court agreed with Employer argument that it would be illogical to require an employer to issue an LIBC notice before employer has conceded a work injury occurred or before employee has proven entitlement to any benefits. (slip opinion p. 19).

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.
           

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.

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.

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.

• 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?

Employer awarded Attorney Fees and Costs payable by Employee!

Extraordinary award of Attorney Fees and Costs in appeal - payable to Employer by Employee and Employee Counsel.

The general rule is that reasonable Attorney Fees are awarded to Employee and payable by Employer, where the Employee succeeds in litigation ... unless the Employer meets its burden to establish sufficient facts to prove a reasonable basis exists for the contest of the petition.
See: Section 440; 77 P.S. 996.

Where there is a reasonable contest of a petition, Section 422 allows the Workers' Compensation Judge to approve a reasonable attorney fee - up to 20% - to be deducted from the Employee indemnity wage loss benefits.

What about the unreasonable contest of a petition by Employee?

There are occasions where the filing and litigation of a petition by an Employee are similar to the circumstances which have resulted in an award of attorney fees and costs against an Employer.
... what's good for the goose, is good for the gander?
Not in PA work Comp practice.

Past appellate decisions interpreted Rule 2744 of the PA Rules of Appellate Procedure to preclude the award of attorney fees and costs to an Employer, even where the Employee pursued what was considered a frivolous appeal.

In an extraordinary set of circumstances, the Commonwealth Court issued a per curiam opinion which sua sponte imposed the sanctions of attorney fees and costs incurred by Employer to defend a frivolous appeal pursued by Employee.
See: Smith v. WCAB (Consolidated Freightways Inc.), No. 606 CD 2014, filed March 9, 2015.

Factual and Procedural Background

As noted above, this case reported an extraordinary set of circumstances.
The extent and duration of litigation are unlike the typical workers' compensation proceeding. Yet this case remains a point of discussion for several reasons, as reviewed below.

In May 1996 Employee filed a Claim petition alleging disability as a result of his brief exposure to a chemical in the course of his work duties as a truck driver.
In October 1997 Employee filed a Review petition alleging entitlement to medical expense payments.
WCJ decision denied both petitions.
WCAB affirmed the WCJ denials.
There were no further appeals.

Subsequently Employee filed "additional petitions" which were described as an effort to re-litigate the same alleged injury. The PA Supreme Court and US Supreme Court declined Employee requests for further review.

The instant petitions were a Petition to Review Medical Treatment and a Penalty petition.
This constituted the 5th time Employee was before the Commonwealth Court for the same injury claim.

The 4th time Employee was before the Commonwealth Court resulted in an unpublished December 2011 Memorandum decision.
This decision affirmed the WCAB dismissal of 6 Review Petitions, on the basis that they were barred by res judicata and collateral estoppel effect of the decision in the 1996 and 1997 petitions.

In the 2011 decision the Commonwealth Court noted the Employee appeal was frivolous and conduct of Employee and his Attorney was "obdurate and vexatious".
... over a period of 15 years Employee filed approximately 15 petitions, all based upon the same incident...
... at least 5 hearings have been held by 4 different WCJs...
... Employee was before the Commonwealth Court 4 times,
...the PA Supreme Court 4 times,
... the US Supreme Court 2 times,

AFTER that 2011 Commonwealth Court decision ... 
Employee and his Attorney filed 2 more petitions in December 2012, raising the same issues.
The WCJ granted Employer's motion to dismiss these petitions. The WCAB affirmed.

So, in this 5th Commonwealth Court appeal, the court concluded (once again) the Employee petitions were barred by the legal doctrines of res judicata and collateral estoppel.

The behavior of Employee and his counsel was described as "precisely the type of obdurate and vexatious conduct which PA RAP 2744 was designed to prevent". 

The 2015 Court looked back to its 2011 review of the caselaw.  The 2011 court referenced the PA Supreme Court decision in Phillips v. WCAB (Century Steel), 721 A.2d 1091 (Pa. 1999).
In Phillips, attorney fees were not awarded to Employer.  
An award of attorney fees to an Employer was said to thwart the declared intent of the Act, which is to give claimants the opportunity to receive attorneys fees in the event of an unreasonable contest by the opposing party.

But the Phillips court specifically distinguished their ruling from a decision where costs were awarded.

In Patel v. WCAB (Saquoit Fibers Company) 520 A.2d 525 (Pa. Cmwlth. 1987) costs were awarded to Employer, payable by Employee pursuant to PA RAP 2744.
The Patel court added, an award of attorney fees to Employer would have been appropriate, had a request been filed.

The Patel procedural history reflected the filing of (only) 3 separate claim petitions with 3 separate appeals to the Commonwealth Court.

2015 Commonwealth Court Decision

In the instant appeal, the Commonwealth Court in Smith asserted that the PA Supreme Court decision in Phillips, which preserved the Patel ruling would support their award of costs and attorney fees incurred by Employer to defend this frivolous appeal.

The Court took the rare affirmative step to award costs and attorney fees, in the absence of a request by Employer. As mentioned in footnote 5, the Court explained,  Employer could not reasonably have been expected to request fees, in light of the prior appellate decisions.

PRACTICE POINTERS:

1. What to take away from this unique case...

This award of attorney fees and costs pertained only to the frivolous appeal. There was no award of attorney fees and costs for the time and expense incurred in the underlying litigation. 

2. There is an Employee remedy to receive an award of attorney fees and costs in the litigation of any petition before a Worker's compensation Judge. The statutory language at Section 440 (a) specifically mentions "the employee or dependents" as the party who is entitled to reasonable costs and attorney fees, where the case is decided in their favor. 

This language does not bestow the same right upon Employer.
In my experience, no workers compensation judge will interpret this unambiguous language to provide the Employer with any similar remedy. In fact, on the rare occasion when I have asserted a right to reimbursement of costs, I've been told that my argument may rise to the level of an unreasonable contest and allow Employee to receive an attorney fee award!

3. In appellate matters, this case may provide a stronger argument for an Employer award of attorney fees and costs. However, I believe this type of award will remain the exception, rather than a more common ruling. 

Impairment Rating Evaluation - the continued challenge and review of the Employer Remedy

Impairment Rating Evaluation and the "MMI" requirement.
Since 1996, the Employer and Insurer have a remedy in the Pennsylvania Workers Compensation Act, to limit the duration of payment of total disability indemnity wage loss benefits to the injured worker. This is accomplished via the filing of a request to have the injured worker attend an Impairment Rating Evaluation (IRE).

We have described the IRE as the "best remedy" to the Employer and Insurer.
Why? For two reasons.

First, there is the limitation of the duration of total disability benefit payments to the injured worker, via a successful IRE.

Second, in your subsequent settlement evaluations of future benefit liability, you may use the remaining duration of TTD status to assess the claim settlement value, rather than calculate settlement value based upon the entire 500 week period!

In the Work Comp practice, we witness a continuing pattern of challenges and appellate review of successful IRE modifications by Claimants and their Attorneys.

Neff v. WCAB (Pa Game Commission), No. 130 C.D. 2014, is a reported decision of a panel of the Commonwealth Court of Pennsylvania, authored by Judge Brobson on January 8, 2015.
In this decision,  the Court addressed the issue of future surgical care, alleged as a factor, in the argument against a finding of Maximum Medical Improvement (MMI).
Note: a finding of MMI is a necessary precursor to the utilization of the IRE remedy.

Factual and Procedural Background

Employee sustained a work injury to the right wrist in February 2004, in the course of screwing bluebird boxes together, in her duties with the PA Game Commission. An NCP was issued and described the injury as "right wrist - carpal tunnel syndrome".

A subsequent Employee Review Petition was filed in July 2006 and was successful to expand the description of injury to "chronic lateral epicondylitis of the right elbow".
[Employer's 2006 Petition for Termination/Suspension was denied in February 2008].

In February 2009, the parties entered into a Compromise and Release Settlement for the carpal tunnel injury ... but Employer remained liable for the lateral epicondylitis injury.
(why the "partial" settlement? see below at Practice Pointer #4)

In January 2011,  Employer filed a Modification Petition based upon an IRE by by William R. Prebola, M.D., conducted on December 15, 2010. This IRE resulted in a determination that Employee had reached MMI status and her whole person impairment was 1%, in accord with the AMA Guides.

WCJ granted this Modification Petition .

Employee appealed. The WCAB affirmed.
Employee appealed to the Commonwealth Court.

Employee Commonwealth Court Argument:

The IRE was invalid.
The IRE was premature.
There is a reasonable potential for future surgery, which would change her condition.
On this basis, Employee argued she was not at "MMI".

Employee relied upon the decision in Combine v. WCAB (National Fuel Gas Distribution Corp.) (Pa. Cmwlth. 2008) for the proposition that the IRE physician must first determine that the worker has reached MMI status before calculating an impairment rating.


The Court reviewed the AMA Guides definition of Maximum Medical Improvement, (as they did in the Combine case).
"... the Guides instruct that an individual is at MMI when his/her condition has become static or stable and that while further deterioration or recovery may occur at some point in the future, one would not expect a change in condition at any time in the immediate future. Combine, 954 A.2d at781."

Dr. Prebola repeatedly testified  that this Employee was at MMI status.
He understood that there was some discussion regarding future surgery.
He explained - with or without treatment - she was at MMI.
He agreed, surgery would be a reasonable treatment option.
Surgery has the potential for improvement of her pain and symptoms, but surgery will not "cure" her, she would have some permanent damage and remained impaired.

Whether an injured worker has reached MMI is a matter of application of the Guides to the workers' condition. If the medical expert considers the appropriate factors required by the Guides, the WCJ may rely upon the medical expert's determination that a worker has reached MMI.

This testimony from Dr. Prebola is compatible with the Guides description of MMI.
- slip opinion page 7.
The WCJ and WCAB decisions were affirmed by the Commonwealth Court.

Practice Pointers:

1. Diary every open file for review at the 104th week of total disability status for consideration of the filing of an IRE Request. LIBC- 766.

2. Schedule all total disability cases for an Impairment Rating Evaluation. 

3. Use this opportunity to assess the necessity of an IME to address work capability and a Vocational Expert examination to establish a post injury earning capacity. 

4. There are several valid reasons to pursue a settlement of less than all of the "components" of the admitted work injury. First, You can end your future medical expense liability for that condition. Second, you insulate the Employer from any future petitions involving indemnity wage loss benefit issues, related to that injury. 

4.1 Another strategy is to settle all indemnity wage loss benefit issues and allow future medical expense submissions ... limited to a specific diagnosis ... or for a specific time duration ... or for a specific procedure... or for a specific $ amount of care.

Employee Wage Loss due to "Economic Conditions" IS NOT a Compensable Wage Loss.

Suspension of Indemnity Wage Loss Benefits - Despite Employee post-injury wage loss. 

An injured employee is entitled to indemnity wage loss benefits when the work injury prevents a return-to-work. If an employee returns to work at wages equal to or greater than the pre-injury wage, a Suspension status is appropriate.

Typically, when an employee returns to work, at wages less than the time-of-injury average weekly wage, the employee is entitled to 66 2/3 % of the difference between the post-injury wage and pre-injury wage. This Permanent Partial Disability (PPD) benefit is payable for a duration up to 500 weeks.

There are specific exceptions to this General Rule.
At times, a post-injury loss of earnings IS NOT compensable as a wage loss, where the wage loss attributed to "economic conditions".

Donahay v. WCAB (Skills of Central PA Inc.), No.869 C.D. 2014, is a reported decision of a panel of the Commonwealth Court of Pennsylvania, authored by Judge Leavitt on February 4, 2015, which discusses one of the exceptions to the General Rule regarding compensation for post-injury wage loss.

Factual and Procedural Background

Employee injured her right arm in February 2011 while working as a team leader and residential services assistant.
Employer initiated total disability benefits via an Agreement for Compensation (LIBC-336).
Employee Average Weekly Wage (AWW) was $816.48.
Her temporary total disability (TTD) rate was $547.04 per week.

Employee returned to her job in August 2011, with:
(i) restrictions on her physical duties and
(ii) earning less than her pre-injury AWW.

In February 2012 Employer Filed a Petition for Termination of benefits based upon a medical examination of Sanjiv Naidu, M.D.
Employer filed a Petition for Suspension of benefits as of March 2012, asserting employee was capable of performing her pre-injury job.

WCJ Proceedings

The residential services assistant works with mentally challenged adults. These duties include cooking, cleaning and helping clients with activities of daily living.
The team leader oversees the RSA and prepares work schedules, site reports and schedules medical appointments for the clients.

In August 2011, when Employee returned to work, her physical restrictions did not affect her ability to perform her RSA job duties.
In October 2011 employee resumed her team leader duties.

Employee testified she was performing the same job she did at the time of injury; one day a week she performs paperwork, the remainder of the week she cares for clients.
Her physical restrictions did not impede her ability to perform her regular job duties BUT she disagreed with Dr. Naidu's opinion that she is fully recovered, as she did not feel capable of lifting over 50lbs (her physician's restriction) and she still experiences pain with certain activities.

AWW and PPD benefit entitlement issue.

At the time of injury employee earned $11.43 per hour.
When she returned to work her rate was $11.66 per hour.

Prior to her injury she worked a good deal of hours (80-85 hours per week) beyond her regular 40 hour work week, as the facility was short-staffed.
When she returned to work she said her physician limited her to 45 hour work week, so she limited her own work schedule. (Dr. Sensiba did not explicitly limit her work hours).

Employer HR administrator Teresa Burbidge testified that after her work injury, the Employer experienced significant funding cuts, such that limits were imposed on staff over-time hours and additional staff was hired to work at "straight pay".
Employee was working an unusual amount of overtime hours at the time of her injury, due to under-staffing.
Since her return-to-work, less overtime was available, BUT employee chose to limit herself to 45 hours per week.

Burbidge confirmed employee could perform her regular job duties, within her physician restrictions, as her clients were independent and required little direct care.

Employee medical expert was Paul R. Sensiba, M.D., her treating Board-Certified orthopedic surgeon. He testified she could return to work with maximum lifting up to 50lbs. The were specific lifting/carrying limits, BUT he did not limit the amount of hours she could work.

WCJ DECISION

WCJ found Dr. Sensiba credible regarding the employee's return -to-work limits and rejected the medical opinion of Dr. Naidu for a termination.
WCJ found employee was not limited in her overtime work hours.
WCJ found Employer witnesses were credible regarding her work conditions.

WCJ found employee had returned to her pre-injury job, with reasonable restrictions .
WCJ found her residual impairment DID NOT result in a loss of earning power.

The extraordinary pre-injury overtime hours were temporary.
Employee's post-return loss of earnings resulted from her self-imposed limits on overtime and Employer's current overtime limits for all employees.

There was no causal relationship between the employee's loss of earnings and her work injury. (ff #15).
The Economic situation resulting in extraordinary overtime was rectified, resulting in reduced overtime for employee as well as other employees.

Employee's earning power was no longer affected by her work injury and she is no longer entitled to PPD benefits, even though her current earnings do not match her pre-injury earnings. 

Employee's PPD benefits were suspended, as;
(i) her injury was not causing her loss of earnings;
(ii) her combined wages and PPD benefits exceeded that of her fellow employee wages.

COMMONWEALTH COURT DECISION

Employee appealed and argued the WCJ (and WCAB in its affirmation) erred as a matter of law in granting an order of suspension, where she suffered a loss of earnings.
Employee argued, as she returned to work with physical restrictions, her PPD benefits should not be suspended.

The Court reasoned, Section 306 (b)(1) entitlement to PPD benefits is limited to the decrease in earning power which is caused by the work injury.

A difference between pre-injury and post-injury earnings does not automatically entitle a claimant to partial disability benefits. citing Harle v. WCAB (Telegraph Press, Inc. ) (Pa. 1995).

In Harle a press operator injured his thumb and was released to return-to-work, without restrictions. However his employer went out of business. He secured a press operator job with another company, but his wage was $2.00 per hour less. He was not entitled to PPD benefits for that wage difference, as his loss was due to factors, other than the injury to his thumb.

Another case was referenced by the Court, regarding the employee's lack of entitlement to PPD benefits, where overtime hours were no longer available. In Trevdan Building Supply v. WCAB (Pope) (Pa. Cmwlth. 2010) a claimant was entitled to PPD benefits for loss of overtime hours when he returned-to-work but he could not perform overtime hours due to his injury.
However, in a subsequent time frame, PPD benefits were not available to claimant when all employees lost their overtime hours due to an economic downturn.

Note: Pope was similar to the instant Employee, as he was released to his time-of-injury job with restrictions, which restrictions did not require modification of his work duties. This was considered the equivalent of returning to work without restriction.

The Court rejected employee's argument that she should receive PPD benefits, as she returned to work with restrictions, similar to the claimant in Harper & Collins v. WCAB (Brown) (Pa. 1996).
Brown returned-to-work in a light duty position. Overtime work hours became unavailable to any employees due to economic circumstances. However, Brown was entitled to PPD benefits.

Here, employee returned-to-work in her regular job duties (not light duty).
Her medical restrictions do not affect her ability to perform her regular job duties.
The only work duties that could possibly exceed her restrictions, no longer existed (ex. wheelchair-bound patients, etc.).
Her current hourly wage exceeds her earlier hourly rate.
Her loss of overtime hours is the result of (1) the addition of staff and (2) the limitation of all employee overtime hours due to economic circumstances.

Note: the WCAB and Court did not address the legal argument regarding the suspension of benefits based upon the fact that the Employee's combined wages and PPD benefits exceeded those of her fellow workers, in violation of section 306 (b)(1).

Conclusion: For all of the above reasons, this employee is not entitled to the payment of partial disability benefits for the difference in her current earnings compared to her time-of-injury wages. 

PRACTICE POINTERS:

1. The detailed facts presented, reflect the level of complexity required in the analysis of the employee entitlement to any partial disability benefits. It is not a simple comparison of the time-of-injury wage to the post-injury earnings. 

2. When assembling your information to propose a return-to-work remedy ... in addition to the matching of the physical restrictions to the work tasks, be mindful of the additional issues such as pay rates, work hours and overtime hours. 

Where employees customarily work overtime hours, remember that a 40 hour work offer will result in a PPD entitlement. Is this PPD status desired?

3. Carefully examine the medical expert restrictions (or work capabilities) to assess whether the "restrictions" actually apply to real, existing work tasks or job assignments. Can the employee perform their "regular" work duties?

4. The characterization of a "return-to-work" as one without restriction  raises a different legal standard and consequences, compared to a return-to-work, with restrictions.

In certain instances this can be the difference between a Suspension status and an obligation to pay ongoing  PPD benefits.

Review all of the aspects of the proposed return-to-work with your work comp team members.