Articles Posted in Case Law Update

The Pennsylvania Workers’ Compensation Act (“Act”) has several “offsets,” which provide a workers’ comp insurer with a credit for other types of benefits received by an injured worker, such as unemployment compensation, Social Security Retirement (“SSR”), severance and pension benefits. These offsets were created to avoid a perceived “double dipping” by an injured worker, getting paid (in theory) twice for one injury.

These offsets are set forth in Section 204(a) of the Act. Each of the benefits is treated differently. For example, with SSR, the workers’ compensation insurer is entitled to a credit of fifty percent of the SSR benefit, “Provided, however, [t]hat the Social Security offset shall not apply if old age Social Security benefits were received prior to the compensable injury.” On the other hand, “benefits from a pension plan to the extent funded by the employer directly liable for the payment of compensation which are received by an employe shall also be credited against the amount of the award.” Notably, there is no mention of a difference whether the pension benefits were received prior to the work injury. So, what happens if an individual retires, starts getting a pension and then is injured?

This situation was recently addressed by the Commonwealth Court of Pennsylvania in the case of Bradford County and PCOMP v. Pasko (Workers’ Compensation Appeal Board). Here, the injured worker (“Claimant”) was employed by Bradford County for 25 years, when he retired in 1993. Upon his retirement, Claimant began to receive an employer-funded pension.

When we litigate cases in the Pennsylvania workers’ compensation system, we often resolve such matters through a Stipulation of Facts.  This agreement of the parties is then approved by a Workers’ Compensation Judge (WCJ) and has the same effect as any other decision of a WCJ.  This kind of resolution often can resolve disputes quickly and easily, saving the parties the time and effort of unnecessary litigation.

Once a Stipulation of Facts is approved by a WCJ, and the appeal period passes, it can no longer be disturbed.  Maybe. A recent decision by the Commonwealth Court of Pennsylvania addressed a situation where it was necessary to set aside a Stipulation of Facts after it was approved by a WCJ.

In VNA of St. Luke’s Home Health/Hospice, Inc. v. Elizabeth Ortiz (Workers’ Compensation Appeal Board), the injured worker hurt her left shoulder at work in 2017.  The workers’ comp insurer accepted the injury as a “left shoulder strain.”  Believing her injury was more significant than that accepted, the injured worker filed a Claim Petition (though it seems more in the nature of a Petition for Review), alleging additional diagnoses.  Based largely on the testimony of the injured worker, that there were no issues with the left shoulder before the 2017 work injury, and the medical records stating the same, a Stipulation of Facts was reached, expanding the work injury to include “a left rotator cuff tear and biceps tendon injury.”  The Stipulation of Facts was approved by a WCJ in 2019.

The standard fee agreement in Pennsylvania workers’ compensation is 20% of the benefits obtained or awarded to an injured worker.  PA Courts have found this amount to be reasonable, and it remains the standard charged.  Historically, this pertained just to wage loss, or what we call “indemnity” benefits.

This was somewhat changed by a 2020 decision by the Commonwealth Court of Pennsylvania in the case of Neves v. Workers’ Compensation Appeal Board (American Airlines).  Here, the Court found that an attorney for the injured worker could obtain 20% of the medical bills, as well as 20% of the wage loss benefits.  While some attorneys immediately started using this ability, others, our firm among them, hesitated to do so.  We were unsure how that 20% fee would be dealt with by the healthcare provider.  More specifically, we were concerned that our client could potentially be liable for the 20% we would be taking as a fee.  This, of course, was a risk we would never place on our clients.

However, the Commonwealth Court of Pennsylvania has now clarified that risk in the recent case of Williams v. City of Philadelphia (Workers’ Compensation Appeal Board).  In that case, the Workers’ Compensation Judge (WCJ) refused to grant a 20% fee on the medical benefits, despite it being requested by the attorney and agreed upon by the injured worker.  While the Workers’ Compensation Appeal Board (WCAB) affirmed, the Commonwealth Court reversed, finding that the 20% fee on the medical benefits should have been granted.

The Pennsylvania appellate courts have consistently determined that a Workers’ Compensation Judge (WCJ) is the final arbiter of credibility in a PA workers’ compensation case.  Short of finding that a credibility determination by the WCJ is “arbitrary and capricious,” these determinations are to be accepted by the courts.  This makes sense, since it is the WCJ who actually sees and evaluates the witnesses and the evidence directly.

Every once in a while, though, a WCJ’s credibility determinations are challenged on appeal, often by casting the attack in a different light.  Recently, the Commonwealth Court of Pennsylvania stopped such an effort by the Workers’ Compensation Appeal Board (WCAB) in the case of Lawry v. County of Butler (Workers’ Compensation Appeal Board).

In Lawry, the WCJ heard the testimony of the injured worker and reviewed the medical evidence, and largely denied the insurance carrier’s Petition to Terminate benefits.  To be specific, the WCJ found that the injured worker had fully recovered from “right thumb strain/sprain and right ulnar collateral ligament tear.”  Importantly, though, the WCJ also “determined that Employer failed to meet its burden of proving that Claimant fully recovered from her RSD/CRPS.”

One of the most important determinations in any PA workers’ compensation case is the Average Weekly Wages (AWW).  As we have explained in prior blog posts, if an injured worker has been employed for over a year, and is not paid a fixed amount each pay period, the AWW is determined by dividing the year prior to the date of injury into four quarters.  The top three of those quarters are then averaged.  This is the AWW.  The compensation rate is calculated from this figure.

For years, the Pennsylvania appellate courts have held that periods of lay off count within this calculation.  The Courts have said that the “employment relationship” continues through the lay off.  This often leads to a deflated AWW for an injured worker unfortunate enough to have undergone periods of lay off in the year before the injury (since those periods of lay off would be a zero for each pay period). Recently, a PA workers’ compensation insurance carrier tried to use this sword as a shield.

In Resources for Human Development, Inc. and Gallagher Bassett Services v. Sherry Dixon (Workers’ Compensation Appeal Board), the injured worker was employed by Resources for Human Development, Inc., as a home health aide.  The injured worker suffered a “strain or tear” to her “multiple trunk” (their word usage, not ours) when a patient fell on her.  Since the injured worker also was employed by Public Partnerships, LLP, she filed a Review Petition alleging that she had concurrent employment (so the AWW would be based on earnings from both of those jobs).

In Pennsylvania workers’ compensation, physical and mental injuries are treated very differently.  Is that fair?  Probably not, but that is the law with which we are left.

A physical injury, like a herniated disc in the neck or back, a rotator cuff tear in the shoulder or a ligament tear in a knee, are compensable under the PA Workers’ Compensation Act (Act), as long as the injured worker was within the scope and course of his or her employment at the time of the injury.  A mental injury, like post-traumatic stress disorder (PTSD), anxiety or depression, on the other hand, must be due to “abnormal working conditions” to be compensable (unless resulting from a physical injury).

It is the interpretation of this phrase, “abnormal working conditions,” upon which such a case turns.  As the court decisions have taught us, that phrase is very fact specific.