Jobs in Labor Market Survey/Earning Power Assessment Must Actually be Open and Available to Injured Worker in PA Workers’ Compensation

Several years ago, we were excited to tell everyone about the Supreme Court of Pennsylvania decision in Phoenixville Hospital v. Workers’ Compensation Appeal Board (Shoap).  It was this case that made clear workers’ compensation insurance carriers in PA could not simply use a classified “help wanted” ad to reduce every injured worker’s benefits.

If a workers’ compensation insurance carrier in Pennsylvania wants to reduce the benefits of an injured worker, said the Court, the jobs shown must not only be open at the time they are found, the potential jobs in a Labor Market Survey (LMS) or Earning Power Assessment (EPA) should “remain open until such time as the claimant is afforded a reasonable opportunity to apply for them.”  The reasoning behind this, of course, is that an LMS/EPA is not just a tool to cut the benefits of injured workers; it should be a device to assist an injured worker back to gainful employment.

The Commonwealth Court of Pennsylvania recently had to address exactly what a workers’ compensation insurance carrier needs to prove in this regard.  In Smith v. Workers’ Compensation Appeal Board (Supervalu Holdings PA, LLC), the injured worker (Claimant) hurt his neck and back.  At the time he was injured, he was earning an “Average Weekly Wage” (AWW; the calculation we do under the PA Workers’ Compensation Act to see the amount of benefits due to the injured worker) of $992.50.  The injury was accepted by the insurance carrier as a cervical strain and sprain (making eventual fusion surgery required due to the work injury a curious fit to that modest diagnosis).

Eventually, the workers’ comp insurance company had an LMS/EPA performed.  This found five jobs alleged to be open and available with weekly pay from $360.00 to $440.00 per week. The average weekly earnings for the five jobs would equate to $400.56.  Claimant applied for each of the five jobs, interviewing for two of them, and received no offers of employment (in addition to applying for jobs on his own).

Seeking to reduce the workers’ compensation benefits, a Petition for Modification was filed by the insurance carrier.  After hearing the evidence, the Workers’ Compensation Judge (WCJ) granted the Petition for Modification.  The vocational counselor offered by the insurance carrier was found credible.  As to the Claimant, the WCJ found, “there is nothing in the record to indicate that the five job positions were not open and available at the time of his application process, nor is there any evidence in the record to indicate that they were already filled, and did not exist.”  Based on the evidence of record, the WCJ reduced the workers’ comp benefits using the $400.56 earnings of the jobs in the LMS/EPA. This led to a new rate of $394.63 (the rate had been $661.67).

This decision was affirmed by the Workers’ Compensation Appeal Board (WCAB), who found that the Phoenixville Hospital case only requires that the potential job be open and available when the LMS/EPA is performed.  According to the WCAB, it was the burden of Claimant to show the jobs were not open and available to him.

Upon further appeal, the Commonwealth Court of Pennsylvania disagreed with the approach taken by the WCAB.  Said the Court:

Based on Phoenixville and Valenta, we hold that a modification of benefits based on proof of earning power associated with specific positions cannot be granted without evidence in the record that the specific positions remain open until such time as a claimant is afforded a reasonable opportunity to apply for them. In the absence of such evidence, earning power associated with specific positions cannot be used in the calculation of earning power under Section 306(b).”

Here, the Court found that the evidence did not support a finding that all of the jobs remained open and available when Claimant applied.  Both the WCJ and WCAB placed the burden erroneously on Claimant.  Simply submitting an application, without more, did not mean the job was open.  However, the two jobs for which Claimant interviewed were, by those interviews, shown to be open.  Therefore, the Court modified the decision of the WCJ to include only the earnings from those two jobs for which he interviewed (earnings of $386.00 per week, a bit less than that found by the WCJ).

While one may think that applying for jobs in a LMS/EPA is always a good idea, this case demonstrates that, as they say, the road to failure is paved with good intentions.  As with many situations in PA workers’ compensation, the response to a LMS/EPA depends on the facts of that particular case.  It is critical that an injured worker get legal advice, specific to his or her own facts, to best handle the situation.  The Court dealt primarily with the “open” part of the equation.  The WCJ in this case, as the ultimate Finder of Fact, could have determined that the efforts of Claimant in looking for work proved that the jobs were not “available,” which may have led to a different result.