PA Workers’ Compensation Judge Lacks Authority to Place Preconditions Before Holding Hearing on Compromise & Release Agreement

As most of you know, the Pennsylvania Workers’ Compensation System is within its own “bubble.”  PA workers’ compensation cases are not litigated in the general State court system.  Within this system, each Workers’ Compensation Judge (WCJ) has his or her own particular procedures for how he or she handles their caseload.  These procedures, however, must remain consistent with the dictates of the Pennsylvania Workers’ Compensation Act (Act).  A recent decision from Commonwealth Court provides an example of when a WCJ’s procedures are at odds with the Act.

In Trustees of the University of Pennsylvania v. Natalie Braas, Corey Grink, and Dean Kenniff (Workers’ Compensation Appeal Board), a Petition for Termination and two Petitions for Review of Utilization Review Determination were being litigated before a WCJ.  After the evidentiary record was closed, and after the Defendant submitted its brief, the parties reached an agreement to settle the case by Compromise & Release.

To complete the Compromise & Release, the Defendant filed a Petition to Seek Approval of Compromise & Release Agreement.  This was filed under the same dispute number as the pending Termination and Utilization Review Petitions.  As would be expected, the new petition was assigned to the same WCJ who was presiding over the pending litigation.

Section 449(b) of the Act requires that “The workers’ compensation judge shall consider the petition and the proposed agreement in open hearing and shall render a decision.”  That section of the Act goes on to state that the hearing “shall” be done on an “expedited” basis, and that a decision on the Compromise and Release Agreement “shall” be issued within 30 days.

In this case, the parties submitted a completed Compromise & Release Agreement, signed by all parties, to the WCJ.  The Compromise & Release Agreement provided that all future benefits were being released, but that a decision was still required on the Termination and the Utilization Review Petitions for the past benefits.

The WCJ rejected this Compromise & Release Agreement and instructed the parties that “[t]he [C&R] Agreement must resolve all issues raised by all petitions or it will not be entertained.”  No hearing was held by the WCJ.  Instead, the WCJ circulated a decision granting the Termination Petition, and denying the Utilization Review Petitions.  The Compromise and Release Petition was dismissed, “as the issues presented [in the Termination and UR Petitions] went to decision.”

Upon appeal, the Workers’ Compensation Appeal Board (WCAB) vacated the decision rendered by the WCJ and remanded back to the WCJ (it would be a different WCJ, as the WCJ who authored the original decision since retired), to hold the requisite hearing on the Compromise & Release Agreement.  The WCAB found that the WCJ exceeded her authority by requiring conditions that were not within the Act.  Based on the clear language of the Act, the WCJ was required to schedule and hold a hearing on the Compromise & Release Agreement and issue an expedited decision on that petition.  Further, the WCAB stated that a Compromise & Release Agreement can require that a decision still be rendered on some aspect of the case; the Act has no such limitation that a Compromise & Release Agreement must “resolve all issues raised by all petitions.”

The Commonwealth Court of Pennsylvania then affirmed the decision of the WCAB.  The Court agreed that the language in the Act is clear and must be given effect.  The WCJ erred by requiring conditions, not contained within the Act, before scheduling the hearing that is required under the Act.  The word “shall” means that a WCJ may not exercise discretion in whether to schedule and hold that hearing.  The Court did not address what would happen to the Termination and Utilization Review Petitions, merely saying that a WCJ must have a hearing to address the Compromise & Release Agreement before any further decisions can be rendered.