Claimant had sustained occupationally-related cervical and lumbar spine injuries on June 6, 1997 and on March 31, 1998, and had incurred another work-related cervical injury on September 3, 1998. After the 1998 injury, claimant never returned to work. At that point, he was fifty-one years old and had been a twenty-year employee of the employer. He thereafter received workers' compensation indemnity benefits, as appropriate.
On June 5, 2003, claimant underwent an Independent Medical Examination conducted by Dr. Levenberg, who concluded that, despite residuals from his injuries, claimant was nevertheless appropriate for full time sedentary work. A Notice of Ability to Return to Work, Workers' Compensation Bureau form LIBC-757, was issued to claimant on June 26, 2003. On June 22, 2004, a Modification Petition was filed on employer's behalf based upon a Labor Market Survey conducted by a vocational rehabilitationist, premised upon Dr. Levenberg's medical allowances for claimant to work. On June 24, 2004, a Suspension Petition was filed on employer's behalf, alleging that claimant had voluntarily withdrawn himself from the labor market because he had retired, that any wage loss he was experiencing was due to this fact, and that he was therefore no longer entitled to workers' compensation indemnity benefits.
These matters were litigated, and the Workers' Compensation Judge (WCJ) ultimately credited Dr. Levenberg's medical findings, assessing claimant as capable of performing sedentary work, over claimant's doctor's testimony that claimant could not work. However, the Judge did not grant the Modification Petition. In regard to the Suspension Petition, claimant was receiving a retirement pension through the employer, as well as Social Security Administration (SSA) disability benefits. Claimant testified that he believed he could not work. The WCJ concluded that claimant had not voluntarily withdrawn himself from the workforce, and that claimant's choice to take his retirement pension was an economic decision. Therefore, the Suspension Petition was denied.
Employer appealed to the Workers' Compensation Appeal Board (WCAB), which affirmed the Judge's denial of the Suspension Petition. The WCAB remanded the case back to the WCJ for presentation of certain additional evidence concerning the Modification matter.
On remand, the WCJ again denied the Modification Petition. He did not credit the vocational counselor's testimony concerning job availability and held that the jobs described in the Labor Market Survey were actually unavailable to claimant. He also concluded that claimant was physically unable to perform the jobs that had been identified as appropriate for him by the Labor Market Survey. In his Remand Decision, the WCJ did not re-address the Suspension Petition because the previous denial of this petition had already been affirmed.
Employer again appealed to the WCAB, which affirmed the WCJ's Remand Decision. Employer then appealed to the Commonwealth Court, alleging that the WCAB had erred in denying the Suspension Petition because claimant had retired and had also erred in denying the Modification Petition.
The Commonwealth Court's Holding
The principal question for the Commonwealth Court on appeal was whether claimant had retired, and in so doing, had he voluntarily withdrawn himself from the workforce? If he had, then a Suspension of his workers' compensation indemnity benefits payments was appropriate.
The Court first noted that in Southeastern Pennsylvania Transportation Authority v. WCAB (Henderson) , 669 A.2d 911 (1995), the Pennsylvania Supreme Court had held that, if it is established a claimant has voluntarily withdrawn himself from the workforce by retiring, the employer does not then need to show that the claimant has been referred to open positions and failed to follow through in applying for them in good faith, or that work is generally available within the claimant's restrictions in his geographic area of residence. Instead, once it is established that a claimant has retired, the burden then shifts to the claimant to show either that he is still seeking employment after retiring, or that he was forced to withdraw from the workforce due to his work-related injury, in order for him to defeat a Suspension Petition. In the instant case, employer argued that claimant had retired, in view of the fact that he had accepted a retirement pension.
The Court then cited language from Day v. WCAB (City of Pittsburgh), 6 A.3d 633, 639 (Pa. Cmwlth. 2010) (en banc): "In order to prove that a claimant has retired for purposes of the Henderson standard, the 'employer must show, by the totality of the circumstances, that the claimant has chosen not to return to the workforce.'" The Commonwealth Court indicated the totality of the circumstances in the instant case showed that claimant had indeed voluntarily withdrawn from the workforce. He had not worked since his last occupational injury, occurring in 1998. Soon after he stopped working, claimant applied for and received retirement pension benefits through the employer, plus SSA disability benefits. The Court noted that claimant could not work and still receive the SSA disability benefits. Claimant received the Notice of Ability to Return to Work in June 2003, informing him that he was cleared to perform full-time sedentary work, and that he had an obligation to look for available employment, according to language in that form. The Judge found claimant was medically capable of performing full-time sedentary work. However, claimant did not testify he ever attempted to find work.
Once claimant sought and received a retirement pension as well as disability benefits that precluded him from working, he received a Notice of Ability to Return to Work which informed him that he was capable of sedentary work approximately a year before employer filed its Suspension Petition, and then did not look for work. The totality of circumstances indicated to the Court that claimant had indeed retired and had therefore voluntarily withdrawn himself from the workforce. Claimant did not rebut this conclusion by establishing he was still looking for work, or that his work-related injury had forced him out of the entire job market. Accordingly, it was held that the WCAB had erred in denying the Suspension Petition. The WCAB's determination was consequently reversed and the Suspension was granted based upon claimant's retirement and corresponding withdrawal from the workforce. In view of the fact that claimant's benefits were suspended, further review of the Board's treatment of the Modification Petition was moot, and the issues employer raised on appeal concerning the Modification were therefore not addressed by the Court.
When a claimant, receiving indemnity benefits "retires," as evidenced by him applying for, qualifying for, and receiving a retirement pension, employer (and its workers' compensation insurance carrier or third-party administrator) can successfully pursue a Suspension Petition based on this fact alone. Claimant can, though, try to rebut that he retired (and thus voluntarily removed himself from the workforce), by establishing he still sought employment even though he retired, or that he was forced to withdraw from the labor market specifically due to residuals from his occupational injury, in order to attempt to defeat the Suspension Petition.
If you would like a copy of Department of Public Welfare/Norristown State Hospital v. WCAB (Roberts), issued June 21, 2011 by the Pennsylvania Commonwealth Court (which, on October 14, 2011, ordered that the opinion be reported), or would like to further discuss this case and its ramifications, please do not hesitate to contact any of the attorneys listed below.