Article by Alana Staniszewski, Esq.
Under Pennsylvania Workers’ Compensation Law, generally, an employer may seek a suspension of a Claimant’s indemnity benefits in the event of the employee’s “voluntary withdrawal from the workforce,” so long as that withdrawal is unrelated to the Claimant’s accepted work injury. However, whether a Claimant has voluntarily withdrawn from the workforce is a question of fact, determined by the totality of the circumstances, and can become complicated by external factors such as the receipt of supplementary retirement benefits.
In a new opinion, Hi-Tech Flooring, Inc. v. WCAB (Santucci), 12 C.D. 2020 (Pa. Cmwlth. 2022) the Commonwealth Court was faced with determining whether an employer had met its burden to suspend a Claimant’s benefits based on his receipt of Social Security Disability (“SSD”) and Union Pension benefits upon his retirement. The Court ultimately held that the employer failed to meet its burden and was not entitled to a suspension.
Generally, a claimant forced into retirement because of a work-related injury may continue to receive workers’ compensation benefits. Southern Pennsylvania Transportation Authority v. WCAB (Henderson), 669 A.2d 911, 913 (Pa. 1995). However, if an employer can establish that a claimant voluntarily left the workforce for reasons unrelated to the work injury, it may be entitled to a suspension of the claimant’s benefits. City of Pittsburgh v. WCAB (Robinson II), 67 A.3d 1194 (Pa. 2013). “An employer must show by the totality of the circumstances that the claimant has chosen not to return to the workforce,” for reasons unrelated to the work injury. Robinson I, 4 A.3d at 1138.
The Pennsylvania Supreme Court has held that the following circumstances could indicate that a Claimant has retired: “(1) where there is no dispute the claimant has retired; (2) the claimant’s acceptance of a retirement pension; or (3) the claimant’s acceptance of a pension and refusal of suitable employment within the claimant’s restrictions.” Id. If the employer provides “sufficient evidence to support a finding that the claimant voluntarily left the workforce, then the burden shifts to the claimant to show that there in fact has been a compensable loss of earning power.” Robinson II, 67 A.3d at 1209-10.
In Santucci, the Employer argued that because Claimant’s pension application asserted permanent, total disability based on “diagnoses for right shoulder pain, neck pain, and right facet arthropathy” and his SSD Decision described Claimant’s right knee injury as degenerative rather than the accepted right knee injury, the Claimant accepted retirement benefits unrelated to the work injury. Additionally, the Employer attempted to argue that Claimant had failed to search for jobs following his ceasing work with the Employer.
The Court rejected these arguments and ultimately held that the totality of the circumstances did not support a finding that Claimant voluntarily retired. The Court pointed to the fact that the WCJ credited the Claimant’s physician’s testimony that Claimant continued to experience right knee symptomatology, for which he continued to treat with the physician. This testimony was supported by the SSD Decision’s description of Claimant’s right knee injury and associated treatments. The Court emphasized that the SSD Decision explicitly found that “Claimant was entitled to SSD benefits because Claimant could not perform his past relevant work, which is the work Claimant remain[ed] unable to perform due to the work injury.”
The Court then stated that it was undisputed that Claimant’s work-related knee injury caused Claimant to stop performing his pre-injury position in August of 2014, nearly three years before applying for his pension, and that the knee remained disabling as to that position per the WCJ’s findings. The Court found that the Union disability pension related to the very position that the WCJ had already found Claimant could not perform due to the work injury. It was immaterial, stated that Court, that Claimant “might have some other conditions that also affect his ability to perform that work.” What mattered was that “Claimant’s unresolved work-related injury prevent[ed] him from doing so.”
Further, while the Court acknowledged that Claimant had not procured other employment, meaning he was in laymen’s terms “retired,” the totality of the circumstances showed that Claimant did not look for other work because “he did not know what other kind of work to look for.” Claimant had testified that there were no Union positions that provided work within his restrictions and the only work he knew how to do was to set tile. The Court noted it was unfair to hold his lack of understanding of available options against him.
As such, the Workers’ Compensation Appeal Board’s order was affirmed, denying Employer’s Suspension Petition.
Moving forward, this case stands as a reminder to not be so easily swayed by a Claimant’s receipt of retirement benefits. An Employer must always remember the core of its burden of proof in these types of cases is the Claimant’s ultimate reason for withdrawal from the workforce. A Claimant’s simple receipt of retirement benefits is not enough. The Employer must demonstrate that the Claimant “retired” for reasons unrelated to the work injury in order to be afforded relief via a suspension. This reminder will prove more useful in light of our ever-growing aging workforce.