Retirement in Workers’ Comp Again Addressed in PA

Fresh from the PA Supreme Court decision in City of Pittsburgh v. Workers’ Compensation Appeal Board (Robinson), comes a decision from the Commonwealth Court, again addressing the interplay between the concept of “retirement” and the continued entitlement to workers’ compensation benefits in Pennsylvania.

In the matter of Fitchett v. Workers’ Compensation Appeal Board (School District of Philadelphia), the primary issue was actually procedural, rather than whether the “retirement” was proven, or which side had the burden of proof. Though other Petitions were pending, the relevant one was a Petition for Termination, alleging that Claimant had fully recovered from her work injury. Notably, in an “interlocutory” order (a temporary order, not usually subject to appeal), the Workers’ Compensation Judge (WCJ) granted Defendant an offset for both a pension and Social Security Retirement (SSR) benefits being received by the Claimant.

While testifying in defense to the Petition for Termination, Claimant was asked whether she considered herself retired. Claimant had responded, “Well, I’m collecting retirement.” In subsequent testimony, she clarified that if not for her work injuries, she had planned to continue working. When asked directly whether she was retired, however, Claimant responded, simply, “yes.” Again, Claimant later clarified that she meant she had to leave her employer due to her injuries. Claimant testified she had not looked for any work, and forms from her treating doctors, wherein Claimant described her occupation as “retired,” were offered into evidence.

The WCJ reviewed deposition testimony of two doctors who had performed Independent Medical Examinations (more accurately known as Defense Medical Exams), and also a deposition of Claimant’s treating neurologist. The WCJ concluded that the work injury was limited to a sprain of the left shoulder, left thumb, neck and lumbar spine, and that all but the left shoulder had healed.

Since Claimant had not fully recovered from the entire work injury, the standard in a Petition for Termination, the WCJ properly denied the Termination. However, though the Defendant never filed a Petition for Suspension, or even placed on record an allegation of Suspension, the WCJ granted a Suspension, based on Claimant’s “retirement” and resulting voluntary withdrawal from the labor market.

In the Findings of Fact, WCJ said:

“The evidence at bar establishes [Claimant] applied for and receives her [Employer] pension and age-related Social Security benefits (N.T., November 2, 2004, p. 59-61), acknowledged to [Neurologist] that she had retired, indicated on an intake sheet of [Second IME Physician] that she retired (N.T. exhibit E-3, p. 11), acknowledged on December 30, 2008 that she “retired” (N.T. December 30, 2008, p. 29) and has not applied for any position in the local economy nor looked for any type of work.”

The WCJ did not find the Claimant credible with regard to her intention to work, and did not believe the work injury, consisting only of a sprain, was sufficient to make Claimant disabled from all gainful employment. This decision was affirmed by the Workers’ Compensation Appeal Board.

The Commonwealth Court of Pennsylvania affirmed the WCJ on this issue (the matter was actually reversed in part, but not on any issue relevant to this discussion). Claimant should have been on notice through the proceedings that a suspension of benefits was possible. The “retirement” of Claimant was discussed, and a credit was being taken for pension and SSR benefits. The Court said the parties “fully litigated the issue of whether Claimant voluntary retired from the workforce.”

Under Section 204(a) of the Pennsylvania Workers’ Compensation Act, an insurance carrier must file a Notice of Offset before it can take an offset against certain benefits, such as pension and SSR. In this case, Claimant then argued that Defendant could not take an offset, since no Notice of Offset was filed. The Court rejected this argument, saying the requirements of Section 204(a) only apply when an insurance carrier wishes to take the offset unilaterally; here, the WCJ had issued the interlocutory order, granting the offset. It was also noted that the amounts of each benefit being received were testified to by the Claimant.

One Judge dissented, not agreeing the issue of suspension, of retirement, was ever truly at issue, sufficient to lead to a suspension of benefits. In relevant part, the dissent observed:

“The matter regarding whether Claimant had voluntarily retired from the workforce was incidentally raised, as explained in the majority opinion, on cross-examination and was never the focus of the proceeding. The issue of whether Claimant had voluntarily retired was never raised by Employer either by petition or motion. Based on that scant testimony, the WCJ suspended benefits finding that Claimant had voluntarily retired from the workforce. I respectfully dissent because, based on the “totality of the circumstances,” that issue was not sufficiently raised for the WCJ to be able to consider it.”