CompCORNER

CompCORNER - May 2008

BLOCKBUSTER COMMONWEALTH COURT CASE
ON INDEPENDENT RATING EXAMS

      The Commonwealth Court has handed down a decision in Diehl v. WCAB (IA Construction and Liberty Mutual Insurance), 1507 C.D. 2007 (hereinafter "Diehl") , which unsettles the law associated with Modification Petitions and Independent Rating Examinations. Previously, the Supreme Court had dealt with IRE requests made after the expiration of the 60-day period following the Claimant receipt of 104 weeks of total disability benefits. That case, Gardner v. WCAB (Genesis Health Ventures), 585 Pa. 366, 888 A.2d 758 (2005), determined that Employer would have to file a Modification Petition to obtain a conversion of benefits from total to partial. The Employer/Carrier was not entitled to an automatic conversion from total to partial based on the percentage impairment determined during the examination as it would if the exam had been requested within the 60-day window. The language of the Supreme Court in Gardner required an employer to pursue a change in benefit status from total to partial through the traditional administrative process.

      In Diehl, the IRE was requested and took place beyond the 60-day window of Section of 306(A)(2) of the Workers Compensation Act. The carrier filed a Petition to Modify, requesting that the benefits be converted from total to partial based on the impairment rating which came back at less than 50%. While the Workers Compensation Judge concluded that the Defendant established that the impairment rating was less than 50%, the Judge also reached the conclusion that Employer had the burden to show that suitable work was available to the Claimant within his limitations. Since the Employer had not done so, the Modification Petition was denied and dismissed.

      The Employer appealed to the Workers Compensation Appeal Board which concluded that the Employer need only prove that Claimant had an impairment rating less than 50% in order to convert benefits from total to partial. Claimant appeal to the Commonwealth Court followed.

      The Commonwealth Court undertook to define what the Supreme Court meant in Gardner regarding the language traditional administrative process The Court determined it could not find that the traditional administrative process consisted of merely filing a Modification Petition and establishing a rating under 50%. It focused on the language in Gardner which stated, "an insurer may request an employee submit to an IRE beyond the 60-day window; the consequences of such examination however, cannot operate to automatically reduce the Claimant benefits. Gardner, 585 Pa. at 382, 888 A. 2d at 767 (Commonwealth Court Slip Opinion, Page 9) (Emphasis added in Commonwealth Court Opinion). The Commonwealth Court refused to read Gardner as requiring a single additional step to obtain a conversion to partial disability. The ultimate conclusion was that in order to obtain a modification of benefits with a post-60-day IRE, the employer must perform either Kachinski job development or a labor market survey to satisfy the requirement that it pursue the traditional administrative process. Diehl has effectively emasculated the IRE provisions of the Act if the employer fails to request the examination within the 60-day window. If this ruling stands, IREs requested after the 60-day window would be a waste of money. This decision resurrects the Commonwealth Court own decision in Gardner. Any Claimant who has a post-60-day IRE petition pending before a Workers Compensation Judge should move for dismissal at this point. As this column is being dictated, there is no indication whether the Defendant has sought allocatur. Practitioners are advised to review the Supreme Court docket on this matter. There are also rumors on the Workers' Compensation listserve that Commonwealth Court may withdraw this opinion. Either course may have developed by the time the column goes to press.

WITHDRAWAL FROM LABOR FORCE

      As many practitioners know, several employers are pursuing Petitions for Suspension based on the theory that the claimant has withdrawn from the labor force. Anyone dealing with these matters must read three cases: Pries v. WCAB (Verizon Pennsylvania), 903 A.2d 136 (Pa. Cmwlth 2006), App. denied, 923 A.2d 412 (Pa. 2007); Hepler v. WCAB (Penn Champ/Bissell, Inc.), 890 A.2d 1126 (Pa. Cmnwlth 2006), App. denied, A.2d 545 (Pa. 2006); County of Allegheny(Department of Public Works) v. WCAB (Weis), 872 A.2d 263 (Pa. Cmnwlth 2005). These cases establish for a claimant to defeat the Suspension Petition, he or she must demonstrate effectively total disability from all employment. The other option is for the claimant to establish that he or she is or has been looking for work. The obvious questions regarding the latter are how many jobs were applied for and how long have applicants been placed.

      These cases seem to be typically an outgrowth of poorly-managed Workers Compensation programs. The employers pushing these tend to be self-insured local governments which allow cases to age unnecessarily through failure to work the files properly or insufficient reserving capacity. The author suggests that these Petitions should be dealt with aggressively. The author notes some similarity between the withdrawal-from-work-force petitions and funded employment. Funded employment fell by the wayside for several reasons, including Act 57 which made it easier for employers to convert injured workers to partial disability status. However, it also fell by the wayside because it was used against a body of claimants most likely to garner sympathy from Workers Compensation Judges. The workers tend to be older and more severely disabled. Employers were more likely to have difficulty with Kachinski job development with a class of workers subject to funded employment. The author believes that the class of employees subject to attack by withdrawal-from-labor-force petitions is similar to the class in funded employment. The workers will tend to be older and with greater disabilities than the average worker. Therefore, they may be more likely to generate sympathy from Workers Compensation Judges. Aggressive litigation of these types of cases may lead to positive results.

      QUERY: Are there additional defenses besides proving a claimant is unable to work at all or is actually applying for?

      When an employer is attempting to establish that an injured worker has earning power, it is required to review the employee residual productive skill, education, age and work experience . . . (Section 306 (B)(2) of the Workers Compensation Act). This is very nearly a Social Security disability standard. If an employee is of advanced age, can a vocational expert testify that no work exists in the local or national economy that the worker is capable of performing from the standpoint of the work-related injury? Would this meet the requirement that an injured worker is forced to retire from the entire labor market?

      The author notes that there is a certain level of hubris held by the defense bar regarding this issue. The leading progenitors of these types of Petitions have become rather doctrinaire in their approach. We may be able to exploit this with aggressive action.

      One last thought - is registering for work at Career Link sufficient to defeat a claim that the worker has abandoned the work force?