Kevin L. Connors, Esquire
To resign or not to resign, whether tis nobler to suffer the slings and arrows,
Of outrageous compensation,
Or to declare, as Howard Beale did in the 1976 movie, Network,
“That I resign,
Doing so of my own free will and volition,
Intending to voluntarily remove myself from the active workforce, because
I can’t take it anymore!”
The above string of irreverent non sequitirs brings us to the Commonwealth Court’s October 11, 2012 voluntary resignation decision in Krushauskas v. WCAB, wherein the Commonwealth Court, in an opinion authored by Judge Leadbetter, affirming a decision by the workers’ compensation judge, an intermediary Workers’ Compensation Appeal Board, suspending the Claimant’s compensation benefits, on grounds that the Claimant had “voluntarily resigned” his employment with General Motors, entitling General Motors, his employer, to suspend his workers’ compensation benefits, a suspension only relevant to the payment of indemnity compensation benefits, as a “suspension” has no legal effect whatsoever over a Claimant’s entitlement to receive reasonable, necessary, and related medical care, until such time as death or a full recovery subsume said liability.
While working for General Motors as a stock picker in 2005, the Claimant sustained a work-related injury to his right shoulder. His injury was accepted as being compensable, with a Notice of Compensation Payable being issued by the employer/administrator, under which it was agreed that the Claimant would receive workers’ compensation benefits for a work-related injury.
Three years later, the Claimant filed a Penalty Petition, under which the Claimant alleged that his workers’ compensation benefits had been unlawfully suspended back in 2006, without the Claimant agreeing to the suspension, or the employer/administrator having secured a Judge’s order, empowering a suspension.
In defense of the Claimant’s petition, the employer presented evidence that the Claimant had agreed to accept a “Special Attrition Plan” separation, that the separation was accepted via voluntary separation, in exchange for which the Claimant received a lump sum payment.
The employer presented evidence that the Claimant’s acceptance of the Special Attrition Plan was part of an employer-union initiative, also titled as an “Enhancement Retirement Program” offering the employer’s workforce monetary incentives to resign and retire, in order to reduce the employer’s workforce.
The evidence presented was that this workforce reduction plan was offered to both working and non-working employees, that the plan conditions were explained to all employees, that no employee was forced to accept the attrition benefits offered under the plan, and that any employee that agreed to accept the plan payments, in exchange for being separated from the workforce, were all given forty-five (45) days to revoke his/her acceptance of the attrition plan conditions.
Alas, poor Claimant, the Claimant’s signed Attrition Plan documents were introduced into evidence, the workers’ compensation judge concluded that the employer had, in fact, violated the Act, as the Claimant’s compensation benefits were “suspended”, without a signed Claimant agreement, any formal notification of suspension by the employer, and without a adjudicatory decision by a workers’ compensation judge, empowering the suspension, although the workers’ compensation judge concluded that a penalty award could not be entered, as there was no back due or past compensation owed to the Claimant.
Instead, the workers’ compensation judge found that the employer had sent a Supplemental Agreement to the Claimant, to effectuate the suspension, but that the Claimant had not signed or returned that agreement, under which the suspension could have been perfected, in compliance with the Act.
Next, the workers’ compensation judge found that no back due compensation was owed to the Claimant, as the judge found that the Claimant had voluntarily retired from the workforce, when the Claimant accepted the attrition plan, and attendant lump sum payment. Finding that the Claimant had voluntarily retired, the workers’ compensation judge granted a suspension of the Claimant’s compensation benefits, with the suspension being retroactively applied to the effective date of the Claimant’s retirement, consistent with his acceptance of the attrition plan.
Disenfranchised, the Claimant appealed the judge’s decision through the Pennsylvania Workers’ Compensation Appeal Board, with the Board summarily affirming the judge’s decision, under which the Claimant’s Penalty Petition was granted with no award of compensation being entered, and the Claimant’s suspension benefits were suspended as of his retirement date.
Appealing to the Commonwealth Court, the Claimant argued that the WCJ and Appeal Board incorrectly characterized what he contended was his acceptance of a pension benefit, as a voluntary retirement/resignation.
While recognizing that the Pennsylvania WCAB requires employers to effectuate a change in a Claimant’s compensation status through more formal means, there being very limited unilateral grounds, such that the employer is typically required to either secure a signed agreement or an order from a workers’ compensation judge, effectuating the compensation status before the benefit entitlement is actually altered, by way of a termination, suspension or modification.
Also argued by the Claimant was that the WCJ was not empowered to order a suspension of compensation benefits, absent the employer having formally requested the suspension via the filing of a petition seeking that relief.
In reliance upon long-standing compensation law, the Commonwealth Court summarily dismissed the Claimant’s jurisdictional challenge to the WCJ’s power to order a suspension, finding that workers’ compensation judges always have the power to determine the length and duration of disability, such that a workers’ compensation judge, even in the context of litigation over a Claim Petition, can order a termination, suspension, or modification of compensation benefits, to follow a closed period of disability.
Citing to a long line of compensation decisions, the Commonwealth Court held that “a WCJ has authority to suspend/terminate a Claimant’s benefits in the absence of a formal petition where doing so would not be prejudicial to the Claimant, i.e., the Claimant is put on notice that a suspension/termination is possible and is given the opportunity to defend against it.”
Under this ruling, the Commonwealth Court found that the Claimant was on notice, throughout the underlying litigation, that a suspension was possible, and that he had actually defended against that possibility in the course of prosecuting his Penalty Petition.
Finding that the WCJ had the authority to suspend the Claimant’s compensation benefits, the Commonwealth Court then addressed the factual validity of the WCJ suspending the Claimant’s compensation benefits in reliance upon the WCJ finding that the Claimant had voluntarily retired, with the Commonwealth Court finding that the Claimant had accepted a retirement pension, which acceptance was not challenged on appeal.
As the Claimant had accepted the retirement pension, the Claimant aborted the burden of proving that he was seeking employment, and/or that his work-related injuries had forced him into retirement.
Instead, the Claimant had testified, before the workers’ compensation judge, that he was not seeking employment, with the workers’ compensation judge rejecting his testimony, on credibility grounds, that he was retired because of his work-related injury.
A dissent was filed by Judge Pellegrini.
Judge Pellegrini essentially dissented to the factual/legal determinations that the Claimant had notice that his compensation benefits might be suspended, without there having been any formal petition filed to accomplish that suspension.
While we are in agreement with the result in this case, caution dictates that a Suspension Petition be filed by the employer, either after the Claimant fails to sign the Supplemental Agreement, or after the Claimant files his Penalty Petition, alleging an illegal suspension of compensation benefits, as the decision in Krushauskas v. WCAB actually ends up hinging on the judge’s finding that the Claimant’s testimony, regarding his work injury having forced his retirement, subjects the employer to the whim of a judge’s credibility determination, with such a credibility determination, on the same facts, more likely than not, often favoring a Claimant, particularly one alleging an illegal suspension of compensation benefits, as opposed to the employer opting for the election of inexpensive but risky self-help, as the flick of a switch deactivates the payment, without so much as a “thank you kindly”, explaining why or how.
Less risky, Act-compliant procedures, on these facts, would have included the following:
- Filing a Suspension Petition, without requesting Supersedeas relief, 30 days after the Claimant failed to return a signed Supplemental Agreement; and,
- Issuing a Notice of Pension Offset, obviously dependent upon the actual description of the payments made to the Claimant under the Attrition Plan.
An action that we would recommend against would be the utilization of a Notification of Suspension (LIBC-762) as any challenge to the Notification would result in a Special Supersedeas hearing, potentially resulting in a workers’ compensation judge ordering the reinstatement of compensation benefits, during the pendency of any litigation over the employer’s entitlement to a suspension of the compensation benefits; and no, you do not want to be asking the Supersedeas Fund to reimburse any overpayment of compensation, during any period of time following a retroactive suspension of compensation benefits.
Our mantra remains “live by the rules”, and this decision begs the question as to which side of the aisle that you would prefer to be on, defending a Penalty Petition, or seeking a suspension.
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