By: Lisa A. Miller, Esquire
The Supreme Court accepted review of this matter to determine whether the Commonwealth Court erred in its interpretation of Section 306(b) of the Workers’ Compensation Act.
The Claimant (Shoap) asserts that the Commonwealth Court erred by concluding that “substantial gainful employment exists” for the purposes of granting a modification of her compensation benefits pursuant to Section 306(b), despite the fact that her application for these specific jobs involved failed to result in any offers of employment. Claimant argues that the Commonwealth Court, even if correct in its interpretation of Section 306(b), erred by not remanding the case for further development of the evidentiary record, which she contends represented a change in the standard for evaluating cases under that statute. The Supreme Court reversed and remanded the Commonwealth Court’s decision.
The Claimant sustained a work-related left shoulder injury while working for Phoenixville Hospital. She began receiving temporary total disability benefits pursuant to a Notice of Compensation Payable.
On August 9, 2007, Employer filed a Modification Petition alleging that the Claimant’s physical condition had improved, and that work was generally available to her within her physical restrictions and the relevant geographical area, as demonstrated by two labor market surveys.
Employer presented the testimony of Dr. Sattel who opined that the Claimant had a residual loss of function in her left shoulder, but she was capable of performing sedentary work. Dr. Sattel also opined that Claimant was capable of performing the jobs described in the labor market surveys prepared by Jeffrey Kimmich.
Mr. Kimmich, a certified rehabilitation counselor and vocational case manager, testified that he met with the Claimant and conducted a vocational interview. In two labor market surveys, he identified five jobs within the Claimant’s restrictions that were “open and available” in the Claimant’s usual employment area, and had forwarded this information to the Claimant. Based upon the five jobs that he located, he calculated the Claimant’s earning power as corresponding to an average weekly wage of $347.41 per week, based on the average of the wages from the five identified positions.
The Claimant testified that she had received the labor market survey, and had applied for each of the five positions on July 30, 2007. In August 2007, she received Mr. Kimmich’s labor market survey regarding the two remaining positions, and reported that she immediately applied for each of them. She had telephone interviews with both of those prospective employers, and testified without objection that she was informed by the second employer that she was not qualified for the position.
Claimant also presented her own expert medical and vocational witnesses who testified that she was incapable of working at the positions that Mr. Kimmich had identified in his labor market survey.
The WCJ issued a Decision in which he credited the testimony of Dr. Sattel that the Claimant was physically capable of performing any of the five jobs identified by Mr. Kimmich, further finding that Mr. Kimmich had indeed identified five jobs that were both compatible with Claimant’s restrictions and in the relevant geographical area. The Judge rejected as less credible Claimant’s medical expert and vocational witnesses. However, the Judge found credible Claimant’s testimony that she had made a genuine effort to secure any one of the five jobs identified in the labor market survey, but had not received any offers of employment.
The Judge determined that Claimant had established in good faith that she followed through on all of the jobs referred to her by the Employer, and that none of the referrals resulted in an offer of employment. For that reason, the WCJ determined that Employer had failed to establish its right to a modification of benefits under Section 306(b) of the Act, and denied its Modification Petition.
On appeal to the Board, Employer argued that by concluding that Claimant had made a “good faith” but unsuccessful effort to secure any one of the five jobs listed in Employer’s labor market survey, the WCJ had improperly incorporated into his legal analysis one of the requirements of Kachinski v. WCAB (Vepco Const. Co.), 532 A.2d 374 (Pa. 1987). Employer contested that Kachinski requirements were no longer relevant in light of the subsequently enacted provisions of Section 306(b) which provides an approach toward a modification of benefits for Claimant’s with partial disability differing from the approach laid out in Kachinski.
A Workers’ Compensation Act was amended in 1996 (Act 57) which substantially amended Section 306(b) of the Act. Amended Section 306(b)(1) establishes that partial disability compensation benefits shall be based on the difference between the Claimant’s pre-injury wage and his or her “earning power”. Section 306(b)(2) defines “earning power” as “the work the employee is capable of performing and shall be based upon expert opinion evidence which includes job listings with agencies of the department, private job placement agencies, and advertisements in the usual employment area.” 77 P. S. Section 512(k). Section 306 (b)(2) also provides that partial disability “shall apply” if the Claimant “is able to perform his previous work or can, considering [her or his] residual productive skill, education, age and work experience, engage in any other kind of substantial gainful employment which exists in the usual employment area” where the Claimant lives in Pennsylvania.
Because Section 306(b)(2) did not include the Kachinski requirement that an Employer must prove that the Claimant was referred to an appropriate “then open job”. Employer argued before the Appeal Board that it was irrelevant that a Claimant had shown “good faith” in applying for the five jobs listed in Mr. Kimmich’s labor market surveys. The Appeal Board rejected this argument opining that the WCJ’s decision to not incorporate the Kachinski standards into the analysis, even though “good faith” pursuit of specific employment is one of the elements of Kachinski.
Instead, the Board determined that “a fair reading” of the WCJ’s Decision “shows that the WCJ used the words good faith to show that Claimant had made a genuine effort to secure the positions located by the vocational expert.” The Appeal Board concluded that modification of benefits could not be based simply on whether Employer had identified job listings within Claimant’s physical requirements and geographic location, when Claimant had produced credible evidence that the jobs were in actuality not available to her, and thus did not “exist in reality”. The Appeal Board held “by taking the initiative and applying in good faith for the positions, [Claimant] put the findings of the labor market survey to the test and demonstrated that the jobs listed therein were not, in reality available to her. Hence we conclude that the positions did not exist for [Claimant] and that the WCJ correctly denied (Employer’s Modification Petition). The Employer must show the existence of “available” position at the time the Expert conducted the labor market survey.
The Commonwealth Court determined that the critical question under Section 306(b) was not whether the Claimant applied for and was offered the listed job; rather, the critical question was whether the jobs identified by Employer’s vocational expert witness were actually open and available to anyone having the Claimant’s physical limitations and other qualifications at the time of the labor market survey. The Court gave several reasons for this determination, namely, that (1) the Employer could not be held accountable based on a Claimant’s possibly untimely application from the listed job; (2) such “open and available” jobs showed that similar positions existed or would likely be open; (3) the Act places a burden on the Claimant to actively look for work once cleared for such activity, without regard to receipt of the Employer’s labor market survey.
In coming to this Decision, the Commonwealth Court rejected any suggestion that the labor market surveys were analogous to the job referrals described in Kachinski. The Commonwealth Court stated that it was “of no relevance” that the WCJ had concluded that Claimant had “followed through” on Employer’s job listings in “good faith”. The Court held that because Employer had established that the jobs identified by Mr. Kimmich were open and available at the time he conducted the earning power assessment, Employer had sustained its burden under Section 306(b) as such, the Commonwealth Court reversed the Appeal Board and ordered a modification of benefits based on Claimant’s earning power of $347.41 per week, as calculated by Mr. Kimmich.
The Supreme Court accepted review for the following issues:
(A). Did the Commonwealth Court err and misinterpret the meaning of Section 306(b)(2) of the Act, in determining that a job is available to the Claimant for purposes of the Act, even when a Claimant applies to each individual job contained in a labor market survey, and does not receive an offer of employment?
(B). Did the Commonwealth Court err in failing to remand the matter to the WCJ for a determination of whether or not the jobs identified by Employer’s vocational expert were open and available in light of the fact that the holding of the Commonwealth Court altered the status of the law at the time the Decision rendered by the WCJ?
The Supreme Court engaged in a statutory construction analysis of Section 306(b). In Section 306(b) the legislature did not explicitly abrogate Kachinski with its amendment of this Section, nor did it state or explicitly suggest that Section 306(b) was to be interpreted in tandem with Kachinski. If the statutory language is plain, then the language is applied to the factual scenario without any need to discuss Kachinski. However, if the statutory language is ambiguous then Kachinski as an expression of existing law at the time of Section 306(b)’s enactment would be one of several matters the Supreme Court could consider.
Section 306(b)(1) clearly defines “earning power” as “work the employee is capable of performing” “based on expert opinion evidence.”
The Court recognized that Section 306(b) does not require that the Claimant be offered a job in order to establish earning power.
The Court noted that other aspects of Employer’s burden under Section 306(b) are less clear and ambiguous with regard to the phrase “substantial, gainful employment that exists”. The Supreme Court observed that Claimant was not afforded the opportunity to fully develop her proof of her experience pursuing jobs identified by the vocational witness. The Court noted that evidence that the Claimant pursued, but failed to obtain gainful employment with the Employer’s identified by the expert witness is undeniably relevant to rebut Employer’s argument that the Petitions identified were proof of the potentiality of Claimant’s substantial gainful employment. The Supreme Court noted that the Claimant must be afforded opportunity to submit evidence that he or she did not obtain employment because the position identified with the Employer’s expert witness was already filled by the time the Claimant had a reasonable opportunity to apply for it. If the job is already filled, it does not “exist”.
In a dissenting opinion Justice Saylor noted that Section 306(b) straightforwardly altered the landscape of modification inquires by shifting the focus from actual availability of a job to the Claimant, to the existence of jobs in the marketplace suitable to Claimant’s vocational skills and medical restrictions.
Justice Saylor agreed with the Employer that the majority opinions construction of Section 306(b)(2) circles back to the Kachinski regime, undermining the Legislature’s effort, under Act 57 amendments to the workers’ compensation scheme to prospectively redirect modification inquires away from the previously prevailing concern with Claimant’s follow-through experience with job referrals.
Justice Saylor agreed with the Commonwealth Court, that based upon the language of Section 306(b)(2) as well as the Legislature’s primary focus on cost-containment “the fact that Claimant applied for jobs identified by Mr. Kimmich and did not obtain an offer of employment is “immaterial” to the determination of earning power.”
He finds the Kachinski-like convention conflicts with Act 57’s job-market focus. Justice Saylor notes that given that Section 306(b)(2) redirects the focus of the salient aspect of the earning power assessment to the job market, evidence of the unavailability of particular jobs to a particular Claimant (based on whatever myriad range of considerations which individual, discrete employers may deem pertinent to their hiring decisions) is simply no longer relevant under the statutory scheme.
