Employer's suspension of benefits upheld because claimant voluntarily accepted retirement package in which he agreed he was not under duress, was able to work and was not disabled.

The claimant sustained an acknowledged work injury on September 7, 2005. In May 2006, as a member of the union, the claimant attended a meeting addressing the employers' plan for attrition of the workforce. After the meeting, he accepted a voluntary retirement from the employer in exchange for a lump sum payment of $35,000 and a vested pension, with 45 days to change his mind. The documentation he signed stated he was not under duress or disabled and not entitled to receive disability pay or benefits. The employer then suspended the claimant's workers' compensation benefits based on his voluntary retirement from the workforce.

The claimant filed a penalty petition alleging a violation of the Act for unilaterally suspending his benefits without an agreement or order. The judge granted the petition, but he made no award since he found that the claimant voluntarily retired from work when he accepted the Special Attrition Plan. Based on the voluntary retirement, the judge ordered the suspension of benefits as of the date of the employer's unilateral suspension. The Appeal Board affirmed the judge's decision based on their finding that the claimant had voluntarily retired from the workforce.

In a 5-2 decision, the Commonwealth Court affirmed the judge's decision. The court rejected the claimant's argument that benefits cannot be suspended without an agreement or order, noting that in situations where a claimant is clearly on notice of the employer's actions and is afforded a chance to defend against it, a judge may act accordingly. In this case, the employer had ceased paying benefits based on the voluntary retirement plan and asserted its right to continued suspension in defense of the penalty petition. The employer's actions, according to the court, clearly put the claimant on notice of the request for suspension.

In a dissent, President Judge Pellegrini took the position that the majority's ruling allows an employer to obtain any relief from a judge without first filing a petition.

Case Law Alert - 1st Quarter 2013