Petition to Suspend Benefits Because the Claimant Has Retired from the Workforce Is Not a Slam Dunk for Pennsylvania Employers

The Pennsylvania Commonwealth Court has held that the employer has the burden of proof to show that the claimant is voluntarily retired from the workforce based on the totality of the circumstances. In Hi-Tech Flooring, Inc. v. WCAB (Santucci), 280 A.3d 1141 (Pa. Cmwlth. 2022), Mr. Santucci, the claimant, incurred a work-related injury initially described as a right knee contusion. The employer filed a suspension petition, alleging the claimant voluntarily left the workforce by accepting a pension from the union on October 1, 2017, and receiving Social Security Disability benefits for physical conditions beyond the work-related right knee injury.

The employer submitted the pension packet the claimant proffered to the union for pension benefits and a copy of the claimant’s Social Security Disability application, decision and letter awarding permanent disability benefits. In his pension application, the claimant stated he was disabled from his trade as a tile setter beginning August 10, 2017. He alleged he had permanent disability for his right shoulder and neck pain, for which he was receiving Social Security Disability. The Social Security Administration awarded the claimant benefits for these claims. This decision also discussed synovitis in his right knee and ongoing right knee pain from the work injury.

The claimant testified that he continued to experience symptoms in his right knee and was still treating for his right knee. He also testified he was a member of the union and began receiving his union pension benefits beginning October 2017 and Social Security Disability benefits starting in 2015. He acknowledged he would be able to do sedentary work but said there were no positions with the union that were sedentary. The claimant admitted to not having worked since 2014 and to not looking for any work since that time.

The Workers’ Compensation Judge found that the claimant did voluntarily leave the workforce by retiring. The judge determined the claimant chose not to return to work and voluntarily retired based on his receipt of the union pension and Social Security Disability benefits. The Worker’s Compensation Appeal Board overturned the judge’s decision, finding that the judge erred by concluding the claimant voluntarily retired from the workforce.

The case was appealed to the Pennsylvania Commonwealth Court, who affirmed the Appeal Board’s decision. First, they relied on longstanding case law that the Act is remedial in nature and intended to benefit the worker. Therefore, the Act must be liberally construed to effectuate its humanitarian objectives. The court found, based upon the totality of the circumstances, the claimant did not retire and leave the workforce. According to the court, the employer did not meet its burden of proof, even though the claimant accepted a union pension and Social Security Disability benefits. The type of pension the claimant receives should be considered, especially if it is a disability pension versus a retirement pension. The court found it was clear from the testimony of the claimant’s physician that the claimant continued to suffer from the work injury, which precluded his return to his pre-injury position. The claimant’s failure to look for work alone was not sufficient to find a voluntary retirement.

It was significant to the court that the claimant’s Social Security Disability award referred to the work injury. The Social Security decision, too, found the claimant could not perform his pre-injury position for the employer. The facts showed that the Social Security Administration’s decision relied, in part, on the claimant’s work-related knee injury in concluding the claimant was totally disabled.

The court also found it significant that the claimant lacked any other transferrable skills, which prevented him from working in another capacity, essentially forcing him out of the labor market. The court acknowledged that the disability pension did not identify the work injury as one of the disabling conditions. However, it was undisputed the claimant had to stop working as a result of the work-related injury in August 2014, nearly three years before he applied for the pension.

The court distinguished other cases where claimants had received Social Security old age benefits and retirement pensions versus Social Security Disability and pension disability benefits. In these situations, an argument existed, based upon the totality of the circumstances, that the claimant had voluntarily removed himself/herself from the workforce. The court stated, that since Mr. Santucci was only permitted to do sedentary work and had ongoing restrictions from the work injury, it was incumbent upon the employer to present the claimant with job referrals to sedentary positions.

In the future, employers should consider an alternative position and obtain an Earning Power Assessment from a vocational expert. This would have been a good alternative to merely litigating the case on the basis that the claimant had retired from the workforce. If an Earning Power Assessment had been obtained by the employer with jobs in the sedentary capacity, a modification and/or a suspension petition based on the Earning Power Assessment may have been litigated simultaneously. This would have given the Workers’ Compensation Judge the option of reducing benefits based on the Earning Power Assessment if the judge did not find the claimant had voluntarily retired.

*John is Special Counsel in our Harrisburg, Pennsylvania, office. He can be reached at 717.651.3532 or JCSwartz@mdwcg.com.

_{Defense Digest, Vol. 28, No. 12, December 2022, is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2022 Marshall Dennehey. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.}