Pennsylvania has long recognized an employer’s right to a suspension of benefits where the claimant has voluntarily withdrawn from the labor market. Recently, the Commonwealth Court addressed whether an employer may exercise this right to suspend benefits where a claimant admits that he or she has not sought work in many years. The short answer: Maybe.

On January 13, 2012, the Commonwealth Court circulated an opinion written by Senior Judge Rochelle Friedman in the case of Burks v. WCAB (City of Pittsburgh), 980 CD 2011. Claimant petitioned the court to review the Order of the Workers’ Compensation Appeal Board (WCAB) which affirmed the Decision of the Workers’ Compensation Judge (WCJ) to suspend benefits because claimant had voluntarily removed herself from the workforce.

By way of background, claimant had long suffered from Legg-Perthes, a hip disease, which caused her left leg to be shorter than her right leg. In addition, claimant developed severe hip arthritis at an early age.

On April 12, 1984, claimant sustained a right knee sprain during the course of her employment with the City of Pittsburgh (employer). As a result of the work injury, Claimant underwent multiple right knee surgeries. She began to receive Social Security Disability benefits and had not worked, or looked for work, since 1984.

Claimant injured her back in a 1985 motor vehicle accident and, later that same year, underwent left hip surgery due to her non work-related problems. In 1990, she was involved in another motor vehicle accident that caused her left leg symptoms to increase.

On April 3, 2008, employer scheduled an Independent Medical Examination (IME), the result of which was a release to full time, light duty work. Even after considering all of claimant’s non work-related problems, the IME physician opined that claimant could work in a full time position involving sedentary or light duty work. Employer subsequently filed a Suspension Petition alleging that claimant was capable of working, but that she had voluntarily removed herself from the workforce. During the litigation, claimant testified that she had been receiving Social Security Disability benefits since 1984 and that she had not worked, or sought work, since then. Based upon this admission, the WCJ suspended benefits because claimant had voluntarily withdrawn from the workforce. The WCAB affirmed.

Claimant appealed to the Commonwealth Court arguing that the WCJ and WCAB had erred in relying solely on her admission that she had not worked since 1984 to conclude that she had voluntarily removed herself from the workforce. Although the court agreed, it held that the suspension was still warranted.

In support of her position, claimant argued that, pursuant to Keene v. WCAB (Ogden Corp.), 21 A.3d 243 (Cmwlth. Ct. 2011), she had no duty to seek employment until employer showed she had voluntarily retired. Until such time as an employer proves a voluntary retirement, an employer must make job referrals to a claimant. In light of Keene, the court held that the WCJ and WCAB had erred in relying solely upon claimant’s admission for concluding that she had voluntarily retired.

In response, employer argued that, considering the totality of the circumstances, it was reasonable to conclude that claimant had voluntarily withdrawn from the workforce. Employer focused on the fact that claimant was a Social Security Disability beneficiary and, as such, she had established that she was unable to engage in substantial gainful activity.

The Court concluded that because claimant sought a disability pension based on her inability to engage in substantial gainful activity, and that her work injury did not prevent her from such activity, claimant had voluntarily withdrawn from the workforce.

What It Means to You

Claims professionals, self-insureds, and defense attorneys should pay close attention to cases in which a claimant is receiving Social Security Disability benefits. When a claimant suffers from a work injury and has no other non work-related medical conditions, then the receipt of Social Security Disability benefits can only mean that the claimant’s work injury has forced him or her out of the labor market. Bear in mind that the claimant can rebut the presumption of a voluntary withdraw from the workforce by showing that he or she was forced to withdraw from the workforce due to the work injury. On the other hand, if the claimant suffers from a work-related injury as well as non work-related medical conditions, and the work injury does not preclude the claimant from working, then the receipt of Social Security Disability benefits means that the claimant is no longer attached to the workforce for reasons unrelated to the work injury.