MONTHLY SUMMARY OF SIGNIFICANT PENNSYLVANIA WORKERS’
COMPENSATION CASES FOR FEBRUARY 2005
SUPREME COURT CASES
There were no Supreme Court Cases of any significance decided in February, 2005.
COMMONWEALTH COURT CASES
Unemployment Compensation
Harkness v. Unemployment Compensation Board of Review, No. 150 C.D. 2004 (February 3, 2005)
Although not decided in the context of a workers’ compensation case, this case has direct relevance to employers. The case held that a non-employee, non-attorney does not have the right to practice unemployment compensation law in an adversary proceeding before an administrative agency on behalf of an employer. In short, an employer may not be represented by a non-attorney at an unemployment compensation hearing.
Compromise and Release Agreement
Farner v. WCAB (Rockwell International), No. 1793 C.D. 2004 (February 9, 2005)
The Claimant sustained a compensable work injury, and ultimately entered into a Compromise and Release Agreement. At a hearing, the Claimant responded to questions concerning her understanding of the Compromise and Release Agreement. The Claimant testified that in addition to waiving all workers’ compensation benefits, she resigned from her position of employment with the Defendant-employer. However, she further testified that she would still be entitled to receive her pension and receive medical benefits under her employer’s plan. No additional information on this point was offered. However, in a written Voluntary Resignation Statement dated the day of the hearing on which the Compromise and Release Agreement was presented to the Judge, the Claimant stated, “I fully realize that with this resignation, I am no longer entitled to any of the privileges or benefits to which employees of (employer) may be entitled except those benefits and rights which are vested at the time of my resignation”. Finding that the Claimant fully understood the legal significance of this Compromise and Release Agreement, the WCJ approved the same. Neither party appealed.
Nearly a year and a half later, the Claimant’s new lawyer filed a Petition to Review alleging that the employer breached the Compromise and Release Agreement by failing to pay her medical insurance premiums following the WCJ’s approval of the Agreement. At a hearing, the Claimant testified that when she settled her case, her former attorney assured her she would continue to receive health care benefits through her employer’s plan. However, the Claimant did not testify that any representative of her employer discussed this aspect of the settlement with her. No testimony by a representative of the employer was received.
On appeal to the Commonwealth Court, the Claimant argued that she had established that the Agreement was materially incorrect. She also relied on the doctrine of mistake. In particular, the Claimant contended that the employer was aware of her mistake at the time she signed the Compromise and Release Agreement but did nothing to dispel her misunderstanding. The Claimant further maintained that the employer’s silence at the hearing at which the Compromise and Release Agreement was presented established mutual mistake.
The Commonwealth Court reviewed recent attempts to set aside Compromise and Release Agreements. Two different analyses emerged. First, the Court utilized a common law standard for setting aside an Agreement, so that such an Agreement can be set aside only upon a clear showing of fraud, deception, duress or mutual mistake. N. Sanitation, Inc. v. WCAB (Dillard), 850 A.2d 795 (Pa. Cmwlth. 2004). More recently, the Court expressed the view that the unappealed approval of a Compromise and Release Agreement precludes re-litigation of the required finding that the Claimant understood the full legal significance of the Agreement. Stiles v. WCAB (Department of Public Welfare), 853 A.2d 1119 (Pa. Cmwlth. 2004). Under a collateral estoppel analysis, a party is foreclosed from re-litigating an issue of law or fact when the following factors are demonstrated: (1) The legal or factual issues are identical; (2) They were actually litigated; (3) They were essential to the judgment; and (4) They were material to the adjudication. Styles.
Applying the collateral estoppel analysis, the Court reasoned that there was no question that all necessary elements for preclusion were present. The factual issue which was raised, mistake as to understanding the full legal significance of the Agreement, was decided in the earlier litigation. The issue was actually litigated, it was essential to the approval of the Agreement, and it was material to the approval of the Agreement.
The Court also dismissed the Claimant’s argument that she was entitled to relief under the doctrine of mutual mistake. Even were she able to re-litigate her understanding of the Agreement, she would not prevail on this theory. Compared to fraud, deception or duress, the test to set aside a Compromise and Release Agreement on the basis of mutual mistake is more stringent. N. Penn Sanitation. Thus, in order for a mutual mistake to constitute a basis for invalidating a Compromise and Release Agreement, the party seeking to set aside the Agreement must prove that both parties are mistaken as to a present, material fact that existed at the time the Agreement was executed. Id. Here, the Claimant proved that she signed the Compromise and Release Agreement while under a mistake as to the employer’s duty to continue paying medical insurance premiums after her resignation. However, the WCJ made no finding that the employer shared that mistake at the critical time. The absence of any finding as to the employer’s state of mind results in the conclusion that the Claimant failed to prove mutual mistake.
Finally, the Commonwealth Court rejected the Claimant’s argument that her Petition to Review should be granted. Section 413(a) of the Act, 77 P.S. §771, permits a WCJ to review an original or supplemental agreement if it is proved that it was in any material respect incorrect. However, in the absence of a finding that the Compromise and Release Agreement was incorrect when executed and that the parties intended different terms, the Claimant was precluded from receiving the relief she sought under this theory.
Sexual Harassment
Heath v. WCAB (Pennsylvania Board of Probation and Parole), No. 733 C.D. 2002 (February 9, 2005).
This case has a convoluted procedural history. In its original Opinion and Order at 811 A.2d 90 (Pa. Cmwlth. 2002), the Commonwealth Court held that, by its very nature, acts of sexual harassment are personal in nature, not work related, and are not part of the proper employer-employee relationship. Thus, any injury the Claimant suffers as a result of the harassment would not be work related and not compensable under the Workers’ Compensation Act. The Supreme Court reversed on what constitutes a technical issue. That is, the fact that the employer did not raise the personal animus defense in proceedings before the Workers’ Compensation Judge. This defense has long been identified as an affirmative defense, and one the Defendant-employer must both raise and then prove before the Workers’ Compensation Judge. The defense cannot be raised for the first time on Appeal. As the argument that the sexual harassment which the Claimant was subjected to fell within the ambit of the personal animus defense, the Supreme Court deemed that defense to have been waived, and not to have properly been considered by the Commonwealth Court. The Supreme Court remanded to the Commonwealth Court.
On remand, the Commonwealth Court addressed three issues: (1) Whether the Claimant was exposed to abnormal working conditions with sexual harassment by a supervisor constituting abnormal working conditions; (2) Whether the Claimant failed to produce corroborative evidence of sexual harassment; and (3) Whether other conditions to which she was exposed were abnormal with the specific argument that a death threat constituted an abnormal working condition.
To recover workers’ compensation benefits for a psychic injury, a Claimant has the burden of proving by objective evidence that she has suffered a psychic injury in that such injury is other than a subjective reaction to normal working conditions. Martin v. Ketchum, Inc., 523 Pa. 509, 568 A.2d 159 (1990). To meet this burden, the Claimant must demonstrate either (1) That actual extra ordinary events occurred at work, which can be pinpointed in time, causing the trauma experienced by her or (2) That abnormal conditions over a longer period of time caused the medical injury. U.S. Airways v. WCAB (Long), 756 A.2d 96, 101 (Pa. Cmwlth. 2000). Objective evidence which is corroborative of an employee’s perception is necessary in determining the existence of abnormal working conditions. An employee’s testimony alone on this issue is not sufficient. Volterano v. WCAB, 536 Pa. 335, 346, 639 A.2d 453, 458 (Pa. Cmwlth. 1994). However, corroborative evidence is not required when an employee is describing the actual events that have occurred and the WCJ finds that such events did occur. Donovan v. WCAB (Academy Medical Realty), 739 A.2d 1156, 1163 (Pa. Cmwlth. 1999). In addition, psychic injury cases are highly fact-sensitive and for actual work conditions to be considered abnormal, they must be considered in the context of the specific employment.” Wilson v. WCAB (Aluminum Company of America), 542 Pa. 614, 624, 669 A.2d 338, 343 (1996). Whether the findings of fact support a conclusion that the Claimant has been exposed to abnormal working conditions is a question of law that is fully reviewable on appeal. Id.
The Commonwealth Court reiterated the requirement that a Claimant must provide objective evidence which is corroborative of her perception of the events that occurred in order to prove the existence of abnormal working conditions. The Claimant’s testimony alone is not sufficient. Volterano. The Commonwealth Court concluded that the Claimant had failed to offer the necessary testimony to corroborate her contention that she was sexually harassed. As such, the Claimant failed to prove that she was exposed to abnormal working conditions in the form of sexual harassment.
The Commonwealth Court also rejected the Claimant’s argument that the other conditions to which she was exposed were abnormal, with the specific contention that a death threat constitutes an abnormal working condition. The Claimant was employed by the Pennsylvania Board of Probation and Parole as a parole agent, and had received a warning from an inmate to the effect that corrections officers were after her. The Commonwealth Court held that this note was properly rejected by the WCJ as hearsay, and the Claimant presented absolutely no other evidence, such as the testimony of the inmate, to corroborate that this actually occurred or that her fellow employees were actually conspiring against her. As there was no proof that the threat was an actual event that occurred and the WCJ made no such finding, the Claimant was required to provide corroborative evidence in this regard. Donovan. Because the Claimant failed to produce such evidence, she failed to prove that this was an abnormal working condition. Volterano.
The Commonwealth Court also rejected the Claimant’s contention that the fact she was moved to a less desirable position constituted an abnormal working condition. The Commonwealth Court reasoned that prior case law indicates that such conditions are not abnormal. In Wilson, the Supreme Court stated that “(a)n employee’s perception that a temporary job is demeaning is not a basis for awarding workers’ compensation benefits. An employer does not have to place an employee in a position commensurate with the position or status that the employee previously held or bear the risk of a workers’ compensation claim for psychic injury.” Id. at 629, 669 A.2d at 346. The Commonwealth Court found Wilson instructive. The employer, in an effort to return the Claimant to work, had found the Claimant a new position. The Claimant testified that she was not given much work to do at this job. The evidence indicated that the employer was attempting to accommodate the Claimant and return her to work, not trying to punish her. The Commonwealth Court reasoned that to hold that an employer creates an abnormal working condition by returning a Claimant to another job without direct evidence that the employer’s motive were solely for harassment of the Claimant would be unwise and contrary to the goal of returning Claimants to gainful employment. Additionally, the Claimant only attempted to perform this position for less than a month. Therefore, the Claimant certainly did not meet her burden of proving that she experienced abnormal working conditions of a longer duration. US Airways. As such, the Commonwealth Court did not believe that this aspect of the Claimant’s employment was abnormal. [1]
Supersedeas Fund Reimbursement
City of Wilkes-Barre v. WCAB (Spaide), No. 1281 C.D. 2004 (February 18, 2005) [2]
The Commonwealth Court held that while an employer is entitled to a credit for pension benefits paid to a Claimant to the extent that it funded such benefits, reimbursement may not be obtained from the Supersedeas Fund for overpayments which have been made.
Petition for Expert Interview
Swartz v. WCAB (Cheltenham York Road Nursing & Rehabilitation), No. 2135 C.D. 2004 (February 24, 2005).
The Claimant argued that before a WCJ can issue an Order granting an employer’s Petition for Expert Interview, the WCJ is required to hold an evidentiary hearing, approve or disapprove a vocational counselor, and, then, issue a reasoned Decision with Findings of Fact and Conclusions of Law. The Commonwealth Court held that the Claimant may challenge the vocational counselor’s qualifications at a hearing in a Petition to Modify or Suspend Indemnity Benefits. The Order compelling the interview is interlocutory, which cannot be appealed to a higher forum. Therefore, an evidentiary hearing is not required for the WCJ to “approve” the vocational expert and the granting of the vocational interview may not be challenged on appeal by a Claimant, in the context of a Petition for Expert Interview.
[1]As the Claimant was found not to be entitled to benefits under the Workers’ Compensation Act, the Commonwealth Court also concluded that the principal of collateral estoppel preclude the Claimant from re-litigating whether she is entitled to benefits for the same injury under the Heart and Lung Act. Heath v. The Pennsylvania Board of Probation and Parole, No. 2170 C.D. 2003 (February 24, 2005).
[2] This Opinion and Order was previously published as a Memorandum Opinion on December 22, 2004.