TTH eNotes: Workers’ Compensation: November, 2018
November 01, 2018
PENNSYLVANIA LEGISLATURE REINSTATES IMPAIRMENT RATING EXAMINATIONS
By Justin D. Beck, Esquire
On June 20, 2017, the Supreme Court of Pennsylvania handed down its momentous landmark decision in Protz v. W.C.A.B. (Derry Area Sch. Dist.), invalidating Section 306(a.2) of the Pennsylvania Workers’ Compensation Act (“Act”). That decision, in so striking a portion of the law, eliminated the Impairment Rating Evaluation (“IRE”) mechanism under which claimants were assigned a percentage of permanent impairment under the purview of the American Medical Association’s Guides to the Evaluation of Permanent Impairment.
Now, little more than one year later, the Pennsylvania General Assembly has responded with new legislation restoring that which was lost. On October 24, 2018, Pennsylvania Governor Tom Wolf signed into law House Bill 1840 (now, Act 111), thereby restoring the impairment-rating mechanism by curing what was perceived to be the critical constitutional deficiency identified in 2017’s Protz. In this respect, the law incorporates, by express reference, the Sixth Edition of the Guides.
Such development stands in stark contrast to the now-defunct Section 306(a.2), which was admonished by the Protz majority for instructing the evaluator to use the “most recent” edition of the text. This, the court held, was an unconstitutional delegation of legislative authority in violation of the Pennsylvania Constitution. Finding that the offending language could not be severed without rendering the remainder of the statutory provisions incomprehensible, the court struck the entire section, and with it, the impairment-rating mechanism itself, from the Act.
II. CRITICAL PROVISIONS OF ACT 111
The new law replaces the now-stricken Section 306(a.2) of the Act with a freshly-tailored Section 306(a.3). Incorporating a number of revisions over that of its now-defunct statutory brethren, Section 306(a.3) avoids the prior pitfalls highlighted by the Protz court, and delivers both self-insureds and carriers alike sought-after retroactive protections.
As its defining proviso, Section 306(a.3)(1) expressly adopts, by reference, the Sixth Edition of the Guides for use in rendering an impairment rating by a qualified physician. Like the stricken provisions which so held before, performance of such evaluation may only be requested by an insurer within 60 days after a claimant’s receipt of 104 weeks of Temporary Total Disability (“TTD”) benefits. However, in another major change, if such determination results in an impairment rating that is equal to or greater than 35%, the claimant will be presumed to be totally disabled, and shall continue to receive temporary total disability benefits. This, notably, represents a 15% difference from the original statute’s 50% threshold.
Notably, under the Pennsylvania system, no concept of permanent disability exists. Therefore, the Guides function not for awards of “PPD” as in many other states, but rather, to institute time-horizons on claims. In this respect, pursuant to Act 111, where a claimant’s impairment rating is calculated to be less than 35%, the worker’s status will be deemed modified to partial disability, for which payment shall not exceed 500 weeks. However, the actual amount of compensation under such partial status will not change from that paid under total disability. This too represents an incorporation from the prior statute and a striking of balance between the interests of injured workers and their employer, to wit, while the employer enjoys a time-horizon for the claim, the worker maintains his or her level of benefits until ultimate exhaustion of eligibility.
In an added measure which seeks to mitigate the fallout and effects of Protz, Act 111 includes retroactive provisions, granting carriers and self-insureds credit for all previous weeks of both TTD and Temporary Partial Disability (“TPD”) benefits paid prior to enactment.
Further, though entirely unrelated to the IRE mechanism upon which the amendment focuses, Act 111 effectuates a long-overdue update to the burial expense payable to an undertaker in cases of fatal work-related injury. While such expense had rested at $3,000 since 1993, the same has now been increased to a maximum of $7,000. Under controlling Pennsylvania precedent, the amount payable is that provided by law in effect on the date of death; accordingly, the new expense shall apply only to deaths occurring on or after October 24, 2018.
Finally, an extraordinary closing proviso of the new statute instructs that, within 90 days following the effective date of the amendment, the Pennsylvania Compensation Rating Bureau shall calculate the savings achieved through the implementation of the statute. Immediately following the calculation, the amendment further requires that a reduction of rates, equal to the savings, be applied to employers’ workers’ compensation policies across the Commonwealth.
III. EFFECTS AND IMPLICATIONS
Perhaps more than any other aspect of the amendment, Act 111’s retroactivity provisions, which grant employers credit for all prior payments of TTD and TPD benefits, serve as the most controversial, and are the primary anticipatory target of forthcoming constitutional challenges. In this regard, the provisions implicate the time-honored challenge of ascertaining whether a new law, which seeks to be applied retroactively, deprives individuals of vested rights which are substantive, rather than procedural, in nature and effect. Indeed, this alteration has been characterized by some prejudiced stakeholders as violative of due process, with litigation advancing such theory already contemplated by aggressive injured-worker counsel.
B. Applicability of Prior Precedent
Between the passage of Act 57 in 1996, and the handing-down of Protz in 2017, a significant body of case law developed pertaining to IREs under Section 306(a.2) of the Act. Now, the Pennsylvania practitioner is left to consider whether cases so interpreting the stricken statute remain applicable to the new Section 306(a.3), or if this corpus of cases must now be cast aside as judicially untethered to its originating statutory text.
A careful review of the new amendment reveals that its language is substantially similar – and, in part, identical – to that which preceded. For this reason, a persuasive argument exists in support of the continued precedential effect of pre-Protz case law.
As one example, this author is reminded of the Pennsylvania appellate court’s 2008 holding that a claimant, off work and receiving TTD benefits, must be found to have attained maximum medical improvement as a condition precedent to being assigned an impairment rating under the Guides. The reasonable observer is compelled to conclude that such case law remains applicable to Section 306(a.3), and that all material statutory elements for which the precedent relied upon remain intact.
Unsatisfied by the delegation restrictions imposed by Protz, a number of leading claimants’ attorneys throughout the Commonwealth have posited that the mere adoption, by reference, of the Guides is, in itself, an unconstitutional delegation of legislative authority to a private entity in violation of the Pennsylvania Constitution. Thus, in these attorneys’ eyes, Section 306(a.3) fails to cure the deficiencies for which its authors intend.
Such line of argument seems misplaced in this author’s view, and fails to recognize the regularity by which legislatures and administrative agencies utilize the mechanism of incorporation by reference. In a recent example, on October 1, 2018, the Pennsylvania Department of Labor and Industry adopted the use of the International Building Code 2015, International Fire Code 2015, International Fuel Gas Code 2015, and International Plumbing Code 2015, amongst others.
To date, no constitutional challenges pertaining to such incorporations have been filed in any courts of the Commonwealth. Thus, it must be considered that arguments advocating a global restriction on mere incorporation by reference are borne merely of contempt for the Guides themselves, rather than sound principles of constitutional law and separations of power. Indeed, were incorporation by reference barred entirely, absurd results might well ensue whereby a legislative body would be required to reproduce an entire publication within a proposed bill so as to avoid an unconstitutional delegation of authority.
Seeking to curb such rabidity in 2017’s Protz, the majority cautioned, “… [O]ur precedents to date have not unequivocally supported the Commonwealth Court’s view that the General Assembly cannot, under any set of circumstances, delegate authority to a private person or entity.” The court further noted that the holding “should not be read as an endorsement … that the delegation of authority to a private actor is per se unconstitutional.”
The passage of Act 111 represents a significant legislative victory for Pennsylvania workers’ compensation stakeholders adversely affected by the 2017 loss of IREs and their risk-mitigating benefits. As a practical matter, Pennsylvania carriers and self-insureds now enjoy immediate restoration of the IRE mechanism as a claim management tool. With an impending reassessment by the Pennsylvania Compensation Rating Bureau, short-term appreciable cost-saving is all but guaranteed.
Still, significant questions present as to the full effect of the law and its constitutional resilience in the face of assured future challenges. For these reasons, national observers will surely be monitoring such developments to both enrich their own understanding and extrapolate lessons from the Pennsylvania experience for application in other jurisdictions navigating similar questions of law.
Any questions regarding this case can be directed to Justin D. Beck, Esquire at (412) 926-1441 or at JBeck@tthlaw.com
Attorney Justin D. Beck Named Contributing Editor of 2018 Update to Pennsylvania Workers’ Compensation Treatise
TT&H attorney Justin D. Beck was recently named contributing editor of the Pennsylvania workers’ compensation treatise, West’s Pennsylvania Practice, Workers’ Compensation: Law and Practice, 2018 update.
Now in its third edition, Workers’ Compensation: Law and Practice is authored by Judge David B. Torrey and attorney Andrew E. Greenberg. The four-volume publication serves as the Commonwealth’s leading authoritative text on workers’ compensation matters, providing practitioners with comprehensive guidance and analysis as it pertains to the Pennsylvania Workers’ Compensation Act and its related body of case law, regulations, and bureaucratic processes. The treatise, published by Thomson-Reuters, is available in both digital and paper formats, with updates issued annually.
SIGNIFICANT PENNSYLVANIA CASE SUMMARIES
Firefighter Cancer Presumption-Burden of Proof/Sufficiency of Evidence
City of Phila. Fire Dep’t v. Workers’ Comp. Appeal Bd. (Sladek), Supreme Court of Pennsylvania, Sept. 12, 2017, Argued; October 17, 2018, Decided.
No. 13 EAP 2017, 2018 Pa. LEXIS 5481, 2018 WL 5046516
By James A. Tinnyo, Esquire
In this Pennsylvania Supreme Court case, the Court answered questions regarding a Claimant’s initial burden of proof to meet the presumption of compensability under the new law specifically created for Firefighters alleging work related cancer. In Sladek, the Claimant contracted malignant melanoma while employed as a firefighter for the City of Philadelphia. The Claimant offered specific medical testimony from a medical expert oncologist who testified that Claimant’s cancer was caused by his exposure to various carcinogens in his firefighting duties. In opposition, the City did not employ an expert to address Claimant’s specific situation. Rather, the City employed an expert who on general epidemiological grounds, essentially testified that melanoma is only caused by exposure to UV sunlight, not carcinogens which are present in firefighting duties and that the methodology employed by Claimant’s expert did not meet the Frye civil standard, namely that the methodology employed by the claimant’s expert did not meet generally accepted scientific standards . Before the WCJ, the claim was granted and the WCJ stated that claimant’s expert’s methodology was sufficient to carry his burden and rejected the general causation opinion of the City’s expert. The WCAB affirmed on appeal.
On further appeal by the City to Commonwealth Court, the Court reversed, holding that in essence there is a two pronged approach to establishing compensability in such cases. First, under 108 (r) of the Act, the claimant must prove that the cancer he contracted is caused by the carcinogens listed as Group I carcinogens by the IARC (an international organization that publishes data and findings on known carcinogens).Second, under 301(f) of the newly created Cancer provisions,(a) the Claimant must prove that he or she was engaged in four or more years of continuous firefighting duties (b) that he or she was directly exposed to Group 1 carcinogens while doing so (c) that he or she passed a physical examination prior to asserting the claim or prior to engaging in firefighting duties and the examination showed no evidence of cancer. Once the claimant meets this standard, he or she has a rebuttable presumption their cancer was caused by their occupation. Section 301(f) further indicates that once the presumption is met, the employer can rebut this presumption by presenting evidence that the specific firefighter’s cancer was not caused by his employment. The City appealed this holding to the Supreme Court who granted the appeal.
In a divided opinion with some Justices concurring in portions of the majority’s opinion and dissenting in others, the Supreme Court held that with regard to the initial burden under Section 108 (r), the claimant simply needs to establish that the type of cancer he had can possibly be caused by exposure to a Group 1 carcinogen encountered in the workplace. Accordingly general epidemiological evidence such as submitted by the City through their expert, is relevant and sufficient to disprove that the type of cancer claimant contracted constitutes an occupational disease. With regard to Section 301(f) however, once the claimant meets criteria a, b and c above of Section 301(f) and gains the rebuttable presumption under that section, the City could not simply rely on general epidemiological evidence that the type of cancer claimant contracted is not caused exposure to firefighting exposures to rebut the presumption, but rather the City was required to submit a medical opinion specifically dealing with claimant’s medical condition. The Court did observe that the type of general epidemiological evidence submitted by the City could be used to defeat the notion that the type of cancer Sladek contracted, melanoma is caused by firefighting duties and therefore does not constitute an occupational disease under section 108(r). Further, the Court found that the civil Frye standard applied in this case and remanded the case to the Board to determine whether claimant’s medical expert’s testimony met the standard.
Firefighter cancer claims are highly complex, fact sensitive cases which necessarily rely on factual, medical, epidemiological and toxicological evidence. In defending these cases, it is important to retain the appropriate expert who can provide the requisite epidemiological (general causation) as well as specific causation opinions to defend the claim. In Sladek, because only evidence of general causation evidence was introduced by the City, the Court found this to be insufficient to rebut the presumption, once met by the claimant. While the Supreme Court’s opinion can be read to lower the burden of proof for claimants pursuing firefighter cancer cases, it is noteworthy that the Court also held that the expert evidence relied upon by a claimant must meet the civil Frye standard.
Any questions regarding this case can be directed to Jim Tinnyo, Esquire at (717) 237-7121 or at JTinnyo@tthlaw.com
Meshoppen Transport, Inc. v. WCAB (Pfister), No. CD 2017 (October 17, 2018)
By: Lee Ann Rhodes, Esquire
This case was litigated by Sean Epstein, Esquire of our office, since its inception. The decedent in this case worked for the employer as an over-the-road truck driver. He suffered a fatal heart attack on September 23, 2015, after participating in a physical examination required for his CDL license. The claimant, the decedent’s widow, filed a Fatal Claim Petition, alleging that the claimant had suffered a work related injury.
Before the Judge, the parties agreed to bifurcate the proceedings, to decide first whether the decedent was within the course and scope of his employment at all relevant times. The parties did stipulate to certain facts, including that the decedent worked for the employer as a truck driver, and that this job required him to maintain a valid commercial driver’s license. The parties also stipulated that on September 23, 2015, the decedent went to WorkWell Occupational Services to undergo a medical examination, for the purposes of his commercial driver’s license. The parties also stipulated that the employer had scheduled the examination for the decedent.
Throughout the proceedings, the employer argued that claimant was not within the course and scope of his employment at the time that he suffered his fatal heart attack. In support of this argument, the employer cited the testimony of its safety director. The safety director testified that while the employer did schedule the claimant for his medical exam, claimant was free to schedule an examination at a place and time of his choosing. The safety director also testified that claimant was required to undergo the physical for his commercial driver’s license, as required by Federal Regulations.
The Judge issued an Interlocutory Order concluding that the decedent was acting in the course and scope of his employment at the time he suffered his heart attack. The parties continued litigation of the Fatal Claim Petition. The Judge issued his decision on March 2, 2017 granting claimant’s Fatal Claim Petition. The Judge found that the decedent was required as a condition of his employment to maintain a commercial driver’s license and, accordingly, was within the course and scope of his employment at the time he suffered his fatal heart attack. The employer filed an appeal with the Appeal Board. The Appeal Board issued its decision, affirming the Judge’s findings.
The employer argued throughout the proceedings that the decedent was not in the course and scope of his employment at the time that he suffered his fatal heart attack. In support of its position, the employer maintained that the decedent attended the medical examination outside of his work hours and was not paid for his time at the exam. The employer also relied upon the Commonwealth Court’s decision in Reichert v. WCAB (Foxdale Village), 126 A.3d 358 (Pa. Cmwlth. 2015). In Reichert, the Court had found that the claimant, who was required to undergo a functional capacity evaluation in order to be allowed to return to work following a period of a non-work related disability, was not in the course and scope of employment when she was injured during that exam. The Court held in Reichert that an injury that arises while participating in a prerequisite for employment is only work-related insofar as the event has the potential to alter the employment relationship by allowing the claimant to return to employment, but does not arise in the course of employment. The employer argued that, similar to the claimant having to undergo the functional capacity evaluation, the decedent in the instant case did not have to take the examination if he opted not to continue his work as a truck driver. Throughout the proceedings, the employer also maintained that the decedent attended the physical examination not solely in the furtherance in the employer’s business, but rather to allow himself to be able to continue working as a truck driver for any employer willing to hire him.
These arguments were rejected by the Judge and the Appeal Board. On appeal, the Commonwealth Court reviewed case law with respect to the issue of course and scope of employment. The Court cited the holding that when determining whether an employee is furthering the employer’s business or affairs when he sustains an injury during non-work hours, the court is to consider whether the employer encouraged the activity at issue, whether the activity furthered a specific interest of the employer, and whether the activity was necessary to maintain the skills required by the employer’s job. The Court reasoned that in the instant case, it was undisputed that the decedent was required to undergo the annual physical examination in order to maintain his commercial driver’s license. The Court noted testimony from the employer’s safety director that while the decedent was free to schedule the examination at a time and place of his own choosing, the employer would pay for the examination only if done at the WorkWell site. The Court also noted the safety director’s testimony that the employer received a copy of the decedent’s examination results from WorkWell. Based on these factors, the Court concluded that the decedent attended the physical examination at WorkWell because the employer encouraged him to do so and so that he could renew his commercial driver’s license. The Court found that the decedent was engaged in an activity in furtherance of the employer’s business during the physical exam, and, as a result, was in the course of his employment at the time of his fatal heart attack. The Court also rejected the employer’s reliance on the Reichert case. The Court found that the claimant in Reichert had been out of work for a significant period of time and was held ineligible for workers’ compensation benefits because she did not prove that she was an employee at the time of her injury. The Court reasoned that this was not at issue in the instant case, as there was no dispute that the decedent was an active employee at the time that he suffered his heart attack. The Court found that the decedent took the physical examination not in order to return to work, but rather to remain employed as a truck driver for the employer.
We attempted throughout litigation of this case to emphasize the point that the decedent took the physical examination in order to maintain his commercial driver’s license as a requirement of Federal law, and not necessarily the requirements of his employer. We also tried to emphasize the point that the decedent participated in the physical examination at a time when he was not considered to be “at work,” as he was not paid for the time spent participating in the physical examination or reimbursed for his mileage to attend the exam. These arguments were not, however, successful as we were not able to get around the fact that while the decedent was not “at work” at the time he underwent the physical examination, the employer did make arrangements for the exam and that, in order to continue working as a truck driver for that company, the decedent had to complete the requirements for his commercial driver’s license. We attempted to liken this case to the Reichert decision, but, as pointed out by the Court, an important fact for the Reichert decision was that the claimant had been off work for a period of time and was required to undergo the FCE as a condition of coming back to work. The decedent in Pfister was, as the Court noted, a long time driver for the employer and his employment status was never in question. As with any case involving a course and scope issue, Pfister was very fact specific and we had to try to place the facts in the best light possible for the employer. We were also very aware during the litigation of the case that we had a very sympathetic claimant, in that she was the widow of a long time employee who died very suddenly.
Charles Grant v. WCAB (IDS Express and UEGF), No. 234 C.D. 2018 (October 22, 2018)
By: Joseph J. Shields, Esquire
The Commonwealth Court affirmed the decisions of the WCJ and WCAB which found that Claimant failed to prove that he was an employee of IDS Express such that he was not entitled to workers’ compensation benefits, and further held the WCAB did not err in failing to address Claimant’s Yellow Freight motion.
On October 23, 2014, Claimant sustained injuries while attempting to make a delivery on his bicycle. Claimant rode into a trench and was thrown head over heels onto a street in Philadelphia. On November 3, 2014, Claimant filed a claim petition against IDS Express and thereafter filed another claim petition against the UEGF. The UEGF filed a timely answer on February 11, 2015 while IDS Express filed an untimely answer on March 17, 2015. The WCJ took testimony which established that Claimant worked for IDS, which is a bicycle courier service, for approximately nine weeks over which period he earned approximately $100 per week on a commission per job basis with no taxes withheld. He was further able to make his own schedule for delivering packages. Claimant provided his own bicycle for the job, and rented a radio provided by IDS so that he could be informed of jobs. Claimant also executed an independent contractor agreement, with IDS’ owner testifying that all bicycle couriers receive IRS 1099. The bicycle couriers are further permitted to work for multiple delivery services and may hire their own employees to assist in making deliveries. Based upon this testimony, the WCJ found that Claimant was an independent contractor and not an employee of IDS and denied both of Claimant’s claim petitions. The WCAB affirmed. Employer appealed to the Commonwealth Court, arguing that he was an employee of IDS, and not an independent contractor, and further arguing that the WCAB erred in failing to address Claimant’s Motion pursuant to Yellow Freight to deem as admitted the facts pleaded in Claimant’s claim petition.
The Commonwealth Court affirmed. It is the claimant’s burden to prove that he or she was an employee and not an independent contractor, as an independent contractor is not entitled to benefits because of the absence of a master/servant relationship. The factors to consider in determining whether a claimant was an employee include: control over the work and manner in which it was done; whether the claimant was responsible for only the result, which party supplied the tools or equipment; whether the claimant was paid by time worked or job performed, who paid taxes and insurance; and whether the claimant was allowed to work for other unrelated companies at the same time. The Commonwealth Court found that the WCJ correctly concluded that Claimant was not an employee of IDS, as the testimony established that Claimant determined and controlled how his work would be performed. Further, Claimant was paid by the job, not on the basis of time worked, used his own bicycle, helmet, and bags for deliveries, and paid his own taxes and insurance. The Court further held that it was not error for the WCAB in failing to rule on Claimant’s Yellow Freight motion. An answer to a claim petition must be filed within twenty days of service upon the employer pursuant to the Act. If the employer fails to answer the petition, petition shall be decided on the basis of the petition and evidence presented. In Yellow Freight, the Court interpreted the phrase “and evidence presented” to establish that an employer would be barred from introducing evidence of an affirmative defense due to a late answer. However, the Court has subsequently held that a late answer does not admit conclusions of law. Here, whether Claimant was an employee or independent contractor was an issue of law, and the employer’s late answer does not admit the existence of an employment relationship. The Court further held that, to the extent its determination was factual, its decision did not contravene Yellow Freight because it was based upon Claimant’s own testimony, not evidence from IDS that was disputed by Claimant.
Any questions regarding this case can be directed to Joseph J. Shields at 570-820-0240 or at JShields@tthlaw.com.
Workers’ Compensation Security Fund v. Bureau of Workers’ Compensation Fee Review Hearing Office (Scomed Supply, Inc.), No. 429 C.D. 2018 (October 5, 2018)
By: Deborah B. Richman, Esquire
The proper venue for a challenge to the reasonableness and necessity of treatment is by filing a Utilization Review (UR), not challenging a fee review application filed by a provider, even where Medicare policy is concerned.
Claimant uses a medically-prescribed neuromuscular electrical stimulation device. Provider dispensed supplies for the device pursuant to a prescription from Claimant’s doctor. Provider dispensed two replacement lead wires on a bimonthly basis four times from December 23, 2016, to June 23, 2017. Insurer denied payment for the lead wires, stating that a Medicare Advantage Policy statement indicates that prescribing lead wires more often than yearly would rarely be medically necessary. Provider filed a applications for fee review challenging the amount and timelines of payment. The Bureau denied the applications and Provider requested a de novo hearing from a hearing officer. The Hearing Officer awarded Provider the payment for the four sets of lead wires. Insurer appealed to the Commonwealth Court.
Section 306(f.1)(3)(1) of the Workers’ Compensation Act limits rates of reimbursement but does not preempt determinations of reasonableness or necessity of treatment under the Utilization Review process. Insurer argued that the payment of lead wires supplied more often than annually is contrary to Medicare’s policy which preempts the issue of reasonableness and necessity thereby removing the issue from the UR venue and into the venue of the medical fee review. The Court determined that this argument, though novel, has no basis in law. The Court also dismissed Insurer’s argument that the Hearing Officer’s conclusion that she lacked jurisdiction to determine reasonableness and necessity required that she dismiss the applications for fee review.
In order to challenge the reasonableness and necessity of treatment, whether due to a provider’s disregard of Medicare guidelines or otherwise, it is the defendant’s burden to file a Utilization Review. A Medical Fee Review Hearing Officer lacks jurisdiction to decide the reasonableness and necessity of treatment.
Any questions regarding this case can be directed to Deborah B. Richman, Esquire at (215)-564-2928 x 8502 or at firstname.lastname@example.org.
Dana Holding Corp. v. WCAB (Smuck), No. 1869 C.D. 2017 (September 13, 2018)
By: Justin D. Beck, Esquire
Reaffirming principles of retroactivity, the Commonwealth Court has again held that a claimant’s status is properly modified to total disability where the disputed IRE was the subject of active and pending litigation at the time Protz II was decided.
In Smuck, the claimant suffered a work injury in 2000. The employer issued a Notice of Temporary Compensation Payable, which thereafter converted to a Notice of Compensation Payable by operation of law. On June 20, 2014, the claimant underwent an IRE, which rendered an 11% impairment rating under the Sixth Edition of the AMA Guides. Based on such rating, the employer filed a Modification Petition.
Following closure of the record, but before the WCJ issued a decision, the Commonwealth Court handed down Protz I. The employer sought to reopen the record for purposes of introducing a new IRE under the Fourth Edition of the Guides. However, the claimant objected. Ultimately, the WCJ so permitted a new IRE. Though based upon the prior June 20, 2014 examination, the revised calculation rendered a 15% whole person impairment under the Fourth Edition. Accordingly, the WCJ granted the employer’s Modification Petition and modified the claimant’s disability status from total to partial as of June 20, 2014.
The claimant appealed to the WCAB, and the matter was stayed pending the Supreme Court’s decision in Protz. Following said decision, the WCAB reversed the granting of the Modification Petition, holding that the WCJ had relied upon the now-defunct Section 306(a.2), and the Fourth Edition of the Guides, in rendering his decision. The claimant was therefore reinstated to total disability status. The employer appealed to the Commonwealth Court.
The Commonwealth Court affirmed the WCAB. The court held that, because the claimant’s change in disability status was based upon an IRE still being litigated at the time Protz II was decided, Protz II indeed applied.
Before the Commonwealth Court, the employer had argued that Protz II should only be given prospective application, or, in the alternative, application should only commence as of the date of Protz II in cases where the issue had been properly preserved. Conversely, the claimant argued that he merely sought to apply the law as it was in effect at the time of appellate review.
In concluding that the claimant was entitled to the benefits of Protz II, the Commonwealth Court noted that the claimant’s disability status, at all relevant times, was far from final. In this sense, the disputed IRE was still being litigated when the Protz decisions were handed down. Rejecting the notion that any final adjudication had previously attached to the IRE at issue, the court stated, “[b]ecause Employer’s Modification Petition was still being actively challenged at the time Protz II was decided, we are hard pressed to find Employer had any reasonable expectation in the finality of the modification of Claimant’s disability status.”
Finally, the court dismissed the employer’s argument that vacating the prior IRE was a constitutional violation of the employer’s entitlement to “the due course of law,” pursuant to the Remedies Clause of Article I, Section 11 of the Pennsylvania Constitution. The court held that the employer did not have a “vested right” in the claimant’s impairment rating, in light of the ongoing litigation and corresponding lack of finality.
Where an IRE-based modification remained in active litigation at the time of 2017’s Protz II, the claimant will be entitled to reinstatement of total disability status as of the date of the disputed IRE. This is so as no finality can be conceptualized as having existed in light of ongoing challenge to the impairment rating through the date of Protz II.
Any questions regarding this case can be directed to Justin D. Beck, Esquire at (412) 926-1441 or at JBeck@tthlaw.com
SIGNIFICANT NEW JERSEY CASE SUMMARIES
Pendola v. Milenio Express, Inc., d/b/a Classic, A-0225-17T2 (App. Div October 26, 2018)
By: Deborah B. Richman, Esquire
A driver for a transportation company was found to be an employee rather than an independent contractor.
Pendola was an “auto cab driver” who fractured his ankle picking up a fare in 2014. He drove for Classic. When he purchased his car, he consulted with Classic. Classic required he paint the car silver, the color assigned to the company by the City, and affix the Classic logo to the sides and front of the car with the company’s telephone number. He was required to purchase a two-way radio to be installed in the car. He paid for those expenses as well as for his medallion, gas, car maintenance and insurance. Classic told him where to pick up customers and supplied business cards, receipts and vouchers. The only customers he was allowed to pick up were those dispatched by Classic. He paid Classic $150.00 a week and kept all of his fares. He could work whatever hours he chose. Classic had rules that drivers had to dress nicely, keep the car clean, be polite and be on time. If a driver violated the rules, they would be suspended. There are no written contracts and the drivers do not receive a 1099. The Judge of Workers’ Compensation held that Pendola was an independent contractor. The Appellate division reversed and remanded.
The Appellate Division applied the twelve-factor Pukowsky test to determine that Pendola was an employee under the two most important factors: the degree of control test and the relative nature of the work test. Pukowsky v. Caruso, 312 N.J. Super. 171 (App.Div. 1998). They looked to a lesser degree at the worker’s economic dependence on the work relationship. The Court determined that Classic’s requirements of the two-way radio, Classic’s rules and Classic’s policies that drivers could only pick up fares from the dispatcher and could not work for any other transportation company pointed to a level of control by Classic over its drivers. The Court determined that his work was an integral part of the business of the employer. Pendola’s work as a driver willing to provide the rides that Classic arranged was essential to the success of its business. That the business required multiple drivers to operate does not reduce Pendola’s importance to the business. Finally, Classic was Claimant’s only job and he had worked for them for 11 years, so he was surely economically dependent upon the company.
Although this decision is unreported, and therefore only has persuasive value, it could portend repercussions for Uber and Lyft drivers.
Any questions regarding this case can be directed to Deborah B. Richman, Esquire at (215) 564-2928 x 8502 or at email@example.com.