Pennsylvania Workers' Compensation Update: Decisions in Three Recent Cases

04.01.15

Category: Pennsylvania

Below are updates on recent Commonwealth Court decisions involving fees and costs awarded against the employee and appellate counsel; determining whether an employer’s answer is late; and calculating the average weekly wage for a short term employee.

Employees Who Keep Filing Petitions and Appeals Might Have to Pay Employers’ Defense Costs

Can counsel fees and costs incurred by an employer to defend against an employee’s appeal be awarded against the employee and the employee’s attorney?

The Commonwealth Court answered this question in the case of Smith v. WCAB (Consolidated Freightways, Inc.) decided March 9, 2015. In this case, the employee filed a Claim Petition alleging that he was disabled as the result of a chemical exposure occurring at work. The Workers’ Compensation Judge (WCJ) dismissed the Claim Petition and a subsequent Petition to Review Medical Treatment. The Workers’ Compensation Appeal Board (WCAB) affirmed both decisions. Subsequently, the employee filed a number of additional petitions, all of which were attempts to re-litigate the same injury.

The fourth time the employee was before the Commonwealth Court, the Court agreed that the appeal was frivolous and said the conduct of both the employee and the employee’s counsel was obdurate and vexatious. By that time, the employee had filed 15 petitions in the course of 15 years, four appeals to the Commonwealth Court, four appeals to the Pennsylvania Supreme Court and two appeals to United States Supreme Court.

In December 2012, the employee filed two more petitions bringing his total number to 17. The two most recent petitions were dismissed by the WCJ and the WCAB affirmed. On further appeal, the Commonwealth Court again affirmed, and this time awarded costs and counsel fees against the employee and his appellate counsel. As the Court explained, the Supreme Court’s decision in Phillips v. WCAB (Century Steel) left open the ability for an appellate court to impose sanctions under the Rules of Appellate Procedure stating, “Otherwise, there is no way for our courts to curb the sort of flagrant abuse of the system engaged in here.”

Comment: The facts of this case are extreme since it involved 17 petitions and multiple appeals. However, in extreme circumstances, attorney’s fees and costs associated with defending an appeal is a remedy which employers can pursue under the Pennsylvania Rules of Appellate Procedure.

An Employer’s “Late” Answer May Be Excused in the Case of an Incorrect Address

Will an employer’s “late” answer be excused where its address on the Claim Petition is incorrect?

The Commonwealth Court held that the answer to this question is “yes” in the case of Washington v. WCAB (National Freight Industries, Inc.) decided on March 4, 2015. In that case, the employee incorrectly identified the employer’s address in the Claim Petition; it was off by one number. The Bureau mailed the Claim Petition to that incorrect address and it was not returned as undeliverable. The employer filed an answer 43 days after the Bureau mailed the Claim Petition. The employee raised the issue of the late answer before the Workers’ Compensation Judge (WCJ), but presented no evidence as to when or how the employer received the Claim Petition or notice of its filing. The WCJ denied the Claim Petition on the merits based on evidence presented by both parties without addressing the late answer issue.

The employee appealed to the Workers’ Compensation Appeal Board (WCAB) on the sole ground that the employer’s answer was late and that the WCJ erred by failing to grant the request to bar the employer from contesting the work related injury. The WCAB affirmed the WCJ’s denial of the Claim Petition holding that the employee had failed to prove the employer’s answer was actually late because the Claim Petition was not mailed to the correct address. The employee appealed to the Commonwealth Court which affirmed the decision below.

Comment: Under Section 416 of the Act, every fact alleged in a Claim Petition which is not specifically denied by an answer filed within 20 days after a copy of the Claim Petition has been served will be deemed admitted. However, the 20-day clock does not begin to run where the employer’s address is incorrect and there is no evidence presented as to when the employer actually received the Claim Petition.

Calculating the Average Weekly Wage When a New Employee Works Less Than 13 Weeks and has no Fixed Hourly Rate of Pay or Expected Number of Hours of Work

How is the average weekly wage calculated where the employee works less than 13 weeks and does not have either a fixed hourly wage rate or an expected number of weekly work hours?

In the case of Anderson v. WCAB (F.O. Transport and Uninsured Employer’s Guaranty Fund), the Commonwealth Court held that an alternative method which reasonably reflects the economic reality of the employee’s pre-injury earning experience must be found.

In this case, decided March 10, 2015, the employee was a truck driver. Although he was employed for two weeks, he was not given any deliveries in the first week of his employment and thus, had no earnings. The second week the employee made three deliveries and the most the employee earned for one delivery was $270. Since there is no provision in the Act for calculating an average weekly wage where the employee works less than 13 calendar weeks and does not have an hourly rate or an expected number of work hours per week, the Workers’ Compensation Judge (WCJ) used an alternative method to determine an average weekly wage. The WCJ multiplied the $270 times three runs and divided the total by two weeks of employment to reach the average weekly wage of $405. On appeal, the Workers’ Compensation Appeal Board (WCAB) affirmed the Judge’s calculation. However, the Commonwealth Court reversed and determined that the correct average weekly wage was $810 ($270 times three runs in one week). Specifically, because the employee earned no wages in the first week of his two weeks of employment, the Court decided not to include that week in its calculation of the employee’s average weekly wage.

The Court agreed that the Act did not provide a method of calculation for the employee’s average weekly wage and, therefore, an alternative method was required. However, the Court noted that an alternative method must advance the overall humanitarian purpose of the Act and should reasonably reflect the economic reality of the employee’s pre-injury earning experience. The benefit of the doubt must be afforded to the employee in this assessment.

Comment: Employees who sustain work injuries shortly after beginning employment present unique issues for calculating an average weekly wage. This is particularly true if the method of an hourly rate times the number of hours expected to work is not available. When faced with that situation, this decision from the Court makes it clear that the humanitarian purpose of the Act is an important factor which must be taken into account.

For more information, please contact Carl J. Smith at csmith@wglaw.com or 412.894.0107.

Media Contacts

Sara L. De Long
267.295.3377
sdelong@wglaw.com

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