One basis employers have to seek a suspension of an injured worker’s weekly compensation benefits is the claimant’s voluntary withdrawal from the labor market. In other words, retirement. Last month, the state Supreme Court weighed in on the issue in its decision in City of Pittsburgh v. WCAB (Robinson), speaking to whether taking a pension creates a presumption of retirement. The case had been decided in 2010 by the Commonwealth Court.
It stands to reason that if an individual were to retire, he or she would no longer be earning an income. Consequently, any lost wages realized upon retirement are immediately attributable to the removal of the individual from the workforce. In the case of an injured worker who retires, the work-related disability is no longer viewed as the primary reason for the wage loss. The problem for the insurance company has always been getting an injured worker to admit to a retirement. Most injured workers, regardless of age, will insist that they would have worked at least another 30 years were it not for the work-related disability.
The law is clear that when an injured worker states without reservation that he or she has retired and has no intention of looking for future employment, the employer does not need to show job availability in order to obtain a suspension of benefits. This is not the case, however, when the retirement is caused by the work injury. In order to demonstrate retirement, an employer must prove, through a "totality of the circumstances" test, that the injured worker has chosen not to return to the workforce.
One of the main factors that makes up the totality of the circumstances is the acceptance of a pension. In the Commonwealth Court version of Robinson, the court articulated the following standard:
"In order to show that efforts to return a claimant to the workforce would be unavailing because a claimant has retired, an employer must show, by the totality of the circumstances, that the claimant has chosen not to return to the workforce. Circumstances that could support a holding that a claimant has retired include: (1) where there is no dispute that the claimant retired; (2) the claimant’s acceptance of a retirement pension; or (3) the claimant’s acceptance of a pension and refusal of suitable employment within her restrictions. To impose a lesser standard on an employer to show that a claimant has retired would not be consistent with the humanitarian purpose of the [Pennsylvania Workers' Compensation] Act or our Supreme Court’s precedent."
The Commonwealth Court essentially established that it is the employer’s burden to show withdrawal from the workforce, which then shifts the burden of proof to the claimant to demonstrate continued attachment to the workforce. However, the court drew a distinction between a disability pension and a retirement pension, finding that the latter creates a presumption of retirement, whereas the former does not, since it only shows an intent not to return to the pre-injury job alone.
While last month the Supreme Court affirmed the Commonwealth Court’s decision in Robinson, it removed the distinction between disability pensions and retirement pensions, finding that neither pension, by itself, creates any presumption that the injured worker has taken him or herself out of the workforce. This is excellent news for injured workers, as the court reduced the role of the taking of a pension to a possible "permissive inference," which is but one factor in the totality of the circumstances analysis. Other factors aside from the claimant’s receipt of a pension could include "objective factors" such as "the claimant’s own statements relating to voluntary withdrawal from the workforce, and the claimant’s efforts or non-efforts to seek employment." According to the court, the permissive inference, if drawn, is not on its own sufficient evidence to establish that the worker has retired — the inference must be considered in light of the other factors. It would be up to the fact-finder to evaluate all of the other "relevant and credible evidence" before deciding whether or not the employer has met its burden of proof.
Notwithstanding the good result in Robinson, it remains incumbent on the claimant’s practitioner to ensure that should the issue come up, it can be proven that the injured worker is seeking employment after retirement or that the employee was forced into retirement from the entire labor market because of the work-related injury. Trying to concoct evidence of a good-faith job search after a suspension petition has been filed is not advisable. Merely looking through want ads or performing an Internet search, without additional efforts, will not be considered a good-faith job search. It is recommended that the injured worker actually apply for employment to bolster the validity of the search.
It cannot be reiterated enough that being proactive in cases where retirement is potentially an issue is essential. Now is as good a time as any to check with any older clients to see what their attitude is on whether they ever plan to work again. Whatever the answer, share with them the status of the law so they are not caught flat-footed in the event an overzealous adjuster concludes they have voluntarily removed themselves from the labor market.
Christian Petrucci is a solo practitioner and past co-chairman of the Philadelphia Bar Association’s workers’ compensation section. He concentrates his practice in workers’ compensation litigation and Social Security disability.