The Pennsylvania Courts have consistently held that an employee who “removes himself from the workforce” or who “retires” from any and all employment is no longer entitled to workers compensation disability benefits that such employee was receiving as the result of a work related injury.  The Pennsylvania courts have reasoned that workers compensation disability benefits are paid as a substitute for the loss of wages caused by a work injury.  However, when an employee “retires” or “removes himself from the workforce”, the employee’s wage loss is no longer caused by his injury but by his/her decision to “retire”.

The only exception to this rule of law was if the employee could demonstrate that his or her decision to retire or remove himself or herself from the workforce was solely due to his or her inability to work due to the work injury.  If the injured employee could demonstrate that the work injury caused his or her inability to return to any gainful employment, then the employee could continue to receive his or her workers compensation disability benefits during retirement.

This issue is particularly complex when an injured employee, while receiving his workers compensation disability benefits, elects also to receive a disability pension or retirement pension from the employer.  Employers and workers compensation insurance companies have argued that an injured employee’s election to receive any type of pension benefits represents a decision to “retire” and “remove himself or herself” from the work place thus making that employee ineligible for ongoing workers compensation disability benefits.

After years of litigation of this issue in the Pennsylvania courts, the Pennsylvania Supreme Court, in a case decided in 2013, stated the following:

We will take this opportunity to make clear the analytical paradigm that applies in cases involving an employer’s petition to suspend or modify [workers compensation disability] benefits premised upon the claimant’s alleged voluntary withdrawal from the workforce, as evidenced only by acceptance of a pension. Where the employer challenges the entitlement to continuing [workers compensation disability] compensation on grounds that the claimant has removed himself or herself from the general workforce by retiring, the employer has the burden of proving that the claimant has voluntarily left the workforce. There is no presumption of retirement arising from the fact that a claimant seeks or accepts a pension, much less a disability pension  rather, the worker’s acceptance of a pension entitles the employer only to a permissive inference that the claimant has retired. Such an inference, if drawn, is not on its own sufficient evidence to establish that the worker has retired-the inference must be considered in the context of the totality of the circumstances. The factfinder must also evaluate all of the other relevant and credible evidence before concluding that the employer has carried its burden of proof…

If the employer produces sufficient evidence to support a finding that the claimant has voluntarily left the workforce, then the burden shifts to the claimant to show that there in fact has been a compensable loss of earning power. Conversely, if the employer fails to present sufficient evidence to show that the claimant has retired, then the employer must proceed as in any other case involving a proposed modification or suspension of benefits. City of Pittsburgh v. Workers’ Compensation Appeal Board (Robinson), 67 A.3d 1194, 1198 n.4 (Pa. 2013).

In a decision this year, the Pennsylvania Commonwealth Court confirmed this rule of law.  In Chesik v. WCAB (Department of Military and Veterans Affairs), the injured worker, while receiving her workers compensation disability benefits, elected to receive a disability pension from her Pennsylvania employer and relocated to Nevada.  The employer and workers compensation insurance company petitioned to stop her workers compensation disability benefits.  During the legal proceedings, the injured worker testified that the climate in Nevada improved the pain and discomfort that she was experiencing from the work injury.  The injured worker further testified that she did not move to Nevada to “retire” but simply to improve her physical condition.

The Pennsylvania Commonwealth Court held that the employer and workers compensation insurance carrier could not solely rely on the Claimant’s receipt of her disability pension to support a suspension of her workers compensation disability benefits on the basis that she has permanently separated from the workforce.  Citing to the Pennsylvania Supreme Court’s decision in Robinson, the Commonwealth Court noted that “there is no presumption of retirement arising from the fact that a claimant seeks or accepts a pension, much less a disability pension; rather, the worker’s acceptance of a pension entitles the employer only to a permissive inference that the claimant has retired. Such an inference, if drawn, is not on its own sufficient evidence to establish that the worker has retired–the inference must be considered in the context of the totality of the circumstances.”  Chesik v. WCAB (Department of Military and Veterans Affairs).

Thus, if you have been injured at work and are contemplating receipt of retirement, regular pension or disability pension benefits, you should contact John J. Stanzione, Esq.  610-430-8000. 

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Mr. Stanzione has over 30 years of experience representing employees with respect to multiple employment matters including workers compensation claims, wage loss claims, claims for wrongful termination and discrimination claims.  In addition, Lamb McErlane is a multi-service law firm with attorneys specializing in several legal disciplines such as business law, family law, personal injury law, criminal law, corporate transactions, social security disability, wills and trusts, estate planning real estate law and more.