Defense Digest

Pennsylvania - Workers' Compensation
Notice Of Ability To Return To Work (LIBC 757) An Analysis Of Allegis Group v. W.C.A.B.

The Pennsylvania Workers' Compensation Act, the Regulations and the governing case law provide the legal community with guidance on the use of Bureau forms, which has always been an area of hotly contested litigation. One particular form – LIBC 757, Notice of Ability to Return to Work – is more often than not being used by claimants to preclude a defense in litigation by employers. With regard to this form, Section 306(b)(3) of the Act provides as follows:

It is well established that the issuance of the Notice of Ability to Return to Work is a prerequisite to obtaining a modification or suspension of an employee's benefits. This issue was addressed by the court in Hoover v. W.C.A.B. (Harris Masonry, Inc.), 783 A.2d 886 (Pa. Cmwlth. 2001), app. denied, 806 A.2d 864 (Pa. 2002), and Summit Trailer Sales v. W.C.A.B., (Weikel), 795 A.2d 1082 (Pa. Cmwlth. 2002), app. denied, 806 A.2d 865 (Pa. 2002). Again, in May of 2005, the Commonwealth Court in Allegis Group (Onsite) v. W.C.A.B. (Henry), 882 A.2d 1(Pa. Cmwlth. 2005), highlighted the importance of this form in yet a different setting. The precise issue in this case was whether the employer was entitled to a suspension of benefits based upon a light-duty job offer when it fails to issue a Notice of Ability to Return to Work as required by Section 306(b)(3) of the Workers' Compensation Act.

In Allegis Group, the claimant sustained a work injury in November of 2000, when a forklift ran over his left foot, causing him to fall backwards onto his tailbone. Two months later, the employer issued a Notice of Temporary Compensation Payable accepting liability for the left foot and back injuries. The employer then issued a Notice of Denial, stating that, although the claimant suffered an injury, he was not "disabled" as a result of the injury. The employer further alleged that it offered the claimant a light-duty position, which he refused. It should be noted, however, that the employer did not issue a Notice Stopping the Temporary Compensation.

Six months later, the claimant filed a Claim Petition seeking ongoing benefits based upon the work-related left foot and back injury, and the employer denied the allegations. The claimant and his physician testified that he could not return to work. The employer presented the expert testimony of Dr. Bruce Goodman, who opined that the claimant could return to light-duty work with a ten-pound lifting restriction. After reviewing the job description of the light-duty position being offered, Dr. Goodman opined that the claimant could perform these required duties. The employer also presented the testimony of its representative, who confirmed that a light-duty job was made available to the claimant in January of 2001. The claimant did not report to work on the scheduled start date, and a few days later he became confrontational when asked to sign documents related to the job offer. The claimant then refused to complete the required paperwork, and the employer's representative requested that he leave the work site.

The Allegis Group judge accepted the testimony of the employer's witnesses and rejected the testimony of the claimant and his physician. The judge also determined that the Notice of Temporary Compensation Payable issued by the employer converted into a Notice of Compensation Payable because the employer did not issue a Notice Stopping the Temporary Compensation Payable. The judge further found that the claimant did sustain a work injury, but he determined that the employer offered the claimant a light-duty position within his restrictions, which the claimant unreasonably refused. Therefore, the claimant was awarded benefits as of the date of injury, but these benefits were suspended as of the date of the light-duty job offer.

The claimant appealed to the Workers' Compensation Appeal Board. The Board reversed the judge's suspension of benefits on the grounds that the employer did not prove it had issued the Notice of Ability to Return to Work as required by Section 306(b)(3) of the Act. The employer appealed to the Commonwealth Court arguing that, because the claimant filed a Claim Petition, the burden of proof related to such a Claim Petition controls. In this regard, the employer: (1) challenged the Board's conclusion that the claimant met the burden of proof for a Claim Petition; (2) challenged the application of the statutory provisions relating to the Notice of Ability to Return to Work in the context of the Claim Petition; and (3) disputed the conclusion that the employer needs to prove anything in a Claim Petition proceeding.

Specifically, the employer argued that the judge erred in granting benefits to the claimant because the claimant failed to satisfy the burden of proof on his Claim Petition in that the Judge expressly rejected the claimant's medical evidence. The Commonwealth Court held that the judge did not award benefits on that determination, but rather, on the basis that the employer did not issue a Notice Stopping the Temporary Compensation Payable. Therefore, based upon Section 406.1(5)(i)(6) of the Act, the Notice of Temporary Compensation Payable automatically converted. The Commonwealth Court went on to state that the Board's decision was legal in nature and not driven by credibility findings.

The employer then asserted that the Board erred in determining that it was required to issue a Notice of Ability to Return to Work as the case concerned a Claim Petition rather than a Suspension Petition. The employer argued that the Board erred in relying upon Hoover to support its determination that the Notice of Ability to Return to Work was required here as Hoover involved a Suspension Petition. The Commonwealth Court rejected this argument indicating that the decision in Hoover was controlling because that case also involved a Claim Petition seeking benefits for a back injury.

During the litigation in Hoover, the employer offered the claimant a sedentary position. The judge granted the Claim Petition for a closed period and suspended benefits as of the date of the job offer. The Appeal Board affirmed that decision. The Commonwealth Court reversed, holding that, in the context of a Claim Petition where an employer seeks a suspension based upon a job offer, the employer must establish that it issued the Notice of Ability to Return to Work, as required by Section 306(b)(3) of the Act, to obtain the suspension. Because the employer failed to establish compliance with the statutory requirement, the Appeal Board's Suspension Order was reversed. The Commonwealth Court emphasized that in Allegis Group, as in Hoover, the employer did not prove it issued a Notice of Ability to Return to Work, and, therefore, there was no basis to reverse the decision and award a suspension of benefits based upon Hoover.

The employer in Allegis Group further argued that it was not required to issue the Notice of Ability to Return to Work because the claimant admitted that the position was offered due to the fact that he reported to work. In Burrell v. W.C.A.B. (Philadelphia Gas Works and Comp Services, Inc.), 849 A.2d 1282 (Pa. Cmwlth. 2004), the employer sought to modify benefits based upon vocational testimony and surveillance, which demonstrated that the claimant was working for another employer while receiving benefits. The court held in that case that the employer was not required to comply with Section 306(b)(3) of the Act regarding the Notice of Ability to Return to Work because it sought a modification based upon surveillance and expert vocational testimony rather than new medical evidence. Also, the Burrell Court stated that the Notice of Ability to return to Work was not required because, at the time that the employer sought modification, the claimant had already returned to work for another employer. Contrary to Burrell, the employer in Allegis Group sought the suspension based upon new medical information, not surveillance evidence and expert vocational testimony. In addition, the claimant in Burrell was not already working at the time that the employer sought the suspension.

Finally, the employer in Allegis Group asserted that the Board violated its right of due process by requiring it to prove it had issued the Notice of Ability to Return to Work since the claimant has the burden of proving disability to prevail in the claim. The Commonwealth Court found that this argument lacked merit as the employer sought a suspension based upon the light-duty job offer, which was within the claimant's restrictions. Therefore, under Section 306(b)(3) of the Act, the employer is required to issue the Notice of Ability to Return to Work based upon its receipt of new medical evidence. The Commonwealth Court then highlighted that it agreed with the Board, which properly determined that the burden of establishing compliance with this statutory requirement rested with the employer.

In summary, from an employer/insurer's perspective, even in the Claim Petition setting, it is critical that the Notice of Ability to Return to Work is issued, provided there is medical evidence received that releases the claimant back to the workforce in any capacity. It is also important to carefully examine the medical records and expert opinion regarding a claimant's ability to work. Since the Act does not specify which medicals are to be relied upon, any medical evidence that the employer/insurer receives that references the claimant's ability to return to work should be considered in the analysis. The Allegis Group decision is an important reminder to employers, insurers and attorneys of the significance of using the LIBC 757 form to limit exposure and to comply with the Act.

*Michele, a shareholder in our Philadelphia, PA office, can be reached at (215) 575-2724 or mrpunturi@mdwcg.com.