Workers’ Compensation; Pretrial Incarceration Suspension of Benefits

Sadler v. Workers’ Compensation Appeal Board (Phila. Coca-Cola), 210 A.3d 372 (Pa. Cmwlth. 2019), allocatur granted Jan. 28, 2020, appeal docket 6 EAP 2020

The Pennsylvania Supreme Court granted allocatur in this case to determine whether a pretrial incarceration meets the statutory requirement to suspend Workers’ Compensation (WC) benefits under 77 P.S. § 511.1 (“Nothing in this act shall require payment of compensation…for any period during which the employe[e] is incarcerated after a conviction”).

In 2012, Sadler was a production manager with Philadelphia Coca-Cola (Employer), and sustained injury while working. Sadler had his pinky finger amputated and sprained his lower back, which resulted in the Notice of Compensation Payable (NCP) basing Sadler’s disability rate of $652 per week on an AWW of $978. In April 2015, Sadler filed a petition to review his WC benefits and sought penalties for miscalculation of his AWW, claiming he should have been entitled to a maximum disability rate of $888 per week, because the original calculation violated the WC Act, Section 309(d.2) (AWW is “the hourly wage rate multiplied by the number of hours the employee was expected to work per week under the terms of employment”), so his AWW should have been at least $1,412.04. In response, the Employer filed a Suspension Petition in May 2015 to end Sadler’s WC benefits because Sadler spent 525 days in jail before his January 2015 conviction. 

During the WC Hearing, Sadler testified that during the summer “he was told he would work in excess of 60 hours,” but was never told that after working the summer time 60 hours per week, his hours would be reduced to 40 hours per week. Slip Op. at 4. Another employee for Employer who hired Sadler, Veneri, testified that Sadler was informed that he was expected to work four ten-hour shifts and would probably receive overtime during the busy time of summer. Sadler’s pay stubs were entered into evidence. The hearing also determined that Sadler was incarcerated for 525 days due to failure to meet bail before his conviction. The WCJ found Veneri and not Sadler credible for determining Sadler’s expected number of hours to work each week, resulting in a denial of Sadler’s Review Petition for miscalculation of his AWW. The WCJ also granted Employer’s Suspension Petition, determining that the 525 days Sadler was incarcerated entitled the Employer to reimbursement for benefits paid during that time. The Workers’ Compensation Appeal Board (Board) affirmed the WCJ’s decision on these issues.  

The Commonwealth Court remanded for a recalculation of Sadler’s AWW because the WCJ did not consider the overtime work in the summer in the calculations, and reversed the suspension of Sadler’s WC benefits because the language of Section 306(a.1) provides that incarceration for the inability to meet bail before a conviction is not a “period during which the employe[e] is incarcerated after a conviction” under 77 P.S. § 511.1.

As to the suspension of Sadler’s WC benefits because he was incarcerated, the Court reasoned:

[T]he plain language of Section 306(a.1) does not support deeming incarceration that occurs before a conviction as having occurred after a conviction in order to suspend WC benefits of a claimant who could not meet bail. The plain language of Section 306(a.1) is consistent with the fundamental principles underlying the WC Act and its purpose. Because the WC Act is a remedial act and statutory provisions that disqualify claimants from benefits “should be narrowly construed” unless the claimants are “unequivocally excluded by the plain language of” the statute, [citation omitted], the Board’s Order must be reversed to the extent it suspended Claimant’s benefits. Claimant did not spend any period of time “incarcerated after a conviction” as required by the WC Act. To hold otherwise, requires this Court to add words to the statute that the General Assembly chose not to include.

Slip Op. at 20-21.

Judge Covey dissented. On the incarceration issue, Judge Covey concluded that the Majority narrowly focused on Section 306(a.1)’s term “after conviction” and “fail[ed] to give effect to all of the words in that provision,” such as suspending benefits for “any period during which the employe[e] is incarcerated after a conviction.” Dissent Slip Op at. 7. Further, she reasoned, allowing a claimant to keep WC benefits because he cannot afford bail for 525 days when the claimant was sentenced to that time for his/her conviction, while suspending WC benefits upon conviction for claimant’s who can afford bail, is contrary to legislative intent and creates an unequal application of the law. Dissent Slip Op. at 16.

The Supreme Court granted allocatur to examine the incarceration before conviction issue:

(1) Whether the Commonwealth Court erred in reversing the appeal board’s affirmance of the WCJ’s grant of [Petitioner’s] suspension petition for a 75 week period which allowed [Petitioner] to assert a credit against [Respondent’s] future compensation for money paid to [Respondent] during his incarceration as the grant of a suspension was consistent with the Act and the applicable case law?

(2) Whether the Commonwealth Court’s interpretation that [Petitioner] is precluded from suspending benefits under the circumstances of this case, creates an unequal application of the law for similarly situated claimants, and similarly-situated employers in violation of the Equal Protection guarantees of the Constitutions of the Commonwealth of Pennsylvania and the United States of America?

For more information, contact Kevin McKeon or Dennis Whitaker.