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Enck v. Workers' Compensation Appeal Board11/13/2002
Cynthia Enck (Claimant) petitions for review of the January 30, 2002 order of the Workers' Compensation Appeal Board (Board) that affirmed the decision of the Workers' Compensation Judge (WCJ) denying Claimant's offset review and penalty petitions. For the reasons that follow, we affirm in part and reverse in part.
Claimant worked for Rite-Aid Corporation (Employer) for approximately thirteen and a half years until it closed its Shiremanstown facility on March 12, 1999. On June 9, 1998, Claimant sustained a compensable work injury in the nature of a lumbar strain and had worked light-duty through March 12, 1999. On March 19, 1999, pursuant to a severance agreement in the parties' collective bargaining agreement (CBA), Claimant received a check from Employer in the amount of $5,003.41.
On May 14, 1999, Employer filed a notice of workers' compensation benefit offset informing Claimant that effective June 5, 1999, her benefits would be offset by the $5,003.41 severance payment made to her. In response, on May 24, 1999, Claimant filed an offset review petition alleging that Employer improperly attempted to take an offset for the severance payment. Employer filed a timely answer denying Claimant's allegations.
On June 1, 1999, Claimant filed a penalty petition alleging that Employer unilaterally suspended Claimant's benefits as of May 18, 1999, without any agreement filed with the Bureau or order from the WCJ, in violation of the provisions of the Workers' Compensation Act (Act). In her petition, Claimant requested litigation costs and attorney's fees.
Following a hearing, the WCJ determined that Claimant failed to sustain her burden of proving that Employer improperly took a credit for the severance payment. Therefore, the WCJ denied Claimant's offset review petition. The WCJ further determined that Claimant failed to sustain her burden of proving that Employer violated any provisions of the Act and, thus, denied Claimant's penalty petition and request for attorney's fees. On appeal, the Board affirmed. Claimant's appeal to this Court followed.
Essentially, Claimant contends that the WCJ erred in granting Employer's workers' compensation insurance carrier, Travelers' Insurance Company (Insurer), a credit for the severance payment made by Employer to Claimant under the CBA. In support, Claimant cites this Court's decision in Kramer v. Workers' Compensation Appeal Board (Rite Aid Corp.), 794 A.2d 953 (Pa. Cmwlth. 2002), where we determined that an employer that was not a self-insurer was not directly liable for the payment of benefits for purposes of Section 204(a) of the Act. Section 204(a) provides in part that " he severance benefits paid by the employer directly liable for the payment of compensation ... which are received by an employe shall also be credited against the amount of the award...." 77 P.S. §71(a) (emphasis added).
The applicable regulations interpreting Section 204(a) defines "severance benefit" as:
A benefit which is taxable to the employe and paid as a result of the employe's separation from employment by the employer liable for the payment of workers' compensation, including benefits in the form of tangible property. The term does not include payments received by the employe based on unused vacation or sick leave or otherwise earned income. 34 Pa. Code §123.2.
In the case sub judice, Addendum C to the parties CBA, entitled Severance Agreement, provides in relevant part:
Conditional upon the employees continued efforts per the terms of the Contract, and the signing of a release agreed to by the parties, all employees, and those hired hereafter, not on probationary status
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