Kramer v. Workers' Compensation Appeal Board2/22/2002
Denise Kramer (Claimant) petitions for review of a June 26, 2001 order of the Workers' Compensation Appeal Board (WCAB) affirming the decision of a workers' compensation judge (WCJ) to deny Claimant's Petition to Review Compensation Benefit Offset (Offset Review Petition). The WCJ had determined that Rite Aid Corporation (Employer) was entitled, under section 204(a) of the Workers' Compensation Act (Act), to take a credit for severance benefits paid to Claimant. We reverse.
Claimant sustained a work-related injury on February 20, 1998, while working at Employer's Shiremanstown, Pennsylvania facility. As a result, Claimant received temporary total disability benefits in the amount of $364.86 per week through June 28, 1998, when Claimant returned to work with injury-related restrictions. On March 12, 1999, Employer relocated its Shiremanstown facility to Maryland, and, as a consequence, Employer laid off the employees, including Claimant, who worked at that facility. Following the lay-off, Employer reinstated Claimant's workers' compensation benefits.
Subsequently, Claimant received a check from Employer in the amount of $3,355.02, representing the net amount of "severance" pay due Claimant as a result of Employer's relocation. The payment was part of a "Severance Agreement" contained in a January 7, 1998 Addendum to the most recent collective bargaining agreement (CBA) between Employer and Teamsters, Local 776, the union for Employer's employees (Union).
On May 14, 1999, Employer sent Claimant a Notice of Compensation Benefits Offset (Offset Notice), informing her that Employer, as authorized by section 204(a) of the Act, 77 P.S. §71(a), intended to use the $3,335.02 severance as a credit against Claimant's workers' compensation benefits. (R.R. at 50a-51a.) As a result of the offset, Claimant did not receive any workers' compensation benefits from June 5, 1999 until August 10, 1999, when total disability benefits once again were reinstated. (WCJ's Findings of Fact, Nos. 9-10.)
On May 20, 1999, Claimant filed an Offset Review Petition alleging that Employer's offset was unconstitutional and contrary to the Act. (R.R. at 1a-2a.) Employer filed an answer denying Claimants allegations, and, following a hearing, the WCJ issued a decision denying Claimant's Offset Review Petition. The WCJ held that the $3,355.02 received by Claimant under the CBA was, in fact, a severance benefit as defined in 34 Pa. Code §123.2 and that Employer properly took an offset pursuant to section 204(a) of the Act. (R.R. at 10a-12a.) The WCJ also concluded that he lacked jurisdiction over Claimant's constitutional challenge to the Act's severance benefit offset provision in section 204(a). (WCJ's Findings of Fact, No. 2; WCJ's Conclusion of Law, No. 3; R.R. at 9a, 12a.) Following Claimant's appeal, the WCAB affirmed. Rejecting Claimant's reliance on pre-Act 57 precedent to support a contrary result, the WCAB agreed that Employer was entitled to a credit for the $3,335.02 paid to Claimant. The WCAB then concluded that it, too, lacked authority to pass upon the constitutionality of the Act's provisions. (R.R. at 18a-22a.)
Claimant now petitions this court for review, arguing that the WCJ and WCAB erred in denying Claimant's Offset Review Petition. First, Claimant asserts that Employer was not entitled to a credit for the $3,335.02 payment because this payment did not fall within the definition of "severance" contained in the regulations. Alternatively, Claimant contends that, even if the payment is deemed to be severance, it is not subject to offset under section 204(a) of the Act. Claimant also renews her argument that section 204(a) of the Act, as amended in 1996 to provide
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