School District of Philadelphia v. Workers' Compensation Appeal Board, 117 A.3d 232

Background

Shirley Hilton, a second-grade teacher, experienced severe classroom-related stress on March 3, 2009, and thereafter suffered symptoms (dizziness, headaches, palpitations, vocal strain, exacerbation of lupus).
Employer initially issued a notice of compensation denial; before Hilton filed a claim petition, Employer offered her a quieter teaching position at Jay Cooke School (summer 2009) that Hilton did not accept.
Hilton filed a claim petition in October 2009; WCJ credited her and her treating physician that the injury was compensable but concluded disability ceased as of September 30, 2009 (when the Jay Cooke position was available) and suspended benefits from that date.
The WCAB reversed the suspension, holding Employer failed to give the Section 306(b)(3) written "notice of ability to return to work" and therefore could not suspend benefits.
The Commonwealth Court reversed the WCAB as to suspension: it held Section 306(b)(3) notice is required only when an employer seeks to modify/suspend existing benefit payments after a compensable injury has been established; because Hilton was not receiving benefits when the job offer was made (and litigation had not yet commenced), no notice was required.
The Pennsylvania Supreme Court affirmed the Commonwealth Court: Section 306(b)(3) is triggered by the insurer’s receipt of medical evidence and operates in the context of altering existing benefits after entitlement is established; it does not require notice whenever an employer offers alternate work before benefits have been awarded.

Issues

Issue	Plaintiff's Argument (Hilton)	Defendant's Argument (School District)	Held
Whether Section 306(b)(3) requires written notice before offering alternative employment when claimant has not yet been awarded benefits	Section 306(b)(3) is mandatory and contains no limiting language; notice must be given even if claimant has not filed or received benefits	Section 306(b)(3) applies when employer receives medical evidence and seeks to change existing benefits; no obligation arises before compensability/benefits are established	Section 306(b)(3) notice is required only when employer seeks to modify/suspend existing benefits after a compensable injury has been established; no notice required here because Hilton was not receiving benefits when job was offered
Whether suspension as of Sept. 30, 2009 was improper absent medical evidence showing change in disability status	Once claimant proves compensability, employer must produce competent medical evidence to suspend benefits; no such evidence showed Hilton was medically able to perform the Jay Cooke job on Sept. 30, 2009	Claimant failed to prove ongoing loss of earning power beyond Sept. 30, 2009; her own and her doctor’s testimony showed she could work in a less stressful school like Jay Cooke, so burden did not shift to employer	WCJ reasonably credited testimony showing Hilton’s disability was limited to schools like Pastorius; benefits properly limited to a closed period ending Sept. 30, 2009; no error to suspend thereafter

Key Cases Cited

Allegis Group v. Workers' Comp. Appeal Bd., 882 A.2d 1 (Pa. Cmwlth.) (employer who was paying benefits when offering light duty must comply with Section 306(b)(3))
Hoover v. Workers' Comp. Appeal Bd., 783 A.2d 886 (Pa. Cmwlth.) (applied notice requirement where job offer occurred in course of claim litigation)
Burrell v. Workers' Comp. Appeal Bd., 849 A.2d 1282 (Pa. Cmwlth.) (Section 306(b)(3) aims to disclose medical evidence of ability to work and impact on existing benefits)
Kachinski v. Workmen's Comp. Appeal Bd., 532 A.2d 374 (Pa.) (pre-Act 57 framework for modifying benefits)
Vista Int'l Hotel v. Workmen's Comp. Appeal Bd., 742 A.2d 649 (Pa.) (burden-shifting: claimant proves injury/disability, employer must prove suitable work to modify benefits)
Inglis House v. Workmen's Comp. Appeal Bd., 634 A.2d 592 (Pa.) (claimant bears burden to prove duration of disability)