Stepp v. Workers' Compensation Appeal Board
2014 Pa. Commw. LEXIS 441
| Pa. Commw. Ct. | 2014Background
- Claimant worked for Marianna Scenery Hill Telephone; FairPoint acquired Marianna on Sept. 1, 2000, with FairPoint managing HR for all subsidiaries.
- Claimant sustained a back injury on June 13, 2008; off work mid-2008, returned to light duty briefly, then ceased work on Nov. 13, 2008.
- Claimant began receiving workers’ compensation benefits; notified retirement effective July 1, 2010; pension payments began Oct. 2010.
- FairPoint issued a Section 204(a) offset notice in Jan. 2011, asserting an offset based on the employer-funded portion of Claimant’s pension.
- WCJ found Marianna funded 95.71% of Claimant’s pension; Board held FairPoint succeeded to Marianna’s right to the offset and affirmed the offset.
- Claimant argued that only Marianna (not FairPoint) funded the pension; Board and WCJ treated FairPoint as successor liable for the offset.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FairPoint can claim a pension offset when Marianna funded the pension | Stepp asserts Marianna funded the pension; FairPoint not directly liable for benefits. | FairPoint, as successor employer, bears the offset liability; Marianna’s funding is irrelevant to FairPoint's liability. | Affirmed; FairPoint entitled to offset as successor under Section 204(a). |
| Whether merger vs stock purchase affects §1929 offset framework | The arrangement is not a true Section 1929 merger; thus Marianna should govern the offset. | LTV Steel principles apply; the surviving entity may assume liabilities and rights, including offset. | Affirmed; controlling entities may transfer offset rights and liabilities; Marianna funded most of the pension. |
| Proper calculation of the offset amount | Offset should reflect Marianna’s funding portion, not FairPoint’s; Claimant’s understanding of contributions contested. | Offset based on 95.71% funded by employer; detailed calculation supported by testimony and NTCA data. | Affirmed; offset amount determined as 95.71% of pension benefit; employer credit properly applied. |
| Effect of the offset on Claimant’s modified weekly benefits | Offset should not reduce weekly benefits below zero. | Offset reduces benefits per §204(a) in light of the calculated employer-funded portion. | Affirmed; Board correctly applied offset, resulting in adjusted weekly benefit consistent with §204(a). |
Key Cases Cited
- Pennsylvania State University v. Workers’ Compensation Appeal Board (Hensal), 911 A.2d 225 (Pa.Cmwlth. 2006) (explains legislative intent of §204(a) to prevent duplicate benefits)
- LTV Steel Co., Inc. v. Workers’ Compensation Appeal Board (Mozena), 754 A.2d 666 (Pa. 2000) (surviving corporation assumes rights and liabilities in mergers)
- Department of Public Welfare/Polk Center v. Workers’ Compensation Appeal Board (King), 884 A.2d 343 (Pa.Cmwlth. 2005) (burden of proof on party seeking change to status quo; employer bears burden for pension offset)
- Greenwich Collieries v. Workmen’s Compensation Appeal Board (Buck), 664 A.2d 703 (Pa.Cmwlth. 1995) (standard for reviewing WCJ findings: substantial evidence and credibility)
- Scarpelli v. Workmen’s Compensation Appeal Board, 333 A.2d 828 (Pa.Cmwlth. 1975) (jurisdictional standard of review for WC decisions)