PA Supreme Court Construes Benefits Disqualification During Incarceration Statute

The Supreme Court of Pennsylvania, affirming a decision by the state’s Commonwealth Court, held that the express terms of Section 306(a.1) of the state’s Workers’ Compensation Act [77 P.S. § 511.1] authorizes the termination of benefit payments only during periods of incarceration served after conviction [Sadler v. Workers’ Comp. Appeal Bd., 2021 Pa. LEXIS 327 (Jan. 27, 2021)]. Accordingly, where an injured employee, who was receiving weekly benefits, was charged with a crime and, because he could not make bail, spent 525 days in jail awaiting his criminal trial, the employer was not entitled to a credit or reimbursement after the employee pled guilty, was sentenced to 525 days of incarceration, given credit for time served, and immediately released from custody. The worker was not incarcerated after conviction.

Background

In July 2012, Sadler sustained a right pinky finger amputation and a low back sprain while working for the employer. The employer accepted the claim and provided benefits at $652 per week, based upon an average weekly wage of $978. On August 13, 2013, Sadler was charged with a crime in New Jersey. As noted above, he remained in jail because he could not post bail.

After his release, Sadler sought review of his AWW. The employer responded with a suspension petition, contending that Sadler was not entitled to retain the benefits he received while incarcerated. It also asked that his benefits be adjusted to prevent him from being unjustly enriched for the amounts received during that time.

The workers’ compensation judge concluded, in relevant part, that the employer was entitled to reimbursement for benefits paid to Sadler during his pre-conviction incarceration. The judge did not provide for a future credit against benefits to be paid to Sadler, but rather ordered that the employer petition the Supersedeas Fund for reimbursement. On appeal, the Board modified the WCJ’s decision by allowing the employer to seek a credit against Sadler’s future payments, but affirmed in all other respects.

Appeal to Commonwealth Court

Sadler appealed to the Commonwealth Court, maintaining that his workers’ compensation benefits had been improperly suspended because he spent no time in incarceration after his conviction, as was required pursuant to the clear language of Section 306(a.1). The Commonwealth Court agreed [see Sadler v. WCAB (Philadelphia Coca-Cola), 210 A.3d 372 (Pa. Commw. 2019). The Commonwealth Court stressed that Sadler’s pre-conviction incarceration was due to his inability to post bail and that consistent with Section 306(a.1)’s plain language, his benefits could not be suspended during that time.

The Commonwealth Court also reasoned that the General Assembly, in enacting Section 306(a.1), was aware that an individual who is incarcerated prior to being convicted is entitled to receive post-conviction credit for time served. Thus, the court reasoned, the General Assembly could have included a provision in Section 306(a.1) that would allow for time spent incarcerated before a conviction to be deemed as occurring after a conviction. The Commonwealth Court based its decision in substantial part on its prior decision in Rogele, Inc. v. WCAB (Mattson), 969 A.2d 634 (Pa. Commw. 2009), a factually similar case also involving the payment of workers’ compensation benefits during a period of pre-incarceration.

Employer Appealed

The employer appealed on two grounds, contending that (a) the Board erred in failing to grant its suspension petition for a 75-week period, for money paid to Sadler during his incarceration, and (b) that the Commonwealth Court’s decision created circumstances under which there had been unequal application of the law for similarly situated claimants, and similarly situated employers, in violation of the Equal Protection guarantees of the Pennsylvania and federal constitutions.

Supreme Court Affirms

The employer essentially argued that once Sadler was convicted, the time he served in pre-trial detention converted to a period of incarceration served for his crime. A contrary reading, the employer insisted, contradicted the General Assembly’s intent and conflicted with its purpose. Sadler countered that the language of Section 306(a.1) was unambiguous. It was a clear expression of the General Assembly’s intent that employers are prohibited from suspending benefits during any pre-conviction period of incarceration.

The Supreme Court agreed with Sadler and the Commonwealth Court. The statutory language was clear and unambiguous. By its express terms, the statute authorized the termination of benefit payments only during periods of incarceration served after conviction. Conversely, the provision made no reference to the termination of benefit payments during periods of incarceration served prior to conviction. Sadler was not incarcerated during any period of time after his conviction, and thus no basis existed under Section 306(a.1) for a termination of his benefits as a result of his incarceration.

Rational Basis Review

As to the constitutional challenge, the Court indicated it would utilize a “rational basis review” of the statute. Under such a review, the Court considered whether the statute at issue sought to promote a legitimate state interest, and if so, the Court was required to determine whether the classification created by the statute was reasonably related to achieving that state interest.

The Court unhesitatingly found no equal protection violation. Section 306(a.1) denied benefits to those who had removed themselves from the workforce as a result of their criminal conduct. It allowed a continuation of benefits to those who were presumed innocent and who were incarcerated only because they could not afford to make bail. In this regard, citing Rogele, Inc. v. WCAB (Mattson), 969 A.2d 634 (Pa. Commw. 2009), the Supreme Court agreed that ” [b]ecause an accused is presumed innocent until proven guilty, pretrial incarceration is entirely irrelevant to the issue of guilt” [969 A.2d at 638] and thus pretrial incarceration was not equivalent to voluntarily removing oneself from the workforce.

For additional discussion of this issue, see Larson’s Workers’ Compensation Law, § 84.04[2] n. 13.2.