Robert M. Neff, Inc. v. W.C.A.B. (Burr)

• Decision Date: 14 April 1993
• Citation: 624 A.2d 727,155 Pa.Cmwlth. 44
• Parties: ROBERT M. NEFF, INC., Petitioner, v. WORKMEN'S COMPENSATION APPEAL BOARD (BURR), Respondent.
• Court: Pennsylvania Commonwealth Court

Page 727

624 A.2d 727

155 Pa.Cmwlth. 44

ROBERT M. NEFF, INC., Petitioner, v. WORKMEN'S COMPENSATION APPEAL BOARD (BURR), Respondent.

Commonwealth Court of Pennsylvania.

Argued March 1, 1993.

Decided April 14, 1993.

Robert F. Young, for petitioner.

J. Scott Leckie and John W. Bitonti, for respondent.

Before PELLEGRINI and FRIEDMAN, JJ., and NARICK, Senior Judge.

PELLEGRINI, Judge.

Robert M. Neff, Inc. (Employer) appeals an order of the Workmen's Compensation Appeal Board (Board) awarding William Burr (Claimant) Pennsylvania Workmen's Compensation ¹ benefits as a supplement to the primary award of benefits under the Ohio Worker's Compensation system.

Employer's principal place of business is in Ohio. Claimant is a Pennsylvania resident and has worked for Employer since 1985 solely at its Mars, Pennsylvania location. When Employer hired Claimant, he signed an agreement with Employer purportedly pursuant to Ohio Rev.Code Ann § 4123.54 (Baldwin 1992), ² providing that Ohio's Worker's Compensation Law was the exclusive remedy for any work-related injury claim. Employer did not carry Pennsylvania Workmen's Compensation insurance and had not filed a certificate documenting coverage in another state. Section 305.2(c) of the Act, 77 P.S. § 411.2(c). ³

In 1988, Claimant was injured in a work-related accident while working at Employer's Mars, Pennsylvania location. He began receiving workmen's compensation benefits through the Ohio Industrial Commission, Bureau of Worker's Compensation. In 1989, Claimant filed a Pennsylvania petition for compensation, noting that he was receiving compensation under the Ohio Law but seeking Pennsylvania jurisdiction over his claim and Pennsylvania benefits for his injury. Employer contested the petition, contending that the claim should be denied because of the agreement providing that Ohio's compensation law was to be the exclusive remedy and Section 305.2(b) of the Act recognized such agreements. ⁴

Even though Claimant had signed an agreement providing for exclusive jurisdiction in Ohio, the Referee determined that Pennsylvania had jurisdiction over the claim because Claimant lived in Pennsylvania and worked only at Employer's Pennsylvania location. The Referee then determined that Claimant was entitled to $246.18 per week in Pennsylvania benefits. Because that was equal to what he was receiving in Ohio benefits, Claimant was not entitled to any additional Pennsylvania wage-loss benefits. See Section 305.2(b) of the Act, 77 P.S. § 411.2. However, based on the differences in medical coverage available from Ohio and under the Act, ⁵ the Referee determined that Claimant was entitled to supplemental benefits under the Act for those unpaid medical bills previously submitted to and rejected by the Ohio Industrial Commission. The Referee ordered that in the future, Claimant was to submit medical bills first to the Ohio Industrial Commission and then to Employer for any unpaid portions. Based on our holding in Rock v. Workmen's Compensation Appeal Board (Youngstown Cartage Co.), 92 Pa.Commonwealth Ct. 491, 500 A.2d 183 (1985), that Section 305.2(d)(5) ⁶ of the Act only authorizes agreements to fix where the place of employment for "traveling employees" is to be considered "principally localized", but not one that provides another state with exclusive jurisdiction over a claim for an injury that occurs in Pennsylvania, the Referee found that Employer's contest under Section 305.2(b) was unreasonable and awarded Claimant attorney fees.

Both Employer and Claimant appealed the order to the Board. Employer appealed the Referee's decision awarding Pennsylvania benefits and attorney fees, while Claimant appealed the requirement that he first submit his medical bills to the Ohio Industrial Commission. The Board affirmed the Referee's decision, finding that the agreement was not controlling and awarded Claimant attorney fees, but modified the order by deleting the requirement that Claimant first submit his medical bills to the Ohio Industrial Commission. The Board found that this requirement placed an unreasonable burden on Claimant. Because the Act does not require a claimant to first file under the compensation system of another state to receive payment for future medical bills that would be covered under the Act in the first instance, it reasoned that Claimant should not now be forced to submit his bills to the Ohio system, especially where the amount and method by which medical providers are paid is at odds with Pennsylvania procedures. ⁷

Employer contends that both the Referee and Board erred in awarding supplemental benefits, because Section 305.2(b) of the Act permits an employer and employee, prior to an injury, to enter into an agreement that a state other than Pennsylvania will have exclusive jurisdiction over workmen's compensation claims. This is true, it contends, even where the employee works only in and is a resident of Pennsylvania. Employer bases this assertion on the language in Section 305.2(b) providing that "[n]othing in this act shall be construed to mean this act excludes coverage under another law ... except, perhaps, to the extent of an agreement between the employe and the employer...." Employer further contends that the Full Faith and Credit Clause of the United States Constitution ⁸ also requires Pennsylvania to give effect to the Ohio statute authorizing an employer and employee to elect Ohio law as the exclusive remedy for a workmen's compensation claim.

Employer's reliance on subsection 305.2(b) for the proposition that employees may enter into such agreements is misplaced when the section is read as a whole. Subsection 305.2(a) specifically provides benefits to a claimant otherwise entitled to benefits when he or she is injured working outside of Pennsylvania and:

His employment is principally localized in this State, or

He is working under a contract of hire made in this State in employment not principally localized in any state, or

He is working under a contract of hire made in this State in employment principally localized in another state whose workmen's compensation law is not applicable to his employer, or

He is working under a contract for hire made in this State for employment outside the United States and Canada.

In enacting this provision, the General Assembly provided that an injured employee otherwise covered by the Act remains covered no matter where his or her employer is principally localized. This furthers the overall purpose of the Act to provide benefits to employees who suffer work-related injuries resulting in a loss of earnings, ⁹ and the Commonwealth's interest in insuring that the benefits received by its disabled workers are sufficient to sustain them during the duration of their disability.

When read in conjunction with subsection 305.2(a), subsection 305.2(b) does not authorize agreements providing for exclusive jurisdiction in another state. Instead, it provides that any payments received by a claimant from another state are credited against benefits sought and compensable in Pennsylvania. ¹⁰ In decisions interpreting this provision, we noted that a disabled worker entitled to compensation under the Act is guaranteed to receive not less than the amount provided for in the Act, regardless of where he or she may have first filed for benefits. ¹¹

Consequently, Employer's interpretation that Section 305.2(b) permits agreements vesting exclusive jurisdiction over workmen's compensation claims in another state is erroneous. The only agreements between an employer and employee permitted by Section 305.2(b) are "perhaps" ¹² those where:

a constantly traveling employee, like a truck driver, with contacts with Pennsylvania as set forth in section (a) elects exclusive Pennsylvania jurisdiction; or

a constantly traveling employee agrees to designate a location as the principle place of employment for purposes of jurisdiction.

Section 305.2(b) does not authorize employers to enter into agreements with employees otherwise covered by Pennsylvania law and subsequently injured in Pennsylvania to bind them to significantly lower benefit amounts or medical coverage in another state. The use of the term "perhaps" perhaps indicates that those agreements authorized by this subsection are not controlling in particular factual settings.

Finally, while the General Assembly has mandated that employers operating in Pennsylvania subscribe to the workmen's compensation system providing penalties for a failure to do so, ¹³ it also prohibited an employer entering into a future agreement with an employee to "vary" the amount to be paid ... under this Act and terms to the contrary "shall be wholly null and void", Section 410, 77 P.S. § 731, that would affect his or her future rights to compensation under the Act. Nothing in the language of Section 305.2(b) creates an exception to this prohibition. To hold otherwise would permit employers to require applicants and employees to waive statutory rights to obtain benefits under the Act, which is clearly contrary to the clear language of Section 410.

Employer argues that an interpretation of Section 305.2(b) that does not recognize its agreement with Claimant that Ohio has jurisdiction over compensation claims fails to properly accord the Full Faith and Credit Clause of the United States Constitution to the Ohio Rev.Code § 4123.54. This is an erroneous interpretation by Employer of the Ohio Code and what is required by the Full Faith and Credit Clause.

According to the courts of Ohio, R.C. § 4123.54 permits employees to waive Ohio jurisdiction over a claim when and only when there is full compliance with all provisions and requirements of the section, and permits Ohio residents working out-of-state to elect Ohio coverage of compensation claims. ¹⁴ There is no authority for Employer's proposition that the Ohio statute permits an employer to enter into an agreement in Pennsylvania with a...