Jennifer CallanCallan Law Firm

1100 Lincoln Avenue, Suite 261San Jose, CA 95125

T: 408.337.0200 Email: jcallan@callan-law.com

Daniel Muller, Esq.Slater, Hersey & Lieberman

160 West Santa Clara Street, Suite 1575San Jose, CA 95113

T: 408.512.3022Email: dmuller@slaterhersey.com

Case Law Update Francis Stevens v. WCAB, Outspoken Enterprises et al. (October 2015) 241 Cal. App. 4th 1074; 80 CCC 1262 [Court of Appeal, 1st

Appellate District]

Background:

In 2004, legislation took effect in worker’s compensation which required allmedical treatment requests by injured workers to go through an evaluationprocess called Utilization Review (UR).

Under the UR process, a request for medical treatment is either certified asmedically appropriate, or denied as medically unnecessary.

Under the UR process, an injured worker can challenge decisions denyingthe requested treatment, but employers cannot challenge the decisionsapproving it.

Case Law Update

Francis Stevens v. WCAB, Outspoken Enterprises et al. (October 2015) 241 Cal. App. 4th 1074; 80 CCC 1262 [Court of Appeal, 1st

Appellate District]

In 2013, additional reforms went into effect which established a newprocedure, Independent Medical Review (IMR) to resolve injured workerschallenges to UR decisions.

The IMR is performed by an independent review organization (MaximusFederal Services), which assigns medical professionals to review pertinentmedical records and reports and other information submitted from theparties.

The name/identity of the IMR physician reviewer is kept confidential and isundisclosed in the final IMR determination.

Case Law Update Francis Stevens v. WCAB, Outspoken Enterprises et al. (October 2015) 241 Cal. App. 4th 1074; 80 CCC 1262 [Court of Appeal, 1st App. District]

An injured worker who disputes the IMR determination may appeal it to the Board,however, under Labor Code §4610.6(h), there are limited specified grounds forwhich relief can be sought, such as (1) the Administrative Director acted without orexcess of its powers; (2) the decision was procured by fraud; (3) the physicianreviewer had a material conflict of interest; (4) the decision was the result of bias; or(5) the decision was based on a plainly erroneous fact that is not a matter subject toexpert opinion.

Mr. Stevens (and the Applicant’s Bar) assert the IMR process violates their stateConstitutional rights.

Holding: CA Court of Appeal upheld the constitutionality of the Independent MedicalReview (IMR) process.

Status: At year’s end, it was uncertain whether the CA Supreme Court would grantreview of this case.

Case Law Update

Angelotti Chiropractic v. Baker, (June 2015) 80 CCC 672 [9th Circuit Court of Appeals]

Under Labor Code §4903.06, every lien claimant must pay a lien activation fee of$100.00 for each pending workers’ compensation lien filed prior to January 1,2013 at the time a DOR is filed for a Lien Conference. [Note: This section doesnot apply to any lien filed by a health care service plan, a group disability insureror EDD].

Plaintiff Angelotti and other lien claimants sued the Director of the Departmentof Industrial Relations (DIR) alleging violation of the U.S. Constitution.

U.S. District Court Judge George Wu issued a preliminary injunction againstenforcement of the activation fees on equal protection grounds which becameeffective on November 19, 2013.

Case Law Update

Angelotti Chiropractic v. Baker, (June 2015) 80 CCC 672 [9th Circuit Court of Appeals]

Following the ruling by the 9th Circuit Court of Appeals, Judge Wu issued anorder vacating the preliminary injunction and permitting lien claimants topay activation fees from 11/19/15 until 12/31/15.

The lien activation fees [for pending lien claims filed prior to 1/1/13] mustbe paid by 12/31/15 or the affected lien will be dismissed by operation oflaw.

Holding: The U.S. Court of Appeals 9th Circuit upheld the constitutionality of lienactivation fees on June 29, 2015.

Case Law Update Douglas O’Connor, et al. v. Uber Technologies, Inc., (March 2015) 80 CCC 345 [U.S. District Court for the Northern District of CA]

The case was brought by three Uber drivers who believe they should be treated as“employees” not independent contractors and are requesting reimbursement fortheir expenses such as fuel and insurance, as well as unpaid tips.

Defendant, Uber’s position is that their drivers are “independent contractors” andnot entitled to the protection of the CA Labor Code. Moreover, the drivers set theirown hours and work schedules, provide their own vehicles and are subject to littledirect supervision.

Uber further contends that it is not a “transportation company,” but instead is a pure“technology company” that generates “leads” for its transportation providersthrough its software i.e. a technology intermediary between potential riders andpotential drivers.

Case Law Update Douglas O’Connor, et al. v. Uber Technologies, Inc., (March 2015) 80 CCC 345 [U.S. District Court for the Northern District of CA]

Holding:

The Court held that Plaintiffs, drivers for Uber are presumptive employeesbecause they “perform services” for the benefit of Uber.

Whether an individual should ultimately be classified as an employee or anindependent contractor under California law presents a mixed question of lawand fact that must typically be resolved by a jury.

Because a number of facts material to the employee/independent contractordetermination remain in dispute, the Court denied Uber’s Motion for SummaryJudgement.

Case Law Update Douglas O’Connor, et al. v. Uber Technologies, Inc., (March 2015) 80 CCC 345 [U.S. District Court for the Northern District of CA]

In finding Plaintiffs are Uber’s “presumptive employees,” the Court stated that it wasobvious the drivers perform a service for Uber because Uber simply would not be aviable business entity without its drivers and that Uber’s revenues do not depend onthe distribution of its software, but on the generation of rides by its drivers.

The Court also noted Uber exercises significant control over the amount of anyrevenue it earns and that Uber also exercises substantial control over thequalification and selection of its drivers.

The Court also relied on case law, and in particular, the case of Yellow CabCooperative, Inc. v. WCAB, (1991) 56 CCC 34, which explained that under Californialaw there is “a presumption that a service provider is presumed to be an employeeunless that principal affirmatively proves otherwise.”

Status: Trial has been scheduled for June 20, 2016 in the U.S. District Court.

Regulatory Changes

New Mileage Reimbursement Rate

On 12/18/15, the DWC announced the mileage rate for medical andmedical-legal travel expenses decreases effective 1/1/16 from .575cents per mile (rate for mileage paid after 1/1/15) to .54 cents per mile.

Regulatory Changes

Revised Supplemental Job Displacement Benefit (SJDB) Voucher Form

On 12/1/15, the DWC posted a revised Supplemental Job Displacement Benefit voucher form on itswebsite to conform to Title 8, California Code of Regulations §17303.

The Return-to-Work Supplement Program makes supplemental payments to workers whosepermanent disability benefits are disproportionately low in comparison to their earning losses.

To be eligible for the fund, an applicant must have a date of injury on or after 1/1/13 and havereceived a SJDB voucher.

Under Regulation §17308, the amount of payment from the fund is $5,000.00 to each eligible injuredworker.

Information has been added to the first page of the voucher form regarding eligibility for the Return-to-Work Supplement.

Injured worker must apply within one-year from the date of service of the voucher and theapplication must be filed electronically/online through the DIR website.

Regulatory Changes

Reinstatement of Lien Activation Fees on 11/19/15 per Angelotti.

Regulatory Changes

New Online QME Panel Request Form effective 10/1/15

Applies to an initial panel request on represented cases only with adate of injury on or after 1/1/05.

Requires parties in a represented case to submit initial QME panelrequests online [at: www.dwc.ca.gov] and immediately receive aQME Panel. The requesting party must then serve a copy of theonline request, the panel list and a copy of any supportingdocumentation upon the opposing party with a proof of servicewithin 1 (one) working day after generating the QME panel list.

Regulatory Changes Temporary Total Disability Rates for 2016

As of 1/1/16, the minimum and maximum temporary total disability(TTD) rates have increased.

Minimum TTD rate will increase from $165.49 to $169.26 perweek

Maximum TTD rate will increase from $1,103.29 to $1,128.43 perweek

Labor Code §4453(a)(10) requires the rate for TTD be increased by anamount equal to the percentage increase in the State AverageWeekly Wage (SAWW) as compared to the prior year.

Regulatory Changes Final Copy Service Fee Schedule Regulations

Effective 7/1/15, the DWC’s final version of the Copy Service Fee Schedule wasapproved by the Office of Administrative Law (OAL).

The Copy Service Fee Schedule regulations include:

Instead of a per-page fee and itemized fees for subpoena preparation, mileage,and other related fees, a flat fee of $180.00 covers records of 500 pages andunder and includes mileage, postage, delivery, phone calls, page numbering,witness fees, release of information fees and subpoena preparation costs.

Separate charges are allowed for cancellations, certificate of no records, forrecords obtained from EDD and WCIRB, and for additional sets of records.

For copies above 500 pages, an additional .10 cents per page is allowed.

CUMULATIVE TRAUMASKendall v. Open Wave Systems, Inc., APIC (August 2012) 2012 Cal. Wrk. Comp P.D. LEXIS 159 [Panel]

Travelers sought contribution from American Protection Ins. Co. (APIC). An arbitratorfound that there was one CT extending through June 7, 2004 and that Travelers wasentitled to contribution from APIC. APIC filed a Petition for Reconsideration. The soleissue before the court was the determination of the CT period.

Mr. Kendall was treated for bilateral hand/wrist pain and numbness in May 2003. Atthat time he was told to cut back on work hours, but he did not. He did wear wristbraces outside of work and took medication. On July 19, 2004, Mr. Kendall filed aDWC-1 claim for BCTS. TD began on September 30, 2004.

The WCAB amended the F&A to find that the period of liability for the CT was throughSeptember 29, 2004. The WCAB noted that liability for a CT is determined according tothe last year preceding either the DOI (Labor Code § 5412) or the last date on whichthe employee was employed with injurious exposure. (Labor Code § 5500.5)

CUMULATIVE TRAUMASKendall v. Open Wave Systems, Inc., APIC (August 2012) 2012 Cal. Wrk. Comp P.D. LEXIS 159 [Panel]

Labor Code § 5412 defines CT injury as “that date upon which the employee firstsuffered disability therefrom and either knew or in the exercise of reasonablediligence should have known that such disability was caused by his present or prioremployment.” “Disability” in this context means either TD or PD.

Mr. Kendall was not found to have suffered PD by the WCAB as he did not reduce hiswork hours or work modified duty. The WCAB then analyzed when Mr. Kendall firstsuffered TD, which it found to be September 30, 2004.

Holding: Since the DOI under Labor Code § 5412 was September 30, 2004, and the lastday of injurious exposure was Applicant’s LDW on September 29, 2004, it isappropriate to use the earlier of these two dates and find that the CT ends onSeptember 29, 2004.

Psychiatric Claims No compensable consequence psyche permanent impairment add-on to

a physical injury for DOIs on or after 1/1/13, absent limited exceptions,namely, being a victim of a violent act or direct exposure to a significantviolent act within the meaning of LC 3208.3, or a catastrophic injury. (LaborCode Section 4660.1(c).)

Labor Code Section 3208.3

Good Faith Personnel Defense

6 Month of Employment Defense

Sudden & Extraordinary Exception

Psychiatric Claims

Labor Code Section 3208.3

Good Faith Personnel Defense: Hybrid medical & legal criteria

What is to be addressed by Medical-Legal Evaluator?

What is to be addressed by Workers’ Compensation Judge?

Psychiatric ClaimsLabor Code Section 3208.3

Good Faith Personnel Defense

What is to be addressed by Medical-Legal Evaluator?

Psyche diagnosis meeting requisite criteria.

Whether or not psyche injury was predominantly (> 50%) caused bywork activities.

Whether psyche injury was substantially (at least 35% to 40%) causedby events/actions which the WCJ deems to be “personnel actions”

Psychiatric ClaimsLabor Code Section 3208.3

Good Faith Personnel Defense

What is to be addressed by Workers’ Compensation Judge?

Psychiatric ClaimsSan Francisco Unified School District v. WCAB (Cardozo) (2010)190 Cal.App.4th 1

When a psychiatric injury is alleged and the good faith personnel actiondefense is asserted, the Workers’ Compensation Judge must make thefollowing determinations:

Whether the alleged psychiatric injury involves actual events ofemployment;

Whether competent medical evidence establishes the required percentageof industrial causation, i.e., whether the predominant cause [i.e., greaterthan 50%] standard has been met;

Whether any of the actual employment events were personnel actions;

Psychiatric ClaimsSan Francisco Unified School District v. WCAB (Cardozo) (2010) 190Cal.App.4th 1

Whether the personnel actions were lawful, nondiscriminatory, and made ingood faith;

Whether competent medical evidence establishes that the personnel action oractions are a substantial cause, accounting for at least 35 to 40 percent of thepsychiatric injury as defined by Labor Code Section 3208.3(b)(3).

When read together, the plain meaning of Labor Code Section 3208.3(b)(3) andLabor Code Section 3208.3(h) is that the entire set of industrial and non-industrial causal factors must be taken into consideration in determiningwhether or not a psychiatric injury was substantially caused by “good faithpersonnel actions”.

Psychiatric Claims

6 Months of Employment Defense

“Sudden & Extraordinary” Exception

General & Special Employment Calculation of 6 Months

Psychiatric ClaimsAguirre v. Ekim Painting North, Inc. Redwood Fire & Casualty Ins. Co., (August25, 2014) ADJ6724252 [split WCAB panel decision]

On 12/1/08, applicant sustained an industrial injury when he fell two stories from theroof of a building which he was preparing for painting. He alleged injuries to his back,neck, jaw, chest, left upper extremity, left elbow and psyche. The matter proceededto trial on the issues of (1) six months of employment and (2) sudden andextraordinary employment condition.

The parties stipulated that applicant worked for the employer from 9/16/08 throughthe date of injury of 12/1/08 (77 days). Applicant was then temporarily disabled untilhe returned to work from 9/15/09 through 10/26/09 (42 days).

Applicant sought reconsideration of the WCJ’s finding that determined his allegedpsychiatric injury was non-compensable based upon the “Six Month Rule,” and thatthe injury was not caused by a sudden and extraordinary employment condition.

Psychiatric ClaimsAguirre v. Ekim Painting North, Inc. Redwood Fire & Casualty Ins. Co.,(August 25, 2014) ADJ6724252 [split WCAB panel decision]

Holding re: Six Months Employment

Pursuant to Wal-Mart Stores v. WCAB, (2003) 68 CCC 575, applicant is not entitledto credit for the time he was off work from 12/2/08 through 9/14/09 [while he wasTTD].

Applicant did not perform actual service for the employer for six months asrequired by L.C. §3208.3(d), and therefore, he was not employed for six months bythis employer.

Psychiatric ClaimsAguirre v. Ekim Painting North, Inc. Redwood Fire & Casualty Ins. Co., (August 25,2014) ADJ6724252 [split WCAB panel decision]

Holding re: Sudden & Extraordinary

Per Matea v. WCAB (2006) 71 CCC 1522, the Sixth District Court of Appeal held that if anemployee carries his/her burden of showing by a preponderance of evidence that theevent or occurrence that caused the alleged psychiatric injury was something other thana regular and routine employment event or condition, that is, that the event wasuncommon, unusual, and occurred unexpectedly, the injury may be compensable even ifthe employee was employed for less than six months.

Here, applicant met burden of showing that alleged psychiatric injury resulted from anincident that was unusual, uncommon and unexpected or “sudden and extraordinary”based upon his unrebutted testimony that in his 8-9 years working as a painter at similarheights he never before fell or lost footing, coupled with the traumatic nature of hisinjury and defendant’s failure to produce any evidence indicating that applicant’s fall wasroutine or ordinary employment condition.

Psychiatric ClaimsAguirre v. Ekim Painting North, Inc. Redwood Fire & Casualty Ins. Co.,(August 25, 2014) ADJ6724252 [split WCAB panel decision]

Dissenting Opinion of Commissioner Lowe re: Sudden & Extraordinary

To allow applicant to satisfy the “sudden and extraordinary” exception simply bytestifying that he was not aware of any other painters failing off of ladders orscaffolding represents an unreasonably broad interpretation and an unwarrantedexpansion of the exception.

Applicant’s accident, though terrible, is part of the hazards of performing workabove ground level and cannot be said to be extraordinary within the meaning ofL.C. §3208.3(d).

Psychiatric ClaimsMartinez v. Mass Precision, Comp West Ins. Co., SCI @ Balance Staffing Service, Zurich North America (October 21, 2014) ADJ7217859, ADJ7544106 [WCAB panel decision]

Defendant, SCI @ Balance Staffing Service (general employer) sought reconsiderationof WCJ’s decision finding applicant sustained both a specific injury on 11/30/09 and acumulative trauma injury over the period ending 11/30/09 to her lumbar spine, rightshoulder and psyche while employed as a part maker by Mass Precision (specialemployer) and the SCI @ Balance Staffing Service (general employer).

Applicant was employed directly by Mass Precision from 3/17/08 to 3/12/09, and laterworked at Mass Precision, employed by the defendant, general employer, from6/19/09 to 11/30/09. Defendant, general employer, contends applicant’s claim forpsyche is barred under L.C. §3208.3(d), since applicant was employed for SCI @Balance Staffing Service for less than the requisite minimum six month period underthe statute.

Psychiatric ClaimsMartinez v. Mass Precision, Comp West Ins. Co., SCI @ Balance Staffing Service, Zurich North America (October 21, 2014) ADJ7217859, ADJ7544106 [WCAB panel decision]

Issue: Whether, when there is dual employment, the general employer may be liable for aclaim of injury to the psyche while working at the special employer if the general employeremployed the injured worker for less than six months?

Holding:

In Martinez v. Tarrant Apparel dba Fashion Resource, 2010 Cal. Wrk. Comp. PD. Lexis192, it was held that an applicant’s claim of injury to her psyche was not barred by thesix month requirement, though the special employer held liable had employed theinjured worker for less than six months.

Psychiatric ClaimsMartinez v. Mass Precision, Comp West Ins. Co., SCI @ Balance Staffing Service, Zurich (October 21, 2014) ADJ7217859, ADJ7544106 [WCAB panel decision]

Holding [cont’d]:

Per Martinez, the plain language of section 3208.3(d) supports the conclusion that applicant was“employed” by the special employer for more than six months on the date of injury. Moreover, ithas long been held that an employee may have more than one employer at the same time. Thecharacteristics of such dual employment are 1) that the employee is sent by one employer (thegeneral employer) to perform labor for another employer (the special employer); 2) rendition of thework yields a benefit to each employer; and 3) each employer has some direction and control overthe details of the work.

Applying Martinez, the WCAB found that where section 3208.3(d) requires that “the employee hasbeen employed by that employer for at least six months,” it extends the requisite employmentperiod in situations of dual employment to the entire period of employment by both the generaland special employers.

Dissent distinguishes Martinez case – applicant was employed by Mass Precision, as a special employeeand as a regular employee. However, here, applicant was only employed by SCI @ Balance StaffingService as a general employee, and had no relationship with applicant other than for the period from6/19/09 to 11/30/09.

Labor Code Section 132a“Any employer who discharges, or threatens to discharge, or in any mannerdiscriminates against any employee because he or she has filed or madeknown his or her intention to file a claim for compensation with his or heremployer or an application for adjudication, or because the employee hasreceived a rating, award, or settlement . . .”

Remedies:

Back pay, back benefits, and reinstatement;

Penalty of 50% of the compensation furnished not to exceed $10,000

Costs not to exceed $250

Criminal prosecution

Punitive damages? (See City of Moorpark)

132a Discrimination ClaimsDept. of Rehabilitation v. WCAB (Lauher) (2003) 68 CCC 831 [California Supreme Court]

Employee bears the burden of proof that the employer violated Labor CodeSection 132a and must show:

Existence of the claimed injury;

Employer knowledge of the claimed injury;

Adverse action impacting the employee on account of the claimeddisability; and

The action was detrimental in removing a benefit of the employment whichwould otherwise have been available to similarly situated employees, i.e.,the employee was “singled out” for adverse treatment.

132a Discrimination ClaimsDept. of Rehabilitation v. WCAB (Lauher) (2003) 68 CCC 831 [California Supreme Court]

In the event the injured worker is successful in meeting all of the criterialisted above, the burden then shifts to the employer to demonstrate thatthe detrimental act was required for a legitimate business purpose.

132a Discrimination ClaimsCity of Moorpark v. Superior Court (Dillon) (1998) 63 CCC 944 [California Supreme Court]

Labor Code Section 132a is not the exclusive remedy for discrimination basedon work related disabilities.

An injured worker may bring a discrimination claim before the WCAB underLabor Code Section 132a as well as actions in state court under the FEHAand for common law wrongful discharge.

Remedies of the FEHA and common law tortious wrongful dischargebased on violation of public policy, in addition to L.C. Section 132a, areavailable to employees who assert discrimination attributable to adisability resulting from an injury arising out of and occurring in thecourse of employment.

132a Discrimination ClaimsGelson’s Markets Inc. v. WCAB (Fowler) (2009) 74 CCC 1313

Fowler injured his neck and was taken off of work by his treatingphysician on August 3, 2004. Medical reports from Fowler’s treatingphysician and the AME were unclear and ambiguous regarding Fowler’sability to return to his usual and customary job duties. In his depositionin December 2006, the AME concluded that Fowler could probablyperform his U&C position. Defendant returned Fowler to work onJanuary 8, 2007.

Fowler alleged a violation of Labor Code §132a. At Trial, Fowlerpresented no evidence that defendant treated him disadvantageouslybecause of his industrial injury, as compared to how defendant treatedany non-industrially injured employee.

132a Discrimination ClaimsGelson’s Markets Inc. v. WCAB (Fowler) (2009) 74 CCC 1313:

Holding: Fowler failed to satisfy the test established in Department ofRehabilitation v. WCAB (Lauher) (2003) 30 Cal.4th 1281, 68 CCC 831,for making a prima facie showing of discrimination.

WC & Civil Cross-overDufresne v. City of Hayward (2009) Alameda Superior Court No. 2002-067063 (Unpub.)

Dufresne filed a workers’ compensation claim against the City of Hayward for “stress,depression, anxiety [and] paranoia due to prolonged discrimination [and]harassment.” The City accepted liability for the workers’ compensation claim andprovided benefits.

During the course of the Trial of Dufresne’s civil Complaint against the City for sexualharassment, evidence was admitted regarding the workers’ compensation claim,including the City’s acceptance of liability for the claim.

Jury returned a verdict in favor of Dufresne, awarding her $472,389.00 on hercomplaint for sexual harassment against the City. The City appealed, arguing that thecourt erred in admitting evidence that the city accepted liability in WC proceedingsarising out of the same alleged harassment.

WC & Civil Cross-overDufresne v. City of Hayward (2009) Alameda Superior Court No. 2002-067063 (Unpub.)

Holding: Evidence of what transpired in the workers’ compensationproceedings was admissible in the civil trial. When the City admitted thatDufresne’s workers’ compensation claim was compensable, it was necessarilyacknowledging that Dufresne had presented sufficient objective evidence ofharassment and that the harassment was the predominate cause of herinjury.

WC & Civil Cross-overJackson v. County of Los Angeles (1997) 60 Cal.App.4th 171 [Court of Appeals, 2nd Appellate District]

Judicial estoppel applied to preclude an ADA claim when the work restrictionsincluded within an applicant’s workers’ compensation award established theindividual unqualified for continued employment with the employer.

Global SettlementsSteller v. Sears, Roebuck and Co. (2010) 189 Cal.App.4th 175

Whether an Offer to Compromise under CA CCP Section 998 purporting toresolve both a civil disability discrimination claim and a workers’compensation claim was sufficient to resolve both pending actions?

Settlements of workers’ compensation claims must be approved by theWCAB to be effective.

No release of liability or compromise agreement regarding a workers’compensation matter is valid unless it is approved by the appealsboard or referee. (Labor Code §5001)

[Note: Employers seeking concurrent resolutions should ensure thesettlement documents expressly provide for, and make paymentconditioned upon, WCAB approval of the workers’ compensationsettlement.]