From time to time, I will review cases dealing with employment law as opposed to Workers’ Compensation law. I think that many times labor law cases significantly impact Workers’ Compensation. The Workers’ Compensation Examiner should be aware of some of these rules as well as the employer.

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Employee Terminated for Refusal to Sign Pre-Dispute Arbitration Agreement: Violation of Public Policy?

Lagatree obtained another secretarial job on September 12, 1997, for the law firm of Luce, Forward, Hamilton & Scripps, LLP. On September 16, 1997, Lagatree, once again, was asked to sign an agreement to submit claims arising from his employment to binding abitration. Once again, Lagatree refused. Once again, he was terminated.

Lagatree filed an action against both of the law firms alleging that it was a wrongful termination in violation of Public Policy.

Both of the law firms filed demurrers to the action. The demurrers were sustained. Lagatree filed an appeal.

The Court of Appeal upheld that the law firms’ right to insist upon arbitration was permissible. The Court of Appeal upheld the lower court’s dismissal of the Complaint. Donald Lagatree vs. Luce, Forward, Hamilton & Scripps, LLP and Keesal, Young and Logan 74 Cal.App. 4th 1105 (1999).

The facts in this case did not indicate whether or not Luce, Forward, Hamilton & Scripps, LLP requested an arbitration agreement which included the arbitration of discrimination claims. I assume that it did not. Such an agreement is unenforceable in any event. See Duffield vs. Robertson Stephens, 144 F.3d 1182 (9th Cir. 1998).

There does seem to be something unfair about an employer’s ability to force an employee to sign an arbitration agreement. However, as noted in this particular case the employer was allowed to require such an agreement.

Reasonable Accommodation Is Still A Requirement

Norris brought an action against her employer for various causes of action, which included a claim for discrimination under the Americans with Disabilities Act (ADA). After a jury trial, Norris was awarded $300,000.00 plus attorney’s fees. The employer filed an appeal.

The District Circuit Court upheld the ADA violation. Although the Court did note that the applicant had applied for and accepted total disability benefits from the employers group disability insurance carrier, and also received disability benefits from the State, the Court found that an ADA claim does not necessarily clash with a disability claim assertion of inability to do substantial gainful work in the national economy. Brenda Norris vs. Sisco Corporation, Allied Sisco Food Services, Inc. 1999 D.A.R. 9587, September 14, 1999.

Some employers have a policy of requiring a total disability release before they allow employees to go back to work. This very rigid application of return to work releases should be re-examined in light of ADA requirements. There would appear to be almost a per se violation of the ADA rule of reasonable accommodations when an employer requires a full release from all restrictions in all cases.

Employer’s Failure To Reject Claim In 90 Days Has Serious Consequence

On March 6, 1992, Ms. Williams filed a psychiatric Workers’ Compensation claim. The claim was accepted. She was paid benefits for almost 2 years until the City rejected the claim because of “information which was discovered subsequent to the 90 day deadline and which will be presented at trial.”

The defendant obtained a medical report which indicated that the applicant’s psychiatric problems were not work related. However, at time of trial the WCJ found that the defendant’s rejection more than 90 days after the date of injury and filing of the claim form did not negate the Labor Code 5402 presumption. The WCJ went on to explain that since the applicant’s claim was accepted after obtaining the opinion of a psychiatrist without doing any further investigation, the subsequent investigation and denial were not performed with due diligence. All of the witnesses were available for interview within the 90 days. Their names were known and they were employed by defendant. The WCJ found the applicant was temporarily totally disabled from March 5, 1992 onward and awarded TTD.

The defendant filed a Petition for Reconsideration which was granted. The WCAB described the case as one where the defendant timely and in good faith conducted an initial investigation, accepted the applicant’s claim of psychiatric injury, and paid benefits in good faith. The WCAB concluded that Section 5402 did not apply to cases where the employer had timely furnished benefits but later discovered that liability was in question. The applicant filed a Petition for Writ of Review.

The Court of Appeal granted the Petition for Writ of Review. They found that Section 5402 plainly states that if liability is not rejected within 90 days of the claim filing, then the injury shall be presumed compen-sible. There are no exceptions listed for claims accepted and paid but later denied. The presumption of the compensability is rebuttable only by evidence discovered subsequent to the 90 day period. Evidence which could have been obtained with the exercise of reasonable diligence within the 90 days is barred. The Court of Appeal reversed the WCAB and reinstated the WCJ’s decision. Melissa Williams vs. WCAB 74 Cal.App.4th 1260 (1999)

I am not sure why the WCAB reversed the WCJ in the first place. Benefits had been paid for more than 2 years. The reversal of position by the defendant did not seem to have any real good basis. It was as if the argument of AOE/COE came up 2 years late. There were no allegations of fraud. I don’t see that Labor Code 3208.3 (good faith personnel action) was even being argued. The WCJ found TTD ongoing. This may very well be a case where multiple penalties will be assessed once the case is concluded.

The foregoing case clearly demonstrates that it is critical to obtain witness statements within the first 90 days. This is particularly true for a psychiatric claim. As a basic rule of thumb, whenever you send a person to a psychiatrist for an AOE/COE evaluation, you should forward to the doctor any witness statements that are supportive. Without witness statements, the doctor only has the applicant’s version of the alleged stress factors. This places the doctor at a significant disadvantage in evaluating the case.

Disclosure Of Witnesses And Evidence At Time Of MSC Is Important

The trial date of February 18, 1998 was continued because the applicant did not appear. The new date was April 22, 1998. However, on the new trial date the applicant requested to reopen her case and present additional medical evidence. The applicant also wanted to have an undisclosed witness, Mr. Weinberger, testify. The Workers’ Compensation Law Judge granted the applicant’s request.

The defendant filed a Petition for Reconsideration which was denied. Thereafter, they filed a Petition for Writ of Review which was granted.

The Court of Appeal carefully reviewed Labor Code 5502(d)(3). The Court noted that discovery is to close on the date of the MSC. Evidence not disclosed or obtained thereafter shall not be admissible unless the proponent of the evidence can demonstrate that it was not available or could not have been discovered by the exercise of due diligence prior to the MSC. The Court noted that in this case the applicant was attempting to call Mr. Page Weinberger as her first witness as part of her case in chief. As for Dr. Purdy’s latest report, not obtained until shortly after the first trial date in April of 1998. It was not merely an update of the original report, but an entirely different report altogether. The applicant gave no good cause for her failure to obtain the report at an earlier date.

The Court of Appeal reversed both the Workers’ Compensation Judge and the WCAB. The applicant was precluded from adding the additional witness and medical reports. San Bernardino Community Hospital vs. WCAB 74 Cal.App.4th 928 (1999).

It is interesting that the applicant was arguing that she should be allowed the new witness and medical reports for rebuttal. The Court of Appeal soundly rejected this argument in that the applicant was attempting to use the information essentially for her entire case. This is not to say, however, that impeachment evidence would have been disallowed. In fact, in the same case, the Court discusses the case of M/A ComPhi vs. WCAB (1968) 65 Cal.App.4th 1020. In M/A ComPhi the Court of Appeal permitted the employer’s doctors to reconsider their opinions in light of surveillance film. They also allowed the employee to respond to the new medical reports. However, in a footnote the Court stated, “This conclusion may be questionable; it is at least generous towards the employee. Presumably, the surveillance films, which are described as `impeaching’ tended to suggest that the employee was falsifying or magnifying his claimed injuries. If that were the case, it is difficult to see why either equity or due process would require that he be given an opportunity to explain away his duplicity.”

Therefore, it is quite clear that impeaching information is allowed whether or not it was listed on the MSC statement. In fact, usually impeaching information is not listed. It is only when the applicant makes a particular claim or statement at time of trial that you would know whether or not the information you have is impeaching.

Anyone who has tried cases in Superior Court know the rules regarding evidence impeachment. It is freely allowed. This includes witnesses as well as documentary evidence. To do otherwise, is to essentially shield the liar. It also deprives a party of Due Process of Law. This is not required in a Court of justice.

Changes In Law

Changes are to Labor Code §96(k), §139(a)(b), §3212.1(a)(b)(c)(d)(e), §3700.5, §3702.5, §3762 (a)(b)(c)(1)(2), §4600.5, §4603.2(a)(b), §4850, §4850.5, and §5433. There are also a couple of changes to Administrative Rules 9785.2 & 9785.3 and 9700 through 9704.