RE: GEORGE THE BARTENDER’S DISPATCHES FROM ONLINE HAPPY HOUR – YOU CAN’T HAVE YOUR JELLO PIE AND EAT IT TOO OR (E)STOP ME IF YOU’VE HEARD THIS ONE BEFORE
FROM MY BAR AT HOME:
Back in the virtual world for what has become a standing remote happy hour, Holly Hustler, my favorite applicant’s attorney friend, was proudly showing off her most recent Etsy purchase for her kitchen. It was a cute cross-stitch of a bear family happily eating spaghetti and meatballs together juxtaposed with the phrase “THERE ARE TWO CHOICES FOR DINNER TONIGHT – TAKE IT OR LEAVE IT,” which was beautifully embroidered in flowery lettering.
The tone of it struck me as harsh, especially because Holly’s interest in cooking was bizarre, as she gravitated toward vintage cookbooks with flavor combinations that were rightfully left behind in the 1960s. If I were one of her kids, I might be inclined to leave it.
I told her as much (leaving out the insensitive comments regarding her own personal tastes) to which she responded, “Look, I can’t be cooking different meals each day for each appetite in my home. The deal is that I take the time to prepare a meal, and the kid eats it. The end.” As a fellow mom of a picky eater, I could see her point. There are realities that can feel unfair sometimes (especially when you’re forcing down your mom’s bad cooking) but are based in a larger concept of fairness (moms do a lot for you!).
I began to stray away from our conversation as I realized that those same realities exist in our beautiful workers’ compensation system. As we all know, the workers’ compensation system is based largely on a concept called “The Grand Bargain.” The employer assumes the liability that comes along with a “no fault” system which protects the employee from injuries (which might very well be their own fault), and the employer is shielded from the larger range of potential recoveries afforded to plaintiffs in a civil claim through the exclusive remedy doctrine which limits recovery to the workers’ compensation system.
This idea is codified in Labor Code §3602 which provides that if a claim is considered compensable in the workers’ compensation system, “the right to recover compensation is, except as specifically provided in this section and Sections 3706 and 4558, the sole and exclusive remedy of the employee or his or her dependents against the employer.”
As with everything in life, there are exceptions. The exceptions to the exclusive remedy rule are rooted in public policy where it would be unfair to allow the employer to limit their liability for egregious behavior. Examples include employers who are illegally uninsured for the purpose of workers’ compensation, claims which arise from harassment, as well as some serious safety failures.
One recent example of how the exclusive remedy rule plays out in the real world was the unpublished California Court of Appeal case Gonzalez v. Soares, F077672 (Cal. Ct. App. Feb. 10, 2021).1 In Gonzalez, a dairy worker lived in a mobile home owned by his employers and owners of the dairy where he worked. There was a fire in the mobile home that resulted in injury to the applicant.
The applicant filed a workers’ compensation claim, which was admitted. He also filed a civil claim in which he argued that the exclusive remedy provisions should not apply to his injury, in part because one of the owners of the dairy and the home was not explicitly named in the workers’ compensation insurance policy. This argument was rejected by the trial court and the Court of Appeal agreed, finding that there was enough evidence to determine that the insurance policy covered both owners and the applicant was confined to their workers’ compensation claim with no civil relief because his injuries were caused as a result of his employment.
By contrast, in a panel decision from February 2020, Monnie Wright v. California Public Employees’ Retirement System and SCIF (ADJ11026657), the Workers’ Compensation Appeals Board (WCAB) found that the applicant was precluded from pursuing benefits through the workers’ compensation system for an industrial injury because a civil court had already found that the claim was not industrial.2
The applicant in Wright worked for the California Department of Corrections and Rehabilitation (CDCR) at San Quentin Prison and lived in on-site housing that they rented from the State. They were injured as the result of a trip and fall on stairs on their way to work from this on-site housing. As the CDCR was legally uninsured at the time of the incident, their claims administrator, State Compensation Insurance Fund (SCIF), voluntarily provided benefits to the applicant on their behalf.
The applicant was then found to be permanently disabled from performing the duties of a correctional officer, so they filed an Industrial Disability Retirement (IDR) claim with their pension agency, the California Public Employees’ Retirement System (CalPERS). In addition, they also filed a civil claim against the state (his employer) arguing that the stairs were negligently maintained.
At trial the state raised the exclusive remedy rule as a defense, but was not successful in convincing the jury that the applicant’s injuries both arose out of and in the course of his employment (AOE/COE). The applicant received a seven-figure award in their civil claim.
Meanwhile, CalPERS had initially approved the applicant’s IDR claim. However, after the trial verdict they cancelled it, opting instead to convert it to non-industrial disability retirement. The applicant appealed this decision and argued their case at the Office of Administrative Hearings (OAH) before an Administrative Law Judge (ALJ), which, as it turns out, is subject to the jurisdiction of the WCAB!
A brief history lesson, loyal Home Bar patron. In 2001 the California Supreme Court in Pearl v. Workers’ Compensation Appeals Board (2001) 26 Cal. 4th 189 [66 Cal.Comp.Cases 823] found that California Code, Government Code §21166 mandates that any CalPERS member that applies for IDR benefits must seek a finding of industrial causation from the WCAB, who will use “the same procedures as in workers’ compensation hearings” to make that determination and in accordance with Public Employee’s Retirement Law §20046, which states:
“Industrial,” in reference to the death or disability of any member of this system who is in a membership category under which special benefits are provided by this part because the death or disability is industrial, means disability or death as a result of injury or disease arising out of and in the course of his or her employment as such a member.
In Wright the ALJ asked the involved parties to obtain a §21166 finding from the WCAB as to the causation of the applicant’s injury. At trial, the defense raised the issue of collateral estoppel, introducing into evidence the outcome of the civil trial.3 Initially, a workers’ compensation judge (WCJ) ruled in favor of the defense, finding that the WCAB had jurisdiction to rule on the doctrine of collateral estoppel and that it applied in this case as the Superior Court had already rule on the industrial determination of the applicant’s injury.
The applicant petitioned for reconsideration and on reconsideration, the WCAB agreed with the WCJ, ruling that they had no jurisdiction to make a finding of an industrial injury because a jury had already found the injury non-industrial in a civil claim and thus the IDR benefits were denied.
As my daydream about workers ’ compensation (what a pastime!) wound down, I returned my focus to the conversation with Holly, who was excitedly describing what she had planned for dinner that night. “I found a copy of Betty Crocker’s cookbook Dinner in a Dish from 1965 and am going to try the Summer Salad Pie,” she said. “That doesn’t sound so bad, what’s in it?” I replied. “Tuna and Jello. Did you want me to save you some?” Holly asked. That was a definite leave it for me, so I politely smiled and emphatically shook my head no.
All characters at my home bar are fictional and the storyline is simply a product of my lively imagination.
Cases like Gonzalez and Wright remind the parties that there are consequences to the employer outside of what happens in our own little wonderful world of workers’ compensation. For example, a defendant representing a permissibly self-insured employer may not wish to vigorously pursue an AOE/COE defense for an injury if it could give rise to a more expensive civil claim against the employer. If such an outcome is a concern, it would be worthwhile to recommend that the client consult with outside counsel to weigh the risk of a civil claim.
While Wright lacks the designation “significant panel decision,” Joe Truce, formerly a managing shareholder at our firm and creator of George the Bartender, always liked to remind me of one of his favorite portions of the Labor Code, subtitled “Specific Additional Evidence Allowed,” §5703(g) which states in relevant part as follows:
The appeals board may receive as evidence either at or subsequent to a hearing, and use as proof of any fact in dispute, the following matters, in addition to sworn testimony presented in open hearing: … (g) Excerpts from expert testimony received by the appeals board upon similar issues of scientific fact in other cases and the prior decisions of the appeals board upon similar issues. (Emphasis added)
He would also draw our attention to California Evidence Code §452(d), which provides that judicial notice may be taken of “Records of (1) any court of this state or (2) any court of record of the United States or of any state of the United States.”
We’re still making our own doubles. May George guide my hand. Bottoms up, friends, and keep washing your hands.
1 A copy of Gonzalez can be obtained via email request.
2 A copy of Wright can be obtained via email request.
3 As the legal dictionary defines it, collateral estoppel is a doctrine by which an earlier decision rendered by a court in a lawsuit between parties is conclusive as to the issues or controverted points so that they cannot be re-litigated in subsequent proceedings involving the same parties.