State News : California

NWCDN is a network of law firms dedicated to protecting employers in workers’ compensation claims.


NWCDN Members regularly post articles and summary judgements in workers’ compensations law in your state.  


Select a state from the dropdown menu below to scroll through the state specific archives for updates and opinions on various workers’ compensation laws in your state.


Contact information for NWCDN members is also located on the state specific links in the event you have additional questions or your company is seeking a workers’ compensation lawyer in your state.


California

HANNA, BROPHY, MACLEAN, MCALEER & JENSEN LLP

  1-510-839-4804

By:  Edward Hummer (Associate Attorney - Santa Rosa)

On March 21, 2022, the California State Senate's Committee on Labor, Public Employment and Retirement voted  4 - 1 to advance SB 1127, authored by Sen. Toni Atkins (D - San Diego). If passed, this bill would amend Labor Code Section 5402 to shorten the time within which to investigate a claim from 90 days to 60 days. If a claim is not denied within 60 days, it would be presumed compensable. The amendment would further reduce the investigation time for claims involving safety officer presumptions (Labor Code Sections 3212 through 3213.2) to 30 days. 

The bill would also amend Labor Code Section 4656 to provide first responders covered by the Labor Code Section 3212.1 cancer presumption with additional temporary disability benefits. The proposal would provide covered employees with up to 240 weeks of aggregate disability benefits for injuries occurring on or after 1/1/2023. 

Particularly concerning to employers and claim administrators is a provision in the bill that would add Section 5414.3 to the Labor Code. This proposed section would impose a penalty for "unreasonably" denying first responder claims subject to the Labor Code Section 3212 through 3213.2 presumptions. The penalty would be five times the amount of the benefits "unreasonably delayed", with a $100,000.00 cap. The determination of whether a claim denial was "unreasonable" would be left to the WCAB. 

A similar proposal introduced in the California Assembly in 2021 died in committee. The 2021 proposal was evaluated by the CWCI and the RAND Corporation. Both evaluations determined that shortened investigation times and faster claim decisions did not meaningfully assist workers and may actually lead to more provisional claim denials. 

The legislation is opposed by a coalition of business interests including the Family Business Association. The opponents argue that the legislation does not provide sufficient time to investigate claims, creates new penalties that make taxpayer funded presumption claims dangerous to investigate, and increases costs because it more than doubles temporary disability benefits. 

The next hearing on the proposed legislation went forward on April 4, 2022 in the Senate Appropriation Committee. 

Learn more here:  https://highlights.hannabrophy.com/post/102hlsf/committee-approves-proposal-to-shorten-investigation-time-for-workers-compensatio


By:  Jeannette Herrera (Partner - Sacramento Office)

The California Supreme Court declined to review the appellate court decision holding that the derivative injury doctrine does not preclude a lawsuit alleging an employer business negligently exposed a worker to COVID-19 that is alleged to have resulted in a subsequent death of a family member. As such, Plaintiffs may proceed to litigate the issues in civil court. 

Earlier, the Court of Appeals reasoned that the workers' compensation exclusive remedy provisions did not apply because the derivative injury doctrine does not apply to the subject claim. They discussed that the spouse may have had a claim regardless of the employee being injured. 

This case represents a blow to employers seeking protection under the workers compensation exclusive remedy rule.  However,  the event Kuciemba decision in another district found the opposite. There's is no final decision on the merits of the underlying claim here yet,  but we will be sure to keep you updated. 

Learn more here:  https://highlights.hannabrophy.com/post/102hn3n/ca-supreme-court-declines-to-hear-sees-candies-case

By:  Kelly Hamilton (Office Managing Attorney - Redding) 

We've all been there . . . you file a Petition for Reconsideration and advise your client that we will have an answer within 60 days.  Then, on day 59, the WCAB issues a "grant and study" order, which essentially gives them an indefinite time period to issue a decision.  You are then in limbo potentially for years.

There has now been a Petition filed with the 2nd DCA arguing that the practice is unconstitutional on its face.  They further argue that it violates the "compensation bargain" of California workers' compensation because it denies a speedy delivery of benefits.  It is noted that some of the "grant and study" orders were issued within 10 days of the filing of the Petition for Reconsideration.

The article states that there have been over 500 "grant and study" orders issued in the last three years.  In part this is due to the reduced number of commissioners, having been short anywhere from one to three commissioners. Currently there are six commissioners and there must be three on a panel to issue a decision.

Read more on the Hanna Brophy website:  
https://highlights.hannabrophy.com/post/102hkbe/2nd-dca-to-evaluate-constitutionality-of-grant-study-orders


By:  Michael Mazzoni (Associate Attorney - Fresno

The Centers for Medicare and Medicaid Services (CMS) has released an updated Workers’ Compensation Medicare Set-Aside (WCMSA) Reference Guide (Version 3.5, January 10, 2022), and has explicitly targeted [in Section 4.3 of the memo] the usage of non-submit, non-CMS approved Medicare Set Aside [MSA] products which have gained popularity in recent years. Practitioners have utilized these MSA products to provide for allocation for future medical expenses in workers' compensation settlements. However, the new memo causes pause for many, who now fear that CMS may view these allocations as “potentially” improperly shifting the claimant’s future medical treatment to Medicare in contravention of 42 C.F.R. 411.46. 

Section 4.3 states as follows:

"A number of industry products exist with the intent of indemnifying insurance carriers and CMS beneficiaries against future recovery for conditional payments made by CMS for settled injuries. Although not inclusive of all products covered under this section, these products are most commonly termed “evidence-based” or “non-submit.” 42 C.F.R. 411.46 specifically allows CMS to deny payment for treatment of work-related conditions if a settlement does not adequately protect the Medicare program’s interest.

Unless a proposed amount is submitted, reviewed, and approved using the process described in this reference guide prior to settlement, CMS cannot be certain that the Medicare program’s interests are adequately protected. As such, CMS treats the use of non-CMS-approved products as a potential attempt to shift financial burden by improperly giving reasonable recognition to both medical expenses and income replacement.

As a matter of policy and practice, CMS will deny payment for medical services related to the WC injuries or illness requiring attestation of appropriate exhaustion equal to the total settlement less procurement costs before CMS will resume primary payment obligation for settled injuries or illnesses. This will result in the claimant needing to demonstrate complete exhaustion of the net settlement amount, rather than a CMS-approved WCMSA amount."

While the wording of Section 4.3 does not prohibit or ban the use of non-submit or evidenced based allocations, it appears that CMS is aggressively placing the industry on notice by stating that “as a matter of policy and practice” a claimant will need to show that the entire settlement is exhausted, minus procurement costs, before CMS will pay for claim related treatment if the settlement does not include a CMS-approved WCMSA.  Therefore, it is clear that the memo is designed to discourage usage of these non-submit MSA's.  

However, there are instances where non-submit MSA's may be necessary, depending on the facts of the case, including lack of recent medical treatment, threshold issues, etc.  This means that some claims are ineligible to obtain a CMS-approved WCMSA amount and nothing in Section 4.3 (or any other section in the revised WCMSA reference guide 3.5) addresses that particular issue.  

The practitioner should still be free to consider the non-submit option if that works. However, they should be aware that CMS has the non-submit MSA in their crosshairs, and must work with their clients and vendors in crafting detailed and creative settlements which make sure a full accounting is done on the allocated MSA treatment when spent, and that the parties are showing that Medicare's interests are adequately being taken into consideration.


 

By: Peter Liu (Partner - Los Angeles

New WCAB Rules in effect today.  

Most important change is the meet and confer prior to the Mandatory Settlement Conference and the requirement of filing of Pre-Trial Conference Statement (PTCS) by the close of the MSC, which would arguably mean that the PTCS needs to be e-filed prior to the hearing for the telephonic MSCs the WCAB is currently conducting.  

The new rules also specify how hearings can be set for electronic hearing, the procedure if a party objects to electronic hearings, and requirement that if a party intends to appear electronically that good cause petition is filed.  

For now, it appears hearings will continue to be electronic and trials can be electronic if good cause is shown.  

See the details here, new regulations.

Kelly Hamilton - DWC Announces New TTD minimum/maximum rates for 2022.
Although there had been a prior notice that there would be no change to the temporary total disability  (TTD) rates for 2022, that notice had been rescinded as the final State Average Weekly Wage (SAWW) information had not been compiled.  This has...Read more
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Michael Mazzoni - EEOC May Recognize Long-Haul COVID-19 as a Disability, Creating Additional Hurdles for Employers
The U.S. Equal Employment Opportunity Commissions recognition that long-haul COVID-19 may be considered a disability under the Americans with Disabilities Act is expected to increase employers potential liability, and could affect the...Read more
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Edward Hummer - COVID-19 Leading Cause of Work-Related Death in California
On Friday, the California Workers Compensation Institute (CWCI) issued a report finding that COVID-19 was the leading cause of job-related death claims in 2020, accounting for more than 55% of workers' compensation death claims. The report...Read more
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Edward Hummer - Amicus Brief Asks Court of Appeal to Reject Employee's Civil Suit for Wrongful Death of Spouse Caused by COVID-19
A recent Los Angeles County Superior Court case has garnered the attention of several employer-backed groups.  In Matilde Ek et al. v. See's Candies Inc. et al. the plaintiffs allege that Matilde Ek contracted COVID-19 while on the job at See's...Read more
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Michael Mazzoni - Growing Use of off Label Neurological Drugs for Injured Workers Poses New Risks
Managing pain can be a difficult task for injured workers who don't want to be subject to long-term opioid use, and the risks that those drugs pose.  Doctors are much more careful in prescribing opioids, especially in light of the opioid crisis...Read more
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By: Edward Hummer (Associate Attorney - Santa Rosa)

California's Second District Court of Appeal has rejected See's Candies' argument that workers' compensation was the exclusive remedy for the alleged wrongful death of its employee's husband resulting from COVID-19. If this decision stands, the Court's decision paves the way to allow Mrs. Ek to pursue her wrongful death claim against her husband's employer, See's. However, it is important to note that the decision does not address the issues of duty or causation that the plaintiff must prove in order to prevail at trial. 

Matilde Ek sued See's in Los Angeles County Superior Court, alleging that she contracted COVID-19 because the company failed to ensure safety in the workplace. Her husband, Arturo Ek, then contracted the disease from her and eventually died from it. See's filed a demurrer arguing that plaintiff's claims are barred by the exclusivity provisions of the Workers’ Compensation Act. The trial judge overruled the demurrer and See's filed a Petition for Writ of Mandate at the Second District Court of Appeal. 

In denying the Petition, the Court held that defendant's interpretation of exclusive remedy was too broad. 

See's had argued that a claim is derivative if it would not exist absent injury to the employee. In this case, Mr. Ek would not have contracted COVID-19 "but for" his wife contracting the disease. Citing Snyder v. Michael’s Stores, Inc. (1997) 16 Cal.4th 991, the court stated that "the fact an employee’s injury is the biological cause of a nonemployee’s injury does not thereby make the nonemployee’s claim derivative of the employee’s injury" and "third-party injuries are not subject to the derivative injury doctrine merely because they are caused by an employee injury".

Further, the Court noted that Mr. Ek's illness was not necessarily contingent on Mrs. Ek's injury. Citing CDC Guidelines, they noted "it is well known that people may transmit viruses, including the virus that causes COVID-19, before they themselves have developed symptoms. Consequently, they agreed with plaintiff that the employee was merely the "conduit" of the virus.

Given the significance of the issue, See's is very likely to seek review of this decision by the California Supreme Court. 

The Court's published Opinion is available here

By: Kelsey Paddock (Partner - San Francisco)

Senate Bill 331, which expands existing prohibitions on confidentiality and non-disparagement clauses in settlement agreements, has now been signed into law. While I have heard some are concerned about the impact this will have on the confidentiality agreements used in the workers' compensation arena, I do not think that the scope of this legislation should be overstated. While practitioners in workers' compensation should certainly be wary of this new law when settling claims involving  workplace harassment or discrimination claims (think psyche claims or Labor Code section 132a claims), for many cases there should be little to no impact. 

That being said, care should be taken in drafting separation agreements to ensure that they comply with the new requirements barring inclusion of any provision that prohibits the disclosure of information about unlawful acts (i.e. any type of harassment or discrimination, or other conduct that an employee reasonably believes is unlawful) in the workplace. 

Learn more:  https://www.jdsupra.com/legalnews/california-employer-compliance-sb-331-8454868/


By:  Jeannette Herrera (Associate Attorney - Sacramento)

The Federal Occupational Safety and Health Administration (OSHA) published its highly anticipated Emergency Temporary Standard (ETS). As expected, employers with 100 employees or more are required to ensure their workforce is fully vaccinated or provide a negative test result at least once a week. In a likely effort to to encourage employees to choose vaccination over testing, the ETS does not require employers to pay for testing to workers who decline the vaccination.

Employers are further required to pay for employee time off to get vaccinated and provide sick leave for workers for any recovery time following the vaccination.

Health care workers must be vaccinated and are not provided the option of weekly testing. Unvaccinated employees must continue to wear face coverings. Employers also must obtain specified vaccatination documentation; a self-attestation is only allowed if the vaccination record is lost/cannot be produced along with acknowledgments of criminal penalties.

OSHA submitted its proposed ETS to the White House for the Office of Management and Budget to complete a regulatory review, and OSHA published a draft to the public yesterday, November 4. Today, November 5, the ETS was published in the Federal Register and is effective immediately. For those states subject to OSHA, the vaccination and testing implementation requirement deadline is January 4, 2022.

Although not subject to OSHA, California employers should expect a similar and applicable regulatory standard. Cal/OSHA has thirty (30) days, or until December 4, to adopt a standard that is at least as restrictive of the anticipated federal ETS. California employers may also see a similar January 4, 2022 implementation deadline for mandatory vaccination or testing.

Learn more here:  https://www.npr.org/2021/11/04/1048939858/osha-biden-vaccine-mandate-employers-100-workers


By: Kelly Hamilton (Managing Attorney - Redding Office)

Although there had been a prior notice that there would be no change to the temporary total disability  (TTD) rates for 2022, that notice had been rescinded as the final State Average Weekly Wage (SAWW) information had not been compiled.  This has now been completed and there was a 13.5213% increase, thereby causing an increase in the TTD minimum and maximum rates.

Full Announcement:  https://www.dir.ca.gov/DIRNews/2021/2021-109.html