Crispin Bermudez claims that while employed by Elkhorn Packing Company, LLC as a manager during a cumulative period ending on August 4, 2023 in case ADJ18217235, he sustained industrial injury to his back, ankles and in the form of hearing loss. Bermudez also claims that while employed as a manager on July 29, 2022 in case ADJ18217236, he sustained industrial injury to his back and left ankle.

Zenith argued that Bermudez executed a valid exclusion of coverage and therefore declined to pay any benefits to Bermudez.

During an arbitration on the issue of insurance coverage, the evidence included an application for workers’ compensation coverage filled out by the employer’s insurance broker which included an exclusion from coverage for the employer’s two individual managing members: applicant and co-owner Pete Colburn. Applicant executed a waiver of workers’ compensation coverage dated October 28, 2020. The waiver was a form approximately half a page long in which applicant agreed that he would “not be entitled to workers’ compensation benefits … there will be a conclusive presumption that I will not be covered under the insured’s workers’ compensation policy with the above-referenced insurer if an employment related-injury occurs.” The language of the waiver substantially tracks the language of Labor Code section 3352(a)(17).

At the arbitration, evidence was presented that applicant signed a similar waiver with the previous insurer covering the employer for workers’ compensation and that the other individual managing member Pete Colburn signed the same waivers. Nevertheless, the arbitrator invalidated the waiver because applicant did not have the subjective specific intent of waiving his workers’ compensation rights.

Zenith filed a Petition for Reconsideration which was granted by the WCAB panel in the case of Bermudez v Elkhorn Packing Company, LLC -ADJ18217235-ADJ18217236 (April 2025). It rescinded the arbitrator’s decision, and issued a new decision finding that applicant is not covered by Zenith’s policy.

“Applicant appears to argue that he should not be bound to the waiver solely because he did not read it. Failure to read a contract, without more, does not allow a party that entered into it to escape its terms. (Randas v. YMCA of Metropolitan Los Angeles (1993) 17 Cal.App.4th 158, 163).)” … “We note that applicant has not alleged fraud, duress or any other ground for the invalidation of the waiver.”

“While in other scenarios the workers’ compensation system does have procedural safeguards to a worker waiving or settling their rights, the waiver executed by the applicant here is expressly sanctioned by Labor Code section 3352(a)(17) which flatly states that ‘There is a conclusive presumption that a person who executes a waiver pursuant to this subdivision is not covered by workers’ compensation benefits.’ “

“We find this case similar to Sanchez v. West Coast Docks, Inc. (2023) 2023 Cal.Wrk.Comp. P.D. LEXIS 286 (Appeals Bd. panel), where we affirmed the finding that workers’ compensation coverage had been waived pursuant to a Labor Code section 3352(a)(17) waiver. In Sanchez, the injured manager also claimed not to have read the waiver, but the arbitrator correctly found that ‘He is presumed to have read what he signed and he should be bound by its terms.’ (Id. at p. *8.) Although the arbitrator in Sanchez also stated that the manager had the terms of the waiver explained, that additional fact was not essential to the holding.”

“Applicant filed a valid waiver of workers’ compensation coverage excluding him from the definition of employee. We therefore grant reconsideration, rescind the arbitrator’s decision and issue a new decision finding that applicant was not an employee pursuant to Labor Code section 3352(a)(17) and thus excluded from workers’ compensation coverage. Since applicant’s only argument for not applying the express waiver was the fact that he did not read it, we not need discuss the contours and limits, if any, of the conclusive presumption codified in section 3352(a)(17).”