Gilberto Lopez Mendoza worked as a prepper/painter for SWI Finishing, Inc. He alleged a cumulative trauma injury to his neck, upper extremities, back, lower extremities, legs, feet, and psyche, pled for the period from August 1, 1998 through October 1, 2017. In April 2017, Mendoza sought treatment after removing wet socks pulled a scab off a preexisting wound on his foot; the wound worsened, and by February 2018 he was hospitalized with a rapidly progressing infection that led to a below-the-knee amputation. None of his 2017 or 2018 medical records addressed whether his condition was related to his work. Mendoza did not file a claim for workers’ compensation benefits until June 29, 2023, and SWI Finishing denied the claim as untimely.

At trial, the parties disputed whether Mendoza’s claim was barred by the statute of limitations and whether he had failed to timely report his injury under Labor Code sections 5400 and 5403. Mendoza testified that he had reported his symptoms to Alex Mendez, a coworker he believed to be his supervisor because Mendez served as the “right hand man” of the actual supervisor and was the only one at the worksite who spoke Spanish with him. Mendez testified that he was not a supervisor, that it would not have been proper for other employees to report injuries to him, and that he did not recognize or recall Mendoza. Panel qualified medical evaluators in internal medicine and orthopedics both later opined that Mendoza’s foot infection and resulting amputation were work-related, with the internist assigning a 28% whole-person impairment, 35% of which was apportioned to the industrial cumulative trauma.

The workers’ compensation administrative law judge (WCJ) found that Mendoza did not have notice of a cumulative trauma work injury in 2017, and that although he had reported his symptoms to Mendez, whom he believed to be his supervisor, neither Mendez nor the actual supervisor ever provided him a claim form or notice of how to report a workplace injury. On that basis, the WCJ found the statute of limitations was tolled and the claim was not time-barred, and issued Findings of Fact including a finding that Mendoza had sustained an industrial injury through the cumulative period ending October 1, 2017.

SWI Finishing petitioned the WCAB for reconsideration, arguing the WCJ erred in finding the statute of limitations tolled because Mendoza’s subjective belief that Mendez was a supervisor could not toll the statute where that belief was contradicted by substantial evidence. In support, the petition cited two cases for the proposition that a worker’s subjective belief about a coworker’s supervisory status cannot toll the statute of limitations when contradicted by substantial evidence, repeating the citations a second time later in the same petition.

In the panel decision of Gilberto Lopez Mendoza v. SWI Finishing, Inc., ADJ17889413 (Cal. Workers’ Comp. Appeals Bd., Dec. 2025) — the WCAB granted SWI Finishing’s petition for reconsideration and vacated the WCJ’s Findings of Fact in their entirety, but deferred a final decision on the merits pending further proceedings and issued a Notice of Intention to impose sanctions of up to $2,500 against SWI Finishing, its insurer, its claims administrator, and its attorneys.

Before reaching the merits, the WCAB addressed a threshold problem with the Petition for Reconsideration itself. In a Report and Recommendation, the WCJ identified that one of the two cases SWI Finishing cited for its subjective-belief argument, described as “Olson v. Workers’ Comp. Appeals Bd. (1997) 62 Cal.Comp.Cases 334,” does not exist at that citation; a real case bearing a similar name exists, but at a different citation and addressing unrelated issues of permanent disability and apportionment. The WCJ further found that the second citation, Reynolds v. Workmen’s Comp. Appeals Bd. (1974) 12 Cal.3d 726, is a real decision but does not support the proposition SWI Finishing attributed to it; in fact, Reynolds held the opposite, ruling that an employer with a duty to notify an injured worker of his rights cannot invoke the statute of limitations as a defense if it fails to do so. In a supplemental petition, SWI Finishing’s counsel admitted that he had used an artificial-intelligence legal research tool called ChatSOC, offered by a legal treatise publisher, and that the tool had generated the fabricated case and the mischaracterized holding, which counsel then included in the petition without independently verifying them.

The WCAB held this conduct sanctionable under Labor Code section 5813, which authorizes sanctions of up to $2,500 for bad-faith actions or tactics that are frivolous or intended to cause delay, and under WCAB Rule 10421, which lists filing a document misstating the law or presenting a position not warranted by existing law as sanctionable conduct. The Board emphasized that an attorney who delegates legal research to a non-attorney tool, including an AI program, remains responsible for supervising that work and verifying its accuracy before filing, citing its own en banc decision in Ledezma v. Kareem Cart Commissary and Mfg. (2024) 89 Cal.Comp.Cases 462, as well as an attorney’s duties of candor and competence under Business and Professions Code section 6068 and rules 3.3 and 5.3 of the California Rules of Professional Conduct. The Board found no excuse for filing a petition containing fabricated citations and misrepresented holdings, regardless of the tool’s own limitations, and directed that the sanctions run jointly and severally against the employer, its insurer, its administrator, and its attorneys, with a separate response due from the firm’s managing partner describing any firmwide policies on the use of AI research tools.

Turning to the merits, the WCAB agreed with the WCJ’s recommendation that the finding of industrial injury should be vacated because the issue of injury itself, as opposed to the timeliness of the claim, had never been raised as a triable issue at trial. But the Board went further, vacating the entire Findings of Fact, explaining that a statute-of-limitations analysis must begin with a finding of the date of cumulative injury under Labor Code section 5412, and that the WCJ’s decision never made that finding. The Board reiterated the settled framework for cumulative-trauma date-of-injury disputes: the employer bears the burden of proving the claim is untimely, medical treatment alone does not establish disability under section 5412, and a worker generally will not be charged with knowledge that a disability is job-related absent medical advice to that effect, citing City of Fresno v. Workers’ Comp. Appeals Bd. (1985) 163 Cal.App.3d 467 and State Comp. Ins. Fund v. Workers’ Comp. Appeals Bd. (2004) 119 Cal.App.4th 998. Only after a date of injury is established, and only if the employer shows the claim was filed outside the resulting limitations period, does the burden shift to the worker to establish tolling. Because that sequence was never completed below, the Board returned the matter to the trial level, suggesting the WCJ may wish to consider bifurcating the statute-of-limitations issue, and invited the parties to meet and confer on a stipulated date of injury. The Board stated it would issue its decision on the merits together with its ruling on sanctions once the sanctions process concludes.