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SCOTUS Enforces California Employee Arbitration Agreements

In the closely watched underlying case of Moriana v Viking River Cruises Inc. Angie Moriana sued her former employer Viking River Cruises, a company located in Woodland Hills California, in a California state court seeking recovery of civil penalties under the Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq.).

She alleged that Viking had failed to provide her with her final wages within 72 hours, as required by §§101-102 of the California Labor Code. The complaint also asserted a wide array of other code violations allegedly sustained by other Viking employees, including violations of provisions concerning the minimum wage, overtime,meal periods, rest periods, timing of pay, and pay statements.

Moriana’s employment contract with Viking contained a mandatory arbitration agreement. Viking moved to compel arbitration of Moriana’s individual PAGA claim and to dismiss her other PAGA claims. The trial court denied Viking’s motion and the 2nd district Court of Appeal affirmed in the unpublished Court of Appeal opinion.

Viking argued that the United States Supreme Court’s decision in Epic Systems Corp. v. Lewis (2018) overruled the California Supreme Court’s decision in Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, in which the California Supreme Court held” “that an employee’s right to bring a PAGA action is unwaivable,” and that “here . . . an employment agreement compels the waiver of representative claims under the PAGA, it is contrary to public policy and unenforceable as a matter of state law.”

Applying California’s Iskanian precedent, the California courts denied that motion,holding that categorical waivers of PAGA standing are contrary to California policy and that PAGA claims cannot be split into arbitrable “individual” claims and nonarbitrable “representative” claims.

The Supreme Court of the United States granted certiorari to decide whether the Federal Arbitration Act preempts the California rule. In an 8-1 decision, it held that the FAA preempts the rule of Iskanian insofar as it precludes division of PAGA actions into individual and non-individual claims through an agreement to arbitrate in the case of Viking River Cruises v Morniana – No. 20-1573 (June 2022).

The California Legislature enacted PAGA to address a perceived deficit in the enforcement of the State’s Labor Code. The primary function of PAGA is to delegate a power to employees to assert “the same legal right and interest as state law enforcement agencies,” But it does not create any private rights or private claims for relief. As the California courts conceive of it, the State “is always the real party in interest in the suit.”

California precedent also interprets the statute to contain what is effectively a rule of claim joinder. Rules of claim joinder allow a party to unite multiple claims against an opposing party in a single action. An employee who alleges he or she suffered a single violation is entitled to use that violation as a gateway to assert a potentially limitless number of other violations as predicates for liability. In this regard the SCOTUS opinion noted that this “mechanism radically expands the scope of PAGA actions.”

The FAA was enacted in response to “judicial hostility to arbitration.” The FAA’s “mandate is to enforce arbitration agreements.” Yet conflict between PAGA’s procedural structure and the FAA does exist, and that it derives from the statute’s built-in mechanism of claim joinder.

PAGA provides no mechanism to enable a court to adjudicate non-individual PAGA claims once an individual claim has been committed to a separate proceeding. And under PAGA’s standing requirement, a plaintiff has standing to maintain non-individual PAGA claims in an action only by virtue of also maintaining an individual claim in that action.

State law cannot condition the enforceability of an arbitration agreement on the availability of a procedural mechanism that would permit a party to expand the scope of the arbitration by introducing claims that the parties did not jointly agree to arbitrate.”

Iskanian’s prohibition on wholesale waivers of PAGA claims is not preempted by the FAA. But Iskanian’s rule that PAGA actions cannot be divided into individual and non-individual claims is preempted, so Viking was entitled to compel arbitration of Moriana’s individual claim.

“When an employee’s own dispute is pared away from a PAGA action, the employee is no different from a member of the general public, and PAGA does not allow such persons to maintain suit.” As a result, Moriana would lack statutory standing to maintain her non-individual claims in court, and the correct course was to dismiss her remaining claims.

In responding to the decision, the California Attorney General said “While today’s decision is disappointing and adds new limits, key aspects of PAGA remain in effect and the law of our state.

Federal Rules Shortens Time to File Koby Bryant Subrogation

A January 26, 2020, helicopter crash in Calabasas, California resulted in the deaths of Kobe Bryant; his minor daughter, six other passengers, and the pilot.

One of the passengers was Christina Mauser, who was in the course and scope of her employment as a basketball coach for Sports Academy, LLC, insured for workers’ compensation benefits by The Hartford Accident & Indemnity Company. Hartford paid funeral and burial costs, and death benefits.

The Mauser Plaintiffs filed their Complaint for Damages with the Superior Court of California against various parties they alleged were responsible for the incident.. When the United States was named as a defendant in the action, it removed the case to the Federal Central District of California on September 30, 2020. Motions to remand to state court were denied.

On July 9, 2021, Hartford filed its Intervention Motion in the federal case after tentative settlements had been reached in the case. On July 22, 2021, the United States Government filed its Opposition to Hartford’s Intervention Motion on the basis that it did not present an administrative claim against it and there was no jurisdiction. No other parties opposed the Intervention Motion.

On November 10, 2021, the federal court issued its Orders granting the Mauser Plaintiffs’ Petitions for Minors’ Compromise and denying Hartfords July 9 Intervention Motion.

An appeal of the denial was filed in the 9th Circuit Court of Appeals. On June 14, 2022 Hartford filed it’s Motion to Voluntarily Dismiss the Appeal.

On appeal, Hartford had argued that error was made in the original denial of Hartford’s Motion “because the Court based its determination that the Intervention Motion was untimely on federal procedural law, instead of substantive state law. California Labor Code § 3853 specifically provides that a motion to intervene pursuant to California Labor Code § 3850, et seq. is timely if it is filed at any time before trial on the facts.”

In denying the Motion to Intervene, the trial court found that intervention is not appropriate, either as of right or permissively.

With respect to intervention as of right, a court must permit any party to intervene in a lawsuit who “claims an interest relating to the property or transaction that is the subject of the action.Fed. R. Civ. P. 24(a)(2). Rule 24(a)2 is broadly construed in favor of intervention. The Ninth Circuit employs four criteria to determine whether intervention under Rule 24(a) is appropriate: (1) the motion to intervene must be timely; (2) the applicant must have a significantly protectable interest related to the property or transaction that is the subject of the action; (3) the applicant must be situated such that the disposition of the action may impair or impede the applicant’s ability to protect that interest; and (4) the applicant’s interest must not be adequately represented by the existing parties.

Sports Academy and Hartford acknowledge, the Mauser plaintiffs initially filed their complaint on April 20, 2020, and their action was removed to federal court on September 30, 2020. Sports Academy and Hartford do not explain why they waited until over a year after Mauser plaintiffs filed their action – and more than nine months after it was removed to federal court – before filing the instant Motion. Thus, the court found that the Motion was untimely.

Having failed to satisfy at least two of the requirements for intervention pursuant to Rule 24(a), the court was not persuaded that Sports Academy and Hartford have met their burden for intervention as of right.

With respect to permissive intervention under Rule 24(b), a court may grant permissive intervention where: (1) the applicant shows independent grounds for jurisdiction; (2) the motion is timely; and (3) the applicant’s claim or defense and the main action share a common question of law of fact. In exercising its discretion on an application for permissive intervention, the court “must consider whether the intervention will unduly delay or prejudice the adjudication of the original parties’ rights. Because the court finds this unexplained delay renders the Motion untimely and risks delaying or prejudicing the adjudication of the original parties’ rights, the court declines Sports Academy and Hartford’s request for permissive intervention.

Bay Area Telemedicine Startup Faces FTC & Congressional Scrutiny

Cerebral Inc. is a San Francisco based mental health telemedicine startup that provides access to medication management, therapy, and counseling for anxiety, depression, insomnia, ADHD, and more. The company is now under intense scrutiny from a number of oversight organizations, and the media.

Congressional investigators are asking the U.S. Drug Enforcement Administration what it’s doing to oversee mental health startups such as Cerebral Inc., calling the company’s business and prescribing practices “manipulative” and “aggressive,” according to a copy of a letter seen by Bloomberg.

In the letter, the chairman of the House Committee on Oversight and Government Reform asked the DEA about the startups, which have rapidly expanded by offering online consultation with clinicians as well as prescriptions for drugs such as Adderall and Xanax.

“The Committee respectfully requests information from the Drug Enforcement Administration to ensure you are focused on catching bad actors who take advantage of the current permissive regulatory structure,” committee Chairman Gerald Connolly said in the June 6 letter, which mentions Cerebral several times. “Reports claim that some companies believe DEA will not or do not have the capacity to enforce its rules.”

In response to the letter, a spokesman for Cerebral told Bloomberg: “Our clinicians are directed to act based on what they conclude is best for patients. We provide best-in-class resources and support systems to our clinicians and do not dictate how clinicians should treat patients.”

Because of pandemic-era regulatory relaxations, remote prescribing of controlled substances for mental health treatments has been permitted over the last two years. Cerebral, a SoftBank Group-backed startup, became a leader in the field of remote prescribing for mental health ailments such as depression and ADHD. The firm, which recently ousted its founder, is being investigated by the federal government for possible violations of the Controlled Substances Act. The company is fully cooperating with that investigation, a Cerebral spokesperson said last month.

Launched in January 2020, Cerebral became one of the most prominent companies in the budding industry. At first, it prescribed only non-controlled substances, such Lexapro and Prozac. Only after regulators loosened prescribing rules during the pandemic did it begin to prescribe drugs that are more tightly controlled by regulators because of their potential for abuse. After a $300 million investment from SoftBank in 2021, Cerebral was valued at $4.8 billion.

In a March report in Bloomberg Businessweek, former nurse practitioners for the company described a fear that Cerebral was over-prescribing the medications. Since then, Cerebral has gone through a variety of changes. In early May, founder and then-chief executive officer Kyle Robertson announced the company would stop writing prescriptions for controlled substances. Robertson has since been ousted by the board of directors and replaced by David Mou, who was the chief medical officer for the company.

The Federal Trade Commission has begun an investigation into mental-health startup Cerebral Inc., according to a letter the FTC sent the company that was reviewed by The Wall Street Journal.

In the letter dated June 1, the FTC said it was investigating whether Cerebral engaged in deceptive or unfair practices related to advertising or marketing of mental-health services. The letter also directed the company to preserve documents.

The FTC’s letter asks Cerebral to answer dozens of questions related to its business. In particular it seeks information related to any programs where Cerebral continues to bill customers a subscription fee until the customer cancels, also called “negative option programs.”

Cerebral said in a statement that it intends to cooperate fully with the FTC and that it is working to improve its service for patients. The company said it has recently undergone an effort to redesign the cancellation process.

Cerebral also has announced layoffs, with affected employees being notified by July 1. A spokesman said the layoffs were part of a decision to “double down on quality” and restructure operations.

Single-Payer Healthcare Proposals Consider Including Workers’ Comp

The idea of a single-payer health insurance system has been discussed at both federal and state levels for years. To date, no state has fully adopted such an approach; however, several jurisdictions are studying the issue.

Of particular interest are bills that include a reference to workers compensation. According to the report by NCCI, in most states that reference workers compensation, the legislation generally contains similar language that directs the board of new state single-payer healthcare programs to develop a proposal for coverage of healthcare items and services covered under the workers compensation system, including whether and how to:

– – Continue funding for the healthcare services under the workers compensation system
– – Incorporate an element of experience rating

In 2022, four states considered or are considering single-payer health insurance proposals with a workers compensation component:

– – Kansas introduced HB 2459, which would have created a universal single-payer healthcare program. The bill required the new program’s board to develop proposals addressing workers compensation and experience rating by July 1, 2024. The bill did not advance this session.
– – Rhode Island introduced H 8119 and S 2769, which would create a universal single-payer healthcare program. The bills require the new program’s director to develop procedures for accommodating coverage of healthcare services covered under the workers compensation system.
– – California AB 1400 would have created a universal single-payer healthcare program and required the new board to develop proposals addressing workers compensation and experience rating. But the bill was not called for a vote on the Assembly floor and is considered failed for this legislative session.
– – New York A 6058, introduced in 2021, would establish a single-payer healthcare program in the state. The bill was recently voted out of the Assembly Committee on Codes and is now in the Assembly Ways and Means Committee. It requires the board of the new healthcare program to develop a proposal for healthcare services covered under the workers compensation law. This includes whether and how to continue funding those services under that law and incorporate an element of experience rating. (The Senate companion bill, S 5474, is currently in the Senate Health Committee.)

In addition, Oregon enacted legislation in 2021 that extended a previously created state Task Force on Universal Healthcare until 2023 and extended the deadline for the task force to submit recommendations to the legislature until September 30, 2022. The recommendations may address whether the single-payer healthcare program should replace the medical portion of workers compensation. Washington enacted legislation in 2021 that established a new commission on universal healthcare. The commission must submit a report with recommendations to the state legislature and the governor by November 1, 2022. However, the legislation did not include a workers compensation component.

Single-payer health insurance is an important topic and all proposals, whether federal or state, raise numerous questions for workers compensation stakeholders, including:

– – What happens to the state workers compensation system if a state enacts single-payer health insurance legislation and the state decides to incorporate the medical portion of workers compensation into the new single-payer program?
– – Would the private workers compensation market continue to write workers compensation policies to cover the indemnity portion of workers compensation?
– – If so, how would the split in public/private coverage impact the delivery system for injured workers, including benefits, quality of care, etc.?
– – How would workers compensation regulators fit into the new system? Would they continue to have any oversight?
– – For employees, their primary concerns are how will this affect benefit delivery and overall medical care for a workplace injury or illness. Would it streamline it or slow it down?
– – Would an employee have to pay into the new system to receive medical care for a workplace injury, unlike workers compensation where the employee does not have to pay for medical care?

Comp Carriers Prevail in Alleged Claimant Data “Hacking” Claim

A putative class action has been in various stages of litigation, in both state and federal courts since 2015, against Berkshire Hathaway Homestate Insurance Company, its wholly owned subsidiary Cypress Insurance Company, Zenith Insurance Company, the defense lawfirm of Knox Ricksen, LLP, and others.alleging that the defendants illegally “hacked” confidential information about workers’ compensation claimants to use to defend claims pending before the WCAB.

Palmdale based HQSU Sign Up Services, Inc. was the centerpiece of the compromised data. HQSU is allegedly paid a pre-negotiated flat fee to provide “administrative services” for clients unable to come to an attorney’s office due to physical, financial, or transportation limitations, and to.assist attorneys signing a retainer agreement and filling out an In-Take Packet with personal information. HQSU then uploads the documents to its allegedly username and password-protected website.

The alleged “hacking” of the HQSU files was first suspected during an in-chambers hearing in a worker’s compensation case before Presiding Judge Paige Levy. The case was being defended by Knox Ricksen. Knox Ricksen’s attorneys allegedly revealed they had Mr. Casillas’ attorney-privileged In-Take Packet. Judge Levy ruled it was attorney client privileged and ordered it to be returned.

Allegedly the downloading of documents from HQ Sign Up compromised approximately 32,500 intake sheets, in addition to the Casillas documents. Plaintiff’s experts have allegedly discovered that the documents were obtained by a “directory traversal attack.” Directory traversal is an HTTP exploit which allows attackers to access restricted directories and execute commands outside of the web server’s root directory.

On the other hand, Zenith has argued HQSU intake packet materials were obtained using a Google search of the claimant’s name and thus “were found in the public domain.” There was a suspicion at the time that HQSU was really a runner or capper organization soliciting injury claimants for lawfirms

The 2015 and 2016 cases filed in federal district court were not successful for various reasons including standing to sue in federal court. In July 2017, the litigation proceeded to state court when plaintiffs filed a complaint for a cause of action for trespass to chattels. In 2019 (after appeals of the federal court dismissal were exhausted) the trial judge in state court sustained demurrers to the state lawsuit. The plaintiffs appealed the dismissal and Court of Appeal sustained the dismissal in the published case of Casillas v Berkshire Hathaway et. al.B302442 (June 2022).

Having abandoned a privacy claim during their federal litigation, appellants effectively attempted, both in the trial court and on appeal, to repackage an alleged invasion of privacy as a trespass to chattels.

In deciding the appeal, the Court relied heavily on the California Supreme Court case of Intel Corp. v. Hamidi (2003) 30 Cal.4th 1342, 71 P.3d 296. The elements of the tort of trespass to chattels include “injury to the plaintiff’s personal property or legal interest therein.

Appellants conceded respondents had not damaged the HQSU system, corrupted the files they allegedly copied from the system, or impaired appellants’ access to the files.

Subsequent cases have applied Intel to instances of alleged hacking, similar to Plaintiffs’ allegations here. None of Plaintiffs’ authorities support the proposition that an actionable trespass to chattel claim exists when an alleged tortfeasor neither damages nor impairs a plaintiff’s computer system.

The Court of Appeal concluded that the appellants failed to allege any actionable injury because: (1) they did not allege damage or disruption to the computer system, as required by Intel; and (2) in any event, they did not allege injury to the copied files or their asserted property interests therein.

Cal/OSHA Proposes Workplace Violence Prevention Plan Expansion

California Code of Regulations, Title 8, Section 3342 require covered employers to develop a workplace violence prevention plan (WVPP). The plan must include procedures to identify and evaluate risk factors for workplace violence, correct hazards, prepare for workplace violence emergencies, and respond to and investigate violent incidents.

Currently the regulation applies to health care facilities covered by the standard. However, Cal/OSHA recently released a revised draft regulation for workplace violence prevention to apply to general industry, not just health care.

The process of increasing the scope of the WVPP regulation commenced in 2014 by way of a Petition filed on behalf of “over 300,000 teachers who work in the state of California” who asked Cal/OSHA “for the creation of workplace safety standards to reduce injuries in the educational setting.”

Petition 542 was subsequently granted “to the extent that it will be sent to an advisory committee to address workplace violence prevention in all California workplaces, specifically inclusive of educational workplaces.” This led to draft proposals that were published in 2018, and now the revised discussion draft in May 2022.

The newest draft proposal adds section §3343 to the regulations. This new section does not apply to health care facilities, service categories, and operations covered by California Code of Regulations, title 8, section 3342, as well as facilities operated by the California Department of Corrections and Rehabilitation, and to certain law enforcement agencies which are covered by other regulations.

If adopted, all other employers “shall establish, implement and maintain an effective workplace violence prevention plan.” And “shall record information in a violent incident log (Log) about every workplace violence. incident.” However a “log is not required when an employer has had no workplace violence incidents in the past five years.”

And the “employer shall provide employees with general awareness training on workplace violence that includes: the employer’s Plan, how to obtain a copy of the employer’s Plan, how to participate in development and implementation of the employer’s Plan, the definitions and requirements in this section, and how to report workplace violence incidents or concerns to the employer without fear of reprisal.”

The Division is seeking input on a revised discussion draft for workplace violence prevention in general industry. Interested parties are invited to submit written comments to Senior Safety Engineer Kevin Graulich, KGraulich@dir.ca.gov by July 18, 2022.

Northridge Physician to Serve Time & Pay $9.5M Restitution for Fraud

Minas Kochumian M.D., a physician previously practicing in the Los Angeles area, has agreed to pay $9,486,287 to resolve allegations that he submitted false claims to Medicare and Medi-Cal for procedures and tests that were never performed.

Kochumian’ medical corporation reportedly practiced under the name California Medical And Rehabilitation Group, located at 18546 Roscoe Blvd, 312, Northridge, California. The mailing address for California Medical And Rehabilitation Group was 2980 N Beverly Glen Cir, 301, Los Angeles.

Kochumian pleaded guilty to one count of federal health care fraud, and on May 2, 2022, he was sentenced to a prison term of three years and five months and ordered to pay restitution in the amount of $5.4 million. This sum is included in the overall civil lawsuit settlement amount.

The civil settlement resolves contentions by the United States and the State of California that Kochumian, over a period of more than six years ending in April 2018, submitted claims to Medicare and Medi-Cal for procedures, services, and tests that were never conducted or administered to patients, including injections of medication designed to treat osteoarthritis and osteoporosis, drainage of tailbone cysts, and the removal and destruction of various growths.

As part of the settlement agreement, Kochumian admitted that he intentionally submitted false claims for payment with the intent to deceive the United States and California. In doing so, Kochumian violated both the federal False Claims Act and the California False Claims Act. Those statutes allow the government to recover damages and penalties for the presentation of false claims for payment to the United States and the State of California, respectively.

The civil settlement with Kochumian resolves allegations originally brought in a lawsuit filed by Elize Oganesyan and Damon Davies, Kochumian’s former medical assistant and former informational technology consultant, under the whistleblower provisions of the False Claims Act.

The Act permits private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery. The whistleblowers who filed the case against Kochumian will receive more than $1.75 million as their share of the recovery. The whistleblowers’ claims for attorneys’ fees are not resolved by this settlement.

The state of California will receive $630,099 from the settlement amount – double the damages which were incurred by Medi-Cal.

Kochumian’s payment obligation set forth in the settlement agreement is secured by the four real properties located at 18251 Roscoe Boulevard, Northridge, California 91325; 18501 Marblehead Way, Tarzana, California 91356; 10986 Vanalden Avenue, Northridge, California, 91326; and 8157 Morse Avenue, North Hollywood, California 91405.

The civil settlement was the result of an investigation by the Office of Inspector General of the U.S. Department of Health and Human Services. The civil lawsuit is captioned United States and State of California ex rel. Elize Oganesyan and Damon Davies v. Minas Kochumian, et al., Case No. 2:17-cv-2236 KJM JDP, and the parallel criminal case, which was filed in the Central District of California, is captioned United States v. Minas Kochumian, M.D., Case No. 2:20-CR-00423 (RGK).

CalFire Fire Fighters Struggle with Increasing Fatigue PTSD & Suicide

Many Cal Fire firefighters told CalMatters they are fatigued and overwhelmed, describing an epidemic of post-traumatic stress in their fire stations. Veterans say they are contemplating leaving the service, which would deplete the agency of their decades of experience. Some opened up about their suicidal thoughts, while others – an unknown number since Cal Fire doesn’t track it – already have taken their own lives.

Interviews with Cal Fire firefighters, including many high-ranking battalion chiefs and captains, and mental health experts paint a picture of the state agency’s sluggish response to an urgent and growing crisis:

– – Cal Fire has an unyielding policy of 21-day shifts and forced overtime. Staffing is insufficient as firefighters battle thousands of fires year-round, sometimes for 40 days in a row, year after year. The nonstop work and increasing overtime are contributing to on-the-job injuries and post-traumatic stress disorder.
– – The workers’ comp system is difficult to navigate for firefighters suffering from post-traumatic stress, even suicidal thoughts, beginning with skepticism among managers about the legitimacy of their unseen wounds. Some say to get help or be reimbursed for mental health care, they have to hire lawyers, who told CalMatters that claims are routinely denied.
– – In California’s rural areas, where many Cal Fire employees are based, there are inadequate numbers of qualified mental health care providers. And many won’t accept workers’ compensation cases because of the extensive paperwork and low compensation. As a result, firefighters say they can’t find help when they desperately need it.
– – Work conditions and stress are driving an exodus from the department, which loses invaluable institutional knowledge and field experience. Last year 10% of Cal Fire’s permanent, non-seasonal workforce quit.
– – Firefighters say suicidal thoughts and PTSD are rampant. But Cal Fire collects no incidence data on suicides or PTSD. Experts say the agency can’t develop an effective program to combat them if they don’t understand and monitor their scope.
– – Cal Fire’s behavioral health unit ramped up slowly despite the growing problem. Although created in 1999, it had no permanent budget and no permanent employees for 20 years. It began with one staffer — and six years later there were two. Now it has 27 peer-support employees, who assist a permanent and seasonal workforce of more than 9,000.

An administrative claim notice from Cal Fire’s firefighters’ union had a Dickensian tone, like a logbook from a 19th century sweatshop: Forced overtime, punishing working conditions, little sleep, workplace injuries, an inhuman system of indenture.

“Employees have been known to work 30 days or more without any time off due to forced overtime, and the most egregious cases include employees on duty for 49 days or more straight without a day off. Overworked beyond the point of exhaustion,” says the claim, which union attorneys sent in February to the state’s Division of Occupational Safety and Health (Cal OSHA) and the Labor Workforce Development Agency.

Cal OSHA rejected the request, saying it has no jurisdiction because there are no workplace standards for overtime and it is not illegal for employers to make employees work long hours as long as they are compensated.

Medical help is the endgame. Workers’ compensation benefits, paid by the state, cover the costs, which average $60,000 for first responders’ cases, according to a Rand Corp. estimate. But the barriers to firefighters’ claims are myriad.

The long wait for workers’ comp insurance “is hugely frustrating,” said Gena Mabary, Cal Fire’s injury and accommodation manager. “When you are dealing with psychiatric stress, you are already stressed out. It adds another layer of stress. It means that sometimes people won’t go through the process.”

Cal Fire workers’ comp claims for mental health problems “are more frequent. I am expecting them to increase still more,” Mabary said. No data, however, was available.

In 2020 SB 542 changed Labor Code section 3212.25, and recognized that all first responders engage in stressful and dangerous occupations, and made PTSD “presumptive” for workers’ comp benefits – codifying that a mental injury is a legitimate medical claim, although it must still be proven. That law sunsets at the end of 2024.

Before the law was enacted two years ago, California firefighters’ PTSD cases were denied workers’ comp benefits 24% of the time – almost three times more often than their claims for other medical conditions, according to a RAND Corp. report. They were also denied more often than PTSD cases filed by people in other occupations.

WCAB Decision Compares Medical vs Vocational Apportionment

Robert Gonzales was employed by Northrop Grumman Systems structural aircraft mechanic when he suffered an admitted CT injury to both shoulders, both knees, cervical spine, lumbar spine, and internal injury in the form of heart disease and hypertension.

The WCJ found 85% medical apportionment with regard to the permanent disability attributable to the cervical and lumbar spines, left knee and right knee; 100% industrial apportionment with regard to left shoulder, right shoulder and right wrist; and 50% industrial apportionment with regard to hypertension and coronary artery disease.

The medical apportionment was based upon the findings of agreed medical examiner (AME) Steven Silbart, M.D., and panel qualified medical examiner (PQME) Benjamin Simon, M.D.,

However, the vocational expert who reported on behalf of Mr. Gonzales said that “It must be understood that the concept of apportionment in medicine and in vocational issues are two different concepts which are not always the same as one another. In medicine the concept applies to impairment, whereas in vocational issues it is disability/ employability, and the two are different from one another.”

The WCJ therefore found that the injury caused 100% permanent disability without apportionment. Reconsideration was denied in the panel decision of Gonzales v Northrop Grumman – ADJ9689895 (June 2022).

The employer contended that the WCJ erred in finding applicant 100% permanently disabled, arguing that total permanent disability cannot be found where there is valid apportionment, and that the vocational expert opinion was not substantial evidence.

In deciding the dispute, the WCAB reviewed Ogilvie v. Workers’ Comp. Appeals Bd. (2011) 197 Cal.App.4th 1262 as well as Contra Costa County v. Workers’ Comp. Appeals Bd. (Dahl) (2015) 240 Cal.App.4th 746 [80 Cal.Comp.Cases 119], both landmark decisions on this issue.

The primary method for rebutting the scheduled rating is based upon a determination that the injured worker is “not amenable to rehabilitation and therefore has suffered a greater loss of future earning capacity than reflected in the scheduled rating.”

The case authority reviewed by the WCAB conceded that “The employee’s diminished future earnings must be directly attributable to the employee’s work-related injury and not due to nonindustrial factors such as general economic conditions, illiteracy, proficiency in speaking English, or an employee’s lack of education.”

In this case, there was ample evidence of medical apportionment. However the record summarized in this decision said nothing about non-industrial vocational factors listed as factors that cannot be a directly attributable to the work related injury. Lacking such evidence by way of rebuttal to the vocational expert, or a cross examination of the claimant’s expert to establish and embellish these factors, the award was supported by substantial evidence.

The clear take away from this decision is to be aware of the difference between apportionment based on medical factors and apportionment based on vocational factors, and thoroughly develop evidence on both.

High Gas Prices Drive Comp Mileage Rate to 62.5¢ on July 1

The mileage rate that workers’ comp claims administrators pay injured workers for travel related to medical treatment or evaluation of their injuries will increase from 58.5¢ per mile to 62.5¢ per mile for travel on or after July 1, 2022, regardless of the date of injury. The old rate of 58.5¢ per mile still applies for travel from January 1 through June 30, 2022.

California Labor Code §4600(e)(2), in conjunction with Government Code §19820 and DPA regulations, requires claims administrators to reimburse injured workers for medical mileage at the rate adopted by the Department of Personnel Administration (DPA) for non-represented (excluded) state employees, which is tied to the IRS published mileage rate.

The IRS normally adjusts the standard mileage rate each fall for the next calendar year based on an annual study of the fixed and variable costs of operating an automobile, but IRS Commissioner Chuck Rettig just announced that in recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2022.

Therefore, for miles driven from July 1 through December 31, 2022, the standard mileage rate will increase to 62.5¢ per business mile driven. The IRS announcement is available in the agency’s online newsroom https://www.irs.gov/newsroom.

CWCI has alerted the DWC of the increase, so as soon as the Division receives confirmation from the DPA it will likely post a Newsline regarding the new mileage rate for travel on or after July 1, 2022 on its website, http://www.dir.ca.gov/dwc/dwc_newsline.html. In the meantime, claims organizations may want to alert their claims staff and programmers of the pending change.

Mid-year mileage rate increases are rare (the last one was in 2011), but there have been multiple mileage rate changes with January effective dates over the past decade, so the DWC has downloadable mileage-expense forms that show the applicable rates based on the travel date posted under “Medical Forms” on the Forms page of its website www.dir.ca.gov/dwc/forms.html.