Tag: 2022 News

An injured worker filed a workers’ compensation claim in April 2015 . After the employer’s workers compensation carrier became insolvent , CIGA became responsible for paying the claim Sedgwick is a third party claims administrator for CIGA and handled the worker’s claim

When the examiner reviewed the file, it was noted that a chiropractor, Andrew John Miles, was treating the injured worker. But under Labor Code section 4600, a chiropractor may only serve as a primary treating physician under limited circumstances.

Accordingly, the examiner prepared a computerized diary entry that instructed a claims assistant to send a letter to the worker letting him know that Miles could not be his primary treating physician and he should select a different provider to fill that role. The diary entry specifically identified Miles as the subject of the letter.

The examiner also saw that one of the worker’s other medical providers, Dr. Rosen, was no longer an approved medical provider for CIGA claims because the DIR had included Rosen on a list of medical providers who had been indicted for fraud or abuse. So the examiner instructed the assistant to send several form letters to the worker, including one notifying the worker of the indictment issue and another instructing him to select a new provider.

The claim assistant received the two diary entries created by the examiner at the same time and assumed both entries related to chiropractor Miles by mistake, and the letters referred to Dr. Miles as the person indicted, not Dr. Rosen.

Chiropractor Miles received the letter, called the examiner and pointed out the mistake, and the examiner took several actions that day to correct them. Nonetheless, Chiropractor Miles sued CIGA and Sedgwick for defamation, intentional interference with prospective business relations, and negligent interference with prospective business relations.

CIGA and Sedgwick moved for summary judgment which the trial court granted and the Court of Appeal affirmed in the unpublished case of Miles v Sedgewick, – B311520 (April 2022)

CIGA and Sedgwick asserted three affirmative defenses – the litigation privilege under Civil Code §47(b), – the common interest privilege under §47(c), – and the limited liability provided to CIGA and its agents under Insurance Code sections 1063.12 and 1063.2. The case was resolved on the “common interest privilege” and the others were not discussed in the opinion.

Defendants argued that the communication was privileged because the drafter and recipients of the letter s shared a common interest in the worker’s claim and in the insurance eligibility of the medical providers and treatment the worker received As for malice, defendants explained the false statements were inadvertent and therefore not malicious. The Court of Appeal agreed.

“CIGA, and Sedgwick as its agent, were obligated to reimburse the worker for medical treatment covered under the workers’ compensation policy at issue. And the purpose of the indictment letter and follow up letter was to ensure that plaintiff continued to receive care from medical providers approved by CIGA so that the care would be covered under the insurance policy In sum, the communications from CIGA by Sedgwick as its agent, to the worker and worker’s counsel furthered the mutual interest of all parties regarding covered medical claims.”

California’s Division of Occupational Safety and Health Standards Board met on April 21, 2022, and formally approved the third readoption of its COVID-19 Emergency Temporary Standard by a 6-1 vote. There were no substantive changes from the earlier April 6, 2022 draft text.

The new rules will become effective when the Office of Administrative Law completes its review and files it with the secretary of state, which is anticipated to occur before the end of the first week of May 2022, and will remain in effect through December 31, 2022. According to the summary by Littler Lawfirm, the key takeaways are as follows:

Vaccination Status No Longer Matters. In a stunning reversal, employee vaccination status is no longer a functional part of the proposed ETS. The definition of “fully vaccinated” has been removed from the ETS and the ETS applies to employees without regard to vaccination status. Any employee is now entitled to request a respirator for voluntary use and an employer must offer COVID-19 testing to any employee exhibiting symptoms of COVID-19. At the same time, close contact provisions no longer depend on vaccination status under the new draft ETS text – but this leads to the next key takeaway.

No Set Rules for Close Contact Exclusion. In what is sure to be a controversial move, the proposed ETS has no set rules for close contact exclusion from the workplace. Instead, the proposed ETS now requires that employers “review current [California Department of Public Health] guidance” regarding “quarantine or other measures to reduce transmission,” to “develop, implement, and maintain effective policies” to prevent COVID-19 transmission from close contacts. Even the definition of “close contact” is now subject to change by CDPH “regulation or order.” Although many employers will be relieved by the apparent flexibility, the vagueness of the new rule will certainly cause issues with enforcement and potentially place too much discretion with Cal/OSHA inspectors to determine what is effective. Further, because the draft retains the requirement to provide exclusion pay when workers are excluded from the workplace, ambiguity in this area may be particularly problematic. Finally, in high-risk settings, because CDPH’s current return-to-work guidance still relies on vaccination status, if employers intend to return employees who are exposed to COVID-19 in the workplace prior to a full 10-day quarantine period, collection of proof of vaccination and boosters is necessary.

Specific Rules for COVID-19 Cases. In contrast to the lack of specific close-contact rules, the rules with respect to COVID-19 case exclusion and return are not left to conjecture. The proposed ETS codifies the substance of the exclusion requirements set forth in the current Cal/OSHA ETS FAQs with minor adjustments – for example, the proposed language now clearly states under what circumstances to count exclusion periods from symptom onset versus test date.

Types of Acceptable COVID-19 Tests Broadened. Except for purposes of return to work, the proposed ETS no longer restricts the types of COVID-19 tests that can be used to identify COVID-19 cases or otherwise be made available to employees when required, including during outbreaks. The restriction prohibiting use of self-administered and self-read tests applies only to return-to-work criteria unless “another means of independent verification can be provided,” such as a time-stamped photograph of the test results presumably taken by the employee.

Contaminated Surfaces no Longer a Hazard. Surfaces and objects potentially contaminated with SARS-CoV-2 are no longer included within the definition of “COVID-19 Hazard.” The proposed ETS removes all cleaning and disinfection requirements, including the requirement to clean an area used by a COVID-19 case.

No More Light Test. The requirement that face coverings not allow light to pass through has been removed.

No More Partitions. The minor and major outbreak provisions of the proposed ETS no longer require consideration or use of cleanable solid partitions whenever social distancing cannot be maintained.

A California woman, 65 year old Corby Kuciemba, sued her husband’s employer because she believes he caught COVID at work and brought it home with him – ultimately infecting her also. He was the only person in their household to have frequent contact with others was Mr. Kuciemba, through his work at Victory’s jobsite.

She and her husband, Robert Kuciemba, alleged in their Oct. 23, 2020 lawsuit that his employer, Nevada-based Victory Woodworks, violated local and federal virus-safety guidelines when it moved workers from one site to another in the San Francisco region.

According to the Kuciembas, Victory knowingly transferred workers from an infected construction site to Mr. Kuciemba’s jobsite without following the safety procedures required by the Health Order. Mr. Kuciemba was forced to work in close contact with these employees and soon developed COVID-19, which he brought back home.

The company’s failure to take basic precautions allegedly caused Robert Kuciemba to contract the virus and unknowingly bring it home and infect his wife, and both required extended hospital stays and suffer from after-effects.

The closely watched case was removed by the employer to the Federal District Court in Northern California. The district court granted Victory’s motion to dismiss, holding that Mrs. Kuciemba’s claims against Victory were barred by California’s derivative injury doctrine and, in the alternative, that Victory did not owe a duty to Mrs. Kuciemba. A timely appeal was filed in the 9th Circuit Court of Appeals.

The parties dispute the scope of California’s derivative injury doctrine and whether it reaches the facts of this case. Victory argues, relying primarily on Salin v. Pacific Gas & Electric Co., 185 Cal. Rptr. 899 (Cal. Ct. App. 1982), that this doctrine bars all claims against an employer that flow in fact from a workplace injury suffered by an employee.

The Kuciembas disagree. They highlight that Salin has been twice called into question by the California Supreme Court and has not been favorably cited by a California court in decades.

After briefing concluded, the California Court of Appeal decided See’s Candies, Inc. v. Superior Court, 288 Cal. Rptr. 3d 66 (Cal. Ct. App. 2021). Faced with essentially identical facts to those here, the Court of Appeal largely agreed with the Kuciembas’ interpretation of Snyder and held that the derivative injury rule does not bar claims brought by an employee’s spouse against an employer for injuries arising from a workplace COVID-19 infection.

But, the 9th Circuit concluded by noting “All the same, Snyder dealt with very different facts from those present here and the Court of Appeal’s reasoning in See’s Candies – although instructive – does not eliminate the need for clear guidance from California’s highest court.”

“In addition, no controlling precedent resolves whether Victory owed Mrs. Kuciemba a duty of care.”

Thus federal case authority dictates that California’s courts be offered the opportunity to answer these questions in the first instance. The 9th Circuit panel certified to the Supreme Court of California the following questions: 1) If an employee contracts COVID-19 at his workplace and brings the virus home to his spouse, does California’s derivative injury doctrine bar the spouse’s claim against the employer? 2) Under California law, does an employer owe a duty to the households of its employees to exercise ordinary care to prevent the spread of COVID-19?

Ethics legislation to shine a light on insurance industry influence over decision-making at the Department of Insurance was killed by the Assembly Insurance Committee when members refused to give the bill a vote.

AB 2323 (Levine) would have required the Insurance Commissioner and top-level appointees to publicly disclose meetings and communications with the insurance industry and others seeking to influence Department actions within seven days, and post these reports on the Department website quarterly.

The bill was presented in committee and Assemblymember Wood moved for a vote, but no other committee member seconded the motion. Without a second, the bill did not get a vote.

Another Department of Insurance ethics bill, AB 1783 (Levine), will be heard in the Assembly Elections committee next week. It would amend the Political Reform Act to require individuals hired to represent companies seeking mergers before the Department register as lobbyists and disclose how much they are paid.

The ethics bills follow revelations of a pay-to-play scandal involving campaign contributions and meetings between Insurance Commissioner Ricardo Lara and insurance company representatives seeking to influence Department enforcement actions and a merger.

A Consumer Watchdog investigation in 2019 found that Insurance Commissioner Ricardo Lara took $54,000 in campaign contributions from individuals linked to two insurance companies with matters before the agency. One of them, Applied Underwriters, was being investigated by the Department for overcharging businesses for workers compensation insurance. The Commissioner subsequently intervened in proceedings involving the company, reversing Administrative Law Judge decisions.

Commissioner Lara later admitted that he had met with the President of Applied Underwriters prior to intervening in the proceedings, and, critically, that intervention in the proceedings was discussed, as well as the status of a merger that also required the Commissioner’s approval.

Additionally, throughout the course of a Public Records Act request and ensuing lawsuit that followed the revelations, Consumer Watchdog discovered that other officials at the CDI had undisclosed conversations with representatives of the insurance company, including lobbyists who were secretly promised a $2 million success fee for influencing the merger.

Writing in support of this bill, the Consumer Federation of California believes that “giving the public reasonable access to information about conversations or discussions had by their elected leaders ensures that they can be properly held accountable.”

A coalition of insurance trade groups opposes this bill on several grounds, but the coalition’s primary argument focuses on concerns that this bill is likely to discourage communications between CDI and the industry it regulates.

Although communications between CDI and the industry it regulates currently occur regularly, industry is concerned that publishing the fact of these communications online will have a chilling effect on both sides’ willingness to engage in them. Frequent, constructive conversations between regulators and their licensees are beneficial; these types of communications can resolve potential problems before they occur or stop them shortly after they start. Thus, to the extent the opposition’s fears about this bill’s impact prove accurate, this bill could result in unintended, negative consequences.

“It’s anti-democratic and demonstrates the insurance industry’s capture of the Assembly Insurance Committee that members refused to even allow a vote on a transparency bill that would have shone light on industry influence at the Department of Insurance,” said Carmen Balber, executive director of Consumer Watchdog.

Insurance companies have made $1.5 million in campaign contributions to members of the Assembly Insurance Committee over the last four years, including $231,000 to Committee Chair Tom Daly.

Tashay Lenzy worked as a barista at a Ralphs grocery store in Los Angeles, California. In September 2016, she fell and injured her knee when she was struck by the door of a service elevator in the store where she worked as a coffee barista.

She filed an application for adjudication of her workers’ compensation claim with the Workers’ Compensation Appeals Board in which she listed “Ralphs” as her employer. She settled her claim for a lump sum payment of $50,000. The compromise and release identified Kroger as her employer. The order approving the compromise and release identified the defendant as “The Kroger Company, dba Ralphs Grocery Co.”

While Lenzy’s workers’ compensation claim was still pending, she commenced a civil action for negligence against Ralphs and Thyssenkrupp Elevator Corporation.

Ralphs moved for summary judgment claiming the case was barred by the workers’ compensation exclusive remedy rule. The trial court denied plaintiff’s evidentiary objections and granted Ralphs’ motion for summary judgment.

The summary judgment was affirmed by the Court of Appeal in the unpublished case of Lenzy v Ralphs Grocery Company, (April 2022) B308069.

On appeal, Lenzy contends Ralphs did not carry its initial burden to establish two facts required for summary judgment based on the workers’ compensation exclusive remedy rule: (1) that Ralphs (not just Kroger) was plaintiff’s employer, and (2) that Ralphs (not just Kroger) carried workers’ compensation insurance or possessed a certificate of self-insurance.

Because the Workers’ Compensation Act intends comprehensive coverage of injuries in employment,it defines employment broadly in terms of service to an employer and includes a general presumption that any person in service to another is a covered employee. (§§ 3351, 5705, subd. (a) . . . .) (S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, 354.

The Court of Appeal resolved these issues by concluding that “Plaintiff’s suggestion that Kroger’s involvement in the resolution of her workers’ compensation claim raises doubts as to the identity of her employer misses the mark because the exclusive remedy rule applies even if she was an employee of both Ralphs and its parent company.

“As to insurance, Ralphs’ initial summary judgment burden was satisfied by plaintiff’s statement that Ralphs was insured in her application for adjudication of her workers’ compensation claim and the order approving her workers’ compensation settlement that identified the defendant as Kroger doing business as Ralphs”