California: Judicial Factors of Consideration in Assessing Substantial Causation of Injury From Good Faith Personnel Actions

California: Judicial Factors of Consideration in Assessing Substantial Causation of Injury From Good Faith Personnel Actions

   David Bryan Leonard, Esq.

In San Francisco Unified School District v. W.C.A.B. (2010) 190 Cal. App. 4th 1, [117 Cal. Rptr. 3d 824, 2010 Cal. App. LEXIS 1943], the Court concluded that all injurious factors, industrial and non-industrial, must be considered by the Court when determining whether or not a personnel action was the substantial cause of injury. In reaching its decision, the term “apportioned” was used by the Court in both its discussion of injury and the impact of disability. The interchanging use of the term “apportioned” creates the incorrect impression that causation of injury can be used interchangeably with causation of disability. This article will review the Court’s decision and conclude with comments referencing the WCAB’s recognition of the difference between the two concepts.

Applicant, a 20-year teaching veteran for the San Francisco Unified School District (“District”) alleged that she sustained a cumulative injury to her psyche. She asserted that the stress of teaching along with “difficulties” with her school’s principal were the actual events of employment that caused her injury.

In its Answer, the District alleged that Applicant’s condition was substantially caused by “good faith personnel actions” consisting of unsatisfactory performance reviews and written disciplinary warnings. It asserted that Applicant’s claim for compensation was barred by Labor Code section 3208.3, subsection (h).

Pursuant to Court Order, Applicant was sent to an Independent Medical Examiner.

The IME concluded that Applicant sustained a psychiatric injury. Detailing the injurious mechanisms of injury to her psyche, the physician determined that 51% of Applicant’s injury was caused by the years of classroom teaching. 34% was due to her interactions with the school’s principal, and the remaining 15% of injury was caused by non-industrial factors. So, total factors causing injury were separated out as 51/34/15.

The injury caused disability which the IME apportioned 60% to industrial factors and 40% due to non-industrial factors.

The case proceeded to trial.  The District argued that since 40% of Applicant’s condition was caused by write ups and reprimands issued by the school’s principal, Applicant’ claim was barred by Section 3208.3(h).

The WCJ found that Applicant sustained an industrial psychiatric injury in the course of employment and that her claim for benefits was not barred by the good faith personnel action limitation imposed by Section 3208.3(h).

The District sought reconsideration. Using the multiple standards of analysis set forth in Labor Code Section 3803.2, the District intertwined the issues of causation of injury with causation of disability to create an argument that Applicant’s claim for compensation should be barred by the “good faith personnel defense” created by subsection (h).

In her Report and Recommendation on Reconsideration, the WCJ explained that Labor Code Section 3208.3 required the Court to consider all causes, both industrial and non-industrial, when deciding whether or not Applicant’s right to compensation is barred by the good faith personnel defense created by Section 3208.3(h).

The WCAB incorporated the WCJ’s Report and denied reconsideration. The District filed a writ requesting review which was granted by the Court of Appeal.

In its opinion, the Court of Appeal observed that it was duty bound to use the plain meaning of the words in the statute. When uncertainty exists, it recognized that it may turn to the statutes’ history and circumstance to ascertain legislative intent.

Turning to the language of Section 3208.3, the Court noted that subsection (b)(1) states, in relevant part, that: “In order to establish that a psychiatric injury is compensable, an employee shall demonstrate by a preponderance of the evidence that actual events of employment were predominant as to all causes combined of the psychiatric injury.” (Emphasis added by author.)

Subsection (b)(2) details the Applicant’s general burden of proof required to establish industrial causation. It requires that “the employee shall be required to demonstrate by a preponderance of the evidence that actual events of employment were a substantial cause of the injury.”

Subsection(b)(3)  defines the term “substantial cause” to mean “at least 35 to 40 percent of the causation from all sources combined.” (Emphasis added by author.)

After reviewing the 1989 and 1993 legislative history of change to Section 3208, the Court considered how other appellate divisions interpreted this statute. It observed that the phrase “‘predominant as to all causes’ ” was not defined within the statute itself. Previously, other appellate Courts concluded that this phrase required the Applicant to show that over 50% of the actual events of employment caused the psychiatric injury. (Department of Corrections v. W.C.A.B.. (1999) 76 Cal.App.4th 810, [90 Cal. Rptr. 2d 716, 64 Cal. Comp. Cases 1356.] and Sonoma State University v. W.C.A.B. (2006) 142 Cal.App.4th 500 [48 Cal. Rptr. 3d 330, 71 Cal. Comp. Cases 1059].

Of interest to all practitioners within the workers’ compensation field, the Court of Appeal also set forth multilevel analytical instructions for the WCAB to use when assessing Defendant’s affirmative defense contending that compensation is barred.

To begin, when a psychiatric injury is alleged and the “good faith personnel action” defense has been raised, the first step for the WCJ is to determine if the alleged psychiatric injury involves actual events of employment.

If actual events of employment are present, the next step for the WCJ is to assess whether competent medical evidence establishes that these actual events of employment were the predominant cause of injury.

If these two conditions are established, the Applicant has met his or her burden of proof establishing psychiatric injury.  Then, the WCJ must now turn to the Defendant’s contention that Applicant’s right to compensation is barred by Section 3208.3(h) which states:

No compensation under this division shall be paid by an employer for a psychiatric injury if the injury was substantially caused by a lawful, nondiscriminatory, good faith personnel action.  The burden of proof shall rest with the party asserting the issue.

In order to assess this affirmative defense, the WCJ must decide whether any of the actual employment events experienced by Applicant were personnel actions.  (For a good discussion of the methods used by WCAB to evaluate employer personnel conduct see, Larch   v. Contra Costa County (1998) 63 Cal. Comp. Cases 831 writ denied.)

Applying the analysis set forth in Larch, supra, the WCJ must determine whether the personnel action or actions were lawful, nondiscriminatory, and made in good faith.

After the nature of the employer’s actions have been considered, the WCJ must review competent medical evidence discussing causation of injury.  Specifically, the WCJ must review a medical opinion explaining whether or not the personnel action(s) were a substantial cause of the injury. This medical opinion must explain whether or not the personnel actions were at least 35 to 40 percent of the cause of the psychiatric injury.  (See, Rolda v. Pitney Bowes, Inc. (2001) 66 Cal.Comp.Cases 241 writ denied.

As detailed above, the IME concluded that Applicant sustained a psychiatric injury.  The cause of injury was 51% was due to classroom teaching, 34% due to reprimands and 15% due to non-industrial factors. The resulting disability was apportioned 60% to industrial causes, 40% to non-industrial causes.

The District argued that by allowing non-industrial factors into the assessment of all events combined, the employer is “essentially penalized if the claimant/employee has greater or more substantial preexisting nonindustrial disability.”  In essence, the employer argued that if it hired fragile personnel, then it carried a greater likelihood of not being protected by the compensation bar of Section 3208.3(h).

The Court disagreed. It observed that the District’s contention that non-industrial factors should be excluded from the assessment of whether good faith personnel actions were the substantial cause of psychiatric injury was contrary to the language of Section 3208.3(b)(3) which specifically requires that the Court consider “all sources combined” when calculating the percentage of psychiatric injury caused by good faith personnel actions.  It found that the plain meaning of the statute required that both industrial and non-industrial factors need to be considered when analyzing if a good faith personnel action(s) was 35-40% cause of the psychiatric injury.

Applying these principles, the Court concluded that Applicant’s claim for compensation was not barred by Section 3208.3(h).

Authors comment: Parsing out the factors of causation can be easily confused with the issues of apportionment of disability. In reading the Court’s opinion, it was noted that the term “apportioned” was used both in the discussion of the cause of injury and resulting disability. Additionally, when addressing the District’s contention that Applicant’s claim was barred by Section 3208.3(h) because 40% of her disability was due to non-industrial factors, the Court did not pick up on the legal concept that this 40% was not the injurious mechanism. This 40% was the residual non-industrial disability after apportionment. The non-industrial disability is not the cause of injury, so it should not be included in the good faith personnel action analysis of substantial cause. At the end of the day, even with the potential blending of terminology concerning “cause of injury” versus “cause of disability,” the Court correctly found that all factors causing the psychiatric injury must be considered when evaluating whether good faith personnel actions were a substantial cause of injury. A good discussion of the difference between cause of injury, and cause of disability, can be found in the WCAB decision of  Reyes v. Hart Plastering (2005) 70 Cal. Comp. Case 223. Additional discussion of this concept can be found in Trugreen Landcare v. W.C.A.B. (2010) 75 Cal. Comp. Cases 385, writ denied.

© Copyright 2011 David Bryan Leonard, Esq. All rights reserved. Reprinted with permission.