California: Is the Good Faith Personnel Action Defense to a Claim of Psychiatric Injury Illusory?

By Hon. Susan V. Hamilton, Former Assistant Secretary and Deputy Commissioner, California Workers’ Compensation Appeals Board

Claims of work-related psychiatric injuries have a fraught history. In 1989 as part of the Margolin-Bill Greene Workers’ Compensation Reform Act, Lab. Code § 3208.3 was adopted with the intent of reducing the proliferation of claims of psychiatric injury by raising the compensability threshold for such claims. But the more stringent rules for psychiatric claims required even more tweaking just a few years later. In 1993 Assembly Bill 119 (1993 Stats. Ch. 118) made further revisions to Lab. Code § 3208.3 to require work-related factors to be the predominant cause of the psychiatric injury, and to prohibit a worker from receiving any compensation for a psychiatric injury substantially caused by a lawful, nondiscriminatory good faith personnel action (Lab. Code § 3208.3(h)). In his signing statement regarding Assembly Bill 119, Governor Pete Wilson explained the legislation was necessary to reduce skyrocketing workers’ compensation costs, largely attributable to fraud, by further tightening the standards for stress claims, which in 1993 were reportedly the fastest growing type of claim in our workers’ compensation system, and to put an end to the stress-mill millionaires.

Fast forward to 2024. More than 30 years have passed since these more rigorous laws were enacted. Studies undertaken by the Commission on Health, Safety and Workers’ Compensation demonstrate the dramatic decline in claims of psychiatric work injury since 1993. Nonetheless, workers continue to file stress-related claims, and whether a particular claim is barred by the good faith personnel action defense continues to be adjudicated. A recent example is Cisneros v. Los Angeles Unified School District, (February 20, 2024, ADJ16681782), in which a divided Appeals Board panel found defendant failed to meet its burden of establishing the defense. See https://www.dir.ca.gov/wcab/Panel-Decisions-2024/Maria-CISNEROS-ADJ16681782.pdf

The Facts

Maria Cisneros (applicant) was employed as a healthcare assistant by the Los Angeles Unified School District (defendant). Her employment began in 1983, and she continued to work for defendant through October 15, 2021. The job duties of a healthcare assistant involved attending to cuts/abrasions, applying Band-Aids, and taking the temperature of students.

In response to the COVID-19 pandemic, defendant instituted a policy of mandatory COVID-19 vaccinations for its employees. Applicant was notified of the requirement in August 2021. Because she had experienced an adverse reaction (apparently anaphylaxis) in response to a hepatitis B vaccine in 1998, she sought the assistance of her personal physician, Dr. Ashida. In October 2021, Dr. Ashida wrote a report in which he confirmed applicant’s adverse reaction to the hepatitis B vaccination in 1998, and stated that since that date, applicant had not received any vaccinations. His report also noted that the COVID-19 vaccination did not have any ingredients in common with the hepatis B vaccination, and while an anaphylaxis reaction was not anticipated, it was certainly possible that she would have a delayed reaction in the form of rash, fatigue, arm pain, and headache.

Applicant requested an accommodation from defendant and submitted Dr. Ashida’s report to support her request for a reasonable accommodation, such as remote work. She offered to do such tasks as maintaining and updating student records, doing Spanish translations over Zoom for special education plans, translating documents for parents, and providing telephone and follow-up support for the Student and Wellness hotline and for defendant’s pass portal. If she had been offered remote work, she would have accepted it. Applicant stated that she completed the accommodation forms (Forms A and B) required by defendant, but her request was denied, and her appeal was unsuccessful. Applicant also said she was told by defendant that she had only two options: to resign or retire. If she retired, she would be able to keep her health benefits. Even though she had planned to continue to work for defendant, she chose retirement, and her last day of work was October 15, 2021.

Applicant filed a claim of psychiatric cumulative injury and was evaluated by PQME, Dr. Howard Greils. Dr. Greils opined that applicant sustained a psychiatric injury, 75% of which could be attributed to work-related events in the realm of a personnel action.

A trial was held on applicant’s claim, and applicant testified consistent with the facts set forth above.

Juan Gonzalez, defendant’s disability manager, also testified at trial. Mr. Gonzalez had oversight over defendant’s COVID-19 accommodation program. Being fully vaccinated with the COVID-19 vaccination was an essential job function, especially for healthcare assistants who were required to be physically present at the worksite to attend to students. Gonzalez testified that some employees requested and received medical accommodations, but applicant’s request was denied. According to Mr. Gonzalez, there was a problem with Dr. Ashida’s report in that it did not indicate the duration of any necessary accommodation. If a duration date was included, Mr. Gonzalez testified it was possible that applicant’s request would have been approved.

Mr. Gonzalez further testified that he contacted applicant regarding deficiencies in the documentation of her accommodation request. In an email dated September 27, 2021, he advised applicant that she had failed to indicate whether her request was due to a disability, a serious medical condition, or a sincerely held religious belief. The email also informed applicant that required documentation (a medical certification and substantiating medical report) were missing because those attachments to her initial submission could not be opened. Defendant’s Reasonable Accommodation Program advised applicant on October 12, 2021, that it had not received the documentation requested in the September 27, 2021, email, and would not take any further action on her request.

Applicant took a leave and when her leave credits were exhausted, she resigned from employment in May 2022.

Following the trial, the WCJ issued a Findings and Order that defendant carried its burden of establishing that applicant’s claim of injury is barred by the good faith personnel defense in Lab. Code, § 3208.3(h), and ordered that she take nothing. A petition for reconsideration followed.

The Majority’s Analysis

The Majority begins its opinion with a review of Lab. Code § 3208.3, emphasizing the applicant’s burden to establish compensability by demonstrating by a preponderance of evidence that actual events of employment were the predominant cause of the psychiatric injury. It goes on to explain that once the issue of industrial psychiatric injury has been established, the defendant can seek to have the claim barred by proving that the injury was substantially caused by a lawful, non-discriminatory good faith personnel action. When the defense is raised, defendant holds the burden of proof.

The Majority then summarizes the multi-faceted analysis that must be undertaken by the WCJ when the good faith personnel action defense is raised, and references the Appeals Board’s en banc opinion in Rolda v. Pitney Bowes, Inc. (2001) 66 Cal. Comp. Cases 241. The “Rolda” analysis requires the WCJ to first consider all the medical, documentary, and testimonial evidence received in the record of the proceedings and then determine: (1) whether the alleged psychiatric injury involves actual events of employment; (2) if so, whether such actual events were the predominant cause of the psychiatric injury by competent medical evidence; (3) if so, whether any of the actual events of employment were personnel actions that were lawful, nondiscriminatory and in good faith; and (4) if so, whether the lawful, nondiscriminatory good faith personnel actions were a substantial cause of the psychiatric injury.

Accepting Dr. Greils’ expert medical opinion that applicant sustained a compensable psychiatric injury, 75% of which is attributable to work factors in the realm of a personnel action, the Majority explains that only the third aspect of Rolda is at issue, i.e., whether any of the personnel actions of defendant were lawful, nondiscriminatory and in good faith. The Majority then discusses the meaning of good faith, as set forth in case precedent: “the personnel action must be done in a manner that is lacking outrageous conduct, is honest and with a sincere purpose, is without an intent to mislead, deceive, or defraud, and is without collusion or unlawful design” (Larch v. Contra Costa County (1998) 63 Cal. Comp. Cases 831, 837 (Appeals Board significant panel decision)); a personnel action is not in good faith if it is “froth with problems of unclarity of rules and errors of management personnel not following proper procedures.” (City of Fresno v. Workers’ Comp. Appeals Bd. (Romero) (2000) 65 Cal. Comp. Cases 1051, 1052 (writ den.)).

The assessment in Romero, supra, of what is not a good faith personnel action is the lynchpin of the Majority’s conclusion that defendant failed to carry its burden of proof on that issue. For example, the Majority observes that the duration of applicant’s request for an accommodation from the required COVID-19 vaccination would presumably be for as long as defendant mandated its employees be vaccinated against the virus, but, at any rate, defendant did not establish that it appropriately communicated its need for the period of duration to applicant.

Next, the Majority points out that applicant submitted a request to be accommodated by a remote work assignment and provided defendant with a variety of different work assignments that she could perform remotely. Even though defendant had a policy of engaging in the interactive process with employees on the feasibility of remote work assignments as a reasonable accommodation, the Majority observes that defendant did not present any evidence that it explored the possibility of remote work with applicant; rather, Mr. Gonzalez testified that remote work was a possibility, but defendant would only engage in discussions concerning the feasibility of remote work if applicant had submitted compliant documents. Additionally, the majority notes that Mr. Gonzalez did testify that some employees did receive medical accommodations but did not present any evidence as to the nature of such accommodations.

In the Majority’s view, these actions are revelatory of personnel actions “froth with problems of unclarity of rules and errors of management personnel not following proper procedures,” as discussed in Romero, supra. In finding that defendant failed to carry its burden of proof that its personnel actions vis-à-vis applicant’s request for an accommodation were not lawful, nondiscriminatory or in good faith, the Majority observes, “[t]he rules regarding the duration of the accommodation, the consideration of remote work, and evidence as to why some accommodations were granted are unclear and show that management personnel may not have followed proper procedures.” (Opinion and Order Granting Petition for Reconsideration and Decision After Reconsideration, p. 6).

The Dissent

Not surprisingly, the dissenting Commissioner (Dissent) interprets the same evidence differently and concludes that defendant did carry its burden of proof on the good faith personnel action defense, consistent with Lab. Code § 3203.8(h) and the Rolda analysis.

Beginning with Dr. Ashida’s report, the Dissent finds it conclusory and defective, and emphasizes that applicant did not cure the report’s defects even when defendant requested that she do so. Further, the Dissent notes that Dr. Ashida admitted that the COVID-19 vaccine does not share ingredients in common with the hepatis B vaccine that applicant had an adverse reaction to, and stated it was unlikely that she would have an anaphylaxis reaction to a COVID-19 vaccination. Further, Dr. Ashida reported only the possibility that applicant might have minor reactions to a COVID-19 vaccine, such as a sore arm, headache, rash, or fatigue.

Next, the Dissent reviews the testimony of Mr. Gonzalez, defendant’s disability manager, who had oversight responsibility over the COVID-19 vaccination policy. Of significance, the Dissent highlights the fact that Mr. Gonzalez advised applicant of the defects in Dr. Ashida’s report, and she failed to cure them. Next, the Dissent points out that Mr. Gonzalez’ September 27, 2021, email to applicant advised her of the deficiencies in her accommodation request documents, specifically the failure to indicate the basis for her request, the duration of her request, and the necessity that she provide a medical certification and report that defendant could open and review. Again, the Dissent emphasizes it was applicant’s lack of response to defendant’s requests that caused her accommodation request to be denied.

Additionally, the Dissent notes that Mr. Gonzalez testified that defendant did not have a policy of automatically denying medical requests for accommodations and stated that some employees did receive medical accommodations.

The Dissent then characterizes Mr. Gonzalez’ interactions with applicant over the period between August and October 2021 as demonstrating engagement in the required interactive process, which was carried out in conformity with defendant’s policies in a lawful, non-discriminatory, and good faith manner.

Finally, the Dissent affords great weight to the WCJ’s assessment that Mr. Gonzalez was an honest, truthful, straightforward, and credible witness.

What Is the Import of Cisneros?

It is important to remember that Cisneros is a panel decision, and a divided one at that. As such, it does not have precedential authority. Nonetheless, it is reflective of how panel members evaluate the good faith personnel action defense to a claim of industrial psychiatric injury. That inquiry is guided, of course, by the Rolda analysis and decisions that discuss the meaning of a “good faith personnel action.” (e.g., Larch, supra; Romero, supra) Whether personnel policies are carried out in a fair, open, and nondiscriminatory manner is a fact-specific matter. Certainly, any written procedures and policies implemented by the employer are key. Equally important is the way such policies are communicated to employees and then applied as part of a personnel action. Written documentation of such policies and procedures should be offered into evidence, and defendant should be prepared to present testimony from knowledgeable management personnel who were directly involved in the personnel action. At the end of the day, documentation of established personnel policies and procedures that are applied in an open, consistent, and uniform manner will go a long way toward enabling a defendant to carry its burden of proof.

Reminder: Board panel decisions are not binding precedent.

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