California: Nunes and the Path Forward: The Use of Vocational Evidence in Determining Permanent Disability and Apportionment

By Hon. Marguerite Sweeney, Former Commissioner, California Workers’ Compensation Appeals Board

In the recent en banc decision Nunes v. State of Calif, DMV (2023) 88 Cal. Comp. Cases 741, the Appeals Board concluded that the concept of “vocational apportionment” is not legally cognizable, while emphasizing that substantial vocational evidence can be necessary to achieve an accurate overall PD rating and an accurate PD rating after apportionment. The Board’s decision follows Labor Code Section 4663 and adheres to stare decisis.

Background.

Ms. Nunes’ overall total PD was established by substantial medical and vocational evidence. The QME apportioned some disability to non-industrial factors. The applicant’s vocational expert reviewed the medical record including work restrictions and conducted vocational testing with a transferable skills analysis. Citing Ms. Nunes’ work history, he concluded that the medical non-industrial factors had no impact on Ms. Nunes’ earning capacity, that her industrial injuries were the sole cause of her total loss of future earnings capacity, and that there was no vocational apportionment to preexisting non-industrial factors. The defendant’s vocational expert also concluded that Ms. Nunes had sustained a total loss of earning capacity, but found 10% vocational apportionment to non-industrial factors. The trial judge relied on the applicant’s vocational evidence and awarded total PD without apportionment.

On reconsideration, the primary issue was whether substantial evidence supported the WCJ’s unapportioned award. The Appeals Board explained that none of the medical or vocational reporting on apportionment constituted substantial evidence. Accordingly, the Board rescinded the Findings and Award and returned the matter to the trial level for further proceedings.

Physicians apportion causation of permanent disability.

The Board concluded that 4663 requires the reporting physician to make an apportionment determination and that the Labor Code and case law do not provide a basis for ‘vocational apportionment’.

“…The Ogilvie court did not sanction rebuttal of the statutory Schedule by a competing empirical methodology – no matter how superior the applicant and her expert claim it may be.” Nunes p.14, citing Dahl.

A Conundrum: Impairment and Disability.

Labor Code Section 4660(b)(1) directs physicians to determine the nature and extent of injuries based upon impairment, but 4663(b) directs them to determine causation of permanent disability.

While whole person impairment and permanent disability are closely related, we know they are not the same. Whole person impairment is a component of permanent disability. Sections 4660(b)(1) and 4660.1(b) require the use of the AMA Guides 5th  ed to formulate impairment ratings. The Guides defines WPI as “Percentages that estimate the impact of the impairment on the individual’s overall ability to perform activities of daily living, excluding work.”

A permanent disability is one “. . . which causes impairment of earning capacity, impairment of the normal use of a member, or a competitive handicap in the open labor market. [Citation.] Thus, permanent disability payments are intended to compensate workers for both physical loss and the loss of some or all of their future earning capacity.” (Brodie v. Workers' Comp. Appeals Bd. (2007) 40 Cal.4th 1313, 1320.)

In this sense, there is an incongruity between 4660 and 4663, where 4660(b)(1) requires physicians to assign impairment ratings but 4663 requires them to apportion ”for both physical loss and the loss of some or all of their future earning capacity.”

Doctors are medical experts, and generally agree that they are not qualified to opine on DFEC in most cases. The Guides themselves specify that vocational experts are often needed to assist the evaluating physician. [Guides, p. 14]. In Nunes the Appeals Board attempts to reconcile this paradox.

Nunes follows the statutory language that requires doctors to address impairment as to the injured body parts and to address apportionment of the causes of permanent disability.

The Board concludes that the concept of vocational apportionment is not tethered to statutory or case law, and therefore does not qualify as lawful substantial evidence to determine or rebut apportionment of permanent disability citing to Acme Steel(Borman), Lindh, Dahl, and Ogilvie. However, the Board instructs that vocational evidence is “appropriate and may be necessary” in many cases (pp 10, 14, 15 of Decision), and gives specific guidance on how vocational evidence may be used in disputes over permanent disability and apportionment.

Vocational evidence may be necessary to effectuate a correct determination of industrial permanent disability.

The California Supreme Court in LeBouef v. WCAB (1983) 34 Cal.3d 234, 48 Cal. Comp. Cases 587, held that “[a] permanent disability rating should reflect as accurately as possible an injured employee’s diminished ability to compete in the open labor market.” Consistent with LeBouef [n1] and other cases, the Board reaffirmed that substantial vocational evidence may rebut the PDRS to establish total permanent disability. The Board illustrated through multiple cases how vocational evidence has been incorporated to rebut the PDRS and/or medical apportionment.

Vocational experts provide evidence on potential future loss of earnings, amenability to rehabilitation and access to the labor market based upon their analysis that includes the injured worker’s medical work restrictions and their effects on the individual’s future earnings. As an example, vocational evidence is needed to parse out the separate and combined effects of impairment and/or work restrictions arising from different injured body parts.  Where there are multiple impairments, sometimes only one or some of the injured body parts are causing an inability to work, even though there are also impairments arising from other injured body parts.  Case law instructs that an injured worker with multiple disabilities and medical apportionment may be permanently totally disabled from only one of the injured body parts or from the combined ratings of the multiple impairments after apportionment. 

Like medical evidence, vocational evidence must be substantial.

Both medical and vocational evidence must be substantial, as defined in Escobedo. In Nunes the Appeals Board provides guidance on what constitutes substantial evidence generally, and what specifically constitutes substantial vocational evidence.

“The same considerations used to evaluate whether a medical expert’s opinion constitutes substantial evidence are equally applicable to vocational reporting. In order to constitute substantial evidence, a vocational expert’s opinion must detail the history and evidence in support of its conclusions, as well as ’how and why’ any specific condition or factor is causing permanent disability...” Nunes, p 11, emphasis included in decision.

What constitutes substantial vocational evidence.

In disputed cases where the LeBouef methodology is used, Nunes outlines a two-step process.

1. A determination of non-amenability or impaired amenability.

In this case, the QME and both VEs agreed that Ms. Nunes was not amenable to rehabilitation services and unable to work.

2. An analysis of whether there are valid sources of medical apportionment (even when IW deemed not feasible and PTD).

The reporting must:

Demonstrate that the expert has a correct understanding of the concept of legal apportionment in California workers’ compensation law;

Include a complete and accurate review of the medical evidence including apportionment;

Address all medical opinions on apportionment, and explain how and why the medical apportionment is or is not a causal factor of the total loss of future earnings and/or non-amenability to vocational rehabilitation services.

Medical apportionment must be substantial evidence. In stating that the vocational expert must evaluate all factors of apportionment “so long as they are otherwise supported by substantial medical evidence…” (p 14, emph added) the Board is emphasizing the need for valid medical apportionment, not tasking the vocational experts with deciding on its validity. That will be the judge’s job. The vocational expert should address and analyze all medical apportionment opinions including those that may not be valid.

“In sum, factors of apportionment must be carefully considered, even in cases where an injured worker is permanently and totally disabled as a result of an inability to participate in vocational retraining. Expert vocational testimony may be utilized to identify and distinguish industrial and nonindustrial vocational factors, but may not substitute impermissible ’vocational apportionment’ in place of otherwise valid medical apportionment…” p 16.

The Board suggests that vocational evidence be reviewed and considered by the evaluating physicians when addressing permanent disability and apportionment.

Evaluating doctors are tasked with determining accurate WPI ratings and with opining on the causes of permanent disability. They now need to be informed and educated in accordance with Nunes. In appropriate cases, physicians can no longer decline to provide their opinion on employability or impaired employability by deferring to vocational experts. In appropriate cases, physicians will consider vocational evidence in determining the causation of permanent disability. When doctors lack sufficient knowledge and expertise, vocational experts can provide evidence to enable the doctors to render qualified expert opinions. When a strict AMA Guides rating falls short, a proper Almarez-Guzman analysis may yield a more accurate rating.

Ultimately, it will be up to the judge to decide upon the substantiality and relative weight of the vocational and medical reports.

Nunes leaves the door open to an unapportioned PD award based solely on vocational evidence: “…Finally, we observe that an unapportioned award may be appropriate where it can be established through competent medical and/or vocational evidence that the current industrial injury is the sole causative factor for the employee’s residual permanent disability.” At p 16, Emphasis added.

Footnote:

1. In this writer’s view, application of the Nunes analysis to the Estrada case would have resulted in the same outcome, i.e., 100% PD without apportionment, because the underlying insubstantial medical apportionment and substantial vocational evidence supported that finding.

© Copyright 2023 LexisNexis. All rights reserved.