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California: Precursor to Nunes En Banc Similarly Rejects the Concept of Vocational Apportionment

July 24, 2023 (12 min read)

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

The workers’ compensation community has been abuzz since the Appeals Board issued its most recent en banc decision, Nunes v. State of California Dept. of Motor Vehicles (Nunes) (June 22, 2023) 88 Cal. Comp. Cases 741 [2023 Cal. Wrk. Comp. LEXIS 30]. There is no question that Nunes is especially newsworthy and deserves all the attention it has received. Its unequivocal holdings resolve issues that are key to the determination of permanent impairment to ensure that employers only compensate injured workers for that portion of their permanent disability attributable to a current industrial injury: First, Labor Code section 4663 prescribes the standards a physician is required to use to make the mandatory apportionment determination and those standards do not include the concept of “vocational apportionment.” Second, vocational evidence can be used to address issues relevant to the determination of permanent impairment. Third, while vocational evidence must address apportionment, it is impermissible to substitute the notion of “vocational impairment” in place of otherwise valid medical impairment. Nunes provides invaluable guidance in the proper application of Labor Code section 4663. Interestingly, there is another equally noteworthy panel decision and an actual precursor to Nunes that issued three-days prior to the en banc decision. That decision is Soormi v. Foster Farms, 2023 Cal. Wrk. Comp. P.D. LEXIS 170 (Appeals Board noteworthy panel decision). In an eloquently written Report and Recommendation on Petition for Reconsideration (R&R) that was fully incorporated by the panel, the WCJ rejected the concept of vocational apportionment and found the injured worker totally and permanent disabled.

The Facts

Youarash Soormi (applicant) was born in Iran and emigrated to the United States from Iran in 2008. His highest level of formal education, which he completed in Iran, was 9th grade. He does not speak English. Applicant worked as an unskilled laborer for defendant for 11 years prior to his injury. He was trained to work the machines on defendant’s production line and was successfully able to do so despite his limited education and limited understanding of English.

On August 22, 2019, applicant was directed to repair a machine on the production line. The machine was supposed to be turned off, but it was not. Applicant attempted to repair the machine, and, in the process, his right hand was crushed and burned. He sustained multiple fractures of the fingers and was later diagnosed with chronic regional pain syndrome. Prior to the injury, applicant was right-hand dominant; now applicant cannot use his right hand.

Dr. Leonard Gordon was selected as the Agreed Medical Evaluator (AME). He reported that applicant is unable to use his right hand to grip anything, has limited strength in the right hand, and is unable to make a fist. Dr. Gordon described applicant’s range of motion as markedly decreased and stated that applicant was unable to work or to use the right hand for daily activities such as holding utensils and personal care. Dr. Gordon found a 24% whole person impairment to the right hand, and issued restrictions precluding applicant from activities that require gripping, manipulating, or dexterous tasks using the right hand. Dr. Gordon attributed applicant’s work injury as the entire cause of his impairment without any factors of apportionment.

Two vocational experts evaluated applicant and offered their opinions. Enrique Vega reported on behalf of applicant. He conducted vocational testing and performed a transferable skills analysis. Mr. Vega advised that applicant scored near the lowest percentile on every test. On the hand-tool dexterity test, applicant had difficulty controlling his right hand and manipulating small nuts and bolts. He scored in the very low range of this category.

Mr. Vega further reported that prior to the industrial injury, applicant had access to a wide group of occupations in the medium, light, or sedentary exertion classifications. However, Mr. Vega reported that the transferable skills analysis did not produce any reasonable occupation options for applicant post-injury, given the pain in his right hand, his difficulty using the right hand even to perform basic activities of daily living, and his limitations with gripping, manipulation, and dexterous tasks.

Defendant’s vocational expert, Scott Simon, reported that applicant is restricted from activities involving gripping, manipulating and dexterous tasks with his right dominant hand. However, Mr. Simon found applicant amenable to vocational rehabilitation and suggested hand grinding and polishing as an occupation.

The WCJ’s Analysis

The R&R’s analysis begins with a discussion of the legal standard to be used to determine permanent total disability. With reference to the Supreme Court’s opinion in Brodie v. Workers’ Comp. Appeals Bd. (2007) 40 Cal. 4th 1313, the R&R explains that permanent disability is the irreversible residuals of an injury that causes impairment of earning capacity, impairment of the normal use of a body part/system, or a competitive handicap in the open labor market, and that permanent disability indemnity is intended to compensate an injured worker for both physical loss and the loss of some or all future earning capacity.

Next, the R&R points out that although Labor Code § 4660 makes the percentage of permanent disability for each injury covered in the Permanent Disability Rating Schedule (PDRS) presumptively correct, that presumption is rebuttable by several different methods. First, there may be an error in the calculation of a factor in the rating formula or in the application of the formula. Second, the PDRS may have omitted medical complications that aggravate the employee’s disability. Third, by showing that due to the industrial injury, the injured worker is not amenable to vocational rehabilitation and for that reason has suffered a greater loss of future earning capacity than is reflected in the PDRS. In this regard, the WCJ cites Ogilvie v. Workers’ Comp. Appeals Bd. (2011) 197 Cal. App. 4th 1262.

The R& R goes on to explain that whether an injured workers’ disability will be considered permanent and total, requires a finding that the industrial injury has caused the injured worker to suffer a complete loss of future earning capacity. Such finding can be shown by medical evidence in the form of expert (medical) opinion that the injured worker is completely precluded from work. It can also be shown by vocational evidence; that is, by demonstrating that the injured workers’ work restrictions cause the loss of ability to compete in the open labor market, resulting in a total loss of earning capacity. In this context, the R& R emphasizes that Ogilvie, supra, and Contra Costa County v. Workers’ Comp. Appeals Bd. (Dahl) (2015) 240 Cal. App. 4th 726 make clear that an injured workers’ non-amenability to vocational rehabilitation must be due to industrial factors.

The R&R offers a simple checklist of the elements essential to a finding of permanent total disability (“essential elements checklist”), as follows: “When you analyze permanent total disability, you are first looking at the industrial injury and the work preclusions assigned to applicant. You then analyze whether those were preclusions were caused by the industrial injury. You then determine whether those work preclusions prevent applicant from gainful employment on the open labor market which includes an analysis of whether applicant can be rehabilitated to a new career. Where applicant is not capable of rehabilitation and employment, and absent apportionment, applicant is permanently totally disabled.” (R&R, pp. 9-10).

In his application of the facts to steps one and two of the essential elements checklist, above, the WCJ explains that the AME assigned a 24% whole person impairment to applicant’s right (dominant) hand. In addition, he restricted applicant from activities that involve, gripping, manipulating or dexterous use of the right hand. He also observed that applicant has limited strength in his right hand and markedly decreased range of motion; is unable to make a fist with his right hand; and is unable to work or use the right hand for daily activities such as holding utensils, dressing, and self-care. Next, the AME found the entirety of applicant’s right-hand impairments to be caused by the work injury without any basis for apportionment.

The WCJ looked next to step three of the essential elements checklist to ascertain whether applicant’s work preclusions prevent him gainful employment in the open labor market. The R&R meticulously summarizes the findings of the two vocational experts, Mr. Vega and Mr. Simon. Mr. Vega administered several vocational exams and conducted a transferable skills analysis. Applicant scored near the lowest percentile on most of the tests, including a hand tool dexterity test. Given applicant’s significant limitations with the use of his right hand, Mr. Vega was unable to find any reasonable occupations.

The R&R discusses Mr. Simon’s findings and points out that Mr. Simon’s vocational testing generally agreed that applicant had minimal skills and worked as an unskilled laborer pre-injury. The R&R notes that initially, Mr. Simon concluded that applicant could not be vocationally retrained, but attributed his conclusion to applicant’s limited education and illiteracy. Later, Mr. Simon opined that applicant could be vocationally retrained, and recommended grinding and polishing work by hand, notwithstanding applicant’s restrictions from activities requiring gripping, manipulating, or dexterous tasks with the right dominant hand.

The WCJ bases his finding of permanent total disability on the vocational reporting of Mr. Vega and explains that he found Mr. Vega’s expertise to be substantial evidence because it was premised upon an adequate history of applicant’s industrially caused work restrictions, which actually preclude applicant from gainful employment. Applicant is a non-English speaking unskilled laborer with very limited formal education. Before his work injury, he had access to only about 4% of the open labor market based upon his skill level. As a result of the significant industrial injury to his right dominant hand, applicant is medically precluded from using that hand to work, which prevents applicant from working in the open labor market and from being vocationally retrained into another career.

Similarly, the R&R discusses why the WCJ found the opinions of defendant’s vocational expert to be lacking substantial evidence. Foremost, the WCJ states that Mr. Simon does not provide a significant discussion of the effects of applicant’s preclusion from using his right hand for work or daily activities. Rather than discuss the impacts of applicant’s injury on vocational retraining, Mr. Simon concludes that applicant cannot be rehabilitated because of his lack of formal education and his inability to speak English. Secondarily, the WCJ found Mr. Simon’s opinions to be contradictory, noting that at one point he finds applicant capable of rehabilitation but at another point, not to be capable. Additionally, the WCJ observes that Mr. Simon suggested an appropriate vocational goal for applicant as grinding and polishing work done by hand without any explanation or discussion of how that vocational goal might be achieved in view of the industrial restrictions to applicant’s right dominant hand.

Finally, the R&R addresses defendant’s contention that apportionment on a vocational basis is required because applicant is an unskilled, uneducated, non-English speaking worker. The WCJ soundly rejects that claim by emphasizing that the AME found applicant’s injury to be 100% industrial with industrially caused work restrictions and without any apportionment. The WCJ points out that being uneducated and unable to speak English are not disabilities. While there are situations in which a workers’ inability to speak or limited education may be due to a pre-existing disability such as hearing loss or cognitive impairment, that is not the case here. Even with limited education and the inability to speak English prior to the injury, applicant was able to be trained and work for defendant for 11 years and was able to make $559.60 per week. Today with his industrial work restrictions, applicant is unable to earn any amount per week. This decline in applicant’s earning capacity is not due to his lack of education or his inability to speak English—it is due entirely to his right-hand work injury. As to the notion of vocational rehabilitation due to the inability to speak English and lack of formal education, the R&R succinctly concludes:

“It may be true that an unskilled worker is more susceptible to sustaining permanent total disability because such a person begins the analysis with a limited labor market. However, that is not a basis to discount applicant’s level of disability. To be clear, the employer receives a discount in such cases. However, the discount is found, not in the percentage of disability, but in the rate of the permanent total disability award. Defendant will pay the permanent total disability award at a rate that is significantly lower than the state average because applicant was unskilled and paid at or around minimum wage. …Defendant hired unskilled labor and gained the benefit of paying such labor at or near minimum wage. “He who takes the benefit must bear the burden.” (Cal. Civ. Code, § 3521.)” (R&R, pp.10, 13) 

Clarification: Invaluable feedback from one of our readers has brought to the author’s attention that the conclusion in the recent article, Precursor to Nunes EnBanc Similarly Rejects the Concept of Vocational Apportionment, is confusing and could be misleading. The reader points out that the conclusion implies that apportionment is only valid where there is substantial medical evidence of the existence of a pre-existing disability that contributed to the injured worker’s current permanent disability. Of course, that conclusion is contrary to Labor Code §§ 4663 and 4664 as well as to consistent case law (e.g., Brodie v. Workers’ Comp. Appeals Bd. (2007) 40 Cal. 4th 1313, 72 Cal. Comp. Cases 565; City of Petaluma v. Workers’ Comp. Appeals Bd. (Lindh) (2018) 29 Cal. App. 5th 1175, 83 Cal. Comp. Cases 1869), which provide that an injured worker’s non-industrial pre-existing asymptomatic and non-disabling condition or disease process can be a basis for apportionment if there is substantial medical evidence that such pre-existing condition/disease was a causally contributing factor of the worker’s current permanent disability. The reader’s feedback is greatly appreciated. Hopefully the revised conclusion, below, will clarify any confusion:

What Soormi and Nunes Stand For

Simply put—Labor Code § 4663 requires the reporting physician to make an apportionment determination and includes the standards for such determination. The physician’s analysis must consider factors before and after the industrial injury, including apportionment to pathology, asymptomatic prior conditions, and retroactive prophylactic work restrictions. It does not, however, sanction the application of a different standard. The theory of “vocational rehabilitation” provided by a non-physician is not a statutorily authorized form of apportionment. Both Soormi and Nunes acknowledge that vocational evidence is relevant to the issue of permanent disability. It may be used to rebut the scheduled rating by demonstrating that the injured worker is not feasible for vocational retraining (see, Ogilvie and Dahl, supra). Similarly, it may be helpful to sort out permanent disability caused by multiple body parts/systems as well as to the evaluation of the effect of multiple disabilities across multiple body parts (Cemex, Inc. v. Workers’ Comp. Appeals Bd. (Burdine) (2013) 78 Cal. Comp. Cases 780 (writ. den.)). In Soormi, substantial medical evidence established that the entirety of the injured worker’s permanent disability was industrial without any factors of apportionment. In Nunes, however, the evidentiary record includes valid medical evidence of non-industrial apportionment. Notwithstanding those distinctions, both cases similarly reject a theory of apportionment (“vocational rehabilitation”) outside of the parameters of Labor Code § 4663 and relevant case precedent.

Publisher's Note: This article was modified on August 2, 2023.

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