California: The Good Faith Personnel Action Defense

California: The Good Faith Personnel Action Defense

Recent cases remind us that there’s a multi-level process as enunciated in Rolda [66 CCC 241] to determine whether a psychiatric claim is barred by the good faith personnel action defense under LC 3208.3(h). The defendant, using expert medical evidence, must show that a personnel action (or actions) was at least a “substantial cause” (35 to 40%) of the psychiatric injury. The defendant must further show that the personnel actions were lawful, nondiscriminatory and done in good faith. Many employers erroneously believe that anything that arises from an employment interaction and that results in an injury constitutes a personnel action.

Case #1: The WCAB affirmed the WCJ’s finding that the applicant, a bank branch manager, suffered a compensable psychiatric injury for the period 1/1/2002 through 7/8/2009, when the AME in psychiatry opined that actual events, including construction work at the bank branch, reduction of bank customers because of construction work, and applicant’s difficulty reaching productivity goals were the predominant causes of her psychiatric injury.

The WCJ found that personnel actions were not a substantial cause of applicant’s psychiatric injury. The WCJ acknowledged that applicant’s interaction with her supervisor contributed to applicant’s psychiatric problems, but the “coaching” in question did not involve discipline or the threat of discipline and thus was not a personnel action within the meaning of LC 3208.3(h). Applicant’s supervisor had testified that she had engaged in a technique she called “enhanced coaching,” by which she “appeared to mean” closer than normal supervision or monitoring, but there appeared to be no criticism involved, beyond comments as to how applicant’s work could be improved, and that this coaching did not rise to the level of “separate and distinct counseling sessions.”

The WCAB pointed out that the defendant had the burden of proof on affirmative defenses, including the “good faith personnel action” defense. In order to prevail, the defendant had to do more than merely raise the defense; the defendant was required to “present evidence which affirmatively establishes, among other things, that personnel actions were a substantial cause of applicant’s injury, and that the personnel actions were done in ‘good faith.’” Indicating that the defendant here had failed in its effort, the WCAB explained that the defendant provided little documentary evidence regarding the alleged personnel actions and that defendant did not provide sufficient evidence to establish personnel actions as a cause of applicant’s injury to her psyche. As stated by the WCAB, “[b]ased on the paucity of evidence provided to the agreed medical evaluator, we are not surprised that [the AME] could not form an opinion regarding the percentage of applicant’s injuries caused by personnel actions.”

Held: Applicant’s psychiatric injury was predominantly caused by job stress and her claim for psychiatric injury was not barred by the good faith personnel action defense in LC 3208.3(h). Blutcher v. Wells Fargo Bank, 2013 Cal. Wrk. Comp. P.D. LEXIS --.

Subsequent History: Defendant’s petition for writ of review denied by Court of Appeal on Oct. 2, 2013. A more detailed case summary of Wells Fargo v. W.C.A.B. (Blutcher) (2013) 78 Cal. Comp. Cases – (writ den.) is now posted at 2013 Cal. Wrk. Comp. LEXIS 167 (, 2013 Cal. Wrk. Comp. LEXIS 167 (Lexis Advance) for our CCC online subscribers.

Case #2: The WCAB found that personnel actions by the defendant predominantly caused applicant’s psychiatric injury. Those actions included charging applicant with customer mistreatment and writing her up for alleged mistreatment and demotion. However, defendant failed to prove that these personnel actions were carried out in a lawful, nondiscriminatory and good faith manner, when unrebutted evidence indicated that the applicant did nothing wrong and followed company policy in denying a customer’s angry demands for additional credit, and that the applicant’s supervisor, who took the customer’s side, was discriminatory because he “did not do well with women” and did not like the applicant. Held: Applicant’s claim for psychiatric injury was not barred by the good faith personnel action defense in LC 3208.3(h). Crockett v. Verizon Communication Services, 2013 Cal. Wrk. Comp. P.D. LEXIS --.

Case #3: Applicant, a special education teacher, filed claims for psychiatric injury. The WCAB found that there was no credible evidence to indicate that any personnel action such as disciplinary action or suspension was ever brought against the applicant, that medical evidence established that actual events of the applicant’s employment, including interpersonal conflicts and physical contact with the school principal, were a predominant cause of her psychiatric injury, and that credible witness testimony indicating that the applicant was harassed and that co-workers were asked to solicit negative comments about the applicant indicated that interpersonal conflicts were objectively reasonable. The WCAB further found that, although applicant’s arrest and subsequent acquittal of workers’ compensation fraud were not acts attributable to management, such events constituted actual events of employment that contributed to the applicant’s psychiatric injury. In addition, the WCAB found that even if the defendant were to show that actual events of employment causing applicant’s injury were personnel actions, the defendant did not offer any proof that they were lawful, nondiscriminatory and undertaken in good faith. Held: Applicant’s claims for psychiatric injury were not barred by the good faith personnel action defense in LC 3208.3(h). Mnyandu v. LAUSD, 2013 Cal. Wrk. Comp. P.D. LEXIS --.

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