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A New Look at What Constitutes a Personnel Action
Workers’ compensation practitioners are well aware of the challenges a worker faces in bringing a successful claim of psychiatric industrial injury. Labor Code section 3208.3 imposes a high threshold with stringent requirements of predominant cause and substantiality. Subsection (h) of the statute acts as a complete bar to an employee’s claim of an industrial psychiatric injury if the employer demonstrates that the injury was substantially caused by a lawful, nondiscriminatory, good faith personnel action. Although the plain language of subsection (h) seems straightforward and unambiguous, it has been the subject of a great deal of litigation. The terms “lawful,” “nondiscriminatory,” and “good faith” are easily understood and applied, but that is less true of the term “personnel action.” It is not defined in the statute, and panel decisions have often disagreed on the types of employment events that constitute personnel actions. For example, a corporate reorganization that increased employee workloads was not a personnel action. (Kaiser Found. Hospital v. Workers’ Comp. Appeals Bd. (Berman) (2000) 65 Cal. Comp. Cases 563 (writ den.).) Nor were an employer’s actions in increasing an employee’s sales quota, reassigning the employee’s accounts to other people, and offering the employee a lower-paying job at a fixed salary. (Atlantic Mutual Insurance Companies v. Workers’ Comp. Appeals Bd. (Brodsky) (2001) 66 Cal. Comp. Cases 370 (writ den.).) But contrast Shultz v. Workers’ Comp. Appeals Bd. (1998) 63 Cal. Comp. Cases 222 (writ den.) wherein a change in company ownership that caused a change in the employment environment, frequent change of managers, change in pay structure, change in sales territory, and increased workload as a result of a reduction in sales staff were found to be personnel actions that barred the employee’s claim of psychiatric injury. No wonder practitioners are confused. Well, there is good news. Two recent panel decisions address this conundrum with a helpful distinction.
The cases are Garcia v. County of Riverside, 2019 Cal. Wrk. Comp. P.D. LEXIS 447 (Garcia) and Merritt v. CDCR—California Institute for Women, 2019 Cal. Wrk. Comp. P.D. LEXIS 420 (Merritt). Garcia challenged a Finding and Order in which the WCJ found that section 3208.3(h) barred his claim of psychiatric injury while employed as an office assistant by defendant because the injury was caused by a lawful, nondiscriminatory good faith personnel action. Garcia began working as an office assistant in 2007. In 2008, he was reassigned to switchboard duties and handled telephone calls from clients, many of whom were angry, aggressive and abusive about not receiving benefits. These duties caused Garcia to feel stress, and in 2009, he provided his supervisor with a memo that described his reaction to the switchboard duties. Garcia was then reassigned to the mail unit, where he felt comfortable and was able to perform his job duties. In 2017, Garcia’s supervisor informed the mail unit that it would be responsible for performing switchboard duties for half of each work day. Garcia felt helpless and hopeless. The reassignment of the mail unit to half-daily switchboard duties was not a demotion or retaliation. Garcia advised his supervisor of the stress he had felt years earlier when performing switchboard duties and was advised that he needed to produce a note from his physician limiting his job duties. Garcia was not immediately able to obtain a note from his physician. He became anxious and was hospitalized.
Garcia’s supervisor testified that the reassignment of the mail unit employees to half daily switchboard duties was not a disciplinary procedure, nor did it impact Garcia’s salary or title. The reassignment was initiated by defendant solely to enhance its switchboard services. If Garcia had been able to produce a note from a medical professional that restricted him from performing switchboard duties, the note would have been honored.
In a split decision, the majority reversed the WCJ and found that Garcia sustained an industrial psychiatric injury as alleged. Their decision underscores the necessity and importance of recognizing a distinction between a psychiatric injury caused by stressful working conditions and a psychiatric injury caused by a lawful, nondiscriminatory good faith personnel action directed specifically toward an individual’s employment status. That distinction is critical, the majority contends, because without it, a personnel action would potentially encompass everything in the employment environment that arises from good faith management actions. Such interpretation is simply too broad says the majority because it would preclude consideration of practically all events occurring in the workplace.
The majority’s finding echoes the sentiments expressed by the dissent in Schulz v. Workers’ Comp. Appeals Bd. (1998) 63 Cal. Comp. Cases 222 (writ den.). In that case, the dissenting commissioner also acknowledged a distinction between a claim of injury based on layoff, termination, or negative performance appraisal (i.e., a personnel action), and a claim of injury based on constant pressure applied by management. The dissenting commissioner argued that an employer’s profit-based management actions which affected all employees became part of the ordinary working conditions for those employees and, therefore, could not be construed as personnel actions.
In the second panel decision, Merritt was employed as an office technician assigned to defendant’s education department. Early in her employment, Merritt had been given keys, which enabled her to access locked portions of the employment premises as well as locked file cabinets. Over the years of her employment, Merritt had received training that enabled her to perform work in various departments. In October of 2016, Merritt was selected as a juror on a trial that was expected to last eight months. Merritt reported for jury duty Monday through Thursday and worked at her regular job on Fridays as well as on those days when the court was not in session. After serving on the jury for several months, Merritt felt a difference on those days that she worked. She felt ostracized and was given menial tasks. Merritt told her supervisor that she felt something was wrong at work and she was being treated as if she did not belong. Her supervisor told her that it was because she was on jury duty and when she returned to her regular job everything would be normal again. Shortly after Merritt completed her jury duty and returned to work, her supervisor informed her that she was being assigned to a different department as a result of a realignment. Apparently Merritt was the only office technician from her unit to be transferred. Merritt requested a transfer to a department in which she had training instead, but her request was denied. Later Merritt’s keys were taken away after she was informed that office technicians do not need keys.
Merritt’s supervisor explained that while Merritt was on jury duty, some of her job duties were assigned to other employees. The decision to transfer Merritt to another unit was to accommodate another employee who was wheel-chair bound and was working in a non-ADA compliant building. The supervisor felt Merritt was a good fit for the position and would be provided training for the position. As to the taking back of Merritt’s keys, the supervisor explained that the employer made the decision to retrieve keys from office technicians.
Merritt claimed an industrial injury to her psyche, which was disputed by defendant. Additionally, defendant claimed that any psychiatric injury was barred as a lawful, nondiscriminatory good faith personnel action. Expert medical evidence determined that stripping Merritt of her job responsibilities and tasks caused 25% of her psychiatric injury, taking away her keys caused another 10%, and transferring her to a different department was responsible for 65% of her psychiatric injury. Following a trial, the WCJ issued a decision finding that Merritt did not sustain a psychiatric injury and that her claim of psychiatric injury was barred as a good faith lawful personnel action. Merritt sought reconsideration.
Although the Merritt panel affirmed the WCJ, like the majority decision in Garcia, the panel decision stresses the importance of recognizing a distinction between a psychiatric injury caused by stressful working conditions and a psychiatric injury caused by an action specifically directed towards an individual’s employment status. It disavows the contrary view expressed by the panel in Schultz, supra, finding the Shultz notion of what constitutes a personnel action to be overly broad, and endorses an older panel decision’s idea of what constitutes a personnel action. That decision, Larch (Fleming) v. Contra Costa County (1998) 63 Cal. Comp. Cases 831 (Significant Panel Decision), also concluded that the term personnel action was not meant to include all actions or happenings in the workplace because that would be preclude practically all events occurring in the work place from consideration. Rather, it viewed a personnel action as conduct by or attributable to management and done by one with the authority to review, criticize, demote, or discipline an employee that has an effect on employment status and includes, but is not limited to transfers, layoffs, performance, evaluations, and disciplinary actions such as warnings, suspensions and terminations of employment. (Larch, supra, 63 Cal. Comp. Cases at p. 835.)
The Merritt panel applied these considerations to determine whether the employer’s actions should be characterized as personnel actions. They concluded that the decision to strip Merritt of her job duties and tasks, as well as the decision to take away her keys were not personnel actions, since neither action was directed at Merritt’s employment status. However, Merritt’s transfer to a different department was a personnel action since it directly affected her employment status. The action was lawful, non-discriminatory and was done in good faith to accommodate an employee entitled to an ADA accommodation.
The reference to Larch in both Garcia and Merritt is significant. It strongly suggests that when considering what constitutes a personnel action within the context of section 3208.3(h), appeals board panels will analyze whether the employer’s action impacted the employee’s employment standing. For example, was the employee transferred, demoted or disciplined? While neither Garcia nor Merritt specifically define personnel action, their endorsement of Larch tells us that what is critical to that determination is the extent to which the employer’s actions affect an employee’s employment status. In contrast, those management actions/events directed at all employees, such as an increase in workloads or a stressful work environment, are not personnel actions subject to the bar by section 3208.3(h).
Practitioners should check the subsequent history of any cases before citing to them.
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