Sasha was in a tough spot: her own personal trampoline, the workers’ compensation policy, was too small to cover her fall from employer grace – being stuck with a Serious and Willful Misconduct allegation.

Your typical California employer closes off workers’ compensation liability by opening up its checkbook – by forking over a chuck of change every year or every six months, the employers keeps on employing, and injuries get referred to the workers’ compensation insurer.  And that’s what Sasha did – her workers had no fall-related injuries, but there were still injured backs from lifting paint cans and twisted ankles from climbing ladders.

But, workers’ compensation insurance does not cover everything.  This includes discrimination and retaliation against workers for having filed a claim.  Workers’ Compensation coverage also excludes allegations of serious and willful misconduct by an employer (see Insurance Code section 11661).

Time to File and Maximum Recovery

So, let’s start with the basics on serious and willful misconduct (S&W for short).  S&W actions must be commenced within a year from the date of injury (see Labor Code section 5407) and can fetch the employee a 50% increase in the benefits paid (see Labor Code section 4553).  Mind you, dear readers, that 50% increase is on the whole package of benefits, not just the permanent disability indemnity.  (Ferguson v. WCAB (1995) “an award for increased compensation due to the serious and willful misconduct of an employer under section 4553 must be calculated … to include medical treatment payments, medical-legal fees and vocational rehabilitation costs, as well as all indemnity benefit payments.”)

That means, dear readers, if your chosen workers’ compensation insurer is known for generously handing out the benefits as your experience modification inflates, so too inflates your liability for serious and willful misconduct.  In considering an insurer, your humble blogger suggests you explore hard-nosed fighters rather than jelly-fish piñatas.

No Conduct by Fellow Employee – Must be an Employer Representative

The Misconduct has to be on the part of the employer, a managing representative, a partner, or a general superintendent – basically, someone high up with the employer’s authority to direct workers’ activities.  (Section 4553).  Excluded from this is a fellow employee.

So, in the case of Bigge Crane & Rigging Co. v. WCAB (Paul Hunt) (2010), an employee was injured when a crane operator made a mistake in disassembling a crane at a construction site, and a load fell on the employee’s foot.  In rejecting Mr. Hunt’s efforts to secure additional benefits through a S&W action, the Court of Appeal reasoned that the employee dismantling the crane was not an officer or executive or anyone else with any real authority vested in him by the employer – just another employee performing specialized work (crane dismantling) instead of unspecialized work (just lending a helping hand).

Type of Conduct

But what is S&W?  Serious and willful misconduct, is given form by the Labor Code (see Sections 4550-4558), but is defined by case-law.  As early as 1953, the Supreme Court had fleshed out the term to mean “an act deliberately done for the express purpose of injuring another, or intentionally performed either with knowledge that serious injury is a probable result” or by having total disregard that damaging consequences might occur.  (See Mercer-Fraser Company v. Industrial Accident Commission (1953)).

In Mercer-Fraser, the Supreme Court specifically held that a finding of negligence, or even gross negligence, meant that there could not be a finding of serious and willful misconduct.  So, Sasha’s best bet was to show that she had merely been negligence (or grossly negligent) in planning to prevent worker injuries after sky-scraper falls with the use of trampolines.  (Easy enough to do, no?)

To prove that the employer engaged in S&W misconduct, the employee can show (1) the employer knew that there was a dangerous practice going on; and (2) the employer knew that the practice was dangerous.  In Rogers Materials Co. v. Ind. Acc. Com. (1956), the employer had warned its employee not to clean a mixer drum from a cement mixer truck while it was moving, but he did so anyway (repeatedly), and his pant leg got caught on a moving part, resulting in him being thrown from the truck and sustaining injury to his back and leg.  The reason for cleaning a moving drum was to prevent the cement inside from drying and hardening, which would then require applicant to climb inside the drum and chip away the cement with a hammer!

In affirming the finding of Serious and Willful misconduct on the part of the employer, the Supreme Court reasoned that concern for injury or a warning against certain conduct was not enough, because the employer had “either acquiesced in the practice or impliedly consented to it.  The fact that [the employee] was not specifically ordered to wash the drum while it was rotating cannot shield the employer from liability.”

But in Sasha’s case, she had gone a step further – she had specifically trained her employees to dive for the trampolines when they fell.

I explained the law in this way to Sasha, but she did not seem concerned.  “So I’m in the clear, right?  After all, I wasn’t trying to hurt any of my workers, and I did provide them with the best trampolines available for free at garage sales that I could find.  I even trained them in the art of trampoline diving so that work would be both safe and fun!”

Well, if Sasha was here typical sweet and kind self at trial, the workers’ compensation Judge could be persuaded that she intended her workers no harm, and that she had, in fact, tried to take corrective measures against their falls.  It’s not like she was sending them up without the trampolines – she had made some effort to avoid injury to the workers.

And, to her credit, her method had worked – it was not until she started tackling San Francisco’s sky-scrapers that injuries started occurring, so perhaps she was just negligent, or grossly negligent, in her misconduct?  (It’s a hypothetical folks… work with me here!)

That’s when Sasha asked me what “Cal/OSHA” was and why they were sending her letters demanding to inspect her business…

When your humble blogger was still a humble (and starving) law student, he was told that, upon receiving a license, most attorneys involuntarily go into what is known as “F&F Law.”  This was explained as “friends and family law” as the initial slate of clients.

Your humble blogger’s actual friends and family rarely have workers’ compensation defense questions to bring to him, but his imaginary ones always do, as was the case with his cousin’s girlfriend Sasha.

Sasha had started a business in Sacramento, where she hired painters to touch up houses and buildings in all the Northern California area.  Her edge in business?  She saved money by setting up trampolines around the work crews instead of using ropes or harnesses or even rail guards.  In fact, her only safety tool was the array of trampolines around the scaffolding that went up her clients’ buildings.

I asked Sasha if she thought this was dangerous, but she seemed convinced that trampolines would be the best bet of a “safe” workplace – lots of falls but no injuries. In a best-case scenario, the worker would bounce right back to where he or she was working before, and just resume work.  “And if it isn’t,” she said, “that’s what workers’ compensation insurance is for!”

This worked out just fine at first, with the workers either staying on their feet or bouncing to safety.  In fact, the trampolines proved so effective, workers even “practiced” falls during their lunch break, because it was so much fun.  But Sasha’s success was her eventual downfall.

As word spread of her low bills and cheerful workers, her operation expanded to window-washing and wall scrubbing, until she was hired to help clean and repaint some of the best-known sky-scrapers in San Francisco.  Your humble blogger is no physics expert, but he’s pretty sure that at a certain point, the fall is too great for a trampoline to effectively stop.

When one of her workers, April (the applicant) fell from the scaffolding set up around the building, she aimed for the trampoline set up ten stories below, as per her training.  The result was a very unfortunate injury and an application for adjudication of claim.  But the fun didn’t stop there – April also filed a petition for increased benefits, alleging Sasha’s misconduct was serious and willful.

Sasha called me to ask what she should do.  It turns out that, in response to this injury, she took the precaution of double-stacking her trampolines, but that work was continuing.  After I persuaded her to cease work until she had gotten regular safety equipment, including harnesses, I thought I might prep her for what was to come as part of this serious and willful claim.

Her first disappointment was the revelation that workers’ compensation insurance does not cover liability for allegations of serious and willful misconduct (see Insurance Code section 11661).  And the news didn’t get any better from there.

What do you think, dear readers, will she bounce back from this?  Come back on Wednesday for more…

Some of my beloved readers may recall the story of a certain Stewart Espinoza, who allegedly sustained an injury while working in the kitchen of a county jail (as an inmate, mind you – the jail birds don’t enjoy visiting chefs).

Stewie claimed compensation benefits but the County Jail said he wasn’t an employee – he was forced to work as part of his incarceration.  Stewie retorted that he wasn’t forced to work at all – he would hop up and down in his cell every morning because he was so excited to go to work in the kitchen.  He WANTED to work.  Well, the Workers’ Compensation Appeals Board ended up reversing the WCJ’s finding of employment, relying on a local ordinance that specifically barred any inmates from employment, and only allowed their compulsory labor as part of the incarceration.

The Court of Appeal denied applicant’s petition for a writ of review, but the Supreme Court reversed – the COA was required to take a good look at this case.

Well, in an unpublished decision, the Court of Appeal did take a look at this one, and came down the same way – no finding of employment.

Referencing a county order prohibiting the formation of an employment relationship between the County and inmates, the Court held: “[g]iven that Order #91 precludes the establishment of an employment relationship, it is not necessary to address the question whether Espinoza volunteered to work.”

The Court went on to note that the County had a sizeable population of inmates, and it would put the County into a difficult financial situation if it were possible to form an employment relationship with any of them.

Your humble blogger agrees – it would be financial burdensome, ruinous even, if the County had to cover an endless amount of inmates and possibly provide workers’ compensation coverage for some or all of them.

Sadly, while the Los Angeles County Jail can simply “opt out” of the comp system, non-government (and non-jail) employers are not so fortunate.  Texas remains the only place where a business can “opt-out” of workers’ comp.

Perhaps Stewie will seek the Supreme Court’s renewed intervention?

California’s workers’ compensation system determines some of the benefits owed based on the average weekly wages of the employee prior to the date of injury.  This can be calculated in a variety of ways, but one method generally rejected is applying applicant’s imaginary wages to the final calculation.

In the case of Yolanda Cruz Garduno v. Tides Wharf Bodega Bay, applicant claimed that her average weekly wages were more than $100 greater than those found by the workers’ compensation Judge.  Applicant’s theory?  Worked but unpaid overtime.

Applicant claimed to have worked several hours of overtime for which she was never paid, but when pressed for proof, applicant came up empty-handed.  At first, she claimed that she had kept records of her hours, but that she had lost the papers which would have proved her case.  She also claimed to have complained to her supervisor, but this testimony was inconsistent with other testimony claiming she had never complained.

The workers’ compensation Judge reviewed the payment records, and averaged the weeks during which applicant worked at least 30 hours per week, finding an AWW of $308.43 (actual AWW was $297.50).  Although defendant did not seek reconsideration for this difference of $10.93 per week, applicant did.

The Workers’ Compensation Appeals Board relied on the WCJ’s ability to weigh credibility and the WCJ’s reasoning, denying applicant’s petition for reconsideration, and noting that “applicant’s claim of overtime income was supported only by inconsistent testimony and lacked other corroborating evidence.”

Now, bear in mind, Labor Code section 4453 lays out the various methods of calculating average weekly wages, and overtime pay can factor into the AWW.  However, though your humble blogger may appear cold-hearted and sinister, but reality is reality: it’s possible applicant worked overtime; it’s possible she wasn’t properly paid; it’s possible that workers’ compensation in California is a flawless system which doesn’t waste money, turn productive workers into permanently useless ones, and isn’t just a social experiment in insanity.  Like I said… it’s possible.

But, just as one would be ill-advised to bring a knife to a gun fight, bringing inconsistent testimony without so much as a literal scrap of paper evidence to support it is not going to drastically increase your chances of winning the blue-collar lotto.

As your humble blogger prepares this blog post, half of his attention is directed at the somewhat corpulent gentleman painting the ceiling of his Uncle Ivan’s home.  Uncle Ivan asked your humble blogger to keep an eye on the work as the excellent workers’ compensation skills somehow equip me to supervise actually useful labor.

This was no ordinary sight, mind you, as Uncle Ivan had gotten rid of the second and third-floor ceiling/floors to create a giant vaulted ceiling.  His hapless employee, desperate for payment, took the job without the proper equipment.  I watched as one watches a train-wreck: a pyramid of ladders, the top one resting on two below, that in turn rested on three others, and so on and so forth, had been assembled to allow this brave and self-less painter to reach the ceiling.

Now, mind you, my Uncle Ivan had not purchased workers’ compensation insurance for this gentleman, because he was not an employee… but should he fall from the ladder, he would likely claim that he was.

Fortunately, a recent panel decision was denied the Court of Appeal’s writ of review, providing hope to residents who hire labor for small jobs.

In the case of Lester Guerrero v. Duane White, a certain Mr. White hired Mr. Guerrero and his friend to patch up the roof in a room of his house.  During the work, Mr. Guerrero fell from a ladder, sustaining injury.  Fortunately for Mr. White, his homeowner’s insurance rushed to his defense, and sought to knock out the workers’ compensation claim on the grounds that Mr. Guerrero was not an employee.

Mr. Guerrero hung his proverbial hat on Labor Code section 3357, which holds person A, rendering service to person B, is presumed to be person B’s employee.  Mr. White’s insurer, however, shot back with Labor Code section 3351(d), which specifically excludes from the definition of employment those retained by an owner or occupant of a residential dwelling whose duties are incidental to ownership, maintenance, or use of the dwelling.  (Note, however, that this only goes so far… Labor Code section 3352(h) specifically limits this to those employed for less than 52 hours or paid less than $100 for the 90 days prior to the date of injury.)

Mr. Guerrero and his friend worked for less than 52 hours, so what’s the problem?

Well, the workers’ compensation Judge found that the work was not a mere handy-man’s task.  In the WCJ’s opinion, the inquiry was a factual one and the circumstances in this case leaned towards a licensed contractor job rather than a handy-man task, because the job “included redoing the ceiling… installing casing and molding, painting, and removing wood from the outside of the house … [s]uch tasks require knowledge and skill in some areas of construction work, and likely require a contractor’s license.”

The defendant petitioned the Workers’’ Compensation Appeals Board for reconsideration, arguing that the WCJ erred in finding an employment relationship.  In granting the petition, the WCAB held that the test was to determine whether the activities engaged in by the (alleged) employee “would be insignificant, as opposed to a substantial project or task.”   Because applicant was hired to do some “moderate cosmetic work,” the exception applies and the defendant is off the hook.

With my Uncle Ivan relatively safe from harm, I shifted my focus to the poor painter, and decided that holding his ladder pyramid steady was a better use of my time than planning my dear Uncle’s legal defense.

Your humble blogger once offered his condolences to his beloved readers representing and adjusting claims made against cities and counties and even the State by peace officers entitled to wage continuation.  As you may recall, in the matter of City of San Rafael v. Workers’ Compensation Appeals Board (Monte Payne), the Court of Appeal denied the City’s petition for a writ of review, allowing the workers’ compensation Judge’s and the WCAB’s findings that wage continuation under Labor Code section 4850 did not start the clock on 104 weeks of temporary disability payments (see LC section 4656.)

So… about that.

On Wednesday, the Court of Appeal issued an opinion in the case of County of Alameda v. Workers’ Compensation Appeals Board (Bryan Knittel), holding that the 104 week limitation on temporary disability payments found in section 4656 includes wage continuation paid to a Sheriff’s deputy.

Deputy Knittel sustained an industrial injury to the knee and went to temporary disability, receiving his full wages for one year after the injury.  After the wage continuation payments expired, the County started paying temporary disability, but only for one year.  At that point the well ran dry and Deputy Knittel called the cops his attorneys.

Under Payne, a police officer would be entitled to three years of payments – one at full pay, and two more at the regular temporary total disability rate.  But, the Court in Knittel held that the term “aggregate disability payments” as used in section 4656 includes wage continuation benefits as well as temporary total disability payments.

Score another victory for the defense!

In the meantime, your humble blogger will try to avoid getting pulled over by some unhappy peace officers…

Today’s post is another case of quis custodiet ipsos custodes, dear readers.

The good people of Fresno County find themselves twice cheated by a former investigator who was ordered to pay almost $24,000 in restitution for wrongfully receiving workers’ compensation benefits from the county.

John Harding Swenning apparently exaggerated his symptoms so that he could receive surgery and return to work, or so his attorney told the Fresno Bee.

As my dear readers are well aware, your humble blogger does not like to name names, but fraudsters are an exception and public shaming is as appropriate as possible.  Hopefully, a Google search of fraudsters named on this blog will help future employers become aware of some of the “experience” their job applicants might have that has been left off the resume and application.

Not only did Swenning cheat Fresno County tax-payers by securing money to which he was not entitled, he also proved incompetent as a fraud by getting caught.  Did the Fresno County District Attorney’s Office have criminals slip through its fingers because they proved better at concealing their fraud than Mr. Swenning?

Congratulations are owed to the Fresno County DA – one cannot ferret out the frauds in the county until one has done so with the frauds in one’s house.

So, dear readers, your humble blogger has a question for you – when an applicant undergoes a medical procedure meant to cure or relieve him (or her) of the effects of his admitted industrial injury, but fails to go through the treatment authorization procedures laid out in the Labor Code and Code of Regulations, is the employer/insurer liable for the temporary disability period resulting from said procedure?

That was the issue in the somewhat recent (there are but so many days in a week, after all, dear readers – one cannot get to all the cases and stories of note!) case of Michael Moser  v. Valli Construction.  Applicant underwent spinal surgery, and his treating physicians anticipated a permanent and stationary date one year after the surgery.  However, applicant became convinced that the metal implant was causing an allergic reaction (as had been the case with two unrelated metal implants in his foot and leg as part of treatment for past injuries).

He complained of constant and extreme pain, and insisted on its removal.

Without seeking authorization from defendant for the removal surgery, applicant underwent the procedure less than a year from his original operation, and had the metal removed.  He then claimed temporary disability benefits while he was recovering from the second surgery.

Naturally, defendant had a problem with this.

Denying liability for temporary disability after the second surgery, defendant rolled up its proverbial sleeves and took it to the street… before taking it to the WCAB, and, upon finding a workers’ compensation Judge less than persuaded by defendant’s position, to the commissioners on reconsideration.

Unfortunately, the WCAB ruled that temporary disability was due at least until the anticipated date of permanent and stationary status as per the initial surgery.  But as for the rest, the defendant was still on the hook.  Why?

Well, defendant correctly pointed out that Labor Code section 4062(b) specifically shields defendants from liability for TTD resulting from a procedure performed prior to the completion of the second opinion process.  But applicant’s argument pointed instead to California Code of Regulations section 9788.01(L)(4), which specifically excluded from the definition of “spinal surgery” any procedure which is required because of bona fide emergency.

The WCAB held that, because the medical evidence supported applicant’s position that he was, in fact, facing a bona fide emergency situation (as defined by Labor Code section 4610(g)(2); “the employee’s condition is such that the employee faces an imminent and serious threat to his or her health…”) the shield of section 4062(b) does not apply.

So, the employer was on the hook for the temporary disability payments until applicant recovered from his unauthorized surgery.

Your humble blogger understands that emergency situations arise and the legendary swiftness of workers’ compensation procedures is not conductive to truly necessary treatment which may be required from time to time.  But… here’s what your humble blogger doesn’t understand about this case:

• the applicant was aware of the metal implants he was receiving in his spine prior to the first surgery, and was aware that he had reacted in exactly the same way to two prior metal implants, and that his symptoms resolved after those two prior metal implants had been removed;
• He first began complaining of this allergic reaction almost two months after his surgery;
• He was evaluated for the second surgery almost ten months after his first surgery, and underwent the surgery more than a week later.

Why was defendant kept in the dark about this?  Applicant finally underwent the second procedure ten months after the first – ample time for the spinal surgery utilization review and second opinion process to be undertaken if not completed.  What’s more, applicant was well aware of how he reacted to metal implants, but had not informed his treating physician of the fact.

Your humble blogger submits to you, dear readers, that applicant himself created the “emergency,” and that if he would have (1) told his treating physicians of his metal allergy; or (2) immediately began the removal surgery approval process upon feeling the same symptoms he had felt after his previous two metal implants, defendant would have rightfully avoided additional liability for temporary disability.

In all likelihood, there would have been a swift removal procedure and applicant would have become permanent and stationary on or before the date previously predicted as one year from his initial spine surgery.

Although the WCAB reached the correct conclusion in terms of legal liability, there should be some correction for self-created emergencies.

Wouldn’t an employer who knowingly and intentionally exposed a worker to a substance which the employer knows will cause a severe allergy be liable for Serious and Willful misconduct penalties?  Should an employee face a reduction in benefits for the same?

When a worker claims to be injured and unable to work, what can we expect about his capabilities?  In theory, at least, when a worker is able to return to his usual and customary duties, he should not be entitled to temporary disability benefits.  What’s more, his permanent disability should be relatively low, and my beloved readers have even seen Almaraz-Guzman applied to lower the permanent disability indemnity in cases where an applicant could fulfill all her job duties.

And then there’s the following story.  Jose Cortez of San Bernardino County sustained an injury while working as a gardener after a branch fell and landed on him.

While Mr. Cortez was collecting disability payments, private insurance investigators observed him on six occasions performing his usually gardening duties, and referred the case to the District Attorney’s office, who then took the case the rest of the way and filed criminal charges.  (Although the D.A.’s office deserves credit for its investigation and impending prosecution in this case, the insurer’s investigators are to be commended for providing the Department of Insurance with a packaged case ready for the slam-dunking.)

Your humble blogger has been known to rant and rave about what such fraud does to California, which can be boiled down to criminal waste – someone is getting free money without providing society with any sort of labor or product in return.  Law enforcement dollars are wasted on investigation and prosecution, and private companies waste dollars on investigators while their policy holders must chip in extra to root such frauds out.

My dear readers may recall a three-part post on the presumptions afforded firefighters and police officers in questions of medical causation.  Specifically, Labor Code section 3212 calls for heart trouble which manifests during employment to be presumed compensable.  Similarly, Labor Code section 3212.1 applies to cancer.  Sit back, dear readers, and hear the tale of how this presumption was defeated in a recent writ denied case (for the more curious readers, the panel case is that of David Pesko v. City of Westminster; please e-mail your humble blogger if you would care for a copy of the panel opinion.)

Officer Pesko of the Westminster Police Department filed an application claiming injury in the form of throat cancer.  The diagnosis was made by applicant’s treating physician, and he eventually underwent surgery and returned to light duty.  (Sources have reported that in response to this claim, Westminster has equipped all patrol cars with sirens and speakers, abandoning the prior procedure of having officers yell at the driver to pull over.)

The parties agreed to go to an AME to resolve all disputes, who found that the throat cancer “developed strictly as a consequence of non-work related HPV infection” which occurred prior to his employment with Westminster PD.

The injury was denied and the matter proceeded to trial, where the workers’ compensation Judge found that the AME’s opinions were substantial evidence, even though the Primary Treating Physician disagreed (sometimes, the AME’s opinions are controlling, even in the face of a PTP’s disagreement).

In denying applicant’s petition for reconsideration, the WCAB recognized that “[p]ursuant to Labor Code section 3212.1, a peace officer who is exposed to a known carcinogen and develops or manifests cancer while employed is entitled to the presumption that the cancer is industrially caused.”

However, citing City of Long Beach v. Workers’ Compensation Appeals Board (Garcia), the panel reasoned that the AME showed that “the odds that applicant’s cancer is industrial ‘are vanishingly small’,” which satisfied the Garcia standard that “an employer demonstrates the absence of a reasonable link if it shows no connection exists between the carcinogenic exposure, or that any such possible connection is so unlikely as to be absurd or illogical.”

However, one of the commissioners dissented, and would have granted reconsideration.  The dissenting opinion stated that the only way to overcome the presumption found in Labor Code section 3212.1 was to show that there was no link between the applicant’s exposure to carcinogens and his cancer – it doesn’t matter which is the more likely cause of the cancer, the non-industrial exposure prior to employment or the industrial exposure during employment; all that matters is the fact that there was an exposure, and the presumption of 3212.1 should kick in.

This blog has witnesses the cookie crumble both ways – a deputy sheriff’s congenital heart disease has been found industrial, while a corrections officer’s heart disease was found to have manifested prior to his employment.

The problem with expanding the application of the “presumption” is that you have cases such as these: a 99% certainty that the injury is caused by non-industrial infection, found by an Agreed Medical Evaluator, and one out of three commissioners would find the defendant-employer liable.

Several cities have had to cut their law enforcement and fire department budgets to accommodate potential liability, as can be seen in this latest police-chase footage from the frozen North of Eureka: