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Good Faith Personnel Defense Survives “Media Scrutiny” Challenge

Happy Monday, dear readers!

We’re all familiar with the Labor Code section 3208.3(h) defense against psyche claims for psyche injuries “substantially caused by a lawful, nondiscriminatory, good faith personnel action.”  But what constitutes good faith?

In the case of Stolp v. California Dep’t of Developmental Services, applicant, a peace officer, was called with his partner to make contact with a staff member accused of “Tasing patients.”  Upon contacting the staff member, applicant confiscated a loaded handgun and a Taser gun but otherwise let the staff member go.  Patients were later found to have sustained “thermal burns” which would not have been caused by the Taser gun.

Six months later, an internal affairs investigation was launched into Mr. Stolp’s handling of the situation, and a while after that, a journalist picked up the story and publicly criticized the handling of the “Taser incident.”

The internal affairs investigation described Stolp’s actions in fairly harsh terms, and recommended a 10% pay reduction for 12 pay periods.  Applicant began seeing a psychologist, who documented experiencing symptoms as a result of the IA report.

Applicant’s psyche claim was denied citing the good faith personnel defense, but applicant countered with the claim that the IA investigation was not in good faith because it was done in response to media attention.

What is the standard for good faith, anyway?  The Court of Appeal in Northrop Grumman Corp v. WCAB, Graves (2002) 103 CA4th 1021 held that the standard is defined as “done in a manner that is lacking outrageous conduct, is honest and with a sincere purpose, is without an intent to mislead, deceive, or defraud, and is without collusion or unlawful design.”  Such was the language cited by the WCJ in finding that the internal affairs investigation was a good faith personnel action.

The WCJ further found that other employees, including supervisors and co-workers, were also subject to personnel action, which militates against a finding of discrimination.

It’s perfectly reasonable that after a harsh and damning internal affairs report, the subject of the report might develop psychiatric or other symptoms.  However, the defense is there for a reason – to allow employers to meet their various business and staffing needs without fear of an expensive workers’ compensation claim.

Of interest here is the fact that a whole lot of heads rolled for the “Taser incident,” and applicant did not receive the worst of the consequences.

But, hypothetically speaking, if the internal affairs investigation was undertaken only after being prompted by bad publicity… would that invalidate the good-faith personnel defense?  The investigation itself might start because of outside influence, but without evidence that the investigation was performed or the results obtained in such a manner as to be tainted with appeasing the public, wouldn’t the defense still hold?

In this case, the factual timeline showed that the internal affairs investigation was started six months or so after the incident, but another five months or so before the negative media attention, so the issue isn’t really present in this case.

How far do you think a defendant can stretch 3208.3(h)?

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