Sub Rosa vs Deep-Fakes?

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Happy Friday, dear readers!

When your humble blogger was knee-high to a grass-hopper, all the “cool” kids played this game called Mortal Kombat.  It was a fighting game akin to Street Fighter and the such.  My favorite character on there was, of course, Sub-Zero, who could freeze his enemies and was, by definition, very cool (see what I did there?)  It makes perfect sense, of course, as now my favorite part of workers’ compensation is called Sub Rosa.

So, for those of you still reading and not busy unsubscribing because of that long set-up that went nowhere, I have a question for you: have you ever seen a sub rosa video used in a workers’ compensation case?  Typically, sub rosa is good for one of two things, if not both: to show unreported income, triggering fraud proceedings, restitution, and the razing of applicant’s credibility; and/or to show applicant engaged in activities exceeding reported limitations.  So you might have an applicant claiming to be limited to 10 pounds of lifting, then seen at Costco loading and unloading large boxes of water bottles.

If done right, and a foundation properly laid, sub rosa video can have devastating effect on the applicant’s credibility.  It can give rise to significant remedies and sometimes even carry serious punishment for the fraudster. 

What are we going to do when applicant swears, adamantly, that the video presented to the QME and the Judge is not that of the applicant, but a deepfake?   The Register is reporting that Tencent Cloud will offer deepfake videos for as low as $145 to generate a high-definition image and video of a person, so long as the client provides 3 minutes of live action and 100 spoken sentences of the real subject.

For example, for the younger readers, Arnold Schwarzenegger was in many fine films, but Ferris Bueller’s Day Off was not one of them:

How is the defense going to respond to the claims made by applicant that the person captured in the video footage is not him or her?

Well, initially we need to remind our investigators that in the world of AI, ChatGPT, Deep Fakes, etc., it is more important than ever to thoroughly document the sub rosa file as to time, date, location, etc. and have a life person who is available to testify that (1) the applicant was the one depicted in the film and; (2) the film has not been altered in any way.

We can also expect applicant attorneys to retain experts to testify that the video must be a deepfake, and cite flaws with the video footage to support this opinion.  Of course, the applicant bar will demand the expert’s fees as a cost.  We will have to be ready to respond to these claims as well once they are made; hopefully the life testimony of the investigator who personally took the footage will suffice to rebut any ridiculous claims of deepfake technology fabricating evidence of applicant fraud.

You might think that this is all from some paranoid mind of your humble blogger’s, who resents the fact that there is no audio-book version of Beyond the Aquila Rift, but let me assure you, these issues absolutely are coming, and we in the defense community would be well served to prepare for them rather than being blindsided when they finally arise. 

Have a great weekend, dear readers!

Is Section 10133.31 Invalid?

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And it’s Wednesday again, dear readers!  What better way to celebrate the mid-point of the week than a WCAB panel decision on vouchers?

The panel decision is that of Gibson v. Apex Envirotech in which the WCAB denied reconsideration of a WCJ’s award of a SJDB voucher.

Applicant had two claims and sought workers’ compensation benefits. However, according to the WCJ’s Report and Recommendation on Petition for Reconsideration, applicant had been laid off during the pendency of his claim because he had been laid off several years prior to filing his claim.  The DOIs in these cases were from 2016 and the applications were not filed until late 2020 (roughly 4 to 4.5 years post DOI).  Per the WCJ, he had retired.

Apparently, defendant did not make an offer of regular, modified, or alternative work.  The WCJ cited the en banc decision in Dennis v. State of California for the proposition that facts such as retirement are irrelevant to the duty imposed by Labor Code section 4658.7 to provide a voucher or make an offer of regular, modified, or alternative work.

What about Regulation 10133.31?  This provides various exceptions to the duty to provide an offer or a voucher, such as when an employee lost no time from work or returned to the same job for the same employer.

The WCJ in this case opined that it may very well exceed Labor Code section 4658.7 and thus be invalid.  This issue was deferred to the WCAB but was not addressed, as the WCAB only adopted and incorporated the WCJ’s report.  The WCJ opined that “[i]t may be that where applicant sustains no lost time from work, a job offer must still be provided or else a voucher is due.”  But the language in 10133.31(c) appears to address this concern: “[a]n employee who has lost no time from work or has returned to the same job for the same employer, is deemed to have been offered and accepted regular work in accordance with the criteria set forth in Labor Code section 4658.7(b)” (emphasis added).

Is the regulation exceeding the labor code by defining terms such as “offer” or “acceptance?”  Section 4658.7(h) expressly authorizing the administrative director to “adopt regulations for the administration of this section.”  This should, at least, authorize the AD to define the “offer” and “acceptance” procedures, including defining a return to work or no lost time from work as an offer being made and having been accepted.

In any case, as we learned from the Dennis decision, when in doubt, make an offer of regular, modified, or alternative work!

That’s your humble blogger’s take on it, anyways.  What do you think dear readers?

Big Announcement from the Humble Blogger!

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Welcome to May, dear readers, and your humble blogger has some news for you.  It’s not crazy news like “Supreme Court Rules All Apportionment Unconstitutional” and it’s not particularly useful news like “did you know about this regulation that allows you to pay temporary disability benefits in Doll Hairs instead of Dollars?”  But it’s news none the less!

After three years with the firm of Gale Sutow and Associates, your humble blogger is moving on to become the managing partner of Tobin Lucks LLP – Northern California!  Tobin Lucks has spent the last 40 years defending employers and insurers in California and your humble blogger hopes to add his energy to those efforts!

I would like to take this time to thank all the fine people of Gale Sutow and Associates for a wonderful experience to practice law and learn and grow. 

I am also very excited to contribute to the excellent service and zealous advocacy Tobin Lucks offers our clients. 

Your humble blogger’s new contact information is ggrinberg [at] tobinlucks.com and 818-226-3400.

SB723 – Is it Time to Revise Those Resignation Letters?

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Happy Wednesday dear readers!

What’s the most typical response to any C&R offer made throughout California’s workers’ comp system?  You might think it’s “more money please” but you’d be wrong.  Back when we still appeared in person at the Board, you would hear the rich, ceremonial exchange much like you would expect to hear “thunder” and “flash” in WWII – the answer being, of course, “will your client require a resignation?”

Well, as we know Labor Code section 2810.8 now requires employers to prioritize rehiring employees laid off due to COVID19 for covered industries, and, in 2019, Governor Newsom signed into law AB749 which rendered unenforceable  any agreement not to seek rehire with an employer as part of any C&R.

Sacramento is not done – eager to continue restricting an employer’s ability to choose who it does, or does not, do business with, earlier this year Senator Durazo introduced SB723 which would expand the scope of Labor Code 2810.8 from COVID19 layoffs to any employee with more than 6 months on the job who was let go as a result of “a public health directive, government shutdown order, lack of business, reduction in force or other economic nondisciplinary reason.”

SB723 also removes the sunset provision placed on section 2810.8, which was set to be rescinded at the end of 2024.

Of course, the employer will still be required to notify any “laid off” employee of an open position and faces penalties for failing to prioritize previously laid-off employees. 

Again, Sacramento is intent on making regulatory compliance impossible for functioning businesses in California.  Hopefully, SB723 will be dismissed from the legislature for the job-killing bill that it is.

In the meantime, perhaps defendants must be more careful about resignation language when resolving claims?  If SB 723 does become law, should resignation letters reflect that this is a voluntary resignation and not a “layoff” as contemplated by Labor Code section 2810.8?

Well, picture this – applicant goes off work on TTD for an accepted injury.  In the meantime, the employer has to institute layoffs for one of the reasons enumerated in SB 723.  Applicant enters into a C&R with the employer and, because he is already laid off, no resignation is requested as part of the C&R.  Three months after the C&R check clears, business picks up and the employer need to hire more employees.  Does applicant now have priority for that same job?  It sounds like, under SB 723, applicant does, and the employer is stuck paying for the same injury a second time. 

The level of compliance necessary to avoid being sanctioned by California rises and rises.  Sadly, Sacramento does not appear to concern itself with helping the employers that barely made it through 3 years of lockdowns due to COVID19. 

What do you think, dear readers?  More paranoia from your humble blogger?

About those 5710 fees…

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Happy Monday dear readers!

Your humble blogger is still around – never fear!

Now, please allow me to ask you a question: what issue in California’s workers’ compensation system keeps adjusters, attorneys, and risk managers up at night?  What is the number one biggest concern shared by the defense community?

Well, if you guessed 5710 fees, I would be really surprised.  They don’t even rank in the top 10 probably.  But, since the humble blogger is nothing if not a merchant of disappointment, let’s do a blog post on 5710 fees anyway!

For those unfamiliar with Labor Code section 5710 governs depositions in the workers’ compensation system (with due deference to the Code of Civil Procedure).  But, if you wake up any applicant attorney in the middle of the night with a violent shake his or her first response will be “protect 5710(b)!”  Why? Because Labor Code section 5710(b)(4) provides for a “reasonable” allowance for attorney fees for representing the deponent in a deposition.

Just as a fun aside, this section, last amended in 2016, reflects “[t]he administrative director shall, on or before July 1, 2018, determine the range of reasonable fees to be paid.”  There does not appear to be a fee schedule set by the administrative director as yet.  Instead, common practice is for the Judges in each WCAB venue to adopt practices of reasonable fees.

Mind you, dear readers, the typical rates for defense attorneys ranges from $170 to $210 per hour, depending on the terms and circumstances.  However, the range for 5710 fees for applicant attorneys as set by the various WCAB venues typically range from $250 to $450 per hour depending on experience of the applicant attorney.

It’s odd really – you could have a defense attorney billing at $195 per hour with 20 years of experience, but if that attorney represents a family member as an applicant attorney, he would be awarded $450 per hour.  The market and the WCAB are clearly not in sync.

Anywho, I want to bring to your attention an interesting case your humble blogger recently had occasion to review – Cowens v. ABC Unified School District, a 2022 panel decision.  Therein, Applicant was deposed by defense counsel, and at that deposition was represented by an applicant attorney with 14 years of experience and who was not a certified specialist.  The firm submitted a bill for $450 per hour, plus $50 for a half hour of “staff time.” 

Defendant objected to the rate for the attorney, agreeing to pay $400 per hour, and objected to the “staff time” out of hand.

There are some other issues in the panel decision as well, but the key one your humble blogger would like to address is that the WCJ found a reasonable rate for the applicant attorney involved was $400 per hour.  If the attorney involved had 14 years of experience at the time of the deposition, and the WCJ awarded $400 per hour… doesn’t this panel decision set at least some authority for a ceiling of $400 per hour for 5710 fees?

We see this dispute come up often and we have the glaring difference between what the “free market” pays to defense attorneys and the WCAB awards to applicant attorneys.  The difference does not turn on years of experience or certified specialist status.  But, without formal guidance from the administrative director as contemplated by Labor Code section 5710, does this panel opinion signal that the WCAB finds up to $400 per hour reasonable?

If so, shouldn’t the Cowens panel decision, which affirmed the WCJ’s opinion and rate, be used as the basis for an objection to any 5710 fee demand in excess of $400 per hour?

What are your experiences, dear readers?  Let your humble blogger know!

WCAB Reject’s AME’s Apportionment Analysis

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Happy Wednesday dear readers!

Well, perhaps not so happy… nothing ruins your humble blogger’s day than reading about yet another apportionment finding by a QME being rejected by the WCAB. 

The case is that of Monter v. Randstad North America, Inc., a WCAB panel decision.  The parties proceeded to trial based on the opinion of an AME, who found 50% apportionment to non-industrial factors.  The AME opined that “50% of the impairment/disability is due to factors before the industrial injury such as lumbarization of the first sacral segment.”  On appeal, applicant argued that the opinions on apportionment was not substantial medical evidence, and sought a finding of 14% PD instead.

The WCAB granted reconsideration and substituted a finding of 14% as sought by applicant.  The reasoning given was that the AME did not “explain the nature of those factors” and “did not explain how and why those factors were causing permanent disability at the time of the evaluation” nor “how and why those factors are responsible for 50% of applicant’s disability.” 

There is nothing new or groundbreaking in the notion that proving apportionment, especially under Labor Code section 4663 is defendant’s burden.  However, the AME did point out the cause of the permanent disability and, more importantly, this is an AME!  An AME’s opinions are typical given significant weight, but not in this case.

Let us be reminded then, as the Monter panel points out, what we need to elicit to support an opinion on apportionment:

  1. Specifically discuss the factors causing permanent disability, particularly those besides the current industrial injury;
  2. Explain how and why those factors caused permanent disability; and
  3. Explain why those factors are responsible for the percentage assigned by the medical-legal evaluator.

A helpful reminder for all of us, no doubt!

WCAB: May I Have Your Autograph?

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Happy Monday dear readers!

Did we all survive the storm ok?  Everywhere your humble blogger looks, there are trees knocked over, so hopefully everyone is safe!

Well, aside from the other storm getting ready to pound the Bay Area, there’s a smaller storm a brewin’ in our beloved swamp of Workers’ Compensation.  The WCAB has issued an En Banc opinion rescinding several emergency procedures put in place in light of the COVID19 state of emergency in California.

The opinion issued March 22, 2023, so presumably it is effective as of that date, and all C&R’s executed previously are still safe.  But, going forward, any C&Rs to be submitted to the WCAB and executed on or after March 22, 2023, will have to have witness signatures.

Specifically, the WCAB rescinded emergency Orders Misc No. 260, 261, and 266.  What are they?

Misc. No. 260 suspended Rule 10500(b)(6) requiring witness signatures on compromise and release documents.

Misc. No. 261 suspended Rule 10940(b) requiring e-filing (rather than e-mailing certain documents directly to the Workers’ Compensation Judge.

Misc. No. 266 suspended Rule 10789(c) which established walkthrough hours (8:00 a.m. to 11:00 a.m. and 1:00 p.m. to 4:00 p.m.)

In light of this new En Banc Order, when preparing a C&R, we now need to ensure we secure witness signatures; documents must again be properly e-filed; and walkthroughs, which are already in person, may be conducted during the previously established hours. 

Your humble blogger sincerely hopes this is not a sign that Mandatory Settlement Conference and Status Conferences will return to in-person, as the current system of remote hearings appears to be very effective, conserving resources for the parties and expediting resolution of disputes.

For the past three years, there have been many calls urging us to return to “normal.”  However, in  your humble blogger’s even humbler opinion, through the measures necessitated by COVID19, we have discovered some procedures that are better than what used to be “normal.”  Let our urge to escape the horrific effects of the COVID19 epidemic not cause us to dismiss the lemonade we have produced from the lemons we’ve been given.

Onward and upward, dear readers!

COA Upholds Prop 22; Should Other Industries Follow?

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Happy Monday, dear readers!

Your humble blogger homes you are staying dry and not being blown away by the crazy winds.  It can be dangerous driving in these stormy conditions, especially when you are busy reading these blog posts or thinking of new ways to deny benefits.  Accordingly, you might consider taking an Uber or Lyft to get from point “A” to point “your claim is denied.”

Speaking of… have you heard the good news out of the California Court of Appeal?  In a published decision in the case of Castellanosi v. State of California, the majority panel declined to strike down Proposition 22 as unconstitutional.  Remember Proposition 22?  It was the ballot initiative that effectively excluded various gig economy entities from the ravages of AB-5.  In short, it allowed for the preservation of the “independent contractor” relationship rather than the effective presumption of employment brought about by AB-5. 

With Prop 22 in effect, individuals who choose to use software provided by such companies to engage in gig work would not be entitled to status as “employees” and remain independent contractors. 

Well, several of these individuals unhappy with the option of simply not engaging in an agreement to such terms decided to sue, and a Superior Court ruled that Proposition 22 was unconstitutional.  That ruling was met with an appeal and now we see Prop 22 survives to fight another day.

Likely this will go to the California Supreme Court, but let’s toy with the idea for a second that the Supreme Court affirms and, by initiative, California’s can carve out exemptions to the heavy presumption of employment vs. independent contractor status.  Can the results be replicated in other areas of California’s industry?

For example, could a coalition form of various somewhat related industries to exempt their respective employees in the same way?  What if enough restaurant groups cobbled together a bill allowing workers to “opt out” of employment for some higher salary?  If a waiter if offered minimum wage plus tips as an employee or $5 per hour above minimum wage to “opt out” and buy his or her own insurance for health and disability, would any waiters take the deal?

Depending on the ultimate fate of Prop 22, perhaps this is a model for California’s long besieged employers to escape the invariably expensive and borderline punitive workers’ compensation system.

Now, you might be thinking “humble blogger, you handsome devil, are you talking yourself out of a job?”  Well, not necessarily.  Work will continue to get done.  Injuries will continue to happen.  Fraud will continue to abound.  If more industries took the Proposition 22 route, coverage for these injuries will continue, but the policy holders could very well become the independent contractors rather than the employers.  It’s a crazy new world your humble blogger is imagining, but not one entirely different than the one we know now.

What do you think, dear readers?  Will more industries push through initiatives to carve out an escape from workers’ comp?  Or is this Prop 22 to be a stand-alone-Stan for the gig economy?

WCAB: Develop the Record on Covid19 Claim

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Happy Wednesday, dear readers!

We are powering through March and, if you’re like me, you’re still reeling from daylight saving time shift that occurred earlier this week. 

You know what’s special about March?  It’s been roughly three years since the lockdowns began.  So what better way to commemorate three years since the world turned upside down than with a COVID workers’ compensation case?

That case is the panel decision of Dawson v. Patton State Hospital.  Therein, following a trial, the WCJ concluded that applicant failed to carry her burden of proof of establishing industrial causation on COVID19 infection.  After returning from a non-work trip in March of 2020, applicant engaged in union activities and reported for work on March 17, 2020 with symptoms of a sore throat.  On March 28, 2020 she tested positive for COVID 19 based on a sample taken the prior day.

In reviewing the WCJ’s decision, the WCAB noted that the presumptions of industrial causation found in Executive Order N-62-20, later to be codified as SB1159, did not apply as applicant last worked on March 17, 2020, and the executive order applied for employees who worked on or after March 19, 2020.

What a difference a day makes, 24 little hours… (sing that one twice!)

Spoiler alert… the WCAB reversed the finding of no industrial causation.  But how? 

The WCAB noted that there was a dispute as to when the infection occurred as between the QME and the PTP.  The QME opined that the exposure likely happened during the non-work trip, while the PTP opined that the symptoms appear 2-14 days after the infection, which would rule out her trip as the exposure point.  Is the development of more severe symptoms the trigger for infection, or the milder symptoms applicant had after returning from her trip?

The WCAB ordered the parties to return to the trial level to further develop the record on whether the initial symptoms (sore throat) were the sign of COVID infection or the more severe symptoms to establish the date of infection.  The WCAB also provided guidance that applicant need not prove the exact time she became infected, but only if her work activities caused her to have higher risk than the general public of contracting the disease.

Your humble blogger, however, would submit that there is another point which the WCAB did not appear to consider: applicant’s burden of proof.  Applicant has one bite at the apple to establish initial causation and developing the record is not appropriate when applicant failed to establish AOE/COE.  If applicant fails to carry her burden at trial as to causation, the case should be done with an order to take nothing.

In litigating these cases, particularly when none of the COVID19 presumptions apply, defendants would be well served shooting for disproving causation, rather than merely pointing out that applicant has the burden of proof.  Since justice moves slowly, we are likely to continue seeing these cases reach the WCAB to address causation on COVID19.

Much like the Starks of Game of Thrones chant “Winter is Coming,” so too the motto for California workers’ compensation is “Reform is Coming.”  Every now and then, we see another attempt to fix the system.  Perhaps the defense community should add to its wish-list for the next reform a stricter standard for “developing the record,” particularly when AOE/COE is in dispute.

California Contemplates Higher Min. Wage for Hospitals

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Happy Wednesday, dear readers!

Well… perhaps that’s not accurate.  When is Wednesday Addams ever truly happy?

Never mind… let’s check up on what’s going on in Sacramento, shall we?  Oh, of course… increasing costs for California’s employers.  In this case, the proposal would affect the healthcare industry, with a minimum wage of $25 per hour effective January 1, 2024.

Senate Bill 525 would apply to every California healthcare employer, including urgent care, hospitals, and home health care, among others. 

My beloved readers might think… well don’t doctors and registered nurses already make more than $25 per hour?  Well, the same brilliance and diligence that draw you to this blog also leads you to be so well informed. 

However, this bill would raise the minimum wage not just for nursing, but “caregiving, technical and ancillary services, janitorial work, housekeeping, groundskeeping, guard duties, business office clerical work, food services, laundry, medical coding and billing, call center and warehouse work, scheduling, and gift shop work” but “only where such services directly or indirectly support patient care.”

Seriously… what the heck?  Is the legislature on a crusade to kill the healthcare industry in California?  Your humble blogger did a quick and totally unscientific search of such positions for San Francisco, where one would expect wages to be among the highest due to the cost of living, and found most of these postings are well under $25 per hour.  The wages offered are significantly lower as we get to more rural areas.

If this insanity becomes law, what can we expect on the comp side?

Well, a full time security guard working for a hospital for $20 per hour, out on TTD, would go from an AWW of $800 to $1,000, with a corresponding TTD increase from $533.33 to $666.67.

Hospitals are already facing serious challenges: COVID19 was not very helpful in keeping the lights on and we are still reeling with expenses related to the COVID19 presumptions and staff shortages.  Raising the minimum wage from the state-minimum of $15.50, to this monstrosity of $25 will make rendering services that much more impossible.

Hopefully, SB525 joins the pantheon of colossally bonehead ideas that never become law.  But with California, you just never know.