BILL ANALYSIS
Senate Committee on Labor and Industrial Relations
Mark DeSaulnier, Chair
Date of Hearing: March 25, 2009 2009-2010 Regular
Session
Consultant: Gideon L. Baum Fiscal:No
Urgency: No
Bill No: SB 145
Author: DeSaulnier
Version: As Proposed to be Amended
SUBJECT
Workers' Compensation.
KEY ISSUE
Should language prohibiting various forms of discrimination in
the apportionment of industrial disabilities and delivery of
workers' compensation benefits be added to the Labor Code?
PURPOSE
To bar the consideration of race, national origin, gender, sex,
genetic predisposition, and certain other factors in the
delivery of workers' compensation benefits and the determination
of an apportionment of the causes of an industrial disability.
ANALYSIS
Existing law:
a) Establishes a workers' compensation system that provides
benefits to an employee injured at work, irrespective of
fault. This system requires all employers to secure
payment of benefits by either securing the consent of the
Department of Industrial Relations to self insure or by
securing insurance against liability from an insurance
company duly authorized by the state.
b) Requires that a physician examine an injured employee
and, and when determining permanent percentages of
permanent disability, the physician must take into account
the nature of the physical injury or disfigurement, the
occupation of the injured employee, and his or her age at
the time of the injury, with consideration being given to
an employee's diminished future earning capacity.
c) Requires that a physician make an "apportionment
determination" with respect to the permanent disability.
That is, the physician must find (a) what approximate
percentage of the permanent disability is caused by the
direct result of the injury arising out of and in the
course of employment, and (b) what approximate percentage
of the permanent disability is caused by other factors both
before and subsequent to the industrial injury. If the
physician determines that the disability is partially the
result of these "other factors" the (degree of) impairment
rating must be reduced by the relevant percentage,
ultimately resulting in a lower permanent disability rating
and reduced permanent disability indemnity payments.
d) Provides that no person in the State of California
shall, on the basis of race, national origin, ethnic group
identification, religion, age, sex, sexual orientation,
color, or disability, be unlawfully denied full and equal
access to the benefits of, or be unlawfully subjected to
discrimination under, any program or activity that is
conducted, operated, or administered by the state or by any
state agency, is funded directly by the state, or receives
any financial assistance from the state. [Government Code
11135]
This bill would:
a) Prohibit the denial of workers' compensation benefits
claim if the employee's injury or death was related to the
employee's race, religious creed, color, national origin,
age, gender, marital status, sex, sexual orientation, or
genetic predisposition;
b) Provide that race, religious creed, color, national
origin, age, gender, marital status, sex, sexual
Hearing Date: March 25, 2009 SB 145
Consultant: Gideon L. Baum Page 2
Senate Committee on Labor and Industrial Relations
orientation, or genetic predisposition shall not be
considered a cause or other factor of disability with
regard to any workers' compensation apportionment
determination; and
c) Make findings on federal and state laws on
discrimination, previous reductions and denials in workers'
compensation benefits that would normally be prohibited in
a work environment as discriminatory, and declare the
intent of the Legislature to enact legislation to apply
existing workplace discrimination protections to workers'
compensation benefits.
COMMENTS
1. Need for this bill?
SB 145 seeks to tackle two different discrimination issues in
the workers' compensation system: denial of benefits due to
characteristics such as race or national origin, and
apportionment based on race or gender, rather than actual
documented evidence.
The issue of the denial of benefits due to characteristics
such as race first came to the Committee's attention with the
denial of workers' compensation death benefits to the
surviving family of Taneka Talley late last year. Ms. Talley
was murdered in March 2006 by a white supremacist while she
was opening a Dollar Tree store in Fairfield. Dollar Tree's
insurer, Specialty Risk Services, argued that because Ms.
Talley's murder was racially motivated, and therefore
personal, despite the fact she was killed at the Dollar Tree
store and would not have been killed has she not been present
at the store.
SB 145 seeks to address this issue with the addition of
language similar to Government Code 11135, which would
prohibit the denial of workers' compensation injury or death
benefits if the employee's injury or death was related to the
employee's race, religious creed, color, national origin, age,
gender, marital status, sex, sexual orientation, or genetic
Hearing Date: March 25, 2009 SB 145
Consultant: Gideon L. Baum Page 3
Senate Committee on Labor and Industrial Relations
predisposition
The second issue SB 145 seeks to address is the issue of
apportionment on the basis of "risk factors" - such as age,
race, sex, and genetic predisposition - rather than basing the
apportionment on actual documented and evaluated evidence of
pre-existing medical condition.
In the 2006 State Court of Appeals case of Vaira v Workers
Comp. Appeals Board (9 WCAB Rptr. 10,371), for example, the
court sent the case back to the Workers' Compensation Appeals
Board, stating that the physician who had done the
apportionment failed to base the apportionment on actual
medical evidence. The physician based the apportionment on
the grounds that the individual in the case was an elderly
woman at high risk of osteoporosis and showing some evidence
of the condition. However, the physician did not demonstrate,
with substantial medical evidence, the link between any actual
condition and the disability.
Dean Calbreath, in a February 17, 2008 article in the San
Diego Union Tribune, cited a number of similar instances of
improper apportionment procedures. He highlighted one case
where a medical examiner cut a man's workers' compensation
payments in half because, as an African-American, he had a
"genetic" predisposition to high blood pressure or
hypertension.
Other examples Calbreath included:
a) In January of 2008, medical examiners at Kaiser
Permanente in San Diego cut down a food service worker's
claims for carpal tunnel syndrome because she had several
pre-existing conditions, including "being female." In the
past several years, medical examiners in other locales have
cited "female gender" as a reason for cutting carpal tunnel
claims, since women statistically report more problems than
men.
b) In September of 2007, a medical examiner in Los Angeles
disallowed a third of a 52-year-old clerk's claims of
work-related stress on the grounds that her advanced age
Hearing Date: March 25, 2009 SB 145
Consultant: Gideon L. Baum Page 4
Senate Committee on Labor and Industrial Relations
made her susceptible to hypertension.
c) In March of 2007, a medical examiner in Torrance
disallowed a portion of a cleaning woman's claims that her
work-related back injury had resulted in depression. The
examiner's reasons for slimming down the claim included
that she was a woman from Central America. "She's from El
Salvador and she is, as the pronoun indicates, a woman,"
the examiner said in a deposition. "She has a personality
disorder, which sadly might apply to all too many women.
And I must say, when it comes to Central America, it might
apply to more men than I would care to mention."
d) A middle-aged Hispanic man who spent decades working for
a utility company injured his left shoulder and left leg on
the job. By the medical examiner's account, the worker was
involved in intense physical activity: "putting up (power)
lines, working underground, climbing up poles,
construction, maintenance of lines, kneeling, squatting."
But the examiner trimmed his claim, saying that his
injuries were also caused by his race, age and gender. "Age
plays a big role in what you determine the nonwork-related
factors are, even though he did work half of his life
there," the examiner said. "Some of these (factors) are
racially connected and some are gender connected." "Is
part of his disability due to the fact that he's a man
versus a woman?" the worker's attorney asked. "Very likely,
yes."
SB 145 would require that apportionment could not be based on
race, religious creed, color, national origin, age, gender,
marital status, sex, sexual orientation, or genetic
predisposition alone - rather, apportionment would need to be
based on concrete medical findings.
2. Why does the language in this bill need to be placed in the
Labor Code, given that very similar language is currently in
Government Code 11135?
Government Code 11135, which first came into law in 1977,
prohibits the denial of full and equal access to the benefits
on the basis of race, national origin, ethnic group
Hearing Date: March 25, 2009 SB 145
Consultant: Gideon L. Baum Page 5
Senate Committee on Labor and Industrial Relations
identification, religion, age, sex, sexual orientation, color,
or disability of any program or activity that is conducted,
operated, or administered by the state, funded directly by the
state, or receives any financial assistance from the state.
This almost certainly includes the workers' compensation
system.
However, in the workers' compensation arena, which involves
thousands of persons and which is governed primarily by the
Labor Code, there seems to be substantial misunderstanding of
the proper, legal procedures for apportionment and benefit
delivery. Placing nearly identical language in the Labor Code
will help to clarify the law prohibiting discrimination and
make the specified language more evident to those who look to
the Labor Code for guidance in making decisions relating to
workers' compensation. In addition, this bill adds the terms
"genetic predisposition", "marital status", and "gender" to
the protected classes for the purposes of apportionment, terms
that are not in existing code.
3. Does this bill place new responsibilities on employers, making
them responsible for medical conditions (with associated
costs) for which they are not currently responsible?
No. While the Taneka Talley case was settled by the Dollar
Store, it is likely that the Courts would have found that it
falls within the guidelines of Labor Code 3600. As for
apportionment, this bill prohibits discrimination on the basis
of generalized "risk factors," which is almost certainly
currently illegal under Government Code 11135.
Apportionments determined through an evaluation of the actual
medical evidence, establishing a clear, causal link between
the condition and the disability are, and will continue to be
appropriate and lawful. Therefore, both changes are largely
clarifying existing law.
4. Double Referral to the Senate Judiciary Committee:
If SB 145 is passed out of the Senate Labor Committee, it will
next be heard by the Senate Judiciary Committee.
Hearing Date: March 25, 2009 SB 145
Consultant: Gideon L. Baum Page 6
Senate Committee on Labor and Industrial Relations
5. Proponent Arguments :
The California Applicant Attorneys Association (CAAA), the
sponsor of the bill, argues that before SB 899 (Poochigian) of
2004, which was a major overhaul of the workers' compensation
system, employers could not penalize an injured worker for a
pre-existing condition if it did not impair the worker's
ability to do his or her job. Since SB 899, however, the CAAA
reports that apportionment has occurred on the basis of risk
factors, such as race, gender, or age, regardless of symptoms
or if the risk factors had any affected the ability of an
individual to do his or her job. CAAA believes that SB 145
will bring the workers' compensation apportionment process in
line with federal and state anti-discrimination law, and
ensure that the apportionment process can continue without
penalizing workers on the basis of discriminatory risk
factors.
6. Opponent Arguments :
The Chamber of Commerce (CalChamber) believes that SB 145
would undermine the fundamental workers' compensation reforms
contained in SB 899 of 2004 (Poochigian). CalChamber argues
that SB 899 was a reaffirmation of the concept of
apportionment, and that prior to SB 899 apportionment was
significantly weakened due to court decisions. Moreover,
CalChamber argues that the sponsors of SB 145 have made the
false argument that the current system of apportionment in
California allows for discrimination, as Labor Code Sections
4663 and 4664 do not allow for discrimination based on
protected classes. CalChamber also believes that SB 145 would
muddy apportionment law and increase workers compensation
costs.
7. Current Legislation:
AB 1093 (Yamada) would prohibit the denial of workers'
compensation benefits solely because the motivation of what
caused the employee's injury or death was related to the
employee's immutable characteristics. It is currently on the
Assembly First Reading file.
Hearing Date: March 25, 2009 SB 145
Consultant: Gideon L. Baum Page 7
Senate Committee on Labor and Industrial Relations
8. Prior Legislation :
SB 1115 (Migden) of 2008 would have barred the consideration
of race, national origin, gender, sex, genetic predisposition,
and certain other factors in the determination of an
apportionment of the causes of an industrial disability. It
was vetoed by the Governor.
SUPPORT
California Applicant Attorneys Association (Sponsor)
American Federation of State, County and Municipal Employees,
AFL-CIO
California Communities United Institute
California Labor Federation, AFL-CIO
California Nurses Association
California School Employees Association, AFL-CIO
Glendale City Employees Association
Organization of SMUD Employees
San Bernardino Public Employees Association
San Luis Obispo County Employees Association
Santa Rosa City Employees Association
OPPOSITION
Acclamation Insurance Management Services
Association of California Insurance Companies
California Chamber of Commerce
California Chapter of the American Fence Contractors'
Association
California Fence Contractors' Association
Engineers Contractors' Association
Flasher/Barricade Association
Marin Builders' Exchange
Hearing Date: March 25, 2009 SB 145
Consultant: Gideon L. Baum Page 8
Senate Committee on Labor and Industrial Relations
* * *
Hearing Date: March 25, 2009 SB 145
Consultant: Gideon L. Baum Page 9
Senate Committee on Labor and Industrial Relations