BILL ANALYSIS Ó
AB 305
Page 1
ASSEMBLY THIRD READING
AB
305 (Gonzalez)
As Amended April 30, 2015
Majority vote
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|Committee |Votes |Ayes |Noes |
| | | | |
| | | | |
|----------------+------+--------------------+--------------------|
|Insurance |9-4 |Daly, Calderon, |Beth Gaines, Travis |
| | |Cooley, Cooper, |Allen, Grove, Mayes |
| | |Dababneh, Frazier, | |
| | |Gatto, Gonzalez, | |
| | |Rodriguez | |
| | | | |
| | | | |
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SUMMARY: Prohibits the use of certain gender-related
characteristics in the calculation of permanent disability
benefits. Specifically, this bill:
1)Prohibits granting the disabling effects of breast cancer a
lower disability rating than granted to the disabling effects of
prostate cancer.
2)Prohibits the use of pregnancy, menopause, or osteoporosis, if
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these conditions are contemporaneous with the industrial injury
causing the disability, to apportion permanent disability with
respect to a physical injury.
3)Prohibits the use of sexual harassment, pregnancy, menopause, or
osteoporosis, if these conditions are contemporaneous with the
industrial injury causing the disability, to apportion permanent
disability with respect to a psychiatric injury.
EXISTING LAW:
1)Provides for a comprehensive system to provide workers'
compensation benefits to workers whose injuries arise out of or
in the course of employment, including medical treatment and
financial compensation if the injury or condition has a
permanently disabling effect.
2)Establishes a Permanent Disability Rating Schedule (PDRS), a
methodology for calculating impairment through the use of the
American Medical Association Guides to the Evaluation of
Permanent Impairment (AMA Guides), and other tools that are used
to determine the extent of an injured worker's permanent
disability (PD).
3)Allows for the "apportionment" of PD determinations to prior
industrial causes, or to prior non-industrial causes, and
reduces the amount of the injured worker's PD award to the
extent these prior causes have contributed to the extent of the
disability.
4)Requires the physician who is making a recommendation on the
extent of disability that has followed from an industrial injury
to identify, and quantify, causation of the disability that is
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either prior to or subsequent to the industrial injury.
FISCAL EFFECT: Unknown
COMMENTS:
1)Purpose. According to the author, "[w]hile current law
prohibits workers compensation claims from being denied based on
certain protected class characteristics, it does not clearly
prohibit gender or other characteristics from being taken into
account when apportioning an injury. Additionally, current law
requires physicians to identify "other factors" when
apportioning an injury. This leaves a loophole in which an
injury can be attributed to conditions predominantly or only
found among the workers' gender." Proponents assert that
lawyers who represent injured workers report that they have
cases where women have had the conditions cited in this bill
used as a reason to reduce permanent disability benefits.
2)Apportionment. Apportionment applies to PD determinations when
the disabling effect of an industrial injury has some percentage
of causation that either predates or occurs subsequent to the
industrial injury. Apportionment does not apply to medical
treatment. For example, no matter how much the old football
injury is making an industrial knee injury more complicated or
extensive, the workers' compensation system provides medical
treatment for the industrial knee injury fully and
comprehensively. The fact that there is pre-industrial injury
causation that affects the seriousness of the injury does not
limit the extent of medical treatment. However, causation of
the disability is treated differently from causation of the
injury.
There are at least three policy rationales underpinning the
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apportionment rule. First, it has been deemed unfair to require
an employer to pay for disability that was not caused by the
employment. Second, if the prior causation was a previous
industrial injury that resulted in a PD award, the injured
worker would have already been compensated for that portion of
the disabling condition. Third, if an employer knew that a job
candidate suffered a previous injury that might lead to more
expense if he should re-injure himself, the employer might opt
to hire someone else who does not pose that financial risk.
Apportionment as a policy is not without its critics. On a "but
for" causation rationale, the injured worker would not be
suffering the current disability to any extent but for the
current industrial injury. And if the injury were being
compensated in the tort system, the person who acted negligently
to cause an injury would be responsible for the full extent of
the disability, because in tort the "victim's" preconditions do
not operate to diminish the consequences of the acts that cause
injury. However, apportionment is the rule in workers'
compensation, and this bill proposes exceptions to the normal
rules of apportionment.
3)Prior legislation. In 2008, SB 1115 (Migden), and in 2011, AB
1155 (Alejo), addressed the apportionment discrimination issue
in virtually the same language. Unlike this bill, those bills
would have broadly prohibited the use of the protected classes
defined in the Unruh Civil Rights Act as a basis to apportion
permanent disability awards. Each was vetoed by the Governor.
The veto message to AB 1155 provided:
"This bill would state that workers' compensation
injury determinations shall not include consideration
of race, religious creed, color, national origin, age,
gender, marital status, sex, sexual orientation, or
genetic characteristics.
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The courts already recognize that apportioning a
disability award to any of these classifications is
antithetical to our states' non-discrimination
policies. The courts also recognize that apportioning
to an actual non-industrial condition that contributes
to causing a disability is permissible and required by
the principle that apportionment is based on causation.
This bill would not change existing law as interpreted
by the courts to date. This bill would, however,
generate new litigation over questions of whether it is
intended to change existing interpretations. At best,
that additional litigation would add to employers'
costs for workers' compensation. At worst, this bill
could disturb the appropriate interpretation of
existing law that is already taking shape in the
courts."
This bill takes a different approach to the issue. Rather than
addressing the use of protected characteristics, this bill
proposes to prohibit precisely what the AB 1155 veto message
notes that courts currently recognize: that apportionment to
actual, factual prior industrial or non-industrial causation is
acceptable. This bill identifies specific factors that
proponents argue are inappropriate apportionment factors, and
prohibits their use regardless of whether there is factual
causation.
4)Case law. In an unpublished appellate decision, Vaira v. WCAB ,
the Court of Appeal returned a case to the Workers' Compensation
Appeals Board (WCAB) because the record was insufficient to
determine whether the physician had based his apportionment
decision on medical facts that showed the older female claimant
suffered from osteoporosis, or on the basis that the risk factor
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(older women face a high risk of suffering from osteoporosis)
alone was sufficient to assign a percentage of the causation to
osteoporosis. This decision has been broadly applied in the
workers' compensation courts as establishing the following rule:
a risk characteristic such as older women having a high
incidence of osteoporosis, or older African American men having
a high incidence of hypertension, cannot be used as a basis to
apportion a permanent disability award. However, a woman
diagnosed with osteoporosis that contributes to her disability
resulting from the subsequent industrial injury, or an African
American man diagnosed with hypertension that contributes to his
disability resulting from the subsequent industrial injury, can
have the disability award apportioned based on the prior
nonindustrial causation. This is the rule Governor Brown
alluded to in his AB 1155 veto message.
5)Gender discrimination. Proponents strongly argue that it is
inappropriate gender discrimination to use even factual
conditions that contribute to disability causation if those
factors are uniquely attributable to being a woman. Thus, the
policy argument is that the uniquely female gender factors
addressed by this bill should simply not be used to reduce
permanent disability awards. Opponents counter that the
workers' compensation system is designed to require employers to
pay to injured workers what the job itself caused, not what
non-job factors caused.
6)Scope of problem. There is substantial disagreement as between
supporters of this bill and opponents of this bill on whether or
not there is a serious problem of gender-based unfairness in the
workers' compensation system. Some supporters have asserted
that "we see it every day" while some opponents assert that the
wrongs complained of simply do not occur in the workers'
compensation courts.
This issue has been presented to, and debated in, the
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Legislature in one form or another for at least 7 years, and
there is a paucity of concrete evidence, either academic or
anecdotal, to show that there is pervasive discrimination based
on gender, or other protected classes. The California
Applicants' Attorneys Association (CAAA), in its letter in
support of this bill, cites several examples of cases where
women are alleged to have suffered unfair treatment by the
system. Without getting into too much case-specific detail, two
things appear from the cited examples: first, the
characteristics used to reduce permanent disability awards
appear to be risk factors or broad characteristics like those
the Vaira case prohibited; second, in each example, it is
claimed that "the doctor determined" the offending apportionment
factor. Opponents have argued that "dumb doctors" making
ill-advised, discriminatory apportionment statements are not a
basis to change the law - they are a basis for the attorney
representing the injured worker to argue to a workers
compensation judge that the doctor recommended an illegal or
inappropriate factor that does not support apportionment.
Opponents state that they are unaware of any workers'
compensation judge or WCAB decision that has adopted or endorsed
apportionment on the basis of the considerations cited by CAAA.
7)Contemporaneous. Recent amendments to this bill provide that,
in order for the gender-related factor to be a prohibited basis
for apportionment, that factor must occur "contemporaneous" with
the industrial injury that is causing permanent disability. The
amendment is intended to ensure that prior factual conditions
that may have been associated with a prohibited characteristic
may still be used for apportionment. For example, if a pregnant
woman suffers a back injury due, in some factually causative
way, to pregnancy, and she has an existing back injury, this
prior back injury is acceptable for purposes of apportionment
when she suffers an industrial back injury 5 years after her
pregnancy. Or, in the case of a psychiatric injury, a sexual
harassment at the hands of a college professor five years prior
to the industrial psychiatric injury that contributes to the
permanent disability would not be prohibited as a basis to
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apportion the permanent disability.
8)While acknowledging that the purpose of this amendment serves to
narrow this bill, and eliminate one of the concerns that remote,
but factual, prior injuries would be used to argue against
legitimate apportionment, opponents fear that the language fails
to accomplish that goal, and that old, factual injuries will
still be used to argue against apportioning job-related
disability for non-job-related factors. This is a consistent
theme in opponents' objections to this bill - that much of the
practical effect of this bill will be to establish vague and
uncertain factors that cannot be used to apportion permanent
disability, with a resulting substantial increase in frictional
litigation costs.
In this regard, it is important to note how courts treat
legislative enactments that add new language to statutes. One
of the most important rules of statutory construction is that
"significance should be given to every word, phrase, sentence
and part of an act" and that the Legislature does not engage in
idle acts or adopt words that are mere surplusage. Thus, when
the Legislature chooses to use certain words in a statute, the
courts will assume that something specific was meant by those
words, and seek to ascertain what that meaning is. From the
opponents perspective, the addition of the "contemporaneous"
amendment will enable a broad range of litigation in an effort
determine what the Legislature intended.
In addition, this concern about how courts will interpret other
terms in the bill, and the frictional litigation costs
associated with those court proceedings, underpins many of the
opposition's arguments with the substantive factors the bill
proposes. Even those insurers and employers who profess that
"we don't apportion to those factors" fear frictional expenses
associated with litigants' efforts to obtain advantage by broad
use of vague terms.
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9)Menopause. Without question, menopause is a gender-based
characteristic that ought not be used as a basis to apportion
permanent disability. Opponents even state that "we don't do
that." However, the effect of adding menopause to the
apportionment statute causes opponents great concern. They
point out that courts have held that menopause is not a
disability. They also point out that there are any number of
symptoms that may or may not be associated with menopause, and
if any of those symptoms is associated with a factual
pre-existing condition that contributes to permanent disability,
there will be costly litigation because attorneys would be
duty-bound to pursue the argument that menopause, and not the
symptom, is the actual basis for the proposed apportionment.
10)Pregnancy. As with menopause, it is difficult to argue that
permanent disabilities ought to be apportioned due to pregnancy.
Indeed, many employers and insurers argue that this is not
done, nor is it allowed in the workers' compensation system.
However, they point out that adding this characteristic to the
statute poses problems. First, they argue that it confuses the
idea of causation to injury with causation to disability. They
suggest that pregnancy can contribute to injury, but it is hard
to understand how it is a condition that causes permanent
disability. However, by adding pregnancy to the apportionment
statue, uncertainties are created that will cause extended
litigation to determine the precise meaning of the statutory
change.
11)Osteoporosis. Osteoporosis presents a fundamental difference
of perspective as between proponents and opponents. This is a
predominantly (although not exclusively) female medical
condition involving loss of bone mass, and the resulting risk of
broken bones and other complications. Proponents argue that it
is fundamentally wrong to reduce a woman's permanent disability
award for a physical injury that occurs on the job due to this
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inherently gender-specific causation factor. Opponents, on the
other hand, argue that it is fundamentally wrong to require
employers to pay for disability that is factually unrelated to
employment.
12)Psychiatric injuries. Psychiatric injuries, and the addition
of sexual harassment as a prohibited apportionment factor for
psychiatric injuries, poses some unique issues in addition to
the issues associated with physical injuries.
First, due to the "contemporaneous" element of the current
version of the bill, it appears that sexual harassment cannot be
used to apportion a permanent disability caused by a psychiatric
injury, but this sexual harassment must be contemporaneous.
Most logically, the psychiatric injury would have to be caused
by a sexual harassment. If that is the case, then it is
difficult to understand how the sexual harassment could operate
to reduce any permanent disability. On the other hand, if the
psychiatric injury is not caused by the sexual harassment, but
by some other stressor that causes psychiatric injury, it is
difficult to understand how a contemporaneous sexual harassment
would be involved.
Second, but partially related to the first point, psychiatric
injuries are treated differently than physical injuries in at
least two significant ways: 1) in order to qualify for
compensation, the psychiatric injury must be predominantly work
caused, and 2) psychiatric injuries that are not the primary
injury, but rather are consequences of the primary injury, are
no longer included in the total PD calculation. Opponents argue
that all of these uncertainties, coupled with the unique way the
law treats psychiatric injuries, will inevitably lead to costly
litigation. In making this argument, the opposition asserts
that they are in no way seeking to justify an employer that
commits or allows sexual harassment in the workplace.
Nonetheless, they find it difficult to understand exactly how
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the bill changes the law, and thus have the concerns noted
above.
13)Breast cancer. Breast cancer is the one aspect of this bill
that has nothing to do with apportionment. Rather, this bill
prohibits giving a lower PD rating to a woman based on the
"sequelae" associated with breast cancer as compared with the
sequelae associated with prostate cancer. ("Sequelae" means
pathological conditions resulting from a disease.) This would
be a public policy judgment that the permanent disability
"value" associated with breast cancer (women) should be the same
as the permanent disability "value" associated with prostate
cancer (men). In essence, it would be a public policy judgment
that these two cancers have comparable effects on their
respective victims.
The 2004 workers' compensation reform (SB 899 (Poochigian),
Chapter 34, Statutes of 2004) sought to reduce the subjectivity
of the permanent disability system, and replace it with a more
objective method of determining PD. One of the ways SB 899
sought to accomplish this goal was to adopt the AMA Guides as
the basis for calculating the level of impairment caused by
industrial injuries. The underlying premise was that objective,
scientific evaluations and determinations of the consequences of
various disabling conditions ought to displace the prior system
which relied upon subjective evaluations and litigation, with
judges making the final determinations. The AMA Guides are used
in a number of states as the best source of objective, medically
expert-based classifications of impairment.
This bill proposes, with respect to breast cancer, to replace
the judgment that went into the AMA Guides with a public policy
judgment that equates two different conditions that proponents
argue are similar as a matter of public policy. Opponents
object that this entry into subjective policy judgments is a
slippery slope that will, eventually, undermine the AMA guides
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as arbiter of objective evidence-based medical impairment
evaluations.
Analysis Prepared by:
Mark Rakich / INS. / (916) 319-2086 FN: 0000305