BILL ANALYSIS Ó
AB 305
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GOVERNOR'S VETO
AB
305 (Gonzalez)
As Enrolled September 14, 2015
2/3 vote
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|ASSEMBLY: |59-18 | (May 11, |SENATE: |24-15 | (September 8, |
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|ASSEMBLY: |60-20 | (September 9, | | | |
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Original Committee Reference: INS.
SUMMARY: Prohibits the use of certain gender-related
characteristics in the calculation of permanent disability
benefits for injuries occurring on or after January 1, 2016.
Specifically, this bill:
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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, or menopause, if 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, or
menopause, if these conditions are contemporaneous with the
industrial injury causing the disability, to apportion
permanent disability with respect to a psychiatric injury.
The Senate amendments:
1)Clarify that the bill applies only to injuries that occur on
or after January 1, 2016.
2)Delete osteoporosis from the list of conditions prohibited to
be used for apportioning permanent disability.
3)Renumber the requirement that breast cancer obtain the same
rating as prostate cancer so that it constitutes a stand-alone
Labor Code Section.
EXISTING LAW:
1)Provides for a comprehensive system to provide workers'
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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 either prior to or subsequent to the industrial
injury.
FISCAL EFFECT: According to the Senate Appropriations
Committee, the Department of Industrial Relations (DIR) would
incur costs (special funds) of $4.25 million in the first year,
and $4 million annually thereafter to implement the provisions
of the bill. In addition, as a direct employer, the State would
incur unknown, but potentially significant increased permanent
disability costs due to breast cancer. This bill also would
result in unknown, but potentially significant increased
litigation costs to the State as a direct employer.
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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 the bill
used as a reason to reduce permanent disability benefits.
2)Scope of problem. There is substantial disagreement as
between supporters of the bill and opponents of the 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
Legislature in one form or another for at least seven 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 (see below) prohibits; second, in each example,
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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 Workers' Compensation
Appeals Board (WCAB) decision that has adopted or endorsed
apportionment on the basis of the considerations cited by
CAAA.
3)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
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
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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. While the
current apportionment statute was adopted in the 2004 workers'
compensation reform, the principle dates back nearly a century
in California law.
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 (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
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causation. This is the rule Governor Brown alluded to in his
AB 1155 (Alejo) of 2011, Veto Message (see below).
5)Is case law 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 the 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)Breast cancer vs. prostate cancer. A key provision in the
bill that proponents argue cures gender discrimination is the
mandate that breast cancer and prostate cancer be treated the
same in terms of disability ratings. Since 2004, the AMA
guides has been the basis in California law for making PD
determinations.
The AMA Guides were first published in 1971 to provide "a
standardized, objective approach to evaluating medical
impairments". The Guides define "impairment" as a loss, loss
of use, or derangement of any body part, organ system, or
organ function. The Guides deal chapter by chapter with
specific areas of the body or a specific type of permanent
impairment and discuss how to measure impairment in a specific
individual. This impairment measurement is a percentage known
as the whole person impairment (WPI), with a higher WPI
percentage signifying a higher level of impairment.
WPI serves as the foundational calculation for the purposes of
calculating a PD rating. In bringing the AMA Guides into the
workers' compensation system in 2004, the goal was to make the
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measurement of impairment, and by extension PD ratings, more
objective and uniform throughout the state and based on the
best available medical evidence. Further, as a part of the
2012 reform, the Legislature codified case law that allows
doctors to "rate by analogy" or to use other chapters of the
AMA Guides if those chapters better explain the nature of the
impairment.
Proponents of the bill have argued that the AMA Guides are not
objective in this context. Specifically, proponents point to
the fact that the AMA Guides rate the removal of female
breasts at a WPI of 0%, while the removal of a prostate would
rate a 16% to 20% WPI, arguing that such a rating shows bias
against women.
However, the male prostate is not a strong equivalent to
female breasts. The prostate is an exocrine gland that
secretes fluid, assisting the mobility of sperm after
ejaculation. As will be discussed in more detail below,
removing the prostate can lead to both incontinence and
impotence. The closest female equivalent, or homologue, to
the prostate is the skene's gland, which is located on the
surface of the vulva. Alternatively, one could also look at
urthereal disease, which would lead to incontinence in women.
A review of how the AMA Guides rate the female equivalent
injuries shows that there is a comparable WPI rating. For
example, vulval disease where sexual intercourse is not
possible would be 26% to 35% WPI. Additionally, urthereal
disease which leads to stress incontinence would be a 25% WPI
at a minimum. Thus, when looking at comparable injuries, both
men and women appear to receive comparable ratings through the
AMA Guides.
7)Psychiatric injuries. Psychiatric injuries, and the addition
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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 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 two
significant ways: a) in order to qualify for compensation,
the psychiatric injury must be predominantly work caused, and
b) psychiatric injuries that are not the primary injury, but
rather are consequences of the primary injury, are no longer
included in the 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.
8)Prior legislation. In 2008, SB 1115 (Migden), and in 2011, AB
1155, 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:
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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.
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, the 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.
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GOVERNOR'S VETO MESSAGE:
This bill prohibits the use of certain gender-related
characteristics in the calculation of permanent disability
benefits for injuries occurring on or after January 1, 2016.
The workers compensation system must be free of gender-bias. No
group should receive less in benefits because of an immutable
characteristic. However, this bill is based on a
misunderstanding of the American Medical Association's
evidence-based standard, which is the foundation of the
permanent disability ratings, and replaces it with an
ill-defined and unscientific standard.
Analysis Prepared by:
Mark Rakich / INS. / (916) 319-2086 FN: 0002539