BILL ANALYSIS
SB 145
Page 1
Date of Hearing: July 8, 2009
ASSEMBLY COMMITTEE ON INSURANCE
Jose Solorio, Chair
SB 145 (DeSaulnier) - As Amended: April 27, 2007
SENATE VOTE : 23-15
SUBJECT : Workers' compensation: apportionment: death benefits
SUMMARY : Prohibits discrimination on the basis of specified
protected classes for purposes of apportioning permanent
disability, and clarifies the law governing compensability where
criminal violence is committed against an employee in the
workplace. Specifically, this bill :
1)Prohibits discrimination on the basis of race, religious
creed, color, national origin, age, gender, marital status,
sex or genetic characteristics in the process of apportioning
medical causation for purposes of determining an employer's
liability for the permanent disability of an employee injured
on the job.
2)Provides that no workers' compensation claim may be denied
because the injury or death was related to the worker's race,
religious creed, color, national origin, age, gender, marital
status, sex, sexual orientation, or genetic characteristics.
3)Defines "genetic characteristics" by citation to the life and
health insurance anti-genetic discrimination law that has been
in effect and used by insurers for a number of years.
EXISTING LAW :
1)Provides for a comprehensive system of workers' compensation
benefits for workers who are injured on the job, including
payments to compensate an injured worker for the permanent
disability caused by an on-the-job injury.
2)Establishes a formula that is used to determine the extent of
permanent disability, which is expressed as a percentage, and
compensates the injured worker based on the percentage to
which he or she is permanently disabled.
3)Allows a permanent disability to be "apportioned" to the
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various causes of the disability so that an employer is only
liable for the portion of the disability attributable to
employment by that employer.
4)Requires a physician, when making a report on permanent
disability, to make an apportionment determination by
providing an approximation of the percentage of the disability
that is caused by the injury at work, and an approximation of
the percentage of the disability that is caused by other
factors, whether industrial or nonindustrial, and whether
occurring before or after the workplace injury.
5)Provides for the payment of death benefits to dependents of an
employee in the case of a work-related injury causing death.
6)Provides generally, based on case law, that an injury or death
caused by assault or other criminal behavior directed at an
employee is not work-related in cases where there is a prior
relationship between the employee and the attacker, but is
work related in the absence of a prior relationship. The
typical, although not exclusive, example of this issue
involves domestic violence committed where the victim is
tracked down at work and attacked.
FISCAL EFFECT : While this bill is tagged as a nonfiscal bill,
the employer opponents raise concerns that the apportionment
provisions, in particular, could have the effect of increasing
costs by hampering the ability of an employer, including the
state, to prevail in apportionment cases.
COMMENTS :
1)Purpose: According to the Author, the bill serves two
purposes. First, it is argued that some physicians are making
discriminatory generalizations, rather than examining actual
medical conditions or facts, when they are carrying out the
mandate that they assign percentages to the various causes of
a permanent disability. Specifically, the Author seeks to
prevent physicians from using "risk factors" as opposed to
actual medical conditions, when making these apportionment
determinations. Second, the bill is designed to clarify the
law with respect to "prior relationship" cases as a result of
a case involving an employee of Dollar Tree who was murdered
while at work by an assailant with whom she had no prior
relationship.
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2)Discrimination in apportionment: Proponents point to several
examples of inappropriate discrimination in application of the
apportionment laws. 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 alone was sufficient to assign a
percentage of the causation to osteoporosis. Among the cases
reported in the media is a case of an African-American man who
had his permanent disability rating cut in half because of the
fact that African-American males have a higher incidence of
high blood pressure, and thus there was a genetic
predisposition to hypertension, aside from his workplace's
contribution to hypertension. These scenarios, among numerous
other potential fact patterns, are examples of unfair
reductions in permanent disability ratings that the bill is
designed to remedy.
3)Dollar Tree case. An African-American woman was murdered
while at work at a Dollar Tree store by an individual who, it
was later determined during a psychiatric evaluation, went out
intending to kill the first black person he saw.
Unfortunately, the Dollar Tree employee was that person.
Dollar Tree defended the claim for workers' compensation death
benefits by relying on at least one "personal motivation" case
that involved an element of ethnic hatred, but also involved a
prior relationship between the killer and the victim, and the
killing only coincidentally occurred on property related to
the victim's job.
Dollar Tree eventually settled this case, but the case presents
the issue of what type of personal motivations qualify to
defeat a claim for workers' compensation benefits. Because
case law was sufficiently vague to cause Dollar Tree to
initially deny the claim, the author believes that clarity in
the law is appropriate.
4)Opposition: The opponents do not disagree that discrimination
based on risk factors associated with the bill's protected
categories is wrong. They respond, however, by arguing that
the law already provides protections, and the bill only serves
to open a Pandora's Box of problems. Specifically, opponents
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argue that the Vaira case proves that the law is not in need
of change. The Court essentially determined that it is
improper to use risk factors, and sent the case back to the
WCAB to make sure that medical facts supported the
apportionment.
With respect to unintended consequences, the opponents believe
that the effect of the bill would be to prohibit apportionment
even when there is an actual preexisting condition, if that
condition is in some way connected to one of the protected
categories. At a minimum, they are concerned that the bill
would generate unnecessary litigation.
With respect to the death benefits case, opponents do not
question the fact that the Dollar Tree case ought to be
compensable. However, they are concerned that the language
used in the bill could have the effect of impacting a number
of cases that are not as clearly compensable. Potential
amendments have been proposed that would remove this part of
their opposition, although those amendments may be overly
narrow and present insurmountable proof problems for an
applicant. At the time this analysis was prepared, the author
had not responded to the offer of amendments.
5)Pending legislation. This Committee, and the Assembly,
unanimously passed AB 1093 (Yamada), which addresses the same
death benefits issue as this bill. AB 1093, however, is
drafted somewhat differently than SB 145, and efforts to make
the language consistent have thus far been unsuccessful. The
Senate Industrial Relations Committee unanimously passed AB
1093 on June 25, 2009. It is currently pending in the Senate
Judiciary Committee.
6)Prior legislation. Last year, SB 1115 (Migden) addressed the
apportionment discrimination issue in virtually the same
language as SB 145. It was vetoed by the Governor. The Veto
Message follows:
I am returning Senate Bill 1115 without my signature.
This bill is intended to provide that race, religious creed,
color, national origin, age, gender, marital status, sex, or
genetic predisposition shall not be considered a cause or other
factor of disability when determining apportionment of
disability for the purposes of workers' compensation. While I
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support the intent of this measure, I do not believe it is
necessary. Current law, as well as court rulings, adequately
protects injured workers from inappropriate application of
apportionment statutes. In addition, I am concerned that the
manner in which this bill is worded could inadvertently create
new ambiguities in the law and result in increased litigation.
For these reasons I am unable to sign this bill.
REGISTERED SUPPORT / OPPOSITION :
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
ALPHA Fund
Association of California Insurance Companies
California Association of Joint Powers Authorities (CAJPA)
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
Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086