BILL ANALYSIS �
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2011-2012 Regular Session
AB 1155 (Alejo)
As Amended May 9, 2011
Hearing Date: June 14, 2011
Fiscal: No
Urgency: No
TW
SUBJECT
Workers' Compensation: Apportionment of Permanent Disability
DESCRIPTION
This bill would prohibit a physician from considering the
following characteristics when apportioning the cause of
permanent disability for determining a worker's compensation
benefit: race, religious creed, color, national origin, age,
gender, marital status, sex, sexual orientation, or genetic
characteristics.
BACKGROUND
In 2004, Governor Schwarzenegger proposed reforms to the
worker's compensation system in order to reduce the costs of
worker's compensation insurance paid by employers. Accordingly,
SB 899 (Poochigian, Ch. 34, Stats. 2004) was signed into law and
enacted many reforms of the worker's compensation program.
Among other things, SB 899 repealed the prior worker's
compensation apportionment provision, which provided clear
descriptions of "previous injury" and "natural progression" and
replaced these descriptions with "causation." Apportionment is
the method by which the percentage of a worker's permanent
disability is attributed to the injury, pre-existing conditions,
or prior injuries, which percentages determine the amount of the
worker's compensation benefit.
Prior to the enactment of SB 899, a physician would examine the
injured worker and decide what part of the worker's permanent
disability came from the injury and what part came from either a
pre-existing disability or impairment or from the natural
(more)
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progression of a pre-existing disease process. After SB 899 was
enacted, a physician must decide what percentage of the
disability was the direct result of the injury and what
percentage of the disability was caused by "other factors." The
worker receives a benefit commensurate with only the percentage
of the disability that was caused by the actual injury.
In 2008, the San Diego Union-Tribune reported that across
California, worker's compensation benefits were being reduced
because "other factors," such as race, age, and gender, were
being used to apportion the causation of the disability.
(Calbreath, Race, Age, Gender Bias Hits Workers Across State
(Feb. 17, 2008) San Diego Union-Tribune
(as of June 5, 2011.) One example of race
being used to decrease the disability benefit was the case of a
relief cook injured by the repeated use of a degreasing formula.
The worker experienced a variety of symptoms from exposure to
the degreaser, including hypertension. According to the
article, "the medical examiner cut Jones' workers' comp payments
in half because, as an African-American, he had a 'genetic'
predisposition to high blood pressure or hypertension."
This bill is substantially similar to SB 1115 (Migden, 2008),
which was vetoed by Governor Schwarzenegger who argued that the
bill was unnecessary. SB 145 (DeSaulnier, 2010) also contained
a provision that is substantially similar to this bill and was
vetoed because Governor Schwarzenegger believed it would
undermine the 2004 workers' compensation apportionment reforms
and that AB 1093 (Yamada, Ch. 272, Stats. 2010) provided the
same protections. AB 1093 provided a prohibition on the use of
personal characteristics when granting or denying a workers'
compensation claim under conditions of compensation.
This bill, sponsored by the California Applicants' Attorneys
Association, would prohibit the consideration of the following
characteristics when apportioning the cause of permanent
disability for determining a worker's compensation benefit:
race, religious creed, color, national origin, age, gender,
marital status, sex, sexual orientation, or genetic
characteristics.
CHANGES TO EXISTING LAW
Existing law provides that an employer, when liability exists,
shall pay a worker for job-related injuries. (Lab. Code Sec.
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4550 et seq.)
Existing law provides that permanent disability compensation
shall be apportioned based on causation pursuant to a
physician's report including the approximate percentage of the
permanent disability that was caused by the direct result of
injury arising out of and occurring in the course of employment
and what approximate percentage of the permanent disability was
caused by other factors both before and subsequent to the
industrial injury, including prior industrial injuries. (Lab.
Code Sec. 4663.)
Existing law provides that an employer shall only be liable for
the percentage of permanent disability directly caused by the
injury arising out of and occurring in the course of employment.
(Lab. Code Sec. 4664.)
Existing law 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. (Gov. Code Sec. 11135.)
Existing law provides that it is an unlawful employment
practice, unless based upon a bona fide occupational
qualification, or, except where based upon applicable security
regulations established by the United States or the State of
California, for an employer, because of the race, religious
creed, color, national origin, ancestry, physical disability,
mental disability, medical condition, marital status, sex, age,
or sexual orientation of any person, to refuse to hire or employ
the person or to refuse to select the person for a training
program leading to employment, or to bar or to discharge the
person from employment or from a training program leading to
employment, or to discriminate against the person in
compensation or in terms, conditions, or privileges of
employment. (Gov. Code Sec. 12940.)
This bill would prohibit the consideration of the following
characteristics when apportioning the cause of permanent
disability for determining a worker's compensation benefit:
race, religious creed, color, national origin, age, gender,
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marital status, sex, sexual orientation, or genetic
characteristics.
COMMENT
1. Stated need for the bill
The author writes:
Currently, if an employee is injured on the job then he/she
has the right to file a workers compensation disability claim.
. . However, some disabled workers are having their
compensation apportioned not just to prior and/or pre-existing
disabilities but also to factors such as age, race, and
gender.
Insurance companies aggressively seek to reduce the amount
requested in the claim, thus reducing the amount of benefits
paid to the injured worker. The insurance companies
frequently apportion the injury based on "risk factors."
These risk factors are based upon race, gender, age and other
immutable characteristics.
2. Apportionment based on other factors, including certain
characteristics
This bill would prohibit the use of certain characteristics when
apportioning the cause of a permanent disability for
determination of the worker's compensation benefit.
Specifically, this bill would prohibit a physician from
considering the following when apportioning permanent
disability: race, religious creed, color, national origin, age,
gender, marital status, sex, sexual orientation, or genetic
characteristics.
Existing law provides that apportionment of the permanent
disability shall be based on causation and a determination of
"what approximate percentage of the permanent disability was
caused by the direct result of injury arising out of and
occurring in the course of employment and what approximate
percentage of the permanent disability was caused by other
factors both before and subsequent to the industrial industry.
(Lab. Code Sec. 4663.)
The author argues that "some disabled workers are having their
compensation apportioned not just to prior and/or pre-existing
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disabilities but also to factors such as age, race, and gender."
Public Counsel Law Center, a supporter of this bill, argues
that "�c]urrently, if an employee is injured on the job then the
worker has the right to file a workers compensation disability
claim. But all too often the monetary value of those claims are
reduced based on, for example, genetic predisposition to
particular kinds of illnesses, even when the immediate cause of
the disability was workplace injury."
As noted above, the San Diego Union-Tribune reported several
instances of race, age, and gender being used to decrease
workers' permanent disability benefits. (Calbreath, Race, Age,
Gender Bias Hits Workers Across State (Feb. 17, 2008) San Diego
Union-Tribune
(as of June 5, 2011.) The article reported
several instances of race being used to decrease workers'
permanent disability benefits as follows:
a women with a carpal tunnel claim that was reduced
based on being female because women apparently have a
higher incidence of carpal tunnel than men;
a 52-year old's work-related stress claim was reduced
because her "advanced age made her susceptible to
hypertension;"
an El Salvadoran woman's claim for work-related back
injury resulting in depression was reduced because, as
stated by the medical examiner in deposition: "She's from
El Salvador and she is, as the pronoun indicates, a woman.
. . . 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;"
and a middle-aged Hispanic man who spent decades working
for a utility company and injured his left shoulder and
left leg on the job, but whose claim was reduced because
the medical examiner stated the injuries were also caused
by his race, age, and gender. (Id.)
This bill would prohibit the use of characteristics, including
race, age, and gender, from consideration when apportioning
the causes of permanent disability.
3. Opposition
The California Manufacturers & Technology Association (CMTA), an
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opponent of this bill, argues that apportionment is a
"long-standing concept intended to protect employers from being
forced to pay for disability that is not directly caused by an
industrial injury. There is currently nothing in the Labor Code
that allows for discrimination based on protected classes when
adjusting the worker's compensation disability rating." CMTA
argues that case law demonstrates that courts do not uphold
apportionment based on discrimination. For this reason, CMTA is
requesting amendments to the bill to strike the intent language
and delete the words "cause or other".
CMTA points to Vaira v. WCAB, 9 WCAB Rptr. 10,371, wherein the
Court of Appeal held that, to the extent the medical examiner
based his apportionment of disability on the worker's age, this
would be a violation of the prohibition against discrimination.
Yet, this ruling was handed down only after the worker's
compensation judge accepted the medical examiner's apportionment
and after the petitioning worker requested reconsideration of
the apportionment three times, with the same result. It appears
a clarification of law is necessary so that medical examiners
are clear that characteristics should not be considered as other
factors contributing to a disability and future workers are not
required to follow the same extended path as Ms. Vaira toward a
fair and just result.
CMTA also argues that this bill will have the unintended
consequence of automatic increased litigation because every
apportionment determination will be questionable, this bill will
create uncertainty, hurt businesses, and "undo the reforms that
were put in place to create objectivity and fairness." In
response, proponents of this bill argue that it will not
automatically increase litigation but rather clarify and conform
the Labor Code to the anti-discrimination provisions of the
Government Code. If the medical examiner is aware of what other
factors should and should not be used in apportioning
disability, protracted litigation as demonstrated in Vaira will
be avoided.
4. Governor Schwarzenegger's vetoes of SB 1115 and SB 145
This bill is substantially similar to the enrolled version of SB
1115 (Migden, 2008). In vetoing SB 1115, Governor
Schwarzenegger stated:
While I support the intent of this measure, I do not believe
it is necessary. Current law, as well as court rulings,
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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.
SB 145 (DeSaulnier, 2010) also contained a provision that was
substantially similar to this bill. In vetoing SB 145, Governor
Schwarzenegger stated:
This measure, like Senate Bill 1115 (2008), which I previously
vetoed, would significantly undermined �sic] the state's
workers' compensation apportionment reforms of 2004.
5. If approved, this bill should be sent back to the Senate
Rules Committee
The Senate Rules Committee has requested that, should this bill
be approved by this committee, it should be sent back to the
Rules Committee for consideration of a request by the Senate
Labor and Industrial Relations Committee to hear the bill.
Support : American Civil Liberties Union; California Association
of Highway Patrolmen; California Communities United Institute;
California Conference of Board of the Amalgamated Transit Union;
California Conference of Machinists; California Correctional
Peace Officers Association; California Labor Federation;
California Nurses Association; California Official Court
Reporters Association; California Society of Industrial Medicine
and Surgery; California State Conference of the National
Association for the Advancement of Colored People; California
Teamsters Public Affairs Council; Consumer Attorneys of
California; Engineers and Scientists of California; Glendale
City Employees Association; International Longshore and
Warehouse Union; Mexican American Legal Defense and Educational
Fund; Organization of SMUD Employees; Peace Officers Research
Association of California; Professional and Technical Engineers,
Local 21; Public Counsel Law Center; San Bernardino Public
Employees Association; San Luis Obispo County Employees
Association; Santa Rosa City Employees Association; UNITE HERE!;
United Food and Commercial Workers - Western States Conference;
Utility Workers Union of America, Local 132
Opposition : Acclamation Insurance Management Services; Allied
Managed Care; ALPHA Fund; American Insurance Association;
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Association of California Insurance Companies; California
Association of Joint Powers Authorities; California Chamber of
Commerce; California Coalition of Workers' Compensation;
California Farm Bureau Federation; California Grocers
Association; California Hospital Association; California
Independent Growers Association; California Manufacturers &
Technology Association; California Restaurant Association;
California Retailers Association; California Trucking
Association; CSAC Excess Insurance Authority; Liberty Mutual
Insurance Group; Los Angeles County Board of Supervisors;
Marriott; Property Casualty Insurers Association of America;
Safeway; Spa & Pool Industry Education Council; UPS, Inc.;
Western Growers; Western Occupational & Environmental Medical
Association; Workers' Compensation Action Network
HISTORY
Source : California Applicants' Attorneys Association
Related Pending Legislation : None Known
Prior Legislation : See Background.
Prior Vote :
Assembly Floor (Ayes 47, Noes 26)
Assembly Insurance Committee (Ayes 8, Noes 4)
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