BILL ANALYSIS �
Senate Committee on Labor and Industrial Relations
Ted W. Lieu, Chair
Date of Hearing: July 6, 2011 2011-2012 Regular
Session
Consultant: Gideon L. Baum Fiscal:No
Urgency: No
Bill No: AB 1155
Author: Alejo
Version: May 9, 2011
SUBJECT
Workers' compensation.
KEY ISSUE
Should the Legislature prohibit discrimination in the
apportionment of industrial disabilities?
PURPOSE
To bar 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.
ANALYSIS
Existing law establishes a workers' compensation system that
provides benefits to an employee who suffers from an injury or
illness that arises out of and in the course of employment,
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.
Existing law 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. (Labor Code �4660)
Existing law requires that a physician make an "apportionment
determination" with respect to the permanent disability. In
order to do this, 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. The employer is only liable for the
percentage of permanent disability caused by injury arising out
of and in the course of employment. (Labor Code �� 4663 and
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. (Government Code �11135)
This bill would prohibit race, religious creed, color, national
origin, age, gender, marital status, sex, sexual orientation, or
genetic characteristics from being considered a cause or other
factor of disability with regard to any apportionment
determination.
This bill would also 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.
Hearing Date: July 6, 2011 AB 1155
Consultant: Gideon L. Baum Page 2
Senate Committee on Labor and Industrial Relations
COMMENTS
1. Need for the Bill?
AB 1155 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. This practice has been documented in the
media and by the supporters of this bill.
For example, 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 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."
Hearing Date: July 6, 2011 AB 1155
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Senate Committee on Labor and Industrial Relations
The supporters of this bill have also provided the Committee
letters where counsel for an employer requested that the
doctor selected through the Panel Qualified Medical Examiner
(PQME) process address if the fact that the employee was
African American may have contributed to his diabetes and
hypertension.
2. Legislative and Legal Background:
In 2004, the Legislature passed SB 899 (Poochigian), which
completely overhauled the workers' compensation system. As
part of the overhaul, SB 899 brought in the concept of
apportionment, which was discussed above. Prior to SB 899,
"�a]pportionment �was] justified only if the Board �found]
that part of the disability would have resulted from the
normal progress of the underlying nonindustrial disease."
(Pullman Kellogg v. WCAB (1980), as cited in Vaira v. WCAB
(2007), 9 WCAB Rptr. 10,371)(Vaira).
The Legislature changes to apportionment were recognized by
the State Supreme Court in Brodie v. Workers' Comp. Appeals
Bd. (2007) 40 Cal.4th 1313. In that case, the Court found
that "�f]ormer section 4750 required consideration of the new
injury `by itself and not in conjunction with or in relation
to the previous disability or impairment' and further called
for compensation for the later injury to be determined `as
though no prior disability or impairment had existed.' But
under Senate Bill No. 899 (2003-2004 Reg. Sess.), the new
approach to apportionment is to look at the current disability
and parcel out its causative sources - nonindustrial, prior
industrial, current industrial - and decide the amount
directly caused by the current industrial source. This
approach requires thorough consideration of past injuries, not
disregard of them." (Id. at p. 1328., as cited in Vaira)
(Emphasis added)
In the same year, the California Court of Appeals issued an
unwritten decision on the appropriateness of apportioning on
the basis of risk factors, such as such as age, race, sex, and
genetic predisposition. In Vaira, the petitioner accused the
doctor of apportioning a 73 year old injured worker's
permanent disability award on the basis of the injured
Hearing Date: July 6, 2011 AB 1155
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Senate Committee on Labor and Industrial Relations
worker's age and osteoporosis. While the Court side-stepped
the issue of if the doctor actually did this, it did weigh in
on if such an apportionment was legal.
Early on in the decision, the Court found that "�t]he short
answer to this contention is that? we conclude the WCAB may
not use risk factors of injury in apportioning disability."
(Emphasis in original) The court continued "The WCAB may not
reduce petitioner's benefits simply because she is older than
another similarly situated worker ?. To the extent osteoporosis
or some other physical or mental condition that might
contribute to a work-related disability arises or becomes more
acute with age, we see no problem with apportioning disability
to that condition." (Underline added)
In short, the Vaira court found apportionment must occur when
real contributing medical conditions are found, but not on the
basis of risk factors not rooted in a demonstrable condition.
3. Disparate Impact and the Vaira Decision:
The court also explored other issues surrounding apportionment
and federal and state anti-discrimination. Specifically, the
issue of disparate impact, which is a concept found in both
federal and state anti-discrimination law where a policy may
be illegal if it has a disproportionate impact on a protected
class.
One of the Amici in the case, the Impact Fund, argued that
apportionment on the basis of osteoporosis created a disparate
impact, as it disproportionately impacts women. As such,
Impact Fund argued that apportioning on the basis of factors
such as osteoporosis, "even where those factors contribute to
disability rather than injury, violates �Government Code]
section 11135."
Here the court found that:
"assuming such disparate impact exists, we disagree? that this
establishes a violation of �Government Code] section 11135.
Reducing permanent disability benefits based on a preexisting
condition that is a contributing factor of disability is not
Hearing Date: July 6, 2011 AB 1155
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Senate Committee on Labor and Industrial Relations
discrimination. When the WCAB determines a preexisting
condition contributes to a given disability, and apportions
accordingly, this is merely a recognition that a portion of
the disability exists independent of the industrial injury. "
(Emphasis and Underline added)
As such, the Vaira decision appears to foreclose the use of a
disparate impact argument when challenging an apportionment of
disability benefits due to medical conditions that
disproportionately impact a protected class. Rather, the
apportionment of an individual injured worker's medical
condition, irrespective of their membership in a protected
class, is lawful if it might contribute to a work related
disability.
4. The Status of Vaira under AB 1155:
As currently written, AB 1155 does not make an explicit
reference to Vaira and appears to overturn several aspects of
the decision. While AB 1155 codifies Vaira's prohibition of
the use of membership in a protected class as a factor of
disability, the addition of "cause" complicated Vaira and
apportionment generally. As was discussed above,
apportionment on the basis of a preexisting condition that can
be documented as contributing to an industrial's disability is
not discrimination under Vaira. Would an individual's age or
gender be considered a "cause" of osteoporosis or a similar
condition which contributes to the occupational injury? If
that was so, the requirement in Labor Code � 4663(c) for the
physician's report to factors outside of the industrial injury
would require the physician to make such a conclusion, which
may prove to be a difficult proposition.
Also of note are the legislative findings and declarations
which would apply discrimination law to the workers'
compensation system. This seems to suggest the availability
of a disparate impact argument when discussing apportionment.
As such, any preexisting condition for which apportionment
would create a disproportionate impact on any protected class
could be prohibited from being considered.
5. Proponent Arguments :
Hearing Date: July 6, 2011 AB 1155
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Senate Committee on Labor and Industrial Relations
Proponents argue that before SB 899 (Poochigian) of 2004,
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,
proponents 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. Proponents
believe that AB 1155 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 :
Opponents of this measure have taken a 'oppose unless amended'
position. Opponents argue 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." Opponents also argue that case law demonstrates that
courts do not uphold apportionment based on discrimination.
For this reason, opponents are requesting amendments to the
bill to strike the intent language and delete the words "cause
or other".
7. Prior Legislation :
SB 145 (DeSaulnier) of 2010 was identical to this bill. It
was vetoed by Governor Schwarzenegger.
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 Governor Schwarzenegger.
Hearing Date: July 6, 2011 AB 1155
Consultant: Gideon L. Baum Page 7
Senate Committee on Labor and Industrial Relations
SB 899 (Poochigian), Chapter 34, Statutes of 2004, was
discussed above.
SUPPORT
CA Conference Board of the Amalgamated Transit Union
CA Conference of Machinists
CA Official Court Reporters Association
California Labor Federation, AFL-CIO
California Nurses Association
California Teamsters Public Affairs Council
Consumer Attorneys of California
Engineers and Scientists of California
International Longshore and Warehouse Union
Professional and Technical Engineers, Local 21
UNITE HERE!
United Food and Commercial Workers-Western States Conference
Utility Workers Union of America, Local 132
OPPOSITION
Acclamation Insurance Management Services (Unless Amended)
Allied Managed Care (Unless Amended)
Association of California Insurance Companies (Unless Amended)
California Association of Joint Powers Authorities (Unless
Amended)
California Chamber of Commerce (Unless Amended)
California Coalition of Workers' Compensation (Unless Amended)
California Farm Bureau Federation (Unless Amended)
California Grocers Association (Unless Amended)
California Hospital Association (Unless Amended)
California Independent Grocers Association (Unless Amended)
California Manufacturers & Technology Association (Unless
Amended)
California Restaurant Association (Unless Amended)
California Retailers Association (Unless Amended)
California Trucking Association (Unless Amended)
County of Los Angeles
Marriott (Unless Amended)
Property Casualty Insurers Association of America (Unless
Hearing Date: July 6, 2011 AB 1155
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Senate Committee on Labor and Industrial Relations
Amended)
Safeway (Unless Amended)
UPS, Inc. (Unless Amended)
Western Growers (Unless Amended)
Workers' Compensation Action Network (Unless Amended)
Hearing Date: July 6, 2011 AB 1155
Consultant: Gideon L. Baum Page 9
Senate Committee on Labor and Industrial Relations