Nuances in Defending Liability for the Supplemental Job Displacement Benefit
I was recently contacted by a claims examiner client questioning liability for the Supplemental Job Displacement Benefit. She had 4 claims for injuries that all contributed to the employee’s impairment causing the need for retraining. Her question was a common one, “Do I owe 4 vouchers? ”
I immediately recalled the 2015 case Silva v. Liberty Mutual Insurance Company, where a Workers’ Compensation Judge ordered the defendant employer to issue 2 separate vouchers to an injured worker claiming an April 16, 2010 injury to his left shoulder, neck and psyche and also a cumulative trauma from April 26, 2009 to April 26, 2010 to the same body parts plus the left wrist. The court held that liability for the SJDB is triggered by each injury judged on its own separate merits. The WCAB Commissioners held that the Trial Judge found two distinct injuries with separate injury dates, with a cumulative injury also involving a new body part, the left wrist. The WCAB Panel rejected the defendant’s claim of improper double recovery and found that the injured worker was entitled to two separate supplemental job displacement vouchers.
But I couldn’t reconcile liability for four 4 separate SJDB vouchers and figured there must be a defense. Triggering liability for the SJDB is not a tall order: A permanently partially disabled worker is entitled to the voucher unless the employer makes an offer of regular, modified or alternative work, per 8 CCR §10133.34, no later than 60 days after receipt by the claims administrator of the Physician’s Return to Work & Voucher Report.
Okay, so it turns out my client was never presented with the Physician’s Return to Work & Voucher Report. However, a short course of research turned up the case Fndkyan v. Opus One Labs, 2019 Cal. Wrk. Comp. 51 which held that the Physician’s Return to Work and Voucher Report is not necessary where the physician’s narrative MMI report contains information sufficient to notice the employer of need to offer permanent modified work.
I didn’t have all the material facts in my client’s situation but couldn’t imagine a scenario resulting in 4 separate injury claims without a return to work. After all, the employee would have to return to work after the first injury to get injured the second time, and a third time, and a fourth…
I considered the effect of 8 CCR 10133.31(c) which allows that “[a]n employee who has lost no time from work or has returned to the same job for the same employer, is deemed to have been offered and accepted regular work in accordance with the criteria set forth in Labor Code section 4658.7(b).” This looked like a viable defense to the claim for multiple vouchers so long as the employee returned to the same job for the same employer.
But in Peery v. California Department of Water Resources, 2020 Cal. Wrk. Comp. P.D. LEXIS 318 the court recognized that Labor Code section 4658.7(b) requires the offer to be for “regular work, modified work, or alternative work lasting at least 12 months.” (emphasis added). I figured we could argue that the offer for work was intended to last 12 months but the fact that the employee was subsequently injured and went back off work was not anticipated. If successful, we may escape liability for all but the claim on last date of injury.
My client subsequently advised that an offer return to work after the last injury would not be possible as the employee’s position was eliminated. I considered the argument that the employer would have offered a return to work but for circumstances out of its control. But I was quickly reminded of the case Dennis v. State of California (2018 Cal. Wrk. Comp. P.D. LEXIS 349) (Appeals Board en banc) where the injured worker was a prison inmate who was released after his industrial injury. The employer claimed that it would have issued a good faith offer to return to work in the prison but for the employee’s release from incarceration. The WCAB commissioners held that an employer’s inability to offer regular, modified or alternative work does not release an employer from the statutory obligation to provide an SJDB voucher. Further a return to work in this situation was impossible and as such was not a bona fide offer made in good faith.
This Dennis case is similar to the holding in Corona v. California Walls, Inc, dba Crown Industrial Operators, 2020 Cal. Wrk. Comp. P.D. LEXIS 25 where the employee was working modified duties but was sent home due to state and local emergency orders related to COVID-19. To escape liability for TTD, the employer argued that it would have continued to provide modified work but for the mandates of the emergency orders which were outside its control. The WCAB found that “applicant’s termination from employment was not for cause, or due to his own misconduct, but was due to COVID-19 shelter-in-place orders.” So, it found that the employer did not meet its burden to show that it was released from paying the applicant temporary disability benefits during the period in question.
When it became apparent that there was no sure defense to the claim for multiple vouchers, my client proposed that we try and settle the liability for the voucher claims. But it is very clear that on claims for injuries occurring on or after January 1, 2013, Labor Code §4658.7(g) and 8 CCR 10133.31(h) specifically prohibit settlement of the SJDB. Nevertheless, in Beltran v. Structural Steel Fabricators, the appeals board held that when the parties establish there is a good-faith dispute that, if resolved against the applicant, would defeat his or her entitlement to all workers’ compensation benefits, he or she may settle a claim by a compromise and release agreement that also settles the potential right to the supplemental job displacement benefit voucher. We considered a C&R settlement that included language consistent with Beltran. We noted that as a panel decision, Beltran is not binding on other panels or WCJs. Many Judges will not approve a C&R with language settling liability for the SJDB in any circumstance; however, I have had success obtaining approval of Compromise & Release agreements containing language that does not reference “settlement” of the benefit but confirms that the case “involves a serious and good faith issue which, if resolved against the injured worker, would defeat all of his or her rights to compensation benefits per Beltran v. Structural Steel Fabricators (2016) 81 Cal.Comp.Cases 1224 [2016 Cal. Wrk. Comp. P.D. LEXIS 366].”
In the end, I never heard how my client’s case for 4 separate vouchers turned out. I do know that we spent a considerable amount of time considering many possible defenses. But if my intuition (based on experience) is accurate, and despite our effort and thoughtful analysis, I suspect the end-result was a $20,000 payment from the State of California.