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Passing the Test

As all of us who have students in our lives know, May is final exam time. Some have completed their exams, others are in the middle of them, and others have them looming in the near future. From our own experience, we know that while the process is stressful, there is a sort of euphoria that happens when you know you have passed the test.

In this edition of the Bulletin, we look at some recent cases, and recent developments in our firm, that bring this experience to mind.

First You Need to Know The Rules.  Before you can pass a test, you have to know what the rules are. In a recent decision, the California Supreme Court announced a new set of rules for determining who is, and is not, an employee for wage and hour purposes.

The case is called Dynamex Operations West v. Superior Court (Lee).Mr. Lee was a driver who delivered packages for delivery company Dynamex, and was considered an independent contractor. He filed a lawsuit claiming he and other drivers should have been classified as employees entitled to protection under California wage orders regarding  minimum wage, maximum hours, meal and rest breaks. The issue in the case was whether there were enough common facts between his claim and those of other drivers to support a class action lawsuit.

To make that determination, the California Supreme Court, after an exhaustive analysis, announced a new three step test for determining whether someone is an independent contractor or an employee. They called it the “ABC” test, and noted that it has been adopted in other states. The test is as follows: An individual is an independent contractor only if (A) the worker is free from control and direction of the hiring entity in connection with performance of the work; and (B) the worker performs work that is outside the usual course of the hiring entity’s business; and(C) the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

In reviewing the Court’s analysis, we think the factor that is likely going to force companies to designate more workers as employees is factor (B). As the Court explained, if a person is performing a task that is essential to the company’s business, that person is an employee. So, for example, if the company’s business is delivering packages, a person hired to deliver packages is an employee.
We need to emphasize that this decision only establishes the test for determining if someone is an employee for wage and hour claims. The Court acknowledged that there are different tests in different contexts, and affirmed that the multi-step Borello test, which has been used for many years, still applies to workers’ compensation claims. However, as a practical matter, we believe the Court’s announcement of this new test for wage and hour claims is likely to result in employers designating more workers as employees, and less workers’ compensation litigation on this issue.

Next, You Need To Know What Information You Can Consider.
Generally stated, a test is a series of questions which measures how well the student applies the rules to a set of facts to reach a conclusion. Once you know what the rules are, you next need to figure out what information you can consider. This was the topic of a recent WCAB panel decision, with an interesting set of facts.

The case involved an applicant, Edward Curtin, with two claims for back injury arising from his work as a custodian for the Sacramento County Office of Education (SCOE). The first claim arose from a specific injury in 1999.  Findings and Award in 2002 awarded benefits against Fremont Indemnity, later administered by CIGA after the insurer became insolvent. In 2014, Mr. Curtin and CIGA agreed to use Dr. Isono as AME to determine whether Mr. Curtin’s need for treatment was the result of subsequent cumulative trauma. Dr. Isono issued a report finding that applicant had sustained further cumulative trauma. Applicant then filed a new cumulative trauma claim against the now self-insured SCOE. Applicant and SCOE obtained a panel QME report from Dr. Chen, who found no cumulative trauma injury.

Applicant and SCOE stipulated to dismiss the cumulative trauma claim based on Dr. Chen’s report, but CIGA objected and sought consolidation of the cases. The WCJ approved the stipulation for dismissal and denied CIGA’s petition for consolidation. CIGA sought reconsideration, and the WCAB overruled the dismissal and ordered the cases consolidated. At a subsequent trial, the WCJ held that Dr. Isono’s report was not admissible because, “the Court is aware of no Labor Code provision or regulation that would allow a party or parties in an unrelated case to obtain a medical-legal evaluation addressing the merits of the yet-to-be-filed case.” Relying solely on Dr. Chen’s report, the WCJ held there was no cumulative trauma injury. CIGA sought reconsideration again.

The WCAB again overruled the WCJ. Citing to Labor Code sections 4062.2(f) and 4064(d), the Board held that the parties to a case can agree on an AME at any time, and all comprehensive medical evaluations obtained by any party are admissible in any proceeding before the appeals board (with specified exceptions). Relying on section 5703, the WCAB further held that reports of examining physicians are admissible as proof of any fact in dispute. Responding to an argument by SCOE that allowing Dr. Isono’s report into evidence was “extremely prejudicial” to the subsequent employer, the Board disagreed, noting that since SCOE was not a party to the AME agreement, it had the ability to, and did, get another opinion from another doctor. The WCAB further held that, while an AME’s opinion is ordinarily given greater weight, that was not true here because SCOE was not a party to the AME agreement. The case was remanded for the WCJ to consider Dr. Isono’s opinion.

It is not a new rule that medical reports obtained independently by a party are admissible evidence at trial. We thought this case was interesting because of the creative way in which the parties applied that rule to the circumstances of this case.

Success!  If you know the rules, and you apply them correctly, you pass the test, and should be recognized for your success.  Similarly, we like to recognize the successes of our attorneys, and take the opportunity here to share them with you.

First, we are pleased to announce that Cynthia Hermann has taken over as Managing Attorney of our Redding office.  Cindy is an excellent attorney who has been with us a long time, and is well liked and respected by all who know her.

We are also pleased to announce that attorney Rod Coppedge has joined our San Diego office. Rod is a Certified Specialist in Workers’ Compensation with over 15 years of experience in all aspects of handling workers’ compensation matters, including appeals up to and including the California Supreme Court. Among other things, he has successfully defended against claims of neurological damage, Chronic Traumatic Encephalopathy (CTE), and dementia caused by concussions in sports cases. He also has experience representing clients in subrogation matters.  We are happy to have him joining our firm.

This Bulletin was written by Karen Dutton, Associate Attorney in our San Francisco office.

Need Assistance? Are you interested in having M&F attorneys design a customized training or claim review round-table meeting for your office? We’d be happy to provide on-site assistance as required to help you meet the challenges of today’s claims administration issues, and to assist you in complying with all regulatory guidelines. Contact us today at education@mulfil.com for further details or to schedule a seminar!