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A VOUCHER IN EVERY POT

California Code of Regulations (“CCR”) §10133.54 sets forth the process for resolving disputes related to the Supplemental Job Displacement Benefit Voucher (hereinafter “Voucher”) for injuries occurring on, or after, January 1, 2004. When there is a dispute with regard to the Voucher, the employee or claims administrator may request that the Administrative Director resolve the dispute. CCR §10133.54(c) sets forth the specific requirements that have to be undertaken in that request.

In the recent decision of Dennis v. State of California – Department of Corrections and Rehab Inmate Claims (2020) 85 CCC 389, the Appeals Board issued an en banc decision holding the following:

1. Administrative Director Rule 10133.54 is invalid because it exceeds the statutory authority granted to the Administrative Director under Labor sections 4658.5(c) and 4658.7(h), and restricts the exclusive adjudicatory power of the WCAB to adjudicate compensation claims, including disputes over supplemental job displacement benefits; and
2. An employer must show that it made a bona fide offer of regular, modified, or alternative work in order to avoid liability for a Voucher.

Factual Background

On October 29, 2013, Applicant sustained an industrial injury to his right wrist while working as an inmate laborer for California Department of Corrections and Rehabilitations. Defendant sent Notice of Offer to applicant offering work for regular, modified or alternative work. However, the Notice stated that applicant had voluntarily terminated his employment due to his release from prison and he is no longer available for employment. The claim was later resolved by way of Stipulations with Request for Award, however, the settlement did not include the Voucher.

Procedural Background

Applicant filed a Request for Dispute Resolution before the Administrative Director, requesting that the Administrative Director resolve the issue of applicant’s entitlement to a voucher. The request was denied as it was not filed timely. Applicant then filed a Declaration of Readiness to Proceed before the WCAB. The matter was set for Trial on the issue of whether the request for dispute resolution by the Administrative Director was timely and whether the applicant was entitled to a Voucher. The WCJ issued an Order that the request was untimely, and applicant was not entitled to the Voucher.

Applicant then filed a Petition for Reconsideration which was granted, and a decision was issued on July 31, 2018 providing that applicant was entitled to the Voucher and that the WCAB maintains exclusive jurisdiction to adjudicate Voucher disputes irrespective of AD Rule 10133.54. Defendant then filed a Petition for Reconsideration and the court issued an en banc Notice of Intention affirming their July 31, 2018 decision.

AD Rule §10133.54 is Deemed Invalid

The court considered Article XIV, Section 4 of the California Constitution, which grants plenary power to the Legislature, who in turn, enacted the California Workers’ Compensation Act. The Act is administered and enforced by the Division of Workers’ Compensation under the control of the Administrative Director, “except as to those duties, powers, jurisdiction, responsibilities, and purposes as are specifically vested in” the Appeals Board.

Pursuant to Labor Code §5300, the WCAB has exclusive jurisdiction to adjudicate the “recovery of compensation, or concerning any right or liability arising out of, or incidental thereto,” of injuries that “arise out of and in the course” of employment. The definition of ‘compensation’ under Labor Code §3207 is broad enough to include the Voucher even though it is not paid to the injured worker.

Labor Code Sections 4658.5(c) and 4658.7(h) only authorized the Administrative Director to adopt regulations for the administration of the SJDB program, not to establish rules for the adjudication of disputes over one’s entitlement to them. The court found that AD Rule 10133.54 is invalid because it exceeds the statutory authority granted to the Administrative Director and restricts the exclusive adjudicatory power of the WCAB to adjudicate compensations claims, including disputes over  Vouchers.

What Constitutes a “Bona Fide Offer”?

The court held that, in order to qualify as an exception to the entitlement to a
Voucher under Labor Code §4658.7(b), the offer of regular, modified, or alternative work must be bona fide.

The court acknowledged that an employee in a prison setting is unique, in that they may not return to an inmate job once they are released. Despite this fact, the court concluded that an employer’s inability to offer regular, modified, or alternative work does not release an employer from the statutory obligation to provide a Voucher.

In the case at hand, the employer sent an offer of regular work or a modified or alternative job availability, however, the Notice stated the offer was, “Subject to applicant verifying they are lawfully qualified to accept employment as an inmate laborer, you have voluntarily terminated your employment due to your release from prison and are no longer available for employment.”

The Appeals Board concluded that, defendant did not extend a bona fide offer of regular, modified, or alternative work to applicant. Absent a bona fide offer regardless of the employer’s ability to make such an offer, and regardless of an employee’s ability to accept such an offer, an employee is entitled to a Voucher. The Appeals Board also commented that the Legislature could have excluded released inmates but this would prohibit the inmate from developing new skills to re-enter the workforce.

Conclusion

Based on this decision, a Workers’ Compensation Judge has the exclusive jurisdiction to resolve disputes over Vouchers.  More importantly, decision clarifies that an employer must make a “bona fide” offer of regular, modified, or alternative work to avoid liability for an Voucher, even to an inmate who had been released from his position previously held in prison. The inability to offer employment does not absolve an employer of the obligation to make a “bona fide” offer of employment.

Please note, however, that this decision does not override Del Taco v. WCAB (Gutierrez) (2000) 65 CCC 342, where the court found that an undocumented workers was not entitled to vocational rehabilitation benefits when the individual is unable to return to work solely because of immigration status.

By Linda Bryan, Elliott Castaneda, Marjan Hemmati and Karly Tambara of the Orange Office, July 2020.