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Handling a Labor Code §3208.3 Psyche Claim for a Public Employee with Industrial Disability Retirement Rights
By Edward L. Faunce, Esq.

A recent case illustrated the labyrinth traps for the psychiatrically injured applicant. In addition to the potential factual dispute as to whether a given personnel action was taken in “good faith,” the Brooks case shows the scope of potential litigation even where there was no “good faith” dispute.

A recent case, City of Sacramento v. WCAB (Michael Brooks), __ Cal.App.4th __, (Filed April 22, 2013; Mod. 5/1/13 (2013) (hereinafter “Brooks”), illustrated the labyrinth traps for the psychiatrically injured applicant. In addition to the potential factual dispute as to whether a given personnel action was taken in “good faith,” the Brooks case shows the scope of potential litigation even where there was no “good faith” dispute. In Brooks, the factual dispute was whether a personnel action was responsible for at least 35% of the psyche injury.

Brooks’s psychiatric AME had assigned 1/3 of the cause to a coworker’s complaint; 1/3 to an internal affairs investigation; and 1/3 to the injured workers’ feelings that he was not supported by his administration. The lack of administrative support was an important factor because the complaining coworker was a county probation officer who filed the complaint against Brooks, a supervising probation officer.

The Brooks Court ultimately remanded the matter for further development of the record because the AME had relied on faulty assumptions and gave contradictions regarding the cause of Brooks’s injury. The AME referred to Brooks’ feelings that he was unsupported by his superiors as being a cause of his injury. Instead, the Court said that the lack of support feelings were the “injury” and were likely caused by the internal affairs investigation personnel action.

Thus, a workers’ compensation attorney, handling a psychiatric claim, must factor in disputes over both the “good faith” requirement as well as what is the actual cause of the injury.

But there may be a way to more efficiently help psychiatrically injured employees when they are also members of disability retirement pension systems (e.g. CalPERS or CERL (County Employees’ Retirement Law) ) systems. The California Supreme Court has specifically held that when the workers’ compensation system was amended in 1989 to add Labor Code §3208.3, which raised the bar to restrict benefits for psychiatric injuries, the legislature did not change the standard for awarding industrial disability retirement benefits under those pension systems which relied on an AOE/COE standard.

“As the legislative history expressly indicates, the Legislature enacted Section 3208.3 as part of a package of reforms to the workers' compensation law. PERS is distinct from the workers' compensation system, subject to different laws and governed by different administrative boards. Moreover, PERS includes a limited class of employees, like police and firefighters, whose employment subjects them to hazardous working conditions in the public interest. It is not absurd or illogical that the standards for benefits under the two systems might differ with regard to eligibility for specific benefits. Nor does the legislative history indicate any concern with fraud or abuse of PERS. Moreover, absent any showing of fraud or abuse by PERS members, we disagree with the Court of Appeal that public policy concerns justify applying Labor Code section 3208.3 in this matter.Pearl v. WCAB, (2001) 26 Cal.4th 189, 198.

Consequently, another strategy for representing such a psychiatrically injured employee, might be to file the psych claim in the workers’ compensation system and settle that claim without the full litigation battle over the good faith personnel action defense. Then, assuming that the psychiatric injury is sufficient to get pass the requirement that the employee is disabled, the question of whether the disability is “industrial” is decided on the basis of the AOE/COE law which existed prior to the 1989 legislation adopting the 3208.3 restrictions.

This strategy would give the injured worker a settlement from the workers’ compensation system and a lifetime pension under his/her retirement system. This could well be a much desired result providing for substantial benefits overall without the bitter litigation battle which could result in no benefits awarded under 3208.3

Of course, any settlement documents must be reviewed to insure that the applicant’s right to pursue their industrial disability retirement benefits have not been waived. See “Unintended Compromise and Release Consequences for CalPERS Disability Retirees”

Edward L. Faunce, Esq.
Faunce, Singer & Oatman
315 N. Vine Street
Fallbrook, CA 92028
Phone: 1-800-874-2284
www.public-pensions.com

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