February 13, 2013
California court tosses workers' compensation retaliation case

We’re not going to sugarcoat it: Letting go of a poor performer who has filed a workers’ compensation claim comes with real risks. After all, the employee could easily allege that you fired him or her in retaliation for filing the claim. Even if you clearly documented the poor performance, you’d still have to expend valuable resources fighting the allegation.

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A ruling from the California Court of Appeals, however, has eliminated one significant risk—that the terminated employee can sue for workers’ comp retaliation in state court. Read on to learn what this means for you.

Injured housekeeper sues for wrongful termination

“Danielle” worked for Mercy Medical Center in Mount Shasta as a housekeeper. She injured her back on the job on January 31, 2008, while pulling a linen barrel across a snow-covered alley, and filed a workers’ compensation claim that day.

Mercy terminated Danielle on March 19 for: (1) continuing to gossip while on duty and after being counseled about it; (2) check fraud; and (3) falsifying her timecard and abandoning her post by leaving work without clocking out.

Danielle sued Mercy in state court for wrongful termination in violation of the public policy codified in Section 132a of the California Labor Code. That provision generally prohibits discriminating against or discharging an employee for filing a workers’ comp claim, otherwise known as retaliation.

The trial court dismissed the claim on the ground that the Workers’ Compensation Appeals Board (WCAB) has exclusive jurisdiction to hear retaliation claims under Section 132a. Danielle appealed.

WCAB must hear claim

As the court of appeals noted, Section 132a entitles an employee who was subjected to retaliation for filing a workers’ comp claim to a 50 percent compensation increase (up to $10,000), reinstatement, reimbursement of lost wages and benefits, and costs and expenses. It also grants the WCAB jurisdiction to remedy violations.

Danielle, however, argued that her Section 132a claim could be asserted as a civil action for wrongful termination in court. In support, she cited a case (City of Moorpark v. Superior Ct. (1998)) in which the California Supreme Court held that the vesting of jurisdiction with the WCAB didn’t establish an exclusive remedy for Section 132a violations—an employee could also pursue remedies in court.

Danielle contended that her wrongful termination claim was one type of remedy that could be pursued in court, instead of with the WCAB.

The appellate court disagreed with Danielle’s interpretation of the earlier California Supreme Court ruling. In that case, it said, the high court held that Section 132a doesn’t provide an exclusive remedy against disability discrimination and doesn’t preclude an injured employee from pursuing remedies under the state Fair Employment and Housing Act (FEHA) or certain wrongful termination remedies.

The Supreme Court, however, didn’t address the question of whether a Section 132a violation—in other words, workers’ comp retaliation—can form the basis of a claim for wrongful termination in violation of public policy. The court of appeals determined that it cannot.

Section 132a, the court found, includes limitations that prevent it from being the basis of a wrongful termination claim. The statute establishes a specific procedure and forum (the WCAB) for addressing a violation. It also limits the available remedies. Allowing Danielle to pursue a wrongful termination action in court would give her broader remedies and procedures than the statute provides. Dutra v. Mercy Medical Center Mt. Shasta, Calif. Court of Appeals (Dist. 3), No. C067169 (2012).

Retaliation is risky

The court emphasized that Section 132a wasn’t Danielle’s exclusive remedy—she could have pursued other remedies for the alleged retaliation. But, despite the trial court giving her the opportunity to amend her complaint accordingly before dismissing the action, she chose not to. Your employees might not make that mistake.

Retaliation, therefore, can still prove costly for an employer. An employee may, for example, sue for disability discrimination under FEHA. And even if the injured employee chooses to pursue only a retaliation claim with the WCAB, the remedies provided under Section 132a can quickly add up.

To avoid these costs, make sure your managers and supervisors are well aware of the risks of retaliation, not just based on workers’ compensation claims but on any type of protected activity. Their training should also include examples of scenarios that could constitute retaliation in the eyes of authorities.

Practice Tip: An employee discharged after filing a workers’ comp claim might be able to sue the employer in court for disability discrimination.

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