California Court of Appeals Forbids Schwarzenegger Workers’ Comp Law From Being Used to Discriminate Against Seniors and Women

In this case, even the insurer’s medical expert agreed that without the injury Ms. Vaira would have no disability from either age or osteoporosis. Nevertheless, the WCAB reduced Ms. Vaira’s disability compensation by 40%, claiming that her osteoporosis made her more susceptible to injury.

Melissa Brown, the Sacramento attorney representing Ms. Vaira, commended the court’s decision, “Ms. Vaira is like many others who have had benefits reduced because of normal aging, without symptoms. It is important that the court found that anti-discrimination laws do apply to workers injured on the job. This is the first time a court has issued such a decision. The court’s decision does leave some issues unresolved, and we are considering whether to appeal on those issues.”

Brad Seligman, an attorney representing the Impact Fund, which filed a friend of the court brief, said, “If Ms. Vaira had been younger, she would have gotten more benefits, and that is discrimination. We’re glad the court recognized that and acted to protect Ms. Vaira. Penalizing Lois Vaira would have been similar to a pension agency discriminating against women because they live longer than men. It is time for this discrimination to end. This case is the first step in making sure that the workers compensation system is not discriminating in awarding benefits to injured workers.”

The California Applicants’ Attorneys Association (CAAA), whose members represent injured workers, today applauded the court for the decision and called for “an end to this age, gender, and ethnicity discrimination that reduces compensation to disabled workers by millions of dollars each year. The governor’s law allows insurance companies to reduce benefits to Californians over 40, women and ethnic minorities," said Sue Borg, president of CAAA.

Borg continued: "Insurers and their doctors say women, minorities or older workers are more likely to develop certain conditions. Then, without any evidence these factors contributed to the work injury or were even known or symptomatic prior to the work injury, they reduce the disability award for these people. Under this new law an older worker who does the same work as younger colleagues can receive less compensation for the same work-caused disability, and a woman doing the same work as her male co-workers can similarly receive less compensation for the same work-caused disability. Today’s decision is a big step toward ending this discrimination. We call upon the legislature and the governor to take heed and act to correct this inequity."

"California has long prohibited reduction of workers' compensation awards based on an employee's vulnerability to disease or injury. The discrimination against Ms. Vaira, based upon her age and her osteoporosis, violates one of the fundamental public policies of our state and nation," said Borg.

Ms. Vaira was rated as 54% permanently disabled, which would have provided her with a permanent disability compensation award of $55,176.25. However, 40% of her compensation was deducted due to "the aging process" and underlying osteoporosis, leaving her with just $33,105.75 to compensate her for a lifetime disability caused by her work injury. "It is unacceptable that those who have worked hard to build California are having their compensation taken away simply on the basis of age or gender," said Borg.

"We are glad the court found that the prohibition against discrimination contained in Govt. Code §11135 does apply to the Workers' Compensation Appeals Board. We are also glad that the court was unequivocal in its determination that apportionment to age per se and gender was prohibited. This will provide significant relief to workers who are being unfairly impacted by the indiscriminate use of ‘risk factors’ to include age, race, gender, national origin and genetic predisposition to reduce the workers' permanent disability award via ‘apportionment’ under Labor Code §4663,” said Linda Atcherley, Legislative Chair for CAAA. “We also believe that the Legislature should act to make sure injured workers are protected from discrimination.”

Apportionment is a mechanism to assure that employers are not held responsible for a "pre-existing" disability if one of their employees is injured on the job. Some types of apportionment are not discriminatory. For example, any prior compensation received can be deducted from a subsequent award should the worker suffer a further disability to the same body part.

But "SB 899 promotes de facto discrimination on the basis of age, gender and other conditions," said Borg. "Ms. Vaira’s case is just one of thousands penalizing the elderly, women and racial minorities in California’s workforce. As we age, everyone will develop degenerative conditions that have no symptoms, or symptoms that don’t affect our ability to do our jobs. Until SB 899, employers could not penalize a worker for a pre-existing condition if it did not impair their ability to do their job. Now, insurance companies aggressively seek any signs of aging and automatically reduce a worker’s compensation solely on that basis. Apportionment under SB 899 discriminates against older workers by using a natural part of the aging process to limit the award of compensation."

I've pointed out in the past how this much touted reform has:

• Cut disability compensation to permanently injured workers by up to 70%

• Reduced or in some cases effectively denied altogether access to medical treatment

• Taken away an injured workers’ choice of his or her doctor

• Penalized workers who return to work

• Allowing insurance carriers to pocket billions from denying medical care and benefits to injured workers

• Cut off temporary disability to many of the most severely injured workers

I even suggested after the California Supreme Court sadly said that the law permitted the payment of only $3,360 for an amputated leg that the workers' compensation laws ought to be repealed in their entirety:

I said at that time:

"If anyone needed any further proof that the workers' compensation system needs abolishing, and that we should return to the pre 1914 system where workers could sue their employers for injuries sustained on the job, this is it. Workers' compensation was a progressive reform brought about by Hiram Johnson who was Governor of California a century ago. A bargain was struck: Workers gave up their right to sue employers where they had to prove negligence, and in return were promised an adequate system of benefits for their injuries and the medical treatment needed without delay.

"Workers are getting neither of these. Even before this court decision, benefits were inadequate and there were so many delays in providing medical care that workers with other insurance, even with deductibles, were better of using their own insurance rather than relying upon that denied, delayed, and sometimes authorized under workers' compensation.

"I know this, because for 26 years I represented injured workers as an attorney and often presided as a Workers' Compensation Judge, pro tem. Even defense attorneys, those hired by insurance carriers or employers, would admit that the system provided far too little to the vast majority of seriously and permanently injured workers."

If this law isn't fixed, it should be abolished because it has become a travesty. It's not just a travesty for injured workers, it is also one for businesses. Insurer profits in 2006 were a record--$27.7 billion, while only $19.8 billion in benefits were paid to those injured on the job. Any time these carriers make more in profit than they pay out, something obviously is wrong.

Schwarzenegger promised at the time this law was enacted that he did not intend for it to harm the truly injured worker. I'd say that someone such as Ms. Vaira, who had a compression fracture at T12 on her spinal column and tens of thousands of other Californians deserve the Governor's attention. I hope he's listening and that the legislature puts him to the challenge.