The Nuts and Bolts of Prevailing on Good Faith Personnel Actions

Thursday, October 14, 2010 | 1

By Aaron Hemmings
Grancell, Lebovitz, Stander, Reubens & Thomas

Often a claim of a psychiatric injury arising out of and in the course of employment (AOE/COE) is disputed or denied based upon a good faith personnel action defense. However, in order to prevail on this affirmative defense at the time of trial, the requisite evidence must be presented.

The necessary evidence the defendant must present is set forth in the case of Rolda v. Pitney Bowes (2001) 66 CCC 241. Failure to provide evidence consistent with the requirements of Rolda will doom this affirmative defense.

Rolda set forth a step-by-step analysis that the workers' compensation judge must follow in order to determine whether or not a psychiatric injury is barred by Labor Code section 3208.3(h) as having been substantially caused by a lawful, non-discriminatory good faith personnel action. Naturally, it is still the Applicant's initial burden to prove that the actual events of employment are predominant as to all causes combined of the alleged psychiatric injury as set for in Labor Code section 3208.3 (b). Predominance is greater than 50%. Assuming the applicant has met that burden with medical evidence, the burden then shifts to the defendant to prove up the good faith personnel action defense by following the steps laid out in Rolda:

1. First, the WCJ must determine that substantial medical evidence demonstrates that the actual events of employment are involved and that they are predominant as to all causes. 2. The WCJ must determine whether the personnel actions are a "substantial cause," or 35% to 40% per Labor Code section 3208.3(b)(3), of the psychiatric injury again based upon substantial medical evidence. 3. Finally, the WCJ must determine whether the personnel actions which were lawful, nondiscriminatory and made in good faith.

In order to prevail upon this defense, a medical opinion is required to determine that the personnel actions are a substantial cause of the alleged psychiatric injury.  In fact, the lack of medical evidence demonstrating that the personnel actions were the substantial cause of the psychiatric condition precludes application of Labor Code section 3208.3(h).  (See Sav-Mart Foods v WCAB [Thayer] [2003] 68 CCC 1517). Personnel actions are defined in Larch v. WCAB (1998) 63 Cal. Comp. Cas 831 as:

". . . conduct either by or attributable to management including such things as done by one who has the authority to review, criticize, demote, or discipline an employee. It is not necessary for the personnel action to have a direct or immediate effect on the employment status. Personnel actions may include but are not necessarily limited to transfers, demotions, layoffs, performance evaluations, and disciplinary actions such as warnings, suspensions, and terminations of employment."

It is critical to ensure that the medical-legal evaluator is made aware of the facts which constitute the actual events of employment and then asked to comment upon whether they are a substantial cause under Labor Code section 3208.3(h).

I always recommend that the applicant be deposed in order to determine whether non-industrial events could be affecting his or her psyche.  Careful examination should be used to pin the applicant down as to the basis of his or her psychiatric claim.  For example, was it discipline or even a termination in the works? Or was it the "constant" interaction with "irate" customers?

The complete contents of the applicant's personnel file can often be helpful in supporting a good faith personnel action defense.  If there are no personnel actions present, again defined by Larch above, then the defense will most likely fail.  This is often seen when an underlying physical injury is found to be a predominant cause without the presence of personnel actions.  Witness statements can be helpful as well, although if the witnesses are not available at trial it may taint the medical report in which they are reviewed.  For that reason, a deposition of the witnesses may be necessary in order to preserve witness testimony.

Aaron Hemmings is an attorney in the Gracell law firm's Central Coast office in Ventura, Calif. This column was reprinted with the firm's permission from its quarterly newsletter.