CA Court Shakes up Workers’ Comp Rules

Business Insurance reports that the case of Wanda Ogilvie vs. City and County of San Francisco was combined with Mario Almaraz vs. Environmental Recovery Services and Joyce Guzman vs. Milpitas Unified School District in 2009, with the WCAB ruling that the rating of permanent disabilities can be rebutted with certain evidence, including data and medical determinations. The Court of Appeal, however, found that the WCAB exceeded its authority in that finding.  

“Because we cannot conclude on this record whether Ogilvie effectively rebutted application of the rating schedule, we reverse the decision of the Workers Compensation Board of Appeals, annul the award benefits to Ogilvie, and remand further proceedings consistent with our opinion,” Judge Peter J. Siggins wrote in the opinion, according to Business Insurance.  

The news report said that in overturning the WCAB opinion, the Court of Appeal rejected the WCAB formula for rebutting the diminished future earning capacity component of the permanent disability award, and it offered three ways in which an injured worker can challenge the rating: 

• The earning capacity adjustment contained a factual error in the calculation or application of the formula; 
• The employee is not amenable to rehabilitation due to the industrial injury; or 
• The omission of medical complications aggravating the disability used to compute the diminished future earning capacity adjustment factor. 

“The court found nothing in the statute that authorized an alternative method for determining an employee’s diminished future earning capacity, so when the (WCAB) devised a formula to rebut the diminished future earning capacity factor, it acted in excess of its authority,” Michael Nolan, president of the Oakland-based California Workers’ Compensation Institute, wrote in an email, according to the news report. “Every permanent disability case rated in accordance with the WCAB’s “Ogilvie formula’ is, therefore, invalid in our opinion.”  

With the Court of Appeal opinion invalidating the WCAB’s rebuttal formula, Nolan said the Court of Appeal could require that cases decided based on the “Ogilvie formula” be re-evaluated.  

The WCAB’s initial decision in Ogilvie caused unrest within California’s workers comp system, with employers and insurers stating the decision would create significant cost increases—up to $800 million in additional costs by some estimates.