(April 5, 2007) The California Supreme Court heard arguments this week on how to apportion employer responsibility for a permanent disability, moving a step closer to deciding between differing opinions from several state courts of appeal.

At issue is whether future workers' compensation cases should apportion an employer's liability for a permanent disability by subtracting percentages of an employee's disability as a result of a work-related injury -- the approach supported by the California Chamber of Commerce -- or by subtracting the dollar value of the injury.

The state high court is reviewing the case of Welcher v. Workers' Compensation Appeals Board et al., along with the cases of Strong v. Workers' Compensation Appeals Board et al., Lopez v. Workers' Compensation Appeals Board et al., Williams v. Workers' Compensation Appeals Board et al. and Brodie v. Workers' Comp. Appeals Board et al.

CalChamber-Supported Ruling
The 3rd District Court of Appeal agreed with the CalChamber approach in a September 2006 ruling in the Lopez case. In agreement with a friend-of-the-court brief filed by the CalChamber, the 3rd District found that the 2004 workers' compensation reform legislation did not change the formula for calculating apportionment from a percentage-based formula to a dollar-based formula. The court also agreed that the reform legislation did not intend to change the formula.

The apportionment method was adopted by the California Supreme Court 30 years ago in Fuentes v. Workers’ Comp Appeals Bd. (1976) 16 Cal.3d 1 (Fuentes).

2004 Reforms
The reform legislation, CalChamber-supported SB 899 (Poochigian; R-Fresno) made fundamental changes in the way the workers’ compensation system determines the level of injury and the amount of disability assigned to an injury, and created a new medical network to provide quality, cost-effective care to workers.

The reform package ensured that medical treatment follows nationally recognized guidelines and set clear parameters for what is acceptable treatment for injured workers in the system, while also reducing excessive litigation.

Included in the reform package were changes in the law designed to bring rationality to the process of determining which conditions contributed to an injury and how much, so employers would be responsible for only the portion of an injured worker’s disability resulting from the existing job-related injury.

The Supreme Court has 90 days to issue an opinion in the case.

Staff Contact: Erika Frank