Monday, December 18, 2017

S&W Penalties: What Employer Misconduct Rises to the Level of Serious and Willful?

When an employee’s industrial injury is caused by the serious and willful misconduct of the employer, Labor Code section 4553 allows for the employee’s compensation to be increased by one-half upon a petition for penalties to the Workers Compensation Appeals Board.  The California Supreme Court has determined that the one-half increase applies to every benefit or payment provided to the applicant under Division Four of the Labor Code, including medical treatment payments, medical-legal fees, vocational rehabilitation costs, and all indemnity benefit payments.  As the penalty is due to quasi-criminal conduct, Workers’ Compensation insurance does not cover employer serious and willful misconduct; and the penalty is assessed directly against the employer.

Serious and willful misconduct petitions claim injury through either the employer or his managing representative, or general superintendent’s violation of a Cal/OSHA safety order, or the failure of the employer to provide a safe working environment under Labor Code section 6400.  Safety Orders are contained within Division 5 of the Labor Code.  Should the injured worker believe that the employer committed serious and willful misconduct, he must file his petition within one year of the date of injury.

To prove an employer’s violation of a safety order, the injured worker must show  (1) the specific manner how the order was violated; (2) how the violation proximately caused the injury to the applicant; and (3) either – the safety order and the conditions of its violation were actually known and violated by a specific individual; - or where the condition making the safety order applicable was obvious to the employer or his representative as designated under Labor Code section 4553, and the failure of that individual to correct the problem constituted reckless disregard for the consequences. 

Labor Code section 6400 requires every employer to furnish employment and a place of employment that is safe and healthful for its employees.  Labor Code section 6400.  To prove employer serious and willful misconduct for an unsafe environment, an injured employee must prove that the employer (1) knew of the dangerous condition; (2) knew that the probable consequences of the condition would involve serious injury to an employee; and (3) deliberately failed to take action.

For a single instance of serious misconduct, the injured worker must show with reasonable particularity that the reckless disregard for safety was made by a person in the managerial class of the employer.  Where obvious, fixed, and long-maintained conditions of hazard exist, the courts have inferred that the conditions were known to members of the managerial class, and can be proved by circumstantial evidence, including evidence of prior injuries arising from similar circumstances.

Courts have required egregious conduct by the employer to be considered serious and willful misconduct.  Serious and willful misconduct involves conduct of a quasi-criminal standard, and are acts that are either likely to result in serious injury, or with a wanton and reckless disregard of their possible consequences.  The misconduct requires an intention to do harm, making it the antithesis of negligence of any degree.  A willful failure to protect an employee from likely injury has been found sufficient to meet the standard.  This standard is applicable both in violations of the Safety Orders as well as a violation of Labor Code section 6400.

Under Labor Code section 4551, an injured worker can be penalized, upon petition by the employer, for his own serious and willful misconduct which caused injury.  If the employer proves that the employee’s own misconduct caused his injury, the otherwise recoverable compensation may be reduced by up to one half upon a findings and award by the Workers’ Compensation Appeals Board. 

Plaintiff – Employment Discrimination Practice

On September 20, 2017, the Federal District Court for the Eastern District of California ruled in favor of an employment discrimination plaintiff represented by Mastagni Holstedt, APC, denying the defendants’ Motion for Summary Judgment. Mastagni Holstedt, APC represents a Butte County Sheriff’s Deputy, Michael Sears, in this federal Racial Discrimination and Harassment lawsuit against the Butte County Sheriff’s Office and a number of individual employees of the Sheriff’s Office. 

In the lawsuit, Deputy Sears – who is African American – asserts that members of the Butte County Sheriff’s Office engaged in derogatory and hateful speech because of race, including use of the word the “N-word” and terms such as “Canadian Blue Gum.”  Mr. Sears charges that a black and white plastic panda figurine was hanged in a Sheriff’s facility and Mr. Sears was told that “the hanging doll symbolized Mr. Sears because Mr. Sears is half-Black and half-White.”  Mr. Sears charges that he was denied promotional opportunities and other job benefits.  Taking evidence of these allegations into consideration – along with evidence of many more instances of racially discriminatory conduct – the Federal Court reasoned that “Plaintiff has offered sufficient evidence in the current posture to show that he was subject to discriminatory and harassing conduct and there are numerous triable issues of fact as to whether Defendants’ proffered reasons for their actions were legitimate or pretextual.” 

In so ruling, the federal court refused to deny Mr. Sears his day in court before a jury. The case now proceeds in litigation toward trial.