Wrongful Termination Versus “At Will” Employment

No employer enjoys firing an employee.  This is typically made even worse and more complicated if the employee has sustained a work-related injury and has mentioned filing or already has filed a claim for workers’ compensation.  There are special laws and protections in place for employees who have suffered on-the-job injuries.  Conversely, employers are not required to continue to extend employment for an employee who is performing poorly or who is not otherwise fulfilling essential job functions, even if the employee has filed a workers’ compensation claim.  This is where we see a tension between “at will” employment and wrongful termination claims.

In California, most employment is done on an “at will” basis.  This means that an employer may usually fire an employee for almost any reason, unless that reason is deemed part of a protected class, such as race or religion.  There are exceptions to “at will” employment, such as if there are contracts or in some cases if the worker is part of a union.  Ultimately this means that an employer is free to discharge most of its employees at any time for nearly any or even no reason at all.

Labor Code 132a provides an important caveat to “at will” employment.  Under 132a, an employer may not discharge or induce adverse employment action against an employee in retaliation for an employee’s decision to file a workers’ compensation law suit.  This provision is meant to provide essential protection to keep employers from simply firing or punishing any employee who seeks to have his or her medical expenses paid for under the workers’ compensation system.  Note, however, that 132a does not provide an invincible shield for an employee.  An employer is still free to discharge an employee even after the employee has filed a workers’ compensation claim if the reason for the discharge is not in retaliation for the workers’ compensation suit.  As you can see, 132a provides only a very narrow exception to the general “at will” employment rule.  If an employer feels that an employee is not performing well, is not meeting job functions, is no longer a good fit for the office, or basically any other reason not relating to the workers’ compensation claim, the employer is still free to exercise its rights under “at will” employment.

If you own a business, it is crucial to understand the limitations under 132a.  Call me today at (714) 516-8188. We can talk about your business and whether your actions are in compliance with California law.

Public Policy Reasons for 132a

The purpose of the workers’ compensation system in California is to make sure that employees receive financial compensation in the event they are injured while working.  The law recognizes that employers need to be taking steps to reduce the risk of injury to their employees, while also recognizing that an injury must be work-related in order for an employer to be responsible for the injuries to the employee.  After an employee is injured, there are additional laws that come into play in addition to the traditional workers’ compensation laws that typically come to mind associated with medical treatment and documentation.  California Labor Code 132(a) is an essential provision that all employers must be aware of and with which they need to ensure compliance.

California Labor Code § 132a provides that an employer may not discriminate or take adverse action against an employee who has filed a workers’ compensation claim.  If an employee suffers discrimination, retaliation, or adverse employment action by virtue of the fact that he or she has filed such a claim, the employer may face severe civil penalties and fines.  It is possible for an employer to discharge an employee even with a workers’ compensation suit filed, but it is essential that employer have reasons to back up a legitimate discharge or negative employment action.

The public policy behind 132a is fairly straightforward.  The law is designed to make sure that employees may exercise their rights under the workers’ compensation system following a work-related injury without fear of retaliation from an employer.  In fact, the law itself contains the statement that “It is the declared policy of this state that there should not be discrimination against workers who are injured in the course and scope of their employment.”  Without the protections provided by 132a, an employer would be free to simply fire any employee who decided to seek compensation for a work-related injury.  With such a strong deterrent, it is likely that few if any workers would actually seek relief under workers’ compensation.  As a result, unscrupulous employers would also have less incentive to ensure work place safety.  Workers’ compensation and 132a help to make sure that workers are safer and the system is not stacked against the employees.

 Labor Code 132a is an essential provision of workers’ compensation and you need to make sure your business is in compliance. I have experience helping clients both prevent 132a claims against their businesses as well as defending such claims.  Contact me today at (714) 516-8188 to talk about your business.

How to Demonstrate Differential Treatment Under 132(a)

California Labor Code 132(a) makes it illegal for an employer to take adverse action or differential treatment against an employee who has filed a workers’ compensation claim. Adverse action can include a variety of actions, including firing or demotion. An employer who takes any type of adverse action against an employee who has filed or is about to file a workers’ compensation claim can expect that employee to soon file a suit under 132(a). In order to be successful with this type of case, an employee must prove: 1) he filed or expressed an intention to file a workers’ compensation claim before the adverse action was taken; 2) the employer took adverse action, such as firing, threatening to fire, or otherwise discriminated against the employee; and 3) the employer acted this way as a direct result of the employee’s work-related injury or workers’ compensation claim.

Proving that an employer’s action is differential treatment is obviously essential for an employee to be successful in a 132(a) claim. The California Supreme Court articulated a particular standard for this in Dep’t of Rehabilitation v. WCAB (Lauher), 30Cal. 4th 1281 (2003). In that case, the California Supreme Court held that it is not enough in a 132(a) case for an employee to demonstrate that he or she suffered a negative consequence from the employer’s actions. Rather, the employee must show that the employer discriminated against the employee, meaning it showed differential treatment based on the work-related injury. For example, if an employee shows that he or she suffered an adverse consequence due to a change in company policy, this would not be sufficient to succeed in a 132(a) case. An employee would need to show that the policy was changed or applied in such a way that the employee suffered differential treatment because of the work-related injury.

The case of Gelson’s Markets, Inc. v. WCAB is a case that applied the Lauher standard. In that case, an employee filed for discrimination because the employer refused to allow the employee to return to work after receiving a doctor’s release that was not entirely accurate. The court ultimately found that the action was not discriminatory because the employer would not have treated an employee who was not suffering from a work-related injury any differently.

If you have questions about 132(a) and differential treatment, contact me today at (714) 516-8188. This area of law is complex, and I have extensive experience helping my clients and their businesses.

Basic Elements of a 132(a) Claim

California Labor Code Section 132(a) states that an employer may not discriminate against an employee who has filed a claim for workers’ compensation. Logically, these claims are typically filed in conjunction with workers’ compensation claims. There are very specific elements that an employee must prove in order to be successful in making a claim that they were unlawfully discriminated against in contravention of section 132(a).

First, an employee must prove that adverse action was taken against him or her. This typically takes the form of termination of employment, but it can take other forms. For example, a demotion, changing the employee’s hours to an undesirable shift, or moving the employee’s location to a vastly different and inconvenient location could all be examples of adverse action.

Second, an employee must also prove that the adverse action was taken because of the workers’ compensation claim or their threat to file such a claim. In other words, merely being terminated from employment is insufficient; an employee must provide evidence that they were terminated due to their claim. From a business’s stand point, this is why it is vital to document under-performance or other disciplinary action taken against an employee following a work-related injury. If it becomes necessary to terminate or demote such an employee, having a documented history of poor performance becomes important to a defense to a claim under 132(a).

Third, an employee must demonstrate that he or she had a right to keep the benefit or status that he or she lost when the employer took the adverse action, and also that the employer had a legal duty to continue providing that benefit. In Department of Rehabilitation/State of California vs WCAB (2003), 30 Cal. 4th 1281; 68 CCC 831;444, the California Supreme Court set out that this was the employee’s burden of proof in a claim under 132(a). The Supreme Court went on to point out that the California legislature obviously wanted to prohibit treating a worker injured on the job differently, solely due to the fact that they were injured while at work.

The Court noted: “To warrant an award the employee must establish at least a prima facie case of lost wages and benefits caused by the discriminatory acts of the employer. The employee must establish discrimination by a preponderance of the evidence at which point the burden shifts to the employer to establish an affirmative defense.” Id. Internal citations omitted.

If your business is faced with a discrimination suit under Section 132(a), contact me today at (714) 516-8188. We will discuss the elements of the claim with you and your avenues for defense.

Key New Laws for Employers from 2016

This past year saw many new laws come into effect, passed by the California legislature, or signed into law by the Governor. Understanding changes in the law is vital to keeping your business in compliance and avoiding penalties, both civil and criminal.

AB 622 came into effect on January 1, 2016, and is now codified in California Labor Code 2814. This law was passed in an effort to prevent discrimination against those who are not permitted to work under federal law, as is the case for undocumented immigrants. Pursuant to Labor Code 2814, an employer may not use the E-Verify system to check whether an employee is authorized to work before making an offer an employment, unless such a check is required by federal law. The employer is still permitted to use the system to check the employment status of employees already employed by the employer.

Another new law is AB 2883, which will go into effect on January 1, 2017. This law creates a large change for small businesses and closely held corporations. The law currently in place states that although employers must carry workers’ compensation insurance for all employees, “employee” did not include offers or directors of private corporations where those officers were the sole shareholders, or all working members of a partnership or a limited liability company. The new law, however, revises these exemptions. As of January 1, 2017, the exemption for officers or members of the board of directors only applies if the member owns at least 15% of the corporation’s stock, or in the case of the general member of a partnership or managing member of an LLC, that the person elects to be excluded by executing a document affirming that he is a qualifying office, director, general partner, or managing member. This document is signed under the penalty of perjury.

Next, SB 623 modifies that benefits can be received under the Uninsured Employers Benefits Trust Fund and the Subsequent Injuries Benefits Trust fund. California law states that immigration status shall not have an impact on an injured workers’ ability to file for workers’ compensation. Under this new law, immigration status also will not act as a bar to applying for benefits under the UEBTF or the SIBTF.

Finally, under SB 560, the Contractors State License Board may now inspect certain job sites. This law allows the Board to conduct investigations and enforcement of licensees to make sure that they are carrying valid and current workers’ compensation insurance. The Board must also provide information regarding licensees to the Employment Development Department.

It is of central importance that your business conforms to the changing landscape of the law. Call me today at (714) 516-8188 for an appointment to discuss your business’s compliance with California Labor Code.

What Violates 132(a)?

California Labor Code 132(a) clearly states that the policy behind this section is that there should not be discrimination against employees who are injured at work. The code goes on to outline that any employer who takes adverse action against an employee due to the employee making a workers’ compensation claim is subject to both civil and criminal penalties. These penalties can be severe, and it is important to have a firm grasp of what does and does not violate the terms of section 132(a).

The most obvious type of violation is where an employer takes direct adverse action that is discriminatory. An employer will expressly violate the statute if the employer terminates or threatens to terminate the employment of an employee because the employee has filed or expressed the intention to file a workers’ compensation claim, the employee receives an award for a workers’ compensation claim, or testified before the Workers’ Compensation Appeals Board for another employee’s claim. The employer will also have expressly violated this section for discriminating against the employee in any way for these same reasons. Discriminatory action can include such actions are not limited to termination; they can also include other adverse actions, such as changing a shift to hours the employer knows the employee cannot work. The law also covers other discriminatory acts by the employer, such as when an employee is penalized for being injured on the job or from missing time from their job due to an injury sustained in the workplace.

Insurers are also included in prohibitions under 132(a). An insurer may not tell an employer to terminate the employee because an employee has filed for workers’ compensation benefits, received an award of workers’ compensation benefits, or testified before the WCAB for another employee’s workers’ compensation claim. Under this section, an insurer is prohibited from telling an employer to fire an employee when that is coupled with a threat to cancel a workers’ compensation insurance police, to raise the insurance premium, or other adverse action against the employer.

These cases are typically filed in conjunction with an underlying workers’ compensation claim. The employee must do more than simply allege that they suffered adverse consequences from the employer. The employee must also prove that they suffered these adverse actions because of their workers’ compensation claim.

It is very important to protect your company from potential claims under 132(a), as a successful suit can be very financially damaging or even fatal to your business. If your business is facing a suit under 132(a), contact me today at (714) 516-8188 to discuss it.

Retaliation and How to Equip Your HR Department

Retaliation or discrimination against an employee who has filed a workers’ compensation claim can result in harsh penalties for a business. This also applies for employees who have already received a settlement for their compensation claim. Types of retaliation can include actions such as terminating employment, demotion, reducing an employee’s benefits, or reassigning the employee to a different location. In the event of a retaliatory action by an employer, the Division of Workers’ Compensation (DWC) and the Department of Fair Housing and Employment (DFEH) will be involved in an employee’s claim under Labor Section 132(a). These claims, if proven true, can result in harsh civil and even criminal penalties for an employer. The best way to handle these claims is to prevent them before they even start.

 

The most obvious way for an HR Department to prevent these types of claims is to not take any of the types of actions that may be considered retaliatory, such as termination or demotion. Unfortunately, it is not always possible to maintain the status quo.

 

In the event that termination or demotion is required due to an employee’s poor performance, it is vital that the poor performance is well-documented. HR should follow the business policies for termination or demotion, and should make sure that any policies are applied equally to all employees, regardless of whether they have filed any type of workers’ compensation claim in the past. Your HR Department should have carefully articulated policies and rules for termination, demotion, or changing an employee’s position. These rules need to be clearly broadcast and set out to the managers. It is essential to make sure these policies and procedures are followed and applied fairly and equally to all employees. An emphasis on creating written reports documenting problems with a particular employee should be made in order that managers understand that the key to avoiding future problems is building a file of written instances of past misconduct by the employee.

 

In the event that an employee does file a retaliation suit against the business, it is possible that the way to resolve this issue would be to settle the claim together with the underlying workers’ compensation suit, or perhaps to put the employee back to work. Both of these options, as well as any others, require thorough discussion with an attorney, and the HR Department should not attempt to handle the issue alone. As mentioned, mishandling and losing a retaliation suit can result in harsh penalties, and the issue should not be treated lightly.

 

The best first defense is to prevent this type of law suit from beginning. Contact me at (714) 516-8188 or email wcabdefense@hotmail.com to discuss your policies and whether they conform with the law.

Overview of California Labor Code 132(a)

The policy of California law that workers shall not be discriminated against is codified in California Labor Code 132(a). The statute says that “any employer who discharges, or threatens to discharge, or in any manner discriminates against any employee because he or she has filed” a claim against the employer is guilty of a misdemeanor. The law does not stop there, however. Employees who have merely notified their employer of their intention to file are also protected by 132(a), as well as employees who have already received a settlement or award for a workers’ compensation claim.

 

In the event an employer is found to have violated 132(a), the employer will be liable for money damages. These damages are also contained in 132(a), which states that the employee’s salary will be increased by up to one half, but not more than $10,000. The employee may also recover expenses up to $250, and is entitled to reimbursement for lost wages and benefits that were caused by the employer’s actions, as well as reinstatement. As the offense is also a misdemeanor, it is also punishable by jail time up to six months, a fine of $1,000, or both.

 

Under 132(a), an employee alleging discrimination may bring a complaint before the Workers’ Compensation Appeals Board to request the compensation provided under 132(a) and reinstatement. Moreover, under City of Moorpark v. Superior Court, an aggrieved employee is not limited to those damages found under 132(a). Instead, an employee may also seek damages under the Fair Employment and Housing Act, which include injunctive relief, compensatory damages, punitive damages, and attorney fees.

 

An employer’s workers’ compensation insurance likely does not cover a claim under 132(a). It is therefore crucial that an employer understand that discrimination against an employee due to a pending or potential workers’ compensation suit is to be avoided at all costs. In order to avoid such a suit it is advisable to not terminate an employee who is on leave due to a workers’ compensation claim or who has filed a workers’ compensation claim. The exception to this rule could possibly come with documented poor performance. It is also important to not demote or reduce the salary of the employee as a result of the work-related injury.

 

I have immense experience in practicing in this area of law, and would value the opportunity to discuss its ins-and-outs with you. Contact me at (714) 516-8188 or email wcabdefense@hotmail.com to set up a consultation so we can plan how to best protect your business from this type of claim, or talk about a strategy if you have already been sued.

Poor Performance and Discrimination

California Labor Code section 132(a) states that it is unlawful for an employer to discriminate against an employee who has filed a workers’ compensation claim. However, if an employee starts to perform poorly at his or her job after the claim has been filed, that does not mean that it is impossible for the employee to be terminated. The key is to document the employee’s poor performance.

 

The employer should make sure that the employee’s personnel file is scrupulously documented with incidents of poor performance. Numerous warnings should be given and noted in the file. Even if the warning was given verbally, the manager or other person of authority should take the time to write the details of the incident in the personnel file. If the business has a particular method or policy for termination, it is important that method be followed. For example, if the business’s policy for termination includes three written warnings for particular types of infractions before termination of employment, then that policy should be followed and documented. If the policies were not followed, the business will need to demonstrate the reason for the deviation.

 

In the event that the employer is forced to fire the employee after a workers’ compensation claim has been filed, a well-documented history of rule breaking or poor performance can provide an invaluable layer of protection for the employer. A detailed history can provide the employer with the means to force the employee to prove that he or she was fired due to the workers’ compensation claim. In the absence of such a detailed document, it will be much harder for an employer to show that the termination of employment was not a result of impermissible discrimination under 132(a).

 

Moreover, case law indicates that simply documenting one employee’s poor performance is not an absolute bar to a case under 132(a). In at least one case, the California court of appeals found that where an employee had been terminated for documented poor performance, she could still proceed with her law suit because the business’s policies allowed for mistakes, and the termination policies had not been applied fairly to other similarly situated employees.

 

It is wise to consult with an attorney prior to termination an employee who has filed a workers’ compensation claim. Even if you have workers’ compensation insurance, it likely will not cover a claim under 132(a).  Contact me at (714) 516-8188 or email wcabdefense@hotmail.com to discuss how to protect yourself before a lawsuit is filed.

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