Originally published by Billie Wenter and Caroline B. Burnett.
This month the California Supreme Court reaffirmed that workers’ compensation laws are the exclusive remedy for an employee’s injuries. In King v. CompPartners, the Court ruled that an employee’s tort claims against a utilization review company and a doctor performing a mandatory utilization review were preempted. In so doing, the Court reminded employees that the Court construes the Workers Compensation Act (WCA) liberally and broadly, in favor of awarding workers’ compensation, not in permitting civil litigation.
Background
This case arose after an employee sustained a back injury at work and suffered a series of seizures after abruptly stopping Klonopin (a psychotropic drug to treat anxiety and depression) when a utilization reviewer (defendant Dr. Sharma) concluded Klonopin was medically unnecessary. The employee alleged that work-related back pain caused anxiety and depression. His mental health professional prescribed Klonopin. As part of the utilization review process outlined in Labor Code section 4610 (the process where employers, through utilization reviewers, determine whether a recommended treatment plan for an industrial injury is medically necessary), Dr. Sharma denied the treatment recommendation.
The employee filed a complaint in superior court claiming negligence, infliction of emotional distress and other tort claims against Dr. Sharma and the utilization review company, CompPartners. He alleged that the Dr. Sharma caused him additional injuries by denying the request without providing a weaning regimen or warning him of the possible side effects of abruptly ceasing the medication. Defendants demurred, arguing that the WCA preempted the employee’s tort claims The trial court agreed and sustained the demurrer without leave to amend.
The Court of Appeal affirmed, except as to the failure to warn theory, which the court concluded was not subject to the WCA’s exclusive remedies because it did not directly challenge Dr. Sharma’s medical necessity determination.
The Supreme Court’s Decision
The California Supreme Court agreed with the lower courts that the employee’s injuries caused by the utilization review are the sort of injuries the WCA’s exclusivity provision covers. However, the Court disagreed with the appellate court’s determination that the WCA did not apply to the extent that the employee complained Dr. Sharma failed to warn of the adverse consequences of abruptly stopping the medication.
The Supreme Court concluded the appellate court erred, because the employee’s injury arose out of and in the course of the utilization review — “a statutorily required part of the workers’ compensation claims process, to which he would not have been subject had he not suffered a work-related injury.”
Court’s ruling resulted from the application of two principles favorable to employers:
- The WCA’s exclusive remedy provision preempts injuries that are collateral to or derive from a compensable workplace injury, including additional or aggravated injuries that stem from conduct occurring in the workers’ compensation claim process. Because the employee’s injuries occurred within the scope of the employment relationship—i.e., from errors in the utilization process that his employer had to establish as part of the claim process—the compensation the employee received for his workplace back injury was his sole and exclusive remedy under Labor Code section 3602.
- The WCA’s exclusivity provision protected CompPartners and Dr. Sharma because they stood in the shoes of the employer. Though a literal reading of the WCA’s definition of “employer” seemingly excluded them, the Court reasoned that the Act, properly interpreted, also preempts claims against utilization reviewers because they discharge the employers’ responsibilities to their employees. In so doing, the Supreme Court expanded the list of third parties entitled to protection from tort claims based on a compensable workplace injury.
In sum, this case illustrates the fundamental public policy rationale behind the exclusivity provision. The Court explained:
The treatment of utilization reviewers is, however, consistent with the basic trade off that underlies the workers’ compensation system as a whole: The employee is afforded swift and certain payments for medical treatment without having to prove fault, but, in exchange, gives up his right to sue in tort for those injuries that result from risks encompassed by the employment relationship.”
Please reach out to your Baker McKenzie employment lawyer with any questions.
Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.
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